Tatiana Tolstaya’s 2000 novel The Slynx unfolds in a post-apocalyptic Russia that has somehow returned to a medieval condition in the aftermath of an unspecified disaster known simply as The Blast. The mysterious catastrophe has not only wiped away nearly all traces of the preceding civilization, it has inflicted strange mutations on everyone, known in the book as Consequences. Not all Consequences are the same: one person has gills, another has a tail, a third has the ability to breathe fire; each is alone in their deformity or new capability. This is a powerful metaphor for the post-Soviet experience, capturing the world-historical bewilderment and dislocation that followed the collapse of the ussr—the proliferation of unfamiliar figures in the social landscape, from millionaires to vagrants, as well as the atomization of collective identities into disparate, individual destinies. But in one crucial sense it is misleading: the new, post-Soviet Russia was not built on a tabula rasa, it emerged from within the carapace of the ussr—inheriting many of the preceding order’s peculiarities, transforming them or exaggerating them into new shapes. This prolonged reforging of Russian society could be divided into three phases, the first running from 1991 to the rouble crisis of 1998; the second from 1998 to 2009; and the third setting in when the effects of the global economic and financial crisis began to be felt in Russia.

By the mid-1990s, then, Russia visibly possessed an elite marked by fabulous extremes of wealth, which had acquired not only prized sections of the Soviet industrial base, but also assets in banking, transport, construction, as well as developing media empires that would forward their interests in the realm of ideology. The richest of the Yeltsin-era oligarchs were relatively heterogeneous in their social origins—the sons of engineers, academics and teachers as well as of Party functionaries. footnote 26 Mostly not Muscovites, many of them laid the bases for their fortunes through cooperatives formed in the late 80s, while others made use of Komsomol connections. Looking beyond the oligarchs to the new class of post-Soviet owners as a whole, however, the continuities with the Soviet-era political and managerial elite were far stronger—as with the post-Communist political class, the bulk of which was drawn from the ranks of the cpsu. Kryshtanovskaia distinguishes between a political elite and what she terms a biznes-elite; in 2001, 77 per cent of the former, and 41 per cent of the latter, came from the nomenklatura. footnote 27 It is worth noting that these two groups combined are considerably smaller than the old nomenklatura. Kryshtanovskaia numbers the upper echelons of Party and state at the close of the Soviet era at 2,500 people, whereas the 1993 Yeltsin cohort numbered only 778 people; that is, the ranks of the political and economic elite, already far from inclusive, narrowed considerably after 1991, while their material advantages over the rest of the population rose vertiginously. footnote 28

Further state assets were put on the block in 1994–97; but perhaps the dominant features of this second stage were an intensifying struggle over already privatized assets, and the creation of private enterprises by state functionaries in the realms for which they were responsible—pod sebia, ‘under oneself’. At the regional level, second-tier industrial groups with close ties to local governments—often of a nepotistic kind—began to consolidate themselves into conglomerates. On the national plane, the oligarchs who had emerged in the preceding years extended their reach—notably through the infamous ‘loans-for-shares’ deals of November–December 1995, in which the Yeltsin government held rigged auctions for stakes in several oil and metals companies: yukos, Sibneft, lukoil, Surgutneftegaz, Norilsk Nickel, Mechel. These were acquired for a fraction of their value by figures such as Vladimir Potanin, Boris Berezovsky, Mikhail Khodorkovsky and Mikhail Prokhorov; the first two entered the cabinet after Yeltsin won re-election in 1996, suggesting the government too had been partly privatized.

