Empire and The Periphery
Empire and The Periphery
Empire and The Periphery
Boris Kagarlitsky
Pluto P Press
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The right of Boris Kagarlitsky to be identified as the author of this work has been asserted by
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10 9 8 7 6 5 4 3 2 1
1. A Land of Cities 26
2. The Thirteenth-Century Decline 45
3. Moscow and Novgorod 60
4. The ‘English Tsar’ 78
5. The Crisis of the Seventeenth Century 99
6. Empire of the Periphery 115
7. Peter the Great 138
8. The Eighteenth-Century Expansion 152
9. The Granary of Europe 170
10. The Crimean War and the World System 192
11. The Age of Reforms 200
12. The Flourishing of Russian Capitalism: From Witte to Stolypin 223
13. The Revolutionary Explosion 255
14. The Soviet World 283
15. After 1991: The Peripheral Capitalism of the Restoration Era 304
Conclusion 323
Notes 326
Index 356
For us, experience of the times does not exist. For us, generations and centuries have passed
fruitlessly. To look at us, you might say that the universal law of humanity has been reduced
to nothingness. Alone in the world, we have given the world nothing, and have taken nothing
from it. To the mass of human ideas, we have added not a single thought. We have not
contributed to the advance of human reason in any way, and everything of this advance
that we have come by, we have mutilated.
I consider our generation fortunate, if we can only recognise this. I think our great advantage
is that we can survey the whole world from the heights of thought, free from the unrestrained
passions and wretched self-interest which in other places obscure people’s vision and distort
their judgment. Moreover, I am profoundly convinced that we are fated to resolve many
of the problems of the social order, to perfect many of the ideas that have arisen in older
societies, and to answer the most important questions that preoccupy humanity. I have
often said and emphatically repeat that we are, so to speak, destined in the very nature of
things to act as the true moral court judging the many suits that are brought before the
great tribunal of the human spirit and human society.2
HISTORY AS POLITICS
In the early 1990s Russia once again astonished the world with a deluge of rapid
and unexpected changes. The collapse of the Soviet Union, the instantaneous
transformation of distinguished Communist Party figures into fervent liberals,
the stunningly quick and easy switch of slogans by the ruling elites, who recast
their whole set of political ideas from ‘the rebirth of socialism’ and ‘the law-
governed state’ to a strong executive authority and Russian national revival
– all within a single decade!
In ‘quiet’ periods people start to feel that the past has no bearing on them.
It is something to be studied from textbooks and monographs. A sharpening
of political struggle forces everyone, at times against their will, to ‘live within
history’, and to ‘create history’. In such times we unexpectedly discover that
our hopes and illusions, our errors and successes, are also part of history; that
we are accountable to the past as well as to the future. We are compelled to
understand the meaning that accumulated experience has for the present day,
for the simple reason that if we do not, we risk understanding nothing about
our own actions. An important element in being a Marxist is to be aware of
the continuity of history. When the anticommunist forces gained the upper
hand in Moscow in August and September 1991, they immediately set about
having ‘held back the country’s development’. For others, the villain is the
1917 revolution or the Bolsheviks, who ‘forced Russia off the correct path’.
Slavophiles see the source of Russia’s problems in Peter the Great, who sacrificed
Russia’s distinctive character to Western influences. It is possible to seek an
explanation for the country’s miseries in the decision by Vladimir Krasnoe
Solnyshko (Vladimir the Sun Prince) to accept Christianity from Byzantium
rather than Rome. The medieval chroniclers, it is true, mention that Prince
Vladimir had other options – for example, to embrace Judaism, a thought which
has ‘Jewish conspiracy’ theorists horrified. ‘Russia is not to be understood with
the mind, Nor with a common arshin will you measure it…’, wrote the poet
Tyutchev. Indeed, the usual ‘European’ schemas have generally been discredited
by attempts to apply them to Russia. The trouble is that attempts to analyse
Russian history from the position of national uniqueness and distinctiveness
have failed just as completely.
Throughout the nineteenth century, the liberal and Slavophile schools waged
a struggle over Russian history. After the collapse of the Soviet Union these
schools reappeared in their original forms, as if neither the experience of the
twentieth century, nor the discoveries of archaeologists, nor Western revisionist
historiography had ever existed. Standing counterposed to one another, the
Westernisers and Slavophiles are united in understanding Russian history as
isolated and ‘special’, not subject to the logic that is common to other countries.
The Westernisers see the country’s history as a strange anomaly, the result of a
number of chance circumstances; overcoming this ‘abnormal’ situation is the
job of an enlightened ruling authority that is ready to break with the past, and
if necessary to carry out a ritual outrage against the people and its culture.
By contrast, the Slavophiles believe in Russia’s ‘special path’, and exult in
the country’s uniqueness. They cherish and foster everything that might serve
as proof of the existence of a special ‘Orthodox’ or ‘Eurasian’ civilisation,
everything that differentiates Russia from the rest of the world.
Meanwhile, there is simply no way that Russia’s history can be divorced from
that of Europe or of the world in general, and not only in the chronological
and geographical senses. Russia’s distinctiveness, even uniqueness, is merely a
specific manifestation of processes general throughout the world. Often, this has
been an extreme manifestation, but for precisely this reason a grasp of Russian
history is indispensable for understanding what is going on in the world at large.
The reverse is also true; without an understanding of world history, the Russian
past becomes a series of absurd puzzles which, as the poet says, can be neither
understood with the mind nor measured in terms of a common arshin. To talk
of a ‘common arshin’ is itself a contradiction, since this measure of length has
never existed except in Russia. This poetical slip of the tongue, however, reflects
the complete pointlessness of the cultural and historical discussions of Russia’s
fate. Any number of facts can be cited to prove Russia’s ‘uniqueness’; this is a
country where, as Peter the Great put it, the unheard-of is commonplace. The
‘uniqueness’ of Russia is due not to the ‘mysterious Slavic soul’, and not to a
lag behind the ‘advanced West’, but to the specific position which our country
has occupied in the world economic system. There is nothing ‘incorrect’ or
mysterious in Russian history. But the history of Russia, like that of any other
country, can be understood only within the context provided by the development
of the world as a whole.
Fortunately, the ideas of the Slavophiles and Westernisers are far from being
the only ones spawned by the Russian historical tradition. The revolution of
1917 placed in question the myths of official Russian historiography. The very
concept of the Russian cultural tradition was destined for a fundamental re-
evaluation. In the early years of the twentieth century, when the coming shocks
were still sensed only dimly, liberal commentators wrote that a people who made
a revolution were doomed to be born anew. The self-awareness of the English
and French, their concept of themselves, changed radically as a result of their
experience of revolution.
In the first quarter of the twentieth century, the Russian past was destined
to become the object of rethinking, of Marxist historical criticism. The leading
figure in this criticism, and in essence the first revisionist historian in the modern
sense of the term, was Mikhail Pokrovsky. A pupil of the outstanding liberal
historian Klyuchevsky, Pokrovsky concluded that the Russian past needed
a radical rethinking, and that Marxist analysis provided the key to a new
understanding of events. Nevertheless, the fate of the ‘historical revisionism’
represented in Soviet Russia by the Pokrovsky school was unenviable. During
the years of revolutionary upsurge its ideas were in demand, but once the
bureaucracy headed by Stalin had gained the upper hand over the revolutionary
currents, the approach to history changed as well.
The rout of the Pokrovsky school began in the fateful year 1937 (Pokrovsky
himself had died five years earlier), and took on the character of a serious
ideological campaign. The ‘Old Bolsheviks’ who were in the dock during
the Moscow Trials were sentenced to be shot, and Pokrovsky’s theories were
condemned to disappear not only from history courses, but also from the
collective memory. Surviving pupils of the distinguished historian suffered
repression. Their late teacher was accused of having come up with a conception
‘devoid of a feeling for the homeland’, while his works were said to exhibit
‘disregard for the Leninist-Stalinist guidelines on questions of history’.3 Just
what these guidelines stipulated (especially on the part of the long-dead Lenin)
no one, predictably, troubled to explain. The propaganda campaign, in the
style of the Moscow Trials, consisted of spreading absurd accusations with
no more relation to reality than the charges – of espionage on behalf of all
the imperialist powers simultaneously – that had been brought against the Old
Bolsheviks. Stalin’s court publicist Yemelyan Yaroslavsky summarised the results
of the offensive, writing in Pravda that the views of the now-suppressed school
amounted to ‘anti-Marxist distortions and vulgarisation’.4
The reality was that once the Pokrovsky school had been smashed, official
history in the Soviet Union returned to the pre-revolutionary tradition. The
‘Soviet Thermidor’ needed its own myths. Lists of rulers, augmented with
Attempts to understand the history of any country without taking into account
the links with the history of humanity as a whole are doomed to failure. The
attempt to analyse Russian history as an independent and isolated narrative
could lead only to the rise of the competing myths of Westernisers (ascribing
all of Russia’s ills to insufficient Western influence) and Slavophiles (convinced
that these misfortunes all flow from an excess of this influence). The question
of how Russia’s relations with the outside world have in fact been constructed,
what the nature of these relations has been, and the reasons for their anguished
quality, remains a mystical puzzle for both currents, and one which they have
a superstitious reluctance even to touch.
Orthodox Marxism, as interpreted by the Russian ‘legal Marxists’ in the
early twentieth century, did little to improve this situation. The history of each
country was viewed in isolation from worldwide processes, while development
was perceived as something like a race in which the runners were moving at
the same time and in the same direction, but in parallel lanes. These ideas,
which contradicted not only the dialectical thinking of Marx but also the
experience of the Russian revolution, lay at the basis of the official Soviet
Marxism of the Stalin era. Hence also the classic images of Stalinist rhetoric
– ‘catch up with and overtake America’, ‘forward on the road to communism’,
and so forth. Pyotr Struve and other liberal ideologues of legal Marxism would
scarcely have supposed that they were laying the methodological bases for
a whole school of communist propagandists and official historians, but the
Marxist vaccination which they administered to the liberal-historical tradition
was extraordinarily effective. Instead of applying the critical method to the
achievements of nineteenth-century historical thought, Soviet official history
turned its Marxism to repeating ideas which, in Marx’s view, needed to be
viewed with scepticism.
The edifice of state erected by the Russian people does not have its foundations on the bones
of downtrodden nationalities. The Russian people either took possession of deserted lands,
or joined to themselves through non-violent historical assimilation such tribes as the Chudi,
Vesi and Meri, or the present-day Zyryane, Cheremisy and Mordvy, who have no rudiments
of historical life and no desire for it; or, finally, the Russian people took under their shelter
and protection tribes and peoples such as the Armenians and Georgians who, surrounded
by enemies, had already lost their national independence or who could no longer preserve
it. In all this, conquest played only a negligible role, as can easily be seen if we examine how
Russia acquired its southern border regions, a process reputed in Europe to have consisted
of conquest by an insatiably greedy Russia.9
At the time when Danilevsky wrote his book, half a century of war was nearing
its end in the Caucasus. This conflict had been accompanied by the mass killing
and ‘ethnic cleansing’ of Circassians, Chechens and other nationalities who did
not understand the blessing represented by Orthodox civilisation. In the same
way, ‘the partitioning of Poland, to the extent that Russia took part in it, was a
completely legal and just affair, the fulfilment of a sacred debt to Russia’s own
sons, in which Russia should not have been disturbed by outbursts of senti-
mentality or of false generosity’.10 The uprisings by the Poles and other subject
peoples is explained solely as the result of their ingratitude and ambition. If
many people in Russia itself disagreed with this, it was merely because Western
education had ‘beaten humanitarian ravings firmly into Russian heads’.11 In
Danilevsky’s view, the other calamities which had befallen the Russian people
included novelties as alien to the national cultural character as the adoption
of Western dress, the granting to defendants of the right to legal defence, and
the freeing-up of the press that took place in the late 1860s.
Not only imperial conquests, but also the oppression of Russian peasants
under serfdom failed to arouse Danilevsky’s condemnation. He glorified the
Orthodox Russian bureaucrat in the same way as Rudyard Kipling extolled the
‘white man’s mission’. Danilevsky’s dim-witted conservatism, however, rested
on a perfectly serious methodological basis – the theory of cultural-historical
types, subject to precise laws of development. In this respect, neither Samuel
Huntington nor other stars of the present-day ‘civilisation’ school have added
anything new to the thinking of Danilevsky’s time. The only difference is that
these writers all offer their own lists of ‘civilisations’, and their own interpreta-
tion of the differences between them.
The anti-historicism of the civilisation school becomes glaring as soon as these
writers come into contact with the facts. The very concept of civilisation is viewed
in rigid fashion, as something fundamental and immutable. The truth is that if
things seem basic and unchanging, it is because they have been retained from
history. The reverse, however, is not necessarily correct; that which is fundamental
is not always retained. In reality, civilisations are constantly changing, under the
impact of external economic, political and historical factors.
The ‘civilisation’ approach has always been convenient for warring political
tendencies. In the West in the early twenty-first century, this approach has served
as the ideology for new ‘crusades’ and as a justification for neocolonialism. In
the nineteenth century, Kipling glorified the ‘white man’s burden’, bringing the
achievements of industrial civilisation to the East. Now, advanced countries
are supposedly grafting the values of democracy onto the ‘backward world’;
these values, it would seem, are completely absent from Islamic or Confucian
cultures. For the purposes of this ‘grafting’, it is no sin to occupy one or another
backward country and make use of its resources, until such time as the local
population becomes ripe for democracy. Islamic fundamentalists have found
in the same concepts an additional basis for their hatred of the ‘godless West’.
Meanwhile, Russian nationalists cite Huntington while arguing for the defence
of the Orthodox faith and ‘holy Russia’ against the onset of ‘Atlantic culture’,
the ‘Islamic threat’ and ‘Chinese pressure’.
The advantage of the civilisation approach lies in its unscientific character, in
the diffuseness and imprecision of its ideas, which are capable of being turned
to any purpose. The discussion which is developing on this basis around the
topic of whether a Eurasian or Russian civilisation exists is itself indicative.
Every participant in this debate has come up with his or her own definitions,
with the result that even the term ‘Eurasian’ is the subject of a multitude of
interpretations.
Nevertheless, the main problem of the civilisation school is not the diffuseness
of its definitions, but its reluctance to take account of history, and of facts in
general. Here we are faced with a classic example of ‘ideology’ as understood by
the young Marx, of false consciousness, amounting to a set of rigid stereotypes
not subject to the test of practice. ‘Civilisation’ is perceived in this case as
something that remains stable over centuries, a set of cultural principles that
determine the development of peoples through the ages. From this arises the
conviction that there are generalised Western or Russian types of humanity,
existing outside of a specific political, social or cultural context. Cultural
traditions are indeed durable, but they also evolve. Their content is shaped and
altered by the influence of history, along with the development of society. They
are themselves the product of this development, a means through which the
results of social evolution are collectively understood and fixed. Consequently,
civilisations and cultures undergo striking metamorphoses. Max Weber saw in
Confucianism (unlike the ‘Protestant ethic’), a cultural mechanism holding back
entrepreneurship. Post-Weberian sociology sees Confucianism as the Asiatic
equivalent of the Protestant ethic, ensuring the success of Japan, Korea and
China in world markets.
Was Weber wrong? Not at all. In his period Confucianism functioned as a
conservative and traditionalist ideology. But along with the modernisation of
the countries of the Far East, the manner in which the Confucian tradition
was realised changed as well. The mistake lies not in the interpretation made
of one culture or another, but in the fact that the cart, in this case, is put
before the horse. It is not culture that determines the success or failure of
modernisation, but, on the contrary, the success or failure of modernisation
that decides whether one or another variant of the development of culture
will take hold. In this sense, the ‘conservatism’ or ‘radicalism’ of Islam in the
second half of the twentieth century is not something inherited from the time
of Mohammed. Islam became what it is through the failure of modernising
initiatives in the Middle East. Modern Islam is a distinctive response to a tragic
experience, a reaction to the series of failures and humiliations undergone by
the Arab world.
It is not hard to establish that in an age of political and economic successes,
Islamic culture was quite different. Consider European civilisation and the
Islamic East in the eleventh century, at the beginning of the Crusades. The
West at this time was closed off, conservative, hostile to innovations, militarised,
and aggressive. The Franks (this is what all Western Europeans were called
in the East) arrived in Constantinople and then in Jerusalem as a horde of
barbarians, the bearers of blanket destruction. The leaders of the Crusader
forces had trouble restraining their warriors from plundering the territory of
their Byzantine allies. The Crusaders were illiterate and unscrupulous. They
lacked even an elementary idea of how the world of their time was organised,
and were cruel and superstitious. The East, by comparison, was dynamic,
tolerant, open and inclined to innovation. It was precisely for this reason that it
initially met with defeat. The success in battle enjoyed by the Europeans was the
result of their higher level of militarisation. This success, however, did not last
long, since the East, with technological superiority and a more dynamic social
system, came to outplay the West in the thirteenth and fourteenth centuries.12
The Crusades can, of course, be depicted as a clash of systems or civilisations.
The situation was quite similar to that in the twenty-first century, though it
was not the West that played the role of the ‘open society’ and the ‘culture of
enlightenment’, but the Islamic world.
A mutual interpenetration of cultures did of course occur, but this does not
explain why the West leapt ahead in the fifteenth century. The Crusades opened
up Eastern knowledge and technology to the West, but still did not guarantee
successful development. On the military level, the Crusades ended in failure,
followed by the assault of the Ottoman empire on South-Eastern Europe. It was
only in the sixteenth century that the Western countries, now entering the era of
bourgeois development, halted the Turkish onslaught.The East in the sixteenth
century did not become more ‘conservative’; rather, it came to be perceived as
conservative by comparison with the dizzying development of the West. What
exactly happened in Europe around the beginning of the sixteenth century?
It might be said that at the end of the Middle Ages a sort of civilisational
mutation took place. It began with the Crusades. Then, in the fifteenth and
sixteenth centuries, Europe experienced the Renaissance and the Reformation;
on the cultural level, the former had perhaps more impact than the latter. There
is no doubt that European culture changed radically; the question is – why?
‘Culturological’ methods yield no clarifications, however much one might
rummage about in the history of the early medieval period. Meanwhile, the
answer lies right on the surface; the reason for the cultural transformation was the
development of bourgeois relations. It is no accident that the breeding grounds
of cultural modernisation in the Middle Ages were precisely those regions where
the most dynamic development of the new market economy was evident – that
is, in Italy and the Netherlands. Life was changing, people’s everyday experience
was changing, and their consciousness was changing as well.
WORLD-SYSTEM ANALYSIS
The Marxist view of history rests on manifest facts, in contrast to the abstractions,
myths and ideological speculations of the civilisation school. Nevertheless,
Marxist scholars themselves, as they have sought to understand the origins of
European capitalism, have finished up divided into two currents. One group
of writers has turned its attention to the technological revolution unfolding in
the West in the fifteenth and sixteenth centuries, to the growth of the internal
market and to the formation of the bourgeois mode of production. The growth
of cities created a heightened demand for the products of the countryside,
the natural economy was finally replaced by commodity exchange, and this
meant that the entire organisation of the economy had to be changed as well.
Eventually, agriculture too began to change, becoming more and more oriented
to the demands of the market. Capitalism was growing out of the development
of feudalism.
On the other hand, the suspicion has grown that this rapid growth was
spurred not only and not so much by the internal dynamic of the system as by
external shocks. In the fourteenth and fifteenth centuries, two developments
changed the face of Europe. Both these events were perceived by contempo-
raries not as ushering in a new era, but as divine punishment, or at any rate as
unprecedented calamities. These two events were the Black Death and the fall
of Constantinople.
The Black Death, by wiping out as much as a third of the European
population, created a demand for hired labour, including in the countryside.
The fall of Byzantium brought about a trade crisis and the search for new
sea routes, leading to the discovery of America and to voyages to India. The
flood of precious metals from the New World led to the ‘prices revolution’,
when gold and silver lost their previous buying power, provoking a sharp rise
in the demand for goods. This was the first practical demonstration of the
future theory of J.M. Keynes concerning inflation as a stimulus to economic
growth. The colonisation of America created the transatlantic economy, in the
framework of which capitalism also took shape.
The world-system analysis school, founded by Fernand Braudel, Immanuel
Wallerstein, Samir Amin and Andre Gunder Frank, focuses its attention on
these global processes. The question arises, however, that if there had not been
first the plague and then the fall of Constantinople, would European capitalism
have come to exist? Especially since bourgeois relations had clearly been ripening
in Italy, Flanders, Bohemia, and several other parts of Europe long before the
period of the great geographical discoveries.
History does not, of course, have a subjunctive mood. But what are we to do
when we encounter two different but equally convincing explanations of one and
the same process? More than likely, the internal development of the European
cities and the external shocks augmented one another. In late feudal Europe,
a vast creative, technological and, most importantly, social and organisational
potential had accumulated. But external stimuli were needed for all these forces
to suddenly burst free.
In any case, without the great turning point of the fourteenth and fifteenth
centuries capitalism would not have taken on the form in which we know it in
modern history. Meanwhile, these events played an important role in determining
the cultural forms of the bourgeois civilisation of the West. Andre Gunder Frank,
in his book ReOrient, sets out to explain the triumph of the West throughout the
modern era as the result of a purely accidental confluence of circumstances.13
Columbus accidentally discovered America, where, as it happened, there was
a great deal of silver, and by chance this coincided with a period of economic
decline in Asia, and so forth. ReOrient is notable precisely in the sense that it
shows the limited theoretical scope of world-system analysis. Beginning with a
demonstration of the limited nature of orthodox Marxist schemas which reduce
economic history exclusively to the ‘natural’ development of productive forces
and productive relations, this school at a certain stage discovered that without
an understanding of the motive forces of social history, it is impossible to make
sense either of the development of world trade or of geopolitics.
In reality, medieval Europe lagged far behind the East. Africans laughed
when they saw the caravels of the Portuguese, since they had already seen
the mighty ships of the Chinese fleet. Nevertheless, it was these little ships
that transformed the entire world economy and political scene, since China,
possessing an incomparable wealth of resources, achieved nothing revolutionary
during that period. The East remained backward because capitalism could not
take shape within the framework of the Asian mercantile civilisation. The Asian
mode of production which Marx discerned in China, Egypt and India was a
reality, and not a myth. The state was powerful, ensuring a degree of economic
equilibrium and progressive development that was not seen in Europe. Because
of this, China in ancient times outstripped the West for an entire era. The lack
of equilibrium in the West, however, also concealed vast possibilities. Historical
development is an uneven process, not a linear one. Even in the seventeenth
century, Europe was still learning from China in the technological sphere. The
East had also overtaken the West in the degree of literacy, in the productivity of
labour, and in general prosperity. But the West was developing rapidly, while the
East was stagnating. The reason was simple, and Marx defined it convincingly.
In the West capitalism had triumphed, forcing a pitiless but exceedingly effective
mobilisation of all available human and technological resources for the sake
of accumulation. The East did not turn the accumulation of merchant capital
into the bourgeois mode of production.
The great geographical discoveries played an enormous role in the history
of capitalism. Capitalism was maturing within feudalism in natural fashion,
but it was the geographical expansion of the Western world that turned the
possibility of bourgeois revolution in Western Europe into a reality. The proto-
bourgeois movements in fourteenth- and fifteenth-century Europe all met with
defeat – until the beginning of the great geographical discoveries. The Italian
Renaissance was in essence the first bourgeois revolution, above all in the area
of culture and ideology, but also in the field of politics; it is not by chance
that we find it summarised in theoretical terms in Machiavelli’s The Prince.
The Hussites were the earliest prototype of a bourgeois national movement
– in the wealthy, developed and flourishing cities of Bohemia. The ideology
of the Hussites was a direct rehearsal for the Reformation. The Hussites were
isolated and defeated, but a century later the flames of the Reformation took
hold throughout Europe. What had changed during that time? The external
conditions. The possible became real. The dramatic expansion of the economic
world opened the way for a different line of development, sharply altering
the relationship of social forces in society, stimulating the appearance of new
technologies and allowing bourgeois relations to grow in breadth and depth.
Capitalism thus arose historically as a world system, and acquired its specific
traits in the process of development of the world economy.
Bourgeois relations also existed before the great geographical discoveries.
Merchant capital existed much earlier, but nowhere could it become the
dominant social force. The Italy of the fourteenth and fifteenth centuries had
finished up in a dead end, with no prospects for commercial expansion. It
was the discoveries of the fifteenth and sixteenth centuries that established the
new productive relations not arisen in the ‘advanced’ countries that became the
centre of the new world system.
Orthodox Marxism stresses the importance of productive relations, while
the world-system analysis school has set out to show that the decisive role
in capitalist development has been played by the globalisation of economic
ties which began in the late fifteenth century and allowed the countries of
the ‘centre’ to exploit the cheap resources and labour of the ‘periphery’. In
each case, what is involved is the accumulation of capital. Orthodox Marxism
stresses the internal sources of this accumulation, the world-system school the
external ones. Accordingly, the question is posed: what exactly is capitalism – a
world system, or a mode of production? The one, of course, does not exclude
the other. Capitalism is a world system that is based on the bourgeois mode
of production, but which is not reducible to it. The effective mobilisation of
internal resources was essential for the successful exploitation of external ones.
This is why the rapidly bourgeoisifying Britain and Holland triumphed, while
the Spanish empire with its vast possessions and wealth – but still-feudal social
order – suffered defeat. Lacking the internal conditions for the development
of capitalism, Spain was unable to implant the system in the sixteenth and
seventeenth centuries, despite enjoying huge geopolitical advantages.
The exploitation of the periphery has taken various forms in the course of
history. The specific forms of this exploitation are well-known to sociologists
and economists, but the underlying mechanisms of redistribution have remained
the topic of heated discussion. The division of the capitalist world system into
centre and periphery has been the subject of analysis over a prolonged period,
starting with the works of Rosa Luxemburg, and ending with the writings not
only of Wallerstein, Amin, and so on, but also with the books of the well-
known financial speculator George Soros. Statistical data collected during the
nineteenth and twentieth centuries show that the relationship between the zones
of the periphery and the centre has remained relatively stable, though most
indicators have the gap between ‘advanced’ and ‘backward’ countries steadily
widening. This gap is superbly illustrated by regional economic statistics. There
is no shortage of historical and statistical data to confirm the global redistri-
bution of resources to the advantage of the wealthy countries. Nevertheless,
economists and politicians are often mystified as to why this happens; they
are unable to say just what gives rise to and perpetuates the subjection of the
periphery to the centre.
Why is this situation continually reproduced, even though capitalism is
altering its form, and the relationships between countries are also changing?
Marxists were at first inclined to explain the wretched position of the countries
of the periphery as the result of their colonial dependency on the West. In the
mid twentieth century this approach determined the strategy of decolonisa-
tion, which by putting an end to political control, was supposed to guarantee
economic independence as well. As early as the nineteenth century, however,
the experience of Latin America showed that political independence does not
allow the countries of the periphery to radically change their position in the
world system. In analogous fashion, tsarist Russia displayed obvious features
of a peripheral society despite being not only an independent state, but also an
influential European power. After freeing itself from its European conquerors,
the former colonial East by the 1960s had become part of the ‘Third World’,
merging in economic terms into a united whole with the countries of Latin
America, which had won their independence in the early nineteenth century. The
global hierarchy, however, did not change radically as a result. From this time
on, the dominant position of the centre was explained on the basis that it was
here that industrial production was concentrated, while the periphery had taken
on the role in the world division of labour of the supplier of resources. In the
1960s, sociologists and economists were accustomed to speak of the dependency
of poor countries on the rich West. Accordingly, liberation movements posited
the task of industrialisation and modernisation, with the first Soviet Five-Year
Plans serving as an inspiring example. Unfortunately, industrialisation did not
solve the problems, despite many obvious successes. Technological dependency
then came to take centre stage, along with the ability of the West to concentrate
strategic monopolies (on high technology, weapons of mass destruction, the
mass information media, and so forth) in its hands. Meanwhile, not even the
developing of the Indian and Pakistani nuclear bombs or the formation of the
Arab television company Al-Jazeera altered the global economic hierarchy.
Moreover, after the collapse of the USSR, Russia and Ukraine, on joining the
world economy, came to display all the features of peripheral development. This
was despite the fact that they already possessed developed industries, and had
inherited powerful armed forces and advanced science from the Soviet Union. In
similar fashion, a high degree of industrialisation and urbanisation did not save
Argentina and Uruguay from drastic decline in the late twentieth century.
A great deal has also been written about unequal exchange between developed
and developing countries. The Western monopolies that control world markets
dictate the prices for the resources pumped out of the countries of the periphery.
An effort to change this situation was the setting up of a cartel of oil producers
(OPEC), which in the first half of the 1970s managed to sharply alter energy
prices. The result was a flood of petrodollars pouring into the Middle East and
to some extent, Eastern Europe. Some countries, possessing important reserves
of oil and relatively small populations, managed to grow wealthy. This was
not enough, however, to make these countries part of the capitalist centre, as
emerged especially clearly during the wars started by the United States in the
Persian Gulf in 1991 and 2003.
After the collapse of the Soviet bloc in the years from 1989 to 1991, the
former communist world finally became part of the bourgeois world system,
with most of it clearly gravitating toward the countries of the Third World.
By late in the twentieth century numerous countries in the periphery had
become urbanised and industrialised. By contrast, many Western countries had
undergone a process of deindustrialisation. Large numbers of jobs had moved
from the ‘developed’ North to the ‘backward’ South. Nevertheless, the relations
between North and South did not change radically as a result. Observing how
international financial institutions functioned in the late twentieth century, their
critics demonstrated that the exploitation of the periphery and control over it
were being realised through the system of foreign debt.
Even though the global division of labour changed repeatedly in the course
of history, the tendency to the accumulation, concentration and centralisation
of capital that lay at the basis of the bourgeois mode of production remained
unaltered. The centralisation of capital on a world scale results in the formation
of several centres of accumulation, often competing among themselves. The
very logic of the accumulation and concentration of capital leads to it being
systematically redistributed to the advantage of world ‘leaders’. Not even the
dramatic growth of the peripheral economy has changed this situation radically.
In certain circumstances, a rise of production in these countries can even weaken
their position. The better a country functions, the greater the volume of ‘free’
or ‘excess’ capital that arises there; this capital is redistributed to the advantage
of the main centres of accumulation. The concrete forms of the international
division of labour are the consequence of this global process. The forms change,
but the logic of accumulation remains the same.
Russia in the 1990s presented an exceptionally clear picture in this respect,
since against the background of a massive crisis, the country was one of the
‘donors’ to the world economy. Vast sums were converted into Western currency,
mainly US dollars, and taken out of the country. Significantly, the upturn from
the late 1990s did not alter this trend; in the relatively prosperous years from
2000 to 2003, the direct and indirect export of capital remained considerable.
Changes in the forms of exploitation and control accompany every new
stage in the evolution of capital, but the logic of the accumulation and cen-
tralisation of capital remains unaltered. The ‘open economy’ that is imposed
on the countries of the periphery means that a redistribution of capital to the
advantage of the centre is inevitable. Hence it was only Japan, Stalinist Russia
and a handful of strategically important and deliberately favoured countries
in East and South-East Asia which at various times managed to separate
themselves off from the world capital markets, and to radically change their
position in the global hierarchy.
Naturally, the social processes unfolding on the periphery of the capitalist
system have differed from those in the centre. In the early twentieth century Rosa
Luxemburg observed that as countries were drawn into the orbit of bourgeois
development, they underwent radical transformations. Their evolution, however,
was in no sense a mechanical repetition of the processes that had occurred in
the West. Luxemburg examined colonial and semi-colonial countries that had
been drawn into capitalist development. The feudal or traditional elites had
become bourgeoisified and were included in market exchange, but had not
become capitalist. Free labour had triumphed in the centre, but on the periphery
the slave trade developed and became a vital source of the accumulation of
capital. Slave labour subsidised and stimulated the development of free labour;
cheap raw materials and foodstuffs, along with additional capital, ensured rapid
economic growth in the countries of the centre.
KONDRATYEV CYCLES
In the mid 1920s the great Russian economist N.D. Kondratyev, after studying
statistical data beginning with the late eighteenth century, concluded that there
were ‘big cycles’ in the development of capitalism. These cycles, or waves, were
uneven in their duration, usually lasting between 40 and 60 years, but they
featured one and the same dynamic. First came an upturn, with production,
prices and profits steadily growing. The crises during this period were not deep,
and the depressions were brief. Then came the downturn, when growth in the
economy was erratic, the crises more frequent, and the depressions drawn-
out.19 The first cycle which Kondratyev studied began in the late 1780s together
with the industrial revolution, and reached its height around the end of the
Napoleonic Wars.
After 1817 the conjuncture in Europe worsened, with economic depression
combined with political reaction. The years from 1844 to 1851 saw a turning
point, accompanied by a growth of the revolutionary movement and a rash
of armed conflicts. A new economic upturn finally appeared in the late 1850s,
after the Crimean War and the crisis of industry that followed it. The upturn
continued until the early 1870s. Then came another period of economic
difficulties, continuing until the 1890s. The recovery that made its presence
felt at the end of the nineteenth century proved short-lived. By 1914, signs
of a new decline were clearly evident. In the early 1920s Kondratyev’s data
indicated the approach of a major depression which hit the world in 1929 and
lasted until 1933.
Having discovered long cycles in the world economy, Kondratyev was unable
to clearly explain what they were associated with. The existence of such waves
of development is a statistical fact, which becomes more obvious as new data
enter into scholarly circulation. But what causes periods of relative upturn to
alternate with equally lengthy periods of stagnation?
Attempts to mechanically predict the onset of the next ‘Kondratyev wave’
on the basis of chronology have invariably had comic results. The forecasting
of long waves by present-day economists is at times reminiscent of astrology.20
The main thing in the Kondratyev cycles is not the timescales, but the phases.
This is the history of the formation, development and then disintegration of
successive models of capitalism. For this reason, any forecasting of cycles that
Prior to the beginning of the upturn in every big cycle, and sometimes at its very beginning,
significant transformations are to be observed in the basic conditions of society’s economic
life. These transformations, in one combination or another, are usually expressed in profound
changes to the technology of production and exchange (these changes are in turn preceded
by important technical inventions and discoveries); in changes to the conditions of monetary
circulation; and in the strengthened role of new countries in world economic life.21
Marxists have also noted that a declining rate of profit sets capitalists on the
road of external expansion (the seizure of new markets, armed conflicts, and
so forth). In most cases, however, the people concerned have lost sight of the
fact that the tendency noted by Marx applies to an economy with a more or
less stable sectoral structure.
Menshikov writes:
It could be argued that Marx lacked a highly developed theoretical model that would explain
the interaction between technological progress and profit rates. That is perhaps true, but
Marx at the very least suggested some of the key elements of such a theory. Kondratyev
was able to make use of these in the 1920s.23
vanished forever into the past. But the period around the beginning of the
twenty-first century has been a time of new colonial wars, in essence if not in
name. This type of repetition, as Kondratyev showed, is not accidental. ‘It is
quite clear that under capitalism new territories are drawn into the system’s
orbit precisely during periods when the countries of old culture experience a
heightened need for new export markets and sources of raw materials.’26
When Kondratyev speaks of the periodic reconstructions of capitalism, he
notes that a precondition ‘is the concentration of capital at the disposal of
powerful entrepreneurial centres’.27 On the geographical level this automatically
results in a redistribution of resources between countries. Within the world
system, the pressure of the centre on the periphery intensifies. When the next
reconstruction is basically complete, ‘an abundance of “free” capital’ is observed,
‘and consequently, capital is cheap’.28 The crisis of overaccumulation is resolved
by moving the excess funds to the periphery of the system, creating the illusion
of successful development there. The impression arises that thanks to the free
play of market forces the periphery, or at least its most advanced section, is
about to catch up with the West. Unfortunately, this happiness is short-lived,
since the time draws near for the next reconstruction, and capital begins to move
in the opposite direction. Each major reconstruction of capitalism has turned
out to be a defeat, and sometimes a catastrophe, for the periphery.
Capitalism is cyclical in principle, since in this system both production and
consumption are subject to the logic of commodity exchange. The short-term,
conjunctural market cycles, already studied extensively by economists back in
the nineteenth century, are superimposed on far more massive and complex
processes of social, economic and technological development. In the same way,
medium-term cycles are also, as Kondratyev puts it, ‘knitted into the waves of
the big cycles’.29
Marx wrote that the development of the productive forces of society requires
the periodic revision of productive relations. In the course of history the
technological basis of capitalism has changed repeatedly. The steam engine
forced the shutting down of factories based on hand labour and water mills,
while electricity revolutionised industry around the end of the nineteenth
century. A new technological revolution occurred in the first quarter of the
twentieth century. Automobiles, conveyor-belt assembly, the telephone and
commercial aviation created a new economy. The resulting model was later
given the name ‘Fordism’. The technological revolution of the late twentieth
century was merely another stage in this process.
Meanwhile, every radical change in technology culminates in the replacing
of the economic model of capitalism, and sometimes of the socio-political
model as well. These changes are inevitably superimposed on the ‘ordinary’
market cycles. What is involved here is not just the ‘long waves’ of economic
upturn and decline, but also the alternation of periods when capital is rapidly
being internationalised and periods of ‘national development’. Phases marked
by the pre-eminence of financial and commercial capital give way to phases
when industrial capital is dominant. Periods of the free market are replaced
by periods of state intervention. Conservative political periods are often
The fact that long waves of capitalist development were first analysed in
Russia was not accidental. It is enough to compare the dates of key historical
events in Russian history with the cycles of the world economy to note the
coincidences. This applies to the oprichnina31 of Ivan the Terrible, to the Time
of Troubles, to the imposing of serfdom and its abolition, to the revolution of
1917, to collectivisation, to the dismantling of the Soviet Union, and to the great
privatisation of the 1990s. Russia from the seventeenth to the twentieth centuries
was continually trying to catch up with the West and continually falling behind,
and was overwhelmed by each new economic wave. The historical analyses of
Pokrovsky and the economic researches of Kondratyev were not only spawned
by the same country and age. Together, they provide a key to understanding
the main dramas and tragedies of Russian history.
The long waves of world development have set the rhythm of social and
political change in Russia no less than in other parts of the world. In Russia,
however, everything has been even more dramatic, and at times more horrifying.
The drastic turnabouts of world history have taken the form of huge shocks.
‘Everything there is without limits – the sufferings and the retribution, the
sacrifices and the hopes’, wrote the French traveller Adolphe de Custine,
who visited Russia in 1839. ‘Russian passions are like those of the ancients.
Everything among the Russians recalls the Old Testament – their hopes and
their torments are as vast as their state.’32 This country seemed to him to be
terrifying, unhappy and great, capable of improbable achievements that would,
however, be bought at the price of the people’s happiness.
Everything that struck the Marquise de Custine in the nineteenth century
was only a prelude to the truly enormous shocks that would begin once the
following century was under way. But neither the catastrophes which Russia
has experienced, nor the heroic feats accomplished here, have been the result
of any special, extraordinary destiny.
The dramatic nature of Russian history stems from the fact that processes
affecting all humanity have manifested themselves here in extreme and tragic
form. In this sense there is not, and cannot be, any special Russian fate. Our
fate is that of humanity.
Russia – or as it was known in early medieval times, Rus – arose later than most
European countries, and made its appearance under quite distinct circumstances.
It was born ‘along the route from the Varyags to the Greeks’. In the Middle
Ages travel by water was both quicker and safer than by land. Ships could
carry greater loads than horse-drawn vehicles. The roads were in an appalling
state, and in some places simply did not exist. Moreover, journeys by land were
relatively perilous; storms at sea were a less serious threat than robbers in the
forests, half-savage tribes, and bands of feudal retainers who were always ready
to enrich themselves with the goods of others. The ancient world was centred
on the Mediterranean Sea. On the periphery of the Mediterranean economy
were the Black Sea and the stretch of the Atlantic that directly adjoined the
Mediterranean countries. Between the seventh and tenth centuries merchant
navigation spread to the Baltic. Until the time of the Crusades, the Byzantine
Greeks remained dominant in the south. In the north, the rising Baltic economy
was the creation of the Vikings, or as they were known in Rus, the Varyags.
Rus was the connecting link between the two world-economies. A trading
ship could come up the River Dnepr from the Black Sea. The Dnepr rapids of
course presented an obstacle, but relatively easy ways were found to overcome
them. Further on, ships could sail down the northern rivers to the Baltic. Only
a small stretch in the middle was not suited to the transit route; here, the ships
had to be dragged overland.
Close by the ‘route from the Varyags to the Greeks’ lay the Volga trade
route. Merchant fleets with Persian wares from the Caspian Sea came up the
Volga, and then along its tributaries. In the Novgorodian lands, these two
routes intersected. From Novgorod, Persian and Byzantine goods reached
northern Europe.1
In the year 862, according to the chronicles, the Novgorodian aristocracy
invited the Varyag Prince Ryurik and his brothers Sineus and Truvor to take the
throne, stating: ‘Our land is great and rich, but there is no order in it. Come and
rule over us.’2 As Karamzin says, ‘The words are simple, brief and powerful!’3 In
short, the Varyags were urged to found a state in Rus. Throughout the second
half of the nineteenth and the entire twentieth century Russian historians
argued incessantly over the ‘summoning of the Varyags’; supporters of the
‘Scandinavian theory’ ascribed the birth of Russian statehood to the influence
of Western neighbours, while Slavophiles and, later, official Soviet historians not
only rejected this influence, but also tried to prove that Ryurik never existed at
all. And even if Ryurik had existed, then Sineus and Truvor were pure invention,
an error of transcription, an incorrect translation of some Scandinavian saying.
For all its heat, this discussion was completely meaningless. The real question
26
did not concern the role of the Varyags, or how many of them there were, or
whether they were simply mercenaries or had come to Novgorod as a military
and political elite. The real question was why, in the 860s, the Novgorodian
leaders suddenly and unexpectedly started wanting to impose ‘order’ on their
territory, and how it came about that in 882 Prince Oleg, after capturing Kiev,
founded a state that was given the name ‘Rus’.
For centuries Slavic and Finno-Ugrian tribes had lived on what is now the
Russian plain, and had somehow got by without a state. In the ninth century
the situation suddenly changed dramatically, and in the space of 20 years a
powerful state had come into existence on the lands from the Baltic to the
Black Sea, uniting under a single authority a multitude of tribes of the most
diverse origins. Moreover, this state proved astonishingly stable, maintaining
itself relatively intact at least until the early twelfth century – significantly longer
than, for example, the empire of Charlemagne.
The need for a state arose abruptly, but not by accident. Nor was it the result
solely of the internal development of Novgorod. Something else was of decisive
importance. In Europe in the ninth and tenth centuries the Dark Ages were
drawing to a close. The West was entering an age of economic growth. The
natural economy was beginning to yield ground, and a trading economy was
developing. This was the time of the first geographic and politico-economic
expansion of Christian Europe. In all, there were three such periods during
the Middle Ages: in the ninth and tenth centuries, when the European world
was expanding rapidly to the north-east, incorporating Scandinavia and large
parts of Eastern Europe; in the twelfth and thirteenth centuries, the time of the
Crusades, of the building of towns and castles, and also of the second Baltic
expansion, when in the north-east the last pagan tribes – Finno-Ugrians, Slavs
and Balts – were subdued and Christianised; and finally, in the fifteenth and
sixteenth centuries, the time of the great geographic discoveries. Each of these
periods was crucial to the history of Russia, changing the character, national
composition and even geography of the Russian state.
Throughout the country inhabited by the Slavic tribes, the almost identical nature of the
products posed a major obstacle to exchange. What could the Polyane and Severyane,
Drevlyane and Dregovichi, Krivichi and Radimichi exchange with one another? Their way
of life was identical; they had the same pursuits, the same needs, and the same means for
satisfying them. The Drevlyane had grain, honey, wax and animal skins; so did the Polyane
and the other tribes.4
In Solovyev’s view, trade appeared only with the coming of the Varyags,
and especially with the appearance of the armed retainers under the princes’
command. But in reality, the retainers also depended on the natural economy.
They did not buy the foodstuffs they needed, but ‘fed themselves’, gathering
tribute or simply robbing agrarian communities, while at the same time providing
them with defence against raids by other, precisely similar gangs. Even in the
fourteenth and fifteenth centuries, notes M. Pokrovsky, the feudal estate was
still a ‘self-contained whole’, with few ties to the outside world.5 What was the
situation in the ninth and tenth centuries?
Official Soviet historians often viewed Kievan Rus above all as an agrarian
society, arguing that it represented ‘a powerful agricultural defence stopping the
nomadic hordes from penetrating unhindered from east to west’.6 According
to such writings, the Kievan state acted as a sort of boundary; beyond it was a
region, like the nineteenth-century American Wild West, in which all civilisation
came to an end. Even if one leaves out of account the racist flavour of such
theories, they have the shortcoming of not corresponding to the facts. In the first
place, it is implied that the people to the east of the Dnepr had no knowledge
of agriculture. In reality, the eastern neighbours of Rus in the eighth and ninth
centuries were not savage nomadic tribes, but prosperous states – the Khazar
khaganate (khanate) and the Volga Bulgars. Initially, both these societies were
far more developed and wealthy than the eastern Slavs or the Varyags.7 Second,
the nomads repeatedly penetrated through Rus into Europe. In the late ninth
century the Hungarians rode past Kiev unopposed, going on to terrorise
Western countries for 60 years until the German King Otto I defeated them
near Augsburg. After this, Hungary soon adopted Catholicism and transformed
itself into the ‘shield of Christendom’, the bulwark of the Western world. In
the thirteenth century the Tatar-Mongols, after sacking Rus, reached as far
as the Danube, and were stopped not by military resistance, but by political
problems in their own camp.
The Soviet historians were in principle correct when they linked the development
of towns with the division of labour, with the separation of handicrafts from
agriculture.8 This, however, applies to the rise of towns throughout the common
history of humanity. The towns of Kievan Rus were clearly not the first in world
history. Nor are their swift rise and above all, their rapid enrichment, to be
explained by the internal processes unfolding in Slavic tribal communities.9
Following the Dark Ages, Western Europe began to awaken late in the
eighth century. France experienced a cultural revival that was later termed the
‘Carolingian Renaissance’. In the year 800 Charlemagne proclaimed himself
emperor in Rome. His armies penetrated as far as Moravia, forcing the Avars
from that region. In the ninth and tenth centuries rapid political and economic
development also took place in north-eastern Europe. The year 874 saw the
rise of the first West Slavic state, Great Moravia. By the end of the ninth
century the Hungarians had founded their own state on the Danube, and in
906 seized part of the lands belonging to Great Moravia, but the kingdom
of Bohemia continued to develop within the framework of the Holy Roman
Empire. In the tenth century the kingdom of Poland appeared on the map of
Europe. The Scandinavian states began taking shape during the ninth century
as well. The Vikings plundered the European coastline as far as Italy, and as the
organisation available to them, or at least, not in the same degree as the Slavs
and Scandinavians. Meanwhile, it was the foreign merchants who brought with
them a considerable amount of the coinage that was in circulation.
In such circumstances the state needed, on the one hand, to ensure that
foreign merchants on the rivers were safe from local desperadoes, and, on the
other hand, to defend its own traders from bandits and from each other. It is
not surprising that when the Novgorod notables called in the Varyags, they
should have referred to perennial fallings-out among themselves. In other words,
a Varyag prince from outside Novgorod was required not only as a defender,
but also as an arbiter.
The combination of trade and plunder made establishing order in the state a
vital necessity; without this, clashes between armed merchants could simply have
paralysed trade. Armed retainers of the prince were needed not only to guard
the overseas convoys, but also to act as judges to sort out conflicting claims,
and as an authority capable of guaranteeing the fulfilment of judicial decisions.
The expansion of the ninth and tenth centuries made Rus indispensable. There
are no ‘dark ages’ in Russian history for the simple reason that in the Dark
Ages there was not and could not have been any Russian history. The state
itself arose as a consequence of the commercial expansion that began with the
overcoming of barbarism in the West. The Baltic became a swiftly growing trade
zone. The Varyags, who not long before had been completely savage, suddenly
became potential customers for the sophisticated manufactured goods produced
in Byzantium and in the East. The trade route between the Black Sea and
the Baltic was becoming profitable and necessary, but it had to be supported
and secured. ‘Order’ was required. Before the rise of the Baltic market, the
navigable rivers of the south and the numerous lakes and connecting streams
of the north had been of no economic or geopolitical value. The tribes living
on their shores were self-sufficient. The rise of the Varyag economy, however,
changed everything. Not only did links become possible and necessary between
the wealthy and developed Byzantine south and the dynamically developing
Varyag north. There was now a need to maintain order and safety throughout
the territory of the long river route. A unified state was essential.
It was no accident that the founders of Russian statehood were the
Novgorodians, who were not so much warriors as merchants. Nor was it
mere chance that in the establishing of the Russian state, the Varyags played
a highly active role. It was not that the Varyags subjugated the Slavs, nor that
the Slavs united themselves, but that numerous Slavic, Finno-Ugrian and
Scandinavian tribes and armed groups located along the rivers joined forces
to make up a state. The Slavs, as the most numerous, were dominant. The
Varyags provided the beginnings of a military elite. The Finno-Ugrian tribes
were subdued and assimilated.
In his book The Origin of the Family, Private Property and the State, Friedrich
Engels wrote that the state amounts to organised coercion, and arises when
society becomes divided into classes. Studying the East, Marx noted another
reason for the formation of a state – the need for the organising and maintenance
of an irrigation system on extensive territories. This also required compulsion
– labour power had to be moved about in accordance with a centralised plan
– but it was possible for the class division of society to be present only in embryo.
The history of Russia shows that the need for a state could also arise in just as
compelling a way when it became necessary to maintain order along trade routes.
In this sense, Russian statehood was originally close to the ‘Asiatic model’, but
at the same time it developed in continual, close contact with Western Europe.
The state ensured the safety of trade. It was not at all a matter of the ethnic
unity of the Slavs. The new state power included Finno-Ugrians, Varyags and,
later on, Greeks. It was not tribes that were being united, but territories. On
the broad expanses through which the navigable rivers flowed, there needed to
be a system of security and a unified authority. From a certain point, control
over territory would become an end in itself for the rulers, but that would only
come later. In the early period, all that was needed was order along the route
followed by the merchant convoys. ‘This was trade organised in regular fashion
by the state authorities’, wrote the historian of Byzantium, G.G. Litavrin.14 The
Novgorodian elite knew why they were inviting the Varyag warriors.
Moving south toward Kiev, the Novgorodian traders and Varyag troops united
vast territories in an astonishingly brief period, and ensured an uninterrupted
flow of goods and knowledge in the direction of the Baltic. Russia as a state
had its genesis in a transit route. Describing the organisation of the first Russian
state, V.O. Klyuchevsky remarks:
There is no mistaking the fundamental economic interest that governed this life, drawing
together and uniting separate and fragmented areas of land. The tribute that came to the
Kiev prince and his retainers fed the growing foreign trade of Rus. This same commercial
interest also directed the foreign activity of the first Kiev princes. This activity had two main
goals: 1) to obtain overseas markets; and 2) to open up and protect the trade routes that
led to these markets.15
Of course, trade in the middle ages was by no means a peaceful pursuit. If the
Dutch in the seventeenth century said that war and trade always accompanied
one another, this was even more true in the ninth and tenth centuries. Mikhail
Pokrovsky notes that the life of Rus at this time was typified by ‘a combination
of war, trade and brigandage.’16 Klyuchevsky also observes that the Russian
military campaigns against Tsargrad (Constantinople) were invariably linked
to commercial conflicts, while the peace agreements that ended the wars were
usually ‘commercial treaties’:
All the agreements between Rus and the tenth-century Greeks that have come down to us
have this commercial character. Of the agreements of this period, we have two negotiated
by Oleg, one by Igor and one short agreement, or the basis for an agreement, by Svyatoslav.
The agreements were drawn up in Greek, and with due changes of form, were translated
into a language understandable to the Russians. Reading these agreements, it is not hard to
see the interests that linked Rus with Byzantium in the tenth century. In these documents,
we find the conduct of the annual trade dealings between Rus and Byzantium set out with
ever greater detail and precision, and also the way in which the Russians in Constantinople
were to conduct their personal relations with Greeks. In this respect, the agreements are
distinguished by their remarkable development of juridical norms, especially as regards
international law.17
A fight had to be waged not only with bandits, but also with the nomads
who roamed the steppes of the lower Dnepr, the ‘Savage Fields’. Although the
Pechenegs and later the Polovtsy mounted frequent raids on Russian towns,
the more usual cause of the expeditions against them was the obstacle which
the nomads posed to trade with the Greeks. The Russian forays into the Savage
Fields were primarily punitive expeditions, a fact the Kievan princes did not
conceal. Explaining to his troops the reason for a campaign against the Polovtsy
in 1167, Prince Mstislav stated plainly that they needed to be punished, since
they were interfering with trade. ‘They are preventing travel on the Greek route,
on the salt route and the iron route.’18 By the ‘Greek’ route Mstislav meant the
one from Constantinople, while the ‘salt’ route linked Kiev with the Greek
colonies in Crimea and, in the view of Solovyev, the ‘iron’ route provided
supplies of metalwares from Byzantium and the Near East.19 After defeating
the Pechenegs or Polovtsy, the retainers of the Kiev princes would often follow
the Dnepr downstream, and wait there for merchant convoys.
