This chapter traces the role of economics in intellectual debates over Russian national identity. On one side are the modernisers who believe that the only way to restore Russia's prosperity and standing in the world is to embrace Western market institutions. On the other side are nationalists who believe that economic integration will erode the political institutions and cultural norms that are central to Russian identity. They argue that erecting barriers to Western economic influence, and creating an alternate trading bloc, are necessary to prevent the exploitation of the Russian economy and even the possible destruction of the Russian state. The chapter traces these debates from the chaotic reforms of the 1990s through what appeared to be a winning Putin model in the 2000s, and then the uncertain waters after the 2008 financial crash, culminating with the Western sanctions (and Russian counter-sanctions) imposed after the annexation of Crimea in 2014.

It is possible to imagine a middle position, a third way between the modernisers and the nationalists: a distinctively Russian economic model that combines elements of trade openness with measures to ensure Russia's long-term development. However, Russia has by and large failed to come up with its own third way model, and has instead remained trapped between the polarities of integration and autarky.

Vladimir Putin was trying to build a third-way model of state corporatism plus international integration in the period 2000–8, but the model showed its limitations in the stagnation following the 2008 financial crash. He then shifted to an alternative approach in the form of the Eurasian Economic Union: a regional trading bloc that would be under Russia's control and would be to a degree insulated from the global economic institutions dominated by the US and its allies.