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Familialism, Friendship and the Small Firm in the New Russia

Entrepreneurship has been constrained in post-Soviet Russia by unsympathetic legislation and punitive taxation (Nelson and Kuzes, 1995; Aslund, 1997). In consequence the registered small business sector in Russia is very much smaller than its counterparts in either Eastern or Western Europe though a high proportion of the population is in some way reliant on entrepreneurial income.1 Although only 6% of registered workers are entrepreneurs, surveys indicate that one-third of households derive income from independent business activity (Rimashevskaya and Voitenkova, 1998, p. 152). As it is a sector ‘in which many people are giving up after two to three years’ hard work and tribulations’ (Medvedev, 1998, p. 59), far more will have been involved in running a small business, often with family members and/or friends. For many in Russia, the impact of marketization on personal relations has been experienced in the everyday travails of running a small business. People have tested the ethic of family duty, the bounds of friendship and the utility of the ‘economy of favours’ (Ledeneva, 1998) originating in Soviet society in business activity. These issues—securing of family obligation, trust and friendship—provide key thematic elements for exploring the cultural and moral embeddedness of a distinctive form of economic activity. The research here has explored the relationship between the affective and rational dichotomies of conventional social analysis with a view to explicating the cultural and moral dimensions of economic activity that have been seen as so signi cant in the recent revival of economic sociology (Etzioni, 1988; Mingione, 1989; Holton, 1992). The data derive from 30 extended interviews with the family members of 12 small enterprises in the city of Novosibirsk, its science-city suburb, Academgorodok, and a satellite town, Berdsk, West Siberia, in the period November 1997 to June 1998. Each had at least two family members working for it.2 The sample includes a cross-spectrum of activities with enterprises with involvement in agriculture (1), commerce (1) manufacturing (3), retail/catering (4), professional services (5) and other services (1). Two enterprises are a relic of privatization (in Berdsk); both are now failing. The remainder, thus, are among the ‘genuinely new  rms [which] are quite rare in Russia’ (Huber and Worgotter, 1998, p. 86). All but two were  rst registered before 1993 (the exceptions were in 1993 and 1994). The sample falls into two groups: the  rst—three  rms, one not registered, another licensed as a housing advisor, in which the activity is supplementary to other sources of income, the registered employees are family members. In these the prime consideration is ensuring the future International Review of Sociology—Revue Internationale de Sociologie, Vol. 10, No. 1, 2000