Economy and Society

Industrialisation:

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…