Reversing generations of Russian and Soviet history, Russian President Vladimir Putin in October 2001 signed legislation legalizing the purchase and sale of land in urban and industrial areas. This accounted for only about 2 percent of Russia's vast land mass, yet the Land Code--which gave foreigners virtually the same rights of ownership as Russians--was epochal nonetheless. Creating a market for land, and a new source of value, could only be good for Russia's faltering economy, but the significance of the new law (just one of several sweeping reforms put through parliament by the president) extended far beyond economics. At a time when unrest in Russia raised occasional fears of a Communist return to power, the Land Code signified a sharp break with the Marxist - and czarist - past.

During the summer of 2001, Putin, who replaced Boris Yeltsin as Russian president at the end of 1999, pushed a bundle of legislation through the Russian Duma, or parliament. The bills in question covered a variety of issues, from a revamping of the notoriously corrupt Russian courts to a reduction in the size of the state bureaucracy. Others addressed old-age pensions, money-laundering, the labor code, and utilities monopolies. All had in common, however, a single theme: reform. Though the Russian Federation had ceased to be the Soviet Union in 1992, remnants of the Soviet system of state control still lingered, acting as fetters on an economy already struggling against shortages and gangsterism.

During the first year and a half of his administration, Putin had been relatively inactive as he surveyed the situation in his beleaguered country. During that time, he quietly gathered a coalition of democratic parties that effectively marginalized the Communists, who had controlled the Duma under Yeltsin. Then, in mid-2001, he burst forth with the reforms, many of which became law at the hands of an compliant Duma.

On Thursday, September 20, 2001, the lower house of the Duma voted 250-137 to permit the purchase, ownership, and sale of urban and industrial land. Though it only affected a fraction of Russia's real estate, the significance of the Land Code was incalculable. As Maura Reynolds noted in the Los Angeles Times, "Foreign and domestic investors here have long listed the ban on land ownership as one of the most odious ideological and bureaucratic barriers to economic development still lingering 10 years after the Soviet collapse." Comparing the vote to the storming of the Bastille (the assault, at the beginning of the French Revolution in 1789, on a hated prison that symbolized royal authority), economist Otto Latsis told Reynolds that the vote "shows that the resistance of the left-wing [pro-Communist] forces has been overpowered and broken."

The vote represented a deep break with Russian history, where there is no generally accepted tradition of private ownership of land. This lack of private property rights long precedes the Communist takeover in 1917. Under the czars, the only people who owned land were royalty and nobility, and even these did not conceive of their ownership as private property. Rather, royal and noble houses acted as vertical corporations, with everyone from the lowliest peasants to the lord enjoying at least a theoretical sense of joint ownership.

Much of the agricultural land under the czars was held by peasant communes, and this provided a framework on which the Soviets grafted their system of state control. Under the dictatorship of Josef Stalin in the 1930s, the idea of private land ownership became a target of hatred and fear. Just as Adolf Hitler's Nazis depicted the Jews as the source of all evil, Stalin's propaganda machine presented the kulak or "rich" peasant as a dangerous enemy to be exterminated.

With the fall of Communism and the adoption of a new constitution in 1993, it became theoretically possible to own land in Russia, but leftist control of the Duma prevented any practical application of this right. Only with the rise of Putin and his moderate coalition was it possible to put through the Land Code, which won approval from the upper house of the Duma on September 28, 2001. It passed on to the Federation Council, which approved it on October 10, and thence to the president, who signed it into law on October 26.

Passage came just before Moscow hosted the World Economic Forum in early November: Putin hoped to join the World Trade Organization, and the new law could only make Russia much more attractive for international investment. "Today," said Latsis before the passage of the Land Code, "businessmen own enterprises but can only rent the land underneath for 49 years. They will feel much more secure if their businesses stand on land they can own as well." Viktor Pleskatchesky, head of the Duma property committee, added, "This law can launch a construction boom, which will decisively pull our economy out of its stagnation. We are now set to cross the last hurdle to building a real-estate market in this country."

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FURTHER READINGS

Baker, Peter. "Russia Allows 'For Sale' Signs on Urban Property." Washington Post, October 27, 2001, p. A24.

Baker, Peter, and Susan B. Glasser. "Putin Pushes Reforms, with Power." Washington Post, July 7, 2001, p. A1.

Melloan, George. "To Win in Texas, Putin Needs to Be a Straight Shooter." Wall Street Journal, November 13, 2001.

Reynolds, Maura. "Russian Lawmakers OK Private Lands." Los Angeles Times, September 21, 2001, p. A32.

Weir, Fred. "Russia Opens Tough Capitalist Frontier." Christian Science Monitor, October 24, 2001, p. 6.