"That is how it should be" said Mikhail Kurayev, a writer from St Petersburg who was himself shortlisted for four years running before rising to become one of the judges. "If our views coincided with the tastes of the general public, then there would be no need for us. We are here to be provocative."
Despite the crisis, Russia can still be heart breakingly romantic. On Thursday night, members of the intelligentsia came through swirling snow in fur coats to a modern art gallery, where they ate smoked salmon and fish in aspic and talked of higher things while they waited for the decision of the jury.
The 1998 laureate was Alexander Morozov, a bearded figure who both looks like and apparently took inspiration from Dostoyevsky. He received the US $12,500 prize, established in 1991, for Other People's Letters, a short novel he wrote 30 years ago but had to keep in his bottom drawer because of Soviet censorship. It tells the story of a man and wife who are unable to be together because of the old Soviet system of residence registration, comparable only to the Pass Laws in apartheid-era South Africa.
"The book is nowhere near the level of Dostoyevsky in artistic terms, of course," said the critic Dmitry Bak. "But he takes one of Dostoyevsky's themes, that of the suffering of little people".
Debate over the judges' decision immediately erupted in the hall. Mr Kurayev, red-nosed after drinking vodka with Yevgeny Sidorov, the former Culture Minister, declared in a stage whisper that he had been one of two judges who had broken ranks and voted for Irina Polyanskaya. Several critics, it seemed, would have preferred to see this younger writer win. "Hers was a more solid achievement" said Alla Latynina. "On the other hand, it's touching to see justice done at last to some of the realists from the 1960s.".
The more sentimental among the dinner guests were disappointed that the prize did not go to Alexandra Chistyakova, an old lady from Kuzbass mining region who only ever wrote one book, a diary of her working life.
Beyond the gallery where the glittering ceremony took place, ordinary Russian readers were complaining that the country's most popular modern writer had not been shortlisted at all. They meant Viktor Pelevin, who had captured a loyal audience which fantasies such as Life of Insects and Chapayev and Emptiness. Just as lovers of Beryl Bainbridge are perennially frustrated in Britain, so in Russia the reading public see their favourite repeatedly ignored. "The Booker always misses the target", said poet Tatyana Shcherbina. The Booker Prize had gone to the "wrong writer". God was in his heaven. All was right with the world.
All is far from right, of course, with the state of Russian literature and of the arts in general, and that despite the fact that Russia is now "free". State subsidies have dried up, artists are under a cruder commercial pressure than in the West and many, like millions of other workers who depended on the state, are undernourished, if not actually starving. Russian intellectuals are supposed to look gaunt, but it is no exaggeration to say that many of the thin black clad figures trying not to wolf their food on Thursday evening were enjoying the best meal they had had for weeks.
They are too proud and high-minded to complain of that. Rather, they lament the spiritual confusion of their country. The bad old Soviet days had one positive aspect: moral issues were clearly defined in black and white. Russians could feel good about themselves by risking KGB persecution and reading under the bed clothes banned books by writers such as Alexander Solzhenitsyn. "Like going to church, reading was a modest form of opposition," said Shcherbina.
Today, for those with money, there are other distractions, such as restaurants, whilst for the poor - scientists reduced to market trading, for example - there is only hard work from morning to night and little time to read. "Serious reading demands thought but I am too busy surviving," said one small businessman struggling against bankruptcy.
Thus the exhausted public has turned to easy reading by foreign authors such as Stephen King and Barbara Cartland, imported and translated often by cowboy publishers who pay no royalties. Or, since the August economic crash has complicated Russia's relations with the West, Russians read home-grown popular writers such as Alexandra Marinina, a former police woman who churns out thrillers.
The crisis in Russian literature, however, goes deeper than the debilitation or frivolity of the readers. "In these bewildering times, the writers themselves are at a loss ... They know that on the one hand they must be readable, on the other they must be faithful to the great Russian tradition," said Kurayev. He believes all that can be expected from Russian writers at present are short stories, sketches for great future novels. "The novel is a complicated form, the fruit of culture. Russians who have read War and Peace will not accept less. You British have the same problem in finding modern writers worthy of, say, Dickens. But Russia will again produce great novels. The glories of the 19th century will be repeated in the 21st."