Against all odds, Russian civil society seems to be gaining strength. The legacy of a revolution led from above is finally giving way to self-organized movements and NGOs. The most recent manifestation of civic organizing comes from Russia's nascent middle class, which is harboring hopes for the rule of law and responsive government.
Revolution from above
The consolidation of Russian civil society has been long coming, hindered only by the way the Soviet regime was overthrown. Former President Boris Yeltsin and his allies did not seize power from the old Soviet regime through social movement. In 1990-91, the Russian civil society that emerged during former Soviet leader Mikhail Gorbachev's Perestroika and the main democratic opposition force, Democratic Russia, was too resource-poor and weakly organized to manage either a peaceful or violent revolution from below.
The Russian proto-state was the real force behind Yeltsin's successful weakening and ultimately dismantling of the Soviet regime and state. Yeltsin used Russian law to separate the Communist Party apparatus from Russia's state apparatus, expand Russian state autonomy from the U.S.S.R.'s apparatus, and support the efforts of the Union republics to do so as well.
After Communists were removed from power, however, Yeltsin cancelled regional elections, appointed governors and dispatched presidential envoys to the regions to monitor regional government. He refused to form a party or convene early federal elections and instead brought entire Soviet institutions and millions of apparatchiks into Russia's state apparatus.
As in politics, in economics Yeltsin and his team preferred to work from above. They made fateful compromises with red directors and the few propertied members of the nomenklatura, who had used their ties to the old party-state to "privatize" state assets. Spontaneous privatization was followed by a fraudulent voucher privatization of small- and medium-sized businesses, insider privatization of large enterprises and loans-for-shares giveaways of major natural-resource export giants.
Property was redistributed among the old nomenklatura and a few select associates. These policies stunted the development of a vital party system and the formation of a broad-based market economy. The combination of limited polity and concentrated capital left society out of the bargain and incapable of rapidly giving birth to a strong middle class. To date, the middle class is estimated to be but seven percent of Russia's population.
Civil society emerges
Given this context and the oft-repeated claim that Russians are genetically passive, willing to knuckle under to the state and an iron fist, the civil society emerging a decade later is a testimony to the remarkable vitality of Russia's citizens. Five hundred people in Chelyabinsk blocked a railroad convoy bringing imported spent nuclear fuel to a local processing plant. Just last week, demonstrators picketed the Defense Ministry in Moscow, challenging its opposition to alternative-service legislation. The most encouraging sign is coming from the nucleus of a future middle class small business.
Small business rises
Over the last two months, small-business groups have been organizing, demonstrating or otherwise acting in defense of their interests. In late March, small businesses protested local tax hikes in Sochi, Ulyanovsk, Voronezh, Khabarovsk and Sakhalin. In Sochi, for example, some 16,000 local entrepreneurs staged a street rally to protest an income-tax hike on April 1 following the introduction of a single social tax by federal authorities at the beginning of the year. According to NTV, the majority of stores and markets in Sochi were closed so that owners could march. In Sakhalin, 400 businesses took to the streets in frigid winter weather.
In Ulyanovsk, Lenin's birthplace, businesses rallied against the city's increase in rents for floor space at the central market, from seven to 300 rubles per sq. meter. Storage space costs were raised, and the market will charge 130-190 rubles a sq. meter for utilities. Small businesses claim that, along with the income and social taxes they pay, their expenditures now exceed income. The demonstrations were held on the eve of Prime Minister Mikhail Kasyanov's arrival in the region to draw his attention to problems posed by excessive taxation for small businesses. A similar strategy was used in much larger demonstrations in Khabarovsk, which also called for Kasyanov's resignation.
In Tver, small businessmen went on strike to protest against the introduction of a unified social tax that would force businessmen selling self-made goods to pay 22.8 percent of the taxed sum. Businesses that rely on hired help would pay 35.6 percent. The strike evoked a response from the city deputy mayor, who blamed federal and regional authorities for the need to introduce the tax.
The small-business community seems to have grabbed the attention of federal authorities as well. On March 23, Prime Minister Kasyanov announced that the government will lower taxes for small businesses in order to stimulate entrepreneurship. The government plans to do away with the social tax for small business and present a bill that would combine the profit, sales, and property taxes into a single tax of five to 10 percent. Days later, President Vladimir Putin said the bill, sent to the State Duma on April 10, would apply the reduced taxes to businesses with 20 employees or less and revenues of less than 10 million rubles per year. Duma deputies Oksana Dmitrieva and Ivan Grachev, members of the Party for the Development of Entrepreneurship, have initiated an even more pro-business bill.
Small- and medium-sized businesses still account for but a third of all Russian businesses and 10 percent of the workforce.
However, should Russia's small-business groups successfully lobby for tax cuts when the correlation of political and social forces are stacked against them, the stage will be set for a surge of entrepreneurship.
Small-business activism may be the first swallow of a new springtime for Russia's bourgeoisie, so long maligned by intellectuals worldwide and in Russian culture in particular.
This is a real change in Russian society after 15 years, indeed 100 long years.
(Dr. Gordon M. Hahn is The Russia Journal's political analyst and a visiting research fellow at the Hoover Institution, Stanford University.)