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Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with with permissionpermission of of the the copyright copyright owner. owner. FurtherFurther reproduction reproduction prohibited prohibited without without permission. permission. CHALLENGING HEGEMONY: LABOR, CAPITAL, AND DEMOCRACY IN UKRAINE AND KAZAKHSTAN by Leo B. Simmons submitted to the Faculty of the School of International Service of American University in Partial Fulfillment of the Requirements for the Degree of

Master of Arts in

International Affairs

C h a ir. Mustapha K. Pasha

Sally W. Stoecker

luniLo CaJ< 3 ~ en > L Louis W. Goodman, Dean 1 i D ate

1998 American University Washington, DC 20016

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'b y LEO B. SIMMONS

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Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. CHALLENGING HEGEMONY: LABOR, CAPITAL, AND DEMOCRACY IN UKRAINE AND KAZAKHSTAN

BY LEO B. SIMMONS

ABSTRACT

This is a comparative study designed to induce conclusions generated from an analysis of the labor-capital relationship now forming in Ukraine and Kazakhstan. Both nations face severe economic crisis and are composed of very weak social actors. The situation favors a turn toward authoritarian regimes. This study takes as its primary focus the potential for labor to direct national development priorities. The context of this paper is transformation in the social relations of production. Workers in the post-Soviet world are challenged by a global neoliberal restructuring accelerated by the end of the Cold War. Nonetheless, workers are mounting resistance, somewhat unevenly, depending on their social and structural position. It will be found that workers in Ukraine are in a advantageous position to affect the direction of market reform. Kazakh workers, however, are stratified by ethnic factors that diminishmobilization potential to influence government policy.

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—A b strac t...... a List of Tables...... iv List of Illustrations ...... v I. Introduction: Comparative Political Economy and Post-Soviet Transition... 1 A. Social Change In Retrospect ...... 7 B. Mapping Change From State Socialism...... 9 —IT. PftrRHt.rnikfl: B reakin g The Bonds Of SociaTCohesion ...... Tt7 DI. Post-Soviet Transformation ...... 22 A Creating A Market Culture...... UO B. Catastrophe In The Context Of The Market ...... 33 C. ^Historical Determinism And Post-Fordism .U 6 IV. Ukraine: A Working Class Cauldron ...... 40 V. Kazakhstan: A Proletarian Awakening ...... U0

VI. The Imperial Production Order 7 5 VH. Globalization And Labor Resistance In The Postcommunist World 80 VUI. Conclusion ...... 87 -Bibliography...... 92

iii

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T able 1. A verage R e a l W a g e s in S e lec t ed S e c t o r s , J a n u a r y , 1 9 9 4 (U k r a in e )...... 4 7 T able 2 . N um ber o f S t r ik e s a n d D ays Loot b y S ecto r 1 9 9 0 -1 9 9 3 (U k r a in e ) ...... 4 8 T able 3 . S e lec t ed S o cial a n d E conom ic In d ic a t o r s 1 9 9 2 -1 9 9 6 (Kazakhstan) ...... 7 1 T able 4 . Appro x im ate N u m b e r o f P eo ple P articipating in P r o t e st A ctivity 1 9 9 5 -1 9 9 8 (K az a k h st a n ) ...... 7 3

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^ F i g u r e 1 . U k r a i n e ...... r42

F i g u r e 2. K a z a k h s t a n ...... 6 4

Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. I. INTRODUCTION: COMPARATIVE POLITICAL ECONOMY ^AND POST-SOVIET TRANSITION

The happiness of mankind is a great goal, and if, in accordance -witfcrMarx, it is near and fuUyattainabie, then it’s understandable why people went into this ‘last battle’ and sacrificed their lives. —Only after a century has it become patently clear that the last verge to the Marxist final battle is not in sight, and not tens, but -tens-ofmriffions of human lives have been ruined, but, alas, the radiant dream of mankind hasn’t come the least bit closer, but, on - -the-contrary, in countries where Marxism has been victorious, it -isn’t the heavenly orders that have triumphed by unym eans.1

The euphoria that swept Eastern Europe and Eurasia almost ten —years-ago is~now over. Paths todfae-new order have-been cast with some

nations reproducing nearly identical social structures, others clearly forging —more liberal societies. The transition from state socialism to-advanced

capitalism entails that forces from the past and present construct new , —realities and relationships within and among civic associations, government, and the economy. The labor-capital relationship that is developing in —Kazakhstan and Ukraine indicates a concrete problem for democratization. Both countries face severe economic crisis and are composed of very weak

—soetahactors. Unless-a more equitable process of distribution and representation develops, these states will be relegated to autocratic regime . —structures well into the future.

1Anatoly Gladilin, Moscow Racetrack (Ann Arbor, MI: Ardis Publishers, 1990) 29.

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This study takes as its primary focus the potential for labor2 to direct national development priorities. In particular, it asks how labor

mechanisms implementing such reform in Ukraine and Kazakhstan? This study is simultaneously a historical project. As the theoretical tradition of

comparative politics is quite rich, it is the historical nature of political economic models that illuminate the potential arrangement of regime structures. The context of this paper is transformation in the social relations of production in former command economies. It is an examination of the consequences of

moving from a redistributive system to a capitalist system. Since the political economy of transition in the Commonwealth of Independent States (CIS) is

dictated by a neoliberal emphasis on the free trade of goods and services, a restructuring of the planning system is paramount. These new conditions —bring about a resistance to austerity policies and refocus politics in new

spaces. Furthermore, neoliberal reform hastens the formation of a - -constellation of forces that have a tendency toward authoritarian solutions in industrial relations policy. Liberalization in Ukraine, for example, has promoted the deleterious effect of codifying power in the hands of very non-liberal owners and m anagers.

At issue is whether we can understand post-Soviet transition as part of arglobal transformation. Andrea Chandler has suggested that critical

2 Intended as a broad analytical category, encompassing individuals and groups considered working class (not controlling the means of production). Also, wage-laborers, not considered part of the ownership structure of any enterprise.

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^theory be used to analyze this post-Soviet situation.3 Chandler exposes the debate between Sovietology and comparative politics by arguing that, “the post-Soviet moment provides an opportunity to better integrate comparative theories and methods into research on the Soviet successor states...perhaps revealing contemporary political dilemmas that transcend regime type.”4 I believe Kazakhstan and Ukraine are affected by the same phenomena. In addition, both countries share most, but certainly not all of the legacies

associated with the ancien regime. The comparability of the two states lies in a convergence of concepts. The aftermath of the Cold War has left Soviet specialists (sovietologists) without appropriate models to analyze these new states. Therefore, it is necessary to turn to non-Soviet specialists in areas

such as democratization, civil society, and economics. Moreover, the very capability of intra-regional comparison and the effects of fragmentation since 1991, prove valuable categories for all political scientists.5 Finally, both countries contain large Russian minorities, and did constitute a significant portion of manufacturing and procurement for the Union of Soviet Socialist Republics’ (USSR) military industrial complex.

Continuities, such as the nature of state-socialist politics and communist trade unionism predicated on subordination, are certainly

remarkable between the new order and the old. Yet these legacies must be qualified against a very obvious structural transformation. The era of Russian

imperialism is considered the earliest attem pt at transforming social

a Andrea Chandler, “The Interaction of Post-Sovietology and Comparative Politics: Seizing the Moment.” Communist and Post-Communist .Studies 27.1 (1994): 3-17. 4 ibid. 3. 5 Chandler, 11-12.

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relationships in this region. This period, termed Phase I, is characterized by an

initiation to industrialization and demographic change. Phase II represents the Soviet period, and is noted for its revolution in the organization of production

relations, and particularly for its method of surplus extraction. Phase IH is the current condition affecting the labor-capital relationship. Two processes of the Phase III historical period are regionalization and globalization. Regionalization of the political economy is codified by the imperial production order (IPO). The IPO is a constellation of

legacies, institutions, and increasingly, public policies designed to hasten marketization in economies of the CIS. The derivation of this idea comes from Robert Cox’s model of the global production order exemplified in his book Production, Power, and World Order.6 Essentially, Cox holds that power is structured in production, specifically the social relations of production

responsible for the formation of classes. He argues further that there are -different types ofproduction relations that govern power and class structure.

A specific legacy of Soviet production relations, the extraction of surplus value from labor, is directly responsible for what is forming the capital-labor relationship in Kazakhstan and Ukraine today. Soviet production was —distinctive due to the absence of monetized exchange. The law of value did not stretch out to consumers and producers within the domestic economy. Rather, as Simon Clarke indicates, the "Soviet system was essentially a system of

bargaining for resources between enterprises and ministries...which bore no

6 Robert Cox, Production. Power, and World Order (New York: Columbia University Press, 1987).

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necessary relation to the productive potential of the system.”7 Thus, a specific form of exploitation existed which differed from capitalist exploitation—one not based on exchange value, but on use value. However, this legacy of Soviet production relations is not the only variable affecting workers.

Workers in the post-Soviet world and elsewhere are challenged by a global neoliberal restructuring accelerated by the end of the Cold War.

Globalization promises to collapse the world into one transnational market. As

defined by Kim Moody, globalization is “a deepening of economic integration

under capitalist terms.”8 It is also a rearticulation of space and time, and a

process of hierarchical compression. Or as Cox maintains, “global production is able to make use of the territorial divisions of the international economy, playing off one territorial jurisdiction against another so as to maximize reductions in costs, savings in taxes, avoidance of anti-pollution regulation,

control over labour, and guarantees of political stability and favour.”9 In fact, the transnational presence that globalization visits upon underdeveloped regions of the world (including the CIS) follows a certain logic of contemporary capitalism. Particular aspects of which are the diminution of state autonomy

at the expense of society, and new production techniques such as “post- Fordism.” Post-Fordism represents a new production order that impacts the constellation of social forces and state institutions that have regulated

economic activity in the past. Post-Fordism is defined by Mitchell Bernard as the encompassing phenomenon of “small-batch production of a variety of

7 Simon Clarke et al.. What About die Workers? (New York: Verso, 1993), 11. 8 Kim Moody, Workers in a Lean World (New York: Verso, 1997), 42. 9 Robert Cox, “Global Restructuring,” in Richard Stubbs and Geoffrey Underhill, eds. Political Economy arid the Changing Global Order. (Ne¥TYork:“StrM arfin,s1Press,'1994), 48.

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products, the use of flexible machinery, a physical reorganization of the factory

to reduce inventories and defects, a decentralization of manufacturing-related decision-makingto workers on the shop floor, and the application of

microelectronics to product and process design and to production machinery.”10 An initial assumption driving the understanding of these historical

periods then is that capitalist development perpetually transforms social relations. Further, any nascent development of civil society in the former USSR is severely challenged by the same process. The concept of civil society hasbeen widely debated, yet retains a quality useful to this study. Collectively, political society and civil society translate into “hegemony”, or the

mechanisms by which the state regulates h u m a n activity. In this Gramsican

conception it is impossible to separate the notions of “state” and “civil society”

as they are fundamentally interlinked.11 This is the notion that structures this study, particularly regarding the position of workers as they struggle to shape

the state. New challenges confrontinglabor, for example, have led to a renewal

of older concepts, particularly state control and class conflict, emphasizing the restructuring in production within and among civil society on a global scale. My attempt is to analyze this dynamic within countries undergoing a

simultaneous transition to democracy and capitalism — a transition of reentry

into the global political economy, presenting altogether new challenges.

10 Mitchell Bernard, “Post-Fordism, Transnational Production, and the Changing Global Political Economy,” in Richard Stubbs and Geoffrey Underhill, eds. Political Economy and the Changing Global Order. 216. u See the discussion in Quintin Ho are and Geoffrey N. Smith, eds. Selections from the Prison Notebooks of Antonio Gramsci (New York; International Publishers, 1971), 206-209.

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A. Social Change in Retrospect

A review of the literature on comparative political economy (CPE) will help inform the preceding framework. Two of the earliest

theoreticians to compare political and economic phenomena in this m a n n e r

were Karl Marx and Max Weber. Marx and Weber represent separate streams of theory th at assist one’s conception of social change.12 The influence of both will be recognized in the framework developed here, but the thrust of the argument adopts more of Marx’s notions of social relations in the context of

production and exploitation, as well as class conflict. In addition, attention is given to both culture and structure, which will highlight the process of social change as affected by the process of globalization and institutionalization of market mechanisms. As Ronald Chilcote explains, “Marx...consciously worked toward an all-inclusive explanation of human history and social transformation [and] Weber, in contrast, worked consciously at critique of Marxism and the elaboration of an alternative perspective.”13 This alternative perspective for Weber did not disregard history out of hand, rather history had to be understood in its rational, or real, form. That is, actual possibilities are formed

by political and social structures already adopted. This is significant in th e

post-Soviet situation where certain institutions delineating socioeconomic redistribution and power are up against alien forms of social organization. Now into the late 1990s, the “transition/transformation”

12 It should be noted that there are some similarities between the two, and it has been argued that Weber is not entirely in discordance with Marx. See Ronald Chilcote, Theories of Comparative Politics (Boulder, CO: Westview Press, 1994) 77-118, and Anthony Giddens, Capitalism & Modem Social Theory (New York: Cambridge University Press, 1971) for an

“jChilcote, 78.

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literature supposedly addressing these tendencies is abundant, but unsatisfactory. The literature thus far paints a picture far more complete than what we actually know. Path-dependence theories (e.g. Stark) have been prominent in portraying an environment with strong cultural antecedents —shapingthe dynamic of market mechanisms. Others have been far more

optimistic about political economic transformation and adhere to principles of

“shock therapy” as a means toward liberal democracies (e.g. Aslund, Sachs). Still others argue the opposite, that transition in these states (esp. Russia/CIS) as burdenedhy autocratic culture precluding any “liberal” transformation (e.g. McDaniel, Pipes). However, some have boldly entered the golden realm of Sovietology and argued the need for adopting a more historical-

interdisciplinary method.14 Theories of CPE and development may illuminate the intrinsic causes of resistance to market reform in the two post-Soviet regimes examined here. First, the CPE literature is useful in examining the efficacy of collective action and the relationship between capitalism and democracy in shaping the institutional development of post-Soviet regimes. Second, the assumptions underlying neo-classical political economy in particular can be

challenged as that model tends to undermine the foundation of post-communist states and societies. By addressing concepts like commodification and the reproduction of capital we can evaluate with more clarity real structural

changes and perhaps proper alternatives in development. Third, independent case studies (primarily industrial workers’ movements) can be used to test the

14 Michael Burawoy, “From Sovietology to Comparative Political Economy,” in Bevond Soviet

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relevance of mainstream models of political and economic transition (e.g. public choice, resource mobilization, neo-institutionalism, etc.), and to facilitate an

alternative conception of transition based on critical theory, hi th is study, production relations (ala Cox) will be emphasized as an avenue toward

analyzing the labor/management schematic for m in gin Kazakhstan and

Ukraine. The notion of the IPO is significant as a salient process in th is discussion.

B. Mapping Change from State Socialism.

It is a common assumption in neo-classical theories of

socioeconomic change that democratization and liberalization are m ech a n is m s toward integration and convergence of regime types. In the post-Soviet context, maintenance of the IPO generates the direction of transformation

—toward convergence in this mold. However, the mechanisms used to maintain this trajectory also prompt countervailing tendencies from above and below, -withhrpolities rigidly structured by the preceding order. Soviet policies dining the perestroika period were the first real attempts to bring market relationships to society. Attempts by neoliberal reformers to impose this new

hegemonic order on its citizens after perestroika is revealing dense pockets of resistance within organized social entities (e.g. miners, teachers, the military). Moreover, there is evidence of acute stratification within and amongst societies previously organized around patriarchal relationships and corporafist administration. Chapters 2 and 3 will show what these policies entailed for workers.

Studies (Washington. DC: Woodrow Wilson Center Press, 1995) 72-102.

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Authoritarian impulses in both Kazakhstan and Ukraine are not only symptoms of the IPO, but of very specific historical inheritances (i.e. Russian imperialism, feudal and pre-feudal social relations, and modernization

struggles). Russian history, and ipso facto the history of Kazakhstan and Ukraine, are frought with attempts at emulating the West through autocratic

direction.15 Russia, as the guarantor of the emerging system, has the potential to strengthen its position vis-a-vis these states by consolidating Soviet socioeconomic networks which furthers its own national capital accumulation.

