This article examines how Russian privatization helped create the Putin political system. During the ‘who lost Russia’ debate in the 1990s, American economic advisors were rebuked for allowing a ‘capture of the state’ by the oligarchs. A larger time frame reveals that the consequences of Russian privatization were quite different from the forecasted ones. Because the new class of owners were regarded as illegitimate, lacked clear property rights, and ran conglomerates immersed in a command economy these owners, that is, oligarchs, were easily subdued by the state. As a consequence, there is little chance for a coalition of elites to mobilize against Putin.