The State and Industrial Development

No sooner had the tsarist regime disposed of the more immediate and tangible threats posed by the French Revolution than it was faced with the novel and ambiguous challenge of the English industrial revolution. By 1815, Russia’s deep involvement in European power politics, the social and economic backwardness of the country, and its political traditions all demanded a decisive initiative on the part of the state in the matter of industrial development. With the relative insignificance of indigenous private enterprise, the state was the only agent within Russia possessing the potential for undertaking the burden of industrialization. Beyond Russia’s borders, foreign industrialists and financiers would soon be able and willing to play a major role in Russian development, but this would involve economic and ultimately political influences to which the tsarist government, as a great power, was loath to submit. The huge military machine which was maintained to police Europe could also act to prevent a repetition of the penetration and dismemberment of the Ottoman and Chinese empires in which Russia herself by 1860 was participating.

It was thus clear to some Russians, even as early as the Napoleonic period, that there was an urgent necessity for the Russian state to close the industrial gap with the West if it was to maintain its leadership at home and abroad. Little in the Russian political tradition stood in the way of such a major governmental intrusion into the economic life of the country. Under Nicholas I the traditional bureaucratic police despotism had matured. The regime possessed most of the instruments of coercion and faced no substantial organized societal opposition to the implementation of a major reorganization of the economy. Although heavy inertias and vested interests blocked the path, Peter the Great had shown that decisive and ruthless leadership could remove them. Mercantilism was nothing new to Russia, and the marshalling and regimentation of the labor and managerial force by the state had formed the fabric of tsarist social and economic history for over two centuries.

Despite these pressures of state interest and tradition, the tsarist regime failed to engineer or stimulate a major industrial effort in the early nineteenth century. Imperial Russia was revealed to the world in the Crimean War as a “backward” country; and it was not until at least the end of the nineteenth century that industrialization became a major aim of the rulers of Russia. The explanation for this failure of the Russian state to decisively activate and accelerate industrialization when many of the Western countries were modernizing their economies must be sought in the complex process of how economic growth begins as applied to Russia. The answer so often given to explain the inertia of Russia’s government in the first half of the nineteenth century (and of many “underdeveloped” countries today) emphasizes the indolence and ignorance of the leadership, the rigidity of the society, the decrepitude of the instruments of government, and the lack of resources. All of these conditions existed in prereform Russia, but not, of course, exclusively, and it is not sufficient to explain the backwardness of the regime by collating the more blatant examples of obscurantism. Evidence can be offered tliat the tsarist leadership at that time was not unaware of the need for industrial progress and was willing to take steps to bring about such progress; that the society was not inflexible and was in fact changing in important ways; that the imperial bureaucracy was viable as an instrument of government; and that resources could be mobilized. The record thus merits reexamination with a view to determining precisely what the regime wanted and did not want, and what it could do and could not do.

Part II will explore three aspects of the failure of the tsarist regime to begin substantially the industrialization of Russia during the early nineteenth century. First, economic thought with specific reference to conflicting views of industrialization will be considered. How aware was the leadership of Russia—the tsars, the bureaucracy, and the ruling and educated classes—of the problem of industrialization? How willing were the rulers of Russia to implement a program of industrialization, and what specific policies were formulated? What alternative views were forwarded and how influential were they?

A second problem to be taken up in Chapter 6 focuses on the administration of industrial development in early nineteenth-century Russia. How was the tsarist administration organized on the central and local levels to deal with the novel problems of industrialization? How well equipped was the imperial Russian bureaucracy to implement industrial policy? To what extent did bureaucratic habits and patterns impede state industrial programs? What specific policies to stimulate, develop and regulate industry were put into effect and how successfully were they carried through?

Part II also discusses in Chapter 7 a third problem fundamentally connected with the failure of the tsarist government to comprehensively foster industrialization in the decades before 1860—the resources at its disposal and the priority accorded industrial policy in their allocation. To what extent was the tsarist government capable of effecting at least a beginning push toward industrialization? How adequate were its revenues? How stabile were its finances? To what extent did other policies, particularly in the realm of foreign affairs, conflict with industrialization or assume priority over it? More specifically, how did the cost of war and of the maintenance of the military machine impede a state industrialization program during the reigns of Alexander I and Nicholas I?