Industrialization in Imperial Russia

In 1860, on the eve of the Emancipation of the Serfs, Russia produced about 350,000 tons of pig iron. By 1900, the figure was roughly 2.9 million tons, and by 1913 it was 4.6 million tons. Coal output rose from 0.5 million tons in 1860 to 36 million tons in 1913. Oil production in the Baku field grew from negligible amounts in the 1860s to nearly 9 million tons in 1901, before the wells began to be exhausted. The Russian industrial economy, almost non-existent at mid-century, had by 1913 become the fifth largest in the world.

The transformation was driven by a combination of state policy, foreign capital, technological transfer, and a small but determined group of Russian entrepreneurs. It was uneven across regions, often brutal in its working conditions, and shaped from start to finish by the autocratic state. It also created the social base — the urban working class concentrated in St. Petersburg, Moscow, Baku, the Donbas, and Riga — that would, in 1905 and again in 1917, shake the imperial system to its foundations.

The pre-industrial economy

In the early eighteenth century, Russia was a largely agrarian society with a small urban population. The Muscovite state had artisan workshops and some large-scale production of salt, iron, and textiles, but industrial output was low by Western European standards. The vast majority of the population was engaged in subsistence agriculture.

Serfdom was the central economic institution, and it shaped what industrialization was possible. Serf labour was attached to the landlords’ estates and could not migrate freely to factories. When serfs were conscripted into factory work, they brought with them the legal disabilities of the peasantry. The lack of a free labour market was a serious constraint on industrial development, as was the limited purchasing power of the peasantry, which kept the domestic market for manufactured goods narrow.

Geography compounded the problem. The vast distances and the absence of an all-weather road network made it expensive to move goods overland. Most heavy freight went by river, and most industrial raw materials were processed close to the source.

Peter the Great and the Ural metallurgical industry

The first serious attempt at industrial development came under Peter the Great. The decisive innovation was the Ural metallurgical industry. The Ural region had rich deposits of iron ore and copper, vast forests to supply charcoal, and rivers to move the finished product. Peter encouraged a handful of industrialists — Nikita Demidov and his descendants above all — to develop the region, supplying them with serf labour from state and private estates and protecting them with high tariffs against Swedish and German competition.

By the time of Peter’s death in 1725, the Urals were producing about 100,000 tons of pig iron a year, more than England was producing in 1700. The Ural works supplied the Russian army and navy with cannon, anchors, and small arms, and they remained the centre of Russian metallurgy for more than a century. The industry had a darker side: the serfs assigned to the works (the posesssionnye krestyane) were bound to them in a form of industrial serfdom that was, in practice, indistinguishable from slavery.

The textile industry developed more slowly. A few cotton mills were established in Moscow in the early eighteenth century, but it was not until the 1840s that Russian textile production became a significant sector, and it was not until the 1880s that Russian factories could meet more than a fraction of the domestic demand for cloth.

The railway age and the emancipation of 1861

The first Russian railway — a short line of about 25 kilometres connecting the mining town of Kolpino with the Alexandro-Nevsky works — opened in 1837. The first major passenger line, the 27-kilometre Tsarskoye Selo railway, opened in the same year. The St. Petersburg–Moscow railway, designed by engineers trained in America and built between 1842 and 1851, was the first long-distance trunk line in the country.

The railway age and the Emancipation of the Serfs of 1861 went together. The serfs gained personal freedom; many moved to the cities to work in factories; and the railways gave the new industrialists a way to move raw materials and finished products cheaply. The combination produced a period of industrial growth that lasted, with interruptions, until 1914.

Between 1860 and 1890, the Russian economy grew at an average rate of about 3% per year. The 1880s saw the beginning of a more rapid expansion, driven by the development of the Donbas coalfield, the Baku oilfield, and the rail network of the south. The Putilov works at St. Petersburg, the Bryansk (later Bezhitsk) works, and the Kolomna works were the largest engineering firms in the country by 1900. The textile industry of the Moscow region had become the largest in Europe outside Lancashire.

The Witte system and the great spurt, 1890-1913

The period from 1890 to 1913 is known to historians as the Witte period or the great spurt. The name is taken from Sergei Yulyevich Witte, the minister of finance from 1892 to 1903, who is the central figure in late imperial Russian economic history. Witte’s program had four main elements.

The first was railway construction. Witte saw the railway as both a stimulus to industrial demand and a way to integrate the empire. He pushed the construction of the Trans-Siberian Railway (begun 1891, completed 1904 with the completion of the Chinese Eastern Railway), the Transcaspian Railway through Central Asia, and a network of strategic railways in the western empire. The state placed large orders with Russian metallurgical and engineering firms, and the railways’ demand for rails, locomotives, and rolling stock sustained the growth of heavy industry.

The second was the stabilisation of the currency. Witte put Russia on the gold standard in 1897, fixing the ruble at a value that made it convertible and credible. The reform required a large foreign loan, but it had the desired effect: foreign investment, which had been deterred by the depreciation of the paper ruble, flooded in. Between 1890 and 1900, foreign capital financed most of the new industrial enterprises. French capital, in particular, was invested in Russian railways, mining, and oil, partly as a by-product of the Franco-Russian Alliance of 1891-1894.

