Russian Law Spotlight

Work, Home, and Russian Law

By Professor Ronald M. Childress

 

Most Americans perform two rituals: we go to work and we return home. Both of these daily routines are embedded in a legal culture of personal autonomy. Rarely do we pause to wonder if the rest of the world operates the same way. Russia does not. Article Seven, section (1), of the 1993 Constitution declares that the “Russian Federation shall be a social state (sotsial’noe gaosudarstvo), the policy of which shall be directed toward the creation of conditions assuring the dignified life and free development of the person.” Section (2) of the same Article catalogues a wide variety of social goals to be achieved under government supervision.

Articles Seventeen through Forty-Eight of the R.F. Constitution contain its “aspirational rights.”1  Article Thirty-Seven, section (3), proclaims the right of every person to “defense against unemployment,” while Article Forty, section (1), affirms the “right to a dwelling (zhilishche). The President of the Russian Federation is the “guarantor” of rights and liberties under Article Eighty, section (2).

Such government sponsorship of personal autonomy  has not appealed to Americans in the past. We prefer to assert our rights for ourselves, freely choosing where to live, how to work and for whom to work. Our freedom to choose rests upon a cash-based market economy . How exactly does Russia’s “social state” co-exist with a market economy? It does not.2 Steve Rosefielde tells us why:

Russia has shunned Pareto-efficient markets, preferring to let the president preside over a patchwork of allocational, productive, financial, and distributive mechanisms. The government has the power to distribute assets, and exclusive contracts. It tightly regulates regional authorities (fiscal federalism); collects taxes; and manages the monetary system, foreign exchange rates, and international trade. It has legalized markets but conferred exclusionary privileges that discourage efficiency in high value added activities while effectively locking the majority of the population in a Soviet era physical management system and subsistence markets.3

In this essay I propose that post-Soviet Russian jurisprudence (reflected in major Codes) pays scant attention to market economics or the impact of regulation upon commercial behavior. Instead, these various Codes evidence a social design which trumps profit-seeking. In the spirit of Ronald Dworkin, I call this a paradigm of legal discourse. 

Two major enactments of 2001 were the R.F. Labor Code (Trudovoy Kodeks) and the R.F. Land Code (Zemelnyi Kodeks). Both of these major Codes contain provisions that amply demonstrate a social design indifferent toward market economics.

 

Labor Law

 

Historically, Americans have understood the private sector as a machine that creates value. A product of this process has been employment for millions. In other words, the business of America has been profits not jobs and benefits.  The R.F. Labor Code (TK) points in the opposite direction. Its “goals and tasks” are stated in Article One:

The basic tasks of labor legislation are the establishment of necessary legal conditions for the attainment of optimal concord (soglasovanie) in the interests of parties to labor relations [trudovye otnosheniya], the interests of the state and also the legal regulation of labor relations and other relations directly connected with them….

Neither “optimal concord” nor “labor relations” have any juridical significance in American jurisprudence. “Labor relations” has a familiar ring to Americans. We have a National Labor Relations Board and colleges of Industrial Labor Relations (ILR) at major universities. Still, an American employment contract does not aim at some “optimal concord” nor mention “labor relations.” Instead, they spell out reciprocal duties of performance which can be objectively measured, usually in cash.

In Russian jurisprudence, however, an essential element is the law-relationship (pravootnoshenie).  In the TK it is the labor-law-relationship (trudovoe pravootnoshenie). TK Article Two lists nineteen (19) “principles” to guide regulation of “labor relations” to achieve the “optimal concord” of worker and employer interests. For example, sub-paragraph (11) of Article Two describes the “Social Partnership.” TK Division Two is entirely devoted to this concept, baffling to American employers pursuing profits. Could it be that “arms-length” employment agreements are not the primary goal of the TK? Rather than free contract formation, the Social Partnership is social engineering – a prominent feature of Russian history for almost two centuries.4

The Social Partnership is “directed toward ensuring concord of worker and employer interests” under TK Article Twenty-Three. The American cash-based market economy is indifferent to such “concord,” so long as disputes do not lead to riots and injuries. Among the “principles” underlying the Social Partnership TK Article Twenty-Four lists: equality of the parties; respect for and consideration of the parties’ interests; and cooperation of the State.

In a competitive market economy, equality of the parties is achieved through brute bargaining power. A statute calling for such “equality” would really be superfluous in the American paradigm, and quite possibly disruptive of the bargaining itself. Mutual respect and consideration are always desired, but not required so long as economic leverage achieves a peaceful (if not amicable) settlement.

Finally, governmental “cooperation” has long been anathema to advocates of a cash-based market economy. The 1935 Wagner Act might well be considered a high watermark of governmental involvement in the American paradigm. Yet the role of the United States government seems limited to that of referee in a “fair fight” between labor and management over terms and conditions operating in a cash-based market economy.

Article Twenty-Six describes the “system” of the Social Partnership. It is divided into national, regional, and municipal levels reflecting the structure of Russian Federalism – a clear indication that governmental structure, not spontaneous market forces, underlie the concept of Social Partnership. The details of “concrete reciprocal obligations” constitute the Social Partnership at the organizational (e.g., enterprise) level.

