Russian President Vladimir Putin, some in Moscow are fond of saying, is like Ricky Martin – you can’t tell if he’s gay or not. For Putin, the question revolves around his political orientation – whether at heart he’s an autocrat or a democrat.

Unlike Ricky, this is no matter for the gossip pages, for we speak of the man at the helm of a country that spans ten time zones. Some argue that his career as a KGB agent bodes ill for the cause of democracy, while others recall his progressive leadership as vice mayor of St. Petersburg.

But then he does something that tilts the scales in favor of the pessimists. On Oct. 25, Putin arrested Russia’s leading businessman and oil magnate, Mikhail Khodorkovsky . The Kremlin’s side of the story is that it nailed a fraudulent robber baron who skimped on his taxes. While this may have some truth to it, it doesn’t explain the need to have masked gunmen storm his plane at 5 a.m. to inform him of the charges.

Rather, this is but the latest chapter in a decade-long confrontation between the Kremlin and the superrich “oligarchs” for control over the new Russia and its course of reform. The oligarchs are those newly minted billionaires who have come to symbolize the post-Communist Wild West and its enormous moneymaking opportunity as the elite divvied up the remains of the vast Soviet carcass. They are certainly no angels, for the way in which they created their vast business empires is a cutthroat tale of murder, intrigue, corruption and blackmail sure to one day find its way to Hollywood.

But Khodorkovsky was not arrested for economic crimes. His crime was to meddle in politics in a way that threatened Putin. The precedents here are the other two oligarchs who challenged Kremlin policy – Boris Berezovsky and Vladimir Gusinsky – both of whom have since been banished from Russia. Khodorkovsky’s seizure is best understood not as the arrest of a corrupt Kenneth Lay, but of an overambitious Rockefeller.

These incidents reveal a larger pattern of increasingly authoritarian behavior. For instance, since May 2000, the Russian state has taken control over one TV station after another – the last remaining independent channel was appropriated in December – leaving Russian’s entire broadcast media in the Kremlin’s hands.

Putin – like Peter the Great before him – has committed himself to leading Russia on the reformist path by adopting Western values and institutions. He understands that if you want Western wealth and investment, you have to play by Western rules. Hopefully, he has by now realized that you can’t just arrest someone you find politically threatening, because it frightens the people upon whom your economy depends. His brashness has already sorely damaged confidence in the government’s respect for private enterprise and the rule of law, triggering capital flight and sending the Russian stock market south.

Russia has suffered a millennial history of centralized autocratic rule, and now all eyes are on Putin to see if he’ll steady Russia on the rocky path of reform or revive despotic tradition. The challenge in his quest to build a “great Russia” is to resist the temptation of guarding his own position at the expense of democratic and free-market reform.

There’s a joke circulating in Moscow these days: “We know Putin prefers the Korean model of economic development. We just don’t know which Korea he has in mind: the north or the south.” That joke, needless to say, just got a little bit less funny.

Joey Tartakovsky is Daily Nexus columnist.