Over the past four years, Putin’s war in Ukraine has transformed Russia into a country with a militarized mentality, an imperial ideology, and a mercenary army, thus creating a society that cannot be easily returned to peaceful life. Deathonomics has proved so beneficial to the regime because it provided an economically efficient way to “utilize” people “superfluous” to the economy, with almost no negative externalities. Today, according to Kremlin leaders, only 167,000 people have returned to “civilian life” after their frontline service99. While no-one knows, by the way, whether this number includes at least 150,000 disabled veterans (such a figure was long ago presented by Russia’s Social and Pension Insurance Fund100), this seems a rather limited stock of people considering a 700,000-strong army still deployed in Ukraine and more than 220,000 casualties reported since the start of the war. The end of the conflict— which will happen sooner or later—will raise many new issues.
From a purely economic perspective, either peace or a ceasefire appears inevitable, as Russia cannot wage its war forever; the potential of “military Keynesianism” has been exhausted, and the country has entered a period of prolonged economic stagnation101. The Kremlin regularly signals its intention to achieve, through military or diplomatic means, the occupation of the entire Donetsk and Luhansk regions and, at least for a while, to stop there102. If reconciliation occurs, Russia will face at least three serious challenges.
99 — “Kreml’: iz zony SVO uže vernulis’ 167 tys. veteranov boevyh dejstvij” [Kremlin: 167,000 combat veterans have already returned from the SVO zone], TASS, December 23, 2025, available at: https://tass.ru.
100 — “Bolee 137 tysâč rossiân s invalidnost’û vstali na učet dlâ polučeniâ kresel-kolâsok i protezov nižnih konečnostej v 2023 godu” [More than 137,000 Russians with disabilities registered to receive wheelchairs and prosthetic lower limbs in 2023], iStories, May 24, 2024, available at: https://istories.media.
101 — S. Aleksashenko, V. Inozemtsev and D. Nekrasov, “Nasledie diktatora: novyj zastoj” [The dictator’s legacy: a new stagnation], CASE Center, October 2025, available at: https://case-center.org; M. Laruelle, “War as Social Elevator: The Socioeconomic Impact of Russian Military Keynesianism”, op. cit.
102 — V. Begunkov, “Putin gotov k častičnomu ‘obmenu territoriâmi’ s Ukrainoj” [Putin ready for partial ‘territory swap’ with Ukraine], Deutsche Welle, December 26, 2025, www.dw.com.
The first problem concerns the fate of the army that is still fighting in Ukraine. While the burgeoning military-industrial complex would probably not encounter any significant problems (Vladimir Putin stated back in 2024 that the government has enough orders for military factories for five, even ten, years103), demobilization may have more provocative consequences. The return of mobilized soldiers has rarely been problem-free, even if they were highly motivated to re-enter civilian life (one can recall Soviet veterans of the Afghan war or American veterans of the war in Vietnam), but the disbandment of a mercenary army of such a scale is something completely unknown in recent centuries. It’s highly likely that the income gap between those who had served in the army and those who continued their civilian employment will prevent successful and soft integration of the veterans into their former social environment. This could pose a more serious threat to the entire society than sporadic crimes committed by former mercenaries (even though these are causing increased concern; by the end of 2025, the number of murder cases involving veterans across Russia exceeded 1,000104). In such a situation, a more acceptable option would be to extend all veterans’ contracts and to station the army in military settlements for at least a few years (this would save the state considerable money on bonuses and death gratuities and be entirely consistent with the Kremlin’s decisions as it has recently increased the authorized number of active military personnel to its exact current count of 1.5 million).105 One should also note that attempts to transform former mercenaries into a “new elite”106 and to promote their career advancement are seemingly failing—partly due to bureaucratic resistance,107 partly due to the veterans’ lack of competences and the public’s reluctance to consider them as having any moral authority. In any case, this problem lacks a clear solution.
103 — “Putin poobeŝal ‘mnogo raboty’ dlâ OPK v bližajšie 5-10 let” [Putin promised “a lot of work” for the defense industry in the next 5-10 years], Kommersant, February 15, 2024, available at: www.kommersant.ru.
104 — “Vernuvšiesâ. Kak veterany vojny v Ukraine ubivaût i kalečat rossiân” [The Returned. How veterans of the war in Ukraine are killing and maiming Russians], Verstka, December 9, 2025, available at: https://verstka.media.
