Russia's experiences in this period illustrate starkly not only the perils of backwardness but also one of the central dilemmas of modernisation: economic development unaccompanied by political reform could produce deadly tensions within a society. Add to this the complications of nationality, and the impression of a state straining at the seams is unavoidable.
Since Russia was an autocracy, it is legitimate to consider the great power preoccupations of its rulers first. Alexander II (1855—81) began his reign all too aware that Russia's vulnerability could affect its ability to maintain itself as a great power. The Empire's fundamental weakness vis-a-vis its European rivals was obvious by the 1860s, as was the reason for it, a lack of economic modernity. Emancipation of the serfs in 1861 was only the first step in this direction and one which certainly failed in its aim of creating a stable class of peasant smallholders. The most visible symbol of Russia's weakness, however, was its lack of railways. A government commission on railway construction concluded in 1865, 'The longer we delay, the further we shall fall behind Western Europe and the less we shall be able to develop our agriculture or even prevent its decline.'1 Alexander's finance minister, Michael von Reutern, put it even more bluntly in 1866: 'Our whole future depends on the railways.'2 The problem was that although there was a growing iron and cotton industry in Russia by the 1860s, the Empire was not capital-rich, and the finance for railways had to come from foreign banks. To attract such capital the Russian government had to guarantee foreign investors a profit, as well as ensuring political stability and avoiding foreign adventures and wars.
Yet precisely because it was a great power, Russia found it impossible to avoid expansion, war and crippling expenditure on armaments. Its conquest of much of Central Asia, in what has been described as psychological compensation for its Crimean defeat but which also had strategic and economic motives, continued for several decades after 1856. It entered into the war against the Ottoman Empire in the 1870s partly for reasons of prestige, partly because of the novel pressure on the tsar of Pan-Slavist-generated public opinion and partly for strategic advantage, but in defiance of the financial consequences. Reutern, who had painfully stabilised Russia's currency and funded railway construction, largely through borrowing, resigned in 1878 in despair over the costs of the war. The Ottoman war left Russian finances 'almost where they had been after the Crimean War'.3
The penny finally dropped in the late 1880s when the crisis over Bulgaria's union with Eastern Rumelia raised the possibility of war with Austria-Hungary and Germany. A major reason for Russia's climbdown was the poor state of the Russian armed forces as a result of successive cuts in expenditure, and the impossibility of funding their improvement. Alexander III (1881-94) was simply forced to recognise the limitations of Russian power, and it was in these circumstances that the decision was taken to embark on a state-led industrialisation programme.
The tsar's resolve owed much to the persuasiveness of Sergei Witte, who as finance minister from 1892 to 1903 masterminded Russia's breakneck modernisation. Witte was in many respects building on the efforts of his predecessors to fuel economic take-off through a combination of high tariffs against foreign manufactures and raw materials, continued borrowing and a drive to push up grain exports, and thus foreign currency earnings, by raising indirect taxes. The latter policy hit the peasantry hardest, by forcing many to sell their own supplies of grain, resulting in widespread famine in 1891—2, but it undoubtedly boosted government revenues. Witte continued these policies. He also commissioned huge infrastructure projects such as the Trans-Siberian Railway, to open up the natural resources of Russia's vast Asiatic hinterland, while offering low freight charges to make the railways profitable. The result was a massive spurt in economic growth: 20,000 kilometres of track laid between 1896 and 1901, a doubling of iron production between 1892 and 1899, with comparable figures for coal and steel, and rapid urbanisation.4 Russia's industrial revolution was well under way.
World History