Despite its seemingly broad scale, the privatization wave of 1992–94 ‘specifically left most of the valuable property in the country to be privatized through channels that could be closed to most Russians’. footnote 24 Notably, the enterprises formerly run by the Soviet fuel and energy ministries—including such behemoths as Gazprom—were sold off or turned into ‘joint-stock companies’ by presidential decree as of mid-1992. These opaque transactions made the fortunes of a handful of oligarchs in the energy sector; a pool of magnates effectively created by state fiat, away from democratic scrutiny. Something similar was taking place, more unevenly and on a smaller scale, at the regional level, as local governors—appointed by Yeltsin until elections were introduced in 1996—disposed of state assets under their purview. The picture across the 80-plus federal components of Russia was highly complex, embracing a range of scenarios from enthusiastic free-market reform to the installation of personalized patrimonialism. But here too, there was a top-down process of elite creation: ‘the governor in effect “formed the elite” by overseeing the privatization process, serving as a midwife to the creation of financial-industrial groups, selecting new owners and managers’. footnote 25

The initial stage in this project was the mass privatization drive of December 1992 to June 1994, in which some 16,500 enterprises, employing two-thirds of the industrial workforce, were sold off through ‘voucher auctions’. The majority of these nominally transferred half the shares to the workers, but the dominant position of industrial directors meant that in practice, the auctions ‘allowed factory managers to privatize their enterprises without losing control over them’. footnote 23 In agriculture, supply and procurement were privatized, but farm directors obstructed Yeltsin’s plans for full privatization of land—announced three weeks after the shelling of parliament—since these would generally involve breaking up large farms into smaller ones. Though achieved by opposite means, the outcome in agriculture was similar to that in industry: managerial control was strengthened, and turned into de facto or even de jure ownership of the land. Privatization of the retail sector also proceeded apace as of 1992, creating tens of thousands of small business owners; but it moved more slowly in housing, since it was not the federal centre, but regional governments or enterprises that held title to buildings. Here the pace depended largely on the fate of local industry and the configuration of local politics, leaving the housing market as a whole fragmented and poorly developed for many years.

The emergence and consolidation of this elite could not have taken place without the decisive intervention of the state. Yeltsin’s project of capitalist transformation was initially based on legislation passed by the elected parliament; but when the legislature offered resistance, Yeltsin brought tanks onto the streets to resolve the deadlock, bombing the Supreme Soviet into submission in October 1993. Two months later, he rammed through a hyper-presidentialist constitution, approved by a referendum marked by widespread electoral fraud; United Russia’s recent efforts pale by comparison with this rigging of the entire juridical basis for the Russian state. Constitutional and democratic norms were evidently secondary considerations for the Yeltsin administration; the primary one was the creation of a stratum of private property-owners.

Within the tumult of the 1990s, an unambiguous process of class formation was taking place, from the top down. The principal mechanism that drove it was the programme of privatization carried out by the Yeltsin government, under tutelage from imf officials and us advisors, which effected a massive transfer of state assets into private hands. As of 1987, a ‘latent’ privatization had been taking place in the ussr, centred in the realm of finance and led by the Party’s youth wing, the Komsomol. footnote 22 But the private fortunes that began to be amassed during perestroika were still eminently dependent on political connections—a provisional wealth accorded by the state, rather than a form of patrimony that could be guaranteed beyond any individual’s life-span. The transition to capitalism offered the Soviet elite the opportunity to convert power into property—and so to become a bona fide possessing class.

The Centrifuge

Alongside the creation of a new elite, a process of mass pauperization unfolded—as if the country’s population were being separated out by centrifuge. The context in which Yeltsin’s privatization programme was conducted was one of economic catastrophe and social crisis for the vast majority of the population: gdp contracted by 34 per cent from 1991 to 1995—a greater decline than in the us during the Great Depression—while over the same period, average real wages dropped by more than half and employment was significantly reduced, in some sectors by as much as 20 per cent. The crime and murder rates doubled in the early 90s, and public health deteriorated with incredible speed: male life expectancy, for example, shortened by five years between 1991 and 1994.footnote29 The poverty rate, already rising as the ussr neared collapse, soared after the freeing of prices in January 1992: an ilo study from that year claimed that as much as 85 per cent of Russia’s population now found themselves below the poverty line. The answer to this problem was not, of course, to change the policies responsible, but to alter the measure of poverty. Once a new definition was devised, the poverty rate was immediately reduced to around 36 per cent.footnote30

