Society
War as a Tool for Social Promotion: Socioeconomic Transformations under Russia’s ‘Military Keynesianism’
July 2, 2025
-
Marlene Laruelle
Historian and political scientist, George Washington University
Historian and political scientist Marlène Laruelle looks at the socioeconomic effects of the Russian government’s shift in fiscal priorities since the invasion of Ukraine – what she terms “military Keynesianism.” She argues that the benefits for lower-income, provincial Russians are nearing their limits, however, as maintaining current social spending will be a growing challenge for the Russian economy.
The original article was published by IFRI here. We are publishing a shortened version here with their permission.
To fund its war effort, the Russian state has spent astronomical sums and implemented a form of “military Keynesianism” – a massive redistribution of state income in favor of industries tied to the war effort and the hundreds of thousands of men deployed to the front line.
This military Keynesianism is transforming society both socioeconomically and culturally. It has partially rebalanced the significant disparities in wealth, consumption and social prestige in post-Soviet Russian society by distributing unprecedented amounts of money and symbolic benefits to “peripheral Russia,” long neglected by the central government.
However, it entails depletion of public resources, persistent inflation, civilian-economy sectors struggling to cope with the state’s preference for military industries and growing dependency on China.
To fund its war effort, the Russian state has spent astronomical sums and implemented a form of “military Keynesianism” – a massive redistribution of state income in favor of industries tied to the war effort and the hundreds of thousands of men deployed to the front line.
This military Keynesianism is transforming society both socioeconomically and culturally. It has partially rebalanced the significant disparities in wealth, consumption and social prestige in post-Soviet Russian society by distributing unprecedented amounts of money and symbolic benefits to “peripheral Russia,” long neglected by the central government.
However, it entails depletion of public resources, persistent inflation, civilian-economy sectors struggling to cope with the state’s preference for military industries and growing dependency on China.
Tula Museum of Weapons. Tula has historically been an important part of the Russian military-industrial complex. Source: Wiki Commons
Spatial and social rebalancing brought about by the war
This military Keynesianism took shape in late 2022, when the Kremlin realized it needed to adapt its economy for a prolonged confrontation with the West. The new strategy started bearing fruit in 2023 and early 2024. Output of military equipment and by industries directly linked to the war effort (transport, IT, electronics, etc.) saw spectacular growth. However, signs of fatigue emerged in late 2024, and the slowdown is now clearly visible.
Military Keynesianism is transforming Russian society on multiple levels, with both spatial and social rebalancing effects in a country traditionally divided into several major socioeconomic regions with highly disparate living standards.
The war has triggered a rebalancing. The Central, Ural and Volga federal districts, home to much of the Russian military-industrial complex and related metallurgical and electronics subsidiaries, have seen significant increases in industrial output. While oil and gas regions have gone into recession or stagnation due to sanctions, regions such as Penza, Tula, Samara, Bryansk and Sverdlovsk, as well as ethnic republics like Udmurtia, Chuvashia and Mari El, have posted rapid growth in industrial production.
Some regions in the Russian Far East have seen an economic revitalization, such as Khabarovsk and Transbaikal, as they have become major logistical hubs in the context of Russia’s pivot toward Asia, particularly China. Finally, the “new territories” – the four Ukrainian regions annexed by Russia in September 2022 but only partially occupied (Donetsk, Luhansk, Zaporizhzhia and Kherson) – have received special subsidies and major investments for construction and reconstruction, with Mariupol serving as a prominent example. There regions offer very high wages to anyone willing to relocate there and help materialize the Russian occupation.
As for social groups, two have seen a significant improvement in their living conditions thanks to the war. The first group is military-industrial complex workers, who number 3-4 million people. They benefit not only from being exempt from military service (though the rules changed in 2025) but also from having their salaries doubled in autumn 2022. In addition, they are eligible for various perks, such as subsidized mortgages and fully paid vacations to the Black Sea.