As has been well documented (e.g. Shelley), this often takes place within a

crim in al context through the usurpation of state property by the

nomenklatura. This strong social bloc controls the rest of society as an elaborate network of elites appointed from the Soviet era. Paul Goble reports that the nomenklatura, “in their pursuit of individual and collective self- interest... viewed the demise of the Soviet system as a golden opportunity to enrich themselves, to own what they used to merely control.”16 The thrust of this paper, the case studies in chapters 4 and 5, will highlight the stealing of state property by the nomenklatura, and discuss the formation of opposing historical blocs within Ukraine and Kazakhstan under pressures of neoliberal

reform. The research in chapter 4 is focused on the coal miners of the Donbass region as a representative case study of this and other significant historical events in shaping a working-class consciousness. This dynamic area

15 See Johann Amason. The Future That Failed (New York: Routledge, 1993), for a thorough discussion on the episodic struggles by Ivan the Terrible, Peter the Great, and Joseph Stalin to modernize Russia.

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of Ukraine paints a vivid picture within which we can examine the introduction

of the market and attempts at capitalist development in a society that has only experienced very elementary capitalism. Kazakhstan, on the other hand, represents a nation forged by the Soviet bureaucracy and indigenous tradition

thatrleaves a nomadic peasant culture very much alive. As Gregory Gleason

observes, “the Soviet administrative system was simply superimposed over the existing local power structures, in which local elites occupied the leading

positions.”17 Naturally, this complicates the formation of a viable democratic industrial relations regime in Kazakhstan. Chapter 5 explains this problemln light of scholarly perceptions, decolonization, and the strong transnational interest in Central Asia, generally. Those workers most directly affected by these processes and actors are located across several industrial pockets (e.g. Karaganda, Pavlodar, South Kazakhstan, and Zhambyl) of Kazakhstan. As in

Ukraine,Tnost are involved with the extraction of non-ferrous (non iron)

metals, coal, and minerals. One challenge facing elites in both of these countries is the

will be found th at the reaction to this emerging network of elites is quite dissimilar between the two states. Other problems marginally addressed, and certainly not given ample treatm ent here, include: the diverse responses of collective action among workers; to what degree working class resistance to market reform is attributable to the implosion of the Soviet system rather

16 Paul Goble, “The Party’s Over; 'Hie Nomenklatura Isn’t.” RFE/RL Newsline Vol. 1, No. 186., 8. ~17 Gregory Gleason, The Central Asian States (Boulder, CO: Westview Press, 1997), 53.

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than to globalization and marketization of the social and economic sphere;

evidence of new class identities; and the activity and role of state and civil society in mobilizing political participation.

In a sense, Ukraine is moving from state socialism to merchant capitalism.18 This transition would represent, quite starkly, movement in accord with the global division of labor. One of the major components

rem a in in g from the Soviet system is the state-imposed division of labor

constituting worker collectives and enterprise unions. While workers do not

control enterprises per se, they do in flu en ce production given their inherited social position. On the other hand, enterprise managers are bargaining with the state because controlling production is impossible on their own.

Kazakhstan is driven by ambitions more akin to the “Asian” model. No other CIS state was as adept as Kazakhstan in steering its economy from the rigid centralization of state socialism to authoritarian imposed market principles. President Nursultan Nazarbayev rules

Kazakhstan much as did Lee Kwan-Yew in Singapore.19 In fact, it is - remarkable how similar are the policies of these two rulers. Writing of sustaining one-party rule in Singapore, Walden Bello and Stephanie Rosenfeld find that the~“solution has been to create a party-state apparatus that combines ideological domination, demobilization, and repression to achieve a

pervasive technocratic control over all sectors of society.”20 Nazarbayev, himself is on record for “proposing that Kazakhstan aim for intensive, rather

18Burawoy, 82-85. 19 Walden Bello and Stephanie Rosenfeld, Dragons in Distress (San Francisco: Food First, • —1990), 289-338. -® ibid. 317.

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than extensive, economic development and that it take as its model the little tigers’ of southeastern Asia with the aim of becoming ‘Central Asia’s mountain

lion’.”21 Given such statements and the inherent consequence of monopoly formation in both Ukraine and Kazakhstan, some important questions must

be posed. W hat direction should the reform process in these political economies take, and most importantly, what relationship shall develop -between these governments and their citizens? Ukraine and Kazakhstan are both faced with drastic social transformation. Structurally, both are Hi-equipped for change in institutional

patterns, and serious social symptoms reveal reactionary elements to -economic reform and democratization. The package of reforms commonly advocated by neoliberal practitioners include: macroeconomic stabilization,

liberalization of prices and trade, and privatization.22 Macroeconomic

stabilization includes fiscal and monetary reform which heightens social -distress throughih e control, indeed suppression, of wages, and a drastic decline

in production. Price liberalization has had drastic implications for the consumer,^ts^prices for staples have risen. Less distress is placed on the

producer, or state-owned enterprise (SOE), which has come under scrutiny and hard budget constraints in Russia, but only minimally in Kazakhstan and virtually not at all in Ukraine. Regional trade agreements have so far failed to constitute a liberal trading regime, as many tariffs remain in place as a way to

protect local currencies. The Kazakh case, however, illustrates that foreign

21 “Kazakh President on Economy.” Central Asia Monitor. No. 6, 1997, 27.

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little government protection for those workers

involved in the extraction of natural resources. Regarding privatization, it can as a socialpartner so long as the nomenklatura only control, and not own, property.23 In tandem with regular

elections and legal reform ensuring free suffrage, these reforms are designed to initiative.

Prior to the Soviet period, we find that social change came in . -a ccordance with the industrial revolution. However, we should be careful not to

relegate Ukraine to that realm of reasoning that suggests bourgeois —experiences facilitate the Eastern Europe experienced industrial capitalism during the inter-war period,

such an experience may not be applicable to Ukraine, and is certainly not so in Kazakhstan. Even Central European societies did not undergo the violent epoch that normally marks a foundation for capitalist development. This follows Barrington Moore's evidence that violent events may be necessary for a bourgeois revolution.24 For the most part, Eastern Europe has retained its peasant society despite Soviet industrialization. The absence ofanmddle class complicates the discussion of social

change in Eastern Europe and the former Soviet Union through all periods. Standard historical accounts of the interwar period in this region suggest a

22 See Anders Aslund, How Russia Rpramp a Market Economy (Washington, DC: Brookings Institution, 1995), and Barry Bosworth and Gin* Ofer, Reforming Planned Economies in an Integrating World Economy (Washington. DC: Brookings Institution, 1995), 13-38. 23 See Michael McFaul, “State Power, Institutional Change, and the Politics of Privatization in Russia,” World Politics 47 (January 1995): 210-43, and Simon Clarke et al. What About —fche-Workers? (New York: Verso, 1993), especially Chapter!).

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!. As

absence of communist revolution in these nations presupposed widespread capitalistr activity, and indeed democracy. Offering a more revisionist account

is Joseph Rothschild, an historian of East-Central Europe, who claims that

:, was never that gentrified. Indeed, radical social change and/or political mobilization never appeared despite

heavy economic investment in industrial plant.25 Socioeconomic conditions in western Ukraine remained unchanged due to challenges to the legitimacy of

Czechoslovak, Polish, and Romanian governance.26 According to the historian, Orest Subtelny, “the Ukrainians were extremely agrarian: about 80% were -peasants compared txrthePolish. average of 50%, and only 8%~were industrial workers compared to the Polish average of 20%.”27 While a working class did develop under primitive capitalist organization in Ukraine during the Tsarist

-period,~it was concentrated almost entirely within the confines of very eastern Ukraine, and therefore not ever part of its own sovereign state able to conclude -its own industrial agreements between capital and labor. Finally, and without remiss, it would be wrong to conclude that Central European states had no real

-bourgeois legacies to draw upon, and indeed, this is what separates them today in terms of economic and social progression.28 In sum, it seems only a few

34 Societal restructuring has played apivotal role in transforming political economies in Britain, France and the United States. See Barrington Moore, Jr., Social Origins of Dictatorship and DemocracvTBoston: Beacon Press, 1966). 25 Josep~h~Rothschild.~Retum tdTKversitv (NewTork: Oxford University Press, 1989), 20. John Feffer, Shock Waves (Boston: South End Press, 1992), also points out that, aside from the newly-formed Czechoslovakia under liberal Masaryk, most of the East-Central European -nations Peered rightward” as aresultof-instability in the aftermath of WWI, 28-29. 36 Orest Subtelny, Ukraine: A History (Buffalo, NY: University of Toronto Press, 1988), 433. 2Mbid.-433. 28 Rothschild, 21.

Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. - -eenntries have come to terms wifch the “peasant question.” Thus, it

important to know where one has been to know where one is going.

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For Ukrainians the disintegration of the Soviet Union was both a

- blessing and a curse. A great amount of hope transcended the population nf Ukraine both prior to and immediately after independence. Given the amount of social and economic resources at its disposal, especially in human capital, it was concluded by many that Ukraine would make a "smooth" transition to

capitalism and perhaps even flourish when finally involved whole-heartedly in the global economy.29 Kazakhstan, on the other hand, settled for involuntary

independence analogous to a prisoner held captive for such a longtime as to not feel comfortable with freedom. Certainly youth protest movements during the perestroika period symbolized Kazakh unity, albeit in primitive fashion.30 It is debatable whether this agitation was more within the scope of simple —leadership reform or for true independence. -The recent history of Kazakh independence suggests that while freedom from the Soviet empire was welcomed, it is more likely that perceived structural inhibition-played a role in

diminishing vibrant nationalism as no perceptible route of political or economic development was in sight.31 Such an easy departure from the grip of

com m u n ism was clearly unrealistic, however. As a matter of fact, several

29 A. Sekarev, “Ukraine: Crisis on the Basis of Vague Economic Policy,” in Problems of Economic Transition 37.9 (1995) 42. 30 See Martha B. Olcott, “Perestroyka in Kazakhstan,” Problems of Communism Julv- August, 1990. 31 Bor more on this, andCentral Asian nation-building in general, see Martha Brill Olcott’s “Nation Building and Ethnicity in the Foreign Policies of the New Central Asian States,” in Roman-Szporhik. Ed. National Identity and Ethnicity in Russian and the New States-of

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factors of production and remnants of the command-administrative system

would better explain the economic stagnation and gross systemic inadequacy that both these governments inherited from the old order. Nevertheless, the

previous system was rejected even if certain perceptions of authoritarianism were to be enhanced, if not fortified, by the introduction of the market.

Post-communist transition can perhaps be deemed as a belated version of the introduction of market society. Karl Polanyi, as one of the self regulating market’s first observers, aptly describes the advent of the market economy into human existence. Essentially, he holds that land, labor and

money as commodities, are wrought with misconceptions. These “fictitious —commodities” function only in a self-regulating m arket. On the creation of this institution, Polanyi notes, "Instead of economy being embedded in social

be shaped in such a manner as to allow that system to function according to -its own laws."32 Perestroika really embodied an initiation to the market

mechanism. While perestroika itself was designed as simple socialist reform, it sought to direct control over the labor process. That is, extraction of surplus value from labor was redirected to private ownership in the form of enterprise collectives.33 The nature of the Soviet political economy was precisely at odds with Gorbachev’s experiments. The effort to mobilize efficient capacity in labor surplus extraction exacerbated the tensions placed on firms governing

Eurasia (Armonk, NY: M. E. Sharpe, 1994): 209-229. Any of Olcotfs publications prove useful in chronicling events throughout Central Asia dining perestroika. 01 Karl PolanviTThe Great Transformation (Boston: Beacon Press, [1944] 1957), 57.

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the social contract. In particular, management was given relative autonomy to govern a change in the mode of production. An asymmetric distribution of influence gained legitimacy among the reformist faction of Soviet leadership. Fundamentally, this was the intent of reformers, in that the professionalized

managerial class would fill a vacuum of leadership (and ownership), antagonistically posed against the interests of labor. Moreover, managers

were left in an advantageous position to usurp property once the system finally imploded. This leaves intact, even today, a development trajectory of

—pervasive corruption. Substantial m arket reform is thus advocated without proper regulatory and legal reform governing the “self-regulating” market.34 Why do these regimes accept this trajectory of market reform? This is theoretically answered by Robert Heilbroner, the prominent historical economist, who illustrated how the m arket gained acceptance in seventeenth century Europe. "Full growth of the system," he states, needed acceptance by "spiritual leaders" of the day.35 The notion is that ideas play a prominent role in structuring political-economic systems. In practice, the introduction of the

market in Kazakhstan and Ukraine has come with a decline of the legitimacy

of the state—a disastrous recipe for societal well-being. The very m ech a n ism s tbatrcontrol the market emanate from the state, which is combined with strident social control. Regarding countervailing tendencies to social control, Polanyi’s insight proves relevant; the introduction of market society and its

implications on the social fabric represent a satanic mill. In fact, he states

31 a6The conclusions in this paragraph are informed by the in depth research of Bob Amot, particularly in his earlier study titled Controlling Soviet Labour. 35 Robert L. Heilbroner. The WorldlvThHosophersTNewTork: Simon & Schuster, 1972), 33.

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%uman society would haveheen annihilated but for protective countermoves which blunted the action of this self-destructive mechanism [the self-regulating m arket].”36 Furthermore, social reactions in Kazakhstan and Ukraine indicate a great mistrust, and misunderstanding of the market. In this paper I will be emphasizing the social relations of

production as defined by Simon Clarke et al. presented in chapter 1. It offers a contextualized and legacy-specific approach used in concert with worker mobilization. This is a notion particularly useful in explaining the

—transformation takingplace in post-Soviet societies. On the one hand, workers in these societies seem inherently adverse to the concept of free labor. Indeed, even a social economy has emerged, where "goods and services are produced

without money changing hands.”37 On the other hand, several sectors of the labor market have demanded secure jobs within the SOE even with low —wages.38 The concept of unemployment is alien to these workers, and they remain "attached to the achievements of socialism (full employment, social —services,"national independence, and public ownership).”39 Yet unemployment remains an essential component of neoliberal reform. According to Stephen Gill, "unemployment was central to the innovation of'functioning' labour

markets, insofar as this involved market discipline over the commodity of

96 ibid. 76. 37 Richard Rose, “Adaptation, Resilience, and Destitution,” in Problemsof Post-Communism Nov/Dec u»yb;, t>t>. ^ Richai d Layard and Andrea Richter, Labor Market Adiustment-The Russian "Wav (Draft Manuscript), (Washington, DC: World Bank, 1994), 14. M Samir Am in,-“The Future of Socialism,” in Barry Gills and Shahid Qadir, eds. Regimes in Crisis (Atlantic Highlands, NJ: Zed Books, 1995), 46.

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labour.”40 Lastly, one of the preeminent features of the communist system, the restriction on labor movement (propiska), has persisted even amongst —severe adversity exhibited by Kazakh anddJkramian workers to just such

limitation on employment choice. In addition, there is clearly a lack of a large

-entrepreneurial, or bourgeois, class as it is conceived of in the Westrto balance

the preponderance of socioeconomic power now in the hands of m a n a g ers to keep workers in their place. Many neoliberal reformers, including Roman

Shpek, Victor Pynzenyk, and Volodymyr Lanoviy (economic advisors to Leonid — Kuchma's government), take faith that managers of large SOEs may some

day constitute this entrepreneurial group.

40 Stephen Gill, “Knowledge, Politics, and Neoliberal Political Economy,” in Richard Stubbs and Geoffrey Underhill, eds. Political Economy and the Ghanging Global Order (New York: St. Martin’s Press, 1994), 81.

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An extraordinary situation has occurred regarding the state- —society relationship in Ukraine and Kazakhstan since independence. The

Soviet form of economy has been freed, while the state has been restructured

to consolidate nomenklatura power. The implosion of the Soviet state is much more significant in Ukraine, where workers and managers have colluded to balance strict nomenklatura control. As briefly documented in the introduction, Kazakhstan has managed to maintain its leadership structure despite market pressures to transform the social structure. Yet for both

nations, post-communist transformation has been a chaotic interregnum as - —economies that are truly still embedded in the social sphere are being reconstructed to the capitalist paradigm of "rationality." Ironically, a destabilized society is not conducive to the very investment needs the West

preaches it must have.41 This great irony of transition has engulfed all of . -Eastern Europe and Central Eurasia to some extent, dependentnpon the level of social relations of production. Persistence of such industrial relations, —particularlyin Ukraine, remain more salienttben ever.

