by Riazanovsky
The Industrialization of Russia
If the "great reforms" helped push the gentry down a steep incline, they also led to the rise of a Russian middle class, and in particular of industrialists, businessmen, and technicians - both results, to be sure, were not at all intentional. It is difficult to conceive of a modern industrial state based on serfdom, although, of course, the elimination of serdom constituted only one prerequisite for the development of capitalism in Russia. Even after the emancipation the overwhelmingly peasant nature of the country convinced many observers that the empire of the tsars could not adopt the Western capitalist model as its own. The populists argued that the Russian peasant was self-sufficient, producing his own food and clothing, and that he, in his egalitarian peasant commune, did not need capitalism and would not respond to it. Perhaps more to the point, the peasant was miserably poor and thus could not provide a sufficient internal market for Russian industry. Also the imperial government, especially the powerful Ministry of the Interior, preoccupied with the maintenance of autocracy and the support of the gentry, for a long time in effect turned its back on industrialization.
Nevertheless, Russian industry continued to grow - a growth traced in detail by Goldsmith and others - and in the 1890's it shot up at an amazing rate, estimated by Gerschenkron at 8 per cent a year on the average. Russian industrialists could finally rely on a better system of transportation, with the railroad network increasing in length by some 40 per cent between 1881 and 1894 and doubling again between 1895 and 1905. In addition to Russian financial resources, foreign capital began to participate on a large scale in the industrial development of the country: foreign investment in Russian industry has been estimated at 100 million rubles in 1880, 200 million in 1890, and over 900 million in 1900. Most important, the Ministry of Finance under Witte, in addition to building railroads and trying to attract capital from abroad, did everything possible to develop heavy in-
dustry in Russia. To subsidize that industry Witte increased Russian exports, drastically curtailed imports, balanced the budget, introduced the gold standard, and used heavy indirect taxation on items of everyday consumption to squeeze the necessary funds out of the peasants. Thus, in Russian conditions, the state played the leading role in bringing large-scale capitalist enterprise into existence.
Toward the end of the century Russia possessed eight basic industrial regions, to follow the classification adopted by Liashchenko. The Moscow industrial region, comprising six provinces, contained textile industries of every sort, as well as metal processing and chemical plants. The St. Petersburg region specialized in metal processing, machine building, and textile industries. The Polish region, with such centers as Lodz and Warsaw, had textile, coal, iron, metal processing, and chemical industries. The recently developed south Russian Ukrainian region supplied coal, iron ore, and basic chemical products. The Ural area continued to produce iron, non-ferrous metals, and minerals. The Baku sector in Transcaucasia contributed oil. The southwestern region specialized in beet sugar. Finally, the Trans-caucasian manganese-coal region supplied substantial amounts of its two products.
The new Russian industry displayed certain striking characteristics. Because Russia industrialized late and rapidly, the Russians borrowed advanced Western technology wholesale, with the result that Russian factories were often more modern than their Western counterparts. Yet this progress in certain segments of the economy went together with appalling backwardness in others. Indeed, the industrial process frequently juxtaposed complicated machinery and primitive manual work performed by a cheap, if unskilled, labor force. For technological reasons, but also because of government policy, Russia acquired huge plants and large-scale industries almost overnight. Before long the capitalists began to organize: a metallurgical syndicate was formed in 1902, a coal syndicate in 1904, and several others in later years. Russian entrepreneurs and employers, it might be added, came from different classes - from gentry to former serfs - with a considerable admixture of foreigners. Their leaders included a number of old merchant and industrialist families who were Old Believers, such as the celebrated Morozovs. As to markets, since the poor Russian people could absorb only a part of the products of Russian factories, the industrialists relied on huge government orders and also began to sell more abroad. In particular, because Russian manufactures were generally unable to compete successfully in the West, export began on a large scale to the adjacent Asiatic countries of Turkey, Persia, Afghanistan, Mongolia, and China. Again Witte and the government helped all they could by such means as the establishment of the Russo-Persian Bank and the Russo-Chinese Bank, and the building of the East China Railway, not to mention the Trans-
Siberian. As already indicated, Russian economic activity in the Far East was part of the background of the Russo-Japanese War.
The great Russian industrial upsurge of the 1890's ended with the depression of 1900, produced by a number of causes, but perhaps especially by the "increasing weakness of the base," the exhaustion of the Russian peasantry. The depression lasted several years and became combined with political unrest and finally with the Revolution of 1905. Still, once order had been restored and the Russians returned to work, industrialization resumed its course. In fact, the last period of the economic development of imperial Russia, from the calling of the First Duma to the outbreak of the First World War, witnessed rapid industrialization, although it was not as rapid as in the 1890's, with an annual industrial growth rate of perhaps 6 per cent compared to the 8 per cent of the earlier period. The output of basic industries again soared, with the exception of the oil industry. Thus, counting in millions of pudy * and using 1909 and 1913 as the years to be compared, the Russian production of pig iron rose from 175 to 283, of iron and steel from 163 to 246, of copper from 1.3 to 2.0, and of coal from 1,591 to 2,214.