The third element was the vodka monopoly, introduced on 1 January 1895. The state took over the wholesale distribution of spirits, and the state share of the revenue from alcohol consumption rose to about a third of all tax revenue by 1900. The monopoly was profitable in financial terms, but it was unpopular, and the policy was reversed in the wake of the 1905 Revolution.

The fourth element was protective tariffs and state subsidies to favoured industries. The tariff of 1891 was the highest in Europe, and it protected the infant metallurgical and textile industries against British and German competition. The policy worked: by 1900, Russian industry was producing most of the consumer goods the empire needed, and by 1913 it was exporting oil, grain, and a small but growing volume of manufactured goods.

The result was striking. Russian pig-iron output grew from 0.7 million tons in 1890 to 2.9 million tons in 1900 and 4.6 million tons in 1913. Coal output grew from 6 million tons in 1890 to 36 million tons in 1913. The total length of railway grew from 32,000 kilometres in 1890 to 71,000 kilometres in 1913. The Russian economy, measured in industrial output, was now larger than those of Italy, Austria-Hungary, and Spain combined, and the rate of growth in the 1890s (about 8% per year) was the highest in the world.

The geography of late imperial industry

By 1913, the geography of Russian industry was sharply regional. The St. Petersburg region was the centre of the metalworking and engineering industries — the Putilov works, the Obukhov works, the Baltic works, the Neva shipyard. Moscow and the central industrial region (the Vladimir, Tver, and Kostroma governorates) were the centre of the textile industry. The Donbas (the Donetsk coalfield) and the Krivoy Rog iron-ore region in present-day Ukraine were the centre of heavy industry. The Baku oilfield in the Caucasus was the centre of oil production, dominated in the early 1900s by the Swedish-born Nobel family, the Rothschilds, and Royal Dutch Shell.

The Polish industrial region around Łódź was the third-largest centre of textile production in the Russian Empire. Riga and the Baltic provinces were centres of metalworking and railway engineering. The Urals, the original centre of Russian metallurgy, had been overtaken by the south by 1890 but remained an important producer of iron, copper, and platinum. Siberia was a source of gold, copper, and coal, and the Ural-Kuznetsk combine was on the drawing board in 1914.

The industrialists

The Russian industrial economy of 1900-1914 was dominated by a small number of large firms. In textiles, the Morozov family — Savva, Timofei, and their descendants — controlled a network of mills in the Moscow region that employed more than 50,000 workers by 1900. In metallurgy, the Putilov works at St. Petersburg was the largest single firm, with 12,000 workers. In oil, the Nobel firm (the Branobel cartel) controlled about 12% of the Baku output in 1900; the rest was divided among smaller producers.

The relationship between the industrialists and the autocratic state was complex. On the one hand, the industrialists depended on state orders, state subsidies, and protective tariffs. On the other hand, the industrial working class was a source of constant anxiety to the state, and the major strikes of 1902-1903 (Rostov-on-Don, the Putilov works) were among the immediate causes of the 1905 Revolution. The Gapon march of 9 January 1905 was, in origin, a workers’ complaint about the management of the Putilov works.

The growth of the working class was rapid. In 1860, the industrial workforce was perhaps 500,000. By 1900, it was about 3 million. By 1913, it was about 4 million, including the mining workforce. The workers were concentrated in a few cities — St. Petersburg, Moscow, Baku, the Donbas, Łódź, Riga — and they were increasingly concentrated in large factories, many employing several thousand workers.

Working conditions were harsh by the standards of contemporary Western Europe. A twelve-hour day was standard; child labour was common; safety regulation was minimal; and housing was often provided by the employer in barracks near the factory. The Gapon petition of 9 January 1905 listed eight specific grievances: lack of freedom of assembly, lack of freedom of the press, the lack of a constitution, the lack of universal education, the lack of freedom of religion, the lack of state protection of labour, the lack of a graduated income tax, and the lack of an end to the war with Japan.

The strikes of 1905 were the largest in Russian history to that point, and the October General Strike forced the October Manifesto. The 1906-1907 laws, modelled on German social legislation, provided for a ten-hour day, workers’ compensation for injury, and a system of factory inspectors; but enforcement was weak, and the major strikes of 1912-1914 (the Lena goldfield massacre of April 1912 was the most famous) showed that the conditions of labour were still an important political issue on the eve of the war.

The limits of the great spurt

The industrial growth of 1890-1913 did not resolve the structural problems of the Russian economy. The empire remained overwhelmingly agrarian, with more than 80% of the population still living in the countryside at the eve of the war. The industrial sector was geographically concentrated, and the bulk of the working class was concentrated in a small number of cities. The Russian economy was heavily dependent on foreign capital: in 1914, more than half of the joint-stock capital in Russian industry was foreign-owned. The economy was also dependent on the continued inflow of foreign capital, and the outbreak of war in 1914 cut off the supply of credit just as the war economy was ramping up.

The war revealed the limits of the industrial base. The lack of rifles, the shortage of artillery shells, and the inadequacy of the railway system were the most visible symptoms, and the autocratic state was unable to organise the industrial economy to meet the demands of modern industrial warfare. The Tsaritsyn front, the Northern Front, the Western Front, the Southwestern Front — all demanded munitions, rifles, and transport in quantities that the Russian economy could not deliver.