The depth of the social crisis was amplified by the dissolution of the Soviet system of provision. Some benefits—housing, childcare—continued to be provided through the workplace, though this depended greatly on the fate of the enterprise itself, and on the inclinations of the new managers and owners. But the central government effectively abdicated responsibility for the welfare, education and health-care systems, increasingly delegating their provision to the local level; by the mid-90s, ‘85 per cent of social spending came from regional and local budgets’.footnote31 The result was to consolidate and deepen existing disparities between regions, adding a marked geographical component to the process of socio-economic separation of the population. Moscow and St Petersburg, along with regions possessing resource endowments or access to export markets, could afford to maintain a semblance of social provision that was beyond the reach of depressed industrial regions or the poor, non-ethnic Russian fringes of the country—for example the North Caucasus, or the republics of Tuva and Buryatia on Siberia’s southern edge.

It is against this backdrop of social crisis and accelerating spatial differentiation that huge inequalities in income rapidly emerged. According to World Bank data, in 1988 Russia had a Gini coefficient of 0.24, which would place it in the company of, say, Sweden; by 1993, the figure stood at 0.48, putting it on a par with Peru or the Philippines. These numbers are for officially declared income, and so surely understate the reality by some distance. The existing wage gap between socio-occupational groups widened: by 1994, top managers on average earned five times as much as skilled urban workers, and ten times as much as unskilled rural ones. This socio-occupational dispersion, however, leaves aside the dramatic differentiation taking place ‘not between but within occupations’, according to economic sector.footnote32 Relative to the average wage in the economy as a whole, workers in the oil and gas sectors made significant gains between 1991 and 1994, whereas those in agriculture, education, culture and above all science lost out (see Table 3).

The process of ‘transition’ also amplified existing gender imbalances. This was in part because those sectors and occupational strata dominated by women were among the worst affected by cuts in employment, drops in real wages or serial non-payment of wages. Moreover, while women had been under-represented in the upper echelons of the Party and industrial management, the elimination of Soviet-era quotas sharply reduced their presence—from 30 per cent to 8 per cent, for example, in the case of the legislative apparatus.footnote33 The new world of biznes was even more strongly male than the Soviet nomenklatura. But perhaps most striking was the mass withdrawal of Russian women from the labour force: two million women left employment between 1991 and 1995, accounting for an estimated 50 per cent of the labour ‘shed’ in this short period. Though some opted to retire, on the whole the choice was not freely made, but was rather ‘a reflection of declining economic opportunities and available child-care services’.footnote34 Moreover many women, already bearing the main burden in the home, were now pushed into becoming the main breadwinners by engaging in petty trade.

Indeed, petty traders were among the most visible of the new social categories that emerged in the 1990s. There was a sudden proliferation of street-vendors, from roadside kiosks to pensioners standing in sub-zero temperatures to sell cigarettes or their veteran’s medals; and there were shuttle-traders or chelnoki, who would travel long distances to buy goods and then resell them locally. Petty trade was a crucial source of income for many people—not only due to widespread unemployment, but also because so many went unpaid in their ‘main’ job, as the Yeltsin government implemented an imf-decreed tight monetary policy that starved the economy of cash. By the autumn of 1996, according to one measurement, some 60 per cent of employees were owed back wages; with payment arrears sometimes reaching six months, many people were obliged to hold two or more ‘jobs’.footnote35 Yet most ‘second’ jobs did not provide sufficient income or security to justify abandoning one’s primary employment; thus many of the new categories overlapped with existing ones.