The second social group benefiting from state largesse in the context of the war is families of soldiers, especially those who sign contracts with the Ministry of Defense. To attract as many volunteers as possible, the state has steadily increased such benefits. Regional and municipal authorities offer ever-increasing signing bonuses, on top of the federal one. This also demonstrates their loyalty to the Kremlin.
The data collected by the BBC Russian service and Mediazona indicates that the poorest republics in the North Caucasus and southern Siberia, along with the large agricultural regions of European Russia, constitute the main reservoir of military recruits. Meanwhile, residents of large cities, especially Moscow and St Petersburg, are largely shielded from conscription and recruitment.
Monetization of wartime patriotism and its social impacts
To get men to sign contracts to fight in Ukraine, the government has multiplied financial and symbolic incentives. All soldiers are awarded the title of “Veteran of the Special Military Operation,” a prestigious status in continuity with that of veterans of the Great Patriotic War and the wars in Afghanistan and Chechnya. Meanwhile, soldiers’ children are entitled to free university education and school meals, family health insurance is covered and families receive low-interest loans.
This spending had an effect on economic sentiment: in June 2024, according to the Levada Center, household confidence was at its highest since the 2000s. Poverty reached lows since the fall of the USSR, at 7.2% of the population in 2024 or about 12 million people living below the poverty line.
However, these social expenditures, which are costly for the state budget, have begun to be quietly scaled back.
Yet while this military Keynesianism has had a rebalancing effect, it has not fundamentally altered Russia’s social stratification. After a temporary deterioration in 2022-23, by early 2024 the more affluent classes had gradually regained financial optimism, while over the following months, less well-off groups reported an eroding sense of financial security, especially due to inflation in essential goods.
Furthermore, the future of this financial windfall for soldiers and their families is uncertain, even though the authorities currently appear committed to continuing generous payments to contract soldiers.
This military Keynesianism took shape in late 2022, when the Kremlin realized it needed to adapt its economy for a prolonged confrontation with the West. The new strategy started bearing fruit in 2023 and early 2024. Output of military equipment and by industries directly linked to the war effort (transport, IT, electronics, etc.) saw spectacular growth. However, signs of fatigue emerged in late 2024, and the slowdown is now clearly visible.
Military Keynesianism is transforming Russian society on multiple levels, with both spatial and social rebalancing effects in a country traditionally divided into several major socioeconomic regions with highly disparate living standards.
The war has triggered a rebalancing. The Central, Ural and Volga federal districts, home to much of the Russian military-industrial complex and related metallurgical and electronics subsidiaries, have seen significant increases in industrial output. While oil and gas regions have gone into recession or stagnation due to sanctions, regions such as Penza, Tula, Samara, Bryansk and Sverdlovsk, as well as ethnic republics like Udmurtia, Chuvashia and Mari El, have posted rapid growth in industrial production.
Some regions in the Russian Far East have seen an economic revitalization, such as Khabarovsk and Transbaikal, as they have become major logistical hubs in the context of Russia’s pivot toward Asia, particularly China. Finally, the “new territories” – the four Ukrainian regions annexed by Russia in September 2022 but only partially occupied (Donetsk, Luhansk, Zaporizhzhia and Kherson) – have received special subsidies and major investments for construction and reconstruction, with Mariupol serving as a prominent example. There regions offer very high wages to anyone willing to relocate there and help materialize the Russian occupation.
As for social groups, two have seen a significant improvement in their living conditions thanks to the war. The first group is military-industrial complex workers, who number 3-4 million people. They benefit not only from being exempt from military service (though the rules changed in 2025) but also from having their salaries doubled in autumn 2022. In addition, they are eligible for various perks, such as subsidized mortgages and fully paid vacations to the Black Sea.
The second social group benefiting from state largesse in the context of the war is families of soldiers, especially those who sign contracts with the Ministry of Defense. To attract as many volunteers as possible, the state has steadily increased such benefits. Regional and municipal authorities offer ever-increasing signing bonuses, on top of the federal one. This also demonstrates their loyalty to the Kremlin.
