Encyclopedia of Russian History

by James Millar

  Trade with the developed western capitalist countries was always impeded by the deficient quality of Soviet manufactured goods, including poor merchandising and after-sales service. Furthermore, western countries also discriminated against Soviet exports by their tariff and strategic goods policies. Even so, some Russian-produced articles, like watches produced in military factories and tractors, entered a few markets. More significantly, the USSR was able to export tremendous quantities of oil, gas, timber, and nonferrous metals such as platinum and manganese, as well as some heavy chemicals. Notable imports included whole plants for the production of automobiles, tropical foodstuffs, and grain during periods of harvest failure.

  Foreign trade was always a state monopoly in the USSR, even during the New Economic Policy (NEP). Under the control of the Minister of Foreign Trade, foreign-trade “corporations” conducted the buying and selling, though industrial ministries and even republic authorities could be involved in the negotiations. Barter deals at the frontiers and

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  tourist traffic provide trivial exceptions to the rule. The object of the monopoly was to fit imports and exports into the overall plan regardless of changes in world prices and availabilities. Foreign trade corporations are not responsible for profits or losses caused by the difference between the prices they negotiate and the corresponding ruble price, given the arbitrary exchange rate. Exports must be planned to cover the cost of necessary imports-notably petroleum, timber, and natural gas during the last decades in exchange for materials, equipment, and foodstuffs during poor harvest years. Hence enterprise managers were told what to produce for export and what may be available from foreign sources. Thus, they had little or no knowledge of foreign conditions, nor interest in adjusting their activities to suit the international situation of the USSR. With internal prices unrelated to international scarcities, the planning agencies could not allow ministries or chief administration, still less enterprises, to decide on their own what to buy or sell abroad. Tariffs were strictly for revenue purposes. For instance, when the world market price of oil quadrupled in 1973-1974, the internal Soviet price did not change for nearly a decade. But trade with the outside world is conducted in convertible currencies, their volumes then translated into valyuta rubles at an arbitrary, overvalued rate for the statistics. Prices charged to or by COMECON partners were determined in many different ways, all subject to negotiation and dispute. Some effort was made during the 1970s to calculate a more efficient pattern of foreign trade for investment purposes, but in practice these calculations were little applied.

  Given the shortage of foreign currency and underdeveloped trading facilities, Soviet trade corporations often engaged in “counterpart-trade,” a kind of barter, where would-be western sellers were asked to take Soviet goods in return for possible resale. For instance, the sale of large-diameter gas pipes for West European customers would be repaid in gas over time. Obviously, these practices were awkward, and Soviet leaders tried a number of organizational measures to interest producers in increased exports, with little success.

  One of the changes instituted under Mikhail Gorbachev’s leadership was permission for Soviet enterprises to deal directly with foreign suppliers and customers. Given the short time perestroika had to work, it is impossible to tell whether these direct ties alone would have improved Soviet penetration of choosy markets in the developed world. After all, Soviet manufactures suffered from poor design, unreliability, and insufficient incentives, as well as substandard distribution and service.

  During the years immediately after the dissolution of the Soviet Union, the Russian ruble became convertible for trade and tourist purposes, but exporters were required to rebate part of their earnings to the state for repayment of foreign debts. Further handicapping Russian exporters was the appreciating real rate of exchange, owing to continued inflation. The IMF also supported the overvalued ruble. By 1996 the ruble became fully convertible. All this made dollars cheap for Russians to accumulate and stimulated capital flight estimated at around $20 billion per year throughout the 1990s. It also made imports of food and luxuries unusually inexpensive, while making Russian exports uncompetitive. What is more, the former East European CMEA partner countries and most Commonwealth of Independent States (CIS) members now preferred to trade with the advanced western countries, rather than Russia. When in mid-1998 the government could no longer defend the overvalued ruble, it accepted a sixty percent depreciation to eliminate the large current account deficit in the balance of payments. This stimulated a recovery of Russian industry, particularly those firms producing import substitutes. Russian exports of oil and gas (which furnish about one-third of tax revenues) also recovered during the late 1990s. Rising energy prices likewise allowed the government to accumulate foreign exchange reserves, pay off much of its foreign debt, and finance still quite extensive central government operations. However, absent private investment, prospects for diversifying Russian exports beyond raw materials and arms were still unclear in the early twenty-first century. See also: COUNCIL FOR MUTUAL ECONOMIC ASSISTANCE; ECONOMIC GROWTH, IMPERIAL; ECONOMIC GROWTH, SOVIET; FOREIGN DEBT; TRADE ROUTES; TRADE STATUTES OF 1653 AND 1667