At least until the end of the twelfth century, the struggle of Rus with the
steppe peoples was successful. The Pechenegs were conquered, and from
bandits were gradually transformed into commercial intermediaries. While
not themselves merchants, they took control of what we might now call
‘information brokerage’ between the Greeks and Russians. From the Greeks
of Cherson they received trade commissions, something like mail orders, which
they forwarded to Russian merchants in Kiev before navigation began on the
rivers. The Cherson commissions, the Soviet historian Litavrin writes, ‘consisted
of orders by assortment and quantity of particular goods from Rus, so that
these would be available by the time (in spring?) when the goods ordered from
the Cherson merchants arrived in Rus’.20 With a little exaggeration, it might
be said that the Greeks ordered goods via the Pechenegs in the same way as
people in our time order them through the internet.
The Pechenegs gradually became assimilated with the Russians. A new threat
to the trade between Russians and Greeks was the Polovtsy, but by the early
thirteenth century they too had been transformed from enemies of Rus to its
allies (it was to defend the Polovtsians against a new, previously unknown
steppe people that a Russian army went in 1223 to the River Kalka, where it
was routed by the Tatars).
Rus also waged numerous wars against the Khazars, who in the ninth and
tenth centuries controlled the southern part of the route from the Varyags to
the Greeks. Before the rise of Kievan Rus, the Khazars had been dominant in
trade as well. The unification of the entire river route under a single power also
required the removal of the Khazars. Initially, the struggle went ahead with
varying degrees of success. For example, the Radimichi, who lived on the border
territories, paid tribute to Kiev and the Khazars by turns. Other allies of the
Khazars were the Vyatichi. It was only in the year 966 that Prince Svyatoslav
finally crushed the Khazars, subduing the Vyatichi at the same time.
The attitude of the Greeks to the Russian trade was ambiguous at first. On
the one hand, Constantinople needed raw materials, while, on the other, the
merchant convoys were painfully reminiscent of military expeditions. Every
spring some 100–200 ships set out from Kiev, not only laden with goods, but also
accompanied by an impressive protective force. Without military protection,
the convoys could not have passed round the Dnepr rapids, where they would
have been easy prey for the nomads. When such convoys arrived at Cherson or
Constantinople, they themselves posed a threat to the Greeks. The Byzantine
authorities thus tried to limit access by the Russians to the Bosphorus, which
in turn aroused the displeasure of the Russians and provoked conflicts.
There are records of seven Russian military campaigns against the Greeks. In
the year 860 or 865 the Kievan ruler Askold mounted the first expedition against
Byzantium to avenge the murder of Russian merchants there. According to the
Russian chronicles, Prince Igor twice set out against Constantinople. Later,
Svyatoslav waged war in Bulgaria, first as an ally of the emperor, and then in
971 as his enemy. Vladimir Krasnoe Solnyshko, before ordering the baptism
of Rus in the Greek rite, first sacked the Byzantine city of Cherson in Crimea.
The last such campaign was organised in 1043 by Vladimir’s son Yaroslav.
Most of these campaigns were something between pillaging raids and punitive
expeditions, and it was only Svyatoslav, in the Balkans, who conducted a genuine
drawn-out war. Svyatoslav first waged war on the Khazars, Volga Bulgars and
Vyatichi, defeating them and laying the groundwork for a Russian princedom
in Tmutarakan, in the Crimean peninsula. Then, in response to a plea from
the Byzantine Emperor Nikifor, he went to Bulgaria as an ally of the Greeks.
The alliance was paid for with a substantial amount of Byzantine gold, with
the Greeks also promising to leave Bulgaria in Svyatoslav’s hands if he could
conquer it. As well as everything else, the Greek ambassador Kalokir made a
personal deal with Svyatoslav: if the latter could help him become emperor in
place of Nikifor, the help would be rewarded with countless riches from the
imperial treasury.
In the year 967 Svyatoslav’s army arrived in Bulgaria. The country was
conquered, with the victors taking ferocious revenge on their ‘brother Slavs’.
Svyatoslav remained in Pereyaslavets on the Danube, leaving Kiev without
a ruler. The prince’s ageing mother, the Princess Olga, could no longer cope
with the tasks of administration, the Pecheneg nomads were at the gates of
the capital, and discontent was rising within the city itself. The citizens of Kiev
sent Svyatoslav a reproachful letter:
You, prince, seek a foreign land and watch over it, while you have renounced your own. The
Pechenegs have almost captured us together with your mother and children. If you do not
come and defend us, they will take us next time. Have you really no pity for your homeland,
for your aged mother, or for your little children?21
Svyatoslav had to return. But after spending a certain time in Kiev, he divided
up power between his sons and made off for the Balkans, where he encountered
a new Byzantine emperor, Ionn Tsimishiy. The Bulgarians had no wish to let
the Russians back into Pereyaslavets, while the Greeks were trying to force
Svyatoslav out of Bulgaria. Meanwhile, the Russian prince was threatening to
seize Greek towns just as he had seized Bulgarian ones. Despite the desperate
courage of the Russian army, Svyatoslav had no chance of victory, since the
Greeks could put significantly more troops in the field and, most importantly,
Svyatoslav could not make up his losses. He was forced to leave Bulgaria. On
the way back, he fell into a Pecheneg ambush and was killed. They made a cup
from his skull, decorating it with gold and drinking from it.
It is not surprising that the military campaigns of Svyatoslav aroused sharp
debate among nineteenth-century historians. To Karamzin, Prince Svyatoslav
was the ‘Alexander of our early history’. Unlike Alexander the Great, however,
Prince Svyatoslav did not found a state, and ended up utterly defeated.
Therefore,
Svyatoslav, the model of the great commander, is not the model of the great sovereign,
since he had more regard for the glory of victories than for the good of the state. While
his personality captivates the imagination of the poet, Svyatoslav merits the reproach of
the historian.22
suspect that the Russian chronicles greatly exaggerate both the strength of
Svyatoslav’s forces and their success. Nevertheless, it is clear that the campaigns
were painstakingly prepared, diplomatically as well as in the technical military
sense. The naval actions were coordinated with those on land, the military
operations were interspersed with negotiations, and so forth. A struggle of
this sort presupposes a more or less developed state, in which the elite can no
longer allow itself to live by simple banditry.
Svyatoslav went further than others; he tried, even if without particular
success, to do what subsequent Russian rulers would also do over the centuries.
The Kievan prince fought for military and political control over trade routes.
The site of the main conflict with the Greeks and Bulgarians was the mouth
of the Danube, which united the route from the Varyags to the Greeks with
another European trade artery that was rapidly taking shape. On capturing the
Bulgarian city of Pereyaslavets, Svyatoslav declared:
I do not like it in Kiev; I want to live in Pereyaslavets on the Danube. There is the middle of
my lands, and goods of all sorts are brought there from all sides – from the Greeks, gold,
cloth, wines, and various spices; from the Czechs and Hungarians, silver and horses; from
Rus, furs, wax, honey and slaves.25
As S.M. Solovyev correctly notes, the conclusion can be drawn from this that
Pereyaslavets was designated as the centre not in relation to its position among
the territories Svyatoslav controlled, but as the ‘mid-point of trade’.26
Unfortunately, the goal Svyatoslav had set for Rus was beyond the country’s
strength. The prince mistook the situation, putting his stake exclusively on the
superiority of his army, and failing to understand that this war did not consist
simply of battles. He did not succeed in consolidating the victories he had won
in the Volga region and in the Balkans. Moreover, the defeat inflicted on the
Khazars created more problems for Rus than it brought gains.
History is written by victors, and in this respect the fate of the Khazars resembles
that of Carthage. We view the history of this state primarily through the prism
of Russian history, just as we view Carthage through a Roman prism. The
hostility with which some authors wrote of the Khazars arouses the suspicion
that this is linked to the dominant religion among the Khazars – Judaism. Hence
B.A. Rybakov, for example, insists that the Khazar state was ‘parasitical’, and
hence destined to destruction.27 The Soviet scholar M.I. Artamonov admits in
straightforward fashion that the view of Khazar history held by many writers
was distorted by hostility toward Jews.28
Meanwhile, the notion that the Khazar state was Jewish is also less than
completely accurate. The subjects of the Khazar khan included Christians,
Jews and Muslims. Between 851 and 863 Christianity was preached on these
territories by St Cyril, the same individual who together with Methodius is
famed for his missionary activity in Moravia, and who devised the Slavonic
alphabet. Cyril was received at the court of the khagan, where he repeatedly
argued questions of faith with the local rabbis. An Orthodox bishopric operated
on the territory of the khaganate, and Islam was also widespread. The French
historian René Grousset considers that Judaism, which was officially accepted
by the Khazar khagans late in the eighth century, was mainly a religion of
the court and of the Khazar aristocracy; ‘among the people, Muslims and
Christians seem to have outnumbered the Jews’.29 In the tenth century one of
the khagans converted to Islam for political reasons, and in the early eleventh
century the Taman peninsula was ruled by a Khazar khagan who had accepted
Orthodoxy and taken the Greek name Georgy. On a few occasions, khagans
entered into conflict with the Greek and Islamic worlds over issues of faith, but
for the most part they traded with both. From 695 to 705 the Greek emperor
Justinian II hid from his enemies among the Khazars, marrying a sister of the
khagan who became the Empress Theodora.
The Soviet historian M.I. Artamonov, in his History of the Khazars, writes:
The elevation of Judaism to the state religion was an act of political self-affirmation, a
demonstration not only of independence, but also of the equality of the Khazar khaganate
with the Byzantine empire and the Arab khalifate. It was also a reply to attempts by both
to subordinate the Khazars to their interests. In foreign policy terms, this was an extremely
effective act. The Khazars raised Judaism to the status of a third world religion, but were
unable to consolidate this position for it, because the ancient Judaism was less suited to a
feudal society than the younger religions, Christianity and Islam.30
The adoption of Judaism by the ruling class did not require that the subject
population be converted in large numbers to this faith. The medieval Jewish
tradition, unlike its Christian and Muslim counterparts, took a very restrained
and at times negative attitude to attempts to convert members of other ethnic
groups. In the Khazar lands, the hereditary character of the Jewish faith made
it the distinctive ideology of the ruling layer, a mark differentiating this layer
from other dwellers in the khanate, who professed different religions.
In ethnic terms, the population of the khaganate was not homogeneous
either. The Khazars themselves were Turks, but controlled extensive territories
colonised earlier by Greeks. Meanwhile, the official adoption of Judaism created
the conditions for Jewish immigration from Byzantium, especially in the tenth
century, when Jews there were undergoing persecution. The population of the
khaganate was thus an ethnic conglomerate of Turks, Jews and Greeks, just as
Kievan Rus united Slavs, Scandinavians and Finno-Ugrian tribes in the one
territory. Such formations typically feature an ethnic division of labour, and
here a Hellenised rural population and Jewish and Muslim merchants and
tradesmen were subject to a Khazar military aristocracy.
‘The Jewish religion did not displace either the old paganism, or Christianity,
or Islam’, writes Artamonov. ‘The religious tolerance of the Khazars was an
exception to the religious practice that was usual in the middle ages, but among
the Khazars it was not elevated into theory, and was not a principle of the
internal politics of the Khazar government.’31 The religious pluralism of the
Khazars was thus not only the result of parallel missionary activity, but also a
consequence of ethnic diversity.
Meanwhile, the rivalry of three religions in the Khazar state shows that
there was nothing far-fetched about the story, related in the Russian chronicles,
concerning an analogous rivalry in Kiev, when preachers of Christianity, Islam
and Judaism came in turn to Prince Vladimir. The victory of the ‘Kievan khagan’
Svyatoslav over the Khazars did not mean the complete annihilation of their
state. As Artamonov notes, once Svyatoslav had begun the war, he sought to
‘take complete control of the Eastern trade, which played an extremely important
role in the economy of the Russian state’.32 The Kievan prince, however, was
unable to maintain his hold on the territories he had seized.
Drawn into a difficult war on the Danube, he was forced to divert his attention from the
east before he could succeed in consolidating the Russian hold on the Volga region. Rus
retained control only of the Don region and of the shores of the Kerch straits, while the
Volga Bulgars and Khazars, it appears, were not subject to Rus for long, and re-established
their independence.33
Svyatoslav’s campaigns in the Balkans ended in total defeat, but their main
result was that in the Black Sea region between Kiev and Constantinople, the
spheres of influence were definitively settled. From the time of Prince Vladimir,
the military and commercial expansion southward by the Kievan princes was
If the eastern Slavs in the eighth century had possessed neither a developed state
nor large cities, 200 years later a mighty and extremely wealthy power extended
from the Baltic to the Black Sea. It not only encompassed a vast territory, but
astonished foreigners with the number and wealth of its cities. At the beginning
of the ninth century the Byzantines still knew nothing of Rus, but in the year
860 the patriarch Fotiy was already speaking of the Russians as a people who
not long before had been unknown, but who were quickly attaining ‘brilliant
heights and incalculable riches’.37 Foreign travellers called Kievan Rus ‘a land
of cities’.38 The wealth and development of Rus, recognised by the Greeks, was
even more striking to Scandinavians. As historians note,
According to the incomplete data of the Russian chronicles, there were eighty-six cities and
towns in eleventh-century Rus. In the twelfth century the chronicles mention a further one
hundred and twenty urban centres, and by the time of the Mongol-Tatar invasion, that is,
the early thirteenth century, the number had reached two hundred and fifty. In reality, there
were significantly more, since not all cities and towns were mentioned in the chronicles.39
The Soviet scholar M.N. Tikhomirov counted 271 cities and towns in Rus. By
comparison, Germany in the year 900 had only 30. Even taking into account the
fact that Tikhomirov’s data refer to a later period, the contrast is striking.40
Of course, and as I.N. Danilevsky notes, the urban centres involved were
not always towns ‘in our sense of the word’.41 In the ninth and tenth centuries,
the word for ‘town’ or ‘city’ (gorod) could also denote a village surrounded
by a palisade, or a prince’s fortress. Nevertheless, the testimonies of Arab
travellers – who, unlike backward Westerners, were familiar with developed
urban culture – leave no doubt that the level of urbanisation in Kievan Rus was
quite remarkable. ‘The Russians in general struck the Arabs as a non-agrarian
people who occupied themselves solely with trade and military campaigns’,
modern scholars observe.42 In the view of the Arab travellers, at least a third
of the people were engaged ‘exclusively in international trade’.43 The Arab
traveller Ibn-Dast encountered no villages at all in Rus; it appeared to him that
the Russians all lived in towns!
If some regional centres were no more than overgrown princely estates,
Kiev and Novgorod were unquestionably among the most impressive cities in
Europe at that time, and not only in terms of their size, but also of their public
amenities. The streets in Novgorod had wooden pavements, which distinguished
the city sharply from most centres in the West. According to archaeologists,
the oldest of these pavements dated from the year 953, and the latest from the
mid fifteenth century.
In Western Europe in the ninth and tenth centuries, monetary circulation was
still poorly developed. The Russians, by contrast, traded with the Byzantines
and Arabs, who paid in silver; consequently, the economy of Rus was far more
market-oriented. This is also recognised by Western historians.
Viewed from the economic and social point of view, Kievan Russia was in some ways more
advanced than backward manorial Western Europe, where markets, fairs and industries were
only beginning to spring up in Flanders, along the Baltic shore, and in northern Italy.44
In Rus it was not the natural economy that was dominant, but commodity-money
relations. In the ninth and tenth centuries, Rus exported silver to Scandinavia.45
This silver was coming for the most part not from Byzantium, but from the
countries of the East. Late in the ninth century, large deposits of silver were
discovered in the territory of modern-day Afghanistan. The Samanid shahs
were able to mint large numbers of coins, helping trade to flourish not only in
Central Asia, but also in the Caspian region and along the Volga. The study of
hoards has led historians and numismatists to conclude that ‘European-Arab
trade arose late in the eighth century, in the form of trade between Eastern
Europe and the countries of the khalifate’.46
Of course, not all the coins arrived in Rus or Scandinavia as a result of
trading operations. Silver could simply be stolen. Such distinctions, however,
have importance only for people living according to the ideas of later times. In
the age of early medieval trade, plunder and military service were interlinked.
Samanid coins began arriving in Rus around the year 910. Samanid dirhams
became popular coins in Rus, and from there reached the Scandinavian countries,
in turn stimulating trade in the Baltic. Kiev also minted its own coins, but in
insignificant numbers. There was no need for them – money was coming in
abundance from the south. The minting of coins in Kiev was evidently dictated
less by economic needs than by political ones. It was necessary to show that the
Kievan prince was in no way inferior to his southern neighbours. The monetary
circulation in Kievan Rus reflected the peculiarities of the country, situated,
as a modern-day historian has put it, ‘between the Arabs and the Varyags,
the West and Constantinople’. In the same way, the system of weights and
measures that became established in Rus showed clear traces of ‘interethnic
cultural reciprocity’.47 From Rus, wax, honey, furs, hunting falcons and slaves
were sent to Byzantium, to the Arab countries and to the Khazars. The slave
trade was an important source of income for the ‘robber merchants’, and, as
Pokrovsky notes, it was not only foreign captives who were sold into slavery
but also fellow tribespeople, especially young women.48
Later, Russian princes provided the Greeks with military help in return for
money – also an example of the export of services. As early as the year 910,
long before the Christianisation of Rus, Russian warriors staged a raid on the
Caspian region of Persia, evidently by agreement with the Greeks. In the same
year, a Russian force landed on Crete as part of a Byzantine army. When a
Byzantine army disembarked in Italy in the year 935, it again included a Russian
detachment, probably made up not only of Slavs but also of Varyags. In 964,
according to Arab historians, Russians fought against the Saracens in Sicily
‘as hirelings of the Greeks’.49
Subsequently, the Byzantine army always included a ‘Russian corps’; in the
eleventh and twelfth centuries its numbers were made up not only of Russians
and Scandinavians, but also of English. Finally, and as historians note, the
links between the Russian and Byzantine churches included not only religious
but also commercial ties.50
When the Russians founded the Crimean princedom of Tmutarakan on lands
formerly controlled by the Khazars, they obtained an important commercial
and military outpost. Historians record that while the princes and soldiers were
Russians, the population of Tmutarakan ‘consisted in the main not of Slavic
Manufactured goods, jewellery, wines and bullion flowed from the East to the
North. In this trade, furs also held a special place. The fact that Rus supplied
furs to Arab cities might appear somewhat comic, but such was then the fashion.
Solovyev writes:
The demand for furs grew in the East with the spread of wealth and luxury during the
splendid reign of Harun al-Rashid. Fur coats came to be highly regarded as clothing, and
were purchased for large sums. We are told that it was Zobeyda, the wife of Harun, who
first created the fashion for coats lined with the fur of Russian ermines or sables. As well as
furs, the Russians also brought slaves to the Volga. In exchange for these goods, the Russians
could obtain from the Arabs precious stones; beads, especially of a green colour (strings of
these were the favourite jewellery of Russian women, whose husbands ruined themselves
by often paying a dirham, fifteen to twenty silver kopecks, for each bead); gold and silver
wares; chains; other jewellery such as bracelets, rings and pins; sword-hilts; buttons; metal
plates for the decoration of clothing and harnesses, and perhaps also silken, woollen and
cotton cloth, herbs, spices and wine. But as can be seen, the Russians were especially anxious
to exchange their goods for Arab coins, dirhams, which were of great value in any place and
for any purpose. By this route, the Arab coins spread through diverse areas of the Russian
provinces of the time. As rare, always valuable objects, they passed as adornments from
family to family, from hand to hand. They were buried in graves along with the dead, or were
buried in hoards, and in this way have come down to us.53
and to the region of Beloozero.’55 Scandinavian sources also bear witness that
from Greece, the Varyags preferred to obtain ‘silk and other cloth, metal and
glassware and wines, rather than cash’.56 The Russians were also anxious to
acquire manufactured goods from Constantinople. Overall, Rus had a trade
deficit with Byzantium, and a surplus in its trade with Islamic countries. To
Byzantium, the Russians supplied mainly raw materials for manufacturing,
obtaining in return the products of Greek workshops, while to the south they
sent luxury items and slaves in return for silver, which the Persians and Arabs
had in abundance. ‘Islamic goods were certainly imported into Russia and some
reached Scandinavia’, wrote P. Sawyer in Kings and Vikings,
but the demand in the caliphate for Russian produce appears to have been so much greater
than the reciprocal demand for Islamic goods that the balance was paid in silver, which for
many of those involved was acceptable and may even have been preferred. Some Islamic
coins were exported from Russia to neighbouring parts of Europe and large numbers have
been found in Scandinavia.57
Where armour is concerned, chain mail was known in Rus from the tenth century, while
this type of equipment appeared in Western Europe only in the eleventh and twelfth
centuries. Chronicle sources also establish that Russians in the period from the tenth to
the twelfth centuries were not only familiar with ‘Greek fire’, but also knew how to use
flame-throwing weapons.61
In the twelfth century there are already instances of the mass production of
weapons. In the view of archaeologists, the level of military production had
become ‘immense’.62
Numismatists remark on the high quality of the minting of Kievan coins
compared with Western European examples from the same period.63 In the
twelfth century Rus was ahead of the countries of northern Europe in the level
of its metalworking. Clear proof of this is provided both by archaeological
evidence and by chronicle sources. As historians note:
The metalworking industry was using complex technical methods such as the heat-
treatment of steel, various methods of cold processing, and welding. To prepare the most
common products, knives, steel was welded onto the iron core of the blade. The two and
three-layered knives were of especially high quality during the first stage of development
of the trade in Novgorod.64
approached mainly from the point of view of church history, and sometimes on
the level of the cultural influence of the Greeks on Rus.68 But trading relations
preceded cultural exchanges by at least a century! It could be said that the
medieval Russian chroniclers showed a better understanding of the historical
process than the scholars of the nineteenth and twentieth centuries.
What is the reason for the extremely limited interest in the ‘Byzantine trail’
in Russian history? On the one hand, no one denies the Byzantine influence, so
unlike the ‘Scandinavian theory’, it cannot be a topic for political discussions.
On the other hand, Byzantium has been on the periphery of Russian ideological
consciousness. The ‘Westernising’ school took a hostile attitude to everything
Byzantine, seeing in the Greek and Orthodox influence an obstacle to cultural
integration with the West. For the champions of ‘uniqueness’ and those
sympathetic to Byzantium, meanwhile, the Scandinavians were just as repellent.
Since the Westernisers paid special attention to the Varyags, the entire polemic
of the ‘native soil’ current was directed against the Scandinavian theory. Neither
school was prepared to acknowledge that Rus arose precisely as the point of
contact between Byzantines and Scandinavians.
The situation changed little in the Soviet period. Interest in economic
history grew somewhat under the influence of Marxism, but Soviet historians
devoted their attention mainly to local production, and also to the relations
that were taking shape on the feudal estates. After the purging of the Pokrovsky
school in the 1930s, trade was rarely considered to merit specific study. Such a
concentration of attention on the agrarian economy was fully justified in the
case of Western Europe. There the medieval economy really did grow out of the
natural economy. Rus, however, knew virtually nothing of the natural economy
in the Western sense of the word. More precisely, in the era of the natural
economy there was neither a Russian state, nor a Russian people. In trying to
understand ‘whence the Russian land is come’, the chroniclers immediately and
quite justifiably pointed to trade.
The cloak of barbarism that darkened the Russian horizon hid Europe from us at the very time
when beneficial knowledge and skills were increasingly multiplying there, when the people
were freeing themselves from servitude, and when close bonds were being forged between
cities for their mutual defence in troubled times; when the discovery of the compass had
widened navigation and trade; when governments were encouraging artisans, artists and
scholars; when universities were arising for the pursuit of higher learning; when minds were
growing used to contemplation, to correctness of thought; when manners were becoming
more mild; when wars were losing their earlier ferocity; when the well-born had grown
ashamed of slaughters, and when noble heroes were famed for their mercy to the weak,
for their magnanimity and honour; when urbanity, humaneness and courtesy had become
known and admired.1
45
while Kievan Rus in the tenth and eleventh centuries and the Russian princedoms in the
twelfth and thirteenth centuries followed the same path as the advanced countries of
Western Europe, without falling behind them, the Tatar-Mongol invasion, which lasted for
more than two hundred years, disturbed the normal life of Rus for a prolonged period. It held
back the development of the productive forces, of technology, of learning and of culture.3
The Mongols differed from the Polovtsy and other nomads with whom the
Russians had earlier had to contend in that they knew how to capture cities.
Battering down stone walls was quite beyond the powers of the Polovtsy
and Pechenegs, against whom even wooden fortifications provided reliable
protection. But before the Mongols came to Russia, they had already seized
control of China, and consequently possessed military technology of a totally
different order. Siege engines capable of smashing down stone walls were
perfectly familiar to them.
This demonstrates, moreover, that the Tatar-Mongols were by no means half-
savage nomads, as they have usually been depicted. They had a qualitatively
higher level of military and political organisation than the Polovsty or Pechenegs,
and this was one of the secrets behind their victories.
The sacking of Kiev and other cities was devastating, but in those times the
plundering of captured cities by their conquerors was normal practice, and
Russian rulers were no exception in this regard. In the twelfth and thirteenth
centuries the soldiers of Russian princes massacred the inhabitants even of
Russian cities as a matter of course, and sold captured compatriots to the Volga
Bulgars as slaves. In 1169 Andrey, Prince of Vladimir, who, for his learning
and piety, was known as ‘the God-loving’ (Bogolyubsky), took Kiev by storm,
subjecting the city to appalling devastation.
The conquerors, to their shame, forgot they were Russians; for three days they plundered
not only the population and the houses, but also monasteries and churches, and the
splendid Sofia and Desyatinny temples. They stole valuable icons, vestments, books, and
even bells….7
Such unconcealed pillage was new to Kiev, which had not been captured before,
but other trading centres had endured such disasters repeatedly.
The destruction of particular Russian cities often led to the rise of others.
Hence the decline of Kiev had aided the rise of Vladimir and Suzdal. All
the Russian cities, however, suffered simultaneously from the Tatar-Mongol
invasion, apart from Novgorod and Pskov, into which the Tatars did not
penetrate. In this respect, the invasion differed qualitatively from the massacres
which the Russian princes carried out regularly in one another’s domains. The
scale of the disaster is hard to exaggerate. It is important to note that the
leading commercial centres of the Russian north, Novgorod and Pskov, which
had managed to defend themselves from the predation of the Russian princes
in the twelfth century, did not suffer from the Tatars in the thirteenth century
either. The Tatars, however, not only laid waste to Rus, but also inflicted heavy
losses on the country’s western neighbours, Poland and Hungary. Medieval
sources themselves differ on the extent of the catastrophe that Rus endured
following the campaigns of Batu. For example, the papal envoy Fra Giovanni
Piano Carpini reported that the destruction of Kiev was almost total: ‘It was
a great and populous city, and now it has been reduced almost to nothing.
Barely two hundred buildings remain.8 Nevertheless, the materials of the same
mission speak of ‘two hundred prominent citizens of Kiev with whom the papal
ambassador met’.9 If the number of prominent citizens who remained was no
fewer than 200, there were clearly more inhabitants in the city. Scholars also
note other evidence:
The question of the real state of affairs in Kiev after its capture by the Mongols (that is, of
whether life there died out or not) has to be viewed in the context of a later report by Fra
Giovanni. In the ransacked city, the papal envoy met with wealthy merchants from Genoa,
Venice, Pisa and Acre. The names of the merchants listed by Fra Giovanni are linked to
wealthy family clans, possessing large amounts of commercial capital. One wonders what
these people were doing in the devastated Kiev.10
The ferocity of the Mongol invasion was astonishing even by the standards of
the Middle Ages. Poland and Hungary were laid waste in catastrophic fashion.
In Rus the northern commercial cities avoided the slaughter, but in Hungary
virtually everything was wiped out. Exterminating the populations of whole
cities and even provinces down to the last person was a common practice.
‘The Mongols stormed and burned Pest, while King Bela took refuge on the
Adriatic’, writes René Grousset.
The population was subjected to unspeakable atrocities, often followed by mass execution.
The Rogerii carmen miserabile is full of stories, all alike: the Mongols treacherously encourage
the fleeing inhabitants to return to their homes, with the promise of complete amnesty;
having thus reassured them, they cut them down to the last man.
The slaughter of the population was deliberate and well-planned, occurring not
just in the towns, but also in the countryside. ‘Having compelled the peasants
to harvest their crops for them, they killed them as they killed – after violating
them – the women of the areas they evacuated, before going on to continue
their ravages elsewhere.’11
Rus did not serve as a ‘covering force’ blocking the path of the Mongols out of
Asia into Europe. After passing through Rus, Batu’s hordes entered the territory
of the countries to the west completely ready for battle. After laying waste to
Poland and Hungary, defeating the German hussars in Silesia and devastating
Bohemia, the Mongols even planned to carry on to Italy and France, where rich
booty awaited them. ‘Actually, Batu’s forces had defeated European mounted
knights at every encounter’, Western historians note. ‘Neither exhaustion nor
geography saved Europe, but rather the sudden death of the great Khan Ugedei,
which precipitated a succession crisis within the Mongol Empire.’12
Surviving the Mongol invasion, Hungary, Poland and Bohemia gradually
recovered, and continued to develop along with the backward West. In Bohemia,
the fourteenth century even became a period of economic boom, that was to
culminate in the following century in the revolutionary actions of the Hussites,
actions that heralded the Reformation and the bourgeois revolutions of the
modern era.
in the late thirteenth and early fourteenth centuries the Christian world was not simply
standing still, but was on a downward path. The tilling of new soil and the appropriation
of new lands had ceased, and even marginal lands that had been brought into cultivation
under the pressure of population growth or in the heat of expansion were being abandoned,
since their yields were low. Fields and even villages began to lie deserted….The building of
great cathedrals came to a halt. The demographic curve turned downward. Prices stopped
rising, which fed the tendency to depression.14
everywhere, once the infection had passed, the population multiplied at an extraordinary
rate. So miraculous is nature, that it is always ready to make up losses in its realms with
new exertions of its fruitful strength.15
After the pestilence many buildings both great and small in all cities, towns and boroughs
fell into total ruin for lack of inhabitants; similarly many small villages and hamlets became
desolate and no houses were left in them, for all those who dwelt were dead, and it seemed
likely that many such little villages would never again be inhabited.18
For those who survived an ugly death, life may not have been as wretched in the late
fourteenth and fifteenth centuries as it undoubtedly was before. For many peasants, this
became an age of opportunity, ambition and affluence….19
By the end of the century, the decline had been replaced by rapid economic
growth. The shortage of labour power had created a new relationship of forces
in society. The demand for free workers had grown, and the use of hired labour
had spread not only in the towns, but also in the countryside. Meanwhile, the
shortage of workers encouraged technical improvements, which by the middle
of the fifteenth century were making an impact on the general state of the
economy. Production for exchange now held a much more important place;
with labour power now in chronic short supply, and grain production lower,
maintaining the ‘natural economy’ had simply become impossible.
Rus was not insulated from this process, though the plague dealt it less of a
blow than was the case in the West. The devastation of Pskov in the spring and
summer of 1352 was just as terrible as in Western cities, and Novgorod suffered
as well. But judging by the sources that have come down to us, Moscow suffered
less, a fact which may have been reflected in the city’s subsequent development.
Overall, the ‘crisis of the fourteenth century’ affected Russia less than other
countries of Europe, and it cannot be said that in this period Rus developed
more slowly than its neighbours. Similarly, there are no grounds for asserting
that the country’s trajectory of development was somehow different or special.
Moreover, the 1340s were a time of conflict within the Golden Horde (the Tatar
state). The Tatar yoke was growing lighter, the fear of raids was gradually
vanishing into the past, and economic life was becoming more vigorous even
in the most ‘vulnerable’ Russian regions.
One of the memorable consequences of the Tatar rule over Russia was a further rise of our
clergy, with monks and church estates multiplying. While the khans oppressed the common
people and the princes, they had a policy of protecting the church and its priests, displaying
particular benevolence toward them. They treated the metropolitans and bishops with
lenience, listened indulgently to their submissive pleas, and often, out of respect for the
pastors, showed mercy instead of anger toward the flock.20
The collaboration of the church hierarchy with the invaders stands as one of
the most shameful episodes in the history of Russian Orthodoxy, and memories
of it have invariably undermined the claims of the church to be playing a special
national role in Russia. Ideologues of official Orthodoxy have sought to justify
themselves in hindsight by explaining that the khans and the church hierarchs
had no interests in common, and that the Tatars supported Orthodoxy solely
because they felt ‘a superstitious fear of the unknown God of the Christians’.21
The reality, of course, is that the khans knew perfectly well what Christianity
was – priests and missionaries had appeared at their court as early as the
1250s. Charters granted by the khans provided the church with immunity. The
Orthodox hierarchs, for their part, called on their flock to pray for the khans.
Pokrovsky writes:
The alliance between the Orthodox church and the Tatar khans was at first equally
advantageous to both sides. If later it proved more advantageous to the former than to
the latter, this was something the Tatars did not manage to foresee, precisely because they
were too much the practical politicians.22
The tribute levied on the Russian princes by the Tatars provided the model
for an up-to-date tax system. In this respect the Mongol khans, who were
familiar with the methods of the Chinese bureaucracy, were far in advance of
many Western European rulers. It was thanks to the Tatars that a unified and
more or less orderly system for the collecting of taxes was established on the
scale of Russia as a whole. The khan’s tax collector, the baskak, served as the
prototype for the Russian bureaucrat. Pokrovsky notes that ‘the Tatar method
of apportioning taxes (so much per plough, the so-called “plough letter”),
lasted until the middle of the seventeenth century’.23
As Karamzin acknowledges, the Tatar tributes in the first instance enriched
Moscow, which acted as the fiscal intermediary between the Horde and the
other Russian princedoms:
The Tatar yoke enriched the treasury of the Great Princes by counting the people and
instituting a poll tax, as well as through imposing various previously unknown taxes which,
though ostensibly collected for the khan, were cunningly diverted by the princes to their
own income. The complex accounts meant that the baskaki, initially tyrants and later the
bribe-taking friends of our rulers, could easily be deceived. The people complained, but
paid up….24
The financial services rendered to the khan of the Golden Horde by the Moscow
Prince Ivan Kalita allowed Ivan not only to accumulate an extraordinary
fortune, but in effect to buy up the lands of poorer rulers. It is understandable
that Ivan should appear to historians as a collaborator and indeed traitor,
especially since his denunciation doomed Prince Aleksandr of Tver, who tried
to incite the people to revolt against the Tatars. Some writers, however, have
been inclined to see Ivan Kalita as an astute tactician, who, unlike his naïve
neighbour, realised that the time had not yet come for open struggle. Meanwhile,
Moscow and the Horde were united by common commercial interests that
extended far beyond the mere collecting of taxes.
The Tatar yoke did not by any means lead to the complete isolation of
Russia from Europe. The route from Moscow to Crimea and the Mediterranean
passed through the lands of the khan, and there is no evidence to show that
the Tatars impeded contacts between the Russian princedoms and the West or
Byzantium. Quite the reverse; the sources show that these ties were continuing,
with all their previous intensity. In 1253 the ambassador of the French King
Louis IX, the Franciscan monk and missionary Guillaume de Rubruck, was
present in the court of Khan Batu. In Crimea, the ambassador observed a
flourishing commerce in which Russian merchants played a substantial part.
Soon after Batu had laid waste to Kiev, the papal envoy Piano Carpini found
Genoan and Venetian merchants there who had come to Kiev from Constan-
tinople and Acre through the lands of the Tatars; Rubruck also reported the
presence of merchants from Rus who had come to Surozh (Soldaiya).25 The
Russian chronicle also mentions ‘guests from Constantinople’ as being in the
Kursk lands, and Surozhans in Volynia, during the second half of the thirteenth
century.26 We also encounter numerous mentions from the same period of trade
by ‘Latin’ merchants in the Russian lands. In Vladimir and Suzdal, Germans
purchased goods that had come by way of the Volga from Muslim countries.
An Arab traveller reported that on the Lower Volga in 1263, Russian vessels
were ‘constantly visible’.27
At the court of the khan, Rubruck found not only Nestorian Christians,
but also artisans from Europe, including the Parisian jeweller Guillaume
Buchier and his brother Roger, and even Knights Templar.28 For the khan
in Karakorum, Guillaume Buchier created a famous silver tree, from which
there poured wine and fermented mare’s milk. As is well-known, the Tatars
maintained close relations with the Genoese, who were based in Crimea (at the
battle of Kulikovo, Genoese infantry fought on the Tatar side). The Kremlin
cathedrals and fortifications were built by Italian and English architects. The
close ties between Russia and Italy are in clear contrast to what we see in
northern Europe, where the Swedish kings, for example, went no further than
inviting in German builders.
In Pokrovsky’s view, the crisis and decline of the Russian cities in the twelfth
and thirteenth centuries was due ultimately to the same causes as their rapid
rise in the ninth and tenth centuries. The cities had grown up primarily on the
basis of international trade. But in order to live and develop, they had at the
same time to obtain foodstuffs and raw materials from the countryside, to which
they provided very little in return. This parasitic development of the cities at the
expense of the countryside, a sort of unequal exchange, has characterised many
periods of Russian history right up until the twentieth century. In principle, the
relations between city and countryside were not equal anywhere in Europe, but
it was the orientation by Kiev, Novgorod and other major urban centres in Rus
toward international trade that rendered the contradiction fatal. ‘Laying waste
to everything around itself with its rapacious practices, the Old Russian city fell,
and nothing could slow this fall.’30 The self-destruction of the city was especially
noticeable in the Kievan lands, where the twelfth-century chronicles constantly
report social conflicts and uprisings. Vladimir and Suzdal, located further from
the main trade routes, were tied more closely to the internal market, and hence
continued to grow even when the crisis of Kiev had become obvious. But this
in turn led to a new relationship of political forces and to constant attacks by
the northern princes on the wealthy but ailing south.
Overall, the picture of feudal fragmentation in Rus differs little from what
could be seen in the West during the same period. The eleventh and twelfth
centuries in Europe not only saw the growth of cities, but were also the period
of castellisazzione, an Italian term that historians in the twentieth century began
using to denote the widespread building of stone castles. The wooden fortifica-
tions of the early Middle Ages were rarely able to withstand a prolonged siege,
and only the largest political centres had well-built stone walls. The development
of the economy in the tenth century enabled improvements in the quality of
construction as well. The fortified structures became more complex and reliable
and, most importantly, any more or less influential seigneur could build them.
In Wales, the widespread building of castles was undertaken by the English
kings in order to keep disloyal subjects under control, while in France, Italy
and Germany the feudal elite built castles to defend themselves against both
the peasants and the neighbouring nobles, and also against the king.
Just as in the First World War, the means of defence were dramatically more
effective than the means of attack, and military actions were doomed to take
on a positional character. To effectively alter the relationship of forces to one’s
advantage, large armies were required; for the rulers to recruit these was difficult,
and to maintain them over a long period, even harder.
One result of the widespread building of castles was a strengthening of the
power of the feudal nobility over the peasants, while another was a weakening
of the power of the king over the nobles. The feudal estate in the West, however,
was now departing more and more from the classical model of the natural
economy, and the inhabitants of the castles had fewer and fewer ties to their
peasants in their interests and way of life. The exploitation of the peasants was
intensifying precisely because the ruling class needed goods for exchange. Since
the lands had all been divided up, and taking lands from one’s neighbour was
In the ninth and tenth centuries Arab and Persian silver had stimulated the
development of Russian and Scandinavian trade. By the eleventh century the
influx of silver coins from the East had almost ceased. Then the flow of money
from Byzantium stopped as well. Initially, the shortage of silver was made up
by coins from Western Europe. Thanks to the Bohemian mines, silver was
coming onto the markets there in substantial quantities. By the end of the
twelfth century, however, German merchants were leaving fewer and fewer silver
coins in Novgorod. Historians have explained this on the basis that as internal
trade in Germany expanded, the internal demand for silver there increased
markedly.31 The reason, however, should probably be sought in reduced exports
from the Russian lands. Earlier, exports had substantially exceeded imports;
now there was equilibrium, which in the conditions of medieval trade favoured
natural exchange.
One way or another, Rus was afflicted by an acute currency shortage. Some
historians even talk of the beginning of a ‘moneyless period’.32 Coins were
replaced by silver ingots imported from Germany, but these were ill-suited
to act as currency, and as scholars acknowledge, could serve ‘only for very
large payments’.33 Pelts, scraps of leather, and so forth, took the place of
small change. In short, a primitivisation of exchange was clearly under way.
With the growth of cities in Western Europe, Scandinavian trade was being
reoriented as well. Meanwhile, the twelfth century saw a gradual decline in the
economic vitality of Constantinople, at the same time as provincial centres
were growing in importance. Russian trade as well was increasingly reoriented
toward the provinces, but here, competition from Italians was already strong.
In 1169 and 1192 the Genoese, to the envy of their Venetian competitors,
concluded agreements with Byzantium that effectively gave them control of
the Black Sea trade. It was Italian ships that transported foodstuffs and raw
materials to Constantinople from Crimea. ‘The monopoly privileges which
Russian merchants had sometimes enjoyed’, writes G. Litavrin, ‘now passed
to the Italian merchants.’34
With no need to make their way down to the Black Sea along the rivers, the
Italians built larger, seagoing ships that were superior to the Russian vessels
both in battle and for trade. Meanwhile, it was above all at sea that the Greeks
at this time needed military help. As earlier, there was a Russian corps within
the imperial forces, and recruiting to it was carried out in a massive way on the
territories of the Slavic princes, but Slavs and Varyags were not the only people
whom the emperor was able to hire. The Russian corps was increasingly ‘diluted’
with Anglo-Saxons.35 In 1204 the Crusaders took Constantinople by storm,
and established their own Latin empire there. It is significant that this was one
of only a few ‘international’ events thought worthy of detailed description in
the First Novgorod Chronicle. What was involved in this case was not only the
sacking of the Orthodox capital by Catholics. The Russian chronicler described
in detail how Orthodox Greeks and Catholic Varyags joined in defending the
city. The Crusaders, as is well-known, sacked Constantinople at the instigation
of the Venetians. For the Italian merchant republics, Venice and Genoa, an era
of prosperity was beginning, an era when they would enjoy commercial mastery
of the Mediterranean. The most important trade routes were under the control
of Venice and, to some degree, Genoa. Goods from the south now reached
Europe through Italy. Venice, it might have been said, was killing Kiev.
The Byzantine empire was later restored, but its decline was now irreversible.
Since the Genoese had provided the Greeks with help in restoring the empire,
their trading privileges were confirmed and expanded, while the positions of the
Russian merchants grew still weaker. The route from the Varyags to the Greeks,
as Pokrovsky writes, now ended in a ‘commercial dead-end’. Instead of being
‘staging posts on the high road of international exchange’, the trading centres
on the great river route had been turned into ‘out-of-the-way trading villages
on a backwoods track’, and were ravaged by the Tatars.36
The princes who ruled in Vladimir controlled the trade routes that led along
the Volga to the countries of the East, while at the same time maintaining
their links with the West by way of Novgorod. Kiev, which lay on the route to
Byzantium in the south, did not have the same value for the Vladimir princes
as it had had for the Novgorodians in the time of Ryurik. As a result, Andrey
Bogolyubsky not only subjected Kiev to plunder, but made no effort to rule in
the city. After ransacking the ‘mother of Russian cities’, he placed one of his
henchmen on the Kievan throne, and headed back to Vladimir.
In Western Europe at this time, new trade routes were being established
between north and south. By way of the Rhine and other German rivers, goods
from the Mediterranean countries were reaching the Netherlands, and going
further still into England, Denmark and Sweden. The rapid rise of Netherlands’
trade coincided with the decline of Novgorod. The commercial capital of the
Russian north remained wealthy, but its strategic position was weakening.
The German expansion to the east in the early thirteenth century created a
new situation in the Baltic. In the tenth and eleventh centuries, Novgorod and
Pskov had been the only trading centres in the eastern Baltic region. But late in
the twelfth century the German knights, after defeating the Slavs, had founded
their own cities. In 1143 the Count of Holstein, Adolf II, founded the city of
Lübeck on the site of the destroyed Slavic settlement of Ljubech. With the help
of Henry the Lion, Prince of Saxony and Bavaria, the shipowners of Lübeck
established themselves on the island of Gotland, formally a dependency of
Sweden. A Soviet text records:
Basing themselves on Gotland, the German merchants gradually increased in strength and
organised a commercial union, the Hanseatic League. The Hansa merchants sailed the Baltic
Sea in their kogge, rounded, high-sided, decked sailing vessels, which were more stable and
capacious than the Scandinavians’ long, oared vessels. The commercial dominance of the
Hansa merchants in the Baltic, however, was probably due less to the superior construction
of their ships than to the fact that the merchants were allies of the German feudal nobility
in its Drang nach Osten [desire for eastward expansion].37
The relationship of the Crusaders with the Hansa in the north developed along
the same lines as with Venice in the south. Lacking their own fleet, the knights
became a tool for the commercial expansion of the traders.
In the thirteenth century, Lübeck became the main centre of German trade with Eastern
Europe. From the middle years of the century, German merchants supplanted their
Scandinavian competitors almost completely in the Baltic and Slavic countries. In the
fourteenth century Lübeck headed the union of north German trading cities which from
1356 came to be called the German Hansa.38
Relying on this settlement, the Swedes could exercise a dual control: over the Novgorians’
most important maritime route, through the Gulf of Finland to the Baltic; and over their
internal route through Lake Ladoga and up by way of Lake Vuoksa to the system of the
Sajmen lakes and into the interior of the land of Sumi Em.41
If Venice and Genoa had forced Kiev out of world trade, the Hansa cities were
turning Novgorod into their periphery.
The political configuration around the Baltic had changed as well. Until the
middle of the twelfth century, the dominant power there had remained Denmark,
whose interests had not directly clashed with those of Novgorod. Denmark was
remote, controlling the western exit from the Baltic just as Novgorod sealed off
the Baltic zone in the east. With the rise of German commerce, the situation
changed. The German merchants not only turned the Livonian and Teutonic
Orders into their military-political instruments, but in the northern part of the
Baltic, found a patron in the King of Sweden. This partnership between the
Hansa cities and the Swedish Crown proved astonishingly durable, lasting right
up until the Thirty Years’ War in the seventeenth century. The rise of Sweden
continued throughout the twelfth and thirteenth centuries. It was not hindered
even by the unification in 1397 of Denmark, Sweden and Norway in something
like a federation, the Kalmar Union, under the Danish crown.
The seizure by the Swedes in the thirteenth century of Finland and part
of Karelia put Novgorod on the defensive. Earlier, Finland had divided the
Scandinavians from the Russians, and had suffered raids from both. Now,
Novgorod shared a direct border with lands belonging to the Swedish king,
and access to Finnish territory was closed off to Novgorodian bandits and
merchants. The border conflict with Sweden continued for around a hundred
years until it was ended in 1323 by a peaceful agreement, the Treaty of Noteborg.
After this, the border did not shift until the end of the fifteenth century. It is
significant that what the agreement of 1323 determined was not so much the
division of the territories in the Karelian border region, as control over the river
and lake routes. The agreement also allowed the Swedes and Novgorodians to
make joint use of part of Karelia and Finland.
While the first era of European economic and political expansion founded
Kievan Rus and enabled it to flourish, the second era weakened it and, ultimately,
predetermined its downfall. In the ninth and tenth centuries, Western and
especially northern Europe simply could not have developed without Rus. But
in the thirteenth century, Western Europe no longer had much need of Rus,
and following promptly on the commercial decline came the Tatar catastrophe.
Pokrovsky is the only Russian historian prepared to argue that the devastation
suffered at the hands of the Tatars in the thirteenth century was not the cause
of the decline of the Old Russian state, but its consequence. The raid by Khan
Batu was preceded by a ‘process of decay of urban Rus between the tenth and
twelfth centuries’.42 The destruction of the unified economic space led to a
steady weakening of central authority, to internecine war between princes, and
to the military disorganisation which the Tatars exploited so successfully. Here,
too, lies the explanation for the fact that the Tatar yoke lasted so long. Batu’s
Horde also staged successful attacks on Poland and Hungary, but Russia’s
Western neighbours recovered considerably faster. Soviet historians repeatedly
and quite correctly argued that Rus shielded the West by taking the main blow.
Nevertheless, and whatever the strength of this blow, the shock it represented
was by no means the only one in the history of medieval Europe. The attacks on
Europe by the Hungarians were a genuine catastrophe. Later, the blows dealt by
the Tatars against Hungary, Poland and Bohemia were no less appalling than
those inflicted on Rus. The damage done to the West by the plague was no less
than that which Rus suffered at the hands of Batu. It was not the insurmount-
able strength of the Horde that prevented the revival of Rus so much as the
internal weaknesses of Russian society itself. In the thirteenth century, Rus had
lost its initial forms of economic organisation, and could not find new ones.
While Batu’s campaign of 1223 did not do the Black Sea region catastrophic
damage, the raid by Khan Nogay in 1299 struck a far heavier blow. The
traditional Greek centres fell into ruin, but new cities arose to take their place,
especially Kafa and Sudak (Surozh). In Crimea in the fourteenth century Tatar
murzy ruled directly over the Greek-speaking rural population, while feudal
dues were collected in money form. In other words, the local economy remained
60
firmly based on commodity production and the market. After the wars of the
1340s and 1350s, trade again flourished.
The river route made its way northward along the Don, while the caravans proceeded to
Astrakhan.There the road diverged, with one route leading along the Caspian to Transcaucasia
and Persia, the source of the silks that were so valued in the West, while the other route led
to Central Asia, first to Saray-Batu, then to the mouth of the Ural River, then to Urgench
and beyond to China.4
As historians observe, it was at this time that Moscow’s trade with Kafa ‘took
on a systematic character, and began to figure in the everyday economic life of
Muscovite Rus’.5 To the south, Rus exported furs, linen and leather. From the
Mediterranean, Italian merchants took soap, sugar, silk, almonds, pepper, cloves
and other spices northwards. Russian artisans worked in Kafa, and as in most
trading centres of the East, the city’s population was an ethnic, cultural and
religious mix. Greeks, Armenians, Jews, Tatars and Russians could be found
living side by side with Italians. The Russians secured an important place in
the ethnic division of labour; all the skornyaki (producers of fur clothing) in
the city were Russians. In the year 1334 the Arab traveller Ibn-Batuta counted
no fewer than two hundred ships in the port of Kafa, concluding that this was
‘one of the great harbours of the world’.6
By comparison, data cited by Jacques Le Goff in The Civilisation of the
Medieval West indicate that ‘the overall number of “merchant galleys” servicing
the three main trade routes in the 1320s was about twenty-five’.7 Of course, if we
add to this other trade routes, and other types of vessels based in different ports
(especially in Crete), the Venetian fleet will appear somewhat more impressive.
Nevertheless, a harbour containing as many as 200 vessels at a time would have
made an enormous impression in those days. The prosperity of Kafa was not
affected either by the city’s difficult and at times even hostile relations with the
Tatars, nor by the plague of 1348. Decline set in only after the seizing of Crimea
by the Turks in 1475, and even then it was not immediate. Trade routes that
were important for the prosperity of Moscow thus led through the territories
of the Horde. It is usually considered that in the fourteenth century Moscow
rose to prominence mainly as an administrative centre recognised by the Tatars;
this is said to have been due to the cunning – and, to a certain degree, national
betrayal – of Prince Ivan Kalita, who undertook to collect tribute from other
Russian princes on behalf of the khan. However, the financial collaboration by
the Moscow prince with the Horde developed against a background of no less
active commercial interchange. Moreover, from the 1340s a period of discord
began within the Horde. To an important degree, the subjection of Rus to the
Tatars was becoming merely nominal. The Tatars were incapable of intervening
actively in the internal affairs of the Russian princedoms. The fear of raids
was diminishing. But Moscow’s ties to the Horde were not weakened; shared
interests bound the two states together.
It is well-established that before becoming a collector of Russian lands, the
Moscow Prince Ivan Kalita was a collector of taxes for the Tatars. Kalita’s
method was simple to the point of genius; princes who did not have the means
with which to pay tribute received loans from the Moscow ruler, but were forced
to pay back the debts with their lands. This means of acquiring additional
territories could, of course, work only on one condition: if the Moscow prince
always had cash available. As Pokrovsky writes:
At the beginning of the period we are discussing, the prince of Moscow was one of the
most petty and inconsequential, but he was in an extremely advantageous location. At
that time, two trade routes passed through Moscow. The older of them led from Smolensk
to the River Klyazma, from west to east. On the Klyazma stood what was then largest city
of feudal Russia – Vladimir. All the goods that were sent from the west to the territories
of Vladimir passed through Moscow. The other trade route led from north to south, from
the territories of Novgorod, which at that time had closer ties to Western Europe than any
other part of Russia, to the present-day guberniya of Ryazan, a region especially rich in grain.
