In “Zero Sum,” Hecker lays bare the callous thinking of foreigners who raked in their profits and turned a blind eye to Russia’s deteriorating political situation. Even after Russian forces invaded Georgia in 2008, and seized Crimea in 2014, they dutifully contributed corporate tax dollars to the Kremlin’s war chest. The message from headquarters, the German executive tells Hecker, was: “We don’t like what Russia is doing, but business is good, so let’s increase our business.” The unspoken social contract between the state and the international business community, Hecker writes, boiled down to: “Get rich but don’t complain.”
The idealists carried on for three decades on the assumption that “with enough time, money and encouragement, Russia would somehow evolve into a liberal democracy.” Hecker had advised many of them and doesn’t let them off the hook. What may have started as idealism, he writes, quickly became self-deception. “We’ve all been complicit,” one American executive tells Hecker. “We’ve gone about our business, and we’ve put the best French perfume on a pile of manure.”
This year, as the new Trump administration moved to wind down the war in Ukraine, Putin insisted it was a great time for international companies to return. But even pro-Kremlin newspapers, like the state-aligned Izvestia, do not expect McDonald’s to reopen anytime soon. Many American companies are hesitant to jump back into the Russian market, though their considerations are not always ethical ones. Autocracies that will seize businesses — for reasons of politics, convenience or whim — are hard places to profit. Russia is also suffering from high interest rates, labor shortages and a dwindling consumer base. As one economist recently told The New York Times, “The biggest problem here is just that there’s not money to be made.”
Still, even after the full-scale invasion, hundreds of Western companies, like Philip Morris and Procter & Gamble, continued to do some form of business in Russia. Altogether, they have paid approximately $16 billion in Russian taxes in three years of war — enough for tens of thousands of long-range missiles. International sanctions do not apply to suppliers of food, such as the Chicago-based Mondelez, which makes Oreos, and the company’s C.E.O. recently told The Financial Times that shareholders do not “morally care” if the company operates in Russia. Hecker notes that this past June, Starbucks and the Coca-Cola Company filed to re-register their trademarks in the country. For many foreign firms, the shame of effectively bankrolling an expansionist totalitarian regime is an insufficient deterrent — and sanctions remain the only real red line. “Before the war was a year old,” Hecker writes, “companies started asking when they could go back.”
In mid-February, after the book went to press, American and Russian officials met in Saudi Arabia to discuss the war in Ukraine. Secretary of State Marco Rubio was in attendance and said he looked forward to normalizing relations with Moscow and consummating “some pretty unique, potentially historic economic partnerships.”
ZERO SUM: The Arc of International Business in Russia | By Charles Hecker | Oxford University Press | 458 pp. | $34.99