Socioeconomic Transformation in Russia: Where is the Rural Elite?

Abstract

MARKET REFORMS IN CONTEMPORARY RUSSIA have spawned a rapid social transformation in the urban sphere. The departure from Soviet-era drabness of dress and life from the late 1980s is nothing short of startling. In larger Russian cities one finds fine dining, expensive cars, cellular phones, night clubs and high fashion clothes. As a result, urban Russia has been transformed, fostered by foreign investment, particularly in Moscow and St Petersburg. Analysts agree that during this transformation stratification in Russian society has widened significantly.' In particular, two new urban elites have emerged. On the one hand, a new political elite displays characteristics different from its Soviet predecessor, based upon age, type of education and past party affiliation.2 The second new elite is a business elite, based upon a concentration of wealth and property ownership.3 This business elite consists mainly of managers of enterprises, bankers and urban entrepreneurs who benefited from the rapid privatisation of former state enterprises.4 Meanwhile, the vast majority of the workforce-which numbered 72.5 million in 1998-earns less than $3000 a year (wage earners in the agricultural sector are among the lowest paid in society, earning about one-third the salary of the average industrial worker). While analysts have focused their attention on the rise of an urban elite and to a lesser extent an urban middle class,5 the rural sector has been virtually ignored. Scholars who study rural Russia have instead explored at length the difficulties of the private farming movement and the myriad problems encountered during land and agrarian reforms. No studies, however, have explicitly analysed the rise of a rural elite or the factors affecting its development. Kitching has attempted to determine the sources of rural capitalism, but his analysis focuses on large farms and not on the development of a social class.6 The rise of a rural elite in contemporary Russia is critical because a rural elite is a key component to transform the rural economic system. The emergence of a new rural elite is economically important because such strata have historically provided the impetus for wider economic transformation. Without a rural elite, Russian agriculture is not likely to become competitive in the global economy. Without the engine for modernisation provided by a new rural elite, market forces will not be able to transform either farm operations or rural social structure, and Russian farms will continue to resemble Soviet-era service communities for a demographically old population.