From there, grain was exported to Novgorod, whose own harvest was rarely sufficient to
meet its needs.8
It was Ivan Kalita’s control over the point of intersection of these trade routes
that provided him with money, and which ultimately made Moscow the capital
of a revived Russia. However, it was not only Russian internal trade routes that
met in Moscow. As noted earlier, Pokrovsky overestimated the decline that
affected the Black Sea trade in the early thirteenth century, while historians in
general have rarely assessed the eastern trade at its true worth.9
In the fourteenth century the economic links of Rus with the south were
developing rapidly, but conducting trade with the regions involved would have
been impossible if Rus had not maintained loyal relations with the Tatars.
Not only did the route along the Volga to Persia pass through the territories
of the Horde, but so did the route along the Don to Crimea, to the Genoese
possessions of Kafa and Sudak. As scholars have observed, in the fourteenth
century the Genoese colonies served as ‘a sort of window on Europe, a direct
link between the Russian lands and the wealthy Mediterranean’.10 With the
development of the Genoese colonies in Crimea, the ‘Greek’ trade shifted
from the Dnepr to the Don, exacerbating the decline of Kiev. From this point,
the developing cities of northern Russia – the already wealthy Novgorod and
Pskov, and the growing Moscow – were far less interested in the unity of the
territories of the former Kievan state. Loyal relations with the Tatars, however,
were to their advantage. This was a question not only of security, but also of
economic well-being.
Not only did the Tatars refrain from cutting off Rus from Europe; it might
be said that they acted as go-betweens, maintaining the links with Italy and
Greece. The political price that had to be paid for this mediation was, of course,
extremely high. Unlike Kiev in its time of greatness, the new Russia that was
taking shape beneath the Horde and its khans no longer controlled its trade
routes. The dominant position was held by Germans in the north, and by
Italians and Tatars in the south. But while formally under the ‘Tatar yoke’, Rus
in the fourteenth and fifteenth centuries was developing in relatively dynamic
fashion. No less important was the fact that it was developing in much the same
manner as the West. The boyar aristocracy was gradually losing its influence,
the princes were losing their independence one after another, and a unified state
was being formed. If we consider the creation of such a state to be a crucially
important precondition for entry into the new age, it must be recognised that
in this respect the situation in Russia was developing more favourably than, for
example, in Germany or Italy. The free citizens of the cities were yielding up
their liberties to a centralised bureaucracy not just in Moscow, but also in France
and England. The institutions of self-rule were of course preserved better in
Western Europe, but in Rus as well traces of the republican system were visible,
at least in Novgorod and Pskov, until late in the sixteenth century.
Without doubt, the Tatars exercised a huge influence on the creation of the
Russian state, but it is quite wrong to interpret this as purely the extension
of ‘Eastern despotism’ and ‘barbarism’. Above all, the Tatar khans did not
occupy the Russian lands, but founded their own state in the Golden Horde.
Politically and economically, the Tatar yoke amounted to two requirements:
the regular payment by the Russians of tribute to the Horde, and the khan’s
confirmation of the position of the Russian princes (the so-called ‘badge of
tsardom’). This meant that the Tatars did not have their own administration
on the territory of Rus, and were compelled to act through Orthodox princes
whose relation to them was that of dependent vassals. The collecting of tribute
in such conditions required the creation of an efficient bureaucracy, which
received precise instructions from the Horde as to the expected revenues, and
which then had to report on the results of its work. Prior to the Tatars, the
quantities of tribute which the princes received from their subjects amounted
to what the latter handed over, or what the princes could appropriate by
force. The dispute between Prince Igor and the Drevlyane over the extent and
frequency of tribute collections had ended with the subjects simply doing
away with their ruler.
The Tatars introduced a degree of order to these proceedings, setting
approximate norms for each princedom. It is clear that the princes sought
constantly to minimise these norms, while the wealth of the Moscow Prince
Ivan Kalita stemmed from the fact that in collecting tribute for the Horde from
his neighbours, he kept a substantial part of the sums received for himself. As
Pokrovsky noted slyly, Prince Ivan Kalita was ‘something like the khan’s head
bailiff’.11 Not only did Ivan, like later Russian bailiffs, defraud his master to a
degree, but he also possessed freely circulating funds, which he could lend to
neighbouring princedoms. Unable to pay off the Kremlin usurer, the princes
surrendered their domains. This was an important step in the direction of
founding a modern state, and contrary to later notions of an ‘all-national war’
against the Tatars, a sort of alliance in fact developed between the princes and
the Tatars, aimed at the joint exploitation of the Russian masses. An exception
was Tver, where Prince Aleksandr sought to rely on the people in waging a
struggle against the invaders; Moscow and the Golden Horde then joined forces
in order to deal with him.
FEUDALISM IN RUSSIA
The decline of the cities, a trend that had begun even before the arrival of
the Tatars, encouraged a slide back toward the natural economy. The Tatars,
however, demanded that the Russians pay their tribute in money; and this
had the effect of stimulating economic development. The relative calm of the
Moscow princedom, and its remoteness from the Golden Horde, also permitted
a steady growth of population. The wealth and influence of the local prince
thus rested simultaneously both on trade and on the funds extracted from the
agrarian population. It was this combination, together with a stable financial
base, that made Moscow the ideal leader for the process of unifying the Russian
princedoms. Overall, this unification took place according to the same logic
as in other European countries. The war against the Tatars that began late
in the fourteenth century was not a unique feature of Russian history either.
The rise of the French monarchy was accompanied by constant war with
English invaders; first the dynastic war of the Parisian Capet kings against
the Anglo-Norman dynasty of the Plantagenets, and then the Hundred Years’
War. Spain was a product of the Reconquista, a war against the Arabs that
lasted for many centuries.
Comparing the social order in Moscow with that in the West, one finds that
the notion of an ‘absence of feudalism’ and of a complete lack of rights for
the population in the fourteenth and fifteenth centuries is not borne out by the
facts either. Comparing documentary evidence on the situation in the German
borderlands and in Russian rural society, the historian N.P. Pavlov-Silvansky
noted ‘the profound similarity of Russian and German medieval institutions’.12
The rights and freedoms of the Russian rural community, which had existed in
customary form, were reinforced in the fifteenth and sixteenth centuries through
numerous deeds and charters. For example, a charter of 1488 granted by Ivan III
‘to all the people of Belozersk’ gave the local population such independence that
in the enlightened nineteenth century it was necessary to abolish the remnants
of these medieval freedoms, which were considered to render the government
‘effectively powerless’. In Muscovite Rus, such liberties were not perceived as
evidence of the weakness of the state; as in other European countries, they
were quite normal. ‘By Lake Beloe in the fifteenth century,’ Pavlov-Silvansky
writes, ‘peaceful self-government retained all its ancient significance as the main
bulwark of the state system.’13
The same applies also to relations of vassalage.
Just like his Western peers, our local boyar, the vassal and servant of the prince, had his own
servants, who were subject to him on the same bases of military, free or contracted service.
The boyar, like the Western vassal, was compelled to have his own military retainers, since
he fulfilled his obligation of service completely only when at the command of the prince he
‘mounted a horse’, appearing not on his own, but accompanied in military accoutrement by
a more or less numerous detachment of his own mounted servants and footsoldiers.14
The similarity of the Russian and Western European rights of that time
is obvious. The population was no more lacking in rights in fifteenth- and
sixteenth-century Muscovy than in Germany or France. Pokrovsky notes:
We need to understand clearly that neither the ruler of Novgorod the Great nor his fortunate
rival, the Great Prince of Muscovy Ivan Vasilyevich, held sway over a herd of subjects who
were uniform in their lack of rights, but over a motley feudal world of large and small
‘boyardoms’, each with its own ruler, who knew just as well how to defend his independence
beyond the forests and bogs of northern Rus as did his Western peer behind the walls of
his castle.15
The general processes that characterised Western Europe were also typical
of Rus at the time when the Muscovite state was being formed. The fifteenth
century, a period of rapid development in the West, was also a time of progress
in Russia. It was not by chance that this period witnessed the artistry of Andrey
Rublev, regarded by many as a Russian exponent of the proto-Renaissance.
Russian culture in the fifteenth century indeed remained more ‘medieval’ than
Italian. The same, however, might also be said of Sweden and even, with certain
qualifications, of Germany. The art of Andrey Rublev clearly bears witness
to the early stirrings of the Renaissance. The forms of social and political
organisation were evolving in the same direction as in the neighbouring
European countries.
While Kievan Rus had outstripped Western Europe in many ways, Muscovite
Rus, as it had taken shape by the years during 1450–80, was by and large
on the same level of development. Artillery and architecture were, at that
time, among the foremost areas of technological development, and here the
Moscow rulers strove to avoid falling behind the advanced countries of southern
Europe. Diplomatic missions were sent to Venice in 1474, 1493 and 1499; on
each occasion not so much for political ends as to secure experts. In 1489 a
mission was sent to Austria, in order to bring skilled miners to Moscow. From
Hungary, skilled foundry workers, silversmiths and architects were invited. The
only noticeable lag was in book publishing; the first printing presses appeared
in Moscow only in the sixteenth century.
Nor was Russia isolated from seaborne trade. Danish documents testify
that Russian vessels appeared in the Baltic in both the fifteenth and sixteenth
centuries.16 The problem was not a lack of contacts, but the fact that there were
no good ports. The Russian vessels, which set out to sea by way of the rivers,
were therefore of low displacement, carried small volumes of cargo, and could
not compete with the German ships.
The issuing of invitations to foreign artisans was evidence of a technical lag,
but not of backwardness. Artisans were recruited in Italy and Germany not
only by Russia, but also by Sweden, and even by England. This was a general
European norm. In the Moscow Kremlin, cathedrals and fortifications were
built by Italians. Anton Fryazin and Pietro Antonio Solario built towers in
the years between 1485 and 1491, and Aristotel Fioravanti built the Uspensky
cathedral in the years 1475–79. In 1505–08, on the site of an old temple built
during Ivan Kalita’s time, Aleviz Novy built the five-towered Arkhangelsky
cathedral, clearly giving it, as art historians recognise, ‘features characteristic
of the Venetian palace architecture of the epoch of the renaissance’.17 Modern
scholars have explained that ‘the creators of the heraldic seal of Ivan III,
which for the first time in Rus depicted a two-headed eagle, were carvers from
northern Italy’.18 The origins of the Russian eagle in Byzantine heraldry are
beyond doubt, but in Moscow it was not the Greek but the Italian design that
was preferred.
There is no way that this Italian influence can be considered the result of
backwardness. After all, it was Italians who in the fourteenth and fifteenth
centuries were the best architects, engineers and artists in Europe. The Moscow
princes invited architects from Italy itself, while the Scandinavians had as a rule
to be content with Germans. The fact that Italians were appearing in the Kremlin
is not evidence of backwardness, but rather of the fact that Rus was still living
by the same rhythm as the rest of Europe, lagging behind the Mediterranean
countries as they experienced the Renaissance, but by no means falling behind
its closest Western neighbours. Foreign goods were becoming increasingly
important in meeting the changing demands of the ruling-class consumer. From
the sixteenth century, French wines were being imported into Rus.
In the south, the centre of attraction for Moscow was Italy, with its advanced
technologies and cultural achievements, while in the north, Denmark had
become the main partner. The more troubled the relations with Sweden became,
the more the Moscow court sought to befriend the Danes. The diplomatic
missions that appeared regularly in Moscow and Copenhagen discussed not
only dynastic marriages and the possibility of military collaboration against
the Swedes, but also trade. The pinnacle of these relations was the Copenhagen
Treaty of 1562.
by the end of the eleventh century most of the furs reaching Western Europe came from north
Russia, not Scandinavia. Danes and Swedes could still exact tribute from people living around
the Baltic, but they could no longer roam as freely in Russia as they had earlier. Russian
princes then had more effective control over the region, and Novgorod took particular care
to control Karelia. Merchants who wanted to obtain the best furs in large quantities had to
buy them in the increasingly important market of Novgorod.19
permanent state of war with the Livonian Order ‘had no effect whatever’ on
trade with the German Hansa.22 The merchants from the city of Lübeck were a
major trading partner both of the Novgorodians and of the knights, and while
the Novgorodians and the Order waged war on one another, the merchants
conducted their business peaceably, formally speaking, on the territories of
both contending sides. The struggle was in fact over the shares in this trade,
and an end to the trade would have been equally catastrophic for both the
Novgorodians and the ‘dog-knights’.
In many ways, the struggle between the Novgorodians and the Germans
in the thirteenth century recalls the seventeenth-century conflict between
the British and Dutch. Like the Dutch, the Novgorodians mostly emerged
victorious from the military clashes, but this proved insufficient to make up
for the strategic advantages of the new, rising power. The Germans in the
thirteenth century, like the British in the seventeenth, had substantial resources,
and also a technological superiority that allowed them to stubbornly pursue
their goal without regard for tactical setbacks. The upshot was that after a few
decades of rivalry, the border was stabilised, and the Novgorodians, reconciling
themselves to the loss of Yuryev (Derpt), turned into junior partners of the
German merchants, just as Dutch capital ultimately became the junior partner
of its British counterpart.
While the thirteenth century had been a time of almost uninterrupted war
with the Germans, the fourteenth and most of the fifteenth centuries were
exceptionally peaceful. Novgorod established trade relations not only with
the merchants, but also with the knights. The Teutonic Order bought up furs
wholesale in Novgorod, while at the same time supplying the merchant republic
with the silver that was so necessary to it. In a sense, the wholesale deals with
the knights were even more advantageous for the Novgorodians than the trade
with the German merchants. ‘Purchases in Novgorod were not as a rule paid for
with goods,’ notes the Swedish historian Artur Attman, ‘but entirely with bars
of silver, which were to a great extent carried to Novgorod by the servants of
the Teutonic Order.’23 It might be said that with the aid of silver, the Germans
in the fourteenth and fifteenth centuries managed to acquire what they had tried
unsuccessfully to gain through force of arms in the thirteenth century.
Archaeological studies show that in the early stages of development of the
Novgorodian economy, the West’s main role was as a supplier of raw materials.24
The importing of raw materials did not cease even in later times, since the
Novgorodian artisan production was almost entirely without its own resource
base. Non-ferrous metals, alum, amber, silver, and so forth, were imported. It
is significant, however, that the importing of non-ferrous metals from Western
Europe reached its peak in the early thirteenth century, and then began to
diminish. Until late in the tenth century, Novgorod obtained silver from the
East, re-exporting it to the West (or, more precisely, to the north). After that,
the flow of silver from the East dried up, while in the West the minting of silver
coins increased. Novgorod began importing specie from Germany and England.
In the thirteenth century the Germans began a Baltic trade in grain which a
few centuries later would play a fateful role for all of Eastern Europe. As in the
past, Novgorod obtained foodstuffs primarily from the south, via Torzhok, but
if necessary it could acquire them from the Germans as well. The result was
that the ties with southern Rus weakened still further.
Although the importing of raw materials did not stop, from the second half
of the thirteenth century imports of finished goods began to increase, partly
taking the place of the diminishing ‘southern imports’. Wine was imported from
Western Europe, as at times were weapons and horses. Cloth was purchased
from Flanders, mainly from Ypres, Ghent and Bruges. A history of the city
notes that:
Evidence of the scale of the imports of expensive cloth to Novgorod is provided by the fact
that in 1410 the German merchants in the city held two hundred bales of cloth, or about
eighty thousand metres. Meanwhile, a certain amount of the cloth imported that year had
already been sold. Of course, not all the cloth, like other goods, which the Germans imported
was consumed by the inhabitants of Novgorod and its territories; a significant proportion
later reached the markets of other Russian cities.25
At the same time, archaeologists note the disappearance from the goods
consumed by the cultured stratum of items that had earlier been brought
from the Black Sea region. Goods that had previously come from Kiev were
now being imported from Western Europe. The trade with the East was
continuing; cloth from Bukhara continued to enjoy a market in Novgorod
until the fourteenth and fifteenth centuries. It is curious that from the fourteenth
century, manufactured goods also began arriving in Novgorod from the Golden
Horde. Earlier, ceramics had been imported from Persia; now, they began to
be imported from the territories of the Tatar khans.26 This also indicates that
the Horde was by no means the refuge of barbarism and savagery which many
Russian historians have depicted. Also coming from the Horde were the silver
coins that Rus sorely needed. Even the Russian word for money, den’gi, is of
Tatar origin. In Russian historiography, the traditional explanation for the
decline of the southern trade is that the Tatars’ Golden Horde blocked it off.
First the struggle with the Polovtsians ‘paralysed the Volga trade route’; then,
in the mid-thirteenth century, ‘the Tatar-Mongol invasion for many years
cut off the trade links between Novgorod and the south’.27 Archaeologists,
however, note that the southern trade was already ‘fading’ in the first half of
the century; that is, before the arrival of the Tatars.28 At the same time, Moscow
chronicles and documents from the fourteenth century are full of complaints
about the Novgorod bandits, the ushkuyniki, who systematically plundered trade
caravans coming up the Volga from the south. The bandit raids were organised
by members of the best boyar families. The victims were Tatar, Armenian and
Arab merchants, but Russian cities also suffered from attacks.
Right up until the sixteenth century, or course, trade and brigandage were
often interconnected. As a rule, the pirate bands gradually made the shift from
plunder to more peaceful methods of commodity exchange. In the case of
Novgorod, everything was reversed. In 1366, ushkuyniki with 150 ships attacked
Nizhny Novgorod and sacked it. In 1371 and 1375, ushkuyniki twice stormed
Kostroma and plundered it. The sale of captives into slavery was normal
practice; the centre of this trade was the Tatar city of Bulgar. The Moscow
princes, by contrast, joined with the khans of the Golden Horde in trying to
put a stop to the slaughter on the river routes. In 1366, the young Prince Dmitry
Ivanovich of Moscow, the future victor at the battle of Kulikovo field, grew
indignant at the behaviour of the Novgorodians, who ‘sailed along the Volga
and robbed my guests’.29 The prince threatened to wage war on Novgorod, and
it was only in the following year that a peace pact was signed. The raids by
the ushkuyniki, however, did not cease. At Saray in 1375 the Tatars killed the
participants in the sacking of Kostroma.
During the fourteenth and fifteenth centuries the Muscovites were repeatedly
forced to join with the Tatars to fight against the Novgorodians. In other words,
it was not the Tatars and Moscow that were blocking the trade of Novgorod, but
the exact opposite; it was the Novgorodians who were impeding the trade of the
Tatars and of Moscow. The latter states responded by joining forces to ensure
the safety of the trade routes. For a time, they shared an objective interest. The
relationship between them, however, gradually changed. From being a junior
trade partner of the Tatars, Moscow began turning into an independent power;
but at first not so much military as economic.
As Pokrovsky observes, the Volga trade route continued to function and
develop throughout the whole of the fourteenth and fifteenth centuries, and it was
Novgorod that linked this route to the markets of the Baltic. Here was one of the
sources of the republic’s wealth. The new situation, however, no longer required
the political unification of the territories along the whole route. Moreover, with
the passage of time, Novgorod was coming to play an increasingly parasitic role.
The fact that a concern with ensuring the safety of trade was being replaced
among the Novgorod elite by a desire for enrichment through plunder was a
sign of the decline that was afflicting the northern republic.
with a role on the periphery of the German Hansa, acting as its advanced post
in the east.
Almost never in history have trading republics been ‘collectors of territories’,
trying to unite lands under single sovereign rule. In Italy and Germany, where
the trading republics were strong, unification of territories into a single state
simply did not occur between the fifteenth and seventeenth centuries. The Hansa
cities, too, were interested not in the unity of Germany, but in the development
of the Baltic trade, and to achieve this they relied more on the kings of Sweden
and Denmark than on their ‘own’ German princes or emperor. In this respect the
‘predatory’ behaviour of the Novgorodian elites in the fourteenth and fifteenth
centuries, when they often allied themselves with Lithuania against Moscow,
corresponds to the general norm of behaviour of feudal trading republics.
France, Spain and England were unified by kings with the support of the urban
bourgeoisie, but their rulers were repeatedly forced to suppress not only revolts
by the barons, but also separatism on the part of the traditional urban elites,
who often summoned ‘foreign’ kings to their defence. The success of the royal
authorities in these countries was predetermined by the fact that the cities were
too weak to act independently.
The struggle to ensure the safety of the trade routes was conducted principally
by Moscow, and to a significant degree was carried on against the Novgorodians.
The advantage which Moscow enjoyed over Novgorod was founded not only
on trade, but also on the powerful tax base furnished by the Tatars, and also
on the control which Moscow exercised over a large population. At the same
time, Moscow was no less interested in trade than Novgorod, though its focus
was on the internal Russian market. For Moscow, the development of trade was
closely tied to support for agrarian and artisan production on its own territory;
without this production there would not have been a stable tax base.
With Novgorod the situation was quite different. Pokrovsky observes that
Novgorod ‘was a city not of artisans, but of merchants’.30 While archaeologi-
cal studies show that handicrafts were quite well-developed in the city, there
are nevertheless no grounds for disagreeing with Pokrovsky. It was trade, not
handicrafts, and certainly not agriculture, that represented the source of the
republic’s wealth. Even more importantly, this was transit trade. Novgorod
traded in its own products only to an insignificant degree. Apart from fur
coats, it produced little for export, and the furs arrived in the city as tribute
paid by the northern territories. In other words, the fur trade did nothing to
aid the growth of an entrepreneurial culture, of the development of bourgeois
relations. The same can be said of the silver ‘from beyond the River Kama’
that reached Novgorod from the eastern (Urals) border of its territories. The
Novgorodians did not work the mines themselves, but merely collected tribute.
Foodstuffs reached the republic from the Volga region, or as the Novgorodians
called it, ‘downriver’. This was also where the largest market for the ‘German’
goods supplied by the Novgorod merchants was located.
The Novgorodian aristocrats became bourgeoisified, investing money in
trading enterprises, while the merchants bought land and became feudalised.
The result was that Novgorod, like the Italian trading republics of the fifteenth
and sixteenth centuries, did not develop from feudalism to capitalism, but the
other way round. The increase in wealth, Pokrovsky notes, led to feudalisation
in Novgorod, not to democratisation. ‘Feudalism, which outwardly seemed to
move to Novgorod from Moscow, was prepared from within by the evolution
of Novgorodian society itself.’31 In their turn, popular representation and the
veche (the people’s assembly, which all free men were entitled to attend and had
the right to vote) inevitably degenerated. The veche served ‘merely as a battering
ram, with the help of which the mercantile-capitalist bourgeoisie smashed the
hereditary nobility’.32 Once this aim had been achieved, and a new ‘compromise
elite’ had taken shape in the republic, democratic institutions lost their former
importance, which in turn later allowed the Moscow princes to finally do away
with the democracy of the veche. It is significant that in the fifteenth century,
when Moscow put an end to the democratic freedoms of the Novgorodians,
the majority of the citizens of the city put up no particular resistance. ‘The
independence of Novgorod’, Pokrovsky remarks, ‘was defended mainly by the
Novgorodian boyars, resting on the lower orders of the urban population; the
Novgorodian merchants had an interest in maintaining good relations with
those at the bottom of the social scale.’33 After its victory, Moscow did not do
away with the Novgorodian merchants, but transferred the head offices of the
Novgorodian trading houses ‘downriver’. Representatives of Moscow were
sent to take the place of the heads of the old merchant families, an outcome
which accorded on the whole with the aspirations of Novgorodian commercial
capital itself.
The end of the Novgorodian veche did not by any means signify the wiping out
of all forms of self-government in the Russian territories. There can be no talk
of tsarist autocracy in Muscovite Rus. The boyar Duma played an important
political role. The oprichnina of Ivan the Terrible was needed precisely in order
to destroy the existing institutions of rule, and to do away with everything that
limited the will of the tsar. This goal, however, was not achieved in full. Until
the middle of the seventeenth century, the authorities periodically called in
‘elected’ people to resolve various problems.34 Ivan the Terrible, in order to
win support for additional taxes, was himself forced to appeal to a territorial
assembly. The elevation to the throne of Mikhail Romanov, by the assembly
of 1613, was possible precisely because the tradition of representation in the
country had been retained. By the standards of the time, this representation was
relatively democratic. As well as nobles and merchants, the participants in the
assemblies of the seventeenth century more than once included representatives
of the ‘dark’ (that is, free) peasants.
The defeat of the Novgorodian republic was in no way a defeat for the
‘European’ or ‘Western’ principle in Russian history. To the contrary, it signified
that the Russian state was developing according to the same general logic as
the rest of Europe, where absolute monarchies were also unable to unite their
countries and impose order on them without putting an end to the remnants of
medieval freedoms. The history of the flourishing and decline of the Russian
trading cities is strikingly reminiscent of Italian history. This similarity is not
due merely to chance. Novgorod in the fourteenth and fifteenth centuries was
like Venice in the sixteenth century. It grew steadily richer, but had no prospects
for commercial expansion. It developed with its ‘face to the sea’ and its ‘back
to the country’. The flowering of art, and the building of new temples and
palaces, hid the decline of the state. Precisely because of this, the Novgorodians
were rendered vulnerable. It was not the Tatar yoke, but the decline of the
Mediterranean trade that played the fatal role in the history of Rus. The causes
of the decline of Novgorod and Venice are not merely alike, but identical.
Moscow did not unite the Russian lands; the lands united around Moscow later
became Russia. This is why Russia in the fourteenth and fifteenth centuries
seemingly shifted to the east. The lands of the earlier Kievan Rus, which were
not of interest to the Moscow princes or were inaccessible to them, did not
become part of Russia. These territories became Ukraine and Belarus, whose
subjection to the Polish-Lithuanian crown no one contested. The historical and
religious unity of Ukraine and Belarus with Muscovite Rus was recalled only in
the seventeenth century, when the international grain trade began developing
rapidly. The desire on the part of Moscow to establish its control over the
Ukrainian black-earth lands would aid the unification of the Slavs no less than
shared religious and ethnic roots.This, however, was to come later. By the end of
the fifteenth century the trade route from the Varyags to the Greeks no longer
existed, and the need for unity of the former territories of Kievan Rus therefore
lapsed. Meanwhile, the Volga trade route continued to function.
In 1452, Constantinople fell to the blows of the Turks. After another 50 years
almost all the eastern Mediterranean was under the power of the Ottoman
empire. The eastern trading outposts of Venice were transformed into advanced
lines of defence. In 1475, the power of the Genoese in Crimea also came to
an end. The expansion of the Turks was eventually blocked, but the old trade
routes finally lost their earlier importance. Naturally enough, it was precisely
at this time that an intensive search began for alternative trade routes. The
Portuguese pioneered the sea route to India around Africa, and the Spanish
discovered America.
For centuries before this, people had navigated the Atlantic Ocean; the
Vikings had reached America, and the Arabs had explored the African coast.
These discoveries, however, had not been of decisive importance; economically,
they had not forged a new system. Consequently, they remained known only to
a few. In the fifteenth and sixteenth centuries, the situation changed radically.
At first, the fall of Constantinople and the decline of Mediterranean trade
served to increase the importance of the Volga route, along which goods from
the East might reach the Baltic and, from there, the markets of Western Europe.
The world situation from 1450 to 1490 favoured Moscow. Not surprisingly,
it was in the late fifteenth century that the Great Prince of Moscow took the
decision to break with the Golden Horde. Moscow at this time, it might have
seemed, had every possibility of rapid development.
It was at this time that Afanasy Nikitin, a merchant from the city of Tver,
made his famous ‘journey across three seas’, eventually reaching India. Unlike
the Portuguese voyagers of the same period, Nikitin discovered no new trade
routes. He may not even have been the first Russian merchant to penetrate
deep into Asia – as early as the eleventh and twelfth centuries, Indian sources
mention ‘armour from the land of the Rusi’.35 But for the most part the trade
with the East was carried on by Arabic and Jewish merchants, and by others
from Bukhara; Nikitin merely followed their trade routes in seach of goods.
Unlike the multitudes of other traders, however, he was also an explorer who left
us a detailed written record, just like the sixteenth-century English merchants
who left us a detailed description of Muscovy. In this respect, the journey of
Afanasy Nikitin was a genuine part of the broader European movement to
the East.
The conquest of the Volga region took place only in the sixteenth century.
As they consolidated their state, the rulers of Moscow expended enormous
efforts on establishing their control over the Volga and the adjacent territories.
One after another, the Tatar trading cities – Kazan, Astrakhan and Saratov
– passed under the control of Moscow. Not only were territories being seized
from others; Russia itself was shifting to the east. The Volga was becoming a
Russian river, known as the ‘mother’ and ‘wet-nurse’. Just as a united power had
arisen from the Baltic to the Black Sea during an astonishingly brief period in
the ninth century, a new Russia was now arising. Not only were the lands of the
Tatar khanates being seized, but the Tatar notables, many of them converting to
Orthodoxy, hastening to become integrated into the Russian elite. A significant
number of the boyar families of the seventeenth century had their origins in
the Volga Tatar aristocracy, and many filled important state posts. Contrary
to later ideas, it was during this period that Russians began mingling with
Tatars in a massive way. It was not the Tatar invasion of Rus that led to the
‘Tatarisation’ of the Slavic population. Instead, the rapid shift of Muscovy to the
east was accompanied by the widespread conversion of the local inhabitants to
Orthodoxy, to their Russification and integration into Russian society. Moscow
succeeded not only in seizing these vast territories in a brief period, but also
in retaining them, precisely because the objective needed to maintain order
on the Volga trade route required the unification of these lands under a single
authority. This was no less obvious to the Tatar elite and to the Tatar merchants
than it was to their Russian counterparts. Just as the Roman empire in ancient
times unified the Mediterranean economic space and integrated the peoples
inhabiting it into a single civilisation, Muscovite Rus formed itself as a nation
by establishing a united authority over the river routes.
Like the Crusades and the Spanish conquest of America, Russia’s eastward
expansion was fed by the land hunger of the petty aristocracy. The peasants, too,
appropriated new lands, as they sought to escape the power of the landowners.
Nevertheless, the campaigns on the Volga, despite their success, came too late.
At the very time when the Volga route came fully and definitively under the
power of Moscow, world trade routes were shifting to the West. The discovery
of America by Columbus not only opened a new era in European history, but
also became the starting point for the formation of a world economic system.
After Vasco da Gama had crowned the efforts of Portuguese navigators over
many years by discovering a Western sea route to India, European commercial
capital acquired quite new opportunities for development. The material and
financial resources that were pouring into the West stimulated the growth of
production and, most importantly, allowed entrepreneurship finally to take
shape on a bourgeois basis. The exploitation of hired labour became profitable,
and favourable conditions were established for the accumulation of capital.
Although the ‘prices revolution’ that followed the vast influx of precious metals
into Europe devalued money to a significant degree, the impetus gained by the
Western economy was extraordinarily powerful. The Spanish Habsburgs, despite
their initial successes, failed to transform the nascent world economy into a
world empire. To subordinate the system to a single political authority was
impossible, but bourgeois nations began to take shape. Overall, the global system
started taking on the characteristic features which it has retained into the early
twenty-first century. The nations which were most developed in the bourgeois
sense became the ‘centre’ of the system, spontaneously transforming into their
economic ‘periphery’ the rest of the world to which they had access.
These changes were far from passing Russia by. In the sixteenth century
the Moscow tsardom was developing rapidly, and was engaging actively in
trade. At the same time it fell further and further behind the West, which was
changing even more rapidly. The river routes could not compare with the vast
expanses opened up by seaborne trade. Moscow was running late, and from
now on, as in Lewis Carroll’s Through the Looking Glass, it would have to run
very fast in order to stay where it was. The Moscow rulers were compelled
to answer the challenge of the times. Located in the depths of the European
continent, Russia had no direct access to the new trade routes. Gaining nothing
from the flourishing of European trade that had begun after the discovery of
America, Russia inevitably finished up on the periphery of world economic
development, effectively dropping out of the world economic system that was
taking shape. The late fifteenth and early sixteenth centuries thus formed a
decisive boundary. It was at this time that Russia’s subsequent fate – to struggle
against backwardness and isolation – was determined.
It was not by chance that the slogan ‘Moscow – the Third Rome’ was
proclaimed in 1517. Samir Amin considers this response ‘brilliant’.36 In fact, this
slogan proved just as politically barren as it was entrancing to the imagination.
It served as ideological compensation. The more Russia became in reality part
of the periphery of the world system, the more it sought to declare itself the
centre of the world on the level of culture and ideology.
But in the sixteenth century, the slogan ‘Moscow – the Third Rome’ was not
meant to counterpose Russia to the West. On the contrary, it was an attempt,
despite diminishing opportunities in the real world, to affirm the symbolic
importance of Russia as a leading European power. The slogan traced Russia’s
origins to the same Roman empire to which many Western monarchs (starting
with Charlemagne and the Holy Roman Empire, and ending with the empire
MUSCOVY
Mediterranean had been able to obtain their foodstuffs from the nearby regions.
The goods that were transported from one region to another were the products
of artisanry. With the start of the modern era, by contrast, the demand for
grain increased rapidly. Grain first became a traded commodity on the internal
market, but this new situation was itself linked closely to the general dynamic of
development. The flow of silver from America, and the ‘prices revolution’ that
began in Europe in the sixteenth century, aided the development of commodity
production. The cities were not only growing, and in need of food supplies,
but could also pay for them. As grain became an object of world trade, Russia
followed after Poland in becoming a world exporter. The development of the
Russian grain trade, however, belongs to a much later period, and it is significant
that this would occur against the background of the political and military
decline of Russia’s main rival, Poland. From the middle of the sixteenth century,
Russia was drawn into a prolonged military conflict with Poland and Sweden.
Poland was the leading supplier of grain to the world market, while Sweden
controlled the Baltic Sea, by way of which this grain reached the West. For
Russia, meanwhile, the struggle for the Baltic trade routes at first had nothing
to do with the grain trade. Muscovy had sufficient grain for the development of
its internal market, but not enough to allow the organising of regular exports.
Timber and hemp were a different matter; Muscovy had surplus of both. In the
sixteenth century the Moscow merchants competed with Poland in supplying
raw materials for the growing shipbuilding industry, and this meant that Russia
found itself at the centre of a political, military and commercial conflict that
was convulsing Europe at the time.
Why was it precisely in the sixteenth century that Russia needed ports on the
Baltic? For hundreds of years before this the Novgorodians had had an exit
to the sea, but had not attempted to build fortresses or towns directly on the
shore. Ivangorod was built opposite Narva only in 1492, and exclusively as a
fortress. Control of the coast had a solely military significance. If the Swedes
or Germans were to seize control of the mouth of the Neva, they could shut
off Novgorodian shipping from access to the Baltic, and so bring Novgorod’s
trade under their control. The Swedes made two attempts to do this. It is
significant that both times, the events concerned took place on the territory of
the future St Petersburg. In 1240 they landed at the mouth of the Neva, but
were attacked by the Novgorodians and forced to withdraw. It was in honour
of this battle that the Novgorodian leader, Prince Aleksandr, came to be known
as Aleksandr Nevsky. Sixty years later, however, the Swedish marshal Torkel
Knutsson made a second attempt, sailing into the Neva mouth with a fleet
of more than a hundred ships. This time, the efforts of the Novgorodians to
drive the enemy into the sea were unsuccessful, and the Swedes established the
fortress of Landskrona, as Karamzin notes, ‘seven versty from present-day St
Petersburg’ (a versta being approximately one mile).1 After the Swedish fleet
had departed, the Novgorodians attacked the settlement, and in 1301 levelled
it to the ground.
With the passage of time, however, the position of the Novgorodians was
objectively growing steadily weaker. Between the eighth and eleventh centuries,
river craft had differed little from seagoing vessels. In the twelfth century,
however, the Italians and Germans were building ships with a substantially
greater cargo capacity than those of the Russians and Scandinavians. With the
start of the great geographical discoveries, a new trading fleet began to develop.
The size and capacity of the ships steadily increased. The Novgorodian river
fleet finally became uncompetitive.
In the early sixteenth century, the economy of the Moscow tsardom was
developing much like those of other European countries. In 1534 Yelena
Glinskaya, the mother of the future Tsar Ivan the Terrible, carried out a monetary
reform, replacing the coins of various independent princedoms with a single
monetary system. The conditions were arising for the formation of a common
Russian internal market. Production and trade were growing. The paradox was
that Russia’s economic growth was accompanied by an increasing lag behind
the West. This apparent contradiction arose from the fact that Russia, while
78
new trading power was emerging – England. Britannia had not yet come to rule
the waves, and a major problem facing the development of English commercial
capitalism was the Spanish and Portuguese monopoly of the Atlantic. German
domination of the Baltic, however, was also holding back the development of
English trade. New markets and new sources of raw materials were needed; for
English merchant capital, Russia promised to supply both.
In 1553 three ships set sail in the direction of Norway, officially to search for
a northern sea route to China, Japan and India. The idea was utterly unrealistic.
Even with the help of icebreakers in the Soviet period, a northern sea route
around Siberia and Chukotka could not be established in any serious way. In the
sixteenth century, however, thoughts of opening up such a route to China did
not seem absurd either in England or in Russia. Thirty years after the failure of
the English expedition, the merchant house of the Stroganovs mounted a second
such attempt. In 1584, Dutch seafarers whom the Stroganovs had hired set out
to achieve what had eluded the Englishmen, and naturally met with defeat.
In fact, the English expedition had from the first pursued a far wider range
of goals. Its organisers were looking for new markets, since ‘our merchants
perceived the commodities and wares of England to be in small request with
the countreys and people about us’.3 The ships took with them a message from
King Edward VI, addressed to no less than ‘all kings, princes, rulers, judges
and governors of the earth.’4 This was not just an affirmation of the powers
of the voyagers, who were at once merchants and official representatives of
their country. ‘The letter,’ wrote the British historian T.S. Willan, ‘explained
the mutual advantages of foreign trade in terms which a nineteenth-century
free-trader would have appreciated.’5
Two ships were wrecked, since the crews were not prepared for the conditions
of the far north, and the expedition’s chief, Hugh Willoughby, also died. But
the third vessel, the Edward Bonaventure commanded by Captain Richard
Chancellor, entered the mouth of the Northern Dvina. In February 1554,
Chancellor, in the capacity of an English ambassador, was received in Moscow
by Ivan the Terrible. The tsar granted the Englishmen commercial privileges in
Russia, including the right to conduct duty-free trade throughout the country’s
entire territory.6
After this, Chancellor and his companions returned successfully to their
homeland. A year later, the Muscovy Company was established in London.
The importance of this move is suggested by the fact that this was the first
such company whose founding was confirmed by Act of Parliament. In a
sense, the Muscovy Company was not just the prototype for the commercial-
political organsations set up in order to operate in the West and East Indies,
but also a precursor of the transnational corporations of the twentieth century.
The company’s trading activity was intimately connected with diplomatic
concerns. The English missions to the tsar’s court defended the interests of
the merchants, and the company’s representatives conducted the business of
the English Crown.
Once in Muscovy, the Englishmen did not waste their time. Unlike the letters
of other travellers, the letters written by Chancellor and his colleague John
Hasse read above all like instructions for the commercial exploitation of Russia.
The letters give a detailed description of the economic geography of Tsar Ivan’s
realm, listing what was produced and where, what could be purchased, and what
could be sold in which places. Soon afterwards, the ‘English court’ appeared in
Moscow. At first a single building, this later came to consist of a whole complex
of residential, commercial and industrial structures, the remnants of which
exist in Moscow to this day. A stone building on Varvarka Street was granted
to the Englishmen as a gift from the tsar, ‘as a mark of his special favour’.7 As
Russian sources noted, this did not suffice for the company, and ‘the English
foreigners built themselves wooden mansions’.8 Before long, ‘English houses’
appeared in Kholmogory, Yaroslavl, Borisov, and other towns. The company
had outposts in Novgorod, Pskov, Yaroslavl, Kazan, Astrakhan, Kostroma
and Ivangorod. In Yaroslavl the Englishmen built large storehouses for goods
that were later sent on to Asia. Protestant churches also appeared in Muscovy.
The Moscow rulers were by no means passive onlookers where the Western
reformation was concerned. ‘Since the Russian government was extremely
hostile to Catholics,’ the historian I. Lyubimenko notes, ‘it often showed great
tolerance to protestants.’9
The new trade route was important not only to the English, but also to Muscovy.
In 1556 a Russian diplomatic mission headed by the boyar Osip Nepeya arrived
in England. Chancellor died while delivering him to London, but Nepeya
completed his task, and went down in diplomatic history as having ‘obtained
in London the same benefits as the Englishmen had received in Moscow’.10
Russian merchants, however, were unable to exploit these gains, since they
lacked a fleet able to make long sea voyages. Regular trade along the northern
route began in 1557. At first, these voyages involved numerous sacrifices. Six or
seven ships would set out from England, and at times no more than half would
return successfully. The navigation season was short, since the sea was frozen
for five to six months each year. As the English seafarers gained experience of
sailing in northern latitudes, these voyages became less risky. Nevertheless, the
company complained periodically of losses: Tatar raids, pirates and northern
storms all dealt blows to commerce. The attack on Moscow by the Crimean
Khan Devlet-Girey caused the company losses of the then enormous sum of
10,000 rubles – which also gives an indication of the company’s huge turnover.
Around forty of sixty or so Englishmen then in Moscow perished in the fire. The
Tatar attack evidently made a strong impression on the leaders of the company,
since under Tsar Fyodor the Englishmen contributed £350 to the building of a
new stone wall around Moscow.
The shareholders in the company were repeatedly called upon to make
additional investments – of £50 per share in 1570, and £200 in 1572. However,
they had no intention of shutting the business down. The reasons for this were
not just the high profits that from time to time could be had from the trade with
Muscovy, but also the importance these shipments had for England’s overall
military and political situation. The imports from Russia were comprised of
not only goods from the north, but also strategic raw materials. As T.S. Willan
observes, the Anglo-Russian trade of the sixteenth century ‘was not unlike
that which later developed between England and her colonies’.11 From Russia,
England imported timber, wax, hides, meat, fat, and at times grain, flax, hemp,
whale oil, tar, ropes, and masts for ships. The tsar himself took part in the trade.
As the English acknowledged, he was ‘a great merchant himselfe of wax and
sables’.12 Wax was an extremely profitable commodity: it was used to make
candles, vast numbers of which were needed to illuminate gothic cathedrals.
This allowed the tsar to maintain that wax was not an everyday commodity,
but a holy one that was ‘reserved’, and in which only tsars should deal. For
other Russian merchants this monopoly was a real burden, and also cost the
English dearly, but for Tsar Ivan it yielded extremely well. The tsar demanded
the right of first purchase of goods imported from England, and was slow to
pay. In this, he was no different from his contemporaries; Elizabeth of England
was also reluctant to pay her debts. During the time of the oprichnina, the
English company tried to obtain from the tsar money owed to it by boyars
whom the tsar had had executed. The tsar heard the claims, but did not hand
over the money, recommending that his English partners be more careful in
lending money to Muscovites. Sometimes, on the other hand, even hopeless
debts were returned. During the diplomatic mission of Ambassador Bowes,
Ivan the Terrible suddenly ordered the repayment of 3,000 silver marks which
the company had already written off.
The English brought paper, sugar, salt, cloth, earthenware, copper, lead sheets
for covering roofs, and luxury items to Moscow. In Russian markets, London
cloth became known as ‘lundysh’. Also of importance were exotic goods from
the Americas and Asia which reached Russia through the Muscovy Company. In
the lists of the goods supplied we also find almonds, currants, horse harnesses,
medicines, musical instruments, halberds, jewellery – and even lions. Church
bells and precious metals were also brought in; these were banned from being
exported from England, but by special order of the Crown, an exception was
made for Russia. Particularly important for Moscow was the fact that the
English ships also brought lead, gunpowder, saltpetre, sulphur and, from what
we can tell, firearms.
The Muscovy Company did not, of course, have a monopoly on trade with
the West. German, Dutch, Danish, and even Spanish and Italian entrepreneurs
made their way to Moscow. However, in the sixteenth century it was the English
who managed to raise commercial collaboration to the level of state policy.
In 1557 the English set up a rope-making works in Kholmogory. Vologda
became another of the company’s industrial centres. By 1560, local workers
had mastered the technology, and most of the English tradesmen had returned
home. While in Kholmogory, the English tradesmen were paid at the rate of
£9 a year, of which £2 were invested on their account in England. These were
excellent wages for the time, but the influx of precious metals from the Americas
resulted in high inflation, and not only in Western Europe. Twenty-five years
after the first English workshops had appeared in Russia, a certain John Finch,
citing the price rises, demanded an increase in his wages to 42 rubles a year, some
£28 in English money. As Willan correctly notes, this is evidence ‘that the “price
revolution” had been operating in Russia in the interval’.13 In 1558, Muscovy
Company representative Anthony Jenkinson received permission from the tsar
to mount an expedition to Persia and Bukhara by the Volga route. Although
many of the goods obtained were lost on the return journey, the proceeds were
sufficient in commercial terms to justify the company’s operations for a long
time to come. While Jenkinson was in Persia, he also carried out a diplomatic
assignment from Ivan the Terrible. The Moscow tsar was seeking an alliance
with the Persians against the Turks.
At the dawn of the capitalist era, politics was openly intertwined with trade.
The Azerbaijani scholar L.I. Yunusova observes that Jenkinson’s commercial
success was determined to a significant degree by the fact that he was ‘not merely
an English merchant, but an emissary of the Russian tsar’.14
Jenkinson’s mission initiated a prolonged period of both rivalry and
collaboration between English and Russian capital in the Caspian. Moscow,
and later St Petersburg, needed foreign partners. Much of the trade with Persia
was of a transportation character. The English helped to establish trade routes;
Persian silks, together with other goods, were transported further into Europe
on English ships, and later also on Dutch ships. On the other hand, the partners
waged a fierce struggle with one another. Both were trying to seize the greatest
possible share of the profits from the Persian trade for themselves.
In Persia, Jenkinson obtained commercial privileges similar to those in
Moscow. English expeditions to Persia followed one upon another, in 1564,
1565, 1568, 1569 and 1579. This aroused fears in Moscow, where there was a
reluctance to concede so profitable a trade route to foreigners. The tsar’s court
subsequently took steps to ensure that the Volga trade remained under its
control, and restrictions were placed on the operations of the English in this
area. Commercial expeditions to the south could be undertaken only jointly
and with the permission of the tsar. For all the problems, the Persian trade
was a veritable goldmine for the company. By the early seventeenth century,
however, a simpler and safer route to Persia, via the Indian Ocean, was being
established. The East India Company was starting to transport Persian goods
to the West in significant quantities, lowering the commercial attractiveness of
the Volga route. Nevertheless, trade with Persia through the Caspian continued,
causing Astrakhan to flourish.
PARTNERS OR RIVALS?
Among Russian historians in later years, the activity of the Muscovy Company
became a topic of heated discussion. The nineteenth-century historian N.
Kostomarov turned his attention to the fact that the English merchants
organised around the Muscovy Company had close ties to their government
and acted in concert, often to the detriment of their compatriots who did not
have political support in London. Kostomarov was convinced that the English
had ‘vast ambitions for political domination in Russia’.15 Not surprisingly, this
thesis was also extremly popular among Soviet historians, especially during the
early years of the Cold War.16 A number of Soviet historians set out to show
that in Russia the English had found a backward country, and had ‘set out to
reinforce this backwardness in every possible way’; that they had ‘prevented the
Russians from studying and mastering advanced technology’, and had ‘taken
the path of coercion and blackmail’.17 Historians of the ‘Westerniser’ school,
by contrast, have seen the English merchants as representatives of advanced
civilisation, who brought knowledge to the backward Russian people.18 It was
only in the early 1960s that Ya.S. Lurye attempted to demythologise the history
of Anglo-Russian relations in the sixteenth century.
The activity of the Englishmen in Russia was accompanied by numerous
disputes between Russian and English partners. From the second half of the
sixteenth century to the time of the first Romanovs, complaints about foreign
competition were heard regularly from Russian merchants. In a petition against
the ‘English foreigners’ presented to the tsar’s government in 1646, much the
same objections were voiced as in documents from an earlier period. The
Russians accused the English of manipulating prices, while the English in turn
complained of the unreliability of the Russian merchants, of frequent delays and
of sharp practice. The complaints by Englishmen (and by foreigners in general)
who were in Muscovy in the sixteenth and seventeenth centuries often seem quite
comic. Foreigners thus objected to the fact that they were ‘overfed’, in a clear
attempt to damage their health through excessive hospitality. In Muscovy at
that time it was thought improper for guests not to become so inebriated at the
host’s table that they were incapable of standing and leaving by themselves, and
if next day the guests did not complain of feeling sick from too much food and
drink, the feast was considered a failure. In their dealings with Russian partners,
the Englishmen found that the Russians did not keep their word, ‘and if they
start swearing oaths, they are probably out to trick you’.19 Protestants could not
fail to be astonished by the ability of the Russians to combine sharp wits and
entrepreneurial flair with disorderliness and carelessness, but as Kostomarov
notes, the claims and counter-claims of the Russian and Western merchants
never stopped them from ‘joining forces to deceive the government’.20
In fairness, it should be pointed out that situations always seem more dramatic
in hindsight. Instances in which the various sides part company amicably leave
fewer traces in the documentary record. It is when disputes arise that people
start writing down complaints and appealing to various authorities, furnishing
materials for future historians in the process. Paradoxically, it is the vast number
of complaints, of all conceivable varieties, that testifies to the scope and intensity
of the trading relations between the English and Russians.
In reality, of course, cultural differences were not the main problem. Making
themselves at home in Muscovy, the English began trading on the internal
market, competing successfully with local merchants. The English organised
their own network of suppliers and system of wholesale purchases, providing
credit to producers. This set-up, Kostomarov notes, ‘was advantageous for petty
traders and for the population in general, but ruinous for the Russian wholesale
merchants’.21 The law of mercantile capitalism is that the market is controlled
by whoever has most capital at their disposal. With greater financial resources,
the English were in a stronger position than their Russian rivals.
The actions of the English merchants in Muscovy aroused dissatisfaction
not only in their Russian competitors, but also among numerous merchants
in England itself. There was a belief in London that Russia had a corrupting
influence on the company’s agents. After arriving in Muscovy they quickly
grew rich, built luxurious mansions such as the London shareholders could
not permit themselves, and adopted local customs, keeping servants, dogs and
bears. Like Moscow boyars, they began stuffing themselves with food until their
stomachs ached.22 It was thought in London that Russia led Englishmen astray
through the temptations of excessive freedom, and that after living for a time
in Moscow, they were reluctant to return to Puritan abstinence. Ambassador
Bowes complained openly to Ivan the Terrible of his poverty (‘my pitiful estate
at home’).23 When agents of the company were recalled, they did everything
possible in order to stay. To achieve this, some entered Russian service, and
even converted to the Orthodox faith.
The trade with the English was so important to Ivan the Terrible that he
ordered the boyar Boris Godunov, at that time the rising star of the Kremlin
administration, to take care of them and keep a watchful eye on their affairs, so
as to protect them from Russian bureacracy and corruption. The Englishmen
accepted Godunov as a sort of protector. Conversely, an English astrologer,
known in Moscow as Yelisey Bomeliy, enjoyed particular influence at the tsar’s
court. As well as foretelling the future, he also carried out more practical tasks
for Ivan, preparing poisons for him, and collecting information on boyars
suspected of treason. ‘Bomeliy was so well known,’ writes S.F. Platonov, ‘and
there was so much talk of his powers, that even a contemporary chronicle
from a remote province refers to him in tones of the epic and fantastic.’24 In
the words of the chronicler, the ‘fierce wolf’ Bomeliy was to blame for all the
misfortunes that befell the country during the reign of Ivan the Terrible. The
English stargazer impelled the tsar to show ‘ferocity’ in dealing with his own
subjects, and influenced him to the advantage of ‘foreigners’.25
The question, however, is not how the English acted, but what the Russian
government expected of them. Karamzin is certain that in establishing ties to
England, the government of Ivan the Terrible made use of an opportunity to
‘borrow from the foreigners what was most needed for civic development’.26
Historians note that Ivan gave the foreigners such patronage as to deal ‘great
offence to his subjects, whom he readily humiliated before outsiders’.27 The tsar’s
interest in foreigners, however, was thoroughly practical. In Queen Elizabeth
of England, Ivan sought to find a military and commercial ally.
A STRATEGIC ALLIANCE
The fact that both the English and Russian governments gave preference to
the organised merchants of the Muscovy Company over individual traders,
whether Russian or English, is evidence that both sides were trying to achieve
their goals on the state level. It was quite natural that Queen Elizabeth and Ivan
the Terrible should feel a common interest. If the Swedes and Germans needed
to preserve their commercial dominance in the eastern Baltic, the English, by
contrast, needed to gain access to Russian resources independent of the Riga
and Revel merchants. In just the same fashion, Muscovy also sought to find a
direct outlet to European markets. However, the commercial goals of England
and Muscovy could not be achieved by peaceful means. To understand why the
state intervention by both London and Moscow was so intensive, it is enough
to look at the list of goods the two sides were supplying to one another. The
point is that what was involved was not so much commerce as collaboration in
the field of military technology.
Individual arms shipments might be supplied by private traders, but even
in the sixteenth century, the systematic procurement of military supplies was
coordinated on a state level. Ensuring the effectiveness of this collaboration
was the fact that arms sales were combined with the supplying of military
materials and with exchanges of technology, the sending of experts, and so
forth. Supplies from Russia were a decisive factor in the rise of the English
navy. The collaboration between Russia and England was an element in the
conflict between England and Spain. The Spanish King Phillip II was preparing
to invade England, while Queen Elizabeth was urgently constructing her fleet.
