Economic developments to 1914: industrial and agricultural growth and change

Russia’s Industrial Development 1905-1914

Despite the fact that Nicholas II had presided over a disastrous first decade of his rule, the next decade that ran up to the start of the First World War saw rapid advances for Russian industry and the possibility that Russia might have escaped the problems that had dominated it for the previous half century.

Some historians have speculated that had it not been for the First World War, Russia might have joined the ranks of modern industrialised states and perhaps even developed a constitutional style government.

The policies that Sergei Witte instituted when he was minister of finance until 1903, and those enacted by Pyotr Stolypin had the combined effect of stimulating rapid economic growth in Russia.

The Russian economy experienced significant changes between 1905 and 1914. Prior to 1905, Russia was a largely agrarian society with a weak industrial base. However, during this period, the Russian economy underwent a process of rapid industrialization, fueled in part by foreign investment. This led to the growth of new industries, such as textiles, coal, and steel, and the development of a modern transportation infrastructure, including the construction of railroads and ports.

We have previously seen Witte’s effect on the development of Russia’s industry, but it was his successor Stolypin who would have a greater effect on the peasantry.

Before 1914, Russia experienced an impressive boost in its economic growth due to a combination of factors, including the growing international economy and domestic demand stimulated by both rearmament and the ability of many people to purchase goods. The Tsar was committed to building Russia’s armed forces following the humiliation of defeat at the hands of Japan, and by 1914 Russia had one of the best equipped armies in the world. The growing purchasing power of Russia’s middle and working classes began to transform Russian cities and new markets emerged for luxuries and consumer items.

This growth was supported by both foreign and domestic investment. However, despite this progress, the Tsarist economy had significant structural weaknesses. Many manufacturing industries, such as machine tools, chemical engineering, and optics, were still in their infancy. These were all industries where Germany led the way (and had begun to eclipse Great Britain) and were at the cutting edge of science and technology. Because Russia was unable to advance technologically at quite the same rate, it was forced to import from Europe.

In addition, factories often had a mix of advanced machinery used by skilled workers and sections that relied on manual labor. This combination of modern and outdated practices could also be seen in Russian agriculture, which had significant variations in productivity between different regions.

Stolypin’s Reforms

One of Stolypin’s key reforms was the dismantling of the village commune, a central aspect of the revolution in land ownership. This change aimed to create a new class of peasant landowners who, by owning property, would feel invested in the system and therefore be less likely to support revolutionary efforts to seize the landlords’ estates. The Law of 9 November 1906 granted the head of a peasant family the right to turn their communal strips of land into privately owned farms within or outside the village. Other legislation was introduced to facilitate the separation process and provide low-interest credit from the Peasant Land Bank to help peasants purchase additional land from the gentry. Despite the efforts of the state to support these reforms, they faced significant resistance from the communes and ultimately had limited success. Between 1906 and 1917, only around 15% of peasant households in European Russia were able to consolidate their land into private plots, amounting to approximately 30% of all peasant farms being in hereditary tenure. Many households failed to successfully enclose their land due to communal resistance or bureaucratic delays.

The Peasants were skeptical about the reforms and many realised that their way of life and the village commune would be destroyed by them. In some villages, class tensions emerged between wealthier and more successful peasants (called Kulaks – meaning ‘fist’ because they were thought to be tight fisted) and poorer peasants. A just over decade later these tensions would begin to be exploited by the Bolsheviks and would continue to be exploited into the Stalin era.

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