Economy and Society



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

  • 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.

Railway construction: 

  • 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

Alexander III:

  • 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


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