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Perspectives on Entrepreneurship and Privatization in Russia: Policy and Public Opinion

Published online by Cambridge University Press:  27 January 2017

Lynn D. Nelson ,
Lilia V. Babaeva  and
Rufat O. Babaev
Lynn D. Nelson
Affiliation:
Department of Sociology and Anthropology, Virginia Commonwealth University
Lilia V. Babaeva
Affiliation:
Institute of Sociology, Moscow
Rufat O. Babaev
Affiliation:
Department of Sociology and Anthropology, Virginia Commonwealth University, and the Institute of Sociology, Moscow
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Extract

In 1991, the Supreme Soviets of both the Soviet Union and the RSFSR approved legislation that was a decisive departure from the tentativeness about individual initiative that had characterized the Gorbachev era until then. Between January and July, a series of laws was enacted which pointedly endorsed entrepreneurship and outlined aspects of a program to remove a broad spectrum of enterprises from state control. Scholarly analysis, however, highlighted a potential obstacle to the incipient transition toward a market economy: public opinion. During the period that the 1991 laws were being enacted, most Soviet and foreign scholars studying the subject were maintaining that the Soviet people generally opposed private enterprise and that historical suspicion about capitalism would probably make the transition away from state ownership particularly difficult.

Type
Articles
Information
Slavic Review , Volume 51 , Issue 2 , Summer 1992 , pp. 271 - 286
Copyright
Copyright © Association for Slavic, East European, and Eurasian Studies. 1992

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References

Research for this article was supported by a grant from the International Research and Exchanges Board (IREX) with funds provided by the Andrew W. Mellon Foundation, the National Endowment for the Humanities and the US Department of State; a faculty research grant from the Virginia Commonwealth University Grants-in-Aid program; and funds from the Institute of Sociology, USSR Academy of Sciences, Moscow. None of these organizations is responsible for the views expressed in this paper.

1. Perspectives of scholars which diverge from this pattern typically do not concentrate explicitly on entrepreneurship and privatization. However, a few works concerned with recent social developments could be seen as having implications for privatization and entrepreneurship that contrast with the characteristic view we identify here. See, for example, Ruble, Blair A., “The Social Dimensions of Perestroyka ,” in Milestones in Glasnost and Perestroyka: Politics and People, ed. Hewett, Ed A. and Winston, Victor H. (Washington, DC: The Brookings Institution, 1991), 91–103 Google Scholar; and Frederick Starr, S., “Voluntary Groups and Initiatives,” in Soviet Update: 1989-1990, ed. Jones, Anthony and Powell, David E. (Boulder: Westview Press, 1991), 97–116.Google Scholar

2. Zaslavskaya, Tatyana, The Second Socialist Revolution: An Alternative Soviet Strategy (Bloomington: Indiana University Press, 1990), 178 Google Scholar.

3. Arkadii Vol'sky, “The Middle Road to the Market,” Delovye liudi/Business in the USSR 11 (April 1991): 54.

4. Aleksandr Zaichenko, “We Are Doomed to the Market,” Delovye liudi/Business in the USSR 12 (May 1991): 13.

5. Zaslavskaya, The Second Socialist Revolution, 156.

6. Aslund, Anders, Gorbachev's Struggle for Economic Reform: The Soviet Reform Process, 1985-88 (Ithaca: Cornell University Press, 1989), 171–72Google Scholar (emphasis added).

7. Jones, Anthony and Moskoff, William, Ko-ops: The Rebirth of Entrepreneurship in the Soviet Union (Bloomington: Indiana University Press, 1991), 105–109, 125–26.Google Scholar

8. Jones and Moskoff, Ko-ops, 126.

9. Ibid., 127.

10. Heidi Kroll, “Monopoly and Transition to the Market,” Soviet Economy 7 (April-June 1991): 167-68 (emphasis added).

11. Ibid., 167.

12. Vladimir Popov and Douglas Purvis, “Should the West Give Economic Aid to Gorbachev?” Delovye liudi/Business in the USSR 13 (June 1991): 64.