  BIBLIOGRAPHY

  Erickson, P.G., and Miller, R.S. (1979). “Soviet Foreign Economic Behavior: A Balance of Payments Perspective.” In Soviet Economy in a Time of Change: A Compendium of Papers, U.S. Congress, Joint Economic Committee, 3 vols. Washington, DC: U.S. Government Printing Office. 2:208-243. Gregory, Paul R., and Stuart, Robert. (1999). Comparative Economic Systems, 6th ed. Boston: Houghton Mifflin.

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  Holzman, Franklyn D. (1974). Foreign Trade under Central Planning. Cambridge, MA: Harvard University Press. Kaser, Michael. (1969). “A Volume Index of Soviet Foreign Trade.” Soviet Studies 20(4):523-526. Nove, Alec. (1986). The Soviet Economic System, 3d ed. Boston: Allen amp; Unwin. Wiles, Peter. (1968). Communist International Economics. Oxford: Blackwell.

  MARTIN C. SPECHLER

  FRANCE, RELATIONS WITH

  If the first official contact between France and Russia was established in 1049, when the daughter of Yaroslav, prince of Kiev, married Henri, King of France, bilateral relations were established with the treaty of friendship signed in 1613 by King Louis XIII and Tsar Mikhail Fyodorovich. Since then, cultural exchanges regularly expanded, most notably during the reigns of Peter the Great and Elizabeth. However, on political and economic grounds, the exchanges remained thus: England retained primacy in Russian foreign trade throughout the seventeenth and eighteenth centuries; and on the diplomatic scene, despite common geopolitical interests, France and Russia were quite often the victims of mutual hostile stereotypes. In 1793, embittered by France’s radical revolution, Catherine II broke all diplomatic relations with the revolutionary state; and in 1804, despite the treaty of nonaggression concluded in 1801 with Napoleon, Alexander I joined the Third Coalition to defeat the “usurper,” his political ambitions, and his expansionism. The war against Napoleon (1805-1813) was a national disaster, marked by several cruel defeats and by the fire of Moscow in 1812, but Alexander’s victory, marked by his entrance into Paris in March 1814, gave him a decisive role during the Congress of Vienna.

  The second half of the nineteenth century brought a major change in Russian-French relations. If France took part in the humiliating Crimean War in 1854-1856, during the late 1860s reconciliation began to take place and, in 1867 and 1868, the Russian Empire participated in the universal exhibitions organized in Paris. Political and military concerns motivated a decisive rapprochement during the last third of the century: France, traumatized by the loss of the provinces of Alsace and Lorraine, desperately needed an ally against Bismarck’s Prussia, while for Alexander III’s Russia, the goal was to gain an ally against the Austro-Hungarian Empire, which opposed the Russian pan-Slavic ambitions in the Balkans. In December 1888, the first Russian loan was raised in Paris and three years later, in Augus
t 1891, the two countries concluded a political alliance, followed by a military convention in December 1893. To sanctify the rapprochement, Tsar Nicholas II visited France three times, in October 1896, September 1901, and July 1909; and in July 1914, President Poincar? visited Russia to reinforce the alliance on the eve of World War I.