The mechanics of TK contract negotiation evidence an overriding emphasis on form over substance. The process of collective bargaining must be completed within three months under Article Forty, whether all terms are accepted or not. A contract (dogovor), containing agreed terms, shall be signed at that time along with a separate “protocol” (protokol) setting forth the terms not settled. Negotiations are allowed to continue on these issues with no deadline.

In this country, when labor-management negotiations reach a deadlock, the parties recruit an arbitrator or resort to strikes and lockouts. The latter was more common forty to fifty years ago. While the former has been more prevalent in recent decades. In the Russian paradigm, the time-consuming, profit-losing negotiation process is a solemn confirmation of the Social Partnership.

The State plays a major role in all labor contract actions: registering, evaluating, and monitoring collective contracts and agreements. See TK Articles Fifty and Fifty-One. These labor agencies are responsible for discovering and invalidating terms and provisions that worsen the status of employees in in violation of TK standards. It is no coincidence that the Russian word kontrol’ features prominently in these articles. More importantly, kontrol’ appears as a leitmotif in TK Chapter 57. Space does not for allow a detailed review of its articles which establish and empower the Federal Labor Inspectorate as well as the vast authority of its inspectors.

 

Land Use

 

Historically, the “American Dream” has been epitomized by home ownership. This requires a market of available homes and access to the appropriate financing. Commercial developers use cash or credit to acquire and develop homes. They pay building contractors (who themselves pay suppliers and employees). In turn, home buyers use cash or credit to purchase these homes and then to furnish, landscape, and insure their property.

More importantly, American commercial and residential land use requires the security of title in land. Historically, land has been the preferred collateral to obtain a loan. A person holding title to land is able to add valuable improvements and fixtures to the land which can then be converted back into money by various transactions. In this country, land use is a matter of free agents pursuing enlightened self-interest.

The R.F. Land Code (ZK) places private ownership in a secondary position to the existence of land as a “natural object.” In Russian legal parlance, an Object ((Ob”yekt) is a thing or intangible right protected by law.5 Indeed, the Ob”yekt may be considered the basic monad of Russian jurisprudence.

ZK Article One proclaims land to be an Obj”yekt in two senses. First (and foremost), land is the natural basis of all life, but it can also be privately owned real estate (nedvizhimoe imushchestvo – “immovable property”). However, section (2) declares the priority of land is its natural “object” and not private ownership, and section (3) drives this point home by declaring that land shall be protected and preserved no matter the cost.

Under Article One section (4), government agencies facilitate “participation” by citizens and organizations in land use decisions. Of course, American zoning board meetings are often quite lively with participation. However, few zoning decisions are made by a majority vote of the audience. Conversely, section (11) concludes ZK Article One by announcing a provision that requires a “conforming” of societal and individual interests in land use, with the interests of all society implicitly taking first place over individual rights to possession, use, and disposition of privately owned land. To an American, the basic “principles” of ZK Article One do not contemplate a robust, profit-seeking exploitation of land.

Space does not allow for detailed examination of the many ZK articles which impose duties and penalties upon landowners and possessors for land use contrary to the priorities established by ZK Article One. As in the Labor Code, three ZK chapters are devoted to kontrol’ and enforcement of the social design embedded in the Code

 

Endnotes

1. The German Constitution (Grundgesetz) enumerates only nineteen individual rights.

2. A decade ago, I published an article applying Ronald Dworkin’s concept of “paradigms” in legal discourse to Russian jurisprudence. It was a foray into “interpretive” study of comparative law. In the closing pages of that article, I gave vent to my long-standing irritation with the 1990s’ Washington Consensus and the various platitudes of the so-called “transition studies” during that period:

As the Soviet Union crumbled, many Americans anticipated that the dismantling of the command-administrative system would simultaneously (and automatically) give rise to a cash-driven market economy. Put bluntly, this expectation was a mindless projection of American practices upon a foreign nation with an incommensurable history.

Ronald Childress, False Cognates and Legal Discourse, 2 J. of Eurasian L. 3 (2009). Backing up that declaration, I invoked the authoritative scholarship of Richard H. Pipes and, more recently, of Stefan Hedlund. See generally Richard H. Pipes, Russia under the Old Regime (1974); Stefan Hedlund, Russian Path Dependence: A People with a Troubled History (2005).

Among authors casting doubt on the Washington Consensus, I include not only Stefan Hedlund, but also the following: Clifford G. Gaddy, The Price of the Past:Russia’s Struggle with the Legacy of a Militariezed Economy (1996); Clifford G. Gaddy & Barry W. Ickes, Russia’s Virtual Economy (2002); Clifford G. Gaddy & Fiona Hill, The Siberian Curse: How Communist Planners Left Russia Out in the Cold (2003); and Clifford G. Gaddy & Barry W. Ickes, Bear Traps on Russia’s Road to Modernization (2013).

3. Steve Rosefielde, Russia in the 21st Century: The Prodigal Superpower (2005).

4. Clifford C. Gaddy, Clifford G. Gaddy & Laurent Murawiec, The Higher Police: Vladimir Putin and His Predecessors, 67 The Nat’l. Int. 29 (Spring 2002).

5. See generally Jeremy Bentham, Principles of the Civil Code, Part I: “Objects of the Civil Law” (1842) (as an Anglo-Saxon equivalent to this Russian concept).