13. See, for example, Nove, Alec, An Economic History of the U.S.S.R. (London: Penguin Books, 1989), 8 Google Scholar; and Guroff, Gregory, “The Red-Expert Debate: Continuities in the State-Entrepreneur Tension,” in Entrepreneurship in Imperial Russia and the Soviet Union, ed. Guroff, Gregory and Carstensen, Fred V. (Princeton: Princeton University Press, 1983), 205.Google Scholar

14. See Ball, Alan M., Russia's Last Capitalists: The Nepmen, 1921-1929 (Berkeley: University of California Press, 1987.Google Scholar

15. TsK KPSS, Resheniia partii i pravitel'stva po khoziaistvennym voprosam (1985-1986), chast’ vtoraia, “O merakh po usileniiu bor'by s netrudovymi dokhodami” (15 May 1986, Moscow: Izdatel'stvo politicheskoi literatury, 1988), 280-85.

16. See Joseph S. Berliner, “Organizational Restructuring of the Soviet Economy,” inGorbachevs Economic Plans, volume 1. Study Papers Submitted to the Joint Economic Committee of the Congress of the United States (Washington, DC: US Government Printing Office, 1987), esp. 79.

17. It not only specified that private activity was to be part-time only—and not an alternative to state sector work—but also prohibited the use of hired labor and required that participants obtain licenses (Verkhovnyi Sovet SSSR, Resheniia partii i pravitel'stva po khoziaistvennym voprosam (1985-1986), “Ob individual'noi trudovoi deiatel'nosti” [19 November 1986; Moscow: Izdatel'stvo politicheskoi literatury, 1988], 489-99). These licenses were often difficult to obtain (International Monetary Fund, The World Bank, Organisation for Economic Co-operation and Development and European Bank for Reconstruction and Development, A Study of the Soviet Economy, volume 1 [Paris: OECD, 1991], 22) and, because they were valid for only five years, they underscored the long-term uncertainty of non-state enterprise in the Soviet Union.

18. Sovet Ministrov SSSR, Sobranie postanovlenii PraviteVstva SSSR (otdel pervyi), “O sozdanii kooperativov po bytovomu obsluzhivaniiu naseleniia,” vol. 11, art. 43, 1987, 227-32.

19. Vedomosti Verkhovnogo Soveta SSSR, “O kooperatsii v SSSR,” vol. 22, art. 355, 1988.

20. “O predpriiatiiakh i predprinimatel'skoi deiatel'nosti,” Ekonomika i zhizn’ 4 (January 1991): 15, 17.

21. Sobranie postanovlenii PraviteVstva SSSR (otdel pervyi), “Ob izmenenii i priznanii utrativshimi silu reshenii Pravitel'stva SSSR v sviazi s Zakonom SSSR ‘Ob obshchikh nachalakh predprinimatel'stva grazhdan v SSSR',” vol. 24, art. 91 (Moscow: Upravlenie Delami Soveta Ministerstv SSSR, 1991), 386.

22. “Ob osnovnykh nachalakh razgosudarstvleniia i privatizatsii predpriiatii,” Izvestiia 188 (8 August 1991): 3. These April and July laws were only two of several legislative acts during this period which were designed to encourage privatization.

23. In the first stage, which will encompass the first nine months of 1992, the plan is to extend privatization to retail shops, canteens, food industries, service enterprises, construction and light industries ( “Nachalis’ torgi na 92 billiona,” Kommersant 1 [30 December 1991-6 January 1992]: 2).

24. Natalia Kalinichenko, “Goskomimushchestvo o privatizatsii: i vse-taki ona vertitsia,” Kommersant 9 (24 February-2 March 1992): 4.

25. Lynn D. Nelson, Lilia V. Babaeva and Rufat Babaev, “Entrepreneurship and Privatization in the Soviet Union during the Gorbachev Era” (monograph in progress).

26. Ibid.

27. See, for example, several articles in Michael Peter Smith and Joe R. Feagin, eds., The Capitalist City (New York: Basil Blackwell, 1987).