  The October 1917 Revolution killed these privileged links. The Bolsheviks opted for a peace with no annexing and no indemnity-and refused to recognize the tsarist loans. As a result, the French state felt deceived, and in December 1917, it broke relations with Russia and engaged instead in a struggle against it. In the spring of 1918, France organized the unloading of forces to support the White Guard and took part in the Polish war against Russia (May-October 1920). However, these interventions failed to overthrow the Soviet regime and, by the end of 1919, French diplomacy opted for a policy of containment against the expansion of communism. By that time, French-Soviet contacts were reduced: the French presence in the USSR was limited to the settlement of a small group of radical intellectuals and to the visits of French Communists; similarly, there was no official Soviet presence in France, although communist intellectuals and artists continued actively promoting Soviet interests and values.

  In 1924 Edouard Herriot, chief of the French government, decided to recognize the USSR. While he had no illusion about the authoritarian nature of the Soviet regime, he thought that France could no longer afford to ignore such an important country politically and that the signing of the Treaty of Rapallo in 1922 could be dangerous. Therefore, for geopolitical reasons, he chose to reestablish diplomatic relations.

  This decision gave rise to a rapid growth of economic, commercial, and cultural exchanges. In particular, Soviet artists became increasingly present in France: Maxim Gorky and Ilya Ehrenburg, for example, became brilliant spokesmen for the Socialist literature. However, this improvement was a fragile one and remained subject to diplomatic turbulences, due to Fascism and Nazism. Foreign

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  French president Jacques Chirac shakes hands with Russian president Vladimir Putin as they meet in April 2003 to discuss the situation in Iraq. © AFP/CORBIS Commissar Maxim Litvinov tried to bring the USSR closer to France and England, but French hesitation, demonstrated by the ambivalent French-Soviet treaty concluded in May 1935 and the lack of strong reaction to the Spanish Civil War, led Josef Stalin to conclude an alliance with Adolf Hitler instead. And on August 23, 1939, the conclusion of the Soviet-German Pact sanctified the collapse of the Soviet-French entente.

  Bilateral relations were reestablished during World War II. In September 1941, three months after the beginning of the German invasion of the Soviet Union, Stalin decided to recognize General Charles de Gaulle officially as the “Chief of Free France”; in December 1944 in Moscow, de Gaulle and Stalin signed a treaty of alliance and mutual assistance. However, the Cold War, which began to spread over Europe in 1946, had deep consequences for Soviet-French relations, and in 1955 the Soviet state denounced the treaty of 1944.

  In 1956 Nikita Khrushchev’s proclaimed de-Stalinization was favorably received by French diplomacy, and in the same year the head of the French government, Guy Mollet, made a trip to the USSR. This trip reestablished contacts and led to a protocol on cultural exchanges. But from 1958 on, de Gaulle’s return to power brought a new dynamic to relations with Moscow. De Gaulle wished to encourage “d?tente.” In his view, this would restore France’s international significance. In June 1966, he signed several important bilateral agreements with the USSR. Two committees were designed to improve economic cooperation; cooperation was also planned for space, civil nuclear, and television programs; and an original form of cooperation took place in the movie industry.

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  These agreements conferred a distinct flavor on bilateral relations: in contrast to the American-Soviet dialogue, which remained limited to strategic issues, the French-Soviet d?tente was in essence more global and covered a wide variety of areas of mutual interest. Political cooperation, economic and scientific exchanges, cultural exhibits, performers’ tours, and movie festivals all contributed to build a bridge between the two countries.

  Perestroika brought a new impulse to these relations. When Mikhail Gorbachev introduced drastic changes in March 1985, Fran?ois Mitterrand’s diplomacy first hesitated but, after a few months, provided strong support for the new leader; and in October 1990, a bilateral treaty of friendship-the first since 1944-was signed.

  The collapse of the USSR imposed another yet another series of geopolitical and cultural changes on the new leaders. But these changes had little impact on the long-lasting structural bonds forged with France through the centuries. See also: FRENCH INFLUENCE IN RUSSIA; FRENCH WAR OF 1812; NAPOLEON I; POLISH-SOVIET WAR; TILSIT, TREATY OF; WORLD WAR I; WORLD WAR II

  BIBLIOGRAPHY

  Shlapentokh, Dmitry. (1996). The French Revolution in Russian Intellectual Life, 1865-1905. Westport, CT: Prager.