As the historian Ya.S. Lurye notes:
To cut off England and the Netherlands from the raw materials of Eastern Europe would
have meant the destruction of these states. This was the goal that Phillip II was pursuing in
Poland, Sweden and Russia. In the case of Poland his diplomats had only a certain success.
In Russia, they met with complete failure.28
For his part, Ivan the Terrible asked England for military supplies, weapons,
engineers, artillery specialists, and architects familiar with the building of for-
tifications. When the Livonian War began in 1557, rumours flew about Europe
of English weapons in the hands of the Muscovites. Poland and Sweden voiced
protests. In Cologne and Hamburg, embargoes were placed on large shipments
of weapons bought up by Englishmen, since the Germans feared that the
equipment was in fact meant for the armies of Ivan the Terrible. Understand-
ably, Queen Elizabeth denied everything. While reassuring other monarchs that
there was no military collaboration with Muscovy, she also made a point of
speaking disparagingly of the extent of the trade relations, maintaining that
what was involved was a few merchant ships that had sailed into the mouth of
the Northern Dvina almost by chance. The merchants, of course, were peaceable
individuals whose exclusive concern was their commercial profits.
One particular episode shows just how ‘peaceable’ the agents of the Muscovy
Company actually were. At the height of the Livonian War, in 1570, Swedish
privateers attacked English traders who were transporting ‘Russian’ cargoes.
In the ensuing battle the Swedish flagship was boarded and captured by the
‘peaceable merchants’.33 The story of this victory was promptly conveyed to
Moscow by representatives of the company, and brought to the notice of the
Russian authorities.
Nevertheless, Enlgish diplomats throughout Europe sought to refute the
‘rumours’ of military collaboration, and to this end, a special mission was sent
to the continent. Meanwhile, weapons and other items of military technology
suspiciously like those of the English were mysteriously appearing in the hands
of Ivan’s soldiers. In 1558, an agent of the company, Thomas Alcocke, who
had been captured by the Poles, admitted that military materials were being
delivered, but justified himself on the basis that ‘only old, useless weapons
were being supplied’.34 This would hardly have met with the agreement of the
engineer Lock, who boasted in his letters that with his help, the Muscovites had
learnt to make weapons as good as any in Europe. Meanwhile, not only were
English physicians and apothecaries arriving in Russia, but also architects, and
builders skilled in ‘the erection of stone structures’.35 If it is recalled that Ivan
several times wrote to London stating that he needed help with constructing
fortifications, it becomes clear what kind of ‘stone structures’ were involved.
Surviving documents leave no doubt as to what was in the holds of the
Muscovy Company’s ships. They were carrying saltpetre, lead, sulphur and
gunpowder for artillery pieces. Of course, nowhere near all the goods supplied
were of strategic significance. The English, who did not produce wine themselves,
nevertheless sent wine to Muscovy. The consumers there were not demanding,
and the English hence dispatched ‘various spoiled wines, sweet wines, and wines
with a large admixture of cider’.36 They may have sent a great deal else, since by
no means all the deliveries have left traces in the documentary record. ‘Although
the English repeatedly assured other states that they were not supplying Russia
with armaments,’ writes the historian of Anglo-Russian trade, I. Lyubimenko,
‘they repeatedly pointed out to the tsar himself what an important service they
were doing him through their shipments of munitions.’37 Since the munitions
as a rule were had in exchange for wax, for which there was a strong demand
in Europe, there was more to Tsar Ivan’s taking personal control of deliveries
of wax than just his desire to profit from a ‘reserved commodity’.
The collaboration between England and Muscovy was as strategic as it
was commercial. The trade of the sixteenth and seventeenth centuries was
inseparable from war. In opening the route from northern Europe to the mouth
of the Northern Dvina, the English quickly made it attractive to other Western
countries. Russia’s coastal region, however, possessed neither the technology
nor the resources for the building of a substantial fleet. Moreover, creating a
significant fleet in the Russian north was impossible in principle, even if the
English had helped with its construction. This task required more than a great
deal of timber and know-how. Experts could be recruited abroad, as Peter I
was later to do. A strong navy, however, could only be based in large port cities.
The Northern Dvina was too remote from the rest of Russia, and had too few
resources and people, to compete with Riga. In any case, developing trade there
was made difficult by the fact that the sea freezes in winter. Russian goods
flowed for the most part through Revel, which was under German control,
and through the Swedish port of Vyborg. The Muscovy Company was in fierce
competition with these cities.38 To gain access to new trade routes, Russia needed
to establish its commercial position in the Baltic region, and hence the German
merchants, who had been first the enemies and then the leading partners of
the Novgorodians, again became enemies, though this time of Moscow. Russia
needed its own large port on the Baltic, and with the beginning of the Livonian
War, obtained it.
In his work on the origins of the modern world economic system, Immanuel
Wallerstein argues that during the Livonian War, Ivan the Terrible was seeking
to ‘establish autonomy of the Russian state from the European world-economy’.
In this sense the tsar’s policies, which led to the war, were not a failure but
represented ‘a gigantic success’. The result of Ivan’s actions was that Russia ‘was
not pulled into the European world-economy’, allowing the country to retain
its developed national bourgeoisie, and subsequently to become a part not of
the periphery of world capitalism, but of its semi-periphery.39 It is curious how
Wallerstein’s ideas coincide with the official propaganda myth that held sway
in the Stalinist period. The Livonian War was not just a military catastrophe,
but resulted from the desire of the tsar’s government to achieve inclusion in
the embryonic world system at any cost.
At first glance, it might appear that during the sixteenth century Russia’s
integration into the world system was proceeding relatively successfully. As
the Swedish historian Artur Attman notes, Russia maintained a positive trade
balance with the countries of the West. ‘As to the Russian market, since the
Middle Ages and down to the middle of the seventeenth century at least, every
country had to pay its trade deficit with precious metals.’40 On the whole,
Russia’s situation was better than that of Poland, even though both countries
often traded in the same goods (though Poland, unlike Russia, could not supply
furs to the world market).41
Russia’s trade in the sixteenth century was nevertheless a paradoxical
phenomenon. On the one hand, it was marked by a positive balance and by
a constant influx of ready money. In other words, Russia profited from world
trade, and accumulated capital. On the other hand, the structure of this trade
was clearly of a peripheral character. The resemblance which Willan notes
to the American colonies was far from accidental. Russia was exporting raw
materials and importing technology. It was competing on the world market with
other countries and territories that made up the periphery of the rising world
system. This combination of strength and vulnerability lay behind the inevitable
aggressiveness of Moscow’s foreign policy, and its subsequent failures.
In comparing Russia with Poland, and concluding that Ivan the Terrible was
anxious to avoid the Polish fate of becoming an appendage to the European
world system, Wallerstein is profoundly mistaken. The tsar was seeking precisely
the opposite, trying unsuccessfully to seize for Russia the very place which
Poland held in the developing world system in the sixteenth and seventeenth
centuries. Contemporary figures were well aware that Russia and Poland were
competitors on the world market. In the seventeenth century Dutch trade rep-
resentatives in Moscow discussed these questions directly with the tsar, calling
for an expansion of Russian grain exports.
Contrary to Wallerstein’s view, Russia’s rulers were not trying to resist
Western expansion, but were seeking inclusion in the world system – as part of
its periphery, but on their own terms. In the Livonian War, Poland and Sweden,
which, by the mid sixteenth century, already occupied this place in the world
economy, were defending their status.
Initially, the Livonian War went well for the Russian forces. In launching
military operations, Ivan the Terrible made use of an absurd, deliberately
contrived pretext, recalling the failure of the Bishop of Derpt to pay a tribute
of which there had been no mention for 50 years. The Livonian Order had been
undermined ideologically by the Reformation, and its forces were few in number.
Unlike the situation in the conflicts of the seventeenth century, the weapons
of the Russian army were not markedly inferior to those of their Western
adversaries. Also of importance was the presence of English military experts.
The Russians’ artillery and metalworking were advanced for the times, and
allowed the tsar’s armies to score rapid successes during the early fighting. The
Livonian Order suffered a crushing defeat. In May of 1558 the Russian forces
captured Narva, the key port and fortress that opened the way to the Baltic.
For England, the capture of Narva opened up direct access to Russian raw
materials. For the shareholders of the Muscovy Company, however, this was
far from good news, since the northern route which the company had opened
up with such difficulty now lost its attractiveness. After the Russians had taken
Narva, English ships began arriving there. As a port, it did not have much to
recommend it, and the conditions for doing business there were incomparably
worse than in Revel. Nevertheless, it drew in Western traders. ‘As with the
north,’ the American scholar Walther Kirchner notes, ‘it was future expectations
which the merchants connected with its acquisition by Russia rather than the
reality which counted.’42 During 1566 some 42 ships called at Narva, and trade
boomed. Compared with this, the six or seven ships that took the northern
route seemed an insignificant commercial operation. The Muscovy Company’s
monopoly did not extend to Narva, and anyone who wanted to could sail
there. The company protested, complaining that traders who had no experience
of working in Russia were bringing all sorts of rubbish to Narva, and were
undermining the reputation of English goods. In the case of the northern
sea route, authorities in London were completely on the side of the Muscovy
Company, guarding its monopoly at all costs, but in the conflict surrounding
the ‘Narva navigation’ the company was forced to yield. Here the trade had
already reached such proportions that military and strategic considerations
were inevitably overruled by commercial ones.
Queen Elizabeth, who had earlier given her full support to the Muscovy
Company, was now reluctant to move against the Narva traders. The company
had not only been a commercial enterprise, but also an instrument of English
policy in Russia; with the capture of Narva, however, one of England’s key
political goals had been achieved. Of course, this did not mean that the policy
had changed, especially since the compromise that was reached between the
company and its competitors allowed the company to keep its dominant position.
But now, all English merchants could enjoy the fruits of the company’s efforts.
The question of the Narva trade was discussed in the English parliament, and the
monopoly was eventually confirmed. For the company, however, the form which
the monopoly now took represented a Pyrrhic victory in commercial terms.
Prior to the Livonian War, Narva had been less a commercial port than a fortress
blocking Russian access to the Baltic. After 1559, however, the Narva trade
developed rapidly. As well as Englishmen, merchants appeared from Holland
and other countries. Extensive building work began in the city, and business
flourished. In 1566, 98 ships from Narva passed by Riga, while only 35 ships
from Riga itself set off for the West.43 Of English ships alone, no fewer than
70 set sail for Narva in 1567. With Narva in Russian hands, the port of Revel
began falling into decline, and even after the end of the war, Narva continued
to undermine Revel’s position. The other German ports on the Baltic, Riga and
Königsberg, suffered less, since Polish exports were passing through them. The
Swedes tried initially to make up their losses by introducing duty-free trade in
Vyborg for Russian merchants. At the same time, Swedish pirates terrorised
the merchants heading for Narva.44 Not even this, however, could secure the
dominant position for Vyborg.
The commercial goals of the Livonian War had been achieved. In starting
the war, however, Ivan had relied not only on the support of the merchants, but
also on that of the land-hungry nobility. As Pokrovsky writes:
The bourgeoisie was satisfied, and for them there was no point in continuing the war. When
a diplomatic mission from the Livonian Order came to Moscow suing for peace, it found
support among the Moscow merchants. In military circles, however, the successes in the
war had made a quite different impression. The campaigning in 1558 had yielded enormous
booty; waging war in a rich, cultured country was quite different from battling foreigners in
distant Kazan, or chasing elusive Crimeans about the steppes. The landowners now dreamt
of making an enduring conquest of all Livonia, and of dividing up the rich farmsteads of
the German knights. This latter process had, in fact, already begun. But the prospect of the
entire south-eastern shore of the Baltic coming under Russian control brought all of Eastern
Europe to its feet; neither the Swedes nor the Poles could allow this.45
Capturing Revel and Riga would have given Russia the chance to enter
European trade without intermediaries. The Poles could not permit Riga to
fall under the control of Russia, their main competitor on the world market.
An era of trade wars had begun, something for which Muscovy was not ready,
especially in diplomatic and political terms. After overpowering the Livonian
knights, Ivan the Terrible came up against the united forces of Sweden and
Poland, which, despite their conflicts with one another, could not allow a
strengthening of Moscow’s hand. Polish mercantile capital was in the same
situation as its Russian counterpart, and Russian domination of the Baltic
would thus be a catastrophe for Poland. In 1561 the Swedes occupied Revel,
and the Poles annexed a large part of Livonia. Ivan tried to avoid a war with
the Swedes, but it was already too late. Talks with the Swedish King Erik XIV
failed as a result of a palace coup; the Swedish throne was then taken by Johann
III, who categorically rejected any concessions to Moscow.
As Pokrovsky notes, the victories of the Russian forces in the first stage of
the war ‘were ensured only by a colossal numerical advantage; where the Order
could field hundreds of soldiers, there were tens of thousands of Russians’.46
With the entry into the war of Sweden and Poland, the relationship of forces
changed. It was hard enough for Ivan’s forces to cope with the Polish army,
but when the superbly armed, organised and trained Swedish forces – arguably
the best in Europe at the time – appeared on the battlefield, the situation of
the Russians became catastrophic. Prince Kurbsky, the best of Ivan’s military
leaders, was defeated by 4,000 Poles near Nevel despite having 15,000 troops, and
near Orsha in 1564 the Russian army was completely routed. The commanders
were killed, and the enemy captured the cannon and the baggage train. Most
importantly, the morale of the Russian army was shattered. In the coalition
that had supported Ivan’s reforms, a split took place.
THE OPRICHNINA
The tsar’s room for manoeuvre was thus reduced. The Soviet historian R.G.
Skrynnikov notes that:
In a context of foreign policy reversals, the tsar’s allies advised him urgently to impose a
dictatorship on the country, and to crush his opponents through violence and terror. In the
Russian state, however, not a single important political decision could be taken without
the approval of the Boyar Duma. Meanwhile, the position of the Duma and of the church
leaders was well known, and did not bode well for the enterprise.47
Trying to put pressure on the Duma, the tsar left Moscow, and declared
that he had abdicated the throne. Before the country and its people, the tsar
presented himself as the victim of injustice, driven out by the boyars from his
own capital. The Duma was forced to reject the tsar’s abdication, and came to
him with professions of loyalty. Having undermined the political position of
the Duma, the tsar declared that in order to protect his life he was forced to
divide his entire land into the ‘zemshchina’ and ‘oprichnina’. The zemshchina (the
part of Russia which retained traditional administration during the oprichnina)
remained under the control of the Boyar Duma, while the oprichnina was subject
to Ivan’s personal authority. Here everything was organised as if in a separate
princedom. Administration was carried on by appointees of the tsar who
were not of noble background. Low-born courtiers without ties to the boyar
aristocracy were selected for these posts. Foreigners were eagerly recruited.
Made up of such people, the forces of the oprichnina were a reliable weapon
for the tsar in his struggle against internal opponents.
Moscow became the witness to bloody purges. Real and imagined enemies of
the tsar were accused of conspiracy and mounted the scaffold. By Ivan’s order,
the chronicles were corrected in line with the changed political situation, and
stories of boyar conspiracies, written to the dictation of the tsar’s men, appeared
in place of the non-existent investigative materials. The oprichnina, meanwhile,
was not simply a terrorist organisation in the service of the tsar. It signified the
beginning of a major land redivision. On the territory of the oprichnina, boyar
estates began to be confiscated; they would then be used to provide for people
whom the tsar had promoted. In waging war on Kazan and in the Baltic, the
tsar had tried to satisfy the needs of land-hungry nobles and the mercantile
bourgeoisie without infringing on the interests of the old aristocracy. But as
Pokrovsky notes, since the defeats in Livonia continuing on such a course had
been impossible, ‘foreign policy no longer promised either land or money’.48
In Pokrovsky’s view, the oprichnina was the only way out for a government
that had become entangled in its own political manoeuvring. The tsar had twice
attempted to satisfy the petty nobility’s hunger for land, the first time with his
Kazan campaign, and the second time during the Livonian War. In neither case
was the goal achieved. There was only one solution: to expropriate the feudal
aristocracy. What had now begun on the territory of the oprichnina was not
only unrestricted terror against the old boyar families and their supporters,
but also a redivision of the land. In the place of the feudal domains, there
now appeared landowners’ estates of much lesser extent. The domains of the
boyars had been large enough to lead a closed, independent existence, sending
only their excess production to market. The new estates, by contrast, were not
self-sufficient; from the first, a substantial part of their output was produced
in order to be exchanged.
Of all the roads that connected Moscow with the borders, it was really only the roads to
the south, to Tula and Ryazan, that escaped the attentions of the oprichnina. This appears
to have been because the income they yielded in customs dues and from other sources was
not great, and their whole extent lay in the troubled regions of the southern frontier.49
This cannot be explained by a concern for defence, since from a military point
of view it was precisely the unsafe roads to the south that should have received
primary attention. The oprichnina, however, was less a military than a socio-
political organisation. As Platonov notes,
It was not without reason that the English, who were concerned with the northern provinces,
asked to be also subject to the oprichnina, and it was no accident that the Stroganovs were
inclined in the same manner. Commercial-industrial capital, naturally enough, needed the
support of the administration that was in charge of the borderlands, and obviously was
unafraid of the horrors with which we associate the idea of the oprichnina.50
In citing the above comment, Mikhail Pokrovsky makes the additional cutting
remark: ‘There was nevertheless much to be afraid of in the oprichnina, which
this same capital had helped call into being.’51
Skrynnikov also stresses that Englishmen achieved serious economic success
in the oprichnina. Within its territories they were allowed to prospect for iron ore
and to ‘build houses necessary for the production of iron’.52 Moreover, unlike
other regions, in the oprichnina territories there were no limits to the privileges
granted to foreigners. Skrynnikov sees the oprichnina as ‘the first example in
Russian history’ of foreign capital being granted such concessions.53
As Pokrovsky observes, the oprichnina involved the expropriation of the
boyars by the petty nobility, oriented toward commodity production and above
all toward the trade in grain. The oprichnina, Pokrovsky considers, ‘lay in the
natural line of economic development’.54 In this respect, the oprichnina in
Russia under Ivan the Terrible represented a step in the same direction as the
creation of the new gentry in England under Henry VII. Not only were the goals
similar, but also the methods. Henry did not hesitate to wreak vengeance on his
opponents; supporters of the Catholic church were harshly repressed, and the
monks were forcibly driven from their cloisters. But for all their resemblance
to the measures enforced by Henry VIII, the steps taken by Ivan the Terrible
differed in one very important respect: on a political level, they failed. Enacting
reforms within the country, while at the same time waging a doomed war, was
impossible. Ivan transformed the Moscow state, effectively setting it on its feet.
In a context of military defeat, however, it proved impossible to consolidate
what had been achieved.
Meanwhile, the Livonian War was irretrievably lost. Attacks were twice
mounted on the Swedes in Revel, in 1570 and 1577, but each ended in a
crushing defeat. In 1571 the Crimean Tatars reached Moscow, and wrought
appalling devastation on the city. Contemporaries wrote of 800,000 dead and
150,000 captured and enslaved. Even if these numbers are exaggerated, the
events involved were a disaster for a country with a population of no more
than 10 million.
The oprichnina terror took on its ‘pointless and pitiless’ character against a
background of military setbacks and a chronic lack of funds. The expropriations
turned into habitual plunder, to the benefit not only of the treasury, but also of
the oprichnina officials themselves. Discontent grew, and the authorities reacted
by intensifying the terror. The height of the madness was the sacking by the
tsar of Novgorod in January 1570. First the tsar and the oprichniki slaughtered
almost all the local elite, including the women and children. The clergy were
not spared the reprisals. Then the real massacre started. In the words of the
historian R.G. Skrynnikov, the oprichniki
launched an all-out attack on the city. They looted the Novgorod warehouses, and divided
the most valuable of the booty among themselves. The everyday goods such as fat, wax
and flax were heaped in great piles and set on fire. In the course of the pogrom huge stores
of goods meant for trade with the West were destroyed. Not only were the warehouses
looted, but also the houses of Novgorod residents. The oprichniki tore down gates, smashed
in doors, and broke windows. Townsfolk who tried to resist were killed on the spot. The tsar’s
henchmen showed particular cruelty toward the poor. As a result of famine, large numbers
of beggars had gathered in Novgorod. During severe frosts, the tsar ordered them all driven
out beyond the city gates. Most of these people died of cold and hunger.55
Despite the terror, and in significant measure because of it, the government’s
position remained precarious. In his letters of 1567, Ivan the Terrible broached
the question of obtaining political asylum in England, should his enemies
prevail in Russia. He also mentioned weapons, and architects for the building of
fortresses. Still better would be the English fleet, for a war on Poland and Sweden.
Queen Elizabeth promised asylum. The weapons, to judge from everything,
continued to be supplied, though clearly not in the quantities on which Ivan
was counting. However, the queen refused to openly enter the Livonian War.
The cunning and wary Elizabeth, needless to say, would not agree to such a
thing. This was not simply from fear of waging war on two fronts; a conflict
was looming with Spain, and for England, a war in the Baltic would have been
an impermissable luxury. The fleet that would one day rule the waves had not
yet been built, and it was in order to build it that the English needed ropes and
masts from Narva. Elizabeth, in any case, had another reason to be cautious.
However important their interests in Russia, the English were also conducting
an active trade with Poland, and were not about to sacrifice it. London found
the existing state of affairs completely to its liking.
While refusing Moscow’s plea to send the English fleet, Elizabeth did not
totally ignore her partner’s requests. In 1572 at least 16 English sailors were in
Narva on the tsar’s service. Some 130 years before Peter the Great, they were
trying to establish a Russian navy in the Baltic, training people and helping
them to build ships.56
In 1568 the diplomatic mission of Thomas Randolph impressed on the tsar
that while the English would trade with Russia, they would not enter into an
open military alliance. Ivan repeatedly let it be known that he was dissatisfied
with this situation, but he was forced to accept the conditions the English had
imposed, recognising that he had no alternative. In 1569 the privileges enjoyed
by the Muscovy Company were reaffirmed in full. A new rope-making works
was set up in Vologda, and the English began prospecting for metals in Russia,
later undertaking their own mining operations.
In the words of Lyubimenko, the privileges of 1569 were ‘undoubtedly the
crowning point in the history of the successes achieved by the company with
the Russian ruling power’.57 Soon afterwards, problems began. In 1571, with
the military situation in Livonia deteriorating, Ivan again tried to persuade
the English to intervene directly. The tsar complained repeatedly that Queen
Elizabeth was interested not in ‘kingly matters’, but in the ‘mercantile’ affairs
of trade and finances. These complaints were clearly demagogic, since the tsar
did not shun commerce either. But to use modern-day language, the purpose
of such complaints was to shift the centre of discussion from commercial to
political and military questions. Failing in this attempt, the tsar sought to exert
pressure on English trading interests. The privileges were revoked, and English
goods were seized. It is significant that this crisis in Anglo-Russian relations
coincided with a crisis of Ivan’s regime. The tsar, however, was in an unwinnable
situation. In 1572 trade was resumed, on terms imposed by the English.
In 1581 Narva was lost, and along with it the Swedes also captured the old
Novgorodian fortress of Ivangorod. For Moscow, the Livonian War had finally
taken on a catastrophic character. A year later, the privileges enjoyed by the
English in Russia were reaffirmed, but their extent was now more limited.
Ivan the Terrible was again trying to use trade as the grounds for an open
alliance, this time dynastic. He sought the hand in marriage of an English
Tudor princess.58
This idea had been conceived as early as 1568, but only now did it become
the topic of diplomatic talks. Lady Mary Hastings was presented to the Russian
Ambassador Fyodor Pisemsky, but does not seem to have made any great
impression on him. The English procrastinated, and in 1584 Ivan the Terrible
died. The net result of Ivan’s rule had been a lost war in Livonia and internal
disorder. The struggle for the Baltic coast had turned into a complete rout for
Russia, which had been forced not only to relinquish the ports it had seized on
the Baltic, but also to surrender parts of its own territory. Polish forces under
Stefan Batory had appeared beneath the walls of Smolensk, and had almost
captured the city. The Muscovite state had been ruined by war and enfeebled.
In the Baltic, Swedish hegemony had been consolidated for the next century
or so. The Swedes had not only captured the trading centres of the Baltic, but
later, would also seize the thinly populated strip of territory between Narva
and Lake Ladoga. This territory was of no value in itself, but it’s possession
guaranteed the Swedes definitive control of the Novgorodian trade routes.
After its catastrophic defeat in the Livonian War, Russia was at risk not
so much of finishing up on the periphery of the embryonic world system as
of being outside its boundaries. Here was the tragic dilemma of the Russian
state: the only real alternative to peripheral development was isolation and
stagnation.
England, by contrast, achieved its goals, even if its triumph was not complete.
It did not win free access to the Russian market, but during the most difficult
period of its conflict with Spain, it was assured of systematic deliveries of the
materials it required for the navy it was creating. In 1588 Spain’s ‘Invincible
Armada’ was destroyed, and the first decisive step was taken toward the day
when Britain would indeed rule the waves. Nevertheless, Moscow’s defeat in
the Livonian War was also a major defeat for England in its struggle for direct
access to Russian resources. Already in the late sixteenth century, Anglo-Dutch
commercial rivalry was growing more acute. Allies not long before in the war
against Spain, the English and Dutch bourgeoisies began quarrelling over
control of markets. In the course of the seventeenth century this hostility was
to breed unending conflicts, that would three times culminate in war. These
struggles were also played out on the territory of Russia, since the Dutch,
following in the footsteps of the English, were subjecting them to ever-greater
pressure.
The first Dutch vessel entered the mouth of the Northern Dvina in 1578.
This was not yet a serious threat to the English. The Swedes, French, Germans
and even Spanish also took part in the northern trade, but none could seriously
undermine the position of the London merchants. Soon, however, Dutch
merchants fleeing from Danish pirates accidentally discovered a new site for
a port that was better suited than the one used by the English. This landing
place, near the Mikhaylo-Arkhangelskaya monastery, would later become the
city of Arkhangelsk.59 The Dutch asked to be allowed to transfer their trade
there. The English objected, but cound do nothing more, and it was here that
the main port of the Russian north was built in 1583 and 1584.
The port at Arkhangelsk was the best in the Russian north, but it was shallow,
like most Dutch harbours, and ideal for the lighter Dutch ships. The draft of
the English ships was significantly greater, and for the Muscovy Company to
transfer its trade to Arkhangelsk thus involved additional problems. After the
port of Arkhangelsk was opened, the rivalry between the English and Dutch
intensified. Since defending its freedom in the struggle against the Spanish
Crown, Holland had transformed itself into a leading maritime power. At the
beginning of its fight for independence the Dutch bourgeoisie had needed the
support of the English monarchy against their common foe, but subsequently
the two most advanced countries in Europe had become first competitors, then
enemies. One of the arenas for their rivalry was Russia. From Muscovy, the
Dutch imported furs, caviar, hemp, flax, tar, fat, soap, and ships’ masts. English
and Dutch diplomatic missions to Moscow followed one after the other. The
English sought unsuccessfully to block their rivals from penetrating into the
interior of the country. During the English-Dutch wars, both sides tried to
persuade the tsar to ban the supplying of masts – strategic raw materials – to
their adversaries. The government in Moscow preferred neutrality, banning the
export of masts to both of the warring states for the period of hostilities.
Accompanying the commercial rivalry and diplomatic intrigues was an
ideological struggle. Contemporaries wrote that the Dutch ‘tried to belittle
and ridicule the English, drew caricatures of them, and made up lampoons’.60
English representatives in Moscow complained that the Dutch ‘deliberately
placed a false English brand (a tailless lion with three upturned crowns) on their
very worst cloth, in order to discredit British goods, while also spreading all sorts
of libels about England’.61 The most effective means of winning the sympathy
of the Moscow elite, however, was the customary one of paying bribes.
In the course of the seventeenth century the position of the Muscovy
Company grew weaker, while the Dutch merchants strengthened their presence
in the Russian market. A Soviet researcher notes that
Their goods were of higher quality, as the English themselves admitted. The Dutch were
also richer, and were better able to pay bribes, though they resorted to this only in extreme
cases. Their gifts to the tsar, however, were more exotic and luxurious than those of the
English. Finally, they managed from the outset to create for themselves the reputation of
honest and unselfish traders.62
To this, historians often add that the Dutch acted more in a spirit of free
enterprise, while the English were organised around the monopoly of the
Muscovy Company in a commercial and political structure with close ties to
the state. The setbacks suffered by the English in the seventeenth century were
thus the result of the same factors that had ensured their impressive success
in the mid sixteenth century. The Muscovy Company, with its close links to
the royal court in London, was an ideal partner for Ivan the Terrible during
the period when he was preparing for the Livonian War and while the war
was in progress. During these periods, Lyubimenko takes delight in recording,
the English ambassador ‘made so bold as to enter the tsar’s presence without
removing his hat’.63 After the defeat in the war, however, none of this was
important any longer for the Moscow government. So long as Ivan the Terrible
was alive, the earlier relationships continued, but with his death everything
inevitably changed.
On the eve of his death, Tsar Ivan arranged a meeting with the ambassador
of Queen Elizabeth. Appearing in the Kremlin, the Englishman learned that
the audience would not take place. ‘Your English tsar is dead’, the official,
Andrey Shchelkanov, told him abruptly.64 Shchelkanov’s dislike of the English
was by no means a personal characteristic, or at any rate not only a personal
one. Shchelkanov was sympathetic to the Habsburgs, and later, to spite the
English, he provided patronage to Dutch merchants. He belonged to that
faction in the court which had put its stake not on a commercial and political
alliance with distant England, but on joint action with the German emperor
against Turkey.
Russia, even after it had lost the war in the Baltic, was by no means diplo-
matically isolated. But in Europe at that time, a decision to favour the English
Tudors or the Austrian and Spanish Habsburgs was not simply a foreign policy
choice. It represented a choice – an unconscious one, of course – in favour of
the forces of bourgeois reform or feudal reaction. Fortunately for the English,
neither Austria nor in particular Spain was able to offer Moscow anything of
real benefit. The Dutch and Danes, for all their rivalry with the English, had
no wish to strengthen the position of the Habsburgs. Ya.S. Lurye writes:
Even though the social order in feudal-absolutist Spain was undoubtedly closer to that in
the Russia of Ivan the Terrible and Boris Godunov than to that in the Netherlands or even
in England, and even though the participation of English merchants in state administration
seemed to the Russian tsar to be a complete absurdity, Russia’s position in international
politics was objectively less agreeable to the Habsburgs than it was to their opponents.65
When the English lost their political influence, they were doomed to lose their
commercial pre-eminence as well. Under Tsar Fyodor and Boris Godunov, they
were finally stripped of the right to conduct retail trade, and lost the right to
travel through Russia to Persia. The political relations between Moscow and
London under Godunov no longer amounted to an alliance. From then on,
Moscow saw England as only one of a number of possible trading partners,
along with the Dutch and Danes. An alliance with the Danes was especially
important, since it was in Denmark that Moscow hoped to find an ally against
Sweden. To the venal Moscow bureaucrats, meanwhile, the generous Dutch
were far more attractive than the English.
The Troubles dealt Russia’s foreign trade a catastrophic blow, but the merchants
from the Muscovy Company did not abandon the country. In 1612, when
Moscow was captured by the Poles, the company’s head office was evacuated
to Vologda. By this time, Vologda had become an important trading centre.
Here, as I. Lyubimenko notes, a sort of international merchant association
had arisen, uniting both Russians and foreigners.
In the winter of 1608–1609, Russian and foreign merchants were held up in Vologda because
of the siege of Moscow by the Poles. Learning of this, Tsar Vasily ordered his commanders to
organise the defence of the city, in which so many valuable goods had unexpectedly been
concentrated. The foreign merchants, owners of the delayed goods, were also recruited
to the defence effort. People chosen by them were to participate in leading the military
actions, ‘to be as one with the commanders and with the soldiers.’ In this way, a sort of
secular council was set up, running the general affairs of the city.1
In London, it was feared that a victory for Catholic Poland would lead
to the complete loss by the English of their Russian market. At this time a
certain Captain Chamberlain, who had served in the Russian army and had
taken part in battles against the Swedes, sent the English Stuart King James I a
99
proposal to intervene in Russia. The essence of the plan was that English forces
should be landed in Arkhangelsk (where British troops also landed during the
intervention in 1918), in order to defend the northern region against the danger
represented by the Swedes. In the process, the English would also defend their
own commercial interests. If the English forces were successful, they could
continue further south, with the aim of liberating Moscow. The result would be
the restoration of the Russian state, but this time as a protectorate of the House
of Stuart. Chamberlain insisted that the intervention would not cost London
any large sum of money – Russian merchants would pay for everything.
Soviet historians, while taking an extremely negative view of Chamberlain’s
plan, acknowledged that his proposal was indeed based on discussions with
‘certain members of Russian society’, and argued that the English were trying
to ‘exploit the fear felt by members of the aristocracy at the movement of the
oppressed masses’.2 Meanwhile, Chamberlain’s proposal made quite clear that
he was looking not to the aristocracy, but to the merchants. The proposal for
English intervention was an obvious outcome of the ‘defence of Vologda’.
If we consider that in Nizhny Novgorod at this time, the commercial
bourgeoisie on the initiative of the merchant Minin were collecting money in
order to set up a Russian militia, it is not hard to see that the social interests
involved were identical. As Pokrovsky notes, the expedition led by Prince
Pozharsky in 1612 with the goal of liberating Moscow was preceded by the
‘hiring’ of the nobles’ army by the bourgeoisie.3 After a series of catastrophes for
Russian forces over almost 20 years, however, the confidence of the merchants
in the nobles’ army was at a very low ebb. Foreign mercenaries in any case
made up a substantial part of the Russian army, and in military terms, the
most effective part; consequently, the idea of hiring Englishmen seemed very
attractive to the merchants, especially since there were shared commercial
interests uniting Russian and English commercial capital.
The court officials in London treated Chamberlain’s idea of an English
protectorate as the fantasy of an adventurer, though it is significant that they
did not by any means rule out the possibility of intervening. Nevertheless,
too much remained uncertain. The London officials wanted to know in more
detail who it was on the Russian side that was calling for English troops to
be sent, and how representative these people were. John Meyrick, the chief
agent of the Muscovy Company in Russia, was summoned to London, and
then sent back with one of the company’s directors, William Russell. In the
accompanying documents, mention was made of a proposal that had been
addressed to Meyrick the previous year by ‘eminent and powerful figures’
concerning questions of ‘security’, and there was also a reference to the
restoring of peace ‘with the help of our intervention’.4
John Meyrick was completely at home in the milieu of Russian bureaucrats
and merchants. The son of William Meyrick, a leading official of the Muscovy
Company, he had grown up in the English Court in Moscow, spoke Russian
fluently, and had spent a considerable part of his life in the country. He was
therefore an ideal intermediary, understanding and defending not only English
interests, but also those of Russian commercial capital.
When Meyrick and Russell arrived in Arkhangelsk, they found that the
question of sending an English expeditionary corps was no longer relevant;
Moscow had already been taken by Prince Pozharsky’s troops, and Mikhail
Romanov had been chosen as tsar. England immediately recognised the new
tsar, though as a Russian historian notes, ‘the firmness of his hold on the
position seemed doubtful to many’.5
In 1617, England acted as the official mediator in talks between Muscovy and
Sweden. As might have been expected, this task was entrusted to John Meyrick.
For Russia, the Peace of Stolbov that was concluded as a result of Meyrick’s
shuttle diplomacy was extremely burdensome but absolutely necessary. The
Swedish claims – ‘imprudent’, in the view of the English – were rejected, but
Russia finally lost its access to the Baltic, with the Swedes taking possession
of the sparsely populated but strategically important strip of land between
Narva and Vyborg. For England, the Peace of Stolbov was unquestionably
favourable. ‘Having established trade relations with Sweden by way of the
Baltic Sea’, Lyubimenko writes,
and with Russia by way of the White Sea, England could now carry on this trade under the
old, favourable conditions, receiving from both countries the naval supplies needed by the
Admiralty for the construction of the English fleet – hemp, ready-made ropes, timber for
masts, pitch, and a multitude of other goods. During the sixteenth century receiving these
valuable supplies had aided in… victory over the Spanish ‘Invincible Armada’, but they were
no less necessary in the seventeenth century as well, since a struggle was looming with
England’s other seaborne rival, the mighty maritime power of Holland.6
on Sweden. This opened the way for a new military and political alliance, with
the initiative this time coming from England.
The Thirty Years’ War immediately dealt a blow to the traditional markets
in which the English had traded. Following the defeat of Muscovy in the
Livonian War, the bulk of Russian raw materials had reached the West through
Estland, by way of the Swedish-controlled ports of Revel and Narva. The war,
however, dramatically increased the difficulties of this situation. The demand
for shipbuilding materials from the east rose sharply, while the supplies were
under threat. Analysing English documents of the years 1618–22, Soviet
historians found that in London the position had been regarded as critical.
The war cut England’s traditional trade ties with the Baltic region, and made importing raw
materials more difficult. From the earliest stage of the conflict the Estland market, which
had been the main supplier of hemp, pitch and sailcloth for English shipbuilding, suffered
enormously. The shortage of raw materials also had a severe impact on the English linen-
weaving industry, not to speak of a dramatic reduction of exports of grain from Germany
and the Baltic region. The English commercial bourgeoisie tried to make up for the curtailing
of the Estland market by expanding their trade links with the Russian state. Consolidating
their position on the Russian market became a question for them of life or death.7
Russian ones. In this fashion, Russia would later be drawn into a whole series
of military campaigns, some of which even made Russian arms famous. In the
years 1622–24, however, Moscow showed caution. The treaty was not signed.
As Meyrick had predicted, the reorganisation of the Muscovy Company was
not crowned with success. The competition from Holland was not overcome,
and increasingly the company fell apart into individual enterprises. There
was dissatisfaction in Moscow, too. ‘The number of Englishmen trading in
Moscow increased, while the possibility of exercising control over their activity
diminished. Customs revenues shrank, since the ambassadorial office began
to issue charters for duty-free trade to all foreign merchants.’9
The latter move was not so much the result of an attachment to free trade
on the part of the Russian functionaries, but rather the result of the chaos
and perhaps corruption that reigned in the Moscow bureaucracy. The effective
disintegration of the Muscovy Company deepened the confusion. In 1635 it
became necessary to conduct a census of foreign merchants, and among them
were discovered an inordinate number of ‘illegals’, said to ‘conduct trade and
purchase houses without the authority of the tsar’.10 High-placed officials
wrote threatening letters demanding explanations as to how such ‘licence’ had
come about, and to know who in Moscow had illegally issued authorisations, if
these had indeed been given out. As might have been expected, these enquiries
yielded no serious results, and the confusion surrounding the customs duties
did not cease either. In October 1638 the utterly bewildered officials in the
Ustyug customs house sent a letter to Moscow asking for the situation to be
clarified, but in the capital it took two years to compile a list containing the
names of 23 merchants who had the right to commercial privileges. This was
despite the fact that all 23 names were listed in English documents that had
long been present in Moscow.
In the same year, 1638, the English for their part complained that senior
local officials ignored the charters granted by the tsar, levied taxes illegally
and, when the merchants refused to pay, inflicted ‘even worse violence’ on
them.11 Eventually, a new investigation followed. On orders from the capital,
an enquiry was conducted. Local functionaries were interrogated and rebuked.
But of course, there were no changes of any consequence.
The Englishmen nostalgically recalled the days of Ivan the Terrible, when
order had been maintained in the country with an iron fist. On ascending to the
English throne, Charles I wrote to Moscow and requested that the tsar appoint
a special protector to safeguard the rights of the English residents, recalling
that under the late Ivan IV this role had been played by Boris Godunov. In the
court of the Romanovs, the reminder was clearly out of place.
In England itself, political conflict was increasing. Unlike the Tudors, the
Stuarts were unwilling to defend the interests of the bourgeoisie as their own.
The court was becoming oriented more and more toward the Catholic feudal
powers, while the bourgeoisie were zealous in their support for the Protestants.
As a result, England not only failed to play a serious role in the Thirty Years’
War, but was also unwilling to support Russia’s entry into it. Meanwhile,
Moscow was not yet capable of defeating Poland unaided. In 1632, Charles
The decline of Anglo-Russian trade in the seventeenth century was not due
solely to politics. ‘There is no doubt,’ writes I. Lyubimenko, ‘that the execution
of Charles I was merely a pretext that was seized upon by Aleksey Mikhailovich
in order to abolish the privileges enjoyed by the English, privileges that…
cut across his entire economic policy.’13 Significantly, the restoration of the
monarchy and the crowning in England of Charles II (who even paid off his
father’s debt to the Muscovite tsar) did nothing to restore the privileged position
of the English merchants in Russia. The decline of Anglo-Russian relations
had two causes. First, the English lost their positions under the pressure of
competition from Holland. Second, in the mid seventeenth century the whole
character of Eastern European trade was transformed, and this could not fail
to make a decisive impact on Russia’s relations with the West.
As Lyubimenko observes,
The Dutch, who were trading in Russia as separate small companies, skilfully exploited
the problems of the English. The capital they had invested in Russian commerce was
calculated in 1642 at two million florins, that is, around four hundred thousand rubles.
It was thus about three times the sum the English had invested, and subsequently, this
difference kept growing.14
With substantial funds at their disposal, the Dutch were ready to pay high
customs duties, and hence were much more suitable partners for the Muscovite
bureaucracy, which was acutely short of money throughout the seventeenth
century. To Muscovy the Dutch merchants brought silver and gold (including
coins), cloth, and weapons and munitions, including muskets, gunpowder and
shot. They also helped with the hiring of officers for the tsar’s forces. There
were Dutch courts in Moscow, Kholmogory, Vologda, Arkhangelsk, Ust-Kola,
Yaroslavl, Novgorod and Pskov. The normalisation of relations with Sweden
also led to competition from Swedish and German merchants, who made use
of the old Novgorodian trade routes through Revel and Vyborg. The privileges
which Ivan the Terrible had granted to the English were the result of a strategic
partnership which now belonged to the past. Russian commercial capital was
now developed enough to play an independent role, the treasury needed funds
which it had been receiving in inadequate amounts because of the duty-free
trading of the English, and the Dutch had established direct links with the
Russian merchants. The desire of the Muscovy Company to keep its privileges
in the changed circumstances brought it into conflict with a united front made
up of Dutch and Russian commercial capital, at a time when the Kremlin
bureaucracy no longer viewed England as a political ally.
Still more important were the changes that had occurred in the world
economic system. The victims of these changes included the countries of
Eastern Europe and also the Muscovy Company, which had been founded
in a different age.
It was the Dutch who began to play the leading role in the international
relations of seventeenth-century Muscovy. They also became the country’s
main source of up-to-date technology. Dutch construction engineers built
fortifications in Moscow, and with their help the Russian capital began its
gradual transformation from a wooden city to one of stone. Dutch builders
and architects were also recruited to work in two other important port cities,
Arkhangelsk and Astrakhan.
For Holland itself, the trade with Russia might have seemed at first sight
to have been of secondary importance. In the number of ships involved and
their tonnage, the ‘Russian route’ was clearly less impressive than Holland’s
seaborne trade with Western Europe. Against a background of Dutch colonial
trade, however, Muscovy appears in a quite different light; 20 Dutch ships a
year were setting off for Russia, and only seven to India.
The first half of the seventeenth century was not only a time of military
and political conflicts, but also a period when economic growth in the West
slackened, and commercial competition grew more acute. From being allies,
England and Holland became fierce enemies; Germany was devastated by the
Thirty Years’ War; and Spain, despite the split in the ranks of the anti-Habsburg
coalition, fell increasingly into decline. The British historian Eric Hobsbawm
describes this siutation as ‘the crisis of the Seventeenth century’.15
By the early years of the seventeenth century, the economic upturn which
Europe had experienced since the late fifteenth century had exhausted itself.
Everything was now placed in doubt – organisational structures, the method
of rule and the dominant ideas. The state was changing in the most radical
fashion of all. In England and Holland a parliamentary regime was taking
shape, while in France the Bourbon dynasty was creating the model of an
absolutist monarchy resting on a centralised bureaucracy. During the next
century this system would serve as a model for most European countries,
including Russia. Military reforms were going ahead as well; the feudal militias
and detachments of mercenaries were being replaced by regular armies. In
economic policy, no less important changes were occurring. As in later ages,
the market could not solve the accumulating problems by itself. King Edward
VI, when sending Chancellor and his companions on the northern expedition,
had entrusted them with a message extolling free trade. In the Europe of a
century later, quite different ideas held sway. The state was beginning to play
a far more active role in both trade and production.
These changes, however, were not occurring spontaneously. The state was
changing as a result of wars, uprisings and revolutions that were taking place
against a background of almost permanent economic crisis. Europe was
being shaken by political and social conflicts – the Fronde in France, and the
revolution in England. Turbulent events were also unfolding in Russia, where
political disorders had not by any means come to an end with the installing
of the Romanov dynasty. In 1648 Moscow was shaken by a new political
crisis. Then followed a reform of the church that split the country into two
camps. In Hobsbawm’s view, one of the causes of the economic crisis of the
seventeenth century was the poverty of Eastern Europe, which was unable to
buy Western commodities in large enough quantities. This is not, of course,
to speak of luxury goods; ‘the future industrialist required not an infinite
willingness to keep scores of chefs, stucco artists and perruquiers employed,
but mass demand’.16 In reality, demand for Western manufactured goods and
technologies grew in Eastern Europe during the seventeenth century, especially
in Russia. The political disorders merely increased this demand, since weapons
were being energetically exported from Western countries to the East. The
actual source of the problem lay in the West itself.
In the sixteenth and early seventeenth centuries, the countries of the West
had a trade deficit in relation to their Eastern European partners, just as they
did with the countries of Asia. This deficit was financed by the American silver
that was coming onto the European market in vast quantities. Around 1620, the
flow of silver from the Americas started to dry up. This meant that commercial
relations between Western and Eastern Europe inevitably had to change. In
the mid seventeenth century the West could no longer use silver to pay for the
goods that were being exported from Poland, Livonia and Russia. European
manufacturers enjoyed no special demand in Asia, from which highly valuable
A NEW COMPETITOR
Early in the seventeenth century, the first English colonies were established in
North America. As T.S. Willan correctly observed, the functions performed
by England’s trade with Russia recalled those fulfilled later by trade with the
American colonies. The settlers were able to supply the same goods, only
in greater quantities. As a result, the importance of the northern sea route
diminished. Risky and expensive, this route had been justified above all by the
access it provided to strategic raw materials. Now, these materials were coming
from America. With the appearance of the French colonies in Canada, a stream
of furs also poured into Europe. Furs were also coming from the English
colonies. The Muscovite goods that had been exported via the inconvenient
northern route were simply unable to compete with those from America.
From the mid seventeenth century, all the countries of Eastern Europe
suffered a deterioration in their terms of trade with the West. An unfavourable
balance of foreign trade became the norm. The goods exported from Eastern
Europe were cheap, while those imported were expensive. For Russia, however,
an unfavourable balance of trade with the West finally became typical only
around 1700 – in other words, only when the country, under the power of Peter
the Great, turned its face fully toward Europe.
The constant worsening of the terms of trade required that this trade be
just as steadily expanded. The less silver and gold could be imported from
Western countries, the greater the difficulty in gaining access to foreign technical
knowledge, and the greater the volume of raw materials that had to be exported.
Dependence on foreign markets and technologies increased, and the need to
absorb Western civilisation came to be felt more acutely.
on the periphery of the emerging capitalist world system, the Russian entre-
preneurial class were highly active in seeking to exploit the opportunities that
were opening up. But they could not manage the same levels of accumulation
as the bourgeoisie in the West.
In Muscovy, everyone – tsars, boyars and monasteries – was engaged in
trade. The local merchants were by no means the leaders in taking advantage
of the new market opportunities that had opened up as the local and world
economies changed. The merchants did not act as a new force opposing the
traditional elite and the state, but as their business partners, and junior partners
at that. The relationship that arose between Russian and foreign merchants
was no different.
Following the blows dealt by the Time of Troubles and the ensuing
depression, the merchants took many years to recover. The crisis of the
seventeenth century took its toll on Russian trade, as the data on the numbers
of merchant companies testify:
Toward the end of the sixteenth century the gostinaya sotnya had numbered 358 people;
in 1649, the figure was 171. The numbers in the sukonnaya sotnya also declined; in the late
sixteenth century there were 250 members, and in 1649, only 116.18
Not surprisingly, the Russian merchants had mixed feelings where foreigners
were concerned. On the one hand, the Dutch and English had far more capital,
and were able to put pressure on their Russian competitors. In Arkhangelsk
they controlled everything, and in Moscow as well their position was very
strong. Russian petty traders were jealous of the foreigners, and from time
to time complained to the authorities about them, hoping that government
intervention would alter the logic of the market. But Russian entrepreneurship
could not develop without the participation of foreign capital, and as time
went on, the dependency on this outside capital increased.
From 1617 the Muscovite merchants repeatedly appealed to the government
to open the door a little wider to foreign capital, since Russians needed to
learn ‘crafts and trades’ from the foreigners (with variations, this theme would
be repeated in an enormous range of documents, letters and articles over
the centuries). The success of the foreign entrepreneurs in Russia, however,
soon provoked alarm in the local merchants, and calls for the broadening of
free trade were replaced by the demand for protectionism. Contradictions
of this sort are typical of peripheral capitalism. On the one hand, it cannot
exist without the centre; that is, foreign influence provides it with the stimulus
necessary for development. But, on the other hand, the more that peripheral
capital develops, the greater its need to protect its own interests, or at least to
obtain better conditions for itself.
In the sixteenth century and the first half of the seventeenth century,
state regulation of business activity was not especially marked, but by the
middle of the seventeenth century the situation was changing. According to
the American historian Richard Hellie, ‘Russian homo economicus was quite
capable of adapting and innovative on his own’; consequently, Hellie maintains,
a strong and economically active state was not only unnecessary, but would
have been counterproductive.19 Hellie clearly views the seventeenth-century
Russian economy through the eyes of a late twentieth-century neoliberal, and
even repeats with hindsight the same arguments: if the tsar’s government had
implemented privatisation and liberalisation (in accordance with the latest
recommendations of the International Monetary Fund), Russian history would
have unfolded in brilliant fashion. However, it is not only the Muscovite rulers
and merchants of the early Romanov era who would have disagreed with
such conclusions, but also their contemporaries in England or in the North
American colonies. The second half of the seventeenth century was a period
when the economic role of the state was growing everywhere. To later liberal
historians, the rise in Muscovy of a ‘strong’ and economically active state
appears to have been associated with continual foreign threats. Formed in
order to resist hostile encirclement, this ‘strong state’ in the view of these
historians later became self-sustaining, smothering the economy and stunting
the development of Homo economicus (that is, the bourgeoisie). However, the
Russian state in the seventeenth century was guided by the same principles as
those of its Western neighbours. Authoritarianism was growing throughout
Europe, as part of the very process of modernisation. A modern bureaucratic
apparatus was taking shape, armies were being reformed and expanded, and a
military-industrial complex was emerging (artillery workshops and shipyards
were being built, weapons were being standardised, and army uniforms were
being introduced). Russia was constantly at war, but its Western neighbours
– Sweden, Poland, France, England, Austria and Holland – behaved in exactly
the same fashion. From 1630, the wars that Muscovy undertook were offensive
in character. The main aim of these expeditions was to win access to markets
for the very same Homo economicus to whom the government, in the view of
later scholars, was proving such a hindrance. In other words, not only did the
‘strong state’ pose no obstacle to the development of entrepreneurship, but, on
the contrary, it also served the entrepreneurs’ interests. Private capital needed
just such a state, and supported it in every possible fashion.
Like most European countries, Muscovy in the mid seventeenth century
was guided in its economic policies by the principles of mercantilism. In
essence, mercantilism was a response to the prolonged crisis that had seized
most European markets. Confidence in the advantages of free trade was being
replaced by hopes of state support. From this time on, governments everywhere
would strive to ensure a positive balance of foreign trade, encouraging the
inflow of silver to their countries and trying to prevent its outflow. Along
with most Western countries, the Muscovite state set out to achieve this goal
using two methods. First, it sought to stimulate production; above all, in those
sectors for whose output there was strong demand in other countries. Second,
it increased the customs duties on foreign goods brought into the country.
Foreigners were denied permission to deal on the internal market, and the state
encouraged local capital, aiding the formation of commercial monopolies.
The Muscovite tsars were guided by the same principles as the ‘Sun King’
Louis XIV, who appointed the famous Jean-Baptiste Colbert, the theoretician
Astrakhan, or Europeans further than Arkhangelsk. The result was that the
Arkhangelsk trade grew without let-up. In the mid seventeenth century, 30–
40 ships were arriving in the city each year; in other words, the volume of
navigation had increased by around seven times in the space of a century.
At the same time, the northern trade was also continuing through Ust-Kola,
another port that had begun to operate in the time of Ivan the Terrible. In
addition, it was also in the seventeenth century that trade began with China
by way of Siberia.
