Ukraine as a late capitalism war

Why is the fancy mall lit up during a blackout?

I recently held a brief seminar at the University of Bologna entitled: “Ukraine: A Late Capitalism War?” I thought it might be interesting to share some of its key points with you. For those of you visiting for the first time, here’s a bit about who I am and what this space is. I hope you find the text engaging.

Tsum Mall in Khreshchatyk, Kyiv (Photo: DMD)

I took this picture at 9 PM on a Wednesday. It shows Tsum, the most posh and trendy mall in Kyiv, lit up with Christmas lights during a citywide blackout. My apartment, less than one kilometer away, was without electricity, as were the homes of an estimated 500,000 Kyivans and millions of other Ukrainians. Half of them, relying on electricity for their heating systems, were also left in the cold.

The blackout was scheduled and programmed. After repeated Russian bombings of the energy grid, four to eight hours without electricity per day has become the norm in Ukraine. In frontline cities and villages, there is even less energy—or none at all—along with a complete lack of heating.

The mall has its own generators and is likely connected to the essential power supply of the nearby Teatralna metro station. As a result, like a few thousand other buildings, it retains access to electricity even during blackouts. Whatever the reason, amid nationwide energy shortages and rationing, the "Harrods of Kyiv" remains fully illuminated.

Many Ukrainian economists have explained to me that there is a logical reason for this, rooted more in economic rationality than in corruption or stark inequality. By staying open and attractive, with festive lights and luxurious Christmas displays, the Tsum mall and other high-end stores on Kyiv’s main street generate revenue and pay taxes—funds that directly contribute to defending the country.

Blackouts are supposed to be egalitarian—but only to a point. If you can afford it, you can buy your way out with generators, fuel, or by being classified by the government as an essential activity, either directly or indirectly. Keeping the lights on in the front windows of closed shops along the main street at night might seem wasteful amid energy shortages. However, the prevailing belief in policymaker circles is that if you were to force Tsum to turn off its Christmas lights, it might result in their shutdown and relocation to Dubai or somewhere else, thus depriving the government of critical fiscal revenues while foreign investors and partners would likely criticize such actions as authoritarian or anti-market behavior.

The deeper one delves, the more they uncover the consumerist mentality and market-based mechanisms that lie at the core of Ukraine’s war effort. Astonishingly, and perhaps without historical precedent, these mechanisms have come to dominate one of the most critical aspects of contemporary Ukrainian life: the decision of which men and women are sent to the front.

Military advertisment in Kyiv (Photo: DMD)

You’ve probably already seen this picture. It’s from a marketing campaign by one of Ukraine’s most renowned military units, the Third Assault Brigade. Launched at the end of last summer, the campaign sparked controversy for its portrayal of women as sexualized innocents in need of protection. But what’s more striking is that this campaign was not created by the army or the Ministry of Defense but was privately funded and produced by a military unit. The website it links to is the private site of a company that manages the portal used by the Third Assault Brigade to recruit members, collect funds, and publish videos and other marketing materials. With donations from Ukraine’s largest betting company, Favbet, the brigade managed to produce an entire film, which was distributed on Netflix.

The Third Brigade, which is part of the far-right Azov network, is only the most prominent example of a unit successfully deploying its marketing machine. However, every Ukrainian military unit attempts to do the same with the resources at their disposal. As a volunteer, you can choose which unit to join, and as a conscript, you can request a transfer through the official military app with just a few taps—the government recently pledged to expedite this process. Thus, there is fierce competition among Ukrainian units to attract the best and most fit recruits.

Market mechanisms influence not only the supply side of the recruitment process. The higher a civilian’s wage, the lower their likelihood of being recruited, thanks to both formal and informal exemptions. In this framework, wages are seen as a measure of utility to the economy—and, by extension, to the war effort. At a certain point, the taxes you generate are deemed more valuable than your contribution in the trenches. Many have proposed in parliament to formalize and make this common practice, by making exemption to mobilizaton explicitly tied to wages, but such efforts have been met with criticism. Nevertheless, this perspective is far from unpopular among elites and experts.

Military units competes also for donations. The Ukrainian army lacks basic equipment, from clothing to protective gear. Nearly every brigade in Ukraine covers part of its needs through civilian donations or alternative means, such as soldiers’ private wages and personal funds. Money is needed for everything—from clothing to fuel to rent. Soldiers often have to pay for their own accommodation, and housing near crowded frontlines doesn’t come cheap.

It pays dividend to have a unit of young, well-trained drone pilots equipped with the latest technology, as they face a lower risk of being sacrificed as riflemen in the trenches. But the posh Third assault, with his sleek website, his nice private recruitmenet center and his fully kitted soldiers, is an exeption. The majority of brigades can barely afford advertisements made with Microsoft Paint, while others rely heavily on charities. Some units cannot even do that because they lack the manpower to navigate the paperwork required to secure donations.