However, one expanding category that was clearly demarcated from the old ones was that of the ‘dispossessed’, which included the unemployed, ethnic Russian refugees from other ex-Soviet republics, demobbed soldiers, the disabled, vagrants, the homeless, among others.footnote36 Pensioners were perhaps the most visible, and piteous, of the new poor in Russia: veterans of war and industry reduced to penury by the combination of spiralling prices and tight state spending produced by ‘shock therapy’. By the end of 1992, 40 per cent of pensioners were receiving monthly payments less than half the declared subsistence level.footnote37 In addition to the differentiations noted above, a chronological fractioning of the population was taking place, as the elderly generations were written off by the country’s new rulers. It is hard not to feel the chill emanating from the words of Boris Nemtsov, then first deputy prime minister, who stated in the spring of 1997 that ‘Russia must enter the twenty-first century only with young people’.footnote38

The creation of new social groups unfolded in parallel with a sweeping process of ‘unmaking’ of the Soviet world. This applied especially to the industrial workforce, who experienced a speeded-up version of the deindustrialization that has engulfed rustbelt areas across much of the globe. The Soviet variant of this process was distinguished not only by its speed, however, but by the specific character of the Soviet system, in which, as noted earlier, the enterprise was the ‘primary unit’ of society. The loss of work thus not only involved a loss of income, but also of the whole web of connections that bound one to a community and, equally or more importantly, secured one’s housing and access to social services.

The quiescence of Russian labour has long puzzled outside observers: why this relative passivity from workers who had only a short time before—notably the coal miners in 1989–91—played such a prominent and active role?footnote39 The dissolution of the material bases of their collective existence clearly played a decisive role—unemployment and atrophying industry undoing the web of the old relations of production. The world-historical disorientation occasioned by the Soviet collapse was surely another crucial factor: the disintegration of a state that represented, however nominally, the interests of the workers as against those of global capital would have been a severe blow to the self-confidence of the class as a whole.

Another, less immediately apparent part of the answer might also lie in the specific mode of labour’s integration into the Soviet system—the paternalistic, cellular structure centred around the enterprise. Amid the turbulence of market reform, workers and management alike found common cause in preserving the enterprise, and hence maintaining production. The trade unions, which generally continued to operate as under the Soviet system—focusing on the smooth running of production rather than on representing the workers per se—played a key role here, since they retained a large degree of control over access to housing, childcare and other benefits. Most workers could not possibly forego these essentials, and hence were willing to accept a reduction in hours or salary if it would preserve their place in the labour collective. Rather than laying them off, many firms instead kept workers on the books, part-time or merely nominally. The result was that unemployment levels in Russia in the 1990s, though high compared with the past, were low compared to other East European countries: 9 per cent in 1995, as against figures of 15 per cent for Poland or 17 per cent for Lithuania. Underemployment, hidden forms of unemployment and the dual work patterns noted earlier became very widespread, and protest was subsumed by the imperatives of survival.

If the end of Communism served to atomize and demoralize the Soviet working class, its impact on the intelligentsia was no less profound. The bulk of the country’s intellectual and artistic elite had been prominent supporters first of Gorbachev’s perestroika, as presaging a liberation from the dead weight of cpsu orthodoxy, then of Yeltsin’s shock therapy—including his assault on the parliament in 1993—as necessary steps on the road to ‘democracy’ and ‘civilization’.footnote40 These commitments ensured Yeltsin a degree of support at striking variance with the harsh 1990s experience of the intelligentsia as a whole, which, defined more broadly to include the vast Soviet scientific and technical apparatus, suffered a dramatic form of déclassement under the new capitalist dispensation. The strategic-military purposes underpinning many scientific institutes and programmes evaporated with the end of the Cold War, and basic funding for research in all fields dried up, in many cases disappearing altogether. Thousands of academics and technical personnel were thrown into unemployment, or else continued their work on minimal or non-existent resources, moonlighting as taxi drivers or shuttle traders to make ends meet.

The downward lurch after 1991 was in that sense especially strong for this layer, both objectively and subjectively: having helped to turn an agrarian empire into a global superpower—complete with nuclear arsenal, space programme, advances in astrophysics and cybernetics—they found themselves marking time amid its ruins. The cultural sphere is often able to function on meagre means and spring back from crisis quickly, as the dynamism of Russian art and literature of the 1920s proved. The experience of the 1990s, however, showed that scientific and technical foundations built over generations can be eroded with dramatic speed. Russia’s losses in this realm seem thus far to have proved irrecoverable, despite the economic rebound that set in at the turn of the new century.