The Political Consequences of Russian Deindustrialization

Abstract

This chapter discusses the political consequences of Russian deindustrialization. By one important measure at least, Russia has successfully deindustrialized: a substantial portion of the labor force has shifted from the industrial to the service sector. Yet in doing so, Russia created a very peculiar labor market: defying predictions to the contrary, the steep decline of the Russian economy of the 1990s, rather than leading to mass unemployment, resulted in extreme flexibility in wages, which declined dramatically. The book demonstrates how workers matter, sometimes as rather passive constraints on Russian economic growth, but sometimes as actors with the potential to directly impact Russia's future. It assesses the argument that the fear of labor and social protest inhibits substantial economic transformation. Vladimir Putin's obsession with a Russian color revolution is quite likely misplaced; there is only limited evidence that labor or social protest in Russia might lead to “regime change,” at least in the short run.