To be clear, what Vance is describing here is a Putin-style system of state capitalism. Oligarchs have to align themselves with Kremlin priorities to maintain their wealth and influence. If they challenge the state, they face bogus investigations and pressure to force them out.
https://twitter.com/jasonahart/status/1953491575989772760
Loyal oligarchs are rewarded with access to state contracts or monopolistic opportunities, creating a symbiotic relationship between private wealth and state power. They can only operate within strict boundaries set by the state, such as the ban on "promoting LGBT".
They are kept in line by government regulations, tax policies, and selective law enforcement to discipline them and ensure their alignment with state goals. That's how Russia ensures there is "no meaningful distinction between the public and the private sector".
Needless to say, it's a system which guarantees a high level of corruption and cronyism. The government chooses who wins and loses, purely on political grounds, regardless of actual market conditions.
How this ends up is visible from what Russia is currently going through. "Raiders" supported by the Kremlin are seizing companies arbitrarily to bring them under the control of Putin's allies. It's leading to much of the economy coming under the control of a few powerful people.
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