Nevertheless, the peripheral position of Russia in the nascent world system
meant that in the seventeenth century, the Russian state could no longer
get by without foreigners. The mercantilist policy of encouraging the local
bourgeoisie made it possible to ensure that Russian entrepreneurs enjoyed
the most favourable conditions within the framework of this system, but the
main centres of capital accumulation were in the West. S.F. Platonov notes
that after the Troubles, the influence of foreign capital in Moscow increased
substantially.
Amid the general impoverishment of Moscow, foreign capital was the main force in the
Russian market, and as the Moscow government sought to survive the economic crisis, it
was inevitably obliged to forge close links with foreign commerical interests. The foreign
merchants became the managers of Russian trade circulation, and the suppliers of silver
(even of Russian coins) for Muscovite commerce. They took such a dominant position
in Muscovite commercial life that the local merchant class began insistently seeking
government protection, eventually winning some restrictions on the commercial privileges
which the foreigners enjoyed.21
Moscow needed Western technology, and following after the technology came
Western capital. The government, in full accordance with the requirements of
mercantilism, supported the building of factories, but the local merchants were
not ready to make use of the fruits of this policy. As A.D. Kuzmichev and I.N.
Shapkin note in their history of Russian entrepreneurship, ‘It was only later, in
the early eighteenth century, that Russian merchants began to be drawn into
the risky and unfamiliar business of manufacturing.’22
The state, by contrast, collaborated actively in the establishing of industry.
In the area of foreign trade, the government had organised a system of official
monopolies that succeeded in filling the tsar’s treasury, but in industry the
government acted as the principal customer. Even Richard Hellie, profoundly
convinced that only private enterprise can yield positive economic results,
is forced to acknowledge that ‘the state was the prime innovator in the
economy’.23 It was the state that implanted new technologies, and at the
same time, new capitalist relations (though in specifically Russian forms). As
Pokrovsky observes:
For the first time, tsarist commerce took on the character of a large commercial enterprise.
The industrial establishments of the tsar and his court were among the first examples of
large-scale industry in Russia. Second place behind the tsar in the founding of mercantile
capitalism in the Muscovite state was taken by the foreigners; apart from the tsar, they were
our first factory-owners and major manufacturers. Like the foreign merchants, the foreign
industrial entrepreneurs acted under the constant protection of the tsarist authorities, and
in close alliance with them.24
– the use of bonded serf labour in industry. This decision had far-reaching
consequences. State enterprises soon came up against the same problem as
the foreign investors; in Muscovy in the 1630s a shortage of free workers was
being felt from time to time. The government followed an already well-worn
path; for almost a century, numerous resolutions would be adopted and decrees
issued broadening the use of serf labour in industry. The culmination of this
process was a decree of 18 January 1721, which gave industrialists permission
to buy whole villages for attachment to factories. At the same time, landowners
acquired the possibility of setting up factories, to be worked by serf labour,
on their estates. Pokrovsky describes this as the beginning of a ‘capitalism of
the landowners, of the serfholders’.26 It is significant that after the foreigners,
the next to set about establishing factories were not merchants but boyars.
A relative of the tsar, Ilya Miroslavsky, and the sovereign’s favourite, Boris
Morozov, were both involved in producing metalware, but their businesses did
not prosper. In 1656 Miroslavsky sold his factory to foreigners for 1,000 rubles,
while Morozov’s enterprise reverted to the state after his death.27
As early as the seventeenth century, a situation typical of Russia’s subsequent
development had thus been established: technological modernisation was not
only associated with serfdom, but rested on it, while the strengthening of the
country’s military might was linked to dependency on foreign capital, which
benefited directly from the state’s efforts.
Foreign capital also established an international postal service in Muscovy.
In 1663, Johann von Schweden founded a postal company which organised the
regular dispatch of letters to Western Europe. A letter to Berlin took 21 days to
arrive. In Soviet times, a letter to West Berlin also spent 21 days en route, but
the delay was of course occasioned by the efforts of the intelligence services
to study most if not all of the communications sent abroad. State officials in
pre-Petrine Russia were not, of course, above such practices either, and the
German postal company collaborated with the tsar’s administration in these
matters. All foreign letters were unashamedly opened in the ambassadorial
offices. It is noteworthy that foreigners who visited Russia at this time took
an approving attitude to this system, seeing it as proof that the Moscow
government took an interest in international events. As Pokrovsky remarks,
the notion of ‘confidential correspondence’ was then quite alien not only to
people in Moscow, but also to their foreign teachers.28
By the seventeenth century, Russia’s lag behind the West was especially marked
in the area of metallurgy. Not a single blast furnace was built in Muscovy prior
to 1636, although the first such installation had appeared in the West in 1443.
On the periphery of the trade routes, Russia was also on the sidelines of the
technological revolution of the fifteenth and sixteenth centuries; this in turn
was responsible for the country’s dependency on Dutch and English partners.
Mercantilist ideology demanded that the transfer of technology be accelerated,
and Western entrepreneurs were compelled to share their knowledge. In 1647,
under pressure from local capital, the government transferred the Tula works
to Russian entrepreneurs, but, as Lyubimenko notes,
in Russian hands the works fell into decay, and in 1648 the factories were returned to the
Dutch for twenty years. Soon afterward, the Protvino works on the Kaluga road were handed
over for fifteen years, and also the Ugodsky works in the district of Malo-Yaroslavl. With
the exception of the state-owned Pavlovo works, the entire industry of iron metallurgy
thus became concentrated in Dutch hands.29
The delay in development that resulted from the shifting of trade routes (first in
the twelfth and thirteenth centuries, and later in the sixteenth and seventeenth
centuries) not only brought about a ‘lag behind the West’, but also caused
Russia’s social evolution to follow a qualitatively different trajectory. These
Eastern ‘peculiarities’ were the consequence not of isolation from Western
Europe, but, on the contrary, of the economic and political bonds that had
been forged with the West. The more actively Russia was drawn into the world
economy, the greater these ‘specific differences’ became.
It was in no way accidental that the ‘second wave’ of enserfment to which
peasants in Eastern Europe were subjected proceeded in parallel with the
establishing of slaveholder plantations in the Americas. The most active
slaveholding relations generally arose where a dynamically developing capitalism
experienced precisely this need. Robin Blackburn in his history of slaveholding
shows that the three most advanced countries of the West – Britain, Holland and
France – also played the decisive role in establishing the slaveholder economy
in the New World.
Nor was it by chance that Holland, the most advanced bourgeois country during
the seventeenth century, also led the development of the slave trade. During the
period 1640–1750, slaveholding developed rapidly. The number of slaves rose
apace, and in a number of Caribbean colonies their number came to exceed the
figure for the white population. The first instance of this was on the British-
controlled island of Barbados in 1645. Later, slavery began spreading quickly.
‘Spain, the first and still the largest colonial power in the New World, ranked
only fourth as a slaveholding power. Britain and France, which had no slave
colonies in 1640, now possessed the most flourishing slave plantations in the
New World.’1 The nature of the plantations changed as well; they became larger,
and more commercial in their orientation. ‘The breakthrough to large scale
plantation was made by British and French planters, backed by independent
Dutch merchants in the Caribbean around 1640–1650.’2 Gold mined by slaves
in Portuguese Brazil was sent to the markets of London. Cotton and sugar
were processed in France. Without European demand, the colonial plantation
economy could never have developed. Meanwhile, Blackburn notes, the cheap
colonial raw materials ‘helped to make possible an enclave of accumulation that
employed wage labour’.3 The forced labour of the slaves on the plantations was
an element in the primitive accumulation of capital.
115
For some time, only the Swedes had been able to move goods into the North
Sea by way of the Sund strait without paying duties to the Danish Crown. When
Sweden captured the city of Malmö on the eastern shore of the strait, Denmark
was finally transformed into a second-rate power. Meanwhile, the mouths of
numerous German rivers and the trading cities of Livonia were controlled by
the Swedish monarch. Only Swedish merchants, however, were allowed to trade
through the Sund without paying duties, while German merchants from Riga,
despite living under the Swedish Crown, did not enjoy this privilege. Riga was
the largest city in the Swedish kingdom, and the government in Stockholm was
extremely wary of the ambitions of its German subjects.
At the same time, the price of grain was rising in line with world demand.
In 1606, one last (1.92 tons) of rye had cost 16 guilders in Danzig; by 1622 the
price had risen ten-fold. After transport costs and the Sund duties had been
met, the price was even higher. In Amsterdam in 1628, a last of grain cost as
much as 250 guilders.
Russia was clearly of enormous interest to the Dutch. By putting large
quantities of rye on the world market, Russia could drive down the price.
In addition, the route from Arkhangelsk to Amsterdam bypassed the Sund
strait. This made the route commercially attractive, despite all the difficulties
of navigating the northern waters.
The Dutch representative in Moscow, Isaak Massa, prepared a memorandum
for the tsar on the grain trade. In 1630 a diplomatic mission from the Netherlands
appeared in Moscow, charged with concluding a special agreement on grain.
From the tsar, the Dutch sought a monopoly on the export of Russian rye, even
offering to plough up unused lands and to carry on production themselves.7
The tsar’s government, however, was not to be satisfied with levying export
duties. Before it was the example of Sweden, where the trade in grain was
concentrated in the hands of the state. The Kremlin functionaries immediately
drew up their own plans for establishing a tsarist grain monopoly. At the same
time, they began trading with the Dutch, putting an end to the excessive prices
before which all the horrors of the Sund duties faded into insignificance.
The plans of the Dutch were not realised, but a start had been made. Russian
grain began moving westward in increasing quantities.
Grain had also been exported from Russia in the sixteenth century, especially in
years when there was famine in England. In this case, Russian rye was exchanged
directly for silver. When there was famine in Muscovy, by contrast, the English
imported grain to the country. This was the case particularly in 1571, when
Russia was affected by a serious crop failure. In the early seventeenth century
about 200,000 chetverti (quarters) of grain were exported annually by way of
Arkhangelsk. In the 1630s grain began to be exported to Sweden in significant
amounts. The shipments of Russian grain to Sweden in 1632 were related to
military collaboration between the two countries; both Russia and Sweden were
at war with Poland, and the Russian grain was in effect exchanged for weapons.
Russian rye also went to Amsterdam. After the tsar had established a monopoly
on the trade in grain, the main concern of the government was to prevent prices
from dropping. The grain exports brought the treasury huge revenues, but by
the late seventeenth century the state had abandoned its grain monopoly for
the sake of an even more profitable business pursuit. Selling grain abroad, it
turned out, was less advantageous for the treasury than distilling it into vodka.
The exporting of grain passed into the hands of private capital.
In order to become an export commodity, grain had to become an important
commodity on the internal market. This occurred as early as the sixteenth
century. The processes unfolding in Russia in this instance differed little from
those taking place in Europe as a whole.8
In Russia in the seventeenth century changes were occurring that aided the
development of the grain trade. If access to external markets was limited for
the time being, on the internal market the trade in grain was expanding rapidly.
It was by no means accidental that the increasing production of grain for the
market went hand in hand with the imposing of serfdom.
Analysing the development of capitalist relations in Eastern and Western
Europe, historians have discovered that serfdom not only failed to disappear
beneath the pressures of modernisation, but on the contrary, strengthened its
position. This in no way testifies to the weakness of capitalist development;
market relations and private entrepreneurship were developing in parallel with
the enserfment of the peasantry. Moreover, and like slavery in the Americas,
serfdom stimulated the development of market relations and entrepreneurship.
‘This remarkable growth in the use of unfree labor along the periphery of
an expanding Europe,’ notes the American historian Peter Kolchin, ‘stood in
marked contrast to its continuing decline in the more economically advanced
nations of Western Europe.’9 In Kolchin’s view, ‘both slavery and serfdom were
labor systems that served to maximise the master class’s access to market’.10
Kolchin also maintains that in the Russian countryside under serfdom,
labour relations were even closer to the capitalist model than they were on the
American plantations. Compelled to serve the tsar, landowners in seventeenth-
and eighteenth-century Russia could not live in the countryside. They thus
depended entirely on managers, who in turn could not devote themselves solely
to maintaining order, but who had to transform agricultural production into
money. The nobility’s constant need for ready cash allowed their managers just
as systematically to rob them, and also permitted a flourishing of mercantile
capital, since control over the process of exchange lay in the managers’ hands.
Long before Kolchin, Pokrovsky noted the same principle. Inasmuch as
mercantile capital does not give rise to production, but exploits it, the American
plantation and the Russian serfholder estate both proved to be ideal instruments
for such exploitation.
The plantation is a manifestation of the capitalist economy, not the feudal economy.
It is a sort of artificially established capitalism, thoroughly counterposed to industrial
capitalism and to the factory in which free proletarians are employed, as totally opposite
as can be imagined.11
The ‘second wave’ of enserfment of the peasantry did not simply represent
‘feudal reaction’, or a return to the past. What was involved was completely
new forms of organising agriculture and exercising coercion. It was not only
in Russia that serfdom was reconstituted in practice during the sixteenth and
seventeenth centuries, reaching its culmination in the ‘enlightened’ eighteenth
century. A similar process took place in East Prussia, and to describe the new
relations of serfdom it was even necessary to introduce a new term, Erbunter-
tänigkeit, in place of Liebeigenschaft, used to characterise the traditional feudal
relations existing in the West. As the German historian Heide Wunder remarks,
this new serfdom ‘must be regarded as a radical innovation in the relationship
between peasant and landlord’.12
The official historians of the Soviet period, who regarded serfdom as
a relic of the Middle Ages, could not explain why the subjection of the
peasantry to serfdom did not weaken during the sixteenth and seventeenth
centuries, but on the contrary grew stronger. It was in the late eighteenth and
early nineteenth centuries that the landowners sought to make the shift to a
thoroughly ‘plantation’ economy, depriving the peasants of the remnants of
their independence. The cultivators were transferred to the ‘monthly’ system,
under which they were provided with their food and had their allotments
taken from them. ‘The landowner was then transformed into something like a
plantation owner,’ Pokrovsky concludes ironically, ‘and the serf peasant into
something like a negro.’13 In Russia, however, this type of management remained
the exception, ‘an outside possibility’.14
The liberal tradition of the early twentieth century was inclined to explain
serfdom by reference to the state’s need to offload the costs associated with
the country’s accelerated modernisation onto the people. But this still does not
explain why modernisation was accompanied by the retention and strengthening
of medieval institutions in the countryside, instead of leading to their dissolution.
In reality, serfdom was not a relic of the Middle Ages at all, but a product of
the modern era. To the state, the link between the modernising of the country
and the need to intensify the exploitation of the peasants was obvious, and
no particular effort was made to conceal it. Meanwhile, the interests of the
government and the landowners were backed up by the less obvious but no
less important interests of commercial capital, both Russian and foreign. This
mercantile capital, which set the agenda for the modernisers, required the use
of bonded labour.
It is noteworthy that, as Kolchin remarks, serf relations developed primarily
in the regions that were most suited to commercial agriculture, and which in
this sense were most ‘advanced’.
A region could be attractive either because of its good soil and relatively mild climate or
because its location – for example, proximity to Moscow – provided a market for agricultural
goods. Areas where the soil was poor or climate harsh, and where a sparse population
produced no significant demand, were usually left to the state peasants, who eked out a
living through subsistence farming and handicrafts.15
The first step toward enserfment was taken under Ivan the Terrible. Prior to
this, the peasants had two weeks each year, from 20 November – St George’s Day,
when work was finished and they could leave a landowner and move to other
landholdings. This departure was not entirely free; the peasants were obliged to
pay the landowner a sort of tax in advance, the ‘elder’s ruble’, a considerable sum
for those times. During the years of the Livonian War, the authorities took the
first steps toward abolishing this custom. As always, military necessity provided
the ideal pretext for implementing ‘unpopular measures’ whose time, in the view
of the ruling class, had come. This ‘temporary measure’ became permanent, a
typical situation in Russian history. Historical sources mention the so-called
‘commandment years’ when the peasants’ right to move was restricted. To judge
from the evidence, these decrees were not in force throughout the country, but
only in a few districts.16 It is obvious that the economic consequences of the tsar’s
policies carried more weight than any official decisions. The devastation which
the country suffered during the Livonian War meant that peasants who were
moving to new lands were unable to pay the elder’s ruble. In the hungry spring
months they drifted from one landowner to another; and often the landowners
themselves, equally oblivious to laws or customs, ‘poached’ peasants from their
neighbours. As Skrynnikov writes:
By the early 1580s, a substantial section of the rural population had either scattered or died.
The countryside was like a vast wasteland. The peasants were cultivating only a small area
of the ploughland which had fed them earlier. Beneath the weight of the catastrophe, the
old custom of moving on St George’s Day fell completely out of use.17
However, the enserfment of the peasants, did not end after the Livonian
War. On the contrary, the situation of the peasantry continued to worsen after
the fighting ceased. The decisive steps toward consolidating the new system in
law were taken by Boris Godunov, who had effectively ruled the country under
Tsar Fyodr, and who later became tsar himself. Godunov did not find this
decision an easy one. His government vacillated. Amid the famine of 1601–02
Godunov declared the St George’s Day custom temporarily restored, though
not throughout the whole country and not for all categories of landowners. In
1603, however, the policy was again tightened, and the peasants were definitively
forbidden to move. This cost the tsar dearly; the mass hostility toward Boris,
who had taken responsibilty for the final abolition of the St George’s Day
custom, was exploited by the impostor Dmitry in his triumphant march on
Moscow.18 As Skrynnikov states:
The civil war which unfolded in the Russian state in 1604 and 1605 was born primarily of
the deep social crisis that resulted from the fracturing of the earlier social structure and
from the imposing of the serf system. Boris Godunov tried in vain to lessen the acuteness
of the problems by temporarily and partially restoring St George’s Day. Resistance from the
feudal landowners forced the authorities to return to the old serf-holding course. The ‘great
famine’ of 1601–1603 hastened the explosion.19
The policy begun by Ivan the Terrible created the preconditions for the
catastrophe of the Time of Troubles.
ENSERFMENT
The Livonian War, the terror of the oprichnina, the famine and the Troubles led
to a huge collapse and to the flight of the population from the European regions
of Russia. Throughout Eastern Europe, the situation during the first half of
the seventeenth century was much the same. In Poland and various parts of
Germany, massive depopulation had occurred following the Thirty Years’ War
and the series of military-political conflicts that continued even after the signing
of the Treaty of Westphalia. By the mid seventeenth century, the demographic
situation in Muscovy and other states of Eastern Europe was comparable to that
in Western Europe after the plague. ‘Serfdom,’ writes Pokrovsky, ‘grew quickly
in Russia on the ruins that resulted from the Troubles, just as in Germany it
arose on the ruins left behind by the Thirty Years’ War.’20
The question presents itself: why did the depopulation of fourteenth-century
England favour the development of free labour, while in Eastern Europe
depopulation was followed by a directly opposite process, the ‘second-wave
enserfment’ of the peasants? The American historian Robert Brenner sees this
as resulting from the defeat of the peasant uprisings. The Bolotnikov uprising
in the early seventeenth century was indeed finally defeated, as was the later
revolt of Stepan Razin. The same, however, can be said of the fourteenth-
century peasant revolts in Western Europe; the uprising led by Watt Tyler
and the Jacqueries in France were also overcome. Peasant uprisings in general
have always tended to end in failure. Moreover, in Western Europe after the
plague, the feudal rulers also tried to limit wages or tie peasants to the land,
but these attempts failed – not only due to massive resistance, but also for
economic reasons, which cannot be said of Russian serfdom in the seventeenth
and eighteenth centuries. Nor is the enserfment of the peasants to be explained
as the result of the weakness of the bourgeoisie. Though backward by Dutch
or English standards, the Muscovite merchants of the seventeenth century
were stronger than the bourgeois strata had been in England 300 years earlier.
Moreover, the serf system also grew stronger in Livonia, where the German
mercantile bourgeoisie was unquestionably powerful. In reality, it was precisely
the development of the international market and of bourgeois relations in the
West that was the decisive cause behind the imposing of serfdom in the East. In
the fourteenth century the need did not exist, either in England or France, for
large-scale commodity production to satisfy external markets. Even the internal
markets were extremely small. The cities were comparatively undeveloped.
The sparseness of the population meant that people started purchasing in the
market various goods they had earlier obtained through their own efforts within
the framework of the ‘natural economy’. The shortage of labour power thus
led both to the formation of a labour market and to the development of the
commodity market in general. By contrast, the East in the seventeenth century
already possessed relatively developed and established markets, both internal
and external. Because of the limited availability of labour power, these markets
came to experience an acute shortage of commodities. The simplest way of
increasing supplies – and perhaps the only way to achieve big increases in a
brief period – was to intensify the exploitation of the peasants.
There was nowhere that Western European peasants, even free peasants,
could go to escape the feudal authorities, since there was ‘no land without its
seigneur’. Russia was different; here there was no land shortage. The Russian
people, Pokrovsky remarks, settled their land ‘not through dispersal, but
through resettlement’.21 The periodic resettlement by the peasants from one
place to another did not undermine the natural economy, since these shifts were
occasioned less by feudal oppression than by demographic causes and by the
exhaustion of the soil. Within the framework of the primitive peasant order,
there were just enough people in any given locality to sustain both the peasants
and the landowner. For commodity-based agriculture, this was no longer
sufficient. Meanwhile, the resettled peasants on their new land reproduced the
natural economy, thus limiting the development of the grain trade.22 It is hence
understandable that subjecting the peasants to serfdom should have become a
‘necessary condition for production’ in a context where ensuring a consistent
supply of grain to the market was essential. ‘Having crushed the feudal overlord
in the name of economic progress,’ Pokrovsky writes, ‘the landowner himself
quickly became an economically outmoded type; such is the paradox with
which the history of the Russian economy of the epoch of Ivan the Terrible
draws to a close.’23
In England, the agrarian revolution of the sixteenth century occurred in a
setting marked by the transformation of commercial capital into a powerful
social and political force, after the aristocracy had been destroyed in the Wars
of the Roses. Similar processes were afoot in Russia during the time of Ivan
the Terrible, but the needs of the market outstripped social development, and
in this regard the rapid expansion of international trade played an enormous
role. No less important is the fact that the creation of the agricultural market
in Western Europe began long before the ‘prices revolution’, while in Eastern
Europe the ‘prices revolution’ preceded the changes in agriculture, and to
a significant degree stimulated them. The landlords needed to increase the
commercial yield of their estates immediately, and with a minimum of available
resources. Moreover, they needed to do this at a time when the currency was
rapidly being devalued. ‘It was necessary to tie down the unrestrained workers
who were leaving the estate, but how could this be done without capital, without
the “silver” through which the peasants could be secured?’24
The crisis that gripped all of Europe in the seventeenth century had directly
opposite results in England and Russia. The outward symptoms of this crisis,
and at times even specific events, seem at first sight to display a striking similarity.
At the same time as England was being shaken by revolution, Moscow was
undergoing its own social and political crisis. In 1648, revolts swept across
the entire country. Not only did the population refuse to obey the orders of
the authorities, but they also showed their discontent in organised form. As
S.F. Platonov notes, after the Troubles, assemblies of the various social estates
By the end of the reign of Mikhail Fyodorovich, the practice of making collective appeals
to the authorities was firmly established, and along with this, it had become obvious that
it was not within the powers of the government to satisfy all the wishes of the various
social strata.25
And he likens the Moscow revolt of 1648 to a ‘revolution’.26 The political crisis
unfolded against the background of a prolonged economic depression. Short
of funds, the government followed the classical road of economic austerity.
The boyar Morozov, who at that time effectively headed the tsar’s adminis-
tration, increased the taxes on salt and tobacco and reduced court spending,
dismissing many of the servants and cutting the wages of those who remained.
Not surprisingly, these measures deepened the economic depression in Moscow
still further, and sparked an outburst of hostility to the ruler. Adding to the
dissatisfaction with the government was the bourgeoisie’s dislike of the clergy,
who engaged actively in commercial dealings, and enjoyed all sorts of privileges
while doing so. To the inhabitants of the merchant quarter, the church hierarchs
were primarily competitors, and unfair ones at that.
The tax on salt that had been imposed in 1646 was abolished early in 1648, but
the damage had already been done. Although the discontent was fundamentally
of economic origin, the uprising by the Moscow populace took on a political
character. The demands of the rebels resonated in striking fashion with the
slogans that had inspired popular indignation in England. To the horror of
the patriarch Nikon, the Moscow rebels were seeking equality of all citizens
before the law, signifiying an end to clerical privileges in the courts. Swedish
emissaries wrote that the common people of the tsar’s capital wanted ‘good
laws and freedom’.27 In essence, a revolutionary situation had arisen in Russia.
Foreign observers in Moscow wrote that the country was on the verge of a
major revolt, and that the government might fall at any time.28
Just how alarmed the authorities were can be seen from the actions of the
tsar, who sacrificed all the key people in his government. The head of the Land
Office, Leonty Pleshcheev, was condemned to death, but the enraged crowd
took its revenge on him before he could be brought to the place of execution.
Morozov was dismissed and fled, and his house was ransacked. The court had
so little trust in its own people that the tsar’s guard was made up exclusively
of foreigners; later, they were replaced with Russians, but under the command
of Dutch officers.
The panicked state of the tsar’s court is understandable if we consider that
the revolt in the capital found echoes throughout the country. ‘The warning
spurred frantic activity’, Klyuchevsky writes.
The court took fright, and began seeking favour with the soldiers of the capital and with
the common masses. On orders from the tsar, the troops were plied with drink. For several
days running, the tsar’s father-in-law entertained in his home selected representatives of
the tax-paying Moscow commoners. During the Procession of the Cross, the tsar himself
addressed the people and called for forgiveness. With tears in his eyes, he pleaded with the
multitude on behalf of his brother-in-law and beloved associate Morozov. Promises were
given freely.29
I promised to deliver Morozov to you, and I must confess that I cannot absolve him completely,
but neither do I have the will to condemn him. That man is dear to me, he is the husband of
the tsarina’s sister, and to hand him over to his death would grieve me deeply.30
Nevertheless, for the tsar to limit himself to issuing promises and rearranging
his officials was now impossible. On 1 September he was forced to convene the
Sobor (Assembly) in order to adopt a new set of laws, the Code of 1648.
While the prehistory of the Sobor reads like a classical description of an
early bourgeois revolution, the outcome of the crisis was a social order that
differed dramatically from the one in Western Europe. On the one hand, the
Code of 1648 abolished the privileges which the clergy had enjoyed in the legal
system; in the words of Platonov, the Code ‘established the principle of equality
of rights between the middle layers of Muscovite society and the aristocratic
elite’.31 On the other hand, this same Code that affirmed democratic principles
also consolidated the ‘right’ of landowners to the labour of their peasants.
The destruction of the system of feudal privileges in Russia proved to be, not
a step in the direction of civil freedoms, but rather a landmark on the road to
the institutionalising of serfdom. There is no paradox here, since serfdom in
Russia was born not of medieval barbarism but of the requirements of the
emerging market economy.
As Platonov remarks, the new laws displayed ‘all the features of conscious
class work’.32 The urban middle layers who revolted in 1648 were not linked
to the rural population. Moreover, the rural estate-owners who made use of
bonded labour were closer to the nascent Russian bourgeoisie than were the
peasants. To the merchants, the landowners were partners, and now became
political allies as well.
This alliance between the landed nobility and the mercantile bourgeoisie
was victorious in 1648, dealing another blow to the privileges of the clergy and
the old elite, while humiliating and once again restricting the monarchy. The
events of 1648 are evidence not of backwardness, but of the considerable level
of development of Muscovite society, which was able to organise itself and to
obtain its due from the authorities. Here, however, the array of interests proved
to be quite different from that in Western Europe. Paradoxically, the social bloc
which triumphed in Russia was not so different in its make-up from the one that
made a revolution in England during the same years. Cromwell’s parliament
was also dominated by an alliance between the bourgeoisie and the new gentry,
with the cheap raw materials and foodstuffs that were essential for economic
expansion.33 It might be said that through their labour, the Russian serf and
the plantation slave extended credit to Western European capitalism. This in
turn gave rise to far-reaching differences in the way the bourgeoisies took shape.
Capitalist relations were established both in the East and in the West, but in
the West an industrial bourgeoisie emerged, while in Eastern Europe it was
primarily commercial capital that developed. The Western bourgeoisie proved
to be revolutionary, and viewed the surviving elements of feudalism as a brake
on development. The bourgeoisie in the East, by contrast, lived in symbiosis
with the landowner economy.
The economy of Russian serfdom was subject to the same dynamic as the
American slaveholder plantations. Ivan the Terrible had restricted the rights
associated with St George’s Day, while Boris Godunov had finally abolished
them, tying the peasant to the land. In the eighteenth century, peasants could
be sold separately from land, just like plantation slaves. It was thus with the
spread of the European enlightenment that human beings were definitively
transformed into commodities.
FORCED LABOUR
‘In the broadest sense,’ writes the American historian Peter Kolchin, ‘serfdom
in Russia and slavery in America were part of the same historic process, despite
the vastly differing societies in which they emerged.’34 In Kolchin’s view, these
phenomena resulted from the combining of economic and geographic expansion
with a shortage of labour power. Each of these factors was present in both
Russia and America, but peasants were enserfed and slavery was restored even
in regions where these problems were not especially acute. In particular, and
as noted earlier, the peasantry were subjected to a ‘secondary enserfment’ in
Poland and in Germany east of the Elbe. The reasons for the spread of forced
labour on the periphery of the growing capitalist system lay far deeper, in the
need of the expanding world market for cheap raw materials and foodstuffs.
These latter were absolutely indispensable requirements if the use of free labour
in the countries of the West was to be effective. If these conditions were to be
met, labour power on the periphery had to be exceedingly cheap, available
almost free of charge.
Unlike the feudal estate of medieval times, the North American plantation
and the Russian serf agriculture of the period from the sixteenth to the
nineteenth centuries were linked closely to the market. Production here was of
a fundamentally commercial character. Ultimately, the forced labour on the
periphery ensured the accumulation of capital in the centre, while of course
guaranteeing the peripheral elites a worthy place among the world elites. This
was particularly evident in the case of Russia, whose serf economy in no way
prevented the country from holding an important place among the great powers
of Europe.
An economy based on forced labour would have been impossible without a
strong state. Agrarian development required the occupying of vast expanses,
which had to be defended. On this level, there are again obvious parallels
between the history of serfdom in Russia and that of slavery in America. Robin
Blackburn notes that Holland was no match for Britain and France so long as
it lacked the resources to maintain an empire based on slave labour. ‘And in
contrast to the Netherlands, Britain and France had been able to mobilise the
requisite strength to defend their colonial conquests in the New World.’35 Finally,
it was essential to control the trade routes by which the products of the slave
plantations reached world markets. Otherwise, these products would simply be
devalued. Portugal, which had a vast colonial empire but lacked a strong fleet,
was itself transformed into a semi-colony of Britain. Maintaining a plantation
economy required the constant use of ‘military, especially naval, strength’.36
The Russian state developed according to the same logic as the colonial
empires founded by Britain and France. The main difference was not the fact that
the Russian expansion of the seventeenth and eighteenth centuries was mainly
across dry land. The struggle for sea routes remained among the chief preoc-
cupations of the Russian state from the sixteenth to the eighteenth centuries,
and to some extent even into the nineteenth century. A far more important
difference was that Russia, having defended its self-determination during the
years of the Troubles, developed as an independent state, on the one hand,
while constituting part of the periphery, on the other. This peripheral empire
was strong enough to solve on its own territory, through the use of its own
power, the same problems that Britain and France confronted in their colonies.
Russia was both an empire and the object of colonisation at the same time.
This determined in advance many of the peculiarities of subsequent Russian
history, not only in the political and economic fields, but also in the areas of
culture and psychology. It might be said that from the seventeenth century
the Russian state underwent ‘self-colonisation’. The powerful state authority,
based first in the Kremlin and then in the St Petersburg court, systematically
enslaved its own population, while at the same time defending its borders against
incursions and securing the trade routes by which products obtained through
bonded labour were exported to the West. Russians became simultaneously an
‘imperial’ people, proud of their historic conquests, and an enslaved population,
colonial in their essence.
After recovering from the shocks of the Livonian War and the Troubles,
Russia in the mid sixteenth century once again became actively integrated into
world trade as a supplier of raw materials for developing Western capitalism.
Compared to the time of Ivan the Terrible, however, the situation on world
markets had changed substantially. Muscovy now had serious competitors
in the form of the North American colonies, which were supplying more or
less the same products. On the other hand, Russia in the seventeenth century
was able to furnish considerably greater resources to world markets than a
century earlier. The prime acquisition of the Russian state in the sixteenth
and seventeenth centuries was Siberia. Significantly, the conquest of the vast
It may be that the people in Moscow who granted title to foreign property did not know that
the lands involved lay beyond our frontiers, inside the borders of the Siberian tsardom, with
which Ivan IV was certainly not planning to provoke a dispute at that time. But bearing in
mind that such ‘gifts’ were not to be had cheaply (given the well-known hunger for bribes of
the Moscow officials), the Stroganovs must have known where they were seeking a gift, and
what it consisted of. All this renders more believable a chronicle entry which suggests that
the glorious conquest of Siberia by the freemen of Yermak Timofeevich should also be viewed
as one of the ambitious commerical undertakings of the Stroganov trading house.37
Learning of Yermak’s expedition, the Muscovite tsar and those around him
realised what was afoot. A commotion broke out in Moscow, and furious letters
were written to the Stroganovs demanding that the Cossacks be recalled. Threats
were made that the participants in the expedition would all be hanged. But by the
time the letters reached the Urals, Yermak had already succeeded in conquering
the entire Siberian khanate, and seizing its capital Isker (now Tobolsk). The tsar’s
rage now turned to mercy, and from being a criminal, Yermak was hurriedly
recast as a national hero, which is how Russians regard him to this day. The
Stroganovs, however, were still punished. The lands conquered by Yermak were
taken over by the state, and the trading house was compelled to write off the
costs it had incurred in equipping its Siberian expedition.
Following commerical capital on the eastward trail came large numbers
of peasants. The colonisation of the eastern Urals and Siberia had begun.
The occupying of these ‘new’ lands by Russian settlers coincided with the
incorporation of these territories into the world market. As early as the 1570s, the
Stroganov merchants were exporting Siberian goods to Antwerp and Paris.
The conquest of Siberia had nothing in common with feudal expansion.
Serfdom did not exist in the new lands. The local populations were at times
ruthlessly exterminated, but were never turned into serfs or slaves. In the
occupying of Siberia, the entrepreneurial initiative of the Stroganov merchants
was crucially important. Having gained temporary possession from Ivan the
Terrible of the lands on Russia’s eastern border, the Stroganovs became the
effective masters of ‘the empty region below Great Perm’. They were able to
recruit and arm ‘hunting people’ – that is, to form their own army – and to exact
tribute from the Siberian Tatars.38 In short, the powers of the Stroganovs were
clearly reminiscent of the status of the British and Dutch merchant companies
founded in order to take control of the West and East Indies.
It is significant that the expansion to the east by the Stroganovs should have
dated from the granting of a charter by the tsar in 1558 – that is, the very year
when the Livonian War began. Nevertheless, it was only in September 1581 that
a Cossack detachment, recruited with the Stroganovs’ money, led by Yermak
and numbering fewer than a thousand men, penetrated deep into the territory
of the Siberian khanate and established the first fortified village. It was only
later that soldiers of the tsar were sent to the aid of the Cossacks.
The actions of the Stroganovs in Siberia were linked closely to the development
of the world market. As historians have noted, the wealth of Anikey Stroganov
had its origins in the fact that ‘earlier than other Russians, he managed to reach
the Ob, and there to exchange cheap “German” trinkets and other goods for
valuable furs’. In the Altay Russian prospectors found gold and silver, which
among ‘men of business’ stirred even greater interest in taking control of Siberia.
Meanwhile, goods acquired in Siberia were reaching the West.
In order that the markets of Western Europe should be penetrated, commerical agents were
selected from among captured ‘Germans and Lithuanians’ who were being held in the prisons,
while experienced foreign sailors and shipbuilders were invited in.39
Despite the intensive granting and spontaneous seizure of settled state lands, a layer of
state peasants remained and gradually multiplied who were dependent in feudal fashion on
the authorities, but who possessed their own personal freedom, officially recognised in law.
Alongside the enserfed peasants, great numbers of fugitives had settled in the forests of the
Perm and Volga regions, on the broad expanses of Siberia, and on the southern steppelands,
where they succeeded in avoiding organised searches, government censuses, and the coercive
measures of the local organs of power. These people were not only the members of free
Cossack communities, whose numbers rose continuously as peasants fled to join them, but
also people who had spontaneously resettled; members of persecuted sects; and ‘restless’
elements who had managed independently to regain their lost freedom. So it was that in the
serf-holding Russia of the sixteenth and seventeenth centuries, centres of free agricultural
development arose, resembling the American squatter settlements that came into being
due to the existence of vast unpopulated expanses with unappropriated natural wealth. The
difference between these independent farming settlements and those of the squatters was
that they arose within the bounds of a feudal-serfholding monarchy; the Russian settlers
could not partake of the advantages of an established capitalist system, and lived under
constant threat of persecution and destruction.41
There is, of course, another explanation for the differences between the Russian
Cossacks and the North American colonists, as Druzhinin also observes:
As the Russian state advanced from the Urals into the remote regions of Siberia, it had at
the same time to expect attacks from the south, and hence to establish forest strongholds
and watch-posts, to maintain armed detachments on its borders, and to conduct delicate
diplomatic manoeuvres in order to retain the expanses it had occupied. Danger also threatened
from the west, from Livonia, Sweden and Poland. If Russia resembled the American colonies
in terms of huge distances and the possibility of broad resettlement in various directions,
the presence of a constant military threat was a sharp point of difference between Russia
and Britain’s transoceanic possessions.42
In reality, the British colonies in North America were also under constant
military pressure, with the danger coming from the Indians to the East, from
the French colonies to the north, and from the Spanish to the south. As Robin
Blackburn remarks, it was the military aspect of colonisation that ultimately
proved decisive. The ending of any serious external threat as a result of the
British victory over France in the Seven Years’ War encouraged the colonies
to struggle for their independence; prior to this, they could not have defended
themselves without the help of the metropolis.
THE COSSACKS
for its expansion on the internal and external markets. But so long as the
landowners remained the principal suppliers of cheap grain, the peasants had
to remain in serfdom. It was not simply that the exploitation of the peasants
in the western regions was being intensified, and that serfdom was moving
gradually to the east. Under such conditions, colonisation required even more
active state support than in America.
The Cossack communities were not just under constant pressure from the
autocratic government. Located on the country’s borders, these communities
were subject to regular attacks from external enemies, with whom they could
not have coped without support from the centre. The state in turn was forced
to tolerate the Cossacks in the border regions to the extent that the Cossacks
could be used to guard the frontiers. In the event, the Cossacks began to serve
the very state from which they had fled. This collaboration, however, was not
permanent, and relations with the authorities were fluid. From time to time the
government took steps to tighten its control over the Cossacks, understand-
ably provoking their resistance. During periods when the central authority
was relatively weak, the Cossacks could effectively ignore the government and
its commanders, taking orders exclusively from their atamans and from the
‘Cossack circles’, representative organs of military democracy that arose on the
Russian borders. Collective land ownership, which prevented excessive property
differentiation within the ranks of the Cossacks, allowed this variety of self-
government to be maintained over a lengthy historical period. The Cossack
detachments were self-governing communities that guarded their independence
fiercely. Cossacks also played key roles in all the great anti-government uprisings
that shook Russia from the sixteenth to the eighteenth centuries. The popular
rebel leaders Bolotnikov, Razin and Pugachev were either Cossacks themselves
or relied on Cossack support, though as a rule most of the rebels were enserfed
peasants. The numerous impostors who laid claim to the Russian throne in
the seventeenth century and in the second half of the eighteenth century also
appealed to the Cossacks for help. Drawing a balance sheet of the political
crisis that gripped Russian society in the early seventeenth century, a modern-
day historian notes:
The Cossacks gave particularly steadfast support to the impostors who claimed to be the
tsarevich (and later tsar) Dmitry Ivanovich, in whose victory they saw a guarantee of the
honoured position held by the Cossacks in Russian society. The desire of the Cossacks to have
their pretender crowned in Moscow was exploited in 1613 by the Romanov ‘party’. The ‘free’
Cossacks were among the main forces that made possible the election by the Zemsky Sobor
(Land Assembly) of Mikhail Romanov, whom they counterposed to the ‘boyar’ contenders
for the Russian throne.43
For all the democracy of their military organisation, the Cossacks were in no
sense bearers of progressive social relations. Nor were the Cossack households
anything like those of the bourgeoisie or of family farmers. Having fled the
country’s central provinces for the frontier, the Cossacks set out to restore,
in a new location, the old patriarchal order which government policy had
undermined. As one historian puts it, the ‘free’ Cossacks of the Don, the Yaik
and the Terek in the early seventeenth century were ‘far more archaic in terms
of their social development than the social organisation of the Russian state
of the same period’.44
After lengthy struggles, the Cossacks finally won their freedom and a range
of privileges. The liberties involved, however, were those of a medieval social
estate, and it is therefore not surprising that by the mid nineteenth century the
now-strengthened Cossacks had been transformed from a politically unreliable
mass with a weakness for periodic revolts into a conservative force helping the
regime to keep other social strata and groups in bondage. If the Protestant
colonists in North America had initially been more or less loyal subjects of the
king, only later turning into rebels, the Russian Cossacks evolved in the opposite
direction. As early as the seventeenth century the Cossacks had periodically
robbed peasants, subjecting them to all sorts of extortion. By the early twentieth
century the Cossack units had become the main force (unlike the fickle troops
of the regular army) on which the government could reliably count to suppress
urban and rural revolts, strikes and uprisings.
While the colonising of Siberia saw Russia’s boundaries expand to the east, the
wars against Poland achieved a good deal more than simply consolidating the
Russian position in the west. When it annexed Ukraine, the Muscovite state
seized the most important source of grain in Europe. In the sixteenth century,
Russia had participated in the grain trade only episodically. By contrast, Poland
in the sixteenth century was already actively involved in grain exporting. In
the seventeenth century, the importance of grain on the world market rose
dramatically. The more grain produced for the market, the greater the market
value of land, and the greater the scale of agrarian conflict. The price of
Ukrainian black-earth lands increased rapidly. Grain became an important
commodity not only on the world market, but also on the domestic one. This
led to active efforts to seize whatever land remained empty in the south, and
also to an increasingly acute struggle for this land between the Polish aristocracy
and the Ukrainian Cossacks. In the sixteenth century the Cossacks had played
an active role in the campaigns by the Rzecz Pospolita against Muscovy, but in
the following century the situation changed sharply. The conflict between the
Polish landowners and the Cossacks in Ukraine intensified in direct proportion
to the development of the grain market. Ultimately, this struggle served to
undermine the Polish state, in the form which it had acquired by the end of
the medieval period.
Meanwhile, the conflict between Russia and Poland also grew more acute
as the grain trade developed. This time, the struggle was conducted not on the
shores of the Baltic, but on the Ukrainian steppes, and it ended with the victory
of Russia. The Ukrainian Cossacks, headed by Bogdan Khmelnitsky, were
inclined to regard Moscow as a tactical ally from whom they would take their
leave as soon as the question of the Poles was resolved. Russia, however, proved
to be far more effective as a state than appearances might have suggested. The
tactical agreement with the Muscovite tsar turned into the annexation, lasting
for centuries, of Ukraine to Russia.
The paradoxical nature of the Russian empire was already fully apparent
in the seventeenth century. On the one hand, Russia was a typical peripheral
country, while on the other, it was a great European power. This paradox
preordained the endless contradictions of Russian politics, the country’s sublime
ascents and painful downfalls, its imperialist ambitions and administrative
helplessness, its building of a powerful army and its inability to overcome the
chronic weakness of its economy.
The Russia over whose fate historians and philosophers have debated endlessly,
the country of endless expanses and ever-unrealised potential, counterposing
itself to the West and striving desperately to draw closer to it, at once self-
satisfied and suffering from an inferiority complex, living beneath the constant
weight of an autocratic regime, enforcing serfdom and also undergoing periodic
explosions of ‘senseless and pitiless’ revolt – this Russia had its genesis in the
seventeenth century. The conquest of Siberia dramatically altered the country’s
geography, and serfdom and autocracy became the basis of the social and
political order. It was not the Tatar invasion of the thirteenth century, but the
crisis of the seventeenth century and the changes which resulted from it and
which culminated in the modernisation under Peter the Great, which inevitably
made the Russian state authoritarian.
The seventeenth century was a time of crisis not only for Russia and Eastern
Europe, but also for the Western world. The opportunities for economic and
political expansion that arose along with the great geographical discoveries had
been exhausted during the previous century. In order to continue developing,
Europe itself had to change. It had to finally overcome the feudal order it had
inherited from the Middle Ages, and to shape a new social order that met the
demands of the modern era. This new order was established in painful fashion,
through wars and upheavals. It was formed simultaneously in the West and
East of the continent. In the West it took shape in the conquests of the English
revolution; in Russia it became set in the form of the autocratic serf-holding
regime that arose on the wreckage of the Troubles.
A HOME-GROWN BOURGEOISIE
The regime that became established in Moscow needed to define and justify
itself in ideological terms. Here, it met with unexpected problems that came
close to destroying the entire edifice of the new social and state system.
In seventeenth-century Moscow, the ideology was religion, just as it was
religion that provided the ideological and moral prop for the state, but the
ecclesiastical organisation of the Muscovite tsardom in the seventeenth century
was extremely unstable. The church in Russia was not completely isolated from
the outside world. Significantly, it was at the very time when the official church
in the West was undergoing upheavals, and when the struggle was unfolding
between Protestants and Catholics, that numerous ‘heresies’ first arose in Russia,
to be followed by the beginnings of ecclesiastical reform.
As in the West, the slogan of the church reformers was a ‘return to the old
faith’, but in fact this amounted to an attempt to adapt the church and the
ideology to the conditions of the new era. The decisive factor here, of course,
was not the influence of the Western Reformation, but the similarity in the
conditions of social development. In both Western and Eastern Europe, parallel
processes were under way. But here too, the ‘peripheral’ nature of Russian
development made its effects felt.
Coming more than a century later than in the West, the Russian Reformation
was similar to that of the West in some respects, but radically different in others,
since the relationship and disposition of forces were now quite different. In
Western Europe the ‘royal’ and ‘popular’ Reformations, despite periodic conflicts
between them, were nevertheless interlinked. This was predetermined by the
impossibility of completely destroying the old Catholic church organisation,
and by the conflict – which had taken on an interstate and international
character – between the bourgeois-Protestant north and the feudal-Catholic
south. In Russia, by contrast, the old ecclesiastical system yielded its positions
without a struggle, since Orthodoxy, unlike Catholicism, lacked an independent
political organisation.
The clash between the ‘popular’ Reformation and the official ‘ecclesiastical
reform’ thus took on the character of a struggle for the ‘old faith’, but it should
not be forgotten that the archpriest Avvakum, the chief ideologue of the ‘old
rite’, and the patriarch Nikon, who was leading the official reform, acted initially
as allies against the traditional church. The conflict was not theological but
social. On the surface, and in terms of dogma, the struggle might be perceived
as having involved a collision between a ‘conservative’ mass of believers and
reformist hierarchs. But in fact, the ‘old believers’ were defending a radical
variant of church reform that extended to such extreme measures as doing away
altogether with a special professional layer of priests, something also proposed
by the most radical Protestant sects in the West.
Pokrovsky quite correctly describes the Old Believers as adherents of a
‘peasant reformation’.45 The distinctive feature of this religious revolt, however,
lay not only in the resistance by the people to the ruling classes, but also in
the fact that the movement ‘from below’, reformist in its essence though not
in its slogans, took shape not in a struggle against the Old church, but against
a reform ‘from above’. To be more precise, both were occurring. The fact that
Avvakum in his struggle made an appeal to old-time piety did not by any means
make him conservative; Martin Luther and the leaders of the English Puritans
acted in exactly the same fashion. The archpriest Avvakum and his radical
supporters were forced to wage a fight against the old ecclesiastical organisation.
This organisation, however, was not conservative, like the Catholicism of the
early sixteenth century in the West, but on the contrary was actively reformist.
Russian Orthodoxy had not wasted the century and a half that separated Luther
from Nikon. It had assimilated both the lessons of the ‘royal’ Reformation and
the experience of the Catholic Counter-Reformation.
Patriarch Nikon, who headed the official reform, not only corrected church
texts on the basis of Greek models, but also strove for what might in modern
language be termed the uniformity and standardisation of rites. The Greek
church, as it happened, was not insisting on the rites being amended. Of
crucial importance here were the needs of the state, and its desire to carry out
modernisation from above. The church needed to be governed according to the
same principles as the state bureaucracy, transforming itself and entering the
new era as part of the system of rule. Not surprisingly, the church authorities
supported such a reform, and tried to suppress Avvakum’s supporters along
with their ideas concerning the autonomy of communities.
The Old Believer schismatics in Russia were simultaneously a milieu that
spawned successful entrepreneurs, and also the most consistent opponents
of Western influences. In the merchant quarters they agitated continuously
against foreign business rivals and Western ‘heresies’, bringing the enthusiasm
of religious partisanship to commercial competition. The old believers accused
Nikon of pandering to Western heresies, and viewed the government as a conduit
for Western influences. Insofar as the government sought to impose ‘German
acts’ on the people, it had to be rejected.46
It is easy to think of the Old Believers as obscurantists, reactionaries and
enemies of progress. But their constant successes in the entrepreneurial field,
lasting right up until the early twentieth century, clearly do not fit in with this
picture. Liberal Russian historiography has felt an insurmountable antipathy
for the Great Schism, or at best has shown a lack of interest. Meanwhile, the
schismatics gave rise to numerous commercial and industrial dynasties, and
their ideological views provided a sort of local analogue of the much-vaunted
rotestant ethic. Similarly, in the epoch of Stalinist industrialisation, the place
of the Protestant ethic as the moral organising principle was to be taken by
communist ideology.
Because the liberal tradition associates everything progressive and modernising
with Western influences, its adherents cannot even imagine that Russian society
might have given birth to its own ideologies of modernisation, which were
forced inevitably to compete with the ideas coming from the West. The more the
ideology of the Old Believers resembled the Reformation in its general thrust,
the more it had to counterpose itself to foreign influences and to the state that
transmitted these influences. In the form of the Old Believer movement, Russia
in essence witnessed an unconscious attempt to lay the base for a democratic
bourgeois order, resting on its own strengths rather than on international trade
and Western technology. Like the Protestant ethic, the Old Believer ideology
viewed success in business as evidence of divine favour: ‘Those who cleave to
the old faith enjoy much greater riches than the followers of the new, and this
shows that God blesses not the new faith, but the old.’47 Similarly, the emigration
of Old Believers from Russia had a good deal in common with the emigration
of Calvinists from the Old World to the New. Of course, the forces involved
were in no way comparable. This was not only because Western technologies
and organisation in the seventeenth century were so much more powerful than
those of Russia, but above all because Russian society itself, along with its elites,
had already by that time taken on a peripheral form. The basis of support for
the Old Believer movement was the same bloc of the urban commercial and
artisan layer with the peasantry as in Western Europe. The events of 1648
showed, however, that in the Muscovite state, social history was not unfolding
in line with the Western scenario. Most members of the nascent bourgeoisie
linked their historical fate not with the peasantry, but with the nobility. The
result was that a reformation and a Western-style bourgeois revolution were
both impossible as a matter of principle. The aristocratic state was destined to
become ‘the only European in Russia’, and the chief modernising force.
The defeat of the Old Believer movement put an end to the democratic
tendencies that were evident in the seventeenth century. The radical heritage of
the Time of Troubles was finally overcome. The ‘peripheral’ line of development
of capitalism triumphed.
The reforms begun by Peter I around the beginning of the eighteenth century are
among the crucial topics of Russian history. We are concerned here not just with
the absurd and essentially pointless romantic dispute between ‘Westernisers’ and
‘Slavophiles’, but also with far more important discussions carried on among
scholars during the early twentieth century. The official literature, both during
the tsarist period and under Stalin, viewed Peter the Great as a reformer and
as a fighter against backwardness. The eminent historian S.F. Platonov wrote
that historical research had ‘long since consigned to the archives the old image
of Russian life before Peter the Great as “stagnant” and “ossified”’.1
The philosopher Nikolay Berdyaev considered Peter the Great ‘a bolshevik
on the throne’.2 Meanwhile, the liberal politician and historian P. Milyukov
described Peter as a senseless bureaucrat, carried away with absurd projects,
and as a result, destroying everything around him. In Milyukov’s view the
Europeanisation of Muscovy had been taking its natural course, and Peter
effectively spoiled things with his excessively radical initiatives.
In reality, Peter was not the ruler who implanted Western technology in the
Muscovite state, or who established ties with Europe. Both processes had been
under way long before Peter arrived on the scene. Indeed, ties with the West
had never ceased to exist.
Contrary to the views of ‘Westernising’ writers in later times, Muscovy had
never been isolated from the West, in either diplomatic or economic terms.
