Is Russian President Vladimir Putin insane? It's a fair question. In the space of a week he has undone almost all the considerable and laudable progress Russia has made in his two decades in office and returned Russia to the Soviet Union set-up.

Is Putin mad? Yes and no. The great Scottish psychologist R. D. Laing explained insanity thus: “Insanity – a perfectly rational adjustment to an insane world.”

Laing said the actions of a schizophrenic are perfectly rational. What is wrong is that their perception of reality is distorted.

I think this perfectly describes Putin.

Laing made his name when he was only 28 with this first book “The Divided Self” in 1960 that upended psychology with a new take on mental illness.

The book's power lay in Laing's ability to catch the rationality behind seemingly irrational behaviour, a logic he revealed by making the reader see through the eyes of someone labelled schizophrenic. Laing did not “explain” schizophrenia as a disease; he showed how schizophrenia was a perfectly logical way of coping with impossible, longstanding situations in a person's family or immediate society. Schizophrenia is a response to contradicting demands that are impossible to reconcile.

What makes Putin look so crazy is that the attack on Ukraine has resulted in the destruction of everything Putin has built over the last two decades in a week and that destruction was entirely predictable. Indeed, I have been arguing that he was well aware of how destructive the invasion of Ukraine would be, which is why he has so painstakingly, over 14 years, built up his fiscal fortress to contain the damage as much as possible. What has shocked is how fast and far he has gone with the aggression. While it was always on the cards, no one was expecting it to escalate so fast.

And it is not going according to plan. It seems Putin was banking on the EU remaining divided and cynically focused on business to ensure the bloc would do what it always does when it comes to sanctions on Russia: obfuscate and fudge.

The US was easier to predict. Russia had long ago paid down its debt and got out of dollar-denominated assets making it impervious to US sanctions. But Putin must be shocked by the unanimity and decisiveness of the EU’s response – especially the freeze on the Central Bank of Russia’s gross international reserves (GIR) on February 27, which it appears the Kremlin was not expecting.

But he ordered the invasion and even as Russia’s economy goes into free fall and will now become another Iran that will curb its development and prosperity for a generation, he is not going to back down.

It looks like the action of a madman. The international sanctions are one thing but the reaction of the Russian people is entirely different. Presumably he is doing this for the “greater good of Russia,” which he has always claimed as his motivation.

But his own people have almost universally condemned the invasion. All the Russian friends I have talked to in the past week are in shock. Everyone agrees an unprovoked attack on Ukraine is senseless. Their dreams of an improving life and a better Russia for their children have been dashed. A lot of Russians are now talking about leaving.

As the protests and complaints swell at home Putin is already acting with ruthless efficiency to cut that movement off at the knees. The press and social media have already been almost entirely shut down and if widely expected mass protests appear the police response to them is likely to be brutal and swift.  

So what is Putin’s world view that has led to these seeming self-destructive decisions? I have criticised other commentators for telling us “what Putin really thinks.” Well, now I’m going to have a go at doing the same thing.

The main problem is that Putin sees the West, and Nato in particular, as “the enemy.”

I mean this in a literal sense. As I have written elsewhere, he reached out at the start of his first term to join both Nato and the EU and was rejected on both counts. Then Russia was rebuffed when it tried to take over the Opel carmaker by former German chancellor Angela Merkel and refused seats on the board when it bought a lot of shares in EADS, the European plane maker. And there are many more examples of these rebuffs. In these cases, Russia was hoping to use these companies to rescue its automotive and aviation industries, respectively.

It also took 19 years before the WTO finally admitted Russia as a member in August 2012. The West was clearly extremely reluctant to allow Russia to join the global trade club and only finally conceded when it got too embarrassing to continue to exclude it. Russia effectively left the club again two years later when it imposed tit-for-tat agro-sanctions on the EU after the annexation of Crimea.

Taking the Crimea in 2014 and ensuring the Kremlin’s control of the naval base there was also part of Putin’s long-term planning for the coming clash. He has been working on this invasion for a very long time. That is the problem: he has been convinced that the West is the enemy for well over a decade.

Things started to really deteriorate for him when the US unilaterally withdrew from the ABM missile treaty, which was then extended to the implementation of the so-called missile shield in Europe and rockets moving into Poland and Romania.

