Harold James writes:  At the 2007 Munich Security Conference, Putinpresented a new face, emphasizing the potential of the major emerging economies – Brazil, India, China, and Russia – to provide an alternative to what he viewed as an arbitrary unipolar world order. Many observers were shocked by his statements, and took the speech as evidence of his insecurity or irrationality.

The next year, the financial crisis struck, convincing Putin that his assessment had been prophetic. The crisis, in his view, was proof that the days of American global dominance were over.

In fact, before 2007 financial crisis, Russia had acquiesced to the logic of global capitalism, recognizing the need to cooperate with multinational corporations to modernize and diversify an economy based on raw materials and energy production. After the crisis, however, there was no longer as much to be gained from global markets – at least not in terms of power. Instead, Russia’s best option was to cooperate with other countries that had adopted a similar model of state-centered capitalism, especially China.

Putin’s interpretation of the crisis was underpinned by political developments in America and Europe. The US elected a president who appeared intent on scaling back America’s global commitments. When the Arab Spring revolutions erupted, the US response was weak and muddled, oscillating between pro-democracy rhetoric and support for anti-Islamist autocrats. This enabled Putin to project himself, particularly in Syria, as a credible proponent of geopolitical pragmatism.

In fact, the economic crisis and its aftermath have permitted Putin to argue in favor of a return to other economic models and engagement with developing natinos whose politics often look more like his.

Europe’s debt crisis – and its leaders’ apparent inability to take coordinated action – gave the Kremlin additional ammunition. Given that Europe’s overall debts and deficits are much lower than those of the US or Japan, the logic went, it should have been able to avoid polarization and paralysis.

More broadly, Putin’s belief that the economic crisis was causing the West to disintegrate aligns with traditional Soviet geopolitical thinking. As Stephen Kotkin shows in a new biography of Stalin,  Soviet policy was strictly rational. The Great Depression convinced Stalin that the different factions of capitalism would go to war; in 1938-1939, Nazi aggression seemed to vindicate his analysis. But Stalin’s predictions fell apart after Hitler’s defeat, when conflicting interests did not lead to a clash between the US and the United Kingdom.

While Western politicians and economic policymakers were trying to avert Great Depression II, Putin was already working on the assumption that it had arrived. For the West, managing the resulting geopolitical imbroglio will be even more challenging than repairing its damaged economies.