Ukraine is a destabilized country for several reasons. Among —these are differentiated and alienated communities. -Alienation in this~sense,rrs

rooted to an individual’s relationship with a political party. Interests cannot be —formulated in arsuitable “ideological package” since the rhetoric of class is

41 Michael Burawoy and Pavel Krotov as quoted in Clarke et al., What About the Workers? (New York: Verso, 1993), 58-59.

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delegitimized by the opposition.42 Indeed, the alienated has included groups from the left and right of the political spectrum. A government mostly made up offormer Party apparatchiks has diminished the ideological appeal of socialism, and real socioeconomic inequalities have eroded any support liberal reformers may have gained to offset that balance. This leaves a distancing in

social prerogatives between citizens and government. This is also a prime example of the antagonistic class relationship that Marx expounded upon. According to Marx, “the possessing class and the proletarian class represent one and the same hum an self-alienation.” 43 Extending Marx, one could extrapolate that alienation is an affirmation of power for the nomenklatura. A most striking feature of these communities, however, is self-reliance. As

mentioned above, the idea of a nonmonetized social economy has emerged. Some observers suggest this strictly as a reaction to need. I argue that values inherent in Ukrainian society have provided for an interesting societal relationship unlike that seen in an industrialized nation. "Activity in social economies is higher in Ukraine," states Richard Rose, "than on average in Central and Eastern Europe."44 Observers such as Rose would indicate that

this behavior is a result of a destabilized official economy, only for the short term, and an "obstacle to mediupa-term economic development."45 In reality,

42 In this case, the opposition is/are former communists (particularly communist bosses). See Stephen Crowley, Hot Coal. Cold Steel (Ann Arbor, MI: University of Michigan Press, 1997), 190 43 As quoted in Robert Tucker, Ed., The Marx-Enyels Reader (New York: W. W. Norton & Company, 1972), 133. See also the work of Antonio Gramsd, especially his ideas on intellectuals. 44 -T-* -I r r lD lQ . W ). 45 ibid. 55.

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this behavior can be more typically ascribed to the redistributive nature of Soviet economic relations.46 As Weber showed, along with the advent of capitalism is a fundamental restructuring of society, the need for a rational organization of

classes.47 In the contemporary historical period (Phase HI) this restructuring of classes has been classically promoted in Russia by Yegor Gaidar, the economic reformer who gained notoriety as Yeltsin's closest advisor and prime

minister. Gaidar and others believe a market economy is already in place in Russia.48 On democratic principles, Gaidar notes the need for an -“entrepreneurial middle class" to buffer severe antiliberal societal reaction.49 Without a doubt, the radical team under Kuchma and Nazarbayev espouse similar views, yet have not taken effective action to strengthen and enlarge such middling classes. Evgenii Starikov, Senior Research Fellow at the

Institute of Sociopolitical Studies, Russian Academy of Sciences, brilliantly sketches the divisions transcending post-communist societies, and therefore preventing entrepreneurial forces from taking shape.

46 Evgenii Starikov, “The Social Structure of the Transitional Society,” in Sociological Research July-Aug. (1995), 40. 47 Max Weber, The Protestant Ethic and the Spirit of Capitalism (New York: Charles Scribner’s Sons, 1958), 21. 48 See Anders Aslund, How Russia Became a Market Economy (Washington, DC: Brookings Institution), for a descriptive analysis of criteria indicating fundamental market relationships already institutionalized in Russia. ■®rAdrian Karatnycky, “Bearish Outlook,” in National Review 29 May 1995, 44.

Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Particularly, lie portrays communist society as an estate-caste society.50 In essence:

The distinguishing features of social groups in the USSR were their particular functions, embedded in the system of state redistribution and formulated as the legal inequality of these groups. This inequality in turn resulted In these groups becoming increasingly closed, in the destruction of the "social elevators" through which upward social mobility could occur, and, to all intents and purposes, in the endogamy of the upper and lower social strata—that is, it led to a tendency for them to become c a ste s.61

Starikov indicates further that there has been a "marginalization of almost all

" during the transition to a class society.52 Marginalization for

Starikov means simply movement of individuals "from one social group to another," thus the situation is not static.53 This phenomenon can lead to an

upward or downward mobility. Yet in its negative, or downward form, marginalization "leads to accumulation of social entropy, barbarism of the

masses, and the destruction of the society...the end result of such a process is

complete iumpenization and anomie."54 Thus, the transitional costs have been

great in Kazakhstan and Ukraine, countries that have only m a r g in a lly embarked on reform processes. This is mainly due to excessive downward

mobility. The individual case-study chapters demonstrate this trend, and

illustrate the deleterious effects of restructuring social relationships more suitable to the market mechanism. Conversely, it will be found that a lack of

state to act on grave inequalities. Ultimately, it

50 ibid. 41. 51 ibid. 40. 52 ibid. 41. 53 ibid. 41. -Starikov, 41.

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seems reform processes shall entail the development of a very strong state in order to restructure the masses into a “viable” capitalist framework. Ukraine

provides one example where the state has effectively moderated the influx of

finance capital. In Kazakhstan the perceptions of a m arket society have

remained linked to a premodem social structure that is tempered by clan relationships. Therefore it is prudent we turn to another historical period to flesh out this social transformation.

The reliance on Moscow that Kazakhstan exhibits today has a long history. As early as 1716-19, some Kazakh societies appealed to Russia

“for protection or acceptance as subjects, and especially for military aid against...[eastern] invaders.55 In the 16th and 17th centuries, Kazakhstan

was loosely divided between three regional societies.56 One group controlled the southern and south-east regions of Kazakhstan. Another was located in the

central region of present-day Kazakhstan. Yet another occupied the west and were the first to officially appeal for Russian protection.57 Because these nomadic groups were vulnerable to invasion (a disposition of living on the steppes of Eurasia) they learned to organize in distinct ways. Tribal land use

and ownership were entangled with the value of community and free space.58 Gregory Gleason, a foremost scholar on Central Asia, confirms that the, “organization of [Kazakh] societies depended less upon the natural rhythms of

55 Edward Allworth, ed., “Encounter,” in Central Asia (Durham, NC: Duke University Press, 1994), 4 7 . 50 UNDP, Kazakhstan Human Development Report. 1995--obtained by . 57 U N D P. 58 UNDP. See also G. Gleason, The Central A sian S ta tes. 6.

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wildlife... and more upon their own capacities of organization.”59 Moreover, and somewhat paradoxically, tribal chieftains “did not rule by divine mandate; [they] had to retain popularity among...followers [which] gave rise to indigenous democratic traditions of consultation and advice.”60 Nonetheless, this social order demanded acute loyalty to the khan. It is precisely this hybrid of a rigid social structure with elements of communitarian values and reciprocal

economic relationships that influences today’s autocratic political culture. Phases II and HI built on these characteristics, yet represent a - transformation by the logic of Marxism-Leninism, and later the self-regulating m arket. Despite Nazarbayev’s archetypal restructuring of peculiar

historical and ethnic societal traits, the state remains weak in Kazakhstan. Ukraine, on the other hand, exhibits this institutional weakness much more explicitly. In both nations, the social fabric is unraveling as a consequence of the legacy of Soviet planning and the vicissitudes of market reform. First, legitimacy of the Soviet state waned with the delegitimization of the Communist Party of the Soviet Union (CPSU). This is primarily due to the process of glasnost, which allowed competitive ideas to flow freely regarding problems particular to Soviet communism and governance over a more

industrialized and urbanized citizenry. Second, neoliberal reforms specifically

advocate diminishment of state oversight in matters of capital accumulation and regulation. This is in order to further “transparency” which facilitates foreign investment. The working definition of the state used here is adopted

68 ibid. 6,

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from the political scientist, Paul Buchanan. His breakthrough study on democratizing class relations in Latin America defines the state thus: an , —frrtsJ itnt.innal mediator [that] provides the organizational guarantees and

framework within which the structural bases of class compromise are

negotiated.”61 Assuming Soviet type societies are en route to some form of market economy, we can also surmise that Soviet type legacies impinge on any future developmental state model to rescue these societies. At this point

we shift the discussion to the actors and effects of reform. Contrary to popular belief, there is a coresocial base emerging.

This core social base and most notorious Soviet legacy, the nomenklatura, is dependent upon the neoliberal model.62 This group includes the nouveau riche, merchant bourgeoisie; government status-quo apparatus; and, as Vladimir

—Bilenkin designates, the^pr West in various positions of science and the arts.63 Furthermore, Bilenkin

- claimsthat new social divisions could become so great that they "may lead to

civil war."64 Am on gthese new divisions are indeed remnants of the old apparatus. Bilenkin defines them as simply "Eurasians," more or less inclined

to develop states emulating the East Asian newly-industrializing countries (NIC's).65 This group, strongest in Kazakhstan, maintains an interest in redistributive, yet nepotistic values. The very economic structure that they

60 (ReasonT H ie Central Asian States. 6. 61 Paul Buchanan, State. Labor. Capital (Pittsburgh: University of Pittsburgh Press, 1995), 25. ® Vladimir B ilen k in , “The Ideology of Russia’s Rulers in 1995,” Monthly Review Oct. 1995,

. -26. . ®jbid.-26. <*ihid. 30. 65 ibid. 28-29.

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establishedwas redistributive, perhaps due to the fact that most ultimately sought power through the Leninist model. This placed primacy in continuance

of an elite leadership over the proletarian masses. Milovan Djilas spoke at large about the concept of this new class that emerged in full form after Stalin,

"com m u n is t systems...did not come to power to complete a new economic order, but to establish its own and, in so doing, to establish its power over

society."66 To what extent, then, could contemporary “reformers” imbue capitalistic impulses among their constituencies? Certainly this is problematic

without a hegemonic framework guiding policy development that m a in ta in s

societal order while establishing an entrepreneurial spirit. Consequently, the question of whether or not a market culture based on consumption could be inherited by post-communist nations must be raised. The initial project by the West in promoting such behavioral changes

came in the form of "shock therapy," albeit in the guise of monetary and fiscal policy reformation. Shock therapy, “makes assumptions about the behaviour and motivations of the relevant actors...about how they will respond to given negative or positive incentives and about the context in which they act," states

Peter Gowan.67 There is little regard for fragile "social tissues" in the shock therapy model, as its premise is to convert East European states into

capitalist democracies within a time span of two years.68 These social tissues -range from living wage incomes to political participation and human rights,

tenets that Western liberal democracies take for granted. Claims that shock

86 Milovan Djilas, The New Class (New York: Praeger, 1957), 38. 87 Peter Gowan, “Neoliberal Theory and Practice for Eastern Europe,” New Left Review 213 (1995), 5. 68 Gtiwari7'5.

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^therapy was a "success," as in the Czech Republic or Poland69, usually fail in mentioning that the state assumed a prominent role in controlling the labor process. In general, CIS countries were not as successful in implementing shock therapy. In The M arket Meets Its Match, Alice Amsden et al. contend

-th a t some nations were hollowed out by the disintegration of the administrative apparatus of the state.70 Furthermore, shock therapy ideologically hastened the political break with the past, and left little base upon which labor movements could stand. As the case studies in this paper demonstrate, the stronger the trade union movement the “weaker” the state.71

This is in part due to how much socialist rhetoric a social movement is politically able to practice.

A. Creating a Market Culture

Frequently the lines become blurred between public and private

domains. That is, neoliberal reforms hasten the demise of public space and responsibility. Institutions of governance become privatized in a most vulgar

manner. Prisons and universities, for example, soon survive only by corporate sponsorship. It is soon forgotten that in East Asia capitalist development was accomplished by authoritarian regimes that played a leading role in society.

—Gertain social realms (e.g. health care and education) were provided for by strong states which, as yet, are not promoted in Eastern Europe by the

60 The victory of Alexander Kwasniewski in the last Polish presidential election indicates that individuals, such as Lech Walesa, are much more creative in tearing down repressive institutions than at nation-building. While Walesa had garnered much support from the working classes in Solidarity, he could not quell disenchantment among his constituents toward the draconian implementation of market reforms. 70 Alice Amsden et al., The Market Meets Its Match (Cambridge, MA Harvard University —Prcoo, 1991), 182.

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international Monetary Fund or the World Bank.72 Creating a market culture in the postcommunist world intrinsically means transferring, or altogether discarding, the responsibilities that the state once assumed. In other words, the economy in its abstract notion must be disembedded from social

relationships.73 Lives m ust be governed according to the logic of the self- regulating market.

The rapid movement of th is cu ltu re is a sto u n d in g . Indeed, social animosities are reinforced by nouveau riche behavior as seen on local television commercials and of "goods and services that are obviously inaccessible to the vast majority of the population^74 On a macro scale, demands of workers are bora by the emerging market culture. Oleksandr Bondarchuk, an engineer and member of the All-Ukrainian Union of Workingmen, has delineated the

demands of labor during the transition as best as possible, "we understand that it is very hard to draw the line between politics and the economy...at times it is simply impossible...we may eventually reach the point where we will become totally political, but for the time being our demands are economic."75 This suggests a confusion of what the market is supposed to bear for those not included in “private” decision-making.

The surge of the market culture is converging with a certain naivetd of post-communist society. The relationship assumes perfect organization and rewards from a market economy, and a strong belief that

71 Amsden et aL, 194. 72 Nicholas Barr, ed. Labor Markets and Social Policy in Central and Eastern Europe (New York: Oxford University Press, 1994), 14-15. 73 Polanyi, 70-71. 74 Starikov, 43. 75 UPresA [1995a]. Obtained by: http://Kyiv.sovam.com.

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criminal dishonesty will disappear. Thus the worker in this

one organizing domain (e.g. the trade union) to the "new market economy

alone."76-The elusiveness of economic security is most certainly a global phenomenon, and now equally a part of the new structures of production in

Ukraine and Kazakhstan. David Ost explains that "workers...are expecting their interests to be protected through the workings of the market economy itself [and] do not see a need, in this initial post-communist period, to organize to defend their interests."77 Conceptions of the market economy are slowly

ch a n g in g as labor begins to voice dissatisfaction. One should ask then, if the

democratic ideal must be given up in order to modernize in the Western mold. means of production has entailed an aversion toward democracy. Specified again by Kumar, "probably the surest way to stifle liberal democracy in Eastern Europe at birth is the rapid, wholesale introduction of market capitalism."78 Finding the quickest path to the market

has also been ill-supported by Ukrainian labor. Ost explains that, "the economy cannot meet the expectations of labor, because those expectations include a just economic distribution that m arket economies do not and cannot provide on their own...fair economic distribution can be won only where labor fights for fair economic distribution."79 The growing income gap in Ukraine has

been a most recent development of this trend. In fact, through the 1980's

76 David Ost, “Labor, Class, and Democracy,” in Beverly Crawford, Ed. Markets. States, and Democracy (Boulder, CO: Westview Press, 1995), 186. 77 ibid. 186. 787R TT__»,1Krishan Kumar, T “H ie Revolutions of 1989: Socialism, Capitalism, and Democracy;” Theory and Society 21 (1992): 309-356. According to Kumar, Vaclav Havel also was _ .— opposed to such rapidity of market mechanisms. He protested early-m4^90-te-gunadom g capitalism," and referred to the prime minister, Vaclav Klaus, as "more Friedmanite than . - Friedman" (334).

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income disparity was declining.80 Lastly, for the state to implement austerity in the name of creating a market culture would effectively diminish social bases of support that would foster democracy.

B. Catastrophe in the Context of the Market

Albert Hirschman identified three modes of ex h ib itin g

dissatisfaction w ith in societal organizations that prove relevant here: exit (leave the organization), voice (expression to public or management), and loyalty (remain within the organization).81 Frequently the Soviet worker, through default, opted for the third mode. Unable to survive without the "social

contract" he/she made a "soft exit" from the enterprise.82 This type of exit is only available in a post-Soviet situation whereby the interests of some managers is in congruence with workers in sustaining their social position through minimal government subsidies, many of which are sold on the m arket in return. Some workers and managers are actually paid in vodka, soap, or some other consumer good which is then used to buy or barter for other needed consumer products. As the political scientist, Yanqi Tong, makes clear, “this ‘soft exit* was a form of alienation,” a condition where “people identified less and less with the norms and values that governed their society.”83

79 ibid. 189. 80 Nanak Kakwani, Income Inennality. Welfare, and Poverty (Washington, DC:World Bank, 1995), 49. See Table 1 in Chapter 4. 81 Albert Hirschman, Exit. Voice. Tnvaltv (Cambridge, MA: Harvard University Press, 1970). 82 Yanqi Tong, “Mass Alienation Under State Socialism and After," Communist, and Poat- Communistv Studies 28.2 (1995), 218.. See also Donald Filtzer, SovietW orkers and t h e Collapse of Perestroika (New York: Cambridge University Press, 1994). 85 ibid. 218, my emphasis.

