The Witte System: Social and Economic Change

• Late 19th Century Russia was one of Europes Great Powers. 
• Status depended on military power but by the 1890's this was becoming increasingly linked to economic power. 
• Armies were expensive (made up of millions of men, transported to war using railways, advanced weaponry etc.) 
• Russia was economically backwards - depended on agriculture surpluses to be exported to gain wealth. 
• However, Russia had greaat natural resources due to it covering 1/6th of the worlds surface. Resources such as coal, iron and oil. 
• Russian government embarked on an ambitious programme to economic modernisation. 
• Witte had two predecessors; Bunge and Vyshnegradsky - they laid the foundation for Witte's economic growth. 

• major problem = serfdom. 
• Society was plagued by unrest.
• System was a major obstacle to economic developement. This is because it encouraged subsistence agriculture (meant there was little grain to be exported stopping wealth) which meant it stopped the needed economic wealth for industrialisation. 
• Emancipation did not bring complete freedom - serfs were still bound to communes stopping the needed migration of workers to towns and cities to swell the workforce.
• Rapid growth in population. Doubled between 1861 & 1914. 
• Only half the agricultural land was producing surpluses which could be sold. 
• Geographically; Russia had limited agriculutral land due to harsh winters and barren lands in other parts of the empire, such as Siberia. 
• Few landowners could afford to become involved in agricultural improvement (many had been in debt) 

• High tarriffs to support the Russian economy in 1891. 
• Wittes aim: to make Russia support its claim to being a Great Power economically. 
• Russia had all the wrong things to support a radpid industrialisation; 
  - Russia had a small business class - was central to Britain and other european powers that had been industrialised.
  - Majority of Russian peasants didn't have complete freedom - stopped migration to towns to swell the workforce which was needed for new manufacturing industries.
  - Insufficent funds to invest in industrial developement. (Couldn't produce enough surpluses) 
• Witte made a plan which differed from that of the rest of Europe. 
• Witte System;
  1. economic developement was sponsored and directed by the government. Government placed emphasis on capital goods such as iron and stel, coal and machinery.  
  2. Much developement was financed from abroad. 
  3. Extra taxes.
  4. Railways; Trans-Siberian railway; ran over 700km across the Empire and would provide the communications essential to exploit the economic potential of siberia. 
• Resembled the opening up of the West to Russia.  

Advantages;

• Coal, iron and oil production rose. 
• Trans-Siberian Railway was completed by 1903 - allowed Russia's influence to reach the Far East. 
• By 1900 over half the industrial workforce was employed in factories - caused large cities to grow - for example the population of St Petersburgh doubled between 1890 and 1914. 
• Russia could expoit the vast resources of Siberia. 
• Allowed Russia to develop its military power.

Weaknesses:

• rapid growth of cities caused poor living and working conditions. 
• Ideal environment for social unrest and supporet for radical alternatives to tsarism. 
• Many new industrialised workers became disillusioned with what they found.  
• Russia still lagged behind the other Great Powers in terms of its economy. 
• Extra taxation plased on the peasantry caused deep resentment - peasant uprisings had become common place.