Industrial Reforms - Alex II

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  • Created by: Fern
  • Created on: 08-04-14 13:31

Industrial Reforms - Alex II

Causes

  • During the Crimean war, a shortage of armaments and weapons had contributed to Russia's failure. Russian industry was not able to cope with the demands of the armed forces in wartime - it was too weak and underdeveloped in size. This meant that industry had to improve and expand in order for Russia to become a "great power".
  • 90% of Russians worked in agriculture - this left industry a small and ineffectual sector of the economy.
  • The main industries were textiles and sugar - obviously not useful to military improvement. Russia needed more development in the heavier industry section.
  • Production was inefficient, often confined to small domestic workshops. This limited output and economic development.
  • The military failure was also caused by a poor transport system - there was no infrastructure designed to transport men and materials.
  • Russian transport in general was terribly underdeveloped compared to Western Europe. It's improvement would be an essential element of economic development, as there was no point in increasing output if the materials could not be effectively transported for national and international trade.
  • If Russia was going to export and trade/sell materials, to develop industry - they needed to be able to transport them with ease across the large geographical space.

Effects

  • The emancipation of the serfs was designed to promote industrial expansion by encouraging migration to the cities, with ex-serfs finding employment in factories.
  • Migration was also fairly restricted due to serfs still having connections to the mir and restrictions on their movement. This limited industrial development as it meant that the industrial workforce necessary for improvement and expansion was not available.
  • The railways were the main area in which industrial improvement occurred - during this era they expanded to become 4x their original size at 22,000 kilometers. However, the transport system in Russia remained far inferior to that in Western Europe.
  • In consideration of the size of Russia, this development was not enough to satisfy the requirements of industry and the military - in proportion, the length of the railways in Russia compared to its overall geographical region was far below that of the Western nations.
  • A "state bank" was established in 1866 - which helped stabilize the currency - encouraging foreign investment and also aiding Russia's economic development by creating a more organised financial system, as well as a more stable economy in general. However, it was still disorganized and inefficient compared to the Western nations.
  • Tariff duties were then raised again in 1878,  later became even higher during this era.
  • This was designed to encourage internal trade - by making foreign products more expensive, the government hoped that the Russian people would choose to buy domestic goods, as such boosting Russian industry.
  • Previous  to this they had been lowered in the 1860's - but this encouraged imports and was not useful to domestic change. As such, change was essential.

Overall summary

The development of Russian industry can be regarded as partly successful - some improvements were made, but these were minimal and Russian industry remained far inferior to the Western nations. Emancipation only lead to a small increase in the size of the available industrial workforce, and although the railways were developed the increase achieved was far from sufficient; A state bank stabilized the currency and so some improvement was observed in the financial sector, but it still remained disorganized and lacked efficient administration. Tariffs being lowered was disastrous - but this  negative effect was reduced by the policy reversal in the 1870's. 

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