I visited such a unit in spring, near the Vovchansk axis in the north. They told me that only one soldier in the company was older than their equipment—a self-propelled howitzer built in 1976 in nearby Kharkiv. They had to purchase most of their clothing and raise funds for gas and repairs for the company vehicles. Military shops, which supply everything from winter jackets to bulletproof vests, have become a booming business in Ukraine. People set up temporary tent shops at crossroads and villages near the frontline.

Military gear tent shops in Kupiansk, Kharkiv oblast (Photo: DMD)

In such a situation, one might expect the state to be scraping the bottom of the barrel for resources so desperately needed at the frontline. And you wouldn’t be entirely wrong. Deep cuts have affected everything that could be sacrificed, with education bearing the brunt, while indirect taxes were increased. But for the rest, the government has pursued an economic war policy that aligns closely with the Washington Consensus. There has been no widespread nationalization, no prescription of workers or rationing of consumer goods. The government even sought to implement peace-time privatization plans and kept cutting red tape, or claimed to do that, to make the country more attractive to international investors.

It is a neoliberalism of war, altough heavily subsidized by foreign countries. The government was forced to surrender and reform the tax system only a month ago. For nearly three years of a war widely regarded as existential for the country, it maintained tax rates at pre-war fiscal heaven levels—except for a nearly symbolic 1.5% military tax contribution introduced at the outset of the full-scale invasion.

Economists in Kyiv, and many others, attribute this to necessity. Raising taxes further would likely push a significant portion of the economy underground or abroad, thereby undermining efforts to generate revenues. It may sound reminiscent of the famous Laffer Curve, but the issue runs deeper. The real concern is that, under current national and especially international constraints, this is the only viable approach. Even during wartime, Ukraine cannot escape the forces of globalization.

I know Russia far less than Ukraine, but I believe many parallels can be drawn. Sociologist Volodymyr Ishchenko has discussed the concept of “military Keynesianism” in Russia’s war effort, involving real wealth redistribution between the top and select segments of the bottom—those directly participating in the “military operation” and their families. In a sense, one could view Ukraine’s neoliberal approach to war as the political opposite of Russia’s military Keynesianism. However, I believe the differences between the two “systems” are more superficial than substantial.

I believe that Elvira Nabiullina, governor of Russia’s central bank, and Russia’s top economic management would respond similarly to Kyiv’s economists when addressing how to manage the economy while waging war. Those Russian elites who advocated for full societal mobilization and the implementation of a total war economy have largely been sidelined—at least for now.

The key point is that both Russia and Ukraine operate within partially shared constraints and contexts. While Russia remains less dependent on international networks and far more authoritarian, allowing for greater freedom in intervening in the economy and society, its war effort remains deeply “marketized” and “privatized.” Like Ukraine, Russia seeks to minimize the war’s impact on the civilian population, particularly those deemed economically active and productive. Even as Putin frames the war as existential and civilizational against the collective West, the lights must remain on in Moscow’s Tsum, just as they do in its Kyiv counterpart.

Furthermore, in Russia, we witnessed the ultimate example of the privatization of everything with Prigozhin’s mutiny, which brazenly challenged the fundamental premise of the state’s monopoly on violence. Though a symbolic event rather than a harbinger of further mutinies, it remains a powerful and striking example.

Late capitalism has been defined in many ways, but lately, it has come to signify the economic system of the modern, developed world—characterized by international economic integration, large corporations, privatization and consumerism. A war in late capitalism is a war that reflects these economic and societal realities. It’s a conflict where market forces constrain the share of the economy that can be mobilized for the war effort, dictating a significant portion of the distribution of resources both behind the lines and, often, on the front.

The war, which began with Putin’s full-scale invasion of Ukraine, is the first of its kind. Never before have two developed nations been pitted against each other in a struggle of such intensity. This is no colonial expedition against a rebellious militia; rather, it’s a genuine conflict between two quasi-peer leviathans. It has been a while since we’ve seen such a clash of titans. The last time we witnessed something similar, the imperial and totalitarian states of the first half of the 20th century waged wars that were all-encompassing battles between the life and death of societies on an unprecedented scale—mobilizing entire populations and leading to destruction never seen before or since. In contrast, neoliberal, late capitalist societies, when confronted for the first time by peers, made war as limited as they could and fought keeping an eye on the stock market. For this, at least, we cannot fault them.

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Thank you for reading. This is my first English article published in this newsletter. If you’d like to read more, please like, comment, and subscribe, or you can follow me on X, where I frequently write in English. For my Italian readers: thank you for your patience. I will soon upload a translated version of this article.