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In order to explain new social phenomena that have arisen in the context of transition, certain forms of social behavior such as alcoholism and -mass protest must be explained in relation to m arket reform. It should be

noted that various symptoms arise with the introduction of the market. Mass alienation, as alluded to above, has been one symptom that originated from state socialism and persists through the social transformation in a more

vulgar form. Specifically, groups outside the present ownership structure, which includes the bulk of workers, are left to procure income from the unofficial economy. This in turn leads to high rates of criminal activity and lack of self-worth seen in other social indicators such as alcoholism, drug

abuse, and prostitution. Primary reasons are associated with unattained goals toward a just society and stifled expressions of freedom during the Soviet period:84

Recent economic reform has also brought severe protest. First, the Ukrainian and Kazakh governments began to tighten their budgets since 1995 in response to spiraling inflation and drastic fall in productivity, respectively.85 Second, the governments began to tackle the problem of inter enterprise debt and wage arrears. In Kazakhstan, 1997 was a particularly strike-prone year. Two separate and grave incidences occurred to the striking workers of the Janatas Phosphorous Plant. First, 70 people were hospitalized after a hunger strike over unpaid wages.86 Workers of Janatas were also

84 Rose, 52-61, and Tong, 215-237. 86 World Bank, “From Plan to Market”, World Development Report 1996 (Washington, DC: World Bank, 1996), 173-174. 86 RFE/RL Newsline, Vol. 2, No. 26 (1998).

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beaten and jailed on February 17,1998.87 In both instances, the nationalist opposition AZAT (a strong political movement) was in solidarity with the striking workers. To date, Ukraine has a long record of protest activity. Yet,

the latest events to occur in Ukraine rem a in very troubling since so many

industries are affected. Approximately 600 employees of the Khmelnitsky nuclear power plant in western Ukraine went on strike demanding payment of

back wages.88 Pilots of the national air carrier also went on strike for back wages, but also for better pensions.89

Regarding passive resistance, most retreat to private life, ignore social norms, and develop ways to "work around the system."90 There is no

inclination to mobilize politically either. The confusion of social relationships in this period has enabled enterprise managers to support their workers through state subsidies.91 The Donbas miners have been an exceptional case, where such mobilization has occurred through work-stoppages, thus leading to further concessions on part of managers. Consequently, sobering statistics show evidence of mass-alienation. For the first time since independence, Ukraine has experienced more unemployment than open job vacancies. True, -much of the employment figures throughout the former Soviet Union are under-reported, yet sufficient evidence from Western sources conclude that this increase in unemployment is not hidden.92 Additional somber data also

exists reflecting the postcommunist malaise. Suicide rates have been

87 RFE/RL Newsline, Vol. 2, No. 35 (1998). 88 RFE/RL Newsline, Vol. 1, No. 144 (1997). ^RFE/RL Newsline, Vol. 1, No. 164 (1997). 90 Tong, 218. 91 Stephen Crowley, “Between Class and Nation,” Communist and Post-Commnn ist Studies 28.1 (1995), -50-51.

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increasing steadily from 21 per 100,000 people in 1991 to nearly 27 per 100,000 people in 1994, and there has been a substantial increase in the m urder rate as well.93 In conclusion, while some of these variables explain inherited moral decay, most can be attributed to both formal and informal

constraints in the transition to the market.94 Zoltan Krasznai and Jan Winiecki, economists of the “neo-institutional” school, arrive at a different

conclusion, however, in that these are simply "bad" costs that are necessary

for an inevitable "good" outcome.95

C. HistoricalDeterm inism and Post-Fordism

Contrary to the concept of capitalism as the end-game of history, the ideological gap in postcommunist discourse as exhibited by the protest

activity shown above and in the case studies indicates that there is room for an alternative conception. Patterns of behavior inherited from the Soviet

period show neither "acquisitive impulse in the general public of capitalist desire," nor the concept of "consumerism."96 Thus, it is conceivable that political space is open to a working-class historical bloc, especially in the absence of an entrenched landed elite. In particular, the imperial Russian/Soviet development pattern in Kazakhstan has been formed by

bureaucratic elites, not necessarily a class that is reactionary and open to form an alliance with the agrarian masses. The trajectory of global capitalism

suggests that transnational actors may be the catalyst to any alliance

92 UPresA [1995b]. Obtained by: http://Kyiv.sovam.com. 98 UPresA [1995b]. Obtained by: http://Kyiv.sovam.com. 94 Zoltan Krasznai and Jan Winiecki, “Formal and Informal Constraints in Transition to the Market,” in CommunistE c o n o m icR r F.onnnmioTransformation 7.2 (1995), 239. - 96 ibidr 246.

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affecting the power balance of the nomenklatura. In fact, the power contest is over competing paradigms marked by several indigenous political movements, labor and elites alike. W hat is most foreboding is if the present bureaucratic elite were able to control a vast proportion of property, form an alliance with the state, and be able to exercise ideological influence over the emerging bourgeoisie.97 Transnational interests, often acting as kingmaker, are attracted to globalizing processes in production.

As evidenced from Stal1 Ershov's observations, post-Fordist, or lean production methods are already being implemented in former Soviet

enterprises98 Yet the key to this definition in the postcommunist context is that post-Fordism represents a new production order that influences the

constellation of social forces and state institutions that have regulated economic activity in the past. For example, according to Ershov "the

humanization of the social sphere at enterprises has in turn become one of the key elements of another new concept—development—which is increasingly

displacing growth in the system of conceptualizations of social progress."99 Essentially, Ershov documents the creating of an "ethic" to go along with capitalist progression. As Weber showed, a consciousness of this type took several centuries to imbue into the minds of European society, and only at the

expense of severe religious/class divisions. Unfortunately, those divisions in

96 Bilenkin, 32, my emphasis. 97 See Dietrich Rueschemeyer, Evelyne H. Stephens, and John D. Stephens, Capitalist. Development & Democracy (Chicago: University of Chicago Press, 1992), for a dynamic analysis of class'Tormations and predilections toward authoritarian regime structures, 100- 101. 98 Stal’ Ershov, “Industrial Democracy in the System of Market Relations,” in Problems of Economic Transition 36.4 (1993), 86-87. "Ershov, 87.

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their nascent form have already been seen in post-communist society. Lean production and state control on the labor process contribute to the authoritarianimpulse. Government employment legislation in Ukraine and Kazakhstan points to an emerging social relationship that is specifically oppressive on labor. In Ukraine, such legislation brings employers into a

dominant role given that trade unions are not allowed a political premise to organize or strike.100 In Kazakhstan, strict labor legislation is found embedded

in new trade codes of the constitution that favor industrial suppliers and exporters (most of which are nomenklatura) and in the privatization process.101

Since the president and his government de facto control the national privatization committee, property options that favor labor are reduced.102

Economic restructuring in the countries examined here is t a k in g a classically global trajectory. That is, methods of production are geared to external markets. This presupposes lean production methods and post-Fordist

relations as discussed in chapters 6 and 7. Kazakhstan has clearly taken the lead insofar as procuring foreign investment. Ukraine is significantly mired in various Soviet legacies, including labor hoarding, th at it will mostly likely

assume a much more ambiguous role in the global political economy. In addition, Ukraine will depend on Russiafor energy needs well into the future.

This dependency will perhaps bind Ukraine to Russia much more subordinately than Kazakhstan would ever experience.

100ILO/CEET, The U k ra in ia n Challenge (Budapest: Central European University Press, 1995), 174-175. 101 Natsuko Oka, “Kazakstan and Efforts at Economic Integration with other CIS States,” Central Asia Monitor No. 4 (1997), 14-21. Note especially the absent discussion of labor as a partner in the Customs Treaties.

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Russia exacerbates^these dependent tendencies by refocusing attention to other issues. First, by assuming the foreign debt of the former republics, Russia is able to demand greater authority in the social and economic policies governing the successor states, mainly by using trans-

regional links with rump com m u n is t parties. Second, Russia has made

strident claims regarding its citizens now found abroad in newly independent

states. Paul Goble asserts that, “two supposedly contradictory tendencies, the collapse of state authority within the Russian Federation and the reassertion of RussiarrpowertJver her new neighbors,” are responsible for these and other

claims.103 Yet real structural linkages remain. As Ian M atley noted, “the —development of northern Kazakhstan has been exactly as one-sided as has

been the development of the Central Asian cotton country.”104 According to Matley, “the whole of northern Kazakhstan has been transformed into an appendage of the metallurgical complex in West Siberia and the Urals...its -important links no longer tie it principally with southern Central Asia but with the north and west.”105 It is difficult to ascertain whether Russia uses this structural legacy as a means to advance its interests. It seems logical that it does, even if no imperial designs are manifested for the near future. These geopolitical considerations are further interlinked with larger global pressures, such as the impetus to developing an efficient trading regime suitable to keeping Russia and the successor states competitive.

102 Waddah Saab and Mukul Kumar, “The Influence of Institutional Arrangements on the Progress of Privatization,” International Review ofAdministrative Sciences 63 (1997), 190. 108 Paul Goble, “The Reassertion of Russian Power in Eurasia” (May 24, 1994), 1. 104 Ian Matley, “Industrialization,” in Central Asia. Ed. E. Allworth, 344.

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For more than six years, Ukraine has managed to survive independence from Russia and maintain viability as a state despite stumbling - through most of its obligations as a protector of its citizens. Not only

devolvement from the former Soviet Union, but also adjusting in an era of

neoliberalism puts great pressure on this state and its constituents.106 Of the many groups vying for power and demanding accountability in Ukraine are the

agitated miners of the Donbas.107 Thus a seemingly old labor movement has

become crucial to social change in Ukraine, while debates in Europe rage over

social movements” in enhancing an already vibrantrcivil society. Indeed, modern day Ukraine continues to exhibit characteristics of —massive social change. The debates over forming a new (post-Soviet) constitution attest to Ukraine’s pluralizing society. Most importantly, the —parliament-more or less acts as a democratic forum. -When Leonid Kuchma, President of Ukraine, sought the constitutional power to reorganize the —institutions-uf govemance in-Ukraine he m et quite forthcoming opposition from

right and left108 The common refrain was that the proposed law would turn Kuchma into a dictator. However, parliamentarians soon came to realize

through a fervent discussion and consensus that the “Law on Power” finalized Ukraine’s statehood and independence from Russian hegemony. It was

106 The “shock-therapy” guru, Jeffrey Sachs, has suggested pressure from multilateral institutions be kept on the Ukrainian government to continue cutting subsidies in order to attract foreign investment (RFE/RL, Pt. II, 21 April 1997). 107 The Donets’ Basin, Donbas, occupies a wide swath of south-eastern Ukraine, nearthe border with Russia. It has traditionally been an industrial region, exploited for coal, and -other minerals- used in production. 108 Taras Kuzio, Ukraine Under Kuchma (New York: St. Martin’s Press, 1997), 100-108.

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approved as a pragmatic measure to avoid a referendum (and perhaps civil war), particularly in the Donbas, where economic distress was threatening

political reform.109 An examination of the reform process particular to the Ukrainian

- situation will reveal this dynamic of competing forces, as well as stark historical continuities challenging state and regional leaders alike. The intriguing continuities that demand further explanation here are rooted in the early twentieth century, and in this case to Russian imperialism. It is no

secret that Tsarist and then Soviet policy was to exploit conquered regions to the benefit of Moscow. What this spelled for modem day Ukraine, however, - was a major complication to state-building. The latest developments in the

Donbas110 represent divisive rifts among the whole of society regarding Ukraine's future and specifically to the objective of state-building. Therefore,

—the project outlined below will study the events in the Donbas as significant to Ukraine's survival. The questions raised are of fundamental theoretical importance to the whole of any post-Soviet society, especially concerning the legacies with which it struggles.

The emergence of a Ukrainian working class in the late —nineteenth century, facilitated by massive migration, would become a

prominent feature of the societal landscape. The functional relationship of -migration to industrialization and urbanization that I use is borrowed from

. 108 K uzio, U k r a in e U n d er TCnrhma, 104. uo I have been alerted to the fact that this spelling is from the U kra in ia n transliteration. Most documentation uses the Russified "Donbass," and where quoted I maintain this spelling. However, with all sensitivities in mind, I intend oncontinuing the usage of Ukrainian transliteration for place names as it is the language of official state administration.

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Ralph Clem. Specifically, he states, "migration generally acts as a mechanism to balance the supply of and demand for labor on a regional scale, while

urbanization usually results from industrialization and the jobs created thereby which attract people to the cities."111 Thus, economic development in

Ukraine was facilitated by just such a process; peasants filling positions in

urban areas. However, it must be noted that this was a differentiated process compared to the remainder of the country. For example, Leonid Melnyk observes that industrialization in Ukraine was unevenly allocated and developed prim arily due to the make-up of "free labor": [t]he main groups from which the pre-proletarian labor force in the Ukraine was formed consisted of: peasants deprived of their means of production (impoverished state peasants, landlord peasants on temporary leave from the land for a contracted period of time, and serfs "assigned" to factories); and impoverished urban artisans, townspeople, and village craftsmen. These groups acquired the requisite factory and technical skills and eventually became hiredlabor.112 This conception has indeed been enhanced by earlier studies submitting the

great importance and presence of heavy state involvement in economic

development:*18

The assessment above suggests that there is a significant linkage . -in-Phase bbetweenthe demographic policies of the Russian empire and the political economy of its periphery, including the Jewish pale of settlement that cuts through the Donbas. First, we can make the assumption that a

111 Ralph Clem, “Population Change in the Ukraine in the Nineteenth Century,” in I. S. Koropeckyj, Ed.U k ra in ia n Economic History (Cambridge, MA: Harvard University Press, 1991), 233- 112 Leonid Melnyk, “Industrial Development and the Expansion of Free Labor in the —Dfeame,” in I. S. Koropeckyj, Ed. Ukrainian Economic History. 256.

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"standard" capitalist model of production is an international phenomenon in the contemporary world. Secondly, the crisis that eventually destroyed the

feudal order in Russia was the b eg in n in g of this phenomenon, namely

industrialization as a higher form of national wealth accumulation. With such

understanding, the following analysis will centralize the labor force of the Donbas within the capitalist production order of that time into the present,

with all of its contradictions. This includes analyzing the industrial revolution of the late nineteenth century (in the case of the Russian empire) as a specific —point uf reference to, and indeed origin of labor unrest. Clearly this was a formative event and period for laborers in Ukraine, who for the most part were — made up of unskilled peasants. Skilled artisans and industrial workers were

also influential in the history of the Don coal m in in g basin, but these workers

an important element in the radicalization of labor in eastern Ukraine. As anarchic as the Donbas was at the turn of the century, with

animosities charged by hired im m ig r a n t labor from the north and great skepticism toward rapid industrialization on part of the local Ukrainian peasant, the most volatile reactions from either group were invariably aimed at Jews. According to an historian of labor in late imperial RussiarCharters Wynn, "workers' intolerance and their proclivity for violence coexisted with iiopesfor economic improvement and social leveling."114 Unfortunately, "economic improvement" and "social leveling" were not occurring at a rate fast

m Specifically, Barrington Moore, Jr. and Karl Polanyi, as noted earlier, are two of the most prominent figures to document the severe social upheaval associated with creating free — labor.

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enough for the mostly Christian Russian and Ukrainian workers. Ekaterinoslav (Dnipropetrovsk) would become the most prominent area of violent pogroms, although the Donbas and entire Dnepr area were hotbeds of anti-Semitism as well.115 Focusing on the pogroms of the early twentieth

century enables one to pinpoint the rift between the leaders of revolution, those that attempted to formulate the collective conscious of the workers, and the unskilled laborers of the mines. Workers essentially used pogroms as a

political outlet to air socioeconomic grievances, and thus articulated the —pretense'of various injustices imparted on them by Jews. Moreover, pogroms

were often manipulated by both the Tsar's administration and Ukrainian nationalists. Consequently, one could look at these events as the failure of the

revolutionaries of that day to establish a collective consciousness, where every worker had a common interest. This failure is perhaps rooted in the fact that —immigration to eastern Ukraine up to 1905 was transitory. Likewise, Wynn notes that not many peasants recruited by coal producers had the intent of settling in the Donbas, because "industrial employment [was] to be temporary."116 Effectively, these were displaced proletarians who always had --the intent of retum ingto agriculture, exercised their discontent to

management by a high turnover rate, and were quick to blame poor working

conditions and low wages on other ethnic groups.

114 Charters Wynn, Workers. Strikes, and Pogroms (Princeton, NJ: Princeton University Press, 1992), 7. 115 See Wynn and Friedgut for more on the pogroms. U6 ibid. 50.

