Russia’s Potemkin Middle Class

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Veteran Russia correspondent Brian Whitmore, blogging at the Power Vertical:

We pretend to work — and they actually pay us!

For the past decade, Russia’s emerging “middle class” got a pretty good deal. The Kremlin was determined to create a stable and sizable cohort of happy, well-fed, and status-conscious consumers who would provide the regime with bedrock political support — or at least tacit acquiescence. They drove cool cars, sported the latest fashions, played with trendy gadgets, and ate in fancy restaurants. All the things that were reserved for the oligarchic class and their hangers on throughout the 1990s were suddenly available to an emerging bourgeois.  Russia’s magical new middle class had arrived.

And how did this new class earn the income to support their lifestyle? Well, there’s the rub. The whole thing was a mirage, subsidized by the state and Kremlin-connected corporations with the help of a seemingly endless flow of petrodollars.

And now that is all at risk.

I recently spoke to Boris Kagarlitsky, director of the Institute for Globalization and Social Movements, who described the arrangement as a twist on the cynical old Soviet saying describing the social contract under Communism: ‘We pretend to work and they pretend to pay us.’

Now we pretend to work and they give us money for real. Our social function is to consume, that’s our only social function…Nice work, if you can get it. And as the economic crisis continues, fewer and fewer people will be able to get it. And that, says Kagarlitsky, is when the trouble will really start for the regime:

This is bad news for the government. They created this middle class. They were breeding it for more than 10 years…It can survive only by being subsidized by the state and the corporations, heavily subsidized. As long as you can keep them subsidized they are ok. But once you stop subsidizing these artificial jobs for the artificial middle class, it is going to disappear. And that is a major source of a potential explosion.

In his 1969 samizdat text “Will The Soviet Union Survive Until 1984?” the dissident writer Andrey Amalrik wrote that Soviet society was divided into three classes: a ruling “bureaucratic upper stratum” that was “rotting and incapable of government-level creativity”; a “middle stratum” of professionals and intellectuals that was cautious, passive, and fearful of losing its limited privilege; and a lower stratum made up of workers that was potentially “a destructive force.”

Amalrik wrote that the system could only remain stable if the middle stratum grew. If it didn’t, then the other two classes would drag the system down.

Sergey Shelin at “Gazeta.ru” and Paul Goble at his blog “Window on Eurasia” have both noted that this 40-year-old text also applies to present-day Russia. Here’s Goble:

But what is striking for one who rereads him now, something even the many who know his title have not done, is just how contemporary his argument and even his specific phrases sound and how much they resemble the content of many articles in Russian newspapers, journals and websites.

Members of Russia’s prefab middle class have seen their living standards rise steadily over the past decade — and expected those improvements to continue indefinitely. How will they react when it becomes clear to a critical mass that this will no longer be the case?

Go around Moscow and ask people what they are doing. Take a poll at any restaurant. You will discover that most people cannot even explain what they are doing. If you ask about their jobs they will give their job title. And if you ask what the job is about they will not be able to explain this. In Moscow we have about one million people doing nothing. Getting nice salaries for doing nothing. That was part of the policy. They gave people money to consume…

I was speaking to a young man. He is 23. He just graduated from university. What’s his job? He’s an advisor. A 23-year-old advisor. An advisor to whom? To the director of his company. What is the company doing? It is giving advise. To whom? To advertising companies. The whole company will go to the dogs. It’s 300 people doing nothing. You get $4,000 per month for giving advise to people who will give advise to other people who will think about giving advise to another group of people.

9 responses to “Russia’s Potemkin Middle Class

  1. And, let us not forget that this fabricated middle-class, largely concentrated in Moscow and a few large cities, took their new money and used it to create a number of bubbles including the ridiculously overpriced Moscow housing market. As the government sponsored middle-class disappears, this will drag down housing prices in Moscow, leaving many people who thought they were rich because they owned a khrushevka in Moscow, with the realization that they are left with a pile of debt and a crappy apartment that is worth less and less every day.

    • The Russian “middle class” I suspect are folding like cheap suits in this crisis and I doubt they can easily be revised. They were all about getting stuff while disregarding the political context that would as easily take it away.

      Bad governments are the single biggest cause of poverty. It’s a lesson lost on Africa, most of SA and Russia. It’s a lesson that Americans will relearn in lesser dire straights too.

      • Pretty much. You also have to remember that roughly half of Russia’s “middle class” were government workers. As Russia’s deficit grows, they will eventually lead to either to Russian government workers being laid off or Russia printing more rubles which will lead to their salaries being worth less due to inflation. Lose-lose either way.

      • I absolutely agree with you penny that bad governments are the single biggest cause of poverty! That should be heard much more in the MSM than it is!

  2. From The Power Vertical:

    “In the confrontation, Nemtsov pointed out that if anyone’s national political career had been engineered by Berezovsky, it was Vladimir Putin’s. Berezovsky, of course, was part of the antidemocratic Kremlin cabal that greased Putin’s rise to power and ensured his election as successor to President Boris Yeltsin. He also was the brain behind the creation of the Unity party, which morphed into United Russia. One wonders if this information came as news to the activists holding the Berezovsky portraits.”
    http://www.rferl.org/content/blog/1618318.html

    Hey “I am Russian” etc. (I don’t remember all your nicknames), is it news to you?

    • Robert, I think Berezovsky was a first class weasel in his time as a Yeltsin lackey, but, he got burned very badly by Putin. Regardless of his motives at least he is putting his money to use in undermining Putin.

      • Boris Berezovsky is just one man. Only a russian would think that Berezovsky is somekind of a symbol of corruption and all other leaders are saints.

  3. “The upper stratum,” in Amalrik’s view, was “rotting and incapable of government-level creativity. ‘The regime did not want either ‘to restore Stalinism,’ ‘persecute representatives of the intelligentsia,’ of ‘provide fraternal help’ to those who asked that of it. Instead, “it only wants that everything will be as it was before.”
    The “middle class” was cowardly and bureaucratized and so intellectually passive that “the success of a democratic movement based on this stratum seems to [Amalrik] extremely problematic,” even though it has been the rise of middle classes elsewhere that has opened the way to modernity and freedom.
    And for Amalrik, “the popular masses are a destructive force.” If the economy slows, they could explode, even though he was confident they lacked the ability to organize themselves. Clearly, Amalrik suggested, such a society will not be able to withstand the first serious test, a test that he wrongly assumed would arise from a drawn-out war with China.

    His observations with the exception of China as an immediate threat then, but, bear in mind they are a future threat, holds true today.

    There is no “middle class” of any serious consequence in Russia. After all of these years since the USSR imploded there are still no serious private property rights. You can’t have a vigorous middle class without that. Starting a small business in Russia is suicide as you’ll be shaken down by the local Sopranos.

    The rural and the blue collar Russians turn to vodka rather than oust their siloviki overlords.

    The intelligentsia and the ROC saddled up with Putin years ago. Basically, Russia is a masochistic dump where they eat their own.

    Russians actually would do better with Chinese overlords. They’d learn a better work ethic and gain a fairer playing field for the ones that are industrious.

    As Russians have rejected the free capitalist and civil society model of the west they might as well go with overlords that are more benign to them.

    • Actually Penny, you may be closer to glimpsing the future than you think. Remember, history likes to repeat itself, especially for those who don’t know it (who said that?!) Since the russians learned their basics from mongol overlords and never really tossed off the yoke of servitude, it would not be that far fetched for them to submit, by what ever means, to a new overlord. Be they mongol, chinese, or whomever.

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