Throughout the period from 1855 to 1964, Russian leaders were keen to accelerate the industrialising process, although there was a consistent emphasis on heavy (iron, steel, coal and engineering) as opposed to light industry.
Catch up with the West: Britain, France and Germany based their economic progress on the development of the iron and coal industries.
- Alexander II recognised that the threat of peasant unrest could be dealt with by moving rural workers off the land and into industry. Factories warranted a 'new work discipline' which controlled the activities of the bulk of the population.
- Appointment of Mikhail Reutern as minister of finance: 1862-78. Continued railway construction, the attraction of foreign technical expertise and the employment of foreign investment capital = modernisation and expanision occured with iron, coal, oil and textiles.
- First railway completed in 1837 during Nicholas I.
- Followed by ambitious St Petersburg to Moscow line in 1581; influenced with Britain
- Reutern built on this = seven-fold increase in the amount of railway track
- 2194 miles in 1862 to 13,979 miles in 1878
- Break build : major reason for the doubling of industrial output and an annual growth rate of 6% during Reutern's term of office.
- Attracted foreign investment capital; Reutern secured foreign investment through issuing of government bonds, taxation exemptions and monopoly concessions.
- New finance minister, Nikolay Bunge: 1882-6.
- The abolition of Salt Tax in 1881 and Poll Tax 1866
- Peasant Land Bank 1883: A bank set up by the government to allow peasants to borrow money at cheap rates to allow the purchase of land.
- Liberal approach did not last long: blamed Bunge for a dramatic fall in the value of the rouble in the mid-1880s and replaced him with Ivan Vyshnegradskii: 1887-92
- Income gained by exporting large amounts of grain; even through shortages and starvation.
- 1891 famine; partially a result of Vyshnegradskii's policies.
- Replaced by Count Witte 1893-1903
The 'Great Spurt': Count Witte
- Witte was the first one to show total commitment to industrialisation
- Radical: achieved mainly at the expense of agriculture = suspicion among Russian Elite
- Taking out foreign loans, raising taxes and interest rates to boost capital
- Resurrected Reutern's idea of encouraging foreign experts to come to Russia
- MAJOR DEVELOPMENT: 1897 rouble on the gold standard
Effect of 'Great Spurt':
- Coal production doubled & steel and iron increased seven-fold
- New technologies in oil industries
- Railway track: 17,264 miles 1891 - 31,125 miles in 1901
- 42 million roubles in 1893 - 161 million roubles by 1897
Criticisms of 'Great Spurt':
- Some historians argue Witte's achievements have been exaggerated
- Witte focused on heavy industry and neglected other parts e.g. engineering/textiles
- Reliance on foreign capital = dangerous as loans can be recalled at short notice
- Railway was still very costly and not as impressive compared to rest of Europe.
Witte's industrial programme = Stalin's industrialisation of the 1930's. Similarities but there was no 'natural' progression from one to the other. WW1 and revolutions forced industrialisation.
WW1 and Industrialisation…