The typical salary in large metropolises is now more than $600 per month - four times meager national average. Some 20 percent of workforce in Moscow earns more than $1700 a month, comparable to many members of European Union. Real average wages across Russia have surpassed pre-1998 level in May.

Moreover, Russians are unburdened by debt and their utility bills and food are heavily subsidized, though decreasingly so. Few pay taxes - lately dramatically reduced and simplified - and even fewer save. Every rise in disposable income is immediately translated to unadulterated consumption. Takings are understated - Russia's informal economy is probably half as big as its formal sector.

A study, financed by Carnegie Foundation, found that only 7 percent of Russians qualify as middle class. Another 12 percent or so have some bourgeois characteristics. Sixty percent of them are men, though Komkon marketing research agency says that genders are equally represented.

Figures culled from census conducted this year throughout Russian Federation - first since 1989 - are expected to confirm these findings. About one fifth to one quarter of all Russian households earn more than average monthly income of $150 per person.

Political parties which purport to represent middle class - such as Union of Forces of Right (SPS) - garnered 10-15 percent of votes in 1999 parliamentary elections. Direct action groups of "third estate" may transform political landscape in forthcoming elections.

In a recent study by sociologists from Russian Academy of Sciences' Institute of Philosophy, more than half of all Russians self-flatteringly considered themselves middle class. This is delusional. Even optimistic research firm Premier-TGI pegs number at 19 percent at most.

Businesses adapt to these new demands of shifting tastes and preferences. The St. Petersburg-based cellular operator Delta Telecom, owner of first license to provide wireless-communications services in Russia, intends to test market among middle class clients.

Ikea, Swedish home improvement chain, has plunged $200 million into a new shopping center. French, German and Dutch cash-and-carry and do-it-yourself groups are slated to follow. Russian competitors, every bit as sleek, have erupted on scene. The investment spree has engulfed provinces as well.

Last month, Citibank opened a retail outlet for affluent individuals in Moscow - though its standards of transparency may yet scare them off, as Gazeta.ru observed astutely. A private cemetery in Samara caters to needs of expired newly rich. Opulently-stocked emporiums have sprouted in all urban centers. TV shopping and even online commerce are on up. According to Washington Post, Moscow retail space will have tripled by end of next year from its level at beginning of 2002.

The Russian Expert magazine says that middle class, minuscule as it is, accounted last year for a staggering 55 percent of all consumer goods purchased and generates one third of Russia's gross domestic product. The middle class is Russia's most important engine of wealth formation and investment, far outweighing foreign capital.

Russia's post-1998 fledgling middle class is described as young, well-educated, well-traveled, community-orientated, entrepreneurial and suffused with work ethic and a desire for social mobility. It is almost as if crisis four years ago served as a purgatory, purging sins and sinners alike and creating conditions for revival of a healthier, longer-lived, bourgeoisie.

But being middle class is a state of mind more than a measure of wealth. It is an all-encompassing worldview, a set of values, a code of conduct, a list of goals, aspirations, fantasies and preferences and a catalog of moral do's and don'ts. This is where transition, micromanaged by western "experts" failed.

The mere exposure to free markets was supposed to unleash innovation and entrepreneurship in long-oppressed populations of east Europe. When this prescription - known as "shock therapy" - bombed, West tried to engender a stable, share-holding, business-owning, middle class by financing small size enterprises. It then proceeded to strengthen and transform indigenous institutions.

None of it worked. Transition had no grassroots support and its prescriptive - and painful - nature caused wide resentment and obstruction. When dust settled, Russia found itself with a putative - and puny - middle class. But it was an anomalous beast, very different from its ostensible European or American counterparts.

To start with, Russia's new middle class is a distinct minority.

Prism, a publication of Jamestown Foundation, quoted, in its August 2001 issue, Serbian author Milorad Pavic as saying that "the Russian middle class is like a young generation whose fathers suffered a severe defeat in a war: with no feeling of guilt and no victorious fathers to boss them around, children of defeat see no obstacles before them".

This is a bit misleading. Euro zone unemployment is far higher and labour force participation far lower than America's. The young are especially disadvantaged. Only Britain is up to American standards. The European labour market is highly inefficient in matching demand and supply. Labour mobility among regions and countries is glacial and generous unemployment benefits are a disincentive to find a job.

Reforms are creeping into legislative agendas of countries as diverse as Italy and Germany. Labour laws are re-written to simplify hiring and firing practices and to expand role of private employment agencies. But militant unions - such as Germany's IG Metal - threaten to undo all recent gains in productivity and wage restraint.

The European Commission - a bastion of "social Europe" - has just equalized rights and benefits of temporary workers (with more than 6 weeks of tenure) and full-time ones. Yet another reformist adviser to Italian Minister of Labour was assassinated. This was followed by a million-workers strong demonstration in Rome's Circo Massimo against minor reforms in firing practices.

But most successful and efficient labour market in world, in States, is associated with a different ethos and an idiosyncratic sociology of work. The frame of mind of American employee and his employer is fundamentally at odds with European mentality. In Europe, one is entitled to be employed, it is a basic human right and a public good. Employers - firms and businessmen - are parties to a social treaty within a community of stakeholders with equipotent rights. Decisions are reached by consensus and consultation. Peer pressure and social oversight are strong.

Contrast this with two engines of American economic growth: entrepreneurship and workaholism.

The USA, according to "Global Entrepreneurship Monitor", is behind South Korea and Brazil in entrepreneurial activity prevalence index. But 7 percent of its population invested an average of $4000 per person in start-ups in 2000.

A 10-country study conducted in 1997-9 by Babson College, London School of Business, and Kauffman Center for Entrepreneurial Leadership found gaping disparities between countries. More than 8 percent of all Americans started a new business - compared to less than 1.5 percent in Finland. Entrepreneurship accounted for one third of difference in economic growth rates among surveyed countries.

Entrepreneurship is a national state of mind, a vestige of dominant culture, an ethos. While in Europe bankruptcy is a suicide-inducing disgrace bordering on criminal - in USA it is an integral and important part of learning curve. In USA, entrepreneurs are social role models, widely admired and imitated. In Europe they are regarded with suspicion as receptacles of avarice and non-conformity. It is common in States to choose entrepreneurship as a long-term career path. In Europe it is considered professional suicide.