The data collected by the BBC Russian service and Mediazona indicates that the poorest republics in the North Caucasus and southern Siberia, along with the large agricultural regions of European Russia, constitute the main reservoir of military recruits. Meanwhile, residents of large cities, especially Moscow and St Petersburg, are largely shielded from conscription and recruitment.
Monetization of wartime patriotism and its social impacts
To get men to sign contracts to fight in Ukraine, the government has multiplied financial and symbolic incentives. All soldiers are awarded the title of “Veteran of the Special Military Operation,” a prestigious status in continuity with that of veterans of the Great Patriotic War and the wars in Afghanistan and Chechnya. Meanwhile, soldiers’ children are entitled to free university education and school meals, family health insurance is covered and families receive low-interest loans.
This spending had an effect on economic sentiment: in June 2024, according to the Levada Center, household confidence was at its highest since the 2000s. Poverty reached lows since the fall of the USSR, at 7.2% of the population in 2024 or about 12 million people living below the poverty line.
However, these social expenditures, which are costly for the state budget, have begun to be quietly scaled back.
Yet while this military Keynesianism has had a rebalancing effect, it has not fundamentally altered Russia’s social stratification. After a temporary deterioration in 2022-23, by early 2024 the more affluent classes had gradually regained financial optimism, while over the following months, less well-off groups reported an eroding sense of financial security, especially due to inflation in essential goods.
Furthermore, the future of this financial windfall for soldiers and their families is uncertain, even though the authorities currently appear committed to continuing generous payments to contract soldiers.
Ad: Children of Ukraine war veterans can study for free at all Russian higher education institutions. Source: VK
The challenge of reintegrating veterans
For the Russian authorities, veterans are both a potential source of social and political problems and a standard-bearer for a new loyal and patriotic elite. Sergei Kiriyenko, one of the chiefs of the Presidential Administration, has acknowledged that veterans “struggle to adapt” upon returning to civilian life. Meanwhile, Putin presents them as the “authentic elite” of Russia, capable of replacing the cynical and corrupt elite inherited from the 1990s.
One of the major social challenges posed by the return of veterans is related to PTSD. For comparison: over half of Afghan war veterans suffered from alcohol or drug addiction as of 1989; two thirds of Chechnya war veterans experienced PTSD; and more than 100,000 veterans were in prison by the mid-2000s.
For now, the impact of veterans’ homecoming on crime rates appears limited (see here and here), but it could rise dramatically once the war ends. Meanwhile, finding a job has proven challenging for many: as of May 2025, about 40% of demobilized soldiers could not find a civilian job.
Veterans are being presented by the regime as a new pool of cadres for the country. This valorization is showcased by the Time of Heroes (Vremya geroev) program, launched in spring 2024 and managed by the Presidential Academy through RANEPA, which is responsible for training veterans. However, this strategy of social promotion has so far involved only around a hundred individuals.
The real pathway to upward mobility for veterans is not through high-level political posts but rather through more modest positions within the administrative hierarchy. A number of veterans have reintegrated into civilian life through the rapidly expanding field of “patriotic education,” which includes new patriotism-related subjects introduced in schools and universities since 2022 and whose funding rose from RUB 5 billion in 2022 to RUB 45 billion in 2024.
Veterans are also being celebrated in the public sphere: civic and charitable associations are now expected to include them as members, myriad television programs feature veterans, etc. Television recruitment ads celebrate “real men” (nastoyashchiye muzhiki), motivated by responsibility, patriotism and archetypal masculinity.
Conclusion
The military Keynesianism launched by the Kremlin in 2022 to sustain the war effort has not only managed to keep the Russian economy afloat but also succeeded in transforming society. An entire generation of men and families will have been shaped by the experience of the war and the financial and symbolic recognition it brings. This monetization of service to the fatherland has paradoxically enabled social spending for peripheral Russia on a scale not seen since the collapse of the Soviet Union.
