With the limiting/cutting off of the wealthy European markets for her products that any isolation / “new Cold War” would imply, her economy will end up even more screwed than it is already, further isolating the government from the people. Yes, cutting off energy supplies to Europe would, in the short term, cause a major global economic crash and untold suffering on a scale not seen for decades which would, in the short term, also help boost energy prices and allow Russia to get rich quick via other markets. But in the longer term? Europe will find other energy sources and recover – while Russia’s short term gain will end up as long-term loss, as her finite natural resources run low and the world’s wealthiest markets continue to shun her. As The Economist has noted, “America’s GDP is ten times bigger than Russia’s and it spends at least seven times more on defence. Russia’s economy would fall off a cliff if energy prices slumped and its population, racked by ill-health and inequality, is shrinking by up to 800,000 a year.” How can she keep going if markets are denied her?
Yes, the nationalistic boost will increase the government’s popularity in the short-term (just as it did during the early stages of the Chechen wars), but the current government’s already insanely popular and there aren’t any elections for years, so why bother? Anything short of total moral/military victory will make them seem weak in the eyes of a people they’ve stirred up into a populist frenzy. It’ll have precisely the opposite effect.
On top of that, the semi-paranoid claims that Western powers are encircling her to crush her will become a reality. The blind eye that’s been turned to Russia’s shoddy human rights record, corruption and lack of democracy will start to see once more, and the Western world will, no doubt, start to seriously aid opposition groups, potentially destabilising the current lot’s hold on power. Plus, of course, Russia’s own hypocrisy over the independence of Chechnya may start to become an issue – and cunning Western states may well start taking more of an interest in other national subgroups within the Russian Federation, bolstering their independence movements to destabilise the Kremlin. The Russian Federation, lest we forget, is a country built on conquest that has been held together largely through fear and oppression ever since the days of Ivan the Terrible. From Caucasian regions Ingushetia and Dagestan right through to Siberia (actually not a bad idea…), there are countless parts of Russia that could – with the right incentives and support – be persuaded to start heading the way of the Central Asian republics, and sever their ties to Moscow.
Some of these are more likely than others, of course – and none of this is to say that I don’t have a certain amount of sympathy with Russian accusations of Western hypocrisy (I don’t buy it completely by any means, but they have got a case, and they’ve been telling us for long enough…) – but still. Why? If it’s really just simple nationalism, aren’t nationalist supposed to want to do things in the best interest of their country? Isn’t the aim normally to make the mother/fatherland great once again? How does Russia expect to do that if she pisses off all her trade partners? Or are Russian claims of self-sufficiency justified? Are they genuinely planning a period of splendid isolation? Is that why they’re seemingly becoming so keen to tidy up any remaining border disputes?
It’s all very complex, very confusing. And I haven’t yet read one explanation that covers all the bases. (Hell, even this one leaves out tonnes of relevant stuff…) I was hoping to go into all of this in more detail on the radio last night, but for some reason never quite got the chance…
The map to the left may indicate why. And yes this is all part of my slowly developing geopolitics of European energy supply theory of relations between Russia and the west (see also theories about 
The recent military action has already 
For more on Nabucco’s significance, check out 
And so it should all begin to come clear. The West wants Georgia for its strategic value as one of the links in the Caucasian energy chain – the only route from Central Asia to Europe that doesn’t involve passing through less than reliable countries like Russia or Iran. The only supply route for non-European natural gas that will not be under Russian control (as can be seen in the map to the left) – and a direct competitor to Russia’s own planned 