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On the whole, the workers of the Donbas today believe they constitute a "special" place in national history.117 However, the rapid industrialization that occurred in the Donbas-Dnepr Bend through Phases I

and II would ultimately strengthen two complications associated with Ukrainian independence in Phase EH. On the one hand, Donbas workers provided a counterweight to Ukrainian nationalist demands, as most factories were populated by Russians. On the other hand, they constituted an entrenched working class, dedicated to the factory and mining complex which

would up to the present day prove a formidable obstacle to marketization.

Phase II of capitalist development was never completed and brought revolution, which simultaneously galvanized and marginalized the mass of

society in Ukraine. Peasants were turned into workers in a most violent manner, as the great famine of 1932-33 attests. Subtelny adds, "the coal miners of the Donbas and the iron-ore producers ofKryvyi Rih...were true - -proletarians," and in many ways they continue to place worker interests above

those of the nation.118 It is thus not surprising that other observers, such as Alexander Motyl, are pessimistic with regard to market reform and

democratization in the Donbas during Phase m . In particular Motyl states, "cleaningup and modernizing the area...will be socially disruptive...and financially prohibitive.”119 Lastly, even the most am ateur observer could

-attribute most of the Donbas' ills to its dependency on the state. Stephen Crowley and Lewis Siegelbaum attribute this to the fact that "Donbass miners

117 Dominique Arel and Andrew Wilson, “The Ukrainian Parliamentary Elections.” RFE/RL Research Report 3.26 (1994), 14. 118 ibid. 270.

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have assumed a political importance out of all proportion to their numbers and,

precisely (though paradoxically) because prospects for their industry are so grim."120 Oddly enough, and unfortunately for Kyiv, the Donbas miners seem

adept a t maintaining their strategic position of stifling reforms despite their

numbers. Table 1 indicates to just what degree these m in e r s have been able to

increase real incomes from the state at the expense of other industries and regions.

Table 1. Average Real Wages in Selected Sectors, January, 1994 -(U k r a in e ) Sector Wages (rubles, coupons, karbovanets/month) Total Economy 763,396 in d u s try 931,711 Coal Industry 1,954,310 D onetsk O blast 1,384,414 Fuel Industry 1,907,856 Food Industry 831,738 Non-ferrous 810,165 -Metallurgy Science 643,071 -Health care 5237619 Education 513,542 Source: ILO/CEET

With these historical preconditions in mind, it is requisite to explain why the Donbas has continued to be a region of labor unrest. Furthermore, it is equally necessary to determine what rifts in the social structure would lead to such remarkable mobilization; clearly unprecedented in most regions of the former Soviet Union.

119 Alexander Motyl, Dilemmas of Independence (New York; Council on Foreign Relations Press, 1993), 131.

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Activism ofthe labor movement in Ukraine is signified by widespread strikes. Table 2 shows the prevalence of this type of protest, strongest in industry.

Table 2. Number of Strikes and Days Lost by Sector 1990-1993 (U k r a in e )

- Establishm ents W o rk ers L o s t D a y s at which Strikes O c c u r r e d Total 1990 260 130,936 126,132 1991 239 175,936 1,873,142 1992 2,239 181,616 865,726 1993 462 260,332 2,676,653 In d u stry 1990 198 119,323 114,468 1991 156 163,835 1,794,376 1992 26 9,926 34,956 1993 345 240,092 2,354,890 Construction 1990 36 7,047 7,044 1991 22 3,766 67,152 1992 2 237 3,938 1993 64 10,147 104,713 T ransport * 1990 17 2,790 2,785 1991 31 6,841 9,088 1992 127 36,495 119,302 1993 20 5,190 43,413 O ther 1990 9 1,776 1,835 1991 30 1,494 2,526 1992 2,084 134,958 707,521 - 1993 33 4,903 173,637 Source: ILO/CEET

—Strikes are especially commonplace in the Donbas. In fact, between 1990 and

1993,3,200 enterprises have experienced at least one strike in Ukraine, at

130 Stephen Crowley and Lewis Siegelbaum, “Survival Strategies,” in Lewis Siegelbaum and Daniel Walkowitz, eds. Workers of the Donhass Speak (Albany, NY: State University of New York Press, 1995), 61.

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least half of them concentrated in heavy industries of the Donets’ Basin.121 The dynamics of labor unrest in the Donbas indicates proletarian, or class

consciousness, the depth and scope of social networks, opportunities for movement participation, and finally, structural conditions conducive to

—sustaining the labor movement. It will be found that class consciousness is so

far incomplete and disjoined from the political process that most exhibitions of collective action are left with a reactionary flavor, verging on mob behavior.

An im portant addition to this, however, is on the necessity of observing the

- actions displayed by political elites supposedly representing worker interests. If anything, elite rifts in formal politics indirectly affects the opportunities for collective action. Yet, what type of political opportunities actually exist is not yet very clear. For example, Crowley and Siegelbaum Claim that, “the expansion and contraction of opportunities at the national and local or — enterpriseievels have structurally delimited the nature, degree, and foci of miners’ activism,” in the mines of eastern Ukraine.122 This goes a long way in —explaining the fragmented nature of working class activism.

Western media did bring attention to the Donbas. In fact, the

Donetsk coal mining basin epitomized the fervor of 1980's glasnost and

perestroika. First, the Donetskii trade union made a valiant effort at representing workers’ interests autonomously.123 This would not have been possible under the strict labor laws of the Brezhnev regime. Second, the 1989

miners' strike exemplified just how far perestroika had stretched the legitimacy of the Soviet government, and it was the first strike of its kind to "create

121 ELO/CEET, 184.

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solidarity among workers of different enterprises and different regions."124 Just

as glasnost was instrumental in providing the means of protest, and thus a political opportunity structure for the miners to organize, so Soviet workers were instrum ental in bringing on the collapse of perestroika, and finally the

USSR itself. Although the Donbas miners were but a part of the collapse, they

were pivotal in that their participation advanced political goals. Interestingly, committees of the Lviv-Volyn coal basin (in western Ukraine) were conducive in moving the Donbas miners to add independence to their agenda and, “miners were organized as a social and political force in Ukraine even before the foundation ofRukh.”125 This type of movement surrogacy was critical to

maintaining the workers’ movement in eastern Ukraine. Still, what accounts for the turnabout in labor behavior from acquiescence toward management to explicit demands on the state?

From one perspective this can be answered by analyzing the progression of society from traditional to modem. Tatiana Zaslavskaialias

pointed to the important societal changes in the USSR since 1930. In particular, Soviet workers today now have a "spectrum of needs and

interests...more abundant and broader than that of workers in the 1930s,” clearly echoing new social movement theory.126 Moreover, “in addition to

economic [needs], it includes social and spiritual needs."127 This is in line with

' 122 ibid. 62. 123 Crowley, Hot Coal. Cold Steel. 76-82 134 Crowley, “Between Class and Nation,” 46. ^ Crowley, “Between Class and Nation,” 46. Rukh means “movement” in Ukrainian, but today only represents a virulently nationalistic front based in western Ukraine. 138 Quoted in Murray Yanowitch, ed., A Voice of Reform (New York: M. E. Sharpe, 1989), Igg 127 Vann witch 162.

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the pluralist literature which posits that Soviet society simply became too complex; th at social and political relationships demanded more freedom in accordance with modem societies. Political control over the means of

production and the labor process became the only mechanism the state could -maintain in order to inhibit such action prior to 1989. Labor essentially

reawakened with liberalization and was strengthened particularly in the Ukrainian context by demands for independence. Workers of the Donbas did

not hesitate removing themselves from the Soviet Union because of the exploitative nature associated with the current production order. Moreover, at

that critical juncture it did not matter how the newly revitalized proletariat extricated itself from the Soviet state, only that it occur soon and that it repair

the grave economic decay that gripped the industrial heart of Ukraine. Perestroika was interpreted by nearly all workers negatively because of the drastic fall in standards of living. Likewise, social benefits ^provided by the enterprise were being cut in order to allocate resources more

efficiently. The workers were so accustomed to these benefits, however, that

they embraced elements prom isin g to provide for basic needs. This explains

both the fight for Ukrainian independence, and alignment with a greatly despised management. Crowley adds that exploitation as related to the "labor theory of value" motivated Donbas miners to challenge the very market principles th at they espoused.128 More importantly, this facilitated a new style of collective action, consolidated in the council of labor collectives (STK). Crowley also notes that, "miners expressed a strong sense ofinjustice, a sense

128 “Between Class and Nation,” 58.

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of having been robbed., .people were not getting paid according to their labor," and subsequently the miners, "drew a connection between their sense of exploitation and die state's ability...to distribute and redistribute wealth as it saw fit."129

Trade unions, including the STK, have had a difficult time framing

themselves as defenders of workers’ interests.130 The decisive moment for all workers came when new legislation allowed the creation of independent workers' organizations. The 1987 Law on State Enterprise (Association)

“played an important role in laying the foundations for the development of independent workers’ organisation in stimulating the enthusiasm and self- activity of workers, and providing an initial channel for their mobilisation.”131

One could now change jobs, avoid being removed from a job for trivial reasons, and of course organize as a collective unit.132 Don Filtzer, a Soviet labor

historian, finds that the miners' strikes133 in particular are in contradiction to proletarian consciousness despite the fact that they have transcended demoralization and depoliticization characteristic of the Stalin years. According to Filtzer, "the strikes threw up extremely radical forms of working-

class organization in the pursuit of demands, many (though by no means all) of which were pro-market and even pro-capitalist."134 This should not be

surprising since this time around there clearly was no intelligentsia to lead

129 “Between Class and Nation,” 58-59. 130 “Between Class and Nation,” 6 6 . 131 Clarke et al., 123. 132 Filtzer, “78. 133 A second strike occurred in 1991, and was clearly more political in nature. What is most —extraordinary about this strike is that it started out small and poorly organized in the Donbas, yet sparked a mass national protest. Some say that the August crisis in Moscow —can be attributed ~to this event as well, see Crowley, “Between Class and Nation,” 47. 134 Filtzer, 81.

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enterprises from the quagmire of stagnation to productive economic activity. In more direct terms, the workers of the Donbas simultaneously initiated explicit demands for Ukrainian society, and were led by the elites within that society. After independence, however, the miners were quick to realize that Kyiv's prerogatives were quite alien to their own. This linkage between working class economic demands and

nationalist agitation for independence ultimately anticipated a radical political agenda in Phase EH; antithetical to the free-market capitalist policies adopted

by the Kuchma regime between 1995-1997. First, state and nation building was never completed under the Kravchuk administration. This left open questions of identity and ideological consensus for nationalists who continued to mobilize society along ethnic lines. Naturally, this predisposed political positions to the right of workers who merely sought to maintain their material

position. Secondly, as nationalists lined up behind neoliberal reform efforts, communist-socialist and peasant party blocs sought to galvanize already

agitated groups of workers in the east and south, who were for the most part

Russian or Russified Ukrainians. Arguably, the decline of the coal industry left

an identity void for the m in ers of the Donbas as well. Indeed, the task rem a in s for leftist parties to construct a new postcommunist identity for them. Ultimately, a transformation must occur in order to unite an effective social

movement organization in the region. Dan Walkowitz c la im s likewise, that

“discarding the language and categories that the Soviet state had used, the miners embraced the ‘forbidden other,’ the capitalist alternative represented

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fay the W est and especially America as the object of desire.”135 Consequently,

“this alternative would be, at best, a problematic identity for industrial workers such, as miners.”136 This issue of identity is further compounded by the exclusionary nature of the past Soviet system vis-a-vis the miners. In support, Tim McDaniel reveals,

The key distinguishing feature of the Russian127 working class, then, was permanent and a lm o s t uninterrupted exclusion. And it was this exclusion...that defined the basic structure of the Russian labor movement. First, there was a large category of mass workers, without stable commitments or loyalties, who were denied organization and participation. Such workers existed in every industrializing country, but the lack of organization, -weakness of civil society, and political despotism of Tsarist Russia ensured that massification would be more widespread and more profound.137 Undoubtedly, this is a formidable experience to overcome as a movement activist. However, the social movement theorist Anthony Marx reminds us that “states shape civil society...by establishing boundaries for inclusion or exclusion in the polity, through the process of‘social closure’.”138 Social closure

was classically defined by Moore as a historical enactment of early capitalism, whereby peasants were forcefully thrown off the commons of manorial estates in order for land to be turned over to small capitalist sheep farmers and,

therefore, profitable use.139 Anthony Marx uses the concept more abstractly, as a process of determining rules of citizenship. In turn, the prevailing issue of

135 Daniel Walkowitz, “Normal Life’: The Crisis of Identity Among Donetsk’s Miners,” in Lewis Siegelbaum and Daniel Walkowitz, eds. Workers of the Donbass Sneak. 162. las Walkowitz, 162. m For our purposes this applies to Ukraine as well, since the Donbas always remained within the Russian Empire. 137 Tim McDaniel, Autocracy. Capitalism, and Revolution in Russia (Berkeley, CA: University of-CaHfbrnia Press, 1988), 161. 138 Anthony Marx, “Contested Citizenship,” Unpublished Manuscript (1996), 7. - IS4bidr-9=*4.

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i a political opening for all aggrieved groups in Ukraine—that

is, full suffrage exists- Yet, the type of state determines this dynamic, and this subsequently “serves as a ‘frame’ for mobilization.”140 Therefore, exclusion in the realm of ideas remains a disappointing factor in providing full citizenship,

as recent media censorship exhibits.

In many ways, the contemporary situation, marked by the persistent upheaval and disenchantment of Donbas workers, mirrors that of the revolutionary period 1917-1920 (see below). Again, we are witness to collective action associated with the livelihood of a class. Moreover, as

Theodore Friedgut has noted, "it was then necessity rather than choice that —formed the Donbass working class," but now it essentially sustains itselfby means of unstable social networks.141 Unfortunately, the worker m ust accept the continuity of inept leadership. In other words, there exists a headless movement, a substantial membership base and a vibrant communication network with no viable leadership.142 A t this point, bereft of effective elites, the government does not have the capacity to influence all economic sectors

simultaneously. Therefore, it is only a m atter of time before worker organization produces a “truly coordinated campaign.”143 Spontaneity is giving way to organization, however. For Bob Amot such a situation is actually near upon the Russian state. He holds that an organized workers’ movement w ill,

“by necessity become political extremely quickly and will identify that wage

140 A. Marx, 8 . 141 Theodore Friedgut, Iuzovka and Revolution (Princeton, NJ: Princeton University Press, 19897T2T6. 142 Doug McAdam and David Snow, Social Movements (Los Angeles: Roxbury Publishing Company, 1997), 80. 143 Bob Amot, “The Political Economy of Russian Labour,” Draft Paper (1996), 12.

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-arrears are not really the problem but the nature of the system as a whole is the root cause.”144 That system has peculiar features: “the existence of —finance capital without capital, banks without real money, commodity

exchanges without many basic goods and without any true commodities,

shares without a secondary market in shares or shares which are not shares but bonds, and a labor m arket which is not a real market.”145

Insofar as 1991 represents a revolution, consider comments by Subtelny on events during 1917-1920: "in eastern Ukraine, the revolution placed idealistic, patriotic but inexperienced intellectuals into positions of

leadership and forced them to act before they were sure of what they wanted or how to get it."146 Now too, the workers of the Donbas find themselves in such a dilemma vis-a-vis political demands on the state. To the Russified population, the 1920's represented a period when an "alien elite" governed in Kyiv and used Ukrainian ization to "displace the existing political class in the Donbas with

Ukrainian nationalist outsiders."147 In reality, the "support of Russian- speaking Donbass miners for Ukrainian sovereignty was based not on - nationalism, but on the hope that a Ukrainian government with more independence would provide a better deal than the Soviet government in terms of what it took away and what it gave back."148 On the establishment of institutional channels for redress, there is some hope for strong state —involvement.

144 ibid. 1 2 . 145 Hillel Ticktin, “Permanent Chaos Without a Market,” Studies in Comparative Communism 25.3 (1992), 242. 146 ibid. 377. 147 Andrew Wilson, “The Donbas Between Ukraine and Russia,” Journal of Contemporary —History 30 (1995-y-381.

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In particular, there is a substantial trend toward corporatism where a continuance of the "social contract" is facilitated by avenues of expression available since the dawn of glasnost. Workers maintain a certain

quiescence to management, but are greatly adverse to unemployment given

historical circumstances, and will not hesitate to uphold the status quo should it be threatened by what economic reform entails; mainly mass unemployment linked to enterprise restructuring. Mark Kramer of Brown University has suggested that, "free-market reform and democratization have had the

simultaneous effect of threatening workers' economic security (at least temporarily) and greatly expanding their political rights."149 In addition,

strategic to both Ukraine and Russia contributes to the social and political upheaval. Lastly, Theodore Friedgut, another Donbas historian, stresses a

lasting fact: "the Donbass...remained within the Ukraine but not of it."150 Given this geopolitical disposition, workers of Russian heritage prove to be a formidable obstacle for policy-makers in Kyiv.