All of this has fed Putin’s paranoia. That was highlighted by one of the clauses in the Russian Foreign Ministry’s eight-point list of demands issued in December. The barely discussed Article three says: “The parties reaffirm that they do not consider each other as adversaries and maintain a dialogue.”  

By rejecting this list, the West, as far as Putin is concerned, affirmed that it sees Russia as an enemy, which is also confirmed, for Putin, by the exclusive nature of the European security set-up. If Russia is not included in Europe’s security infrastructure then it is the enemy.

But it goes beyond that, which is where the twisted reality comes in. Putin not only see the West as an enemy; he sees it as an existential threat. He seems to assume that Ukraine’s membership of Nato is inevitable, despite the fact that no membership has been offered, nor is it ever likely to be offered. He seems to assume that the appearance of Nato missiles on Ukraine’s soil is also inevitable and that the US will inevitably use that pressure to make demands on Russia at the point of a gun.

Nato Secretary-General Jens Stoltenberg has said repeatedly that Nato is a defensive organisation. The Kremlin has repeatedly pointed to the offensive Nato campaigns in Kosovo and Libya as evidence that this is not true and that has also fed Putin’s paranoia.

From Putin’s perspective then he is acting purely rationally to head off an inevitable existential threat to Russia before the inevitable attack can happen, before those missiles arrive in Ukraine.

The second distortion is that Putin apparently seems to believe that he has nothing to lose. The West is already the enemy. It is already hellbent on destroying Russia. The destruction of the Russian economy was going to happen anyway. All that Putin is doing is bringing the clash forward and doing it on his terms, where he hopes to control the situation rather than waiting until those missiles are in Ukraine and Russia has been dealt an unwinnable hand.

From this perspective Putin has not destroyed anything as far as he is concerned. He has just made an implicit threat explicit and he has prepared Russia with his fiscal fortress for a fight that was going to happen anyway.

Russia’s economy was always going to be wrecked by the West, but just now Putin is ready for the battle and seems to hope that Russia can just re-orientate away from the West and turn to Asia instead. This is certainly true for the gas business: Gazprom CEO Alexei Miller highlighted that Russia’s energy future lies in China in a speech last September.  

“There is no doubt that the Chinese market is the most dynamic and fast-growing one, and it shows simply unbelievable consumption growth rates every year,” Miller said. “Moreover, the annual volume of gas imports [to China] is expected to reach 300bn cubic metres as early as by 2023, in just 15 years. The figure is just staggering,” Miller told delegates at a Gazprom conference. For comparison, Gazprom currently exports some 200 bcm of gas to Europe each year, but only about 10 bcm to China.

How can Putin, in the name of making Russia great again, so blithely and thoroughly destroy its economy and condemn its people to a second-class life? That is an easy one. Putin is displaying a pure Soviet mentality: where the citizens are expected to make sacrifices for the good of the Motherland. bne IntelliNews has written about this before in the clash between the Moscow Consensus, which prioritises the state over the individual, versus the Washington Consensus that puts individual happiness at the centre of its ideology. The Chinese think the same way.

So yes, Putin has gone mad, but in a perfectly rational and understandable way. I personally believe that the solution to Putin’s dilemma was to concede that Russia lost the Cold War and that it is unable to prevent Ukraine joining Nato. The focus would then be on growing the economy and building up business with the West.

It would prevent the West ever attacking Russia, as it would simply lose too much money. The sanctions imposed on Belarus last year were some of the harshest ever, yet in 2021 trade with Belarus doubled. It's a version of the Golden Arches Theory of Conflict: “No two countries that both have a McDonald's have ever attacked each other.” (Although that rule has been proved wrong in the meantime in Serbia, and now here, as both Russia and Ukraine have McDonald's restaurants.)

When I was a boy, I belonged to a generation where Germany was still “Nazis” in the minds of most people. Yet a generation on, I am married to a German. My children are half German. And everyone in Emerging Europe wants to live in Germany (except the Estonians who all go to London), as Germany is not only the most prosperous country in Europe, it is also the de facto leader of Europe. That is the role Russia should have aspired to and it was already halfway there.  

The tragedy of Putin’s insanity is, as Laing said, “We are effectively destroying ourselves by violence masquerading as love.”