28. Lane, David, Soviet Society under Perestroika (Boston: Unwin Hyman, 1990), 232–37.CrossRefGoogle Scholar

29. See Hess, Beth B. and Markson, Elizabeth W., eds., Growing Old in America: New Perspectives on Old Age (New Brunswick, NJ: Transaction Books, 1985).Google Scholar

30. Lilia V. Babaeva and Lynn D. Nelson, “Contrasting Perspectives Regarding Entrepreneurship and Privatization among Men and Women in Russia,” in Lilia V. Babaeva and Lynn D. Nelson, eds., “Russian Women at the End of the Soviet Period: Anxiety and Hope” (submitted for publication).

31. The list used was from Gosudarstvennyi komitet SSSR po statistike, Naselenie SSSR 1989: statisticheskii ezhegpdnik (Moscow: Finansy i statistika, 1990).

32. 40 percent of specialists with higher education were sampled, 40 percent of clerks and secretaries without higher education, 25 percent of skilled workers and 25 percent of unskilled workers.

33. The question of non-response bias is a thorny problem which is widely discussed in the literature. Earl Babbie summarizes the general view of survey researchers that a 50 percent rate is generally considered adequate ( Babbie, Earl, Survey Research Methods [Belmont, CA: Wadsworth Publishing Company, 1990], 182 Google Scholar). Vladimir Shlapentokh addresses specific problems of survey research in the former Soviet Union and notes that response rates there are typically “substantially lower” than in the United States ( Shlapentokh, Vladimir, The Politics of Sociology in the Soviet Union [Boulder: Westview Press, 1987], 197 Google Scholar). We have compared basic socio-demographic characteristics of our sample with population distributions (see “Entrepreneurship and Privatization in the Soviet Union during the Gorbachev Era’) and found the sample satisfactory on the dimensions we examined.

34. This “indirect” approach, in which respondents are asked to assess the attitudes of their neighbors instead of stating their own attitudes, is recommended by Shlapentokh who believes that, perhaps in the Soviet Union even more than in the west, it helps to lessen the likelihood of responses which fit perceptions about social desirability(The Politics of Sociology in the Soviet Union, 218-19).

35. The Russian cities studied were Magnitogorsk, Naberezhnye Chelny and Syktyvkar. We also found very similar results from four Ukrainian cities (Odessa, Donets'k, Symferopil’ and Kharkiv).

36. This also holds true for unskilled workers overall, although only 44 percent of the 42-49 age category voiced this opinion.

37. Jones and Moskoff, Koops, 127.

38. “Speculation” does have negative connotations among many Soviet people. When asked to choose three words from a list of 12 “which most closely resemble the meaning of the word ‘entrepreneur, '” only 1.8 percent of our sample chose the word “speculator.” This is not a simple issue, however; and we recognize that many people in our sample may not fully comprehend the role of “middlemen” in a market economy.

39. Babaeva and Nelson, “Contrasting Perspectives Regarding Entrepreneurship and Privatization among Men and Women in Russia.”

40. Robert Faulkner, “Coming of Age in Organizations,” Sociology of Work and Occupations 1, no. 2 (May 1974): 131-74; cited in David A. Karp and William C. Yoels, “Work, Careers, and Aging,” in Growing Old in America, 277.

41. Barbara Lee and John Nellis, “Enterprise Reform and Privatization in Socialist Economies,” World Bank Discussion Paper 104 (Washington, DC: The World Bank, 1990), 24.

42. Nygzar Betaneli, “Kogda Rossiia sumeet preodolet’ krizis?” Izvestiia 28 (3 February 1992): 2. Several other surveys reported in February and March using various data collection methods have found similar public opinion trends.

43. Moskovskie novosti 9 (1 March 1992): 2.

44. The answer “never” was given by 16.9 percent and 27.4 percent responded, “It's hard to say.” There were significant variations by age and job type, with younger people and people with higher-status jobs tending to believe that change would occur more quickly.