Otherwise, the existence in Moscow of the well-known ‘German quarter’, where
the young Tsarevich Peter learnt German and Dutch and acquired European
manners, would have been unimaginable. It is true that the regime which came to
power in Russia following the defeat in the Livonian War and the shocks of the
Troubles consciously chose isolation. This, however, was isolation in cultural and
ideological matters, not in economic ones. Increasingly dependent on Western
technology, the state under the early Romanovs sought to compensate through
cultural self-affirmation, through counterposing ‘Muscovite piety’ to Western
mores. Russia was not being isolated from European culture, but was being
counterposed to it. The reason for this counterposing was that Russians in the
seventeenth century encountered various manifestations of Western culture
on a continual basis.
V.O. Klyuchevsky writes:
The state grew confused amid the difficulties that were appearing. The government, which
as a rule neither foresaw these problems nor issued warnings about them, began searching
138
in society for ideas and people that might rescue it. Finding neither, it turned reluctantly
to the West, where it beheld an old and complex cultural apparatus that was fashioning
people and ideas. From the West, it hurriedly summoned artisans and scholars who might
undertake something similar in Russia. It hastily built factories and established schools,
into which pupils were herded.3
salaries and land grants. An infantry colonel received 250 rubles a month,
and a cavalry colonel 400 – astronomical sums for those times. Under the
Romanovs, the armed forces ministry was so dependent on Western mercenaries,
both rank-and-file soldiers and officers serving as instructors and advisors,
that it even set up a special institution, the ‘foreigners’ office’. The defence of
national independence and state interests thus fell increasingly into the hands of
outsiders. Numerous Western European adventurers in Russian service received
vast incomes recruiting mercenaries, ordering weapons abroad, training soldiers,
and establishing arms factories. In 1632, not only were muskets and bayonets
for the war with Poland purchased in Holland, but even powder and bullets.
The cost was unimaginably high. In the course of a single year the regimental
infantry commander in charge of such matters, a certain Leslie, received a
salary of 22,000 rubles.
Since the foreigners attracted by these conditions of service remained in
Russia for long periods, a distinction began to be made between ‘old’ and ‘new’
‘Germans’. By the 1630s Muscovites were dividing the ‘Germans’ into ‘old’
and ‘new’ arrivals – that is, those who had come before the Time of Troubles,
and those who had arrived since. The ‘old’ foreigners had quickly become
Russified. A contemporary Western observer noted disparagingly that these
‘old’ arrivals were easy to pick; they ‘went about in Russian dress’, and were
‘worthless in military matters’.7 It was not self-isolation, however, that resulted in
backwardness; to the contrary, it was Russia’s peripheral position with relation
to the emerging world economy which, as a peculiar reaction, gave rise to the
policy of self-isolation. This reaction was ineffective, but perfectly understand-
able; it is enough to recall the similar attempts made by China and Japan
between the seventeenth and nineteenth centuries to ‘shut themselves off’.
Meanwhile, the isolationism of Muscovy in the seventeenth century was
exclusively cultural. It did not presuppose a rejection of economic ties;
indeed, to a signficant degree it was founded on them. Because the state was
literally unable to exist without foreign technologies and experts, and even
foreign mercenaries, it sought to preserve its political independence and to find
ideological justification through constantly stressing its religious and moral
superiority over the West. In the context of the cultural isolationism under
the early Romanovs, the slogan ‘Moscow – the Third Rome’ also took on a
new resonance. From this time on, the slogan would not affirm Russia’s key
significance for European and Christian history in general, but would assert the
‘spiritual’ superiority of Rus, against a background of the increasingly obvious
technical superiority of the West.
Orthodox Christianity could not be the main reason for isolationism.
Throughout most of the Middle Ages, religious discord had not put a stop
to commercial and political contacts between the Russian princes and the
Scandinavians, and later, Italians. In the eighteenth and nineteenth centuries
Orthodoxy not only failed to prevent contacts with Europe, but also proved
unable to avert the growing secularisation of society. Orthodoxy did not
cause isolationism; it was the policy of isolationism that made stressing the
Peter’s fanatical desire to force the Russian ruling class to adopt the way of life
of the European elite down to the smallest detail later drew ironic comments
even from many Westernisers. The Petrine cultural revolution was intended
to smash the resistance shown to Western ideas and norms by adherents of
the ‘old piety’. Naturally, the question of the virtues and shortcomings of
Western culture itself was never posed; this culture was supposed to be adopted
immediately and in its entirety, in just the same way as technology and forms of
military organisation were adopted. Both Aleksandr Griboedov and Aleksey
Tolstoy wrote scathingly of the Western finery of the Russian nobility. Chaadaev
in his philosophical letters waxed ironic over the prevailing belief in Russia
that ‘European progress’, which had required centuries of slow development,
could be ‘mastered immediately, without us even taking the trouble to learn
how it came about’.9
Peter’s policies, however, were perfectly logical and well-founded. The
Romanov state could not survive without Western Europeans, while at the
same time it was trying to preserve its independence by fencing itself off from
the foreigners in cultural matters. The more economically dependent Russia
became, the greater its need for cultural isolationism – and in turn, the greater
its dependence became.
Proceeding from the same logic, Peter found a different solution. If Russians
could not do without Western Europeans, then the Russian nobles themselves
would have to become foreigners. The tsar understood intuitively that the
Western knowledge which all Russian tsars since Ivan the Terrible had made
such efforts to obtain was the child of the corresponding culture. If Russia
were not simply to acquire the products of Western science and technology, but
to develop them itself, people were needed who had been raised in a cultural
milieu analogous to that of the West. Even in the epoch of brilliant discoveries
around the beginning of the eighteenth century, Western science was of course
far from being the only model on the planet for the development of learning. It
was, however, the only ready-made model accessible to the Russia of the time.
By substituting Russians for foreigners, and by creating the cultural conditions
in which Western technology could develop in Russia as well, Peter would
seemingly have done everything needed to overcome the country’s backwardness.
If the problem had indeed been one of backwardness, by the mid eighteenth
century it would have been resolved once and for all.
Peter’s choice was thus to start a revolution from above. On the cultural level,
the impact was truly massive. In the space of a single generation, one world
was destroyed and another created. Cultural isolationism was replaced with
openness, and fear of the West with an orientation to foreign models. Even the
language changed, with an influx of German and Dutch words, designating
a multitude of previously unknown concepts. In place of the old patriarchal
system of rule, a new centralised bureaucracy was established on the German
or French model. The army and navy were totally reorganised. A new system
of education began to be implanted. Spelling was reformed, and the calendar
was changed. New holidays appeared. The customs and daily life of the ruling
class became Western. Architecture changed, and consequently the appearance
of the cities changed too. The new capital of St Petersburg, constructed on the
banks of the Neva where previously there had been nothing, became a symbol
of modernisation and of Russia’s new greatness. Successful wars consolidated
what had been achieved, opening up access to the sea and making European
politics without Russia unthinkable.
As with every revolution from above, the changes carried out by Peter contained
numerous contradictions. The ‘top-down’ nature of the reforms, implemented by
the government with bewildering speed, made them anti-popular in their essence.
In Peter’s view, the new capital was built on vacant ground, but in reality it was
built on a bog fertilised with the bones of thousands of peasants driven to this
work in the name of the ‘greatness of the empire’. The population of the new
capital lived in completely unbearable conditions, suffering from the appalling
climate and from frequent floods. It is recorded that
the first people to live on the banks of the Neva never built substantial houses, but only
small huts. As soon as stormy weather approached, they immediately demolished these
dwellings. Putting the planks on rafts, they tied the latter to trees, before themselves taking
refuge on Duderhof Hill.10
criticism, the eminent liberal historian and political figure of the early twentieth
century, P. Milyukov, wrote:
New foreign policy tasks were heaped on the Russian population at a time when it still
did not have the means of carrying out these tasks. The political growth of the state again
determined its economic development.
The military campaigns against Poland in the second half of the seventeenth
century were successful, even though Russia under the early Romanovs was
even more backward in relation to the rest of Europe than the Muscovy of
Ivan the Terrible had been. Meanwhile, Poland was by no means among the
advanced countries of Europe, with their rising bourgeoisies; it was just as
peripheral as Russia, with a similar dynamic of development. Despite its external
trappings of European culture, from Catholicism to the French fashions of its
noblewomen, Poland on the whole was in decline. Its peripheral status meant
that the Reformation failed, after initially enjoying considerable support. In
the seventeenth century, Poland joined the camp of the Counter-Reformation.
The combination of a peripheral economy with feudal reaction in ideological
matters guaranteed that Poland’s position in a changing world would grow
steadily weaker. In military terms, however, it was not Russia but Sweden that
dealt decisive blows to Poland, setting out to win control of the port cities
through which Polish exports reached world markets.
For Russia, the steady rise of Sweden created new problems. In the mid
seventeenth century, despite the Polish decline, Russia’s position grew even
worse, since up until the Livonian War German and Swedish trading cities had
competed among themselves to attract Russian merchants. In the seventeenth
century, all outlets to the Baltic for Russian goods were in the hands of a
single power, Sweden, which now also controlled a significant portion of Polish
exports. Dutch trade with Russia was limited by the low capacity of the port
of Arkhangelsk.
Every year, as many as 500 Dutch ships set sail for Denmark and Norway,
while the number setting out for Arkhangelsk was no more than 20–30. The
tonnage of the Dutch fleet that plied the Arkhangelsk route was less than 1
per cent of the shipping that Holland had available to it in the Baltic. This, of
course, exceeded the scale of the Dutch trade with Africa and Asia (ten ships
set out for Guinea, seven for India, and only three for China), but the imports
from Muscovy had to compete not with Asian goods, but with American ones.16
Nevertheless, the small size of the Arkhangelsk trade should not lead one into
error; to a large extent, and perhaps predominantly, the Baltic ports of Riga,
Revel, Narva and Vyborg also traded in goods produced in Russia. It was
this that lay behind the relative ease and speed with which Russian authority
was imposed in the country’s new Baltic provinces. After conquering Revel
and Riga, the Russian government had no particular trouble maintaining its
control over them until 1917. These successes for Peter provide a particular
contrast with the difficulties of Ivan the Terrible, who was persistently unable
to consolidate his hold on the Baltic territories. A great deal had changed since
the time of the Livionian War. Not only had the Riga bourgeoisie grown rich on
Russian exports, but they viewed the Swedes as competitors. The government
in Stockholm had not freed the merchants of Riga from the Sund duties, which
Swedes did not have to pay, and the German nobles were gradually losing their
privileges. Repeated efforts by the German elite in the Baltic region to win
‘justice’ from the Swedish king had yielded no results. Worse, in their attempts
to undermine the position of the Germans, the Swedes had begun protecting
the interests of the native population. Not surprisingly, the German barons
and merchants greeted the arrival of the Russians in the Baltic in the early
eighteenth century with relief.
The strengthening of Russia’s armed might, and the country’s emergence
as a naval power in the Baltic, did not in any way alter the peripheral nature
of Russian development. In this regard, the history of the Russian navy is
instructive. Holland, Britain, and even Spain and Portugal needed powerful
navies to support and defend their merchant fleets. By contrast, after winning
an outlet to the sea, Russia swiftly built an impressive navy, but was unable to
construct a significant merchant fleet by world standards until the revolution of
1917. Russia’s trading partners, Britain and Holland, were themselves leading
maritime powers. Moreover, the Navigation Act banned the importing of goods
to British ports except in British ships. The growth of Russian exports, even in
periods when the country enjoyed a positive trade balance with the West, thus
aided primarily the development of British and Dutch commercial capital.
Meanwhile, the Russian fleet in the Baltic was forced to protect the trade routes
for British and Dutch vessels.
In his well-known pamphlet on secret diplomacy in the eighteenth century,
Karl Marx noted that support for Russian military and political expansion
in Europe became ‘the openly professed and orthodox dogma of English
diplomacy’.17 Since Russian tsarism was seen in Marx’s time as the main bulwark
of European reaction, the author of Capital, dispensing with a more painstaking
Marxist analysis, condemned the policy of British cabinets in the harshest terms.
Meanwhile, it is noteworthy that the pro-Russian policy in London was pursued
by the Whigs – that is, by liberals, supporters of free trade and bourgeois
progress. Marx saw this as simply a manifestation of political shortsightedness
and duplicity, and also as proof of Dutch influence; his main aim was to show
that for more than a century, successive cabinets had implemented a policy that
in no way reflected either Britain’s national or its commercial interests. Here,
Marx the radical commentator clearly overwhelmed Marx the scholar.
Examining the statistics for Anglo-Russian trade, Marx noted that in the
course of the Northern War it grew to the same degree that Anglo-Swedish
trade diminished. He therefore concluded that the growth was to be explained
simply by the Russian empire’s takeover of Swedens’ former Baltic provinces.
Marx, however, did not take account of the fact that to a significant degree,
the Baltic ports were trading in Russian goods. British capital had now won
direct access to the Russian market, without Swedish intermediaries or taxes.
Overall, Russia’s foreign trade under Peter the Great rose by a factor of eight
to ten. Most of this increase fell to the share of Britain and Holland.
Both Russia and Poland had entered the world system as suppliers of cheap
raw materials and foodstuffs. But precisely because this role did not, ultimately,
promise major benefits, both countries were doomed to wage a furious struggle
against one another, as they sought to maximise the few advantages that
participation in world trade brought them. In essence, they were fighting for
the same place in the world system. In the sixteenth century Russia had suffered
a disastrous defeat in the first round of this struggle, finishing up on the verge
of total catastrophe; in the eighteenth century Russia not only took its revenge,
but also condemned Poland to economic and political decay, and later to the
loss of its political independence as well. The rise of Russia was accompanied
by the decline of Poland. During the Troubles, Polish troops had stood at
the gates of the Kremlin, and the Polish Crown Prince had laid claim to the
Muscovite throne. The era of trade wars culminated in the division of Poland
and the annexation to Russia of its grain-producing provinces. In the nineteenth
century, Warsaw passed under the control of the Russian tsar.
The division of Poland strengthened Russia’s position in the world economy
as the leading supplier of cheap raw materials and grain. ‘With the incorporation
of Poland,’ Kirchner states with satisfaction, ‘even the land routes had become
free. Russia’s struggle for direct connections with the West had been won, and
both sides profited.’19 Here the historian, defending the principles of free trade,
shows an almost childlike naïvety as he expounds the benefits of destroying
one of Europe’s leading states. After their country had been divided up, Polish
patriots for almost a century and a half appealed to the liberal West for aid, but
were fobbed off with ambiguous promises. Sadly, and as romantics are prone
to do, the fighters for Polish national rebirth paid far more attention to slogans
and declarations than to business interests.
AUTOCRACY
linked in the closest possible way, in terms of their activity, with absolutism and the
feudal sector. They received privileges and loans from the government; were freed from
accommodating billets, rendering services and paying taxes; enjoyed the right to monopolies
on the production and sale of goods; and were allowed the use of forced serf labour.23
From the eighteenth century, numerous merchant families were ennobled, and
hence acquired political rights.
In essence, Russia’s historical tragedy was not that the people were
unaccustomed to freedom or did not love it, but that the organised structures
of civil society were absent. This was why Russia repeatedly won freedom, but
could never consolidate it. The inclusion of Russia in the world economy and
the development of ties with the West led not to the growth and flourishing
of civil society, but to a strengthening of authoritarianism. A contradictory
situation arose. On the one hand, the cultural and ideological influences that
were coming from the West, and that were linked closely to the development
of new relations of production, demanded the emancipation of the individual
and the formation of civil institutions. On the other hand, the logic of the
economic interdependence between Russia and the world system presupposed
that an authoritarian system of rule would remain, not only in the state, but
in society as well. This authoritarianism could not fail to permeate the entire
range of social relationships.
In the nineteenth century, Slavophile historians furiously denounced Peter
the Great for his reforms. This critique, however, was powerless to influence
the dominant trend of historical thought. The reason was not just the obvious
internal contradictions of Slavophilism, which despite angrily rejecting
everything Western, was itself to a substantial degree the product of Western
ideas, primarily German; without the influence of the aesthetic of romanticism
and the philosophy of Schelling, Slavophilism would never have seen the light
of day. More important is the fact that in seeing Russia’s turn to the West
exclusively from a cultural point of view, the Slavophiles looked on pre-Petrine
Moscow as their ideal, without realising how dependent the Muscovite tsardom
was on the West, or that the Russian history of the sixteenth and seventeenth
centuries had prepared the way for the Petrine reforms and made them inevitable.
Considering the course Russia had followed since the 1560s, these reforms were
natural and legitimate, even the country’s salvation. Their relative success, at
least on the cultural and political plane, was determined precisely by the events
that had gone before. The reforms did not represent a break from Russia’s earlier
trajectory of development, but rather its culmination.
Meanwhile, Western influences were not always a boon to Russia. In the
sixteenth and seventeenth centuries Russia battled constantly, making enormous
sacrifices, to be included in the world system which the West was establishing.
During the same period, Japan was closed off from the West. According to the
‘Westerniser’ theories of development, the result for Japan should have been a
historic catastrophe of unprecedented dimensions. For almost 200 years, while
Russia lived alongside the West, traded with it, took part in its wars and adopted
its technologies, Japan remained isolated – losing, as it would seem, nearly two
centuries of development. Then late in the 1860s, when Japan finally opened
itself up to the outside world, there proved to be nothing to stop the country
from rapidly developing a capitalist economy, adopting new technologies and
founding a modern state. In an astonishingly brief period Japan caught up
with Russia, and early in the twentieth century dealt it a crushing defeat in the
war of 1904–05. The victory of the Japanese was not determined by the genius
of their commanders or by numerical superiority, but by their higher levels of
technology and organisation. By the beginning of the twentieth century, the
backward country was not Japan, but Russia.
For the Japanese empire, its self-isolation strategy proved to be more effective
than the modernisation strategy undertaken by the St Petersburg empire. As
an island nation remote from Europe, and with a completely different cultural
tradition, Japan was of course able to choose isolationism. Russia, despite all
the dreams entertained by enthusiasts for old-time piety, had no such choice,
or at least, not in the seventeenth century. Nevertheless, the question thrusts
itself upon us: could it be that the tragedy of Russian backwardness was the
outcome not of remoteness and isolation from Europe, but of precisely the
opposite – of Russia’s closeness to the West and innumerable links to it? Was
this backwardness due to the fact that whatever their wishes, neither Muscovite
Russia nor its St Petersburg successor could escape the West’s impact?
152
The country was necessary as a market, as an object of usurious exploitation, and simply as
a military force. We took to repeating that in Russia during the eighteenth and nineteenth
centuries the state ‘marched ahead of society’. In technical terms, indeed, the state was
always far more progressive than society, since its technology had international capital at its
service. For international capital, supporting the Russian state – or more correctly, Russian
feudalism – became a sort of profession.3
retained but strengthened. Over decades, the privileges of the nobility steadily
expanded. Meanwhile, the privileged stratum, whose sole obligation was to
render military or civil ‘service’, merged organically with the swelling state
apparatus. In this way, Klyuchevsky states, ‘the democratisation of rule was
accompanied by a strengthening of social inequality’.7
In effect, the nobility dragged the countryside forcibly into the market.
During the eighteenth century, the dues owed by the peasants increased by a
factor of twelve. Peasant resistance was crushed in the most brutal fashion. A
decree of 1765 permitted landowners to send offending serfs off to hard labour
camps, and another of 1767 forbade peasants to address complaints about their
masters to the sovereign.
It was not only the nobility that needed money, but also the government,
whose ‘European’ ambitions were resulting in growing financial dependency
on the West. In the eighteenth century, the obtaining of foreign credits became
commonplace. In 1769, Catherine the Great took out a loan in Amsterdam for
7.5 million guilders to pay for her war with Turkey. The following year, money
was borrowed in Genoa.
By the end of the empress’s reign, sixteen foreign loans had been taken out, for a sum of 55
million rubles. Only 36 million rubles of this sum went to cover military expenses, while a
total of 17 million was spent on paying off the loans themselves.8
On average, as much as 5 per cent of the state budget went on servicing these
debts. Present-day historians generally console their readers by stating that this
was ‘a usual practice at the time’. Nor was anyone perturbed by the budget
deficit. ‘Despite all the innovations, the deficit was permanent, and it continually
increased.’9
In the nineteenth century, such phenomena were regarded with less tolerance.
As one of the economists of the period remarked, history knows of few examples
in which ‘the finances of an absolute monarchy were, if not in a flourishing
condition, then simply in order’.10 Trying to exercise control over court spending
was a virtually hopeless endeavour.
The ambitious and spendthrift courts of Western Europe were, indeed,
no better in this respect than the court in St Petersburg. There was, however,
an important difference. The courts in the West borrowed from their own
bourgeoisies – if not in their own countries, then at least within their own
economic zone. The debts of the Western monarchs remained part of the
economy of the ‘centre’, strengthening the position there of finance capital.
The Russian debt, by contrast, served to pump money from East to West, aiding
the development of the bourgeoisie not in Russia, but in the countries of the
‘centre’. It was not simply that the expensive ambitions of St Petersburg were
impossible to realise without foreign help; the very successes of the St Petersburg
emperors also contributed to the development of a new world system in which
Russia was far from being a dominant force.
These successes were quite genuine. The brilliant eighteenth century was
not only a time of military and diplomatic achievements for the St Petersburg
remained the banker of Russia. At the time of Peter they supplied Russia with ships, officers,
arms and money, so that his fleet, as a contemporary writer remarks, ought to have been
called a Dutch rather than a Muscovite one.11
BRITISH CAPITAL
Nevertheless, it was British capital that played the decisive role in Russia’s
foreign trade. In the eighteenth century Britain accounted for almost half of
the external trade of the Russian empire, and in the 1730s, for even more than
half.12 British merchants were also the main buyers of the so-called treasury
goods – iron, copper, potash and rhubarb – whose sale brought direct proceeds
to the St Petersburg government. As a rule, however, the balance of trade
remained in Russia’s favour. The shipments of Russian raw materials were
strategically important to Britain. The only alternative available to the British
was trade with its North American colonies, but the situation here was not
promising. The government in London had sought repeatedly to expand the
shipments from America, but without great success. As the Russian historian
P.A. Ostroukhov observes, importing raw materials from Russia was a simpler
and more profitable option. Despite enormous expenditures of money and effort,
it proved impossible to increase the supplies of timber and other shipbuilding
materials from New England substantially.
Efforts to increase the production of hemp were a complete failure. Equally unsuccessful were
attempts by the metropolis to preserve the forest resources of the colonies as a permanent
source of ships’ timbers. These attempts met with resistance from the local population, for
whom it was far more profitable to export timber to Portugal.13
The problem with the North American colonies, and particularly with
New England, lay in the ‘excessive’ (from the point of view of the metropolis)
development there of bourgeois relations. The colonists had their own business
interests. They were not content with the role of suppliers of raw materials, and
were prepared to compete with their historical homeland. Their ties with Britain
were retained until the mid eighteenth century more for military and political
reasons than for economic ones. Fear of the French presence in Canada forced
them to look for their defence to the British Army and Navy. But as Ostroukhov
notes, even before the Seven Years’ War the North American colonies had
begun to compete with the metropolis on the world market, producing ‘the
same products as were produced in Britain itself’.14
Far more suitable partners for the metropolis were the Southern slaveholding
states, producing tobacco, cotton and rice. They did not compete with Britain,
and supplied it with goods that could not be had from Europe. During the
War of Independence, the political ties between the Northern and Southern
colonies outweighed their commercial relations with the metropolis, but even
after the rupture with Britain, the Southern states continued to provide a raw
materials base for the British market, a situation which also contributed to the
later conflict between North and South.
The American colonists needed raw materials for the development of their
own industries. By contrast, Russia with its serf economy provided Britain with
an ideal raw materials base. The more backward the Russian empire, the more
successfully it was integrated into the world system. Exports to Britain rose
steadily. The rapid economic expansion during the eighteenth century required
constantly increasing supplies of raw materials. It was only in 1710 that Britain
had a positive trade balance with Russia. But in the view of contemporaries,
the strategic raw materials obtained from Russia served ‘the spread of British
trade to all countries of the globe, so that in essence, all the nations with which
Britain trades pay for these raw materials’.15
To a significant degree, Britain’s victory over its competitors in the Russian
market was predetermined by the fact that Britain was the sole Western country
that could permit itself a negative trade balance. Bringing into Russia the silver
that the Russian government and St Petersburg elite sorely needed, the British
shipped out commodities. The French, by contrast, invariably had a positive
trade balance. It should be remembered that according to the mercantilist
ideas of the first half of the nineteenth century, the export of silver from a
country was regarded as a negative phenomenon, while an influx of silver was
considered the main proof of a country’s success in world trade. The result was
that the French encountered numerous problems and restrictions from which
their British competitors were free.
Nevertheless, the view in London was that exports to Russia could be
substantially increased. The main task was seen as expanding shipments of
wool and woven cloth, including for the purpose of providing uniforms for the
After talks with the Russian authorities, it was decided to build ships, on the
Volga, that would be used in the Caspian; the vessels would sail under the British
flag, but the crews would be Russian. The first such ship, with a displacement
of 180 tons, was launched at the government shipyards in Kazan in August
1741. In November 1742 construction was begun of a second ship, to which
the British gave the flattering name Empress Elizabeth. The ships were also
equipped with cannon and powder from the government stores. Russian ships
were ordered to render the British vessels all necessary help while at sea. Also
in 1742, the Governor of Astrakhan, and the commanders in Tsaritsyn and
Saratov, received a resolution of the senate instructing them to see promptly
to the needs of British subjects and their agents.18 The Azerbaijani historian
L.I. Yunusova notes correctly that the Russian authorities were themselves
equipping the fleet of their commercial competitors.
Depending on their construction, the carrying capacity of Russian merchant ships in the
Caspian up to that time had been from three to five thousand pudy (48 to 80 tons). The
relationship between the Russian ships and the planned British vessels, and accordingly of
the prospects for trade using these ships, thus becomes clear.19
trade. Russian merchants would thus gain from the hiring by the British of river
boats for transporting goods, and would also ‘form companies with the British’
to conduct business in Persia.22 Even if the Russian merchants ended up losing
money, this should be tolerated ‘for the good of the state’.23 In practice, things
worked out somewhat differently. Russian capital quickly began to be forced out
of the Caspian zone. With far greater financial resources than the Russians and
with considerable experience in Eastern matters, the British needed the Russians
as military and political collaborators, but not as commercial partners.
Karl Marx, who hated the St Petersburg regime, complained that in developing
ties with Russia, British politicians and entrepreneurs became tools for ‘realizing
the plans of Peter I and his successors’.24 Russian historians and commentators
in turn complained of foreign dominance during the first half of the eighteenth
century. The question, however, is not of who was using whom. Both the
government in St Petersburg and its foreign partners were participating in a
common process, incorporating Russia into the expanding world system.
The government of Anna Ioanovna, consisting mainly of Baltic Germans,
was notorious for its venality and neglect of Russian national interests.
The domination exercised by foreigners in all fields of St Petersburg life
aroused indignation in Russian society. It is significant, however, that, as
Pokrovsky notes,
the foreigners to whom the German government sacrificed Russian interests were not
Germans, but British. Biron did not serve the people who could talk with him in the same
language, but those who paid him more and better.25
As the main rival of the ascendant British empire, France also had its
candidate in St Petersburg. This was Yelizaveta Petrovna, the future Empress
Elizabeth. When a conspiracy against Anna Ioanovna and Biron was hatched
in the Russian capital, the French embassy supported it enthusiastically. The
patriots and opponents of foreign domination, who had united around the
candidacy of Elizabeth, in turn supported close relations not only with the
French, but also with the Swedish court, which was plotting a war on Russia.
As Pokrovsky remarks ironically, the ‘patriotism’ of those times ‘was of a quite
peculiar variety’.26
Events did not unfold quite as the conspirators had foreseen. The Swedes’
military campaign ended in defeat, a fact which Elizabeth was later to exploit;
having promised to reward Stockholm for its help by making territorial
concessions, she reneged on this pledge. The British sought to bring the
conspiracy undone by informing Biron and his associates of the danger, but
Biron’s government was doomed. On 9 November 1740, Biron was arrested.
The struggle was resolved by the Guard, which placed Elizabeth on the throne.
The triumph for France, however, proved short-lived. The objective course
of events favoured Britain. London’s representatives had to bear the expense
of bribing the officials of the new administration, but the decisive factor was
still that of economic influence. Britain was incomparably more important to
Russia’s trade than France. In 1742 a new Anglo-Russian agreement was signed.
The British gradually regained the major positions they had held under Anna
Ioanovna, and which they almost lost in 1740. Even the supplies of cloth for
the Russian army were organised from Britain. In London, liberal observers
stressed that the links between the Russian and British empires were ‘formed
by nature and inviolable’.27
It was only on the question of the Caspian that Empress Elizabeth’s government
took an intransigent position. Those who were to blame for this, however, were
the British themselves, who not only had forced Russian merchants out of the
Caspian, but had also created military and political problems for Russia in the
region. Establishing themselves in Persia’s Caspian ports, British entrepreneurs
had forged links with the local authorities, and had started building a navy for
the shah. One large vessel and a number of smaller ones had been launched,
and several others laid down. Crews for them were being recruited from among
Englishmen, and also from among fugitive Russian bandits who had taken
refuge in Persia. With fittings for the ships in short supply, the Persians tackled
the problem with oriental directness, and set about stripping Russian vessels
that arrived in Derbent, taking ‘superfluous’ anchors and cables from them.
It remains unclear whether the British merchants and shipbuilders were
motivated simply by thoughts of commercial gain, or whether they were
colluding with officials in London. The latter, naturally enough, denied any
involvement in the matter. Whatever the case, the authorities in St Petersburg
could not be indifferent to such developments. In the senate, a report was
drawn up stating that if Persia’s Caspian fleet were to ‘multiply’, this would
lead to an arms race, and that the Russian government would ‘inevitably be
forced to maintain another fleet there, at no small cost to the treasury’.28 It was
decided to take steps to ensure that British military and naval experts did not
accompany merchants to Persia, and British ships were ordered to be detained
in Astrakhan. Even after this, however, British participation in the building of
the Persian fleet did not cease. In 1746 Russia once more banned the British
from the transit trade with Persia. The relevant article in the treaty of 1734
was annulled. At the same time, the St Petersburg authorities set about finding
someone to blame. Since it was impossible for the officials themselves to accept
responsibility for the decision, they decided to make a scapegoat of Astrakhan
governor V.N. Tatishchev. The governor, it was said, had ‘dealings in common’
with the British.29
A new crisis in Anglo-Russian relations erupted in the 1750s, and was connected
with the Seven Years’ War. This was the first conflict that might have been
described as a world war. The battles were fought on land and sea, in Europe,
America and India, and by the coasts of Africa. The military actions began
with a raid on a French outpost in Canada; dismally unsuccessful, this exploit
was organised by a young British officer named George Washington. During
the conflict, the future first President of the United States distinguished himself
solely by his extreme cruelty to prisoners of war.
In the Seven Years’ War, Britain and Russia unexpectedly finished up in hostile
coalitions. The reason was the familiar duplicity of British policy in Eastern
Europe. As in earlier times, London had cultivated relations with Russia while
simultaneously pursuing its interests in countries that were Russia’s competitors.
The global conflict became superimposed on regional rivalry. In this particular
case, a choice had to be made between Russia and Prussia. The Prussian army,
headed by Frederick the Great, was needed by the British empire because it
could strike a blow against the French forces on the European continent, leaving
Britain’s armies free rein in India and Canada. Meanwhile, St Petersburg, fearful
of a strengthening of Prussia, took the side of Paris.
At first glance, the Seven Years’ War was a success for Russia. The Russian
armies emerged victorious from one battle after another, and Königsberg and
Berlin were taken. It was at that point that Frederick the Great uttered his
famous phrase, ‘Everything is lost – except honour!’
It is significant, however, that this war did not become part of the national
myth, in the manner of the campaigns of Peter the Great and Suvorov. It receives
only passing mention in school history textbooks, and few scholarly works are
devoted to it. The reason, of course, is not simply that the victories cost the
Russian forces an unbelievably high price. The losses were monstrous, but in
other wars, too, Russian generals took no special pity on their peasant infantry.
From its very beginning, the Seven Years’ War was not especially popular among
educated society in Russia, and most importantly, it was not understood. For
the economy, the war was catastrophic. Vast military expenditures were added
to the losses associated with the ending of trade with Britain. ‘By the time of
Elizabeth’s death,’ Pokrovsky writes, ‘the position was such that any reasonable
government would have made haste somehow or other to extricate itself from
the conflict.’30
Frederick had expected that the first to conclude a peace would be the
Austrians, on whom he had inflicted serious defeats. The court in Vienna,
however, held out to the last, while St Petersburg offered peace to Prussia
on extremely advantageous terms. Peter III, after inheriting the throne from
Elizabeth, promptly ceased military actions. This peace was viewed in hindsight
as traitorous, since all the conquests of the Russian army were handed back to
Frederick. Until his elevation to the Russian throne, Peter III had been a Prince
of Holstein, and did not conceal his admiration for the Prussian monarch. It
was not, of course, simply a matter of Peter’s sympathy for the ‘enlightened
monarch’ in Berlin, nor of the personal enmity which Elizabeth had nourished
for the ‘Voltarian’ Frederick. The country simply could not carry on fighting,
and had no wish to do so. Russian society was aroused to indignation not by
the peace with Prussia, but by the intention of the young tsar to immediately
start a new war, this time in alliance with Frederick. Another coup followed;
Peter III was driven from power, and soon killed. The throne was assumed by
his wife, a German princess who was to go down in Russian history under the
name of Catherine the Great.
Unlike her unfortunate husband, Catherine was considered a wise ruler. She
pursued the same policies as Peter III, but in a more considered and cautious
fashion. Even before Peter III was crowned, Catherine had emerged as one of
the leaders of the ‘pro-British’ party, and as a leading opponent of war. She was
not, of course, distinguished by any real love of peace, and unlike her husband,
displayed no sentimental admiration for Prussia. She was motivated by specific
political and economic interests.
In essence, Catherine continued the policies of Anna Ioanovna, but from now
on, St Petersburg would not be dominated by short-term favourites or upstarts
with dubious pasts. A more or less stable elite was becoming established, an elite
which, despite the diversity of its pedigrees, was becoming conscious of itself as
a national aristocracy. This political class was capable of ruling effectively. Anna
Ioanovna’s government of Baltic Germans had served foreign interests in minute
detail, for the sake of bribes and short-term benefits, while ignoring the claims
of the Russian nobility; now, the St Petersburg rulers were starting to think
strategically. Under Catherine, a compromise solution that suited both Anglo-
Dutch commercial capital and the Russian elites was at last taking shape.
Catherine’s reign was a time of uninterrupted war. From now on, however,
Russian policy would have a different thrust. In attacking Turkey the government
in St Petersburg was trying to open a new trade route, and to win new markets
in the south, by breaking through into the Mediterranean. The opportunities in
the Baltic that had seemed so enticing in the time of Peter the Great no longer
sufficed for the growing stream of Russian exports. The Baltic trade route,
like the Arkhangelsk route before it, was a sort of trap. It stimulated Russia’s
involvement in world trade and incorporated the country in the international
division of labour, but at the same time Russia was persistently unable to obtain
the benefits that were expected to result. Since the virtues of world trade were
not in doubt, the only solution was through expansion – a dramatic broadening
of exports, the conquest of new markets and, most importantly, of new trade
routes that were not controlled by intermediaries.
INDUSTRIAL DEVELOPMENT
While the seventeenth century had been a time of crisis throughout Europe, the
eighteenth century was a period of rapid economic growth. An element in this
expansion was the impressive rise of the St Petersburg empire under Catherine.
Estate agriculture was being radically transformed. It was becoming increasingly
organised and efficient, and its links with the world market were becoming more
durable. In the view of Pokrovsky, the economic life of Russian landowners in
the seventeenth century amounted to ‘an orgy of naïve people who had glimpsed
commercial agriculture for the first time.’ By the eighteenth century things were
different. For Russia, the economic growth in the West meant ‘a flourishing
of landowner entrepreneurship’. Meanwhile, estate agriculture in Russia was
growing stronger ‘the closer its ties with Western Europe became’.31
Within Russia, foreign commercial capital worked directly with the nobility,
and Russian merchants received only a minor share of the profits. The inevitable
cultural consequences of this were the cosmopolitanism and Westernising views
of the nobles, and the provincial-minded patriotism of the merchants, shut up in
The same was done in Britain under Cromwell, and in France in the time of
Colbert; later, the practice would be repeated in Prussia. ‘But in Russia,’ the
historian continues,
the implanting of large-scale industry met with two difficult obstacles: a lack of private
capital, and an acute shortage of free labour power. Despite the developing unequal
exchange and wealth of furs in vast, newly-conquered Siberia, Russia did not have colonies
as rich as those possessed by Britain and France during the period when capitalism was
emerging; the rural population of an agrarian country was tied to its allotments, and fewer
people left their native surroundings than nascent industry required…. Forcing the pace of
development of large-scale industry, especially in the Urals region with its mineral deposits,
the government and private industrialists resorted to an economic measure unknown in
Western Europe: tens of thousands of state peasants were forcibly assigned to industrial
enterprises. The entrepreneurs were given permission to buy peasants and to employ
them in industrial production. The peasants – assigned, temporary, ‘granted in eternity’, or
purchased – had to work off their dues as serfs in the newly established and multiplying
plants and factories.34
In examining the Russian factories of the eighteenth and the first half of
the nineteenth centuries, the Soviet academician S.G. Strumilin encountered
a problem of methodology. Clearly, what he was studying was not classical
capitalism, since the labour it employed was not free. On the other hand, it was
clearly not feudalism either; it featured neither a natural economy, nor systems
of personal obligations passed down by inheritance. Ultimately, Strumilin
soothed himself and his readers by referring to the ‘transitional’ nature of this
phenomenon.35 Strangely, however, this ‘transitional’ phenomenon existed for
a century and a half, leaving its mark not only on Russian capitalism, but also
on the world economy. Moreover, M. Tugan-Baranovsky remarked that what
occurred as industry grew in the Russian empire was not a transition from
serf to free labour, but, on the contrary, a strengthening of the constraints
on workers. The position of workers deteriorated in direct proportion to the
development of the Russian factory. Since there were both free and serf workers
in plants at the same time, the factory-owners sought persistently to put the
rights of these two categories of toilers on an equal footing, by ending the
freedoms of all. This was achieved in 1736, when an imperial edict was issued
to this effect.36
The logic behind this and many other paradoxes of Russian history must be
sought in the development of the world system. ‘Semi-free’ labour is a normal
phenomenon on the capitalist periphery. This was not only the case in the early
stages of the history of capitalism, but remains so in the early twenty-first
century. Restricting the freedom of workers is the price which the periphery
pays for successful integration into the system; it is the periphery’s competitive
advantage. ‘Free’ labour hire in the centre is not only combined with far harsher
forms of exploitation on the periphery, but is an important element in the global
division of labour.37
RUSSIAN METAL
The Northern War led to rapid growth of the metallurgical industry in the early
eighteenth century. Previously, Russia had obtained a significant proportion
of its iron from Sweden. With the beginning of the war against the Swedes,
these shipments naturally stopped. Peter the Great, meanwhile, needed metals
in growing quantities to equip his armies. To meet the wartime needs, new
plants were established in the Urals and in European Russia, and old ones were
expanded. Not only were workers brought there by force, but entrepreneurs were
also compelled to join companies organised by the tsar. In the Urals the plants
were mainly private, but in western Russia, close to the theatre of war, state-
owned blast furnaces were built. Despite all the drawbacks of Peter’s methods,
results were achieved. By the 1720s, an important metallurgical industry had
been created, most of it concentrated in the Urals.
With the end of the war, it was found that productive capacity exceeded
demand on the internal market many times over. Meanwhile, as if from inertia,
the growth of state-owned plants continued, including in the Urals. Production
could now be developed only on the basis of the external market. Already by
the end of the Northern War, Russia was exporting an average of 35,000 pudy
(one pud was equal to roughly 16 kg) of iron per year to Britain. After the
war, exports grew rapidly. In 1723, a total of 360,177 pudy of iron was sent
abroad.38 Thanks to serf labour, selling Russian iron on Western markets was
extremely profitable. In addition, world prices were steadily rising. In 1720 a
pud of bar iron cost 0.45 rubles in St Petersburg, and 0.89 rubles in London.
The corresponding figures in 1766 were 0.72 and 1.81 rubles, and in 1798,
1.16 and 2.90 rubles.39 With the beginning of the industrial revolution in the
1770s, demand for iron in Britain grew rapidly, and this was naturally reflected
in prices. Under Catherine the Great, Russia held first place in the world for
iron production. Internal demand, however, was extremely weak. In 1769, the
problem of overproduction in the metallurgical industry was being discussed at
court. As well as going to Britain, Russian iron was being exported to France,
where rival producers were complaining that the competition was ruining them.
Iron was also exported through the port of St Petersburg to Holland, Spain,
and even North America. The only alternative on the world market was Swedish
iron, but this was noticeably dearer. Contemporary scholars observed that in the
eighteenth century Britain could ‘no longer get by without supplies of Russian
iron’.40 Between 1754 and 1793, 55–74 per cent of Russia’s iron exports went
to Britain. Even the Russian producers, however, were thoroughly dependent
on the British. Not only was Britain the main purchaser, but British merchants
held a virtual monopoly on the exporting of iron from Russia.
In eighteenth-century Russian metallurgy, state and private interests were
closely intertwined. The Demidov and Stroganov plants in the Urals were
private, but operated on the basis of state monopolies. Oriented to the world
market, metallurgy became one of the most important sources of funds not only
for the government, but also for the aristocracy. Periods of state construction
alternated with waves of privatisation, when state enterprises were transferred
The truth is that this glittering cavalcade of the nobility never gilded their chosen industrial
plants with their brilliance. These people were not builders, but dilettantes. Benefiting from
the favours of loving tsarinas, they eagerly acquired factories as gifts or on credit, or as
dowries for wealthy brides. But while pilfering virtually all the state enterprises in this
manner, they multiplied their indebtedness, and having lost their factories, in almost all
cases found themselves once more in financial strife.41
Russian serf-owners were perfectly familiar with the ideas of free trade.
Nevertheless, Catherine the Great was perturbed by the lack of competition
on world markets. She therefore addressed a letter to the College of Commerce,
insisting that a search be made for new markets for Russian iron. In her view, the
metal could be exported not only to Britain, but also to Mediterranean Europe,
thus subjecting the British purchases to competition. The tsarina considered
that if need be, iron could even be sold at a loss, so long as competition was
created. But when the College of Mines and the College of Commerce saw the
letter from the empress, they disagreed with her suggestions. As they saw it, the
decline in returns from selling Russian iron was not linked to the monopolisa-
tion of export operations by the British. It was simply that the production of
Russian state and private enterprises was ‘continually multiplying’. In short,
the problem was a typical crisis of overproduction, that had nothing to do with
the way the international economic order was structured. ‘The more iron there
was in the port to be shipped, the more its price fell.’43 The College of Mines
suggested making up for the losses from falling prices by expanding exports.
The devotion of the Russian bureaucracy to the ideas of the free market
proved insuperable, and the empress was forced to yield. The success of her
project was also blocked by political factors; the exit to the Mediterranean was
in the hands of the Turks. Consequently, it was difficult for Russia to trade with
Italy and Spain. The demand in these relatively backward European countries
was limited and, as the bureaucrats correctly noted, it was necessary to ship
other goods there besides iron. Meanwhile, the demand in Russia for goods
from these countries was minuscule.
It is significant, however, that it does not seem to have entered the heads
either of the enlightened monarch or of her opponents that it might have been
possible to develop domestic demand as well, and not only on the basis of
defence production. The narrowness of Russia’s internal market was linked to
the serf-holding system, which meant that the overwhelming majority of the
population exercised no effective demand. However, it was precisely this system
which gave Russia its distinctive competitive advantage on the world market.
The metal smelted by serfs was cheap. For the elites that had arisen in post-
Petrine Russia, the super-exploitation of their own population was a means
of economic and cultural integration into Europe, the basis not only of their
prosperity, but also of their country’s status as a great European power.
For the ‘free’ economy of Britain in turn, obtaining cheap raw materials
and semi-finished products from Russia and America was very important.
Precisely because British labour was free, and hence relatively expensive, a
special significance attached to supplies of cheap iron, cotton and other goods
produced by serfs in Eastern Europe or by slaves on American plantations.
Russia was not only modernising itself on the basis of serfdom, but was also
making its contribution to the development of European capitalism. There
was only one way in which the cheapness of Russian exports could be made
up for – through increasing the volume of sales. This could be ensured only by
constant expansion; not so much economic as military and political. Although
Catherine’s plans concerning the metals trade in southern Europe remained on
paper, she did not cease her interest in the Mediterranean.
against one another, exploiting the vast military potential of the Russian empire
for their own purposes.
Russian expansionism in the eighteenth century was supported by Britain,
Holland and even Prussia above all because it answered the objective needs
of the developing world economy. Dominating Eastern Europe, the Russian
empire assisted in maintaining order in the region, and helped integrate it into
the world market. This was why the Western powers did nothing to obstruct
the gradual swallowing up by the St Petersburg rulers of Poland and the Baltic
region, but took pains to ensure that Russian expansion did not extend beyond
the bounds of the peripheral zone to which the empire itself belonged. Hence
during the Russian-Turkish Wars of the eighteenth and nineteenth centuries,
Russia’s Western partners did not prevent the court in St Petersburg from
widening its domains at the expense of the ‘sick man of Europe’, but never
allowed the Russian monarchs to force the matter to its conclusion. Plans
to finally dismember Ottoman Turkey were nurtured in St Petersburg for a
century and a half, but each time they had to be abandoned. Catherine II was
compelled to bury her ‘Greek project’ – a plan to create a Greek state under
Russian control, with its capital in Constantinople and with a Russian Grand
Prince Constantine at its head. At that point, the main opposition to Russian
interests was coming from France, but Russia’s allies, Britain and Austria, were
not willing to support the empress’s plans either.
The war with Turkey ended in the Peace of Kuchuk-Kaynardzha, on terms
that were very favourable for Russia, but which at the same time represented
the total collapse of Catherine’s ‘Greek’ ambitions. Andrey Zorin, a student
of eighteenth-century Russian political life, notes that this resistance on the
part of Christian powers to Russian plans with regard to the Muslim Turks
aroused genuine puzzlement among the Russian elites, and laid the basis for ‘the
mythology of a world-wide conspiracy against Russia’.44 Meanwhile, French
policy was viewed in St Petersburg not simply as hostile, but as an attempt ‘to
exclude Russia from the system of European states’.45
If we are to regard Catherine’s ‘Greek project’ as an attempt to restore the
route from the Varyags to the Greeks, it is obvious that this was a utopia in the
era of Atlantic trade. Nor can the symbolic importance of Constantinople as
the centre of the Orthodox world have been of much concern to Catherine – a
German, educated in the writings of the French enlightenment. Nevertheless,
the effort by St Petersburg to broaden its influence in southern Europe was not
rooted exclusively in a desire for territorial conquests.
The states of Eastern and southern Europe, which like Russia were part
of the peripheral zone of the world economy, were doomed in one way or
another to fall under the influence of the empire. The more ‘backward’ these
countries became in the process of development, and the more dependent
they became on the West, the greater the influence on them of their Eastern
neighbour. In ideology, causes and consequences will often swap places, and
hence the economic ‘backwardness’ of the region has been ascribed in hindsight
to Russian influence, while the situation in practice was very much the reverse.
This misconception also helps explain the hope (particularly characteristic
of the Polish elites in the nineteenth and twentieth centuries) that liberation
from Russia and the forging of political ties with the West would help the
countries of Eastern Europe to solve their problems. It also lies behind the
near-unbroken series of ‘betrayals’ on the part of the West, which periodically
handed over its freedom-loving admirers to the mercy of the Russian autocracy.
A classic example of this was the notorious indifference of the West to the
Polish uprisings of the nineteenth century. The partitions of Poland, the
Congress of Vienna and the Russo-Austrian alliance against the Hungarian
revolution of 1848–49 successively strengthened the role of the regime in St
Petersburg as the gendarme of Eastern Europe. In this role, Russia acted
with the complete approval of the Western powers, and in the interests of the
developing international economic order.
In the 1780s and 1790s, grain became an exceptionally profitable commodity, and
the growth of demand was accompanied by the modernisation of agriculture.
Although rye had been exported from Russia since the time of Ivan the Terrible,
the country’s main agricultural export was not grain, but industrial crops. In
the eighteenth century first place had been held by hemp, followed by flax.
Hemp was needed for sails and ropes, without which the ships of the time
could not have functioned; it was as much a strategic material as coal was in the
second half of the nineteenth century, or oil in the twentieth century. Top-grade
Russian hemp went to Britain, while material of lesser quality was supplied
to the French. The Russian peasants produced hemp for their own use only
in minuscule quantities, and on the internal market demand for it was small.
But landowners, oriented toward demand on the world market, induced their
peasants systematically to sow hemp in the fields.
GRAIN EXPORTS
The question of how important grain exports were to the Russian economy was
already the topic of lively debate in the nineteenth century. Some writers argued
that the exporting of grain played a key role in the country’s development, while
others set out to show that no more than a tiny proportion of the grain produced
was exported, and that as a result there could be no talk of agriculture being
export-oriented. Both sides were able to put forward persuasive arguments
to support their point of view, which is not surprising if one considers that
the volume of grain exported varied widely depending on the harvest and
the state of the world market. What is really important, however, is not how
much grain was shipped abroad in one year or another, but the fact that world
grain prices gradually began to determine the prices on the internal market.
This was because nowhere near all the grain produced in Russia was meant to
be sold. In a country where most of the population lived in the countryside,
the internal market was not especially large. Exports might have been small
compared to the overall quantity of grain produced, but if we take account
only of the grain produced for sale, the picture changes radically. Agriculture
was becoming export-oriented to the same degree in which it was becoming
commercial and market-driven.
Pokrovsky noted that the two types of grain produced in Russia corresponded
to the social hierarchy. Rye was a ‘peasant’ crop, while wheat was the grain of
the gentry. The growth in wheat production was linked closely to the growth
of commercial agriculture and to its integration into the world market. The
variations in wheat prices in Russia throughout the nineteenth century reflect
170
world trends. But the prices for rye also reflect the same dynamic, though with
a certain delay. The influence of the world market was gradually beginning to
affect not only landowner agriculture, but also that of the peasants.
In the post-Petrine era, grain exports from Russia were restricted by the
fact that while there was a surplus of grain in the south of the country, there
was, as a document of the period observes, ‘no port close to those regions’.
In citing this remark, Pokrovsky concludes ironically that with these words, ‘a
modest, unremarkable individual from an out-of-the-way place set forward the
philosophy behind all the Russo-Turkish wars of the eighteenth century’.1
GRAIN AS STRATEGY
Throughout most of the eighteenth century, the main doors onto the world
economy remained Riga and Arkhangelsk. The policy of Peter the Great, and
of the following generation of imperial rulers, was aimed at encouraging the
use of the port of St Petersburg in every way possible. From the point of view
of economic geography, however, the capital had been built in a completely
inappropriate place. Politically, St Petersburg might have been a window on
Europe, but not for the reason that it was located on the Baltic; constructed
from the very beginning as the capital of a great European power, it embodied
the architectural-bureaucratic utopia of the eighteenth century. St Petersburg
was never intended to be anything except a capital. The only other function
it was capable of fulfilling was a military one. Pushkin was entirely correct
when he put into the mouth of Peter the words, ‘A city will be founded here to
spite the haughty neighbour’, and ‘from here we shall menace the Swede’. St
Petersburg closed off the mouth of the Neva, and in this respect was located
in a very important strategic position. As early as the thirteenth century the
Swedes had tried to establish the fortress of Landskrona on the site, and in the
seventeenth century had seized this patch of ground from Muscovy, a piece of
territory of no special value for them in itself, but very important militarily.
Russia ultimately acquired a great city that was to come under military threat, or
attack, in the course of almost every major European war. But unlike Moscow,
situated in the very heart of Russia, the city which Peter ordered to be built on
Russia’s outskirts has never once been captured by an enemy.
The presumption that once the port of St Petersburg had been established ‘all
flags would visit us’ nevertheless turned out to be false. The policy of favouring
St Petersburg did enormous damage to Arkhangelsk and impeded business in
Riga, but still yielded no results. The restrictions on the Arkhangelsk trade
were lifted in 1727, but the harm they had done was so great that the city never
recovered its status as a major port.
The greatest gains from Peter’s victories were made by the German city
of Riga, which became one of the largest cities in the Russian empire. Riga,
however, did not trade only in Russian goods. Grain was exported through Riga
from Lithuania and Belarus, which at that time were still under Polish rule.
Though an important export, grain was not the main one, and the authorities
in St Petersburg had trouble formulating a consistent policy with regard to it.
The rise of Russian grain exports coincided with a period of great turmoil in
Europe. Among advanced French thinkers, the Russian empire was considered
an enlightened monarchy, distinguished by a much greater liberalism than the
French regime with its foolish and incompetent kings. When revolution erupted
in France, however, the enlightened government in St Petersburg joined with
the liberal elite of Britain in opposing it. Understandably, the St Petersburg
bureaucrats were not delighted by the ideas of the Jacobins, but the principles
of British parliamentarism were alien to them as well. Ideological hostility to
revolution was in this case superimposed on economic interests, and reinforced
by British gold.