These interpretations alone force us to reflect on the present situation in light of the knowledge of social movement dynamics as well. According to Sidney Tarrow, “since the power in movement depends on the

mobilization of external opportunities, when opportunities expand from challengers to other groups and shift to elites and authorities, movements lose

148 Crowley, “Between Class and Nation,” 59. 149 Mark Kramer, “Blue-Collar Workers and the Post-Communist Transitions in Poland, Russia, and Ukraine,” Communist and Post-Commnnist Studies 28.1 (1995), 6 . - l5Q-ibkfc-33i.

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their primary source of power.”151 One barrier that contributes to grassroots

power is the legacy of the administered mass organization (AMO). Vestiges of the AMO may still exist in the former USSR and represent institutions draining power from the opposition to elites and authorities. Gregory Kasza

defines this type of institution as one based on conscription, like the army.152 An AMO is dramatic in form in that it can mobilize a mass of people rather

quickly for a one-party state without the need of interest groups and/or

ubiquitous governing organizations for the ru lin g party.153 According to Kasza,

the origins ofthe AMO in the Soviet Union were founded on the principle that,

“the party had to industrialize Russia to create the objective conditions for expanding the proletariat, and this required it to mobilize labor.”154 I would

argue that thisLe n in is t doctrine holds true today in all sectors of heavy

industry that have not been monetized. Thus, the type of social movement

that emerges is dependent on the type of social relations of production manifested in civil society, and in turn determines its base of support—its power.

In the final analysis, labor unrest in the Donbas is associated

with a relative proletarian consciousness only when juxtaposed with another ethnic group or class. These upheavals remain problematic and unworkable because there remains a strong sense of political atomization which may or may not be rectified by an indigenous intelligentsia. Likewise, eastern Ukraine is pivotal to the success of all Ukraine. This specific situation represents the

151 Sidney Tarrow, Power in Movement (New York: Cambridge University Press, 1994), 190. 132 Gregory Kasza, The Conscription Society (New Haven, CT: Yale University Press, 1995). 153 Kasza, 1 . 164 Kasza, 168.

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opportunity to build a multi-national state. Therefore, every incentive should be tested in order to bring the Donbas into a rational dialogue that is critical to

the state- and nation-building process, which includes addressing the issue of

citizenship. Nevertheless, the miners have proven their political s ta m in a. Coal miners in the Donbas have been able to sustain their position as a strong political force despite poor leadership. They have been able to place enough pressure on the government resulting in continued support of an ailing coal

industry. As of late 1996, the government has conceded again, and miner —activism has been able to raise subsidies up to (35 trillion karbovantsi) ($189 million).155 In sum, this is a portrayal of a dynamic that can onlyhe deemed a mini cycle of protest. Tarrow defined the protest cycle as a phase of

heightened conflict and contention across the {entire] social system, and the culmination of informal political struggle determ ining the direction of social change.156 Thus far, the mobilization of aggrieved workers in eastern Ukraine merely mirrors the larger phenomenon of subdued conflict and contention in the rest of the nation. Political mobilization remains miniature in guise in that it remains regionally intense, and has only spread sporadically in other industrial sectors of the political economy.

155 OMRI Daily Digest, “Ukrainian Government Ups Subsidies to Coal Industry,” (1996). 156 ibid. 153-169.

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The introduction of marketization and globalization in Central Asia impinges on the state-society relationship somewhat differently than in

quiescence relative to Ukraine. Naturally, this can be explained by the . - absence of a deeply entrenched industrial working class, but it points to other factors as well, including scholarly perceptions of the region. Orientalist ideas

—were just ay prevalent among Soviet political scientists and historians as they were among practitioners in the West.157 This does indeed inform perceptions —on the route of development policies-as-tbeywere shared between Soviet and Western observers. One could argue that the perception and study of Islam -shrouded the potential of the industrialized peasants, today a working-class, to

organize into a viable labor movement. Edward Said has written that, -^Islam...seems to its historians to be best-suited to a rather Platonic and antiquarian bias.”158 The pervasiveness of “oriental” ideas is prevalent among academic practitioners, as well as trade union organizers, who failed to note the advance of nascent social forces challenging rapid m arket reform. This is in spite of the fact th at roughly 60% of the Kazakh population is non-Muslim.159 Also, it was assumed that the “Asian” nations would unequivocally yield to

157 See Edward Said’s Origntqlism (New York: Vintage Books, 1979). Dale Eickelman, “Introduction,” in Russia’sM u slim Frontiers (Bloomington, IN: Indiana University Press, 1993), notes that Soviet orientalism “occurred in relative isolation from Western scholarly - —debate,” and that Gorbachev’s “new thinking” left a vacuum in conceptual thinking on development (2-3). 168 ibid. 305. 159 Ali Banuazizi and Myron Weiner, The New Geopolitics of Central Asia (Bloomington, IN: . —Indiana University Press,-1994), 12.

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authoritarian impulse as

it drastically easier to pursue a neoliberal agenda. Regarding the reformation oflabor markets as part of the

neoliberal agenda during Phase EH, the World Bank states, “greater market

minimize adverse incentives, improve occupational and geographical mobility, —and protect workers.”160 Likewise, American think-tanks, such as the Initiative for Social Action and Renewal in Eurasia (ISAR), adhere to a “third

— sector” model of civil society that relies on a preponderance~of NGQs (non governmental organizations) to defend the realm of civil society.161 Also, as

Alejandro Colds maintains, “[NGOs] are fundamentally pressure groups which do not contest the overall legitimacy of a specific regime but merely seek to alter a particular policy.”162 In reality, this conception of economy and civil

society leaves scarce hope for Kazakh workers to organize in any capacity so —long as they are not included in any dialogue with the state. TNCs, orrthe other hand, rely on a more direct approach to setting guidelines to the emerging -capital-labor relationship. Chevron, for example, has signed deals with

whomever was willing to make an agreement in order to get oil to m arket.163 Between financiers abroad and the Nazarbayev regime, corruption and

160 ibid. 74. 161 Bakhytzhamal Bekturganova, “Kazak NGOs Struggle for Influence,” Surviving Together (Summer 1997), 44-45. 162 Alejandro Col&s, “Promises of International Civil Society,” Global Society 11.3 (1997),

163 Craig- Mallow, “Big Oil's Pipa Dream ” Fnrtnna fMnrrh 2, html.

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—mismanagement have run rampant over big petroleum, agreements like that of Tengiz.164 Needless to say, all of this affects the nature of industrial —relations-in Kazakhstan. First, states must guide initiatives and incentives

into the labor market. Often this is done in a repressive manner, and without —fche-consent of labor. Secondly, as an enforcer, the government does not hesitate to jail and/or censure those who advocate reform in social policy. The -latest instance was the sentencing of the leader of Kazakhstan’s Workers*

Movement to one year in prison for “insulting comments about the president.”165 Thirdly, just as in theNIC cases ofEast Asia, a hegemon is

valuable as a protector, and as an expansive market. Russia assumes this role as shown in the next chapter. Finally, poverty relief rarely adds up to real unemployment benefits and it encourages workers to turn elsewhere (i.e. —criminal activity) whichrcan be legally repressed.166

It is precisely that institutions representing labor are so weak —that the NIC model is so inviting to policy-makers. As elsewhere in thet brmer USSR, trade unions were dominated by the Soviet state. Given a weak civil —society, Soviet legacies of mutual dependence and patriarchal authoritarianism, and the expansive process of globalization, it is -understandable that any emergent working-class would confront many

obstacles to restructuring an industrial relations model more suitable for -—Kazakh labor. Studies on Russian labor movements have found a lack of self-

164 See Craig Mellow. 186 RFE/RL Newsline, Vol. 2, No.6 8 Part I. 166 World Bank, 75-76. See also UNDP, Chapters 2 and 4 for some disheartening trends in —employment levels and industrial restructuring impinging on Kazakh sodety.

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—awareness due to the inchoate transformation process of industrial relations now taking place in that country.167 This dynamic is compounded throughout —Gentral Asia, however, due to the historical pull of ethnicity in production relations. As in other NTS states, Kazakhstan had an industrial work force

consisting mostly of non-Kazakhs.168 Before departing on a historical discussion of industrialization and

—fee development of a working-class irrKazakhstanran important element of this history m ust be noted. Specifically, modernization in any guise is not

-n ecessarily new to Kazakhstan. fn~fact, it can be argued that economic policy

today is informed by two Soviet-era events that are deemed “rapid -modernization programs” by Gleason.169 The first such program was the Virgin Lands project, implemented by Soviet Premier'Nikita Khrushchev. The Virgin Lands project brought dry and normally unsuitable soil into production for

-wheat. The premise being, in classic Soviet scientific r e a s o n in g , that drought in Ukraine meant heavy rainfall in Kazakhstan.170 The second Soviet-era

—program influencing economic policy in Kazakhstan today was the geographic positioning of research and development, and heavy industrial plant.171

Because these facilities required considerable maintenance and comprised a strategic zone of the Soviet empire, a high concentration of the brightest minds -and strictest control mechanisms evolved. Thusdabor in Kazakhstan was not as under-industrialized as some assume, but was in a particularly vulnerable

167 Vladimir Iadov, “The Formation of Working-Class Consciousness Under Conditions of Social Crisis and the Developing Market Economy in Russia,” in Bertram Silverman, Robert Vogt, and MurrayYanowitch, eds., Double Shift (Armonk, NY: M.T3. Sharpe, 1993), 35-36. 168 Ian Matley, “The Population and the Land,” in Central Asia. Ed. E. Allworth, 105-108. lg>-The Central Asian States.-52. 170 Gleason, The Central Asian States. 52.

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Figure 2.-Kazakhs tan

swssssg

Budnyy

AN ; \ o Arqalyq TORGHAY ^ OBLYSY MSSBS \ V x Zhezqazghan A n T <

Oyzynrda

m m m ■ yS-'] / . ,-r=> . ‘1'S-L£ J -i-'vSMs'f?/ ;'."■i l . .' - - i * ^ e- K azakhstan International boundary — • — » O bfys boundary ’ // K • ■ - ★ National capital • O bfys capital 1 1 ■ Railraod

The national capita/ is scheduled to be moved from Aim ety to Aqmofa by the year 20QQ. A n obfys is named onfy when its name differs from that o f its administrative center. The dty of Almaty has status equai to that o obfys.f an 200 400 KBometen

Base 802222 (R0012S) 4 94 Source: Central Intelligence Agency

171 Gleason, The Central Asian States. 52.

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—position to be simultaneously repressed and regulated by the new political

economy. Russian imperialism played a significant role in the division of

. —laborin Central Asia. Before being integrated into the scheme of Soviet development, tsarist Russia made a point of controlling the region by fiat.172 - The reaction to this alien social structure today differs little among the new nations. Each leader has adopted an inordinate amount of strength in politics

. -as precedence over w hat is structurally desired by the masses. Kazakhstan

was not as heavily infiltrated with foreign capital as Ukraine at the beginning

—efthe twentieth century, but did face similar structural changesihat come

with foreign capital penetration. In fact, while the Russians were extracting —mineral resources from the Kazakh steppe, only three American and one British concern operated in what is now Kazakhstan.173 The most important

-— f.liange to Kazakh r.uH.iiim was-an im posed restrirt.inn of movement..

Historically, Kazakhs have been nomads.174 Land was valued as —arcommon resource, of which the Kazakhs utilized almost exclusively for the

g ra z in g of horses.175 When Russians began settling the region at the turn of the century, more consistently after World War II, a definitive social structure had emerged. The origins of this social structure, however, emerged much

—earlier.- Russian colonization was assisted by the guberniia system.

Gubemiias, or territorial jurisdictions, were marked by the fact that they were

172 H£l&ne Carrfcre d’Encausse, “Organizing and Colonizing the Conquered Territories,” in Central Asia. Ed. E. Allworth, 152. 173 Matley, “Industrialization,” 315. 174 Gleason, The Central Asian States. 27. 175 Matley, “Population and Land,” 128.

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organized under permanent martial law.176 The guberniia of the Steppe, which included all but very southern Kazakhstan, was organized in this manner.

Interestingly, the Russians granted an inordinate amount of authority to

traditional village leaders.177 This perhaps marked the beg in n in g o f an era

when Moscow officially delegated its power, and pressed its influence on

Central Asian henchmen; a tradition that blossomed under Soviet tutelage. According to the Central Asia historian Helene Carrere cTEncausse, the most significant event to occur under Russian domination was, “to destroy the

structures of the traditional society and break the prestige of the local authorities...constantly recarving the Kazakh region and dispersing the tribes

in several districts:”178 Thus, in order to controlTCazakh territory, it was

necessary to inhibit wanton movement. The division of the proletariat in Kazakhstan began after the

concentration of these territorial units. This development came in conjunction with expanded trade and commodity production.179 With more and more Kazakhs moving to the cities and working as wage-laborers, a distinct identity -begant o emeigein juxtaposition lu skilled Russian workers. Naturally, the

“rapid development of industry, transport and trade...led to the formation of a working class and intelligentsia” on its own m erit.180 Yet class divisions began to form as a direct result of stratifying social relations rooted in production for -the Russian empire. As in other parts of Russia, the revolution of 1905 began

in Kazakhstan at the interstices of the growing railway infrastructure, but

176 cTEncausse, “Organizing and Colonizing,” 153-157. 177 cTEncausse, “Organizing and Colonizing,” 154. 178 d’Encausse, “Organizing and Colonizing,” 159. 179 UNDP.

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consisted mostly of Russians.181 Noting thatrRussians were the only “permanently employed,” d’Encausse duly suggests that “the only permanent -proletariat was Russian.”182 This was to remain the case up until World War

II. Even while Russians were clearly more proletarianized and had long standing grievances with the Tsar, social discontent was evident among the

indigenous population. The earliest expression of this ferment was found in -1902 at the Uspenskii copper mines and Karaganda coal mines, and among railway workers at Petropavlovsk and adjacent industrial centers. Any indigenous agitation that did occur, however, was directly related to socialist

ideas held by “czarist political deportees.”183 Kazakh workers never did develop into a viable class able to

recognize and act upon their interests collectively. Class struggle was actually

quite opposed by the formerly nomadic Kazakhs. According to d’Encausse, ^Muslims demanded that in a colonial environment where no conscious and organized proletariat existed, priority be granted to the nationality struggle —rather than to social liberation.”184 Alash Orda, a mildly Islamic Kazakh

enlightenment movement that advocated an alliance with Russia as a means —toward modernization, picked up on this and was able to influence only a small margin of industrialized Kazakhs before Soviet authorities crushed its

180 UNDP. 181 Hel&ne Carr&re d’Encausse, “The Stirring of National Feeling,” in Central Asia. Ed. E. Allworth, 181. 182 cTEncausse, “The Stirring of National Feeling,” 181. 183 d’Encausse, “The Stirring of National Feeling,” 181. ^-Helfene Carrfere d’Encausse, “Civil War and New Governmen ts.” in Central Asia. Ed: E. Allworth, 235.

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leadership.185 Alash Orda maintained that the settling ornomads was progressive, but that the Soviets were particularly brutal in their methods (esp. collectivizatioh).186_Moreover, by the end of the civil war, Kazakh industry was completely destroyed.187 It seems conclusive to suggest that not only was

- -any movement oforganized labor stifled by the civil war and then by the Soviet government, but that indigenous cultural factors combined with the absence of

-an elementary local and national identity contributed to a disorganized and

stratified social class. It was not until the next substantial influx of Slavs after WWTt - —that Kazakhs themselves would-mold into a nascent working-class, dirfact,

betw een 1 9 2 6 and 1959 the combined Russian and Ukrainian population in

-Central Asia-increased from 2,72 6 ,0 0 0 to 7,360^300, a m ajority of which

emigrated to Kazakhstan.188 The workers I have chosen to study here are all

—based~in industries of heavy mineral resource extraction.^Tfais-tnchides workers involved in the mining of non-ferrous metals, and the drilling of oil. The -regional equivalent ofthe Donbas in-Kazakhstan is Karaganda, dike the

Donbas, Karaganda consists of several coal pits.189 Karaganda’s development —ewes much to the war, mid Donbas’ occupation by the Grermannrmy. Its

capacity as a primary coal extraction and processing center nearly doubled

betw een 1 9 4 0 and 1 9 4 5 .190 Even with this rapid reconstruction of industry,

and influx of skilled labor, Kazakh workers remained relatively subdued. Labor

186 H£l&ne Carrfere d’Encausse, “The National Republics Lose Their Independence,” in Central Asia. Ed. E. Allworth, 260. 'aB d’Encausse, “The National Republics,” 260. 187 Matley, “Industrialization,”'330. 188 Matley, “Population and Land,” 106-108. ^ Matley, “Industrialization,”-339.