The new industrial advance followed in many ways the pattern of the previous advance, for instance, in the emphases on heavy industry and on large plants. Yet it exhibited some significant new traits as well. With the departure of Witte, the government stopped forcing the pace of industrialization, decreased the direct support of capitalists, and relaxed somewhat the financial pressure on the masses. Russian industry managed to make the necessary adjustments, for it was already better able to stand on its own feet. Also, the industry often had the help of banks, which began to assume a guiding role in the economic development of the country. But, financial capital aside, the Russian industrialists themselves were gradually gaining strength and independence. Also, it can well be argued that during the years immediately preceding the First World War Russian industry was becoming more diversified, acquiring a larger home market, and spreading its benefits more effectively to workers and consumers.
To be sure, the medal had its reverse side. In spite of increasing production in the twentieth century, imperial Russia was falling further behind the leading states of the West - or so it is claimed by many analysts, especially Marxist analysts. Just as the Russian government relied on foreign loans, Russian industry remained heavily dependent on foreign capital, which rose to almost two and a quarter billion rubles in 1916/17 and formed approximately one-third of the total industrial investment. The French, for example, owned nearly two-thirds of the Russian pig iron and one-half of the Russian coal industries, while the Germans invested heavily in the
* A pud equals 36 pounds.
chemical and electrical engineering industries, and the British in oil. On the basis of investment statistics some Marxists even spoke of the "semi-colonial" status of Russia! More ominously, Russian industry rose on top of a bitter and miserable proletariat and a desperately poor peasant mass.
Labor
The industrialization of Russia created, of course, a considerable working class. While Russians began to work in factories in the Urals and elsewhere far back in history, as mentioned in previous chapters, a sizeable industrial proletariat grew in Russia only toward the end of the nineteenth century. Russian industrial workers numb
ered over 2 million in 1900 and perhaps 3 million out of a population of about 170 million in 1914. Not impressive in quantity in proportion to total population, the proletariat was more densely massed in Russia than in other countries. Because of the heavy concentration of Russian industry, over half the industrial enterprises in Russia employed more than 500 workers each, with many employing more than 1,000 each. The workers thus formed large and closely knit groups in industrial centers, which included St. Petersburg and Moscow.
True, the term "worker" may be too definitive and precise as applied to the Russian situation. Populists, Marxists, and scholars of other persuasions, as well as Western specialists such as Zelnik and Johnson, have debated the extent to which Russian workers remained - or ceased to be - peasants. These workers usually came from the village. Often they belonged to the village commune, left their families behind in the village, and spent a part of every year there, gathering harvest and performing other peasant tasks. For them the village remained their home, while the factory became a novel way to earn obrok, so to speak. When a close relationship with the village ceased, many factory hands still maintained their membership in it and sought to retire to it to end their days in peace. And even after all important ties with the countryside were broken and workers were left entirely and permanently on their own in towns and cities, they could not shed overnight their peasant mentality and outlook. The Russian proletariat tended to be not only the pride but also the despair of the Marxists both before and after 1917. In fact, in the years following the October Revolution much of it vanished into the countryside. Nevertheless, the Marxists were right in their argument with the populists to the extent that they emphasized the continuing growth of capitalism and the proletariat in Russia. With all due qualifications, from the 1880's on, an industrial working class constituted a significant component of Russian population, an essential part of Russian economy, and a factor in Russian politics.
As noted in an earlier chapter, the government initiated modern labor
legislation in the 1880's, when Minister of Finance Bunge tried to eliminate or curb certain glaring abuses of the factory system and established factory inspectors to supervise the carrying out of new laws. More legislation followed later, with a law in 1897 applicable to industrial establishments employing more than 20 workers that limited day work of adults to eleven and a half hours and night work to ten hours. The ten-hour day was also to prevail on Saturdays and on the eve of major holidays, while no work was allowed on Sundays or the holidays in question. Adolescents and children were to work no more than ten and nine hours a day respectively. A pioneer labor insurance law, holding the employers responsible for accidents in connection with factory work, came out in 1903, but an improved and effective labor insurance act, covering both accidents and illness, appeared only in 1912. Unions were finally allowed in 1906, and even then exclusively on the local, not the national, level.
However, in spite of labor legislation, and also in spite of the fact that wages probably increased in the years preceding the First World War - a point, incidentally, strongly denied by Soviet scholars - Russian workers remained in general in miserable condition. Poorly paid, desperately overcrowded, and with very little education or other advantages, the proletariat of imperial Russia represented in effect an excellent example of a destitute and exploited labor force, characteristic of the early stages of capitalist development and described so powerfully by Marx in Capital.