The result was that Russian armies turned up in the most unexpected corners
of Europe. Admiral Ushakov joined with Nelson in defeating the French fleet in
the Mediterranean, and attacked the island of Corfu. Suvorov fought in Italy,
and then crossed the Alps. None of these victories for Russian arms yielded the
country an inch of new territory. They were the price paid for the Anglo-Russian
alliance, with all the benefits that flowed from it for Russian bureaucrats and
landowners. In 1798, when French troops under the command of the young
Napoleon Bonaparte landed in Egypt, the British government even discussed
whether to hire a Russian army to defend India.5 Even the conservative patriot
Danilevsky was forced to admit that in the wars of the late eighteenth and early
nineteenth century, the armies sent by Russian emperors to the West fought
‘with varying degrees of success, not for Russian interests but for European
ones’.6 Danilevsky saw the reason for this solely in the ‘nobility’ of the Russian
government, always ready to come to the defence of European peoples suffering
from French aggression. This ‘nobility’ on the part of St Petersburg was of
course paid for generously with British gold, and was linked closely with the
general commercial interests of the two empires. The attempt by Catherine’s
heir Paul I to alter the direction of Russian foreign policy ended in a coup d’état.
Paul’s plans to end the alignment with Britain, and his decision to join with
the French in waging war on the British, were regarded by the St Petersburg
elite as obvious proof of derangement; in the same category was the new tsar’s
anxiousness to improve the situation of rank-and-file soldiers at the expense of
the nobles who made up the officer corps. The image of Paul as a mad emperor
has been cemented so firmly into the national historical tradition that in the
period since, only a few scholars have tried seriously to examine his actions.
Even the progressive elements in the Russian elite were strongly convinced
that it was necessary to stick with the British. The future Decembrist Denis
Fonvizin wrote:
The break with Britain dealt enormous harm to our foreign trade. Britain supplied us with
manufactures and with goods from its colonies, in exchange for the raw materials produced
by our soil. This trade represented the sole route through which everything Russia needed
flowed into our country. Through the export of grain, ship’s timbers, masts, lard, hemp, flax
and so forth, the nobility received reliable incomes from their estates. The rupture with
Britain shattered the material well-being of the nobility, and strengthened the hostility to
Paul which his harsh despotism had in any case aroused. The conviction became almost
universal that by some means or other, Paul needed to be removed.7
The continental blockade was advantageous for the former, but for the latter it spelt disaster.
Speransky was on the side of the industrialists…. For him, the political freedom of Russia
flowed from the country’s industrial development. His understanding of this point was
entirely bourgeois; he regarded a juridically free worker as the sole conceivable basis for
‘industrialism’.13
In the history of our social development, the second decade of this century was curious
for the arguments over protectionism and free trade that engaged public consciousness to
an extraordinary degree. Since the overwhelming majority of educated people at this time
were connected in one way or another with the agriculturalist class, it is understandable
that protectionists, or more precisely supporters of the system of trade bans, did not enjoy
public sympathy. The number of pamphlets written in defence of the existing tariff was very
small compared with the pamphlets and articles favouring free trade.15
How important was the world economy to the development of Russia in the
eighteenth and nineteenth centuries? It is obvious that only a tiny proportion
of the country’s resources finished up on the world market. The peasants and
landowners in a remote province from which ‘you would ride for three years
without encountering any sort of state’ had only an extremely dim notion
of what the world market amounted to. In St Petersburg, however, people
understood the world market very well, even too well. Precisely because they
understood these matters, they drove the peasants and the landowners to war
at the point of a gun, forcing them to take part in endless incomprehensi-
ble conflicts, sometimes at the other end of the continent. Either the Russian
forces were to take Berlin, or they were to conquer Crimea, or cross the Alps;
eventually, they reached Paris. Russian society was uniformly proud of these
victories, but the majority of the population, including the provincial nobility,
rarely had any comprehension of the purpose of these campaigns. The war of
1812 was the first conflict since the time of Peter the Great that ordinary people
had understood; it was this that earned it the name the ‘Patriotic War’.
In the early twentieth century, when no one was yet prepared to talk of
the positive role of serfdom in history, Lenin argued that the serf-holding
landowners had tried unsuccessfully to fence Russia off from the West, to
‘impede the growth of commodity exchange between Russia and Europe’, in
order to ensure the survival of the ‘old, decaying economic forms’.16 Lenin
here was clearly reiterating the standard positions of liberal commentary. In
reality, the serf-holding economy had a vital interest in the foreign market, and
served as a sort of agent drawing Russia into the world system. Pushkin in the
1830s coined his well-known remark to the effect that the government, despite
its crudity and cynicism, was ‘still the only European in Russia’.17 The poet,
of course, was not referring to the cultural achievements of the St Petersburg
bureaucrats, but to their involvement in wider European affairs and to their
resulting wish to ‘modernise’ the country.
For all its authoritarian bureaucracy, St Petersburg was for Pushkin a
source of dynamism, a force impelling the country into motion and causing
it to participate in world affairs. It would be naïve, however, to explain this
behaviour of the authorities solely on the basis of their political ambitions. The
Europeanism of the authorities was predicated on the involvement of the elites
in the international economy. The Russian capital needed the money and goods
to be had from the world market. The higher the position of a social group in
the St Petersburg empire, the stronger its ties to Europe – or, in other words, to
the emerging bourgeois world system. It is true that the people drawn into this
system made up only a tiny minority of Russia’s inhabitants. But it was this
minority that ruled the country and, in essence, owned it.
In the late 1770s the Russian writer Denis Fonvizin travelled about Europe
with his ailing wife, and left us an extremely revealing set of observations.
Europe, living with a presentiment of future revolutionary shocks, appalled
the Russian writer with its coarseness. Everywhere, Fonvizin saw backwardness
and barbarism. In the eastern regions of Germany he encountered abominable
roads, revolting food, an unreliable postal service, drunkenness, rudeness and
inefficiency. A journey by mail coach was akin to torture.
Generally speaking, the postal institutions of His Prussian Majesty are not worth a farthing.
His posts at their fastest are much slower than our foot-messengers. In Saxony things are
a little better, but also quite bad.18
Only the western regions of Germany met with the traveller’s approval. Having
crossed the French border, Fonvizin recorded,
When we entered the city we were met by a revolting stench, so that we could no longer
doubt we had arrived in France. To be brief, they have not the slightest conception of
cleanliness here. People are allowed to pour anything out of the windows onto the street,
so of course no one opens their windows unless they want to suffocate.19
The streets in France were narrow; in Lyons, ‘the widest would not serve as
an alley-way in Russia, and they are wretchedly maintained’.20 In the middle
of a city, the Russian writer notes, ‘the French allow people to singe pigs! Just
think whether they would find anywhere to singe a pig in Millionaya Street,
and whether our police would let them do it!’21 Even the customs of the French
aristocracy evoke Fonvizin’s condemnation:
The table napkins in France are so filthy that the ones used by the nobles on feast-days are
incomparably worse than the ones that in Russia are put out on weekdays in poor homes.
They are so coarse, and so poorly washed, that wiping your mouth is a vile business.22
Things in Italy were even worse. The poverty was such that ‘on fertile soil, the
people suffer from hunger’.23 All around, there was ‘an enormous amount of
swinish behaviour’. Meanwhile, ‘the floors are of stone, and dirty; the linen is
filthy, the bread is such that the poor in Russia would not eat, and they consider
to be clean water what we would regard as slops’.24
On top of everything, Russia in Fonvizin’s view was a much freer country
than Italy. In St Petersburg and Moscow people freely read Voltaire, Diderot
and Rousseau, while in Rome these writers were strictly forbidden. In short,
the Russian traveller on returning to his homeland came to the firm conclusion
that ‘life in St Petersburg is incomparably better’.25
One of the few people in Paris whom Fonvizin found genuinely interesting
was Benjamin Franklin, United States Ambassador and one of the Founding
Fathers of American history. There is something to ponder in this meeting of
two heartsick enlighteners, one of them representing a slave-owning republic,
and the other a serf-holding monarchy.
If we are to believe Fonvizin, eighteenth-century Russia had far outstripped
the West in all respects. The same era, however, has left us another literary
memento, Aleksandr Radishchev’s Journey from St Petersburg to Moscow. The
picture drawn by this traveller was so gloomy that the book was banned and
its author was exiled to Siberia.
Fonvizin made two journeys about Europe, the first in 1777 and 1778, and the
second in 1784. Radishchev’s book was published in 1790. In other words, the
rapture of Fonvizin and the horror of Radishchev relate to one and the same
period. The first traveller looked on the road before him with the eyes of a St
Petersburg nobleman. It never occurred to him that there was no need to ban the
books of Voltaire and Rousseau in an empire where most of the population was
illiterate, and where most of those who could read were satisfied with the existing
order. In Europe he was everywhere confronted by ordinary people, appearing
with their uncouth manners before his haughty gaze. In Russia, the police
would not permit such an outrage. The local aristocrats bore no comparison
with those in Russia, since they were short of cash. From the bearers of noble
titles, money had passed to the bourgeoisie. Radishchev, by contrast, sought
to look at his road through the eyes of the peasants and common people. His
Russia was not mighty and brilliant, but god-forsaken and sinister.
However, neither the moral indignation of Radishchev nor the well-meaning
recommendations of the French enlighteners influenced the policies of the
St Petersburg government. This was not only because the government rested
above all on nobles with an interest in serfdom, but also because it saw no
other path it might have followed. Even the Pugachev revolt failed to shake
the conviction of St Petersburg that for Russia, being a European power and
being a serf-holding country were one and the same thing. Numerous French
books on the rights of the individual crammed the libraries of St Petersburg
aristocrats to whom it never occurred that all this might have some bearing on
the lives of enserfed peasants. This situation only changed in the early nineteenth
century. The reason was not only that the new generation of young people who
had grown up in Moscow and St Petersburg read the books of Voltaire and
Rousseau more attentively than their parents. Russia after the Napoleonic Wars
was a country on the rise.
This was not only because the campaign of 1812 took on the character of
a victorious popular war, following which Russian forces reached Leipzig in
1813 and Paris in 1814. Nor was it only because of the hopes aroused in society
by these victories and by the liberal promises of Alexander I. In economic
terms as well, Russia at this time was achieving a great deal. The results of the
modernising efforts of the eighteenth century were finally starting to have an
effect not only in St Petersburg and Moscow, but in the provinces as well. The
prospects for agriculture looked highly pomising, while industry, which had
received a powerful stimulus during the years of the continental blockade,
continued to develop rapidly. Manufacturers were taking their products onto the
world market, and in Europe the demand for Russian iron remained relatively
high. Western Europe needed constantly increasing quantities of Russian grain,
and the ports of southern Russia began to develop rapidly. Odessa, which had
been founded in 1794, grew apace. Described by nineteenth-century economists
as ‘the commercial capital of the Black Sea coast region’, Odessa flourished
thanks to the grain exports.26 In 1802 the city had a mere 400 buildings, and
at most, 8,000 residents; by 1812 the number of buildings was 2,600, and the
population had reached 35,000.
In the years from 1813 to 1817, Russian grain exports increased by a factor
of five. As the industrial revolution in Britain continued, Pokrovsky writes,
the Russian landed estate was transformed into a ‘ grain-producing factory’.
This change had already been in evidence in the late eighteenth century, but it made its
effects felt with particular force immediately after the Napoleonic Wars… in the middle of
the second decade of the nineteenth century.27
Serf labour was relatively unproductive, but cheap, and could be extremely
profitable so long as the market was more or less stable. When the need appeared
for a sharp increase in labour productivity, however, the inefficiency of the
serf system became apparent. This was clear both from the point of view of
the landowners and in terms of the general developmental needs of the world
system. Grain was in short supply. Prices in London rose rapidly, from 50
shillings a quarter in the late eighteenth century to 90 shillings at the end of the
Napoleonic Wars. Not surprisingly, the Russian nobility increasingly became
imbued with the spirit of free trade, in the spirit of the Manchester school of
British economists. Pushkin with a degree of irony records that his hero Onegin
has read Adam Smith, and Marx later took satisfaction in quoting fragments
from Evgeny Onegin that in his view bore witness to an exemplary grasp of
political economy. This enthusiasm on the part of Pushkin’s hero was perfectly
understandable to the poet’s contemporaries. Pushkin’s novel, including its
account of the economic views of the nobility of the time, was indeed ‘an
encyclopedia of Russian life’.
An enthusiasm for the ideas of free trade was typical of the landowners of
that period. Unlike the nobility and aristocracy, Russian industrialists favoured
protectionism, but it was not they who set the tone in the capital. Describing
the moods of the St Petersburg elite in the early nineteenth century, Tugan-
Baranovsky turned his attention to the universal enthusiasm for the ideas of
Adam Smith. As we see, Pushkin’s Onegin was far from being an isolated case:
‘If we look through the St Petersburg Journal, the official organ of the Interior
Ministry in the early years of the century, we are struck by how much space in
this publication is devoted to the preaching of the Smith school.’28
It was none other than that favourite of the tsar, Count Aleksey Arakcheev,
who drew up the next proposal for the emancipation of the peasants. Yet
Arakcheev was to enter Russian history as a symbol of harshness and despotism!
Pokrovsky speaks repeatedly of ‘Manchester nobles’. It is significant that
such sentiments should have held sway among the inhabitants of the ‘nests of
gentlefolk’ at this time, when the conjuncture on the world market was especially
favourable. On this same world market, however, import changes were taking
place. It was only at first that the industrial revolution in Britain and the ending
of the wars on the continent brought a sharp increase in the demand for Russian
raw materials; later, demand began to decline. The technology employed in
British metallurgy was being modernised, and shipbuilding was also gradually
changing. As the fleet made the shift to steam power, demand lessened for the
hemp, sailcloth and masts which the Baltic coast had earlier supplied to British
and Dutch shipyards. Finally, the ending of hostilities made it possible to buy
THE DECEMBRISTS
The revolt of the Decembrists was to become a seminal myth for Russian culture.
Some people see in this episode a romantic story of noble aristocrats who,
infused with the ideas of the enlightenment and proceeding about Europe in a
victorious campaign, decided to renounce their class privileges. The revolution-
aries of the second half of the nineteenth century declared the Decembrists their
direct predecessors, and not even Lenin rejected this heritage. Here, however,
the Marxist tradition encounters a serious problem. On the one hand, we are
faced with a movement voicing demands that were clearly revolutionary. On
the other, the leaders of this movement and most of its participants belonged
to the traditional elite of society.
Despite their aristocratic origins, Mikhail Pokrovsky explained a century
later, the Decembrists were genuine revolutionaries. In terms of the ideas of the
age, theirs was an extremely advanced political organisation. The Decembrists
had ‘proceeded to the utmost limit of revolutionism that is attainable by non-
proletarian classes’. More could not have been demanded of them, since ‘there
was no proletariat whatever in Russia at that time’.29
What induced these brilliant aristocrats to resort to ‘the utmost limit of
revolutionism’? At first glance, the image of the Decembrist revolt as doomed,
as premature, as having been plotted by people who were ahead of their time, is
confirmed by the general picture of the reaction that held sway in Russia after
the movement collapsed. The words of Aleksandr Griboedov, commenting
ironically on an attempt by 100 ensigns to turn the country upside down, have
remained in popular consciousness. So too has Lenin’s well-known formula:
‘The circle of these revolutionaries was narrow, and they were terribly remote
from the people.’ For Lenin, the revolt of 1825 was not of significance in and
of itself. It did not represent an opportunity that was let slip. Rather, it was
an essential first step, after which a second would naturally follow: ‘Their
exploit was not in vain. The Decembrists aroused Herzen. Herzen expanded
the revolutionary agitation.’30
Every subsequent generation of revolutionaries was more radical, more
democratic (‘popular’) and more effective. After Aleksandr Herzen came the
narodnik populists, whose agitation was broader and more profound, and finally
there appeared the Marxist social democrats, at the head of ‘the only thoroughly
revolutionary class’, the proletariat. The activity of Lenin’s Bolshevik party
represented the culmination and completion of a century-old process. This
scheme, completely in line with the Hegelian tradition, looked convincing at the
dawn of the twentieth century. The real story, however, was far more complex
and dramatic.
The image of the Decembrists as a ‘small circle’ is quite debatable. Of course,
they were not a large group compared with the mass parties of the twentieth
century, but both the Union of Prosperity and the Union of Salvation were
relatively serious organisations for their time. Even the materials of the official
investigation provide us with a picture of a distinctly impressive conspiracy, by
no means restricted to a narrow circle of St Petersburg malcontents. Beyond the
scope of the investigation there remained thousands of sympathisers who were
not, of course, prepared to join in the conspiracy, but who would cheerfully
have attached themselves to the rebels had the latter been victorious. Naturally,
the defeat of the Decembrists was not a matter of chance. But neither was their
attempt to transform Russia a baseless adventure. Indeed, their enterprise was
absolutely in keeping with the times.
Secret societies began to be formed immediately the Napoleonic Wars ended.
First were the Russian Knights (1814), then the Union of Salvation (1817),
followed by the Union of Prosperity in 1818. By 1821 a fully-formed conspiracy
had arisen, and had drawn into its orbit not only a considerable section of the
St Petersburg elite, but also provincial officers from the impoverished nobility,
who provided the backbone for the Southern Society and the Society of United
Slavs, representing the extreme left of the movement. In the unique political
and economic situation of the years from 1815 to 1825, the boldest and most
enlightened section of the Russian ruling class saw a historic opportunity
opening before the country. Once the social order had been modernised, the
logic of peripheral development could be broken, and Russia could be turned
into a fully-fledged European power, possessing not only a large army, but also
a strong and independent economy. The military and political outcomes of the
years 1812–14 needed to be consolidated on the level of social development, or
they would be irretrievably lost, as indeed happened under Nicholas I.
The Decembrists were not merely aristocrats, but in the first instance constituted
a military elite. In this respect the conspiracy of 1825 was fundamentally unlike
West developed, the more Russia felt the constraints of its peripheral position.
Initially, the falling-off of exports to Britain was compensated by the growth
of purchases by the countries of continental Europe, but then Russia began to
lag behind these countries as well. As exports declined, the narrowness of the
internal market made its effects felt. The growth of output slowed, and the sector
began falling into decline. By 1825 Russian metallurgy had been overtaken by
that of France and North America, and in 1855 Russian output of cast iron
was less than that of Germany and Austro-Hungary. By the mid nineteenth
century Russian industry needed to import cast iron from Britain.
In the new conditions, the reform projects which the court had found so
captivating in the time of Alexander I were quite unrealistic. Nicholas I was
by no means a committed supporter of serfdom; various proposals for the
emancipation of the peasants continued to be discussed in St Petersburg
throughout his reign. Enacting these proposals against the background of
an extremely unfavourable market conjuncture, however, would have meant
ruining the landowners. Consequently, the plans for making the shift to freely
hired labour and for modernising agriculture no longer seemed so attractive
economically as during the previous reign.
Even in the absence of reforms, the landowners were starting to have
problems with money. Large numbers of estates were mortgaged, with the
state bank, as the Marquise de Custine noted, acting as the main creditor to
the nobility. The government thus obtained an additional instrument of control
over ‘enlightened society’.
The reign of Nicholas I was not, however, a period of total economic
stagnation. Industry, which had received an impulse to its development during
the years of the continental blockade, contined to grow, and at quite rapid rates.
The narrow internal market was by now insufficient for the Russian factory-
owners. In order to maintain industrial growth, the government resorted to
protectionism, defending the Russian market against British competition;
meanwhile, new markets needed to be sought. There was obviously no serious
possibility of exporting Russian industrial products to Europe. That meant that
markets had to be secured in the East – in Turkey, Persia and Central Asia. Out
of necessity, Russian foreign policy was becoming expansionist.
The growth of Russian industry had put in question Russia’s place in the
international division of labour. The mutual understanding between Britain
and Russia, based on the traditional eighteenth-century community of interests
between British capitalists and Russian landowners, had been broken.
The restructuring of the world economic order which the industrial
revolution brought about created a new situation, which Russia tried actively
to exploit in order to win a more exalted place in the world system. For the
St Petersburg empire, however, the chances of success in this endeavour were
minuscule. The internal structure of Russian society doomed the effort to
failure, and the last possibility of radical reform was lost with the defeat of
the Decembrist uprising.
The Russian empire was left with no choice except to expand to the
east. Russian influence was growing in Turkey and Egypt; the country was
the interests of Russian industry were the starting-point for a whole series of diplomatic
moves; in a process of which the actors themselves were not always aware, but which was
always evident to any attentive outside observer, these moves gradually formed themselves
into a definite political line. At the end of this line was Sevastopol.34
According to Pokrovsky, the British economy by the 1830s had far less need
of Russian goods than earlier.
As luck would have it, the main commodity which Britain sought on the Russian market – that
is, grain – was cheap in Western Europe at this time. This on its own meant that Britain no
longer needed Russia. With the growth of Russian industry after 1812, Russia became – or
at any rate, appeared – dangerous and threatening.35
Recent research, however, paints a far more complex picture. As one Soviet
historian puts it, Britain in the mid nineteenth century was for Russia simul-
taneously both its ‘main trading partner, and a rival’.36 For all the political
conflicts, economic ties between Russia and Britain were intensive. As before,
politics and commerce went hand in hand; the British consul in St Petersburg
was also the representative of the London-based Russian Company. In the mid
nineteenth century Britain accounted for about a third of Russia’s imports, and
approximately half of its exports. As well as grain, Russia exported timber, flax,
hemp, lard, wool, and pig bristles, while gradually increasing its purchases of
British industrial equipment. By the 1840s Russia was supplying Britain with
two-thirds of its needs for raw flax and hemp, and 80 per cent of its flax and
hemp seed.37 It is noteworthy here that in Russia itself, output of linen goods
was falling, a development not unrelated to British competition.
As Britain’s fleet of steamships expanded, demand in the country for Russian
hemp declined, but this did not happen immediately; for some time, old and new
technologies coexisted. Russian timber served the British ‘railway fever’ of the
1840s, just as Russian metals 30 years earlier had been used in the mechanisation
of the ‘workshop of the world’. Now, however, raw materials were coming from
all directions – from Australia, South America and Canada. The further the
capitalist world-system expanded, and the richer the sources of raw materials
became, the wider the choice for the ‘centre’, and the fiercer the competition
between the countries of the ‘periphery’. As a source of imports to Britain,
Russia at this time held second place, behind only France, and it led the field
as a supplier of raw materials and foodstuffs to the ‘workshop of the world’.
Among the countries to which Britain exported goods, Russia occupied fourth
place. Moreover, a substantial proportion of the goods which Russia exported
to Germany and Holland finished up eventually on the British market. In the
re-export of colonial goods, Russia shared first place with the Hanseatic cities of
Germany. The Russian market took on special importance in years of industrial
crisis. In 1841 and 1842, imports to Russia of British goods continued growing
against the background of an overall decline in world trade.
Britain was not only the greatest trading partner of the Russian empire, but
also its main creditor. British capital participated in seven of the ten foreign
loans concluded by the tsarist government between the 1840s and the 1860s.38
Although most of the funds were obtained on the London financial market,
the tsar also contracted debts with the bankers of Berlin and Paris.
The first Russian railway, linking St Petersburg with Moscow, was built with
the help of foreign loans. Foreign credits were also required for the building of
a railway line to Warsaw. Most of the money was obtained in 1840 in Berlin,
though British and Dutch capital was also involved in financing the project.
Since Russian railway construction depended increasingly on the Berlin financial
market, Prussia used its influence when plans for a railway to Lithuania were
being discussed in St Petersburg. This railway could have subjected Prussian
trade to serious competition, and under pressure from Berlin, the tsar’s
government was forced to reject the proposal.
Despite active Prussian participation, it was British capital that played the
decisive role in the first wave of Russian railway construction. According to
calculations by Soviet historians, ‘at the time of subscribing, British capital
accounted for approximately half of the total sum of all the loans for financing
railway construction’.39 The money borrowed by the Russian government often
remained in the West, where it was used to buy railway equipment in Britain
and America. In order to maintain its creditworthiness, the government in St
Petersburg was forced to sell its gold to the Bank of England.
During the crisis of 1847, the financial markets in London and Paris
themselves felt the need for Russian money. The crisis of European industry
had an extremely severe – though not immedidate – effect on Russia. At first
there was a sense that as an exporter of agrarian produce and raw materials,
Russia was in a better position than the Western countries that had been hit
by the industrial downturn. Russian raw materials and foodstuffs had been
purchased before the crisis struck; the result was that the Western industrialists
were left with mountains of unsold products, and their Russian suppliers with
ready cash. The tsar’s government found itself unexpectedly with a surplus
of money, and began actively playing the market, buying up French, British,
Dutch, Austrian and Prussian stocks. The industrial downturn of 1847 restored
Russia’s reputation in Europe as a wealthy country, but as Marx observed
ironically, this reputation ‘had to be bought with cash’.40 In addition, the
purchasing by the Russian government of securities in London and Paris took
place against the background of a flow of British capital out of Russia. In
sum, Strumilin argues, a substantial part of the Russian gold that poured onto
the London market during the crisis belonged ‘not to the Russian tsar, but to
British capitalists who had long since penetrated Russia, and was withdrawn
from Russia at a moment of danger in order to save the capitalists’ own country
from monetary crisis’.41
The following year showed that the ‘advantages’ which the Russian economy
possessed were fanciful. Following the collapse of demand for industrial
Consequently, it cannot be said that in the mid nineteenth century there was any
sharp decline in Britain’s need for Russian raw materials, or in Russia’s need for
British money. Nevertheless, the situation changed substantially. The strategic
importance of Russian supplies diminished as the fleet made the transition
from sail to steam. Meanwhile, competition increased; the goods that had been
supplied from Russia could be obtained elsewhere. As markets for the sale of
British goods, however, Russia and the countries of the Near East came to mean
far more to British capital than in earlier decades. But standing in the way of
these commercial ambitions was Russian industrial protectionism.
The protectionist policies of the Russian government were a serious problem
for British exporters not only in Russia itself, but also in the countries which
in one fashion or another fell within the sphere of Russian influence. The
possibility that the Russians might capture the Black Sea straits was a genuine
nightmare for British capitalists operating in the Near East. War was in the air
as early as the 1830s and, as Pokrovsky notes, Russia appeared ‘in the role of
the attacking side’.43 Here is how the notorious ‘Eastern question’ arose.
Fierce competition between British and Russian industrial suppliers emerged
in Central Asia. As British India expanded to the north, British goods came
increasingly to penetrate nearby markets. In Bukhara and Khiva, British goods
began forcing out Russian ones. As usual, commercial competition was combined
with political rivalry. While the Afghans fought back against British attempts
at conquest, the Central Asian khanates tried to preserve their independence
by appealing to the Russian tsar to defend them.
Acting as the protector of Slavs and Orthodox Christians, the government
in St Petersburg was trying to establish its control – if not overt, then at least
indirect – over the territories in south-eastern Europe that were still formally
subject to the Ottoman empire. Russian protectionism also stood in the way
of British goods en route to Persia. The conquest of the Caucasus closed off
yet another potential market to British industry.
In the early 1830s, Russian influence on Turkish affairs was so great as to
cause panic in London. The Ottoman empire was trying desperately to keep
Egypt under its control, but was suffering one defeat after another. In 1832,
forces of the Egyptian ruler Muhamed Ali advanced on Istanbul. The entire
Ottoman political system was in danger of collapse. Under these conditions
the sultan had no alternative but to appeal for help to his age-old enemy, the
Russian emperor, who provided Turkey with the necessary guarantees, and
who in extreme circumstances was also ready to provide military assistance.
The agreement of 1834 gave Russia enormous privileges on the territory of
the Ottoman Porte.
Predictably, Britain regarded these developments as extremely undesirable.
As recently as 1827, the Russian and British navies had fought alongside
one another against the Turks at Navarino,44 and now the London press was
writing about the possibility of military conflict with Russia. Nevertheless,
direct conflict was avoided. Reforms that had begun in Turkey meant that its
political alignments shifted toward Britain. ‘In the second half of the 1830s,’
wrote the modern-day scholar V.N. Vinogradov,
Russian influence in Istanbul declined dramatically, while that of the British, by contrast, was
in the ascendant. The reformers, for obvious reasons, turned their gaze not to a backward
autocratic state, but to the countries that were impressive for their economic might, naval
power, political stability, and flexible system of rule.45
The decisive role, however, was not played by ideological sympathies, but by trade.
Between 1825 and 1835, British exports to Turkey more than doubled, making
the Turkish market especially important for Britain in a period when other
European countries, having established their own industries, were increasingly
resorting to protectionism. In 1838 an Anglo-Turkish convention was signed,
creating still more favourable openings for British capital. As Vinogradov puts
it, ‘on a backward, somnolent country, “free trade” was imposed with the
foremost industrial power of that epoch’.46
Influenced by the British Manchester school, the reformers were convinced
that free trade would lead Turkey to prosperity. The anticipated prosperity,
however, failed to eventuate. Not only Turkish but to some degree Russian
industry as well fell victim to the new system. The competition from the stream
of British goods that poured onto the Turkish market was too great for the
Russians. Just as important was the fact that the British entrepreneurs had
more money. Both in Turkey and in Central Asia, they could sell goods at
‘giveaway’ prices (according to Russian sources, even at a loss), provided they
won a commanding position in the market. Vingradov concludes:
The reason for the growing eclipse of Russian influence is to be found in the irresistible force
of circumstances. Tsarism had nothing with which to counter British naval and financial
might, or the varied range of Western industrial goods, or the attractiveness of bourgeois
ideology to the Turkish reformers. It lost the battle without having put up a fight.47
Britain had no need to go to war with Russia in the 1830s, since it could
achieve its goals by peaceful methods. But the conflict was not exhausted. British
industry was desperately seeking new markets and fighting to retain existing
ones, while the crises followed one after another. After the crisis of 1836 came
the depression of 1841–42, which was succeeded by a short-lived upturn in
1843. Then in 1847 a new slump began.
It is obvious that under such conditions the struggle against Russian
protectionism became one of the most important foreign policy tasks which
London faced. British diplomats repeatedly called on St Petersburg to review
its customs tariffs. Prussia, too, sought a lowering of Russian customs duties,
with Berlin enjoying more success than London. The Liberal-Whigs headed
by Viscount Palmerston had traditionally sought to collaborate with Russia,
but they were unable to win the required concessions from St Petersburg. The
customs tariff of 1841 did not improve access to the Russian market, and Britain
immediately began seeking its abolition. The agreement of 1842 ensured both
countries most favoured nation status in their reciprocal trade, but did not
satisfy London.48 Russia continued to defend its industry through protectionist
measures, while Britain campaigned against these provisions. Soon after the
signing of the agreement, the British Conservative Prime Minister, Robert Peel,
held a very informative discussion with the Russian envoy, F.I. Brunnov. If we
are to believe the report which the diplomat sent to the minister K.N. Nesselrode
in St Petersburg, the British leader lectured his interlocutor on the evils of
industry. Peel argued that
Russia was destined by nature itself to be an agricultural country, not a manufacturing one.
Russia should have factories, but it does not follow that it should summon them into life
artificially, through the permanent protection of Russian industry.49
After this, the Prime Minister set about complaining of the ingratitude of British
entrepreneurs, who never appreciated the concern the government showed for
them.
The efforts of British diplomacy yielded at least a partial result in the form of
a lowering of customs duties in 1846, but this could not satisfy British industrial
capital, which had encountered another crisis of overproduction. Tariffs were
again lowered in 1850, but once more, London was not satisfied. British textiles
were meeting with growing competition in the Russian market, and prices were
falling. In such conditions, even reduced tariffs were a relatively heavy burden
for British industrialists.
For its part, the government in St Petersburg was prepared to reduce tariffs only
gradually, keeping imports, in the words of contemporaries, ‘within the bounds
required by the condition of Russian factories’.50 On the whole, this approach
was relatively effective. The government defended national manufacturers, but
did not let them rest on their laurels. This was especially true in the case of
the textile industry, which was involved in fierce competition with its British
counterpart. ‘The reduced profits of the cotton textile factories in connection
with the tariffs of 1850’, a Soviet scholar notes, ‘would force them to step up
their activity in Eastern markets.’51 Not surprisingly, this approach aroused
little joy in London. Not long before the Crimean War, Brunnov informed St
Petersburg that Britain would even reconcile itself to a Russian conquest of
Turkey, ‘were it not afraid of Russian tariff’.52
During the 1830s a struggle was unfolding in British society whose outcome
would do much to decide the next shift in the course of Russian history. This
struggle was between supporters and opponents of the Corn Laws. These
laws had been adopted in 1815, when the Tory Party was in power and was
steadfastly defending the interests of landowners. In its efforts to protect British
agriculture, parliament introduced high customs duties which restricted imports
of foreign grain to the United Kingdom. In essence, this move represented
a compromise. The Corn Laws were in no sense a ban on imports; Britain’s
rapidly developing economy could no longer have got by without foreign
foodstuffs. The resulting price levels, however, left space on the market for
both importers and local producers.
This situation changed radially in the 1830s. One after another, the countries
of continental Europe were setting out on the road of industrial revolution.
British goods were subject to increasing competition. Industrial crises were
affecting output. Entrepreneurs were trying to reduce their costs, while the need
for imported food supplies was growing as urbanisation proceeded.
The only way that British industrialists had of cutting wages, or at least of
restraining their growth, without provoking massive resistance from workers
was through the abolition of protectionist tariffs. During the industrial crisis
of 1836–37, tariffs had been reduced, and in 1846 they were finally abolished.
The repeal of the Navigation Acts followed in 1849 and 1850. From now on, the
interests of industry would be of more importance to Britain than maintaining
a commercial monopoly. Capitalism was entering a new era.
For Russia, the repeal of the Corn Laws and the triumph of the ‘free
trade system’ meant the possibility of dramatically increasing exports. The
expectations of the economists of the ‘free trade school’, which had prophesied
that a fall in prices would follow swiftly on the abolition of protectionist tariffs,
were not borne out. Agriculture depended not only on the market, but also on
the weather. The crop failure of 1847 in Western Europe was an unprecedented
stroke of good fortune for Russian landowners. Prices and the volume of sales
rose simultaneously. Twenty years of stagnation were replaced by rapid growth.
The granaries of the Russian landowners contained large quantities of grain,
which they had not been able to sell for years. At a stroke, 10.5 million chetverti
of grain flooded onto the world market. In the late 1840s and early 1850s, the
share of Russia’s exports represented by grain almost doubled. Referring to
statistical data, Marx during the Crimean War argued that Britain’s dependence
on Russian grain had been greatly overestimated. However, he was misled by
the imprecision of the documents, which defined the place of origin of the grain
not as the country where it was grown, but as the one where it was loaded onto
a ship. In other words, Russian grain loaded in Königsberg or Amsterdam for
shipment to Britain changed its nationality.
Between the 1820s and the early 1860s, prices on the Berlin grain exchange
rose by 74 per cent for wheat and by 90 per cent for rye. In 1838, 20 million
pudy of wheat were exported from Russia; the corresponding figure in 1851 was
22 million, and in 1853, no less than 64.5 million.53 World demand for grain
was so strong that even rye, which in Russia was considered ‘peasants’ grain’,
and which was grown for the peasants’ own use or for the local market, was
readily sold abroad. As the export trade developed, grain prices rose within
Russia as well. The ‘golden rain’ that was pouring down on the country opened
up new opportunities for the development of industry. Russia had already
begun importing industrial equipment in previous decades, but now machinery
imports took on a massive character, with equipment coming not just from
Britain, but also from France and Belgium. All the signs were present of an
incipient industrial revolution. Import substitution was taking place; instead
of importing manufactured items, Russians were beginning to buy equipment,
and to set up production locally.
At the same time, competition on the world market was also growing
dramatically. In 1854 the official journal of the Interior Ministry stated that
‘competition for Russian ports, and especially for those in the south’ had
‘intensified to an extraordinary degree’.54 The international division of labour
was changing once again. The industrial revolution was beginning to make an
impact on agriculture. For producers in the ‘centre’, the possibility had now
arisen of producing, at low prices, goods which in the past had been obtained
more cheaply from the ‘periphery’. The list of grain-exporting countries began
growing quickly. The Danube principalities, Egypt and the US were now
shipping grain abroad; soon they would be joined by Canada and Argentina.
Pokrovsky writes:
Russia’s place in the European grain market was contested by a whole series of bourgeois
countries, both European and non-European, and the rivalry with them was leading to an
inescapable conclusion: the necessity of making the shift to bourgeois relations within
Russia itself.55
The Crimean War resulted from an attempt by the Russian empire to alter its
place in the world system. With the aid of an expansionist foreign policy and
military conquests, Nicholas I sought to do what the Decembrists had tried to
achieve with the help of political and social reforms. This expansionist strategy
was implemented, however, against a background of internal reaction that
doomed the country to failure. Conservative regimes are typified by attempts
to solve internal problems through actions in the external field. Meanwhile, the
government in St Petersburg felt extremely confident in matters of international
politics. Since 1812, Russia had been considered beyond question the major
military power in Europe, and the ruling elites in the West, with an interest
in employing the ‘Russian gendarme’ against the revolutionary movement on
the continent, backed these ambitions of the tsar in every conceivable way.
Nicholas’s government did not want war with Britain and France, but when it
became clear that his plans to partition Turkey were encountering firm resistance
from these countries, it was decided in St Petersburg that Russia had quite
enough military strength to cope with this problem as well. In any case, the
Russian authorities did not believe that Britain and France would mount serious
military actions on land.
In hindsight, the defeat of Russia in the Crimean War was inevitable; the two
most advanced countries of Europe were bound to prevail over a backward
empire. The government of Nicholas I, however, reasoned differently. Russia
had been preparing for war since the 1830s. The navy had been expanded, and
fortresses had been rebuilt. In 1812 and 1815, Russia had managed to defeat
France, an incomparably more developed country. Why could Russia not win
a conflict with Britain as well? It was no accident that Nicholas, in his corre-
spondence with his adversaries, constantly reminded them of 1812. Moreover, a
land war was anticipated only with the Turks, who were not expected to present
any special difficulties.
Unfortunately, the problem for Russia in 1853 turned out not to be
backwardness as such, but the industrial revolution that was unfolding at
the other end of Europe. The invention in the 1840s of screw propulsion for
steamships brought about a naval revolution that rendered worthless all the
previous efforts by St Petersburg to strengthen its fleet. Russia was not in any
condition to build a completely new navy and bring it into operation. Nor was
it prepared to re-equip its land forces with new-generation firearms. During the
siege of Sebastopol the defenders suffered their worst losses not from the enemy
artillery, but from rifle fire. Finally, Russia’s lack of a developed railway network
was a crucial factor in the war. The allied armies were able to reach Crimea
unhindered by sea, but after penetrating to Sebastopol along appalling Russian
192
roads, the tsar’s forces were in a terrible state, having lost large numbers of men
and horses along the way. Nicholas had been right to recall the experience of
1812; this time, however, it was not a foreign invasion that was brought undone
by the vastness of Russia, but his own troops. ‘Neither energy nor prudence
was lacking’, Pokrovsky writes.
What was lacking was technology. But the technology of a particular country is always
determined by its level of economic development. The key to the disaster suffered by Russian
foreign policy in the first half of the nineteenth century, and to this policy itself, has to be
sought in the economy.1
In analysing the reasons behind the Crimean War, Karl Marx noted that all
the clashes between Russia and Turkey ‘were in part the result of commercial
competition between the provinces of southern Russia and the Danube princi-
palities, as well as Bosnia, Serbia and Bulgaria, which traded along the Danube’.2
It was not by chance that the latest conflict had begun with the occupation of
the Danube principalities by Russian forces and their complete control over
the mouth of the river. Nevertheless, the explanation offered by Marx is clearly
inadequate. It is not merely that Nicholas’s ambitions were far greater – he
aimed to take control of Istanbul and of the Black Sea straits. Plans to capture
Constantinople had, of course, been nurtured in St Petersburg from the time
of Catherine the Great. Russia had already launched repeated incursions into
Turkish territory, arousing disapproval in London and irritation in Paris. Even
though St Petersburg never concealed its desire to partition the Ottoman ‘mpire
(the ‘sick man of Europe’), Russian diplomacy was always perfectly aware that
conquering Turkey was impossible without foreign help. As the authorities in
St Petersburg drew up their plans, they therefore made genuine efforts to take
into account the interests of Britain, and also of Austria and France, viewing
these countries not so much as rivals but rather as potential partners in the
partitioning of Turkey. An analogy was drawn with the dividing of Poland in
the eighteenth century; there, the acts of partition had been carried out jointly
with Prussia and Austria.
This time, Russia not only failed to win the support of its traditional allies,
the Austrians and British, but also encountered growing resistance from them.
Quite against its expectations, the Russia of Nicholas I found itself in conflict
with all of Europe. The narrowness of the internal Russian market was a
decisive obstacle to the growth of industry, an obstacle for which no degree
of protectionism could compensate. Russian protectionism, however, was by
now arousing the irritation not just of Britain, but also of other European
countries which had set out on the road of the industrial revolution. Prussia
had long complained of St Petersburg’s customs policies. Austria was unnerved
by the Russian efforts to assert control over the Danube principalities, and
consequently over the Danube trade as well. France had followed the Dutch
road, and by the mid nineteenth century had been transformed from the main
rival of Britain to its junior partner.
One of the results of the industrial revolution in France had been the
development of modern transport, on both land and sea. French capital had
found a highly effective form of symbiosis with its British counterpart. British
firms produced goods for the world market; French entrepreneurs took charge of
supplying these goods to the consumers, while also providing financial services.
Railway construction, merchant shipping and bank credits became the main
specialties of French capital. As the industrial revolution developed, the British
elite was increasingly less alarmed by the competition it encountered from
foreign merchant navies. Now, it no longer mattered whose ships transported
the raw materials and finished products; the main thing was that export markets
should be guaranteed.
ECONOMIC CRISIS
Why, then, did this situation lead to a major war precisely in 1853? Tensions
between Britain and Russia over the ‘Eastern question’ had begun as early as
the 1830s, but somehow everything had been settled. This time, a political crisis
broke out suddenly and developed apace.
As Marx observed, 1853 was the last pre-crisis year, a time of ‘feverish
prosperity’ when the ‘overheating’ of the economy in Europe and America
was unmistakable. ‘In other words, the economic cycle had again reached the
point where overproduction and excessive speculation are replaced by crisis.’3
Also in 1853, world grain prices reached a peak. By this time, there were clear
signs of a crisis of overproduction.
Marx noted ironically that in the first half of 1853, against the background of
a still-continuing industrial expansion, the ‘Eastern question’ was something like
a ‘remote little cloud’ on the horizon.4 But by the end of the year, when industry
had become fully aware of the impending difficulties, the disagreements between
Britain and Russia suddenly took on the form of an irreconcilable conflict.
As Kirchner observes, Russia from the 1840s was experiencing the same
economic cycles as all the other countries that were part of the world system.
Even earlier, economic booms and busts in the West had of course impacted
directly on life in Russia. Now, however, this link was becoming far stronger.
The fluctuations of grain prices on the internal market, for example, now
‘corresponded to those in the West’.5 To the competition from the Danube
principalities, Moldavia and Wallachia, there was now added the increase in
grain exports from other countries, including even Egypt. In the market for
wheat, this competition appeared so threatening that, as an official St Petersburg
journal put it, ‘the Russian heart was gripped with unwitting fear’.6
As the crisis drew near, the nervousness and aggressiveness of the main players
increased, not only in the economic field but in politics as well. For both Russia
and Britain, a war seemed, unexpectedly, the simplest way of resolving all the
problems. The St Petersburg authorities decided to make use of the favourable
situation to deal with Russia’s competitors on the Danube, imposing Russian
control over the main flows of grain onto the market, and if the war were a
success, taking control of the straits as well. What Nicholas’s government did
not understand was that the impending crisis had made London even less open
to persuasion than usual. For the Russian authorities, the harsh response of the
British to the ‘Eastern question’ thus came as a complete surprise.
The contradictory nature of British policy with regard to Russia, something
that was already evident in the time of Ivan the Terrible, emerged with particular
acuteness in the 1850s. As the government in St Petersburg prepared for another
war with Turkey, it expected that the British would at least remain neutral, even
if they did not provide active support. Secret talks on the partitioning of the
Ottoman empire were conducted between British and Russian diplomats. Once
again, however, the interests of British capital in Russia came into conflict with
the interests of British capital in neighbouring countries – in this case, those of
the Near East. London would have liked an expansion of Russian grain exports,
but not at the cost of effectively destroying Turkey. Because St Petersburg could
no longer make concessions, the British government was forced to choose. The
choice turned out to be in favour of Turkey; London’s interests in the Middle
East were a higher priority.
Turkey in 1851 and 1852 purchased far more British goods than Russia,
though the latter was both richer and more populous. The historian E.V. Tarle
notes that
The more Russia’s protective tariff policy restricted British sales in Russia, the more insistent
the desire became in the British commercial world to be done with the need to pay an
annual ‘tribute in gold’ to the Russian imperial treasury, to the Russian landowning class
and to the Russian export merchants for grain, and British businessmen naturally showed
an ever greater inclination to expand their operations in the two grain-producing provinces
– Moldavia and Wallachia – that were still numbered among the domains of the sultan.7
Turkey was also of exceptional importance for the transit of British goods to
Persia. An expansion of the tsar’s possessions threatened to extend the control
of the Russian customs service to this route as well. From the point of view of
the elites in Victorian Britain, Turkey in this period was a country of free trade,
open to British goods and influence. Russia was a protectionist country. In other
words, the loss of the Russian market if there were a war would, of course, be
a misfortune, but because of Russian protectionism the British risked losing
this market even without a war. Meanwhile, to retreat on the ‘Eastern question’
meant losing both Russia and Turkey. Such was the reasoning in London. The
government in St Petersburg was confident in turn that the old commercial ties
between the two countries were of such scope and importance that the British
would not go to war in any circumstances, but would prefer to negotiate.
While the war became a disaster for St Petersburg from the very moment the
British and French entered into it, for the Western countries the Eastern War
served initially as a way to postpone the onset of the crisis. As Marx noted:
Particular sectors of industry, such, for example, as the production of leather, iron and woollen
goods, and also shipbuilding, received direct support thanks to the demand occasioned by
the war. For a short time, the fear aroused by the declaration of war after forty years of
peace paralysed speculation. Thanks to the loans concluded by various European states in
connection with the war, interest rates were so high as to provide an obstacle to the excessive
development of industrial production, and thus delayed the crisis.8
The Crimean War showed the falseness of many diplomatic forecasts on both sides concerning
the role of the economic factor in British-Russian relations. The fact that economic ties were
at stake did not prevent the conflict, but it proved stronger than the inclination to do without
trade with Russia, and to impose a full economic blockade.9
It was quite obvious that Victorian Britain had no intention of waging a serious
war on tsarist Russia. This infuriated radical nineteenth-century writers who,
like Marx, saw the Russian empire as the main prop supporting European
reaction. Marx therefore consistently sought to expose the approach which
the cabinet in London was taking to the Crimean conflict, showing that the
British empire was merely making a show of waging war, and had no serious
desire to crush the power of the tsar’s army. This, of course, was correct; the
British government was not in any way aiming at a comprehensive rout of the
Russian forces. Still less was it intent on bringing about the collapse of tsarism
and the abolition of serfdom.
From the British viewpoint, the Russian government was clearly not going to
be content with Russia’s poor standing in the world system at that point in time.
Consequently, it had to be taught a lesson. To this end, a limited contingent
of British troops was sent to Crimea. The appearance of British squadrons
in the Baltic and off the Solovetsky Islands, and even an ill-fated landing on
Kamchatka, served the same purpose. The British empire was not about to go
to war in the Far East or in the Baltic; it was simply demonstrating its power
and its readiness to inflict blows in the most unexpected places. As Pokrovsky
notes, this tactic proved extremely effective. The Russian government was forced
to disperse its forces across an enormous territory, without knowing where
the main blow would fall. To a considerable degree, meanwhile, the landing in
Crimea was a surprise for the Russian government, which had been distracted
by the operations of the allies in other regions.
Military actions were not mounted in the sole place where Russian and British
possessions shared a common border – in Alaska. This territory, then known
as Russian America, was practically undefended in military respects, but no
invasion took place. Instead, an agreement was concluded between the Russian-
American Company and the British Hudson Bay Company under which Alaska
and the western part of Canada were declared neutral territories for the duration
of the war. The events of the Crimean War, however, showed beyond doubt
that Russia was incapable of defending its American possessions, and prepared
the way for the transfer of these regions to the United States. It was during the
period of the Crimean campaign that the idea of buying Alaska began to be
discussed in the US. At first, St Petersburg refused, especially since there was
no direct British threat to the territory. Nevertheless, the first step had been
taken, and some time later Russian America ceased to exist.
The fighting in Crimea was extremely fierce, but neither Russian interests nor
those of the allies would have been served by a full-scale war. Russia’s foreign
trade was conducted on foreign vessels, primarily British ones. The Crimean War
put this system in jeopardy. As became clear, Britain as well as Russia suffered
from the halting of trade. British industrialists had an interest in maintaining
uninterrupted supplies of raw materials and foodstuffs, irrespective of how
events turned out in the East. In an address to parliament, J. Ricardo, the
son of the distinguished economist, warned that production would otherwise
suffer serious damage. The year 1853 saw record purchases of Russian goods
by British entrepreneurs, who were clearly anxious to build up reserves of
indispensable raw materials in case of war. Champions of free trade argued
for the preserving of ties to Russia whatever the circumstances. A solution was
found when the British cabinet recognised the right of neutral ships to transport
goods from Russia during wartime. This was an unprecedented step, which ran
counter to all previous British practice.10 The United States offered its services
as an intermediary. The problem was that the US in the 1850s did not possess
a sizeable merchant fleet that could have made up for the ending of direct trade
between the ‘granary of Europe’ and the ‘workshop of the world’. In fact, the
scale of Russian-American trade during the war even diminished. Exports of
Russian goods across the land border with Prussia increased, however, and from
Prussia they went by land to Western Europe. While shipping Russian goods
from the Prussian port of Memel, the Americans at the same time offered their
ships to the British and French for the transporting of troops, the evacuation
of wounded, the supplying of munitions, and so forth.
In the United States itself, the greatest sympathy for Russia was felt, under-
standably, by Southerners. The plantation-owning aristocrats and serf-holding
landowners were united by something akin to class solidarity. In St Petersburg, it
was thought that the conservative slave-owning South, rather than the democratic
industrial North, was an ally in the conflict with liberal Britain. In reality, the
situation was not so simple. Like the serf-holding agriculture of Russia, the
plantation economy of the American South was far more bound up with British
capital than the North, and was far more oriented to the world market. By
contrast, the industrial North sought with the aid of protectionism to shut itself
off from British goods, and it was from this that the strength arose that in time
would allow the United States to overtake Britain as the leading power in the
world capitalist system. The Crimean War represented one of the first moves in
this direction, though not of course a decisive one. As Marx observed, in the US
the war stimulated ‘an unprecedented rise in shipbuilding and maritime trade,
and ensured markets for several types of raw materials which earlier had been
supplied mainly or exclusively by Russia’.11 Particular benefits were enjoyed
by traders in grain (also principally Northerners), who made up for the lack
of Russian grain on British markets. It is hardly surprising that in the US, the
news of peace between Britain and Russia was received, to use the words of a
Russian diplomat, ‘not without a certain displeasure’.12 For many Americans,
the ending of the war meant the end of high commercial profits.
Prussian entrepreneurs also grew fat on the Crimean War, transporting
Russian raw materials and foodstuffs by land. Flax, hemp, tallow and other
goods passed through Prussia on their way to Britain. During the war the
tsar’s government continued to float its loans on the European money markets,
where it carried on its dealings alongside Prussian, British and French finance
capital. Russia’s pre-war loans were still quoted freely on the London securities
exchange. The Russian government in turn continued to service the old loans it
had obtained from its enemies. It is understandable that St Petersburg officials
should have remarked in astonishment that the British trade blockade existed
‘only on paper’.13
The main negative result of the Eastern War for the tsar’s government was the
loss of its fortresses and naval fleet in the Black Sea. For the Western allies,
the main positive outcome was the ending of Russian industrial protectionism
– the opening of the Russian market, and free access to the markets of the
Near East. It is not surprising that the later efforts of Russian diplomacy,
aimed at doing away with the negative consequences of the Peace of Paris, were
brilliantly successful. The credit here was due not to the exceptional talents of
Prince Alexander Gorchakov, who headed the Russian diplomatic service after
the Crimean War, but to the fact that in the 1860s and 1870s neither Britain
nor France saw Russia as a serious threat to their economic interests, even
though problems remained in their relations with St Petersburg. Neither the
rebuilding of the Black Sea fleet nor even a new conflict between Russia and
Turkey changed anything in this respect.
Britain’s victory in the Crimean War was sealed not only by the Peace of
Paris, but also by the new Russian trade tariffs that came into force in 1858.