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unrest was virtually nonexistent, as it was in Ukraine, until the collapse of the Soviet Union.191

Given the absence of clear evidence showing any prelude to

organization and/or grievances with the former regime, one must widen the'lens to take in other salient factors contributing to an inactive proletariat. In this case it is pertinent to look at ethnicity. Nancy Lubin, a scholar of Central Asian labor, has stated that, “in social organisation, choice of occupation, and

—in-location of settlement, there was a clear-cnt division between the Russian and Asian worlds.”192 Ethnicity then certainly guided decisions in occupation that would have a profound effect on networks between workers. The Soviet development strategy never drastically altered this dynamic. Allworth notes,

“the great influx of outsiders into Kazakhstan, especially toward the northern oblasts and towns of the union republic, preempted much of the skilled

work.”193 At best was an acute regional difference within Kazakhstan alone. -Today the northern oblasts remain overwhelmingly Russian and “undifferentiated in population, landscape, and economy from the Russian

-Federation oblasts of western Siberia that they abut.”194 This is quite a

contrast to eastern Ukraine, with an a lm ost, even mix of Russians and

190 Matley, “Industrialization,” 341. 191A dearth of information on any labor activity between WWII and the late 1980s suggests that workers were fairly demobilized. More information should become available, as it has —on-unrestin the Donbas, that-proves-any-activity was ruthlessly suppressed. 192 Nancy Lubin, Labour and Nationality in Soviet Central Asia (London: Macmillan, 1984), 74. 188 Edward All worth, “Thp New Central Asians” in ftentrnl Asia Fid F. ATIwnrth

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- industrial jobs •witli Central Asians could be seennnore clearly in Kazakhstan

than in the southern parts of the region.”195 This actually appears to be a

-am

real structural changes threatened their livelihood. A Central Asian political culture adhering to a hierarchical social

structure impinges directly on efforts at worker mobilization. Gleason notes

th a t, “t.hp. Soviet administrative system was simply superimposed over the

existing local power structures, in which local elites occupied the leading positions.”196 The same could be said of enterprises and trade unions. No trade unions were autonomous of the communist regime. Therefore, for Kazakhs to

lines, and challenge fellow Kazakhs in management positions. The so-called —efantocracy, “the relationship between strong clan identification and political

control,” has been an inhibitive institution in creating an independent realm for organizedlabor.197 Tn most cases, it was Russians who anticipated this

activity and made real efforts during perestroika to push for autonomous unions. Yet economic demands by all workers were inextricably linked with

political ambitions of republic leaders, particularly the call for regional

autonomy within the union.198 Today these linkages remain salient, yet are converging into more

material concerns. Boris Kagarlitsky, a former socialist parliamentarian in

194 Martha B. Olcott, “Central Asia’s Political Crisis,” in D. Eickelman, Ed. Russia’s Muslim Frontiers. 50. 186 Allworth, “New Central Asians,” 565. 196 The Central Asian States. 53. ^ Gleason. The Central Asian States.-46. 186 Crowlev. Hot Coal. Cold Steel. 124.

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- Russia, notes that, “as in Ukraine and Russia, the most experienced and

organised sector of the workers in Kazakhstan has been coal miners.”199 The

trend of severe wage arrears and im m e n s e inter-enterprise debts plaguing other NTS states, has similarly affected Kazakhstan in this industry.

Moreover, nominal wages have fallen by more than 60% in Kazakhstan, and

a lm o s t 50% in Ukraine.200 As Table 3 shows, rapid restructuring in the industries of heavy resource extraction has precipitated a decline in the employed workforce and real wages, and a modest decline in the production of

^ion-ferrous metals. This tendency exacerbates protest activity among all

workers, Kazakh and Slavic a lik e .

—Table 3. Selected-Social and Econom icdndicators 1992-199C (Kazakhstan) 1992 1993 1 9 9 4 199 5 1996 Real Wages (% change, annual average) -29.2 -21.8 -32.2 ia .7 -6 8 'UnofficiaTTJheinployed (‘000) n/a n/a 483 710 n/a Fuel Production (% change) -5.9 -14.8 -14 -12.8 2.4 Metallurgy (% change) -6.6 -15.9 -20.6 11.9 10.7* Industrial LaborForce (‘000) 1,490 1,305 1,201 1,088 812 *non-ferrous metallurgy Source: EIU

It is central to the present analysis to explain the belated —explosion of industrial-based social movements to th e outcome of political and economic reform in Kazakhstan. The Karaganda coal miners did participate in contestingindustrial restructuring policies of the Gorbachev regime, yet were in a much more advantageous position than actually realized.201 First,

m Boris Kagarlitsky, “Kazakhstan Miners Fight Government Austerity.” Labour Chronicle Russian Radio Show. (24 February 1995). 200 World Bank, 75. aa'SeeBoiis Kagarlitsky, “KazakhstanMiners Fight Government Austerity;” and Stephen Crowlev. Hot Coal. Cold Steel. 124-129.

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-% idustryin Kazakhstan had suffered much less from the disintegration ofthe old economic relationships than, for example, industry in Ukraine.”202 The - workers also had extensive parliamentary support early in the transition period.203 Unfortunately, “the new parliament was transformed into a

subsidiary of the executive.”204 Second, Nazarbayev’s regime did not privatize rapidly.205 As in Ukraine, this granted Kazakh workers enough time to exploit

—their social position in the enterprise, either by g a in in g ownership rights and/or

a capacity to organize under severe economic stress. One significant aspect of this development is unemployment. Official unemployment in Kazakhstan is measured at approximately 1%, this slightly higher than that in Ukraine at

0 .5 % .206 More realistic figures,however, show that unemployment in

Kazakhstan is within the 4-6.3% range.207 However, hidden partial -employment is given new life bythe efforts of transnational capital tohire informally, and by the efforts of local elites, hi fact, “continuation of the colonial regime, with much the same beneficiaries” is more alive than realized.208

Foreign investment in Kazakhstan is directed primarily to the energy extractive industries. Oil and gas reserves present TNCs with enormous profit-making potential, and this directly affects the mobilization ^potential of labor. In fact, according to Fortune magazine, which concludes

203 Kagarlitsky, “Kazakhstan Miners Fight Government Austerity.” 308 Kagarlitsky, “Kazakhstan Miners Fight Government Austerity.” 204 Kagarlitsky, “Kazakhstan Miners Fight Government Austerity.” — See Kagarlitsky, “Kazakhstan-Miners Eight Government Austerity;" and Saab and Kumar. 206 World Bank, 75. 20t 'j'hjg fs a 1 9 9 4 estimate, UNDP; and EIU Gountrv Report: (4th Quarter 1997), 8 .

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that Kazakhstan has managed the former USSRs easiest transition, Kazakhstan also “led the former Soviet bloc in foreign investment for 1997, -drawing $3.5billion.”209 Ironically, wage arrears have effected workers hardest

in these sectors of the economy. The Achisay Polymetal factory is a case in point, where over 1,000 workers marched October 1,1997 demanding nearly

$1.3 million in unpaid wages.210 The frequency of strikes has since risen in several labor market sectors as indicated in Table 4. Indeed, Kazakhstan has proven most pro-business and least democratic in light of these factors, as —evidenced fronrthe hastily concluded privatization program.

Table 4. Approximate Number of People Participating in Protest A A • » A < « AAVA /»» | 1 . J A

Date Sector Location Workers January 1995 Industry Karaganda Coal 50,1)00 In d u s try Ekibastuz Coal 50,000 February 1997 Energy Karaganda Heat and Power T.,000 P lan t Education Semipalatinsk 1,000 October 1997 -In d u stry Achisay Polymetal-Kentau HOOO November 1997 Industry Qaratau Phosphorus-Janatas 3,000 December 1997 Construction Akmola 150 February 1998 Pensioners Aim aty-Tractabel Firm 1,000 Source: Kagarlitsky, RFE/RL

Property, especially in the form of land, has historically been a 'point of contention between native Kazakhs and their Slavic neighbors.211 Collectivization, which nationalized land from any owner regardless of - —ethnicity, mayhave halted this impetus of redistribution. "However, privatization in Kazakhstan has been a particularly arduous adventure for

306 Eickelman, 6 . Mellow 5 310 RFE/RL Newsline, No. 129, Part I, (1 October 1997).

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another reason; it proves that clantocracy reigns over any democratic predilections toward true private ownership. For example, Saab and Kumar —fe d that horizontal dispersion ofdecision-making power is hazardous to smaH-

and medium-sized enterprises since it plays into the power configurations of

local elites.212 In sum, it seems Kazakh society is more accessible to state - —intervention. The transition to democracy has been diverted by the weakness

of autonomous activity in light of economic distress on Kazakhstan’s weakest —eitizens: workers and peasants. Also, the development of truly independent

trade unions has been phlegmatic at best. According to observers at Radio -Free Europe/Radio Liberty: The largest union remains the successor to the Soviet-era General Council ofiTrade Unions and is practically a government organ. Among independent unions, the largest is the Independent - Trade Union Center. Registering a legal independent union is lengthy, difficult and expensive, and the decision process is arbitrary, lacking published criteria. There are significant limits on the right to organize and collective bargaining. Workers who join independent unions often face harassment, dismissal, and transfer to lower-payingjobs.213 Under these conditions it is worthwhile to ask whether an industrial relations regime based upon democratic institutions is even possible in post-Soviet Kazakhstan.

211 Hdl6 ne Carr 6 re d’Encausse, “Social and Political Reform,” in Central Asia. Ed. E. Allworth, 201. 212 ibid. 203-204. 213 RFE/RL, Kazakhstan: Economic Freedom. n.d. Obtained by . —httpi//www .rferl.org/bd/ka/info/ka-ec.html.

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- - Given that capitalist economic development creates social class forces, what gives rise to organized demands for subordinate control; the issue that concerns us here? This question highlights one of Cox’snotions, that

“historic blocs underpinning particular states become connected through the m utual interests and ideological perspectives of social classes~hr different countries.”214 Historic blocs in this case are what Gramsci identifies as, the “capacity to unite an ensemble of economic and political relations.”215 Hie privatization programs of CIS states were the mechanisms by which one

previously assembled class, the nomenklatura, was able to link across newly established borders and thus construct a historic bloc. Likewise, labor, as a

left relatively intact and perhaps able to construct an alternative historic bloc. -Before moving on to some explanations on the origins and functioning ofthe IPO, it is necessary to delineate some of its basic tenets.

The imperial production order is characterized by the following phenomena: a central, hegemonic state ordering the CIS political economy through coercion and consent; difluse layering of the labor force through economic restructuring; strained political relationships between states of the old economic order based on issues of sovereignty and geo-political interest; a

universal alternative conception of modernization based on rapid industrial and —technological change.

214 Cox, Production. Power and World Order. 7. 215 Quoted in Jeremy Lester, Modern Tsars and Princes (New York: Verso, 1995),6 .

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-Russia assumes the role as the-central, hegemonic state. Because CIS states are so tightly integrated with the Russian Federation, RussiarisTn a fortoitous^osition to exploit these-states for its own gain.

Networks of the nomenklatura are deep and extensive. These social networks - -are-the tools by which Russia is able to expand its~influence.-Some examples of

Russia’s intransigence of the regional political economy and cultural borders -arefihiminating.-First, Russia has taken firm (il)legal positions directly affecting the sovereignty of both Kazakhstan and Ukraine. In Kazakhstan,

“R u ssia has threatened to voidth e most, basic understanding unHerlyrrrgrthe

Tengiz project by declaring that the Caspian is not a sea after all but a lake.”216

—Mellow confirms that, “seas, under international law, include sovereign coastal waters; [and] most of the Caspian’s wealth is within Kazakhstan’s or

Azerbaijan’s [territory].”217 Furthermore, he states, “a lake’s resources are divided equally among its bordering states...oil people devoutly hope Moscow’s

re-definition (quietly backed by Tehran) is yet another bluff.”218 Like Ukraine, -R ussia is Kazakhstan’s main supplier of energy, “with 89.3% of its oil products, 56.7% of its electricity, and 20.4% of its gas.”219 N aturally, this complicates

with workers that threaten to upset a peaceful Caspian balance favoring

i nternational capital. Ukraine’s problems with Russia relate more directly to the large Russian minority inhabiting the Donbas and Crimea. Russia’s strong -displays toward Ukraine are highlighted by the recent Black Sea Fleet

216 Mellow, 5. 217 ibid. 5. 21J4bid. 5. 219 Oka, 16.

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agreement, which involves right of ownership (i.e. access to markets and security). This is Russia as the protector hegemon in a realist sense. Yet

Russia-exhibits an engaging ideology aswell. fn most historical cases Russia offers an alternative modernization program.

^Modernity has always confounded. Russia and a priori by those

who had been colonized by Russians.220 A cadre of officials in all CIS states certainly have adopted Moscow’s preaching of access to modernity through

alternative routes. This is evident by any one of the com m u n is t parties, who - —are-really favorable to some kind of restorationto the previous modernization

trajectory. Workers are caught in this political vacuum of alternatives. Labor neither benefits from this conception of politics, nor from rapid industrial and

technological changes that threaten their structual position. In addition, the —historic bloc that comprises large groups of workers in industry and services do not have effective leadership. In other words, in both Kazakhstan and

Ukraine, there has been little restoration of praxis to theory, of workers to political parties. Since leaders have failed to emerge form or even engage —eulturefrom below, traditional aspirations of adherence to a strong state

persist, and this does not bode well for the existence of democratic polities in -Kazakhstan and Ukraine.221 The notion of separation between state and

society thus precludes the understanding of modernity.

230 See Johann Amaaon’s The Future That Failed (New York; Routledge,1993). An exceptional book illustrating the dynamics of the Soviet model of development as an alternative route of modernity. 231_This is essentially an echo o f Burbank’s conclusion, but is supported"by noting stratified social structures, not by simple fragmentation of the intelligentsia as she seems to argue. .. -S ec “Were the-Russian Tntelligenty’-Qrganie-Intellectuals?,” in Leon Fink, StephenrLeonard, and Donald Reid, eds. Intellectuals and Public Life (Ithaca, NY: Cornell University Press, 1 9 9 6 ),-9 9 .

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David Lempert, an anthropologist at Harvard University,

remakes the state/society paradigm which, some Sovietologists have found to -be constructive in understanding transitional-events. Lempert’s model of

international corporate feudalism complements the IPO model in that culture . -is-considered an important variable in the normative development of social

forces. Lempert holds that, “the ultim ate goal of legal reforms is not to create —the social contract type of democracy lost in the eighteenth-century but,

rather, to establish the corporate and institutionally dominant forms characteristic of other Western nations.”222 “The CIS political economy is thus better controlled via networks with international capital. Furthermore, it is -stressed that, “this is the easier path of social evolution because it takes a

centralized system and turns it back into the feudal-type system from which it originally evolved.”223 An elite stratum , is also maintained through this model. Silverman and Yanowitch have w ritten extensively on the inequalities —associated with this type of development.- Specifically, they hold that the,

“effectiveness of a market system is related to the institutional and organizational framework as well as the traditions and cultural values in which markets are embedded.”224 Kazakhstan and Ukraine merely mirror this logic - ofthe market. Moreover, a “free” m arket may also undermine trust and cooperation if loyalty is sold to the highest bidder and the fear of

-unemployment increases workers’ powerlessness and resistance to change.225

222 David Lempert, “Changing Russian Political Culture,” Comparative Studies in Society & History 35.3 (1993), 641. 223 Lempert, 641. 234 Bertram Silverman and Murray Yanowitch, New Rich. New Poor. New Russia (Armonk, , NY: M. E. Sharpe, 1997fr-9. 225 Silverman and Yanowitch, Double Shift, xxiv.

