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Social & Economic Developments in Russia 1881 - 1914



The Social and Economic Developments of Russia during the later Imperial Era, 1881 - 1914: Indus

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Generally, Russia was economically backward; and by 1880 an industrial revolution had not taken place. The Urals did have iron industries and textiles were manufactured in Moscow and St. Petersburg. Russia was too big and her road and rail network not sufficiently developed. There was no effective banking system. The 1880s saw an industrial expansion in Russia. It has been called the 'great spurt'. Coal output from the Ukraine and oil from the Caucasus rapidly increased. The expansion was brought about by private enterprise. Government policy sustained it; however, for military reasons. Sergei Witte was minister of finance from 1892 to 1903 and sought to modernise Russia. He invited foreign experts to advise on industrial development. He believed in state capitalism - that is, he expected the state to direct the development of the economy. He negotiated foreign loans of capital, but held high taxes and interest rates within Russia. Witte has been criticised for making Russia too dependent on foreign loans, and for not diverting resources to light industry and agriculture. Witte had many contemporary critics who were suspicious of him and his policies. So industrialisation gathered pace during the period of Witte, who ensured that industrially was energetically supported by the state. The 1905-6 revolution interrupted this development, but thereafter there was a recovery and the period up to the 1914 war was a "second golden age" for Russian industry. However, nowadays it is held that state intervention to foster this development was not so important. Additionally, it would probably be a mistake to regard Russia as developing a capitalist mentality; Russia never developed an business ethos and free-enterprise economy. Typically, a Russian merchant of the Moscow region was ultra-conservative and came from an Old Believer family; they were concerned not to risk their position by political agitation. They were authoritarian and harsh in their treatment of workers, and tended to obstruct the efforts of government to introduce factory legislation. The situation was more dynamic in the peripheral regions, especially in Russian Poland and the Baltic area, where St. Petersburg increased in population from 1.25 million in 1897 to 2.2 million by 1914. It was an important centre of metal-working, textile industry and food-processing. Newer industries of chemicals, rubber and electrical equipment also developed there. Much of this was due to foreign investment. Labour productivity increased. The Putilov works, manufacturing industrial machinery and railway locomotives employed over 12,000 men. Shipbuilding, leather-working and brewing were also important industries. There were also jobs in banking, insurance and the civil service. In the south there was a major expansion in the iron and steel industry. This region produced 64% of the empire's iron and steel and 70% of its coal by 1913. Output of coal rose from 15.6 million tons in 1870 to 1.6 milliard tons by 1913. Firms organised into the Association of Southern Coal and Steel Producers, which was in effect a cartel that manipulated the market by making output quotas and fixing prices. This monopoly power was enhanced by the high degree of vertical integration in Russian industry - with corporations controlling every stage of production. In the north Caucasus at Baku oil extraction became a major business financed by the firm of Nobel; yet Russian percentage of total world output fell as oilfields were opened up in the Near East and elsewhere. Average gross factory output increased by 5 to 5.5% per annum during 1883 to 1913. Productivity increased by 1.8% during this period. Comparative growth rates for 1894 - 1913 are: [Table goes here - download the original pdf to see it.] Foreign trade in £millions was: [Table goes here - download the original pdf to see it.] Although Russian industrialisation was a success story, Russian industry was by no means firmly established by 1914, when the war struck. Historians debate whether Russia was or was not in a process of industrialisation in the period up to 1914. Alex Nove, the leading Western writer about Russia's economy, states that the question is "meaningless". The growth in the Russian economy was in part due to the worldwide boom of the 1890s. By 1900, however, there was a slump in international trade. Rapid industrial growth meant that the towns rapidly increased in size and there was overcrowding. With the slump came unemployment; however, there was recovery during 1908 to 1914, during which time state revenues doubled from 2 to 4bn roubles and the number of industrial workers increased from 2.5 to 2.9 million. However, real wages fell during this period. Between 1908 and 1914 there was 40% inflation, but wages only rose 8%. There was enormous industrial unrest. The number of strikes rose from 892 in 1908 to 3,574 in 1914. (There was a dramatic increase from 466 in 1911 to 2,032 in 1912). (The peak was in 1905 at 13,995.) There was a successful strike in St. Petersburg in 1896-7 by 30,000 cotton spinners and weavers; the won public sympathy and a law was introduced restricting work to 11.5 hours per day! However, whilst this figure is high it must be remembered that there were many public holidays in Russia and only 270 were worked. All associations of workers striving for better pay and conditions were illegal until 1906. There were increases in state supervision of work-places; in 1885 22% of workers in industry were subject to the factory inspectorate; this figure rose to 31% by 1909. More and more women were being employed in industry, and this upset trade-union activists who sought to maintain wage-differentials and exclude married women from working altogether.
Contents of
Social & Economic Developments in Russia 1881 - 1914

1 The Social and Economic Structure of Tsarist Russia
2 The Social and Economic Developments of Russia during the later Imperial Era, 1881 - 1914: Autoc
3 The Social and Economic Developments of Russia during the later Imperial Era, 1881 - 1914: Agric
4 The Social and Economic Developments of Russia during the later Imperial Era, 1881 - 1914: Indus
5 The Social and Economic Developments of Russia during the later Imperial Era, 1881 - 1914: Commu
6 The Social and Economic Developments of Russia during the later Imperial Era, 1881 - 1914: Educa

Related articles: (1) The Reign of Nicholas II, the 1905 'Revolution' and 'Counter Revolution', (2) Social & Economic Developments in Russia 1881 - 1914