The aim of this article is to reveal the genesis of modern Russian capitalism, in order to better understand its main features. In the view of the author, the main historical source that determined the character of the new social system in our country was the degradation and degeneration of the Soviet party-state and economic bureaucracy. The sources of that bureaucracy lay in the privileges of the Soviet ruling stratum, and in the informal control by the bureaucracy over economic resources, a control that grew as the degeneration of the bureaucracy proceeded. These processes gradually undermined the planned economy, ensuring the growth of private appropriation behind the façade of collective property. During the epoch of Gorbachev’s perestroika a degenerate sector of the Soviet bureaucracy formed and headed an influential pro-capitalist bloc of social forces that called for the dismantling of the Soviet system and for a transition to capitalism. Along with members of the bureaucracy, this bloc included a part of the intelligentsia that hoped to benefit from monetising their qualifications, as well as people from criminal circles. In the course of the radical market reforms of the Yeltsin era this bloc legalised their informal control over assets through criminal privatisation. These processes determined the limitations and the vices of present-day Russian capitalism, and in particular, found expression in the authoritarian character of the Russian model of corporative rule.