Why McDonald’s Leaving Russia Might Be Just What Putin Wants

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Through a gray and empty Red Square, Mikhail Gorbachev strolled leisurely with his granddaughter while using an umbrella to dodge the snow. The year: 1997. With Saint Basil’s Cathedral behind them, the pair walked into what purported to be a Pizza Hut in the center of a liberalizing Moscow, staged as part of an American advertising campaign. While the Gorbachevs sat in the corner of a separate but real Moscow-area Pizza Hut—and camera crews rolled—actors debated the legacy of the then-former Soviet leader until the matriarch of the family interjected in subtitled Russian: “Because of him, we have many things, like Pizza Hut.”
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And because of one of Gorbachev’s successors, those same Russians today do not.

Pizza Hut is among the raft of Western-based companies to announce they are closing their doors across Russia as the invasion of Ukraine approaches its two-week mark. Western leaders in and out of government have been tightening the screws on Russian President Vladimir Putin, who has caused a two-million-strong refugee crisis, a spike in gas prices, and a unified front of Western allies against Moscow’s march. The symbiotic effort between government and business to make life harder for the Russian leader has amplified the efficacy, but it may have unforeseen effects on cultural diplomacy.

It’s one thing to turn off access to foreign capital and the flow of Russian oil to the United States. It’s another to turn off the latte machine at Starbucks. Even in the most amoral universe of the political economy, symbols matter. Especially when it comes to food.

The net effect has been the recall of Uncle Sam from Moscow, a striking reversal from the end of the Cold War. As Moscow opened up to the West’s footprint three decades ago, Big Mac boxes became status symbols. Such cultural interactions helped thaw relations between the two global powers and softened the image of the Eagle in the land of the defeated Bear.

Now, companies like Boeing and Ford, all Big Four accounting firms, and financial institutions like American Express have pulled out of Russia, eliminating thousands of jobs and billions in goods and services. Some, though, recognize the damage they could deal their reputations—if not America’s standing—with a total shutdown; PepsiCo is continuing to process milk, cheese and baby formula at its Russian sites while McDonald’s will keep paying its 62,000 employees despite shutting down 850 counters.

The new pressure on Russia hardens the line between Russia and the West, which may achieve its economic goal of so crippling the Russian economy that Putin decides to withdraw his forces from Ukraine. The far-fetched hope is that Putin actually loses his grip on power as oligarchs and his people decide that two decades in near-absolute power has been enough.

But the Cold War ended as much because of the Soviet system’s flaws as the West’s cultural creep into Mother Russia. Gorbachev sought to build up the system by adding transparency and accountability, opening the country for those who at least wanted to consider the West. Ultimately, the system couldn’t sustain it and, in part, consumerism conquered the planned economies. The story Russians told themselves about their glory couldn’t stand the scrutiny.

For his part, Putin calls the end of the Soviet system the greatest tragedy, one he’s trying to remedy. Which is why he won’t mourn the retreat of Western companies from his backyard.

Time and time again, history has shown how engagement can break rogue states. There’s a reason Iran’s leaders fear the rising generation that has always known the West through popular media and the Internet. The Arab Spring was a byproduct of citizens realizing the system being imposed on them didn’t have to be as repressive or corrupt—in part through social media. North Korea survives only because it has achieved a completely hermetically sealed border for most of its citizens. Those nations one step down the ladder of autocracy, such as China, can still hold onto power by cutting off access to information.

Western companies are clearly hoping they can do their part to end the war on civilians in Ukraine, and many governments in the West are welcoming them as partners in the fight against Putin’s cruelty. But there is a second edge to this scalpel: breaking up with Russia surrenders the West’s toehold inside the country. America preached its gospel of capitalism’s superiority through consumerism, and Russians were ready congregants.

Like Moscow’s embrace of change as the Cold War ended, the corporate embrace of this anti-Russia agenda may turn out to be a temporary glitch. As was the case during the divestiture campaigns against apartheid and the current BDS efforts against Israel, corporations have responsibilities to shareholders, and in the end, those often win out over political stances. ESG only provides so much cover to promote an agenda that might be in conflict with the companies’ stated fiduciary goals. It was fun to play with “woke capitalism” during the Trump years and consider it a moral stance, but the choice to oppose the erratic President who could move markets with a tweet ultimately was in CEOs’ best interests.

Companies may eventually realize isolation isn’t the best path for ending Russian attacks on Ukraine. The Soviet system was sclerotic by design, but societies find ways of evolving because powerful ideas don’t respect borders or central committees. Cultural diplomacy made Soviets question the system. Gorbachev understood that, sparking a series of reforms that he thought could keep the system afloat. Ultimately, he could not stave off the West—and ended up starring in that Pizza Hut commercial.

Yes, let’s go back to that one-minute ad once again. It’s an artifact of an era that saw Gorbachev as a symbol of the West’s victory over its Cold War menace. The ad never aired in Russia, but the symbolism was clear in an American pizza chain using the former Soviet leader as an emblem of a changing world. Gorbachev had recognized America’s inevitability, allowing McDonald’s to open its first store in Pushkin Square in 1990; opening day served 38,000 customers, the global fast food company’s biggest day to date. “I felt like I was eating America itself,” one man told VOA in 2020 on the 30th anniversary of the store opening.

And, in another symbol of the West’s relationship with Russia, that store will now close as part of the Western withdrawal. One has to wonder what a darkened pair of golden arches in Moscow says about America’s cultural dominance. It doesn’t stretch the imagination to see Putin grinning like Ronald McDonald.

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