This chapter examines the paradox of Russian labor through the prism of the Russian state and the role it has set for itself in labor relations. It briefly discusses Russia's changing labor relations in comparative perspective and explains how labor's quiescence was anticipated neither by social theorists nor political actors. The chapter examines four distinct areas where the Russian state attempted either to disentangle itself from labor or to exert some control over it: privatization; labor legislation; the state's relationship with unions; and the issue of unemployment, wage arrears, and general enterprise restructuring. It shows that Russia's liberal transformation involved the state extracting itself from labor relations. The Russian government has liberalized prices, dismantled central planning, opened up to the world market, and privatized enterprises. Finally, the chapter focuses on the relationship between labor, the Russian state, and the feared social explosion to examine how workers might further impact Russia's economic and political transformation.