At the same time, three years into the war, the socioeconomic benefits that military Keynesianism has brought to Russia’s lower social strata appear to be reaching their limits. The upper classes have largely avoided the trenches thanks to sacrifices made by low-income groups, which reinforces the entrenched social hierarchy in today’s Russia. Moreover, sustaining the current social spending will be a challenge for the Russian economy and the new balance across regions it has produced.
More broadly, social spending will help determine the trajectory for the veteran community and the position of veterans on the political chessboard. In any scenario, postwar Russian society will be significantly more militarized. This militarized component is likely to remain hostile to the West and to any notion of reconciliation with yesterday’s enemies – unlike other social groups that may welcome an end to war and hope for a return to some form of normalcy. Russia’s ideological landscape may thus become far more fragmented than currently anticipated.
For the Russian authorities, veterans are both a potential source of social and political problems and a standard-bearer for a new loyal and patriotic elite. Sergei Kiriyenko, one of the chiefs of the Presidential Administration, has acknowledged that veterans “struggle to adapt” upon returning to civilian life. Meanwhile, Putin presents them as the “authentic elite” of Russia, capable of replacing the cynical and corrupt elite inherited from the 1990s.
One of the major social challenges posed by the return of veterans is related to PTSD. For comparison: over half of Afghan war veterans suffered from alcohol or drug addiction as of 1989; two thirds of Chechnya war veterans experienced PTSD; and more than 100,000 veterans were in prison by the mid-2000s.
For now, the impact of veterans’ homecoming on crime rates appears limited (see here and here), but it could rise dramatically once the war ends. Meanwhile, finding a job has proven challenging for many: as of May 2025, about 40% of demobilized soldiers could not find a civilian job.
Veterans are being presented by the regime as a new pool of cadres for the country. This valorization is showcased by the Time of Heroes (Vremya geroev) program, launched in spring 2024 and managed by the Presidential Academy through RANEPA, which is responsible for training veterans. However, this strategy of social promotion has so far involved only around a hundred individuals.
The real pathway to upward mobility for veterans is not through high-level political posts but rather through more modest positions within the administrative hierarchy. A number of veterans have reintegrated into civilian life through the rapidly expanding field of “patriotic education,” which includes new patriotism-related subjects introduced in schools and universities since 2022 and whose funding rose from RUB 5 billion in 2022 to RUB 45 billion in 2024.
Veterans are also being celebrated in the public sphere: civic and charitable associations are now expected to include them as members, myriad television programs feature veterans, etc. Television recruitment ads celebrate “real men” (nastoyashchiye muzhiki), motivated by responsibility, patriotism and archetypal masculinity.
Conclusion
The military Keynesianism launched by the Kremlin in 2022 to sustain the war effort has not only managed to keep the Russian economy afloat but also succeeded in transforming society. An entire generation of men and families will have been shaped by the experience of the war and the financial and symbolic recognition it brings. This monetization of service to the fatherland has paradoxically enabled social spending for peripheral Russia on a scale not seen since the collapse of the Soviet Union.
At the same time, three years into the war, the socioeconomic benefits that military Keynesianism has brought to Russia’s lower social strata appear to be reaching their limits. The upper classes have largely avoided the trenches thanks to sacrifices made by low-income groups, which reinforces the entrenched social hierarchy in today’s Russia. Moreover, sustaining the current social spending will be a challenge for the Russian economy and the new balance across regions it has produced.
More broadly, social spending will help determine the trajectory for the veteran community and the position of veterans on the political chessboard. In any scenario, postwar Russian society will be significantly more militarized. This militarized component is likely to remain hostile to the West and to any notion of reconciliation with yesterday’s enemies – unlike other social groups that may welcome an end to war and hope for a return to some form of normalcy. Russia’s ideological landscape may thus become far more fragmented than currently anticipated.
Share this article
Read More
