Staunton, October 30 – Fifty years ago, Michael Harrington described the alternative universe of the poor in the United States in his classic and transformative “The Other America.” Now, Russian researchers are pointing to the re-emergence of what might be called “the other Russia,” those from rural areas living in the shadows in Moscow and other urban centers.
Yesterday, the Khamovniki Foundation for Social Research released the results of a three-year study on “otkhodnichestvo,” a term that refers to those who move from rural areas into the cities to work but who stay in the shadow economy and are largely disconnected from the state or broader social organizations.
In an article in today’s Nezavisimaya gazeta, Igor Naumov describes this revival of a phenomenon which was quite typical in Russia at the end of the tsarist period and surveys expert opinion on the consequences for the integration of Russian state and society in the future (ng.ru/economics/2013-10-30/1_russia.html).
Sociologists call “otkhodniki” “those residents of small cities and villages who leave their permanent residences for work in major cities on a seasonal or temporary basis.” There are a lot of them: up to 80 percent of those of working-age in these places does so, and they form 10-15 percent of the country’s population and roughly half of all those in the shadow economy
In most cases, as Naumov says, the work these people do bears “an unofficial character.” That is, they work off the clock, do not pay taxes, and do not make any contribution to pensions plans. But this enormous group exists below the radar screen of officials because, the study argues, “the bureaucracy not only doesn’t consider [it] but doesn’t know how to react to [it].”
But the scholarly community is devoting more attention to this group. Yury Plyusnin, a professor at Moscow’s Higher School of Economics, says that contemporary “otkhodnichestvo” has a great deal in common with the phenomenon in Russia at the start of the 20th century when “up to 90 percent” of rural residents in some areas went to work in the cities.
The contemporary members of this group, he points out, “are capable of surviving autonomously without the state, and they find work independently as a rule in the shadow sector.” The authorities lack the administrative resources and desire to “return this category of workers into the legal field.”
But Plyusnin continues, “one cannot exclude that when the treasury can’t make ends meet, bureaucrats in the localities will try to force the ‘otkhodniki’ to ‘share’ their incomes.” That is part of a broader struggle that has taken place in Russia, between a population “fleeing the state” and a state trying to “track it down” to tax it.
Simon Kordonsky, another expert at the Higher School of Economics, suggests that the “otkhodniki” are “a powerful social group which is not included either in statistics or in politics” and that it plays a key role in the labor market even though its members do all they can to remain “in the shadows.”
“Even at the level of municipalities,” he points out, “there is practically no informationa bout these peoples.” As a result, Kordonsky says, “one can assert that the provinces have turned out to be practically independent of the state.” Consequently, “even if the state disappeared from the regions formally, the population … would not cease to exist.”
But it is important to keep in mind, the Moscow scholar suggests, that “otkhodnichestvo” is “not a market phenomenon [as some may think] but rather a social-structural one. In Russia in this sphere nothing has changed from the 18th century. The state does not have any instruments to deal with it.”
Yevgeny Gontmakher, the deputy director of the Institute of the World Economy and International Relations (IMEMO), shares these views. Calling “otkhodnichestvo” a relic of the past, he argues that “it is impossible to govern these processes” at the present time because “the state has lost that ability.”
Moreover, as economic conditions deteriorate, this phenomenon will only grow in size. “People in fact are actively fleeing from the state. Unfortunately,” he continues, “’otkhodnicheestvo’ has great prospects.” And that in turn means that there will be new opportunities for the authorities to “exploit the best part of human capital.”
According to Gontmakher, the state of health of the people in this category is “significantly worse than those of settled residents.” And because they are cut off from the state, the new pension reforms will only push them and those close to them further from the public sector and into the shadows.
We are heading toward tsarist times,” the Moscow scholar concludes, “when pensions were a privilege of a very narrow group.” The consequences of that trend first on the otkhoniki and then on the country as a whole are certain to be enormous.