Not surprisingly, the workers began to organize to better their lot. Indeed, they exercised at times sufficient pressure to further labor legislation, notably in the case of the law of 1897, and they could not be deterred by the fact that unions remained illegal until after the Revolution of 1905 and were still hampered and suspected by the government thereafter. The first significant strikes occurred in St. Petersburg in 1878 and 1879 and at a Morozov textile factory near Moscow in 1885. The short-lived but important Northern Workers' Union, led by a worker and populist, Stephen Khalturin, helped to organize the early labor movement in the capital. Major strikes took place in the '90's, not only in St. Petersburg, but also in Riga, in industrial areas of Russian Poland, and in new plants in the Ukraine. In addition, railwaymen struck in several places. The strike movement again gathered momentum in the first years of the twentieth century, culminating, as we know, in the Revolution of 1905, the creation and the activities of the St. Petersburg Soviet, its arrest by the government, and the unsuccessful armed uprising of workers in Moscow at the very end of the year. A lull of several years followed these events. However, the Russian labor movement revived shortly before the outbreak of the First World War. Strikes became frequent after the massacre of workers in the Lena gold fields in April 1912, when police fired into a crowd of protesting workers killing and wounding more than a hundred of them. In 1912, 725,000 workers
went out on strike, 887,000 in 1913, and over a million and a quarter from January to July in 1914. Their demands, it should be noted, were often political, as well as economic, in character. The Social Democrats, both the Mensheviks and the Bolsheviks, developed large-scale activities in the Russian labor movement.
The Peasant Question
Peasants constituted the vast majority of the Russian people, at least three-quarters of the total population according to the census of 1897. In a sense, they were the chief and the most direct beneficiaries of the "great reforms," particularly since the serfs received their freedom and the state peasants escaped some of their bondage to the state. Yet, after the reforms, their condition remained the largest and the gravest problem in Russia. As mentioned, the emancipation provisions proved to be insufficient to develop a healthy peasant economy - whether any provisions would have sufficed is another matter - and some of these provisions were shown to be entirely unrealistic: at the time of the partition former serfs received considerably less than their half of the land, and they simply could not meet the redemption payments. Moreover - a point which we have not discussed in any detail - the emancipation took a long time and followed an uneven course throughout Russia, with periods of transition and other delays to the peasants' full acquisition of their new status. And even that status, when finally attained, did not make the peasants equal to other social groups. Thus they possessed a separate administration and courts and, besides, were tied to the peasant commune in most of European Russia.
The communes, which received the land at the time of the emancipation, were made responsible for taxes and recruits and were in general intended to serve as bulwarks of order and organized life in the countryside. No doubt they helped many peasants keep their bearings in post-reform Russia, and they usually provided at least minimal security for their members. Even industrial workers, as mentioned above, often planned to retire in their villages. But the price of communal services was high. Communes tended to perpetuate backward, indeed archaic, agricultural production: they continued their traditional, ignorant ways, including the partitioning of land into small strips so that each household would receive land of every quality; and they lacked capital, education, and initiative for modernization. Individual householders, even when more progressively inclined, to a large extent had to follow the practices of their neighbors and, besides, acquired little incentive to improve their strips in those communes which periodically redivided the land. At the same time communes greatly hampered peasant mobility and promoted ever-increasing overpopulation in the countryside. Members of a commune frequently found it difficult to
obtain permission to leave, because their departure would force the commune to perform its set obligations to the state with fewer men. Also, where communes periodically redivided the land among the households, the head of the household could prevent the departure of one of its members on the ground that that would result in a smaller allotment of land to the household at the next reapportionment. As Gerschenkron commented: "Nothing was more revealing of the irrational way in which the village commune functioned than the fact that the individual household
had to retain the abundant factor (labor) as a precondition for obtaining the scarce factor (land)."
Population in Russia grew rapidly after the emancipation: from over 73 million in 1861 to over 125 million according to the census of 1897 and almost 170 million in 1917. Land prices more than doubled between 1860 and 1905, and almost doubled again between 1905 and 1917. In spite of the fact that peasants purchased much of the land sold over a period of time by the gentry, individual peasant allotments kept shrinking. Russian economic historians have calculated that 28 per cent of the peasant population of the country could not support itself from its land allotments immediately after the emancipation, and that by 1900 that figure had risen to 52 per cent. That the allotments still compared reasonably well with the allotments of peasants in other countries proved to be cold comfort, for with the backward conditions of agriculture in Russia they plainly did not suffice. The average peasant ownership of horses also declined sharply, with approximately one-third of peasant households owning no horses by 1901. The peasants, of course, tried a variety of ways to alleviate their desperate plight, from periodic employment in the cities to migration, but with limited success at best. They worked as hard as they could, exhausting themselves and the land, and competing for every bit of it. In this marginal economy droughts became disasters, and the famine of 1891 was a shattering catastrophe. But even without outright famine peasants died rapidly. At the beginning of the twentieth century, the annual death rate for European Russia, with the countryside leading the cities, stood at 31.2 per thousand, compared to 19.6 in France and 16 in England. Naturally, conditions differed in the enormous Russian Empire, with Siberian peasants, for example, reasonably prosperous. On the other hand, perhaps the worst situation prevailed in the thickly populated provinces of central European Russia - caused by the so-called "pauperization of the center." How the peasants themselves felt about their lot became abundantly clear in the massive agrarian disturbances culminating in 1905.