Russia finally accepted the ‘free trade system’. The next British-Russian trade
agreement was drawn up in the same spirit, and the drafting of the tariff
provisions began immediately after peace was concluded. By February 1857 a
draft had been prepared that accorded fully with the recommendations for the
new Tsar Alexander II that the London Times and Economist had publicly set
out on their pages. Nor did the authorities in St Petersburg conceal the fact that
the tariff was meant to ‘satisfy, as far as possible, the numerous requirements in
this area both of our own trading community and of foreign governments’.14
Commercial relations with the West again began developing rapidly. Russia’s
foreign trade turnover quickly came to exceed the pre-war level. Crop failures
in Europe followed one upon the other; grain prices rose, and along with them,
Russian grain exports. Among European exporters to the British market, Russia
immediately assumed first place; among all the sources of British imports,
Russia was second only to the United States. British exports to Russia also
expanded rapidly. In 1867 they reached £4 million, and in 1873, £9 million.15
French banks and experts came to Russia along with the railway loans. The
former enemies began collaborating in the very area whose weak development
had played such a fateful role for Russia during the war. ‘Beneath the walls of
Sevastopol,’ Pokrovsky concludes, ‘French capitalism had won for itself a new
field of expansion.’16
The defeat in the Crimean War was viewed by Russian society, including the
ruling groups themselves, as proof of the country’s hopeless backwardness.
For the Russian state, the army had always been not just a means to an end,
but something close to an end in itself. During centuries of struggle against
invasions from East and West, a state tradition had taken hold according to
which the viability and authority of the ruling apparatus was linked intimately
to its military might. Nowhere was backwardness felt so painfully by the
government itself as in the military field. The Russian military machine was
the most important part of the state organism, and this conviction was shared
by both the popular masses and the ruling class. The people were ready to
accept the existing state system as necessary and inevitable, for all its obvious
injustice, so long as this system could ensure the battle-readiness of the army.
The ruling elites in turn sought constantly to justify their rule through genuine
or imaginary military successes. The defeat of the Swedish army at Poltava,
and the victory over Charles XII in the Northern War, signified the irreversible
triumph of the Petrine system not only in the international arena, but also, most
importantly, within the country. From this time on, Peter’s reforms, despite their
appalling cruelty and obvious anti-popular nature, were vindicated so far as
the masses were concerned. Under Catherine II the capture of Crimea and the
asserting of Russian dominance over the Black Sea were seen as proof of the
success of modernisation, though the enemy by this time was different; Peter
had waged war against the outstanding general Charles XII, who headed one
of the best armies in Europe, while Catherine had fought the backward and
declining Turkey. The triumph over Napoleon in 1812–14 was viewed in the
same positive fashion as Catherine’s victories.
To be defeated on the field of battle in Russia had always been an ideological
catastrophe. In the eyes of the lower social orders – and of the ruling layer itself
– the state lost its main justification, the reason for its existence. A lost battle
or catastrophic losses might have been explained, but to lose a war, even the
most minor one and even in a remote and useless borderland, created serious
tensions in society.
Nevertheless, to explain the abolition of serfdom and subsequent reforms as
the results of a lost war, as many Russian historians have done, is to confuse the
instigation with the cause. The defeat at Sebastopol created an exceptionally
favourable set of conditions in society for political and social reforms, but these
reforms themselves were the outcome of far deeper processes taking place not
only in Russia, but also in the world at large.
200
The world economic crisis that had been postponed by tbe Crimean War
broke out immediately after the war ended. It began in America, and from
there spread to Western Europe and Russia. In a period of crises, Russia felt
the disadvantages of its peripheral status in the world system with particular
acuteness. ‘As our statistics show,’ Strumilin writes, ‘every world crisis brought
drastic reductions in the overall value of commodity exchange with Russia,
due to the lowering of effective demand and prices.’1 For the government in St
Petersburg, the downturn of 1857–58 exacerbated the problems associated with
the defeat in the Crimean War. This damage was partly made up by continuing
rises in world grain prices. On the global scale, however, it signified the beginning
of important changes from which Russia could not remain isolated.
The British historian Willie Thompson describes the 1850s as the time of ‘the
second industrial revolution’.2 Unlike the first industrial revolution, which had
begun in Britain and had made it the ‘workshop of the world’, the new industrial
revolution encompassed and in one way or another affected the entire world
economic system, giving rise not only to new technologies, but also to radical
changes in the political geography of the planet. Capitalism was becoming
global not only as a unified commercial form of organisation, but also as a
productive, social, cultural and ideological system.
The demand for raw materials and resources for growing and changing
industries ensured new international conflicts. The world order which had
seemed to be firmly established, which was reinforced by the Holy Alliance
of Russia, Prussia and Austria and which had withstood the revolutions of
1848 and 1849, was vanishing into the past. The allies of the recent past were
becoming adversaries.
Industrialisation was becoming a global process, and at the same time
the crises of overproduction were becoming increasingly profound. These
developments entered economic history as the ‘great Victorian depression’,
which, as Thompson notes, ‘in spite of its name did not affect Britain only’.4
The Crimean War had shown that Russia could not succeed in conquering
foreign markets. It was necessary to expand the internal market. The abolition
of serfdom in Russia was seen by ‘enlightened society’ as an indispensable step
toward overcoming technical and social backwardness. This step, however, was
wonderfully attuned to the worldwide processes occurring at this time.
If we compare Russia with Germany and the US, it can readily be seen that in
the 1860s and 1870s the ‘backward’, ‘peripheral’ regions of both countries were
successfully integrated into a unified political and economic space, becoming
part of the centre. In Russia, by contrast, the underdeveloped ‘backwoods’
acted as a brake on modernisation. The country seemed too big, too heavy to
lift, too stagnant. In reality, the problem was not Russia’s ‘limitless expanses’,
but the level of development of industrial capitalism.
By the time their modernisation began, both Germany and the US possessed a
‘critical mass’ of industrial capital, which was also the main motivating force of
the changes that were occurring. It was in the interests of industrial capital that
the model of development was formulated. Colonial and industrial expansion
ensured the advance of the system to new frontiers; the centre seized hold of
a new periphery in place of the integrated one, and it was this process that
yielded the resources needed for integration. Latin America was taken over by
North American capital, while German colonies were founded in Africa. All
this occurred together with, and to some degree as a result of, the modernisation
of the American South and of Germany east of the Elbe. Russia, however, did
not possess a developed industrial capitalism. The two-centuries-old rule of
commercial capital was not shaken by revolutions.
According to Pokrovsky, the main preconditions for the peasant reform of
1861 were rapid price rises on the world grain market, accompanied by the
steady growth of Russian grain exports. ‘The peasant “liberation” was a direct
response to the high grain prices that had prevailed in Western Europe since
the 1840s.’7 This trend was evident before the outbreak of the Crimean War,
and continued after it ended. The growth of prices persisted even in the context
of the crisis of industry that had engulfed Europe. To a certain extent it was
also due to the Crimean War, which destabilised the Black Sea trade zone from
which the West obtained a significant proportion of its grain. ‘In Russia’s overall
exports on the eve of the abolition of serfdom,’ a Soviet historian reports, ‘the
share made up by grain exceeded 35 per cent, and represented around a fifth
of the overall volume of grain that was traded.’8
It is noteworthy that once the landowners had money, their indebtedness
did not diminish. But if their funds had earlier been spent on consumption, on
maintaining ‘a way of life worthy of nobles’, money now began to be invested in
agriculture. Serf-holding estates were starting to take on the features of normal
bourgeois enterprises. The more the landowners needed money, the greater
became their interest in reform – but in the kind of reform that would force the
peasants to buy their own land and, in the process, to finance the development
of landowner agriculture. In essence, what was involved was transferring the
debts of the landowners to the peasants. Reform was needed in order to help
the landowners turn themselves into bourgeois. The goal of reform, Pokrovsky
concludes, was ‘not in any sense to create a free and independent peasantry, but
to replace bonded labour with hired labour, and the enserfed peasant with the
paid farm-hand’.9 The more bourgeois the landowner became, the less chance
the peasant had of turning into a farmer. ‘The transformation of the landed
estate into a capitalist enterprise was thus purchased at the cost of delaying
bourgeois development in the countryside.’10
In reality, what resulted was not simply a delay, but a qualitatively different
type of development, radically different from that in the West. In order to
participate in the new economic relations, it was not necessary to refashion
AGRARIAN CAPITALISM
While the British and French armies defeated their Russian counterparts in the
Crimean War, Russian industrial capitalism was defeated by agrarian capitalism.
For Russian industrial capital the new customs tariffs were an unquestionable
defeat, for which the new opportunities associated with the emancipation of
the peasants and the building of railways were only partial compensation.
The rapid growth recorded by industry in the 1830s and 1840s was replaced
by stagnation.
The industrial depression of 1857 affected Russia even more than the
countries of the West. Strumilin explains this on the basis that in Russia the
world crisis of overproduction coincided with ‘a crisis of the entire system of
serf agriculture’.11 But as we see from the agricultural statistics, the position of
landowner agriculture at this time was improving. More likely, we are confronted
here with a particular case of a general rule of the capitalist market: in times of
crisis, suppliers of raw materials suffer more than sellers of finished products,
peripheral countries more than those of the centre, and weak economies more
than strong ones. In 1857, as now, the greatest losses from the crisis were
borne by Russian suppliers of industrial raw materials to Western markets.
Meanwhile, the shift to the ‘free trade system’ in the heat of the crisis dealt
industry a heavy blow.
The emancipation of the peasants in 1861 did not have a stimulating effect
on industry. In ‘liberated’ Russia, Pokrovsky states, industry developed more
slowly than at the height of serfdom under Nicholas I.12 The ‘era of stagnation’
under Nicholas had seen industry and culture develop rapidly (it is enough to
recall Pushkin, Belinsky, Gogol and Herzen), while the succeeding ‘era of great
reforms’ was marked by the exceedingly slow growth of industry, by the rule of
political mediocrities, and by far less impressive results for Russian culture.13
The only sector of industry that developed impressively during the 1860s was
railway construction. For this activity the free trade tariffs were unquestion-
ably a boon, since they expedited the importing of machines and metals from
abroad. A significant proportion of the machinery that was imported to meet
state and private orders was brought in duty-free.
The building of the railways, Pokrovsky writes, ‘provided the most powerful
impulse to the development of capitalism that Russia experienced throughout
the entire nineteenth century’.14 Without this, a new wave of industrialisa-
tion and modernisation would have been unthinkable; without railways, the
traditional commercial capitalism and the agrarian capitalism of the landowners
could not have developed. Not least, the building of railways aided integration
into the world economy. Railways were needed for the export of grain, and
there was no question of waiting until Russian industrialists accumulated the
necessary capital; the world market demanded grain promptly. Western credits
played an important role in the peasant reform, but in the railway programme
of the 1860s, their role was simply crucial.
The ‘railway fever’ was accompanied by a ‘chartering fever’ in the banking
sector. Between 1868 and 1873, 26 banks were founded (for purposes of
comparison, the overall number of banks in Russia reached just 34 by 1894).
With a shortage of funds for financing major construction projects, the Russian
banks were forced to turn to the West for credit, and later to sell their shares
on the Berlin and Paris markets.
Taking part in the building of railways were not only foreign financiers,
but also Russian aristocrats. In the lists of company founders we find some
of the country’s most distinguished names. It was easier for nobles than for
ill-educated provincial merchants to forge relationships with foreigners, and
to obtain support in St Petersburg for projects. As the railways failed to yield
the expected profits, they were gradually transferred to the hands of the state.
The main basis for agrarian capitalism in the second half of the nineteenth
century was not the ‘national bourgeoisie’, but the nobility and its government,
in alliance with foreign capital.
Studying the processes that were actually taking place in the Russian
countryside, the noted Russian economist of the early twentieth century, A.V.
Chayanov, found that from the point of view of bourgeois political economy,
the peasants were behaving incorrectly in the marketplace. Statistics showed
that in years of high grain prices the peasants reduced their deliveries to the
market, while in years when prices were falling they suddenly poured still more
grain onto the market. In terms of market logic such actions were completely
ruinous, but despite this, peasant agriculture remained relatively stable. When
the peasants sold grain, they were guided by a quite different logic. Unlike
farmers, who produce goods exclusively for sale on the market, the peasants
had traditionally sold their surplus grain in order to satisfy their needs. These
needs changed little over time. Consequently, peasants in a ‘good’ year were in
a position to sell less grain, leaving themselves with a reserve against hard times
in the future. In a ‘bad’ year, the peasants had to sell more. Farmers work in
order to accumulate capital and maximise their profit; the traditional peasant
household, by contrast, restricted itself to meeting its own internal requirements.
From this, Chayanov concluded that ‘the structural peculiarities of peasant
family agriculture force the peasants to reject the mode of action dictated by
the usual formula for the calculation of capitalist profit’.17
The peasants could not remain outside the market, but to an important degree,
the way in which they interacted with the market was not bourgeois. Unable
to develop commodity production on a broad scale, the peasant households
were oriented primarily toward supplying their own needs. For the landowners,
meanwhile, exploiting dependent peasants on small allotments was clearly more
profitable than developing capitalist agriculture. The result, Chayanov notes, was
that throughout the period 1861–1917, capitalist production in the countryside
not only failed to drive out other modes of operation but itself collapsed. The
kulaki, the better-off peasants whom the Bolsheviks later viewed as a Russian
version of the rural bourgeoisie, in fact had little in common with large-scale
farmers in the West. To a significant degree, the kulaki prospered through usury,
lending grain, equipment or money to their less-fortunate neighbours, and not
through developing their own production.
In reality, the picture was, of course, far more complex than the interpretations
provided by economists, whether of the liberal, Marxist or populist schools.
Agrarian capitalism in post-reform Russia at times advanced, and at other times
retreated. These rises and declines of bourgeois development in the countryside
were linked intimately with the fluctuations of the world market. The state,
with its interest in the timely payment of taxes, helped maintain the communal
village structures that kept the peasants bound in a ‘mutual guarantee’. The
village preserved the patriarchal system. Hundreds of thousands of people
who were unable to support themselves through agriculture were taken on as
factory workers, but often retained their links to the village communities, as
was still evident even in 1917 and 1918. Many – even those living in the cities
– returned to the countryside to perform seasonal work. Because of this, there
was almost no unemployment in Russia during crises of industry; when people
lost their jobs, they set off for the countryside.
By the 1860s the rapid growth of the world grain trade was slowing down, and in
the 1880s the European grain market became saturated. Prices once again began
to fall. In nineteenth-century Russian novels and in the late plays of Aleksandr
Ostrovsky, the 1880s appear as a time when Russian capitalism was flourishing.
This sense that the ‘bourgeois ethic’ had triumphed, however, had its roots in
the fact that economic conditions were noticeably worse than earlier, and that
as a result, behaviour had become more ruthless. This harshness that entered
into people’s relations signified not so much that Protestant rationality had
finally been attained in Russia, as that money was simply lacking for traditional
Russian sentiments. The late nineteenth-century writers who attributed the
impoverishment of the nobility to the reform of 1861 were also quite mistaken.
When the ruin of the ‘nests of gentlefolk’ became widespread in the 1880s, it
was against the background of the agrarian crisis. The fluctuations of the world
economy were directly reflected in the state of Russian society. According to
calculations by Strumilin, the overall decline in trade between Russia and the
West that resulted from the crises during the period between 1861 and 1908
amounted to 2 billion rubles.
This enormous blow to exports during the crisis years was mainly due to lower prices for grain,
butter, eggs, flax, hides and other products of the Russian countryside. These billion-ruble
sacrifices by the working people of Russia to the Moloch of world capitalism could not, of
course, fail to affect the state of the domestic market. Selling a substantial proportion of its
commodity production at a discount because of world crises, or unable to sell it at all, the
Russian countryside in turn cut its demand for printed fabrics, sugar, kerosene, iron and other
products of national industry. If we also recall the particularly direct dependency of Russian
industry on imports of foreign machinery, cotton, dyes, and a whole series of chemical and
other products, the mechanism through which global cycles affected the development of
our industry will become clear.18
One of the key results of the peasant reform was an increase in the production
of rye. Despite receiving no more than a highly conditional freedom, and tiny
plots of land, the peasants became a problem for the development of the market.
The Soviet scholar of the 1920s, P. Lyashchenko, wrote that after the reform of
1861 the growing economic importance of the peasant households did not bring
about a sharp decline in commodity production, but saw a shift in the Russian
countryside ‘from such globally traded commodities as wheat to the Russian
peasant product, rye’. This shift in turn constituted ‘one of the main reasons for
our agrarian crisis in the 1880s’.19 At the beginning of the decade the ‘peasant’s
grain’ appeared to be showing its superiority over the ‘landowner’s grain’, wheat.
The price for wheat, which was more subject to the fluctuations of the world
market, fell more quickly than that for rye; consequently, the initial phase of
the agrarian crisis saw the relationship of forces in the countryside begin to
change. The peasants grew stronger while the landowners fell into decline. The
rental and purchase of estate lands by peasants became widespread.
Unfortunately, rye could be sold profitably on the world market only during a
grain boom. Indeed, the trade in rye was declining even in good years. In 1850,
376,000 tons of wheat were exported, and in 1870, no less than 1,573,000 tons;
for rye, the picture was quite the opposite, with 900,000 tons exported in 1850
and only 442,000 in 1870.20 While the ‘peasant’s grain’ responded only after a
delay to the signals of the world market, it could not ignore these signals. The
growth of the world grain trade in the mid nineteenth century was accompanied
by increasing competition, but the demand in Europe was so great that there
was room in the market for everyone. As demand stabilised, the competition
grew more acute. By the 1870s the wheat produced by American farmers was
beginning to supplant not only the wheat supplied to the European market
by Russian landowners, but also the peasant’s rye. The world market was also
seeing an increasing role played by such ‘new’ countries as Argentina, Canada
and Australia.
Another competitor for Russia on the grain market was British India. Russian
economists in the 1870s complained that cheap Indian exports were ‘proving
a barrier in the major markets not only to us, but also to the Americans’.21
Nevertheless, it was the United States that represented the main threat to
Russian suppliers. The Americans were not only winning on the basis of prices.
Russian experts noted that America was forcing Russian suppliers out because
it possessed ‘an incomparably better organised trade, an abundance of capital,
and superb grain processing’.22 Moreover, the ports of southern Russia at the
time were notorious for fraud, with low-quality grain sold under the guise of
the high-quality product. In sum, it was stated,
our wheat is considered better by nature than that of the Americans, but in recent years we
have done everything to undermine its good reputation, while the Americans with a whole
series of improvements have raised the quality of their grain to the point where on European
markets it continually attracts a higher price than ours.23
By the period 1898–1902, Russia was supplying the world market with
only a quarter to a third as much grain as the United States. Russia’s less
technically developed agriculture suffered more from crop failures. It was not
simply that the American grain-producing states were in climatic zones far better
suited to crop-raising than the Russian provinces that competed with them.
Agriculture in the US was also expanding on a massive scale onto previously
uncultivated territories. In Russia, it might have seemed, there were both
previously unploughed lands and people to work them. But the population was
concentrated in the old agrarian provinces. Dispatching large numbers of people
to the virgin lands would have meant undermining landowner agriculture, and
at the same time destroying the institution of the village community which
allowed the government to extract both taxes and soldiers from the countryside.
In sum, this would have meant doing away with the entire traditional system
on which both the landlords and peasant society was based.
By the mid 1880s the monetary resources of peasant agriculture were
exhausted. The crisis was affecting rye even more than wheat. The peasants
who suffered worst were those who had previously been serfs; they became
more dependent on the market, but could not make the transition to farmer-
style commercial agriculture. The nobility for their part, immediately drew the
conclusion that the peasants needed to be ‘put in their place’, that labour power
in Russia was excessively expensive. For Russia, according to Lyashchenko, the
fall in world grain prices ‘took on the nature of a catastrophe’.24
The 1880s ended with measures to restore the system of class distinctions
and the privileges of the nobility. The political reaction and the stagnation of
the grain trade coincided in entirely natural fashion. ‘The rise in grain prices
on the European market turned the landowners of the 1850s from supporters
of serfdom into liberals’, Pokrovsky states. ‘The strong prices of the next two
decades then sustained the “bourgeois mood” of the Russian nobility under
Alexander II.’ Sadly, nothing lasts for ever, especially grain prices, and in the
1880s the situation changed dramatically. ‘When Russian producers exported
their grain, they received less and less for it.’25 The crisis of the 1880s turned
both landowners and St Petersburg officials into reactionaries.
The countryside witnessed the beginning of a sort of counter-reform. The
peasants could not be deprived of their personal freedom, but, on the economic
level, efforts could be made to restore as much as possible of the old order. The
free peasants finished up tightly controlled by the landowners. After the reforms,
landowner agriculture rested on the otrabotki, a system of debt-bondage in
which the feudal dependency of the peasantry had changed only in appearance.
In the course of the ‘liberating reforms’, the landowners had lost part of their
holdings; now the peasants were forced to compensate their former owners for
this loss. According to Druzhinin, the large estates in Russia had
already in the 1860s and 1870s turned into a base of support for survivals from the era of
serfdom. The estates were rented not to capitalist farmers but to impoverished peasants, on
conditions that included burdensome share-cropping arrangements, exploitative payments
and the expiation of debt through labour. Where the new leaseholders were merchants or
well-off peasants, the rented lands were divided into small plots and sublet at extortionate
rates to needy village communities, peasant associations or half-ruined farmers.26
By the 1880s, semi-serf forms of organisation had not only failed to vanish
into the past, but, in the conditions of the agrarian crisis, had come to play
an increasingly important role in the life of the countryside. Traditional pre-
capitalist agrarian relations were most clearly expressed in the otrabotki, under
which the peasants, in order to pay for the land they had received, were forced
to work without pay on the lands of the estate-owner. In principle, and as
Pokrovsky stresses, this was free labour; no one could force the peasants to
work off their debts, and they could, of course, simply renounce their claim
to the land. Significantly, it was small and medium landowners who most
often resorted to the otrabotki. The larger the landholding, and the greater the
landowner’s financial resources, the easier it became to employ free labour. ‘The
feudalists adapted more readily to the bourgeois environment than the petty
landowners’, Pokrovsky notes ironically.27
The only way Russian producers had of maintaining their position in the
world market was to systematically lower their prices. It was in this era that
Russia began to live by the slogan ‘We shall go hungry, but we shall export!’
The landowners could still somehow survive this situation, but for the peasants,
real misery ensued. Once again, the domestic market was sacrificed to its world
counterpart, and the peasant household to the interests of commercial capital.
The profits of grain traders were maintained at the expense of the producers.
The poorer a village was at the beginning of the crisis, the worse its ruin by the
time the crisis ended. As Lyashchenko writes,
The decline of grain prices, and along with it, the whole weight of the competitive struggle
waged by Russian grain on the world market, was loaded onto these impoverished groups
to the most intense and ruinous degree. The well-known formula ‘We shall go hungry,
but we shall export!’ was merely a concise and quite unabashed official expression of this
situation. The only people who were forced to go hungry in order to export were, of course,
those who were forced by necessity to lower their prices on the world grain market. Only
on these terms could commercial capital act as an intermediary between these producers
and the world market, and only on these terms did it agree to do so.28
times makes its presence felt so painfully on all the forward-thinking people of
any backward agricultural country’.31
The decay of the traditional modes of life in Russia in the late nineteenth
century was an obvious fact. It would be premature, however, to conclude
from this that the ‘outmoded forms’ were replaced by new, European types
of organisation. Furthermore, the problem did not, of course, lie simply in
the ‘backwardness’ and ‘inertia’ of which the ‘advanced thinkers’ complained
so much. Karl Marx held quite different views. From the mid 1870s, Russia
occupied an increasingly important place in his works. Marx had not merely
overcome the Russophobia which, it must be acknowledged, characterised
him in the 1850s. He was also starting to see Russia as a country which it was
necessary to understand in order to have a grasp of the modern world in its
entirety. As he continued to work on Capital, Marx made plans to use the
historical experience of Russia in the third volume, just as he had used the
experience of Britain in the first.32 At the same time, he was starting to show an
interest in populist ideas. If the Russian narodniki were studying the author of
Capital, the thinking of Marx himself was to an increasing degree developing
under the influence of Russian populism. He devotedly studied the Russian
language, and diverted himself with the works of N.G. Chernyshevsky, whom
he spoke of (perhaps with a certain exaggeration) as ‘a great Russian scholar
and critic’.33
In the 1850s, Marx viewed Russian society as an unrelieved reactionary mass
of humanity. He even regarded the émigré dissident and socialist Aleksandr
Herzen, then living in London, as part of the same aggressive imperial and
provincial world; this was a response to Herzen’s pan-Slavist sympathies. In
the 1870s Marx saw Russia in a totally different light. The Paris Commune had
been defeated, and the West at this time was not a place to look for the triumph
of progressive principles. As Theodor Shanin has noted,
At the turn of the decade, Marx became increasingly aware that alongside the retrograde
official Russia, which he so attacked as the focus and the gendarme of European reaction,
a different Russia of revolutionary allies and radical scholars had grown up, increasingly
engaged with his own theoretical work. It was into the Russian language that the first
translation of Capital was made, a decade before it saw light in England. It was Russia from
which news of revolutionary action came, standing out all the more against the decline in
revolutionary hopes in Western Europe after the Paris Commune.34
Marx began attentively reading the works of the Russian populists, and
found in them not only ideas that accorded with his own, but also questions to
which, as a scholar of social development, he felt compelled to respond. As the
populists analysed the Russian past, they threw down a challenge to both of
the dominant trends of national thought, the Slavophiles and Westernisers. The
narodnik writers rejected the ideas of the Westernisers, who saw the future of
Russia as repeating the ‘European road’, but in the same way they also rejected
the Slavophile myth of Russian uniqueness. To the contest of myths in Russian
social consciousness they counterposed their historical and sociological analysis,
which to a substantial degree was based on the ideas of Marx. The narodnik
thinkers suggested that Russia would be able to avoid repeating the path of
European capitalism. As Shanin notes, their anti-capitalism had nothing in
common with anti-Westernism. ‘That possibility resulted, however, not from
Russia’s uniqueness, exalted by the Slavophiles, but from Russia’s situation
within a global context, which had already seen the establishment of capitalism
in Western Europe.’35
The Russian populists were, in essence, the first to sense the specific nature
of peripheral capitalism. They discerned that in Russia it was not the national
bourgeoisie but the autocratic state, integrated into the world system, that
was the main agent of capitalist development. Consequently, a blow against
the government was inevitably a blow against capitalism as well. Within the
context of the world system, meanwhile, Russia had the status of an exploited
nation. Not only the proletariat, but all the country’s working strata were
subject to exploitation, though in varying forms. The world system benefited
from this situation, but the main tool of exploitation nevertheless was not
foreign capital but Russia’s own authorities. From this stemmed the alliance
between the Russian revolutionary movement, seeking to base itself on the
intelligentsia and the peasant masses, and the proletarian movement in the
West. Russia’s peripheral status in the world system meant that pre-capitalist
structures, above all the peasant communities, were preserved in the country.
The peasant communities were subject to exploitation by the state, which used
them as a tool for extracting taxes; by the landowners; and by finance capital
in association with the government. This exploitation made the peasantry a
potential threat to the system, and the village communities themselves a possible
point of support for future change. The result was that Russia’s peripheral
status and ‘backwardness’ might unexpectedly prove to be an advantage from
the point of view of revolutionary struggle.
At the core of the theoretical discussion was the question of the peasant
communities, which the one-time moderate populists, now transformed into
orthodox Marxists, viewed as survivals from the past. Declaring themselves the
interpreters and advocates of Marxism in Russia, Plekhanov and his supporters
launched an irreconcilable ideological battle against populism.
Meanwhile, the views of Marx himself were developing in the opposite
direction. Like the revolutionary populists, the author of Capital did not
deny the archaic origins of the peasant communities. However, his dialectical
approach forced him to see in one and the same phenomenon both a relic of
the past, and a potential prototype of the future. When asked for his opinions
on this topic by an adherent of Plekhanov’s group, the Russian revolutionary
Vera Zasulich, Marx backed the populists in no uncertain manner. He repeated
the same conclusions in a letter to the journal Notes of the Fatherland.
The deeper the author of Capital immersed himself in questions of Russia’s
history and economy, the more clearly he perceived that the question could not
be reduced to the future of the peasant communities. The real issue was the
degree to which the world outside Europe and North America was doomed to
repeat the ‘Western’ road of development. In Capital, Marx had written that the
more developed countries displayed for the less developed a map of their future.
He asserted this, however, in comparing Britain with Germany. In this case, he
was correct on the whole; for all its national peculiarities, German capitalism,
like that of other countries of the centre, did not transgress the bounds of the
general Western model first established in Britain and North America. Russia
was different; in comparing it with Britain, Marx concluded that the ‘historical
inevitability’ of the processes of capitalist development he had described was
‘limited strictly to the countries of Western Europe’.36
This does not mean that capitalism fails to affect the countries of the
periphery, but that in these countries everything happens differently. In any
case, there is no reason to see human history as a pre-programmed process in
which social formations succeed one another in mechanical fashion. In essence,
Marx here entered into a polemic with those of his followers who were trying
to use his theories as a universal master-key. These followers, Marx objected,
invariably found it necessary to
turn my historical sketch of the rise of capitalism in Western Europe into a historical-
philosophical theory of a general road along which all peoples, whatever the historical
conditions in which they find themselves, are fated to proceed, in order to arrive ultimately
at that economic formation which ensures both the supreme flourishing of the productive
forces of social labour and the fullest development of humanity.37
It was by no means true that the incorporation of Russia into the world
market, and even the development of bourgeois relations there, would necessarily
lead to the rise of the same sort of capitalism as in the West. ‘Events which are
strikingly analogous, but which take place in a different historical setting, have
led to quite different results.’38
The sharp polemics here were so obviously directed against the orthodox
Marxism then taking shape, that it is easy to see why Plekhanov and his co-
thinkers did not publish these two letters of Marx, even though they had the
texts. They were not persuaded to print them even by a recommendation from
Friedrich Engels, who looked after Marx’s affairs during the latter’s illness and
after his death. The letter to the editors of Notes of the Fatherland was published
in 1886 in the Herald of the People’s Will, while the letter to Vera Zasulich came
to light only in 1924, due to the efforts of David Ryazanov. The latter, who was
director of the Institute of Marx and Engels, was later repressed by Stalin.
In their refusal to take note of these texts, the orthodox Marxists were as
one with the irreconcilable critics of Marxism who throughout the twentieth
century insisted that Marx had set forward his theory of social development as
a universal schema, to be applied mechanically in all circumstances. In fact, and
as Shanin correctly observes, Marx himself in his polemic with the orthodox
Marxists clearly articulated ‘neo-Marxist’ positions. In the last years of his life
he was preoccupied with the very questions that were at the centre of Marxist
discussions in the twentieth century. In other words, he not only spoke as the
founder of Marxist theory, but also anticipated its development by a good
half-century.
While the experience of India or China was to Marx’s generation of Europeans remote,
abstract and often misconceived, Russia was closer not only geographically but in the basic
sense of human contact, possible knowledge of language and of availability of evidence and
analysis, self-generated by the natives. It was not only the difference in extent of information
which was at issue, however. The Russia of those times was marked by political independence
and growing international weakness, placed on the peripheries of capitalist development,
massively peasant yet with rapidly expanding industry (owned mainly by foreigners and the
crown) and with a highly interventionist state.39
The combining of all these factors made a powerful social explosion in Russia
inevitable. Because of the peripheral nature of Russian capitalism, however, the
impending revolution was clearly going to differ radically from the proletarian
movements of the West. The agrarian revolution and the seizure of the landed
estates by the peasants placed in question the very existence of the Russian
model of capitalism and its integration into the world system.
The populists described the transfer of the land to the rural masses as the
‘black [that is, peasant] redivision’. From the point of view of the orthodox
Marxists, there was nothing anti-capitalist about such an agrarian movement.
Had not the Western bourgeois revolutions begun with the abolition of landed
estates? Indeed, in the long term such a ‘black redivision’ might have led to
the development of rural capitalism. But in the short term, it would have led
to the peasants quitting the market, which would have been a catastrophe for
capitalist development.
In Capital, Marx stressed that the expropriation of petty producers was
a precondition for capitalist accumulation. In imperial Russia, however,
this expropriation was carried out by commercial capital with help from
the landowners. Meanwhile, because of its ties to the landowners, peasant
agriculture was not done away with completely but was subordinated to the
requirements of the market. This is why the ‘black redivision’ was a catastrophe
from the point of view of the accumulation of capital. Its impact on the world
economy was even more severe. The time was no longer the sixteenth century,
and large volumes of capital were required for development. The small-scale
accumulation by the ‘solid proprietors’ was being drawn out over decades;
it was of no use either for the building of railways, or for the payment of
international loans.
Russian capitalism could no longer develop without the exploitation of the
peasantry by the landowners. Therefore, an agrarian revolution would inevitably
turn into an anti-capitalist overturn, and the effort to radically improve the
position of the peasantry was inseparable from the question of changing the
character of the entire Russian state.
In one of the drafts of his letter to Vera Zasulich, Marx wrote:
The question at issue here is no longer therefore of the problem that needs to be solved, but
quite simply of the enemy that needs to be crushed. To save the Russian peasant community,
a Russian revolution is needed. In the event, the Russian government and the ‘new pillars of
society’ are doing everything possible to prepare the masses for such a catastrophe. If the
revolution occurs in timely fashion, if it concentrates all its strength in order to ensure the
free development of the village community, this latter will soon become an element in the
rebirth of Russian society, and will provide it with an advantage over those countries that
are beneath the yoke of the capitalist system.40
RUSSIAN COLONIALISM
From the 1870s, the Russian empire, having recovered after its defeat in Crimea
and fortified itself with reforms, again set out on the path of foreign expansion.
To outside observers this appeared to be a rebirth of Anglo-Russian rivalry in
the East, an attempt to settle old scores with Turkey, and an effort to regain
for the tsar the aureole of defender of Slavic interests. Like all international
developments of the nineteenth century, however, the new military campaigns
of tsarist Russia had profound economic roots.
Russian industry was gradually starting to revive. It is significant that the
‘free trade’ customs tariff was abolished in 1877, at the very time when Russian
foreign policy was once again asserting itself in the Balkans and Central Asia.
A distinguishing feature of a peripheral society is the narrowness of the
internal market. Lenin was convinced that Russia suffered simultaneously from
capitalism and from its insufficient development. If we look at the size of the
Russian internal market, however, we find that in these terms the development
of capitalism was not merely sufficiently great, but was excessive and dispro-
portionate when compared with domestic demand.
The development of Russian capitalism was dictated not only by internal
requirements, but also by the logic of the world market. For capital, being on
a ‘modern’ level meant being part of the world system. The Russian domestic
market, however, was too small for this. In nineteenth-century Britain, an
extensive domestic market allowed mass production and the possibility of
conquering foreign markets. Russian industrialists, by contrast, could make up
for their weakness only through government support and through expansion
into foreign markets. To compete abroad was difficult, requiring low prices
and the military-political support of the state. The Russian population
was obliged to pay for both. It was forced to pay high prices for local and
imported goods in a protected market, and also to maintain the army and
the bureaucracy, which was growing constantly as a result of the new tasks
required of it. The population was compelled, ultimately, to go to war in order
to conquer or defend markets for the ‘national commodity producers’. Industry
was not Calcutta but Constantinople’.43 The real problem for the British empire
was not the concentrating of Russian forces in Turkestan, but the growth of
German industry. Britain was also losing its positions in the Russian market,
mainly because of German competition rather than as a result of the growth
of Russian industry. The rapprochement between St Petersburg and Berlin,
however, did not lead to a stable alliance. The two empires were competitors on
the world grain market, and this was of far more importance than any number
of colonial misunderstandings with the British.
For 200 years, the Russian elites had viewed the problem of peripheral
development as one of ‘backwardness’. For Russia, the second half of the
nineteenth century was a period when the authorities and the opposition,
conservatives and liberals, bureaucrats and intellectuals, were seized by a
single, shared idea: catching up with the West. The Crimean War had put a
question mark over the place of the Russian empire in Europe. This place had
to be regained and consolidated with the help of reforms, diplomacy, military
construction, the building of railways and the expansion of education. In Russia’s
twin capitals the liberal public was well aware that an autocratic state could act
as a tool for modernisation, but that the authoritarianism that was effective in
exceptional circumstances was not conducive to healthy development or to the
consolidation of successes that had already been achieved. Russia had taken on
Western forms, but without becoming part of the West. The problem was clear
and simple, but for liberal minds, the solution to it was maddeningly elusive.
Russia’s problem was not backwardness, but something else. Backwardness was
delayed development; Germany had been a backward country compared to
Britain. Russia was part of the periphery, and this represented a quite different
variant of development. Attempts to overcome the development gap rapidly
through a ‘burst’ of progress created fresh problems and new dangers unknown
to the ‘advanced’ countries.
The modernisers were invariably convinced that their own countries would
pass through the same stages, in orderly sequence, as the ‘advanced states’ of
the West, only with a certain delay. As a result, the problem was reduced to the
speed of development. How could the advance along the road of progress be
accelerated? In reality, different speeds of development inevitably gave rise to
different economic and socio-political structures, and this in turn altered the
character of the processes that were occurring. The outcome was quite different
from what had been intended. One society cannot repeat the path of another,
quite different one.
Pyotr Chaadaev was the first Russian thinker to recognise this
contradiction.
In my view, anyone who argued that we were doomed somehow to repeat the whole long
train of lunacies committed by peoples in less favourable situations than us, and once again
to undergo all the calamities they have experienced, would be displaying a profound incom-
prehension of the role which fate has allotted us.44
navy that inspired fear in neighbouring states; and agriculture that produced
grain for export. Voltaire and Diderot notwithstanding, there was no need for
political reforms or emancipation of the peasants for all this prosperity to be
attained; thanks to the efforts of a despotic central authority, it was achieved
on the basis of slavery and autocracy.
In the late nineteenth century the feeling was once again arising that Russia
would soon stand as an equal alongside the ‘advanced’ countries of Europe.
But the latest round of modernisations, that had begun with the reform of
1861, could in no way guarantee this. The Russian empire was only one of
the countries that underwent rapid changes in the final third of the nineteenth
century, and of these countries, it was in the least favourable position.
Making use of hindsight, many historians stress the high growth rates in
Russia in the 1890s and on the eve of the First World War, trying to prove that
capitalist development was proceeding successfully, and that only the war and
the revolution that followed it prevented Russia from ‘catching up’ with the
West. In reality, the situation was far less favourable. The late nineteenth and
early twentieth centuries were a period of rapid industrialisation in most of
the states of the capitalist world, including even such colonial or semi-colonial
countries as India and China. Germany, the United States, Austria-Hungary and
even Japan, which not long before had lagged behind Russia, were developing
overall at significantly more rapid rates. Russia was clearly falling behind, and
this meant that in the new international division of labour that was taking shape,
it would finish up in a distinctly disadvantageous position. There were unques-
tionably more factories in Russia than earlier, and they were turning out more
modern products, but dependency on exports, and on foreign technology, loans
and capital investments, had grown as well. As in the 1850s, all was not well on
the defence front; Russia could not re-arm itself as quickly as its rivals. For a
state in which armed might had traditionally meant far more than economic
prosperity, this could not fail to become a serious problem.
In the world system, the success of some countries had traditionally led to the
decline of others. While capitalism was experiencing its latest ‘reconstruction’,
the Russian empire was having to endure increasingly fierce competition from
countries whose positions were incomparably more advantageous. Germany and
the United States had entered the period of modernisation at the same time as
Russia. Both countries had also undergone political transformations. Germany
had been unified in a single state, while in the course of a ferocious civil war the
United States had overcome the division between North and South.
The advantage that the US and Germany possessed over Russia was that
despite being relatively backward countries, they had nevertheless belonged
from the first to the ‘centre’ of the capitalist world system. The triumph of North
over South in the US was not simply the victory of the industrially developed
part of the country over the agrarian part, but also the victory of the centre
over the periphery. The Southern states were doomed to fight a war not only
because their slave-owning system was incompatible with the liberal institutions
of the North, but also for the reason that as a peripheral society, they had
far stronger ties to the world market for raw materials than to the American
internal market. The North needed the raw materials and labour power of the
South for its own development. The Southerners were lucky. After losing the
war, they finished up integrated into the centre of the capitalist world system,
something their local elite had strenuously resisted.
In similar fashion, unification allowed Germany to overcome the gap between
the more developed and the relatively backward parts of the country, and to
organise a single labour market, a common education system and a transport
network.
Finally, Japan, which was integrated into the world system in approximately
the same period, was not weighed down by the baggage of the past. It entered
the capitalist world without being part of capitalism’s periphery, at the very
moment when highly favourable conditions had arisen for it. Japanese capital
did not serve the process of accumulation in the West, but on the contrary, was
able to exploit the fact that European colonial and commercial expansion had
opened the markets of the Far East to foreign penetration.
The modernisation of Germany and the US thus saw peripheral regions that
were part of the same political space as the centre, ‘gravitate’ into it, while the
modernisation of Japan represented a unique case in which a country burst into
the world system from the outside. Russia, by contrast, was still a country of
the periphery, even though a relatively developed one. For this reason, Russia’s
efforts to ‘catch up’ with the West did not extend outside the framework of the
general rules dictated by the world system.
Even though participation in the world grain trade was ruining the countryside,
during the 1880s this trade remained a crucially important source of funds for
industrialisation. Capitalism, as Lyashchenko puts it, survived the crisis of the
1880s ‘at the price of the destruction of the petty commodity producer’.1
By the early 1890s these efforts were starting to bear fruit. The growth of the
cities had brought with it the development of the internal market, including that
for Russian agricultural produce. As Russia had overcome the consequences
of the Crimean defeat, its customs policies had become more protectionist.
Russian industry was beginning to recover from stagnation.
The year 1894 saw prices on the Russian and world markets reach their low
point. After this, a sustained rise began. The flow of capital into agriculture
made production commercially profitable, at least under certain circumstances.
Wheat increasingly took the place of rye, and grain exports almost doubled.
Exports of grain during 1900–14 were worth 7.3 billion rubles, compared to a
mere 8.6 billion rubles during the previous 30 years.2
In Lyashchenko’s view, the income which Russia obtained from grain
exports around the beginning of the twentieth century was comparable to the
export earnings which in America created ‘the preconditions for the brilliant
development of capitalist industry’. Why then, this historian asks, did nothing
similar occur in Russia? The reason, he maintains, lay in ‘the backward social
and economic conditions which this flow of wealth encountered in Russia’.3 The
development in Russia of these ‘backward social and economic conditions’ was
not, of course, divorced from the impact on the country of the world market or
of the established international division of labour. As we shall see, Russia’s entry
into the industrial era did not by any means signify that ‘backwardness’ had been
overcome. In a certain sense, the flow of wealth not only stimulated ‘progressive
development’, as interpreted by both the liberal and Marxist economists of the
period, but also had the contrary effect of strengthening the ‘backward relations’
which liberals and Marxists were united in condemning.
The proceeds from the grain trade allowed increased investment in industry
and encouraged industrial growth, but were not enough to ensure that this
growth would be maintained. The ‘grain’ income was followed by investments
from the West. As Pokrovsky puts it, the industrial upturn of the 1890s was
accompanied by ‘the conquest of Russia by foreign capital’.4
223
same time the amount of paper money in circulation was reduced and the silver
coins were reminted. The exchange rate of paper and silver money then became
one paper ruble to one silver copeck, and was fixed at this level. The financial
reform, carried out against a general background of inflation in Europe, led to
a sharp appreciation of the ruble, which for the first time in its history came to
be valued more highly than gold in the West. The exchange rate of the Russian
currency was now as elevated as it had earlier been depressed. Nevertheless,
the system worked.
A positive trade balance could only be maintained by exporting grain. In the
mid 1880s, 17 per cent of total Russian grain production went abroad, and in
the early 1890s, no less than a quarter. Meanwhile, world prices were declining.
The growth of exports was supposed to compensate for the lower prices, but
the increasing Russian exports themselves put pressure on the world market,
exacerbating the problem. In the 1880s, Russia had run balance of trade surpluses
of 100–150 million rubles a year, but by 1899 this figure was only 7.2 million.7
In the first years of the twentieth century the position improved somewhat,
with world grain prices again rising. However, this was accompanied, by an
increase in domestic prices and a rise in the price of labour power. Naturally,
this created favourable conditions for the growth of the workers’ movement,
which gave a serious account of itself in 1905.
Despite holding only the post of finance minister, Witte concentrated enormous
powers in his hands, powers that far exceeded his official authority. The secret
of his success lay in the fact that, while taking advantage of exceptionally
favourable market conditions, he managed at the same time to strengthen the
national currency and dramatically increase state spending. At the same time,
the treasury’s printing press was run at full capacity; the lower orders of Russian
society were forced to pay the growing costs of the government.
Large sums were poured into railway construction, ensuring a flood of orders
for the metallurgical and, to some degree, machine-building industries. The
return to protectionism stimulated local production. Under Witte, Russian
customs tariffs were among the highest in the world. Despite this, machines and
equipment were imported in huge quantities; the growing Russian market was
attracting foreigners, and the ‘strong’ ruble allowed technology to be imported
relatively cheaply.
With the ruble strengthened, the government in St Petersburg was able to
sharply increase its borrowings on international financial markets. To Western
investors, Russia seemed a country of unique opportunities. Circumstances
had coincided, it appeared, in an extraordinarily fortunate manner. In Russia
there was a strong ruble, while Western financial markets were suffering from
a surplus of ‘excess’ money. ‘All this’, Ronin writes, ‘poured like a river of gold
into railway construction and into industries that were shielded from foreign
competition by the high protective tariff of 1891.’8
The industrial expansion of the 1890s and early 1900s was genuinely
impressive. Between 1890 and 1899, output in the chemical industry grew by
274 per cent; in mining, by 372 per cent; and in metallurgy, by 793 per cent.9
According to data cited by Strumilin, the overall growth of industrial production
in the years 1895–1900 came to 59 per cent; if 1892 is taken as the base year,
the growth by 1899 amounted to 73 per cent.10 Even in this setting, the pace of
development of the railway network was dizzying. The programme of railway
construction drawn up in the last years of the nineteenth century created a
furious demand for the products of the metallurgical industry. Between 1860 and
1870, the length of Russia’s railway network grew from 1492 versty to 10,090,
which was considered an impressive success. Between 1870 and 1880, it again
doubled, reaching 21,236 versty. But the years from 1890 to 1900 witnessed a
new ‘railway fever’, with the length of track reaching 48,565 versty, mainly due
to the Trans-Siberian Railway.11 By inflating the demand for metals and other
products, this latest burst of railway construction created the conditions for the
expansion of other industrial sectors. This demand was underwritten by state
programmes, so it is not surprising that the completion of the Trans-Siberian
Railway was a real catastrophe not only for Russian capitalists, but for French
ones as well. Russian industrialists complained constantly of the government’s
unsystematic and inconsistent approach to railway construction, but as the
economist I. Vavilin later remarked, these reproaches were misplaced:
The Tsar’s government built railways using money from the pockets of the French, British
and German bourgeoisies. Consequently, it could not have its own plan for building railways.
Instead, it built them when the European bourgeoisies provided money, and did not build
the lines needed to satisfy the requirements of the economy, but those that corresponded
to French military commands.12
Indeed, the French government repeatedly told the Tsar’s administration that
the tracks should be constructed on the basis of strategic considerations. In
1901 the French general staff insisted that credit provided to Russia should be
used for the building of a strategic double-track line from Bologoe to Sedlec.
Witte argued that for this to happen, St Petersburg would have to be provided
with a new loan; meanwhile, the officials in Paris were convinced that the funds
already borrowed would be quite enough. In the end, a new loan was made
available. In 1912 and 1913 the French finance ministry twice declared that a
condition for the providing of credit was the building of a railway network
in western Russia that would allow troops to be moved there rapidly in the
case of a war with Germany. The official French representatives acted in close
collusion with private banks such as Crédit Lyonnais, incidentally disproving
the argument that French entrepreneurs were apolitical. The Russian population
was told informally that ‘the French government can aid in the regular placing
of Russian stocks on the market, but as compensation it has to receive military
aid from its Russian allies’.13
The years around the beginning of the twentieth century were a time of rapid
industrialisation in southern Russia. Numerous metallurgical and metalworking
plants were built in the region. The overwhelming majority of these enterprises
were established by foreign capital – first British, and then French and Belgian.
The initial step was taken by the Englishman John Hughes, who founded the
Novorossiysk Coal and Rail Production Company. Soon afterward, the Southern
Dnepr Metallurgical Company was set up by the Belgian firm Cockerill. This
was then followed by the French Krivoy Rog Iron Ore Company, by the Russian-
Belgian Metallurgical Company, and many others. Virtually all scholars of
the early twentieth century acknowledge the role of foreign investment in the
economic boom of that period. ‘The exceedingly rapid growth of industry that
took place in Russia in the late nineteenth and early twentieth centuries’, Vavilin
notes, ‘was due in significant measure to an influx of capital from the countries of
Europe.’14 This thesis was embraced by both Marxist and liberal economists.
The measures that Witte used to strengthen the ruble drew foreign capital to
Russia at a time when a crisis of overaccumulation was gathering strength in the
West. Profits were in decline, and attractive investment projects were lacking. As
Tugan-Baranovsky remarks, in the 1890s there was ‘an abundance of available
capital on the Western European market’.15 The crisis of overaccumulation
was especially severe in Britain and France. In 1895, capital invested in Paris
yielded 2.2 per cent; in London, 2 per cent; and in Berlin, 3.15 per cent. Two
years later, the yield in Paris was 2 per cent; in London, 2.78 per cent; and in
Berlin, 3.84 per cent.16 In Germany, where industrialisation had begun later, the
average return on capital was higher. In conditions of acute Franco-German
rivalry, investing money in the development of German industry presented
problems for French financiers. By contrast, Russian enterprises were ready to
pay unimaginable returns, while the strong ruble made it possible to accumulate
funds and to repatriate them at any convenient time. Belgian capital – usually
the junior partner to its French counterpart – had an important part to play in
the industrialisation of Russia. Belgian entrepreneurs owned a disproportionate
number of newly established enterprises in diverse sectors. In particular periods
the share of Belgian capital on the Russian market was almost equal to that of
French capital, and in terms of direct investment the Belgians outstripped the
French. This was due to the fact that unlike the French investors, who brought
with them only their financial assets, the Belgians much more often brought
technology with them as well. In the early years of the twentieth century,
Belgium, a smaller-sized nation, was one of the most industrially developed
countries on earth. Belgian industry, however, had quickly reached the natural
boundaries of growth within its own country, and Belgian capital was setting
out to conquer new territories in Eastern Europe.
The major investments by foreigners were in the south of Russia, where
steelworks, engineering plants and tube-rolling mills were established. As Tugan-
Baranovsky writes,
These plants yielded huge profits of the kind to which foreign capitalists had long been
unaccustomed, and shares in the enterprises commanded such high prices on foreign markets
that it was enough to add the words ‘Dnepr’ or ‘Donetsk’ to the name of a firm to ensure
the ready sale of its shares abroad.17
The Russian tube-rolling mills, which were under German control, were
combined into a syndicate that waged a fierce struggle with its French and
Belgian competitors. In their turn, French and Belgian capitalists founded
syndicates in the coal industry of southern Russia. Prior to the arrival of foreign
capital, this part of the country had been almost untouched by industrialisa-
tion. By 1895, however, the south had outstripped the Urals, the cradle of
Russian industry, and by 1900 was smelting more cast iron than all the rest of
the empire together. By 1900, some 70 per cent of Russia’s cast iron was being
produced in this region.
Of the 18 industrial joint-stock companies that were set up in Russia during
these years, twelve were completely foreign-owned, while the other six were of
mixed ownership. Foreign enterprises accounted for 67 per cent of the locally
produced cast iron, and for 58 per cent of finished manufactures.18 With the
help of foreign investment, electrical generating stations, machine-building
works, and locomotive and wagon-building plants were constructed. Describing
the trade in Russian securities ‘behind the scenes’ of the Paris stock exchange,
Professor Levin wrote in 1918: ‘It would not be an exaggeration to say that it
was Parisian stock-jobbers who founded our heavy industry.’19
The dominance of foreign capital was felt acutely in the ‘high technology’
of that period – in the energy industry, and in the production of electrical
goods and chemicals. The investors were mainly German. Scholars recognise
that in the Russian electrical goods industry, German capital held an ‘almost
monopolistic position’.20 Of the two companies specialising in the production of
resins, one, Provodnik, was French; while the other, Treugolnik, was German.
In the tobacco industry, the leading position was held by the British-owned
General Russian Tobacco Corporation.
American companies invested in goldmining, oil wells and insurance. Between
1900 and 1915, their investments increased almost fifteen-fold, from 8 million
to 114 million rubles.21 American firms also set up in business producing
agricultural machinery. Once entrepreneurs from the US had established
themselves in Russia, the historian M.Ya. Gefter notes, ‘they became ardent
supporters of the introduction of protective tariffs’.22 Production of copper also
fell increasingly under the control of British and French capital, and 90 per cent
of platinum production was in foreign hands. Foreign investments were also
made in the coal industry of the Donetsk basin, and in iron ore mining.
Unlike French capital, which was concentrated in the south, the more
conservative British investors preferred to put their money into Urals metallurgy.
But of special importance for Russian industry was, of course, the Swedish firm
Nobel, which undertook oil extraction on a massive scale in Baku. The Nobel
Brothers partnership had been founded as far back as 1879.
Before the formation of this first foreign oil company, oil production by local entrepreneurs