105 — “Ukaz Prezidenta Rossijskoj Federacii ot 16.09.2024 № 792 ‘Ob ustanovlenii štatnoj čislennosti Vooružennyh Sil Rossijskoj Federacii’” [Decree of the President of the Russian Federation No. 792 of September 16, 2024, “On Establishing the Authorized Strength of the Armed Forces of the Russian Federation”], Official website of the President of Russia, September 16, 2024, available at: www.kremlin.ru.
106 — “Putin zaâvil, čto za veteranami SVO – buduŝee” [Putin stated that the future lies with veterans of the Soviet Armed Forces], TASS, April 21, 2025, available at: https://tass.ru.
107 — “‘On dub-dubom’: kak učastnikam vojny v Ukraine ne udaëtsâ ustroit’sâ vo vlasti” [“He’s a blockhead”: how participants in the war in Ukraine fail to find positions in government], Verstka, October 11, 2024, available at: https://verstka.media.
The second problem arise from the inevitable “financial externalities” of deathonomics. Even assuming that returning mercenaries would not become dangerous troublemakers, they will represent a huge burden to the budget. Of course, Russia isn’t America, and the authorities won’t care for former soldiers to the point where spending on veteran affairs would exceed the cost of the war itself within a few years, as happened in the US after Iraq.108 Still, however, medical expenses (the number of seriously or completely disabled people in the country could probably double compared to the pre-war period),109 military pensions, survivors’ benefits, loan write-offs, provision of state-funded quota at colleges and universities for veterans’ children, and much more could become a challenge—not only financially but also socially. There’s no consensus in Russian society about the wisdom of the war with Ukraine, and the general attitude toward former soldiers is unlikely to be enthusiastic, especially if they enjoy special treatment. A gradual phase-out of this system is most likely. The Russian authorities have extensive experience with this; for example, the infamous abolition of monthly payments to those decorated with orders and medals soon after the end of the Great Patriotic War,110 or the rather rapid descent into oblivion of Afghanistan veterans. Vast promises currently made to veterans are most likely motivated by the same reasons that motivated the 2022 decisions to increase salaries and bonuses for mobilized personnel; the Kremlin makes them on an ad hoc basis, without much thought of how they will be implemented in the long term.
108 — L. Bilmes and J. Stiglitz, The Three Trillion Dollar War: The True Cost of the Iraq Conflict. New York: W.W. Norton & Co., 2008.
109 — O. Loginov, “Protezy dlâ voûûŝih protiv Ukrainy. Kto ih postavlâet v RF?” [Prosthetics for those fighting against Ukraine. Who supplies them to Russia?], Deutsche Welle, November 29, 2025, available at: www.dw.com.
110 — “Kak v SSSR otmenili vyplaty za ordena i medali” [How the USSR abolished payments for orders and medals], Versia, June 7, 2023, available at: https://versia.ru.
However,a third—and perhaps even the most complex—problem will arise if the Kremlin achieves all of its primary ideological and propaganda goals. If the returning mercenaries receive all the promised privileges and some even manage to make good careers; if the money they have earned helps them to improve their standard of living; if the authorities are able to develop and popularize the cult of sacrifice they actively promote (these days presenting former mercenaries as a promising mix of patriotism and success), then the very image of a mercenary soldier willing to conquer neighboring lands and to kill people for money will prove a powerful role model. At the beginning of this report, the prerequisites for the rise of deathonomics were discussed. As noted, they have long been present in Russian society but, whether expressed through criminal gangs or private military companies, were historically regarded as illegitimate and illegal forms of organization. Today, Putin’s regime is tantalizingly close to presenting this path as not only socially acceptable but also perfectly legitimate—and even publicly encouraged. The success of such a policy would amount to an apologetics of endless militarization, leading Russia sooner or later to an even larger war with European countries, even if Putin’s propagandists might dismiss the resulting military hysteria as ideological nonsense.
In other words, deathonomics has no bright future. Its emergence was no accident, but its implementation has proved excessively ad hoc and reactive. It has demonstrated its effectiveness—both politically, by dividing society into a warring group and one shielded from mobilization, and economically, by creating a mechanism to buy out “useless” human resources at prices far exceeding their market value. Yet these outcomes can be considered achievements if they operate as exceptions: either by sparing society at large from mass mobilization or by offering new opportunities to individuals previously deprived of any realistic prospects. If this temporary solution, which has helped to manage an acute crisis, cannot be quickly and carefully reversed–let alone if it hardens into a new social norm–serious consequences for both the Russian economy and Russian society can be expected.