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-Perhaps the TP€Hs something more abstract: Perhaps Eurasia is

notably tainted by W estern conceptions of how it should operate. This view is —developed by Sergei Medvedev, Research Fellow at the Finnish Institutexrf International Affairs. Medvedev uses a post-structuralist theory to suggest

—that Russia acts in relation to its~space. The notion being that Russia embodies good culture and bad civilization.226 W hether tsar or commissar, —governing institutions were beholden'to the logic of space governance. According to Medvedev, “any political action has [had] a spatial meaning.”227

—These ideas and the institutions that emerged have molded colonized regions in

a Russian image. The “administrative market” was designed to subordinate

this space.228 Subjects were settled in controllable units, as in Kazakhstan,

“sociospacial phenomena.”229 In sum, post-Soviet restoration as guided by —Russia, has m eant a return 4xranderstandirtg~space as a vehicleho impose

order.

226 Sergei Medvedev, “A General Theory of Russian Space,” Alternatives 22 (1997), 524. 227 ibid. 528. 228 Medvedev, 530. 229 Medvedev, 534.

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Certain cultural and national prerogatives protecting the worker and society in general are threatened by the process of globalization. As

indicated in the Introduction, globalization can be construed as a manifestation - —efeontemporary capitalism. To flesh out some of the main features of contemporary capitalism in the postcommunist world, it is useful to follow

Ahmad Seyfs observations.230 Seyf points to specific structural changes that underlie contemporary capitalism: labor and technology, the capital/labor

—relationship, and the globalization of production. I have focused prim arily on the second and third structural changes as they have impinged on the two —fermeHSoviet republics-discussed above. Yet technological advances will

continue to disrupt egalitarian principles in the NIS and will most certainly -contribute to-labor unrest.

Kazakhstan and Ukraine both have to grapple with a reduction in tax revenue and reduced expenditure on social programs as it becomes easier

for capital to take flight. The unofficial economy of Ukraine, for example, has exported approximately $20 billion out of the country.231 In addition, both countries are caught between mass unemployment and not realizing higher

understood as the preeminent contradiction of capitalism. In general, both

states have chosen to keep unemployment low. Ukraine has taken the lead in

230 Ahmad Seyf, “Globalisation and the Crisis in the International Economy,” Global Society. 11.3, 1997: 299-324.

8 0

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trying termaintain full employment, although this stance is collapsing. In

December 1997 it was announced by the Ukrainian government that

unemployment increased by 70%, to about a half million people.232 Nonetheless, the Donbas case has shown that an entrenched working-class

—movement can direct government policy. Employment policy in Kazakhstan, however, has recently become less friendly to labor. Table 3 shows that industry has been shedding work there at a rapid clip. The Nazarbayev regime has clearly chosen to —increase GDP at the expense of employment. Moreover, Kazakhstan values

highly skilled workers over under-skilled, wage-laborers. Of course this de-

—skilling trend is~also evidenced^lobally, but it engenders a more nuanced reaction in the former Soviet Union. A model encompassing these contradictions intrinsic to neohberabrestructuring heightens our understanding of labor challenges in the postcommunist world. -First, the economic globalization of space has intensified in the CIS. W ithin one region, globalization can have a very “uneven” nature.233 — Ukraine, for example, has clearly become a m arginalized economy relative to Russia. Performance indicators rank Ukraine near the “bottom of post- -eommunist countries in terms of economic growth.”234 The trend is equally

disheartening in Kazakhstan, where most foreign investment is concentrated - -jn-the western partu f the country. It is therefore difficult to analyze the social relations of production in Kazakhstan without a look at the oil industry. Any

231 RFE/RL Newsline, Vol. 1, No. 174,( 8 December 1997). 232 RFE/RL Newsline, Vol. 1, No. 174,( 8 December 1997). 3 3 3 92 234 RFE/RL Newsline, Vol. 1, No. 193, (12 January 1998).

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oil deal struck with western investors includes debate on accessing oil to

outside markets. Thus, once a pipeline becomes reality, the region will become .- Essentially this means a reconfiguration of space within Kazakhstan itself. It is completely plausible that Aqmola, as the core of local capital, becomes exceedingly affluent at the expense of the southern half of the country.235

Second, the economic globalization of time tells us that the -contemporary period is a “conjuntural” phase. That is, one marked by a stage of capitalist development.236 Regarding labor movements across the former

state-socialist world, this is a excruciating period of learning to behave

according to market principles. This period was not initiated in the Soviet Union, nor by the end ofthe Cold War. More likely, this is a catching-up period

for the rest of the world’s workers (and employers) to tolerate the significant

- political changeshom in the West, such as the “globalisation of trade, production and finance.”237

Third, to view economic globalization comprehensively in the region, it is useful to examine it from the vantage of social orders. The process

could then be examined in Kazakhstan and Ukraine through the lenses of “economic’, ‘political’,^social’, and ‘cultural’, perspective[s].238 Obviously this complicates how we read into labor reactions to market reform. But these —perspectives in the Braudelian model do tell us much about the formation of

the states in the region. Economically, Kazakhstan and Ukraine are

235 Outside of Karaganda, Southern Kazakhstan oblast is the most active region for labor strikes. 236 Helleiner, 94. 3?Z-Helleiner1 94.

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.— attempting to commodify goods and services for the world market. This trend can explain why the Nazarbayev and Kuchma regimes wish to structure .— gelations of production in a manner more suitable for foreign investment.

Politically, while these states are internationalizing, they are failing in -—-absorbing democratic institutions. At the social level, the nomenklatura

clearly represent what Cox has deemed the “transnational managerial

—-elass.”239 This is a distinct class in th e poslcommunist world bydint oftheir owning vast amounts of former state property, sharing identical ideological — bases with-their Western counterparts, and by participating in the

internationalization of production and finance. Culturally, the value of ...— exchange is-transforming in-both Kazakhstan and Ukraine, but certainly slower in the former. After spending a year and a half in a Kazakh village,

—Cynthia Werner explains that the exchange of goods is not-associated with

consumption, rather it is a symbol of status.240

PmatiyT-tbe Ukrainian and-Kay.akb states are pressured by

economic globalization of authority. This refers to authority as “hierarchy,” a —term in which “a power apparatus” govems-eeonomic, political, social, and cultural space.241 W ithin globalization, then, could also be noted a “hierarchical

—compression.”242 Tke-reaKtyis th at “material life,” described in the Kazakh and Ukrainian cases as the informal economy, is permeated by transnational corporations and privileged elites—often working in tandem. Looking at

previous state assets, Kazakhstan and Ukraine represent divergent degrees of

238 Helleiner, 96. ' —2S9 Cox, Production. Power, and World Order. 359-360. 2,0 Cynthia Werner, “Marketing Gifts,” Central Asia Monitor. No.6 , 1997, 3. - — 3+1 Helleiner, 99.

Reproduced with permission ofthe copyright owner. Further reproduction prohibited without permission. — foreignrownership-. While foreign ownership and investment remains spotty in

both countries, private capital has made its boldest inroads in Kazakhstan. .— Graig Mellow reports that Nazarbayev-%as created what passes in the region for a pro-business environment...has no use for Russia’s noisy evolving

,— democracy...[and] multinational businesses applaud his middle course—no to

chaos, yes to capital.”243 Before the recent parliamentary elections in Ukraine, — the speaker of the Rada, Oleksandr Moroz, suggested that the “government is

a slave to Western institutions...that Ukraine is being transformed ...into a raw — materials provider for other countries.”244 ~TNCs and state governments often

collude in order to restructure social relationships, usefully through the role of

-—debt. Colin Leys supports this notion that, “the immediate subordinatioirof —social goals to the interests of private capital is-only made more complete and immediate by the size of some countries’ public debt, especially if foreigners are — alluwedto own it.”245 "More often than not, a restructurLng~of the capital-labor relationship comes with a stratification of workers that directly affects the — household and the significance-of political conflict.

W hat is the likelihood of postcommunist states to defend this — eapital-labor relationship? Insofar as the former USSR has disavowed Marxism-Leninism, there will be a tendency to embrace the neoliberal notion,

— curtailing the rights of workers. The “world-systems school” suggests "that the state accomplishes this through politicizing and guiding a domestic economy to

-—fee global market.- Increased-permeation of the state into the economy makes

342 Helleiner, 99. 343 ibid. 344 RFE/RL Newsline, Vol. 2, No. 51, (16 March 1998).

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,— perfect sense from, the worid-systems- perspective since capitalism depends on

a strong state to structure economic relationships. Likewise, the struggle for — capital-accumulation depends on certaina prioririgfatg fimthe state-such as

territorial jurisdiction, rulemaking, taxation, and monopolization of armed —force.246 Given this belief, itis argued by Daniel Deudney and^ohnTkenberry

that the present tendency of the nomenklatura of the former Soviet Union is to -—reintegrate with (lie capitalist world;247 Specifically, they hold thatr“urthe Soviet era, the Russians have been pursuing a semi-peripheral strategy [vis-a-

— vis thegldbal economy]: the Bolsheviks withdrew,-Stalin autarkically developed, and now Gorbachev seeks reintegration into the world economy as a

—veliicle~to enter into the core [of capitalist production relations].248 Yetihis idea would have more weight if predicated on the guidance of a strong state. At

— prcsentr the incapacity of Kazakhstan-and Ukraine-to govern effectivelyis directly related to an inability to reach a social consensus. According to Peter — Stavralas,-“the-soft state model is therefore relevant to post-Soviet experience precisely because it links the unsettled political relations among emerging -—elites txrithe inability of government institutions to meet the new challenges

confronting society,” and this includes the process of globalization.249 — ha conclusion, globalization is restructuring the ^former state- socialist world, and the global political economy that informs this process has

245 Colin Leys, “The World, Society& the Individual,” Southern Africa REPORT (April 1996) 17. - ~346lniTnanuel Wallerstein, Historical Capitalism (New York: Verso, 1983), 48-55. 247 DameTDeudhey ahd JohriTkenberry, “Soviet Reform and the End of the“CoId War,” in Frederic Fleron, Jr. and Erik Hoffmann, eds. Post-Commnnist Studies & Political Science „ (Boulder, CO: Wcstview Prc3 3 , 1993), 226. 248 ibid. 2 2 0 .

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-— gained-its own. advocates -and detractors. Yet any world order affecting the social relations of production rooted in a redistributive industrial relations -— regime -is bound to confront countervailing social movements. —fanrKeams

contends that, "Eastern Europe is and always has been greatly influenced by ,— wider global power structures and that it needs to-be assisted, not in copying the West, but in finding a form of capitalism in the post-Communist period

-—that is built on its own social and economic institutions and not on those imposed or imported from outside."250

349 Peter Stavrakis, “The Soft State and the Emergence of Russian Regional Politics,” Unpublished Manuscript (1994), 4. 250 Ian Kearns, “Eastern and Central Europe in the World Political Economy,” in Richard onH ConffrryU n d erb ill oda Political Economy and the Changing Clobal Orderr-S8 8 .

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The administrative-command system failed in its effort to promote loyalty and cooperation because workers and citizens were excluded -from the decision-making process. When neither voice nor exit are availabletx)

improve the quality of one’s work or nonwork life, apathy and resignation or —ether forms of covert resistance undermine economic performance and social

responsibility. Private life becomes the only authentic source of involvement -and satisfaction. But even this realm is proving uninhabitable for workers in

the cases studied here. Failure of the current labor-capital relationship is imminent for

—fee following reasons. First, it is found that widespread apathy is translated into relative power for workers. This is mostly due to an entrenched worker-

socialist bloc that grew up in an era of a secure social contract and some

control over the labor process. While new managers have had success —regaining power over workers, it remains the case in both Kazakhstan and Ukraine that space has opened for other forms of mobilization. Strikes, previously illegal in the Soviet period, are one method of redirecting politics to a labor oriented agenda. Second, the endemic corruption that symbolizes the -NKrpromises to widen the income-gap between workers and elites,- raising social ire to levels incompatible with perceived expectations. The promise of

The growth of the unofficial economy, alcoholism and drug abuse, prostitution,

-and suicide all indicate this disturbing trend. Thirdrattempts at a corporatist revival really just mask and/or defend Soviet era production relations. Given

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that corporatism is failing around the world, it makes little sense to support an industrial relations model that is antiquated by the global political economy. —The advent of post-Fordist production is one example of neoliberal permeation in the countries examined here. Fourth, the current version of capitalism being

-practiced is unsustainable because it is fundamentally undemocratic. While it may fortify and enrich the nomenklatura and “new entrepreneurs” of these burgeoining states, autocratic capitalism sows its own seeds of destruction by

n o t reig n in g in long-term imbalances in ownership—the very basis of democratic capitalism.

I have tried to reflect in this study that the working-class has the -potential to stifle reform, but also to direct it in a manner more amenable to democratic change and supportive of society in general. Marketizationund post-industrialism are transforming the former state-socialist world as equally

as-anywhere-else. Given the current global context, it is the contention of this author that culture will and should predominate in transforming the labor- capital relationship in Ukraine and Kazakhstan for the foreseeable future. Again, it is arguable whether a bourgeois class even exists, of which the

-w orking-class can push up against. This may be a story without an

antagonist. The Ukrainian political economy points to many important —findings regarding class relationships. We havefoundfn chapter 4 that Ukraine has had a long history in proletarian development. In fact, the most —significant characteristic of labor in Ukraine is its predilection to protestrbasic

injustices. Recall that perestroika was the first attempt at injecting market

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mechanisms into the labor process. In and of itself, restructuring of the Soviet economy brought rewards to the factory worker, including active participation in decision-making and management on the shop floor. Once the system began

to collapse, however, it became clear to most workers that the old industrial

relations model had little merit. The next logical step was to extricate workers and the republic from Russian hegemony. Support for the market was made

status of the working class in the Soviet Union, Ukrainian workers held a shared interest in independence from bureaucrats and control over the mode of

production. Oddly enough, the gross inadequacy of Soviet economic —interdependence allowed eastern Ukrainian workers a structural position to manipulate political decisions in their favor. Once neoliberal packages of —reform were contemplated, let alone implemented, workers did not hesitateto demand fair living wages and continuation of social benefits. Institutional

change has come much slower, however, which means benefits are still procured from the factory/enterprise.

- Kazakh workers~have not been so fortunate in~finding structural position and/or organizational strength. Ethnic stratification has certainly —played a much more important role in working class developmen tin

Kazakhstan than in Ukraine. As discussed in chapter 5, the Russian presence - in industrializing and modernizing the Kazakh economy has not come~without

its distinct institutional distortions. First, Russians make up most skilled labor. This impinges on the efficacy of social movement strength. In general, ethnic Kazakhs have not managed to shape new political orientations that

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—bridge labor and other social movement organizations or find unity across industrial sectors. Secondly, Kazakh workers have been demobilized either by - —strong transnational interests or strict government enforcement of labor rules,

or both. The level of foreign investment in Kazakhstan suggests a continuing —aHaance between foreign capital and the clantocracy that rules the-cormtry to

suppress, or at the very least, to exacerbate ethnic fissures in the labor —market. However, a declinefirthe entire industrial labor force engenders a sharing of interest among Kazakhs and Russians over the long term. This

—trend is expected to continue in the~face of globalization. Workers, then, have formed a least some distinct challenges to -fee global hegemony of neoliberalism, and its defenders in the cores of Moscow,

Aqmola, and Kyiv. The economic crises that Kazakhstan and Ukraine bear —today are furthering the advance toward a consolidation of authoritarian power in those cores. Moreover, the working-class is accelerating its consciousness via the actions of these regimes. Evidence from Ukraine shows that ethnicity

is marginal to the real debate about global restructuring. Specifically, an —organic intellectual base is becoming a staple for workers in~the Donbas. Soviet legacies, are certainly responsible for the discourse that now permeates - -feis-ctdture. The emerging proletarian identity of Kazakh workers must at

least come to terms with the skilled Russian minority that has always been -fee catalyst for equitable industrial relations~in Central Asia. Their potential to mobilize into a solid historic bloc is linked to an openness toward other social . -movements. Evidence there points at least to just such potential.

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^—Qn the viability of capitalist democracy in Ukraine and Kazakhstan, we should remember the implications of growing social debt in the

context of globalization as it tends to undermine a viable democratic social base. Current socioeconomic transformation in the postcommunist world

- —elaborates the more intrusive nature of the market whenieft to itself. Viewed in its context (local setting and tradition) and in a lengthy historical manner, - these changes confront workers (as it-didin 1905-1917twith the dilemma of

revolution or reform. The protest movements indicate that some workers —think of globalization as a reversible process. Whidtrpath they assume has

yet to be determined. Thus Polanyi’s conception holds true, that the market —demands a violent struggle between classes as long as it permeates embedded

institutions designed to protect social relationships. Finally, what I have -portrayed is a crisis-=one that destroys social fabric in~the name of tranquil and just ideals. Unfortunately, the pauperization of these countries is just a chapter in die epoch of historical precedents established in the underdeveloped world.

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