  MARIE-PIERRE REY

  FREE ECONOMIC SOCIETY

  The Free Economic Society for the Encouragement of Agriculture and Husbandry, established in 1765 to consider ways to improve the rural economy of the Russian Empire, became a center of scientific research and practical activities designed to improve agriculture and, after the emancipation of the serfs in 1861, the life of the peasantry. “Free” in the sense that it was not subordinated to any government department or the Academy of Sciences, the society served as a bridge between science, agriculture, and reform until shut down during World War I. It sponsored a wide variety of research in the natural and social sciences as well as essay competitions, publishing reports and essays in Transactions of the Free Economic Society (comprising 280 volumes by 1915), and nine other periodicals. Founded under the sponsorship of Catherine the Great, who provided funds for a building and library, as well as a reformist agenda influenced by physiocratic ideas, the society brought together noble landowners, government officials, and scholars to study and disseminate information on advanced methods of agriculture and estate management, particularly as practiced abroad. Papers were presented on rural economic activities, new technologies, and economic ideas that could be applied to Russia. Young men were sent abroad to study agronomy. At the initiative of Catherine, the society’s first essay competition examined the utility of serfdom for the commonweal, but the winning essay, which opposed serfdom, was ignored.

  In the first half of the nineteenth century, the society’s membership came to include more scientists, professionals, and officials, and fewer landowners. Its work focused on discussion of advanced ideas in agronomy, medicine, and the developing sciences of chemistry and biology. After 1830 the society concentrated on practical applications of technology to agriculture. Among its most important projects were research on the best varieties of plants to grow on Russian soil, efforts to improve crop yields and sanitary measures, and the introduction of smallpox vaccination into rural areas.

  After the accession of Alexander II in 1855, the society threw itself into reform efforts and greatly expanded its activities. It offered popular lectures on physics, chemistry, and forestry. It entered the fight against illiteracy and in 1861 established a committee to study popular education. It supported research on soil science, agricultural economics, demography, and rural sociology, and carried out systematic geographic studies. To educate the newly freed peasantry, the society initiated a wide range of activities, mounting agricultural exhibits, establishing experimental farms, encouraging the use of chemical fertilizer and industrial crops, promoting scientific animal husbandry and beekeeping, and expanding its efforts to vaccinate the peasantry against smallpox. As part of its educational mission, the society published popular works on agriculture and distributed millions of pamphlets and books free of charge.

  Increasingly, as the society became a for
um for progressive economic thought critical of government policy toward the peasantry, its work took on political dimensions. The government revoked its charter in 1899, ordering it to confine its activities to agricultural research. Nonetheless, in 1905 the society supported the election of a constituFREEMASONRY tional assembly and after 1907 published surveys of peasant opinion on the land reforms proposed by Interior Minister Peter Stolypin that were implicitly critical of government policy. During World War I the tsarist government closed down the society because of its oppositional stance, and the new Soviet government formally abolished it in 1919. See also: AGRARIAN REFORMS; AGRICULTURE; MOSCOW AGRICULTURAL SOCIETY; STOLYPIN, PETER ARKADIEVICH

  BIBLIOGRAPHY

  Pratt, Joan Klobe. (1983). “The Russian Free Economic Society, 1765-1915.” Ph.D. diss., University of Missouri. Pratt, Joan Klobe. (2002). “The Free Economic Society and the Battle Against Smallpox: A ‘Public Sphere’ in Action.” Russian Review 61:560-578. Vucinich, Alexander. (1963). Science in Russian Culture. Vol. 1: A History to 1860. Stanford, CA: Stanford University Press. Vucinich, Alexander. (1970). Science in Russian Culture. Vol. 2: 1861-1970. Stanford, CA: Stanford University Press.