Hopes that President Vladimir Putin would use this week's state of the union address to clarify where Russia is heading were frustrated. His speech had a little something for everyone, leaving liberals and nationalists alike grasping for their favorite sound bite. It is tempting to look to the case of "oligarch" Mikhail Khodorkovsky for some indication, as a guilty verdict against him is virtually a foregone conclusion.

The real question is whether Mr. Putin understands that the absolute control of Russian society that he seems to demand is incompatible with the requirements of a modern economy. Thus far, the answer appears to be no.

Liberals and free market enthusiasts will applaud Mr. Putin's declaration that his main task is "the development of Russia as a free and democratic state." He minced no words, noting that "ensuring human rights and freedoms is critical both for the development of the economy and for the social and political life of Russia." He criticized Russian bureaucrats, calling them "an isolated and sometimes arrogant caste that sees the civil service as a kind of business," and he called for the rule of law to check the unbridled power of government, saying "tax agencies have no right to terrorize business."