Russia is suffering its own bitter version of financial turmoil, partly because of the summer of antagonism led by Vladimir Putin, the Prime Minister. Yesterday Russia suspended its stock market for the fourth day in a fortnight, to try to stem falling share prices. The move headed off a rout, although investors have been fleeing for four months and the market is down by more than half since May.

Those on the receiving end of Mr Putin's belligerence might hope that the plunge will undermine him. His power has rested on his claim to have steered Russia out of chaos and into prosperity in eight years. But, as with every optimistic statement about Russia, that depends on the middle class suddenly revealing itself to be large, outspoken and prepared to challenge the country's leaders if their actions threaten the standard of living. This hasn't happened yet.

More worryingly, the turmoil could strengthen those who argue that capitalism is too risky. In that case, the advantage will go to those, such as Mr Putin, who favour more control of key industries and the stock markets, although that may prove to be at the expense of economic growth.

Since 2000 Mr Putin has tried to have it both ways. He has extracted political capital from the new prosperity, in which average incomes nearly doubled in six years, but he has acted as though there was no contradiction with his growing control of regional government, the media and the energy industry.

His claims for his first years as President are solid. He did steer Russia out of the 1998 crisis; a tangle of debt default and a run on the rouble. Four years of high oil prices have left the country with no debt and with more than $500 billion in foreign currency reserves. But, as foreign investors have been saying for years, Russia has failed to reinvest oil profits back into the industry, and production is now dropping, while Mr Putin has failed to diversify the economy away from energy.

Even though poverty has halved to below 14 per cent of the population, wealth is spread very thinly. The population of 141 million is shrinking by nearly half a million a year, leaving eastern villages deserted (something that China, with tens of millions living along the border, watches keenly).

This summer, Mr Putin's contribution has made the inevitable financial turmoil worse. True, he cannot be blamed for the one-third fall in the oil price since its July peak. But it removes his room for manoeuvre; if it falls below $70 a barrel, the Government will start posting deficits.

Meanwhile, Mr Putin's accusation in July that the coal and steel company Mechel had engaged in price-fixing sent its shares plunging by nearly 40 per cent in a day; it was one of the triggers for the flight of foreign capital. So was the continuing fight between BP and its Russian joint venture partners, with the apparent support of some ministers, which was uncomfortably resolved last month. And then there was the war with Georgia.

In the end, all this weakens his position. The question in the short term is how many Russians buy his line that there is no alternative to his prescription of greater control and that the turmoil in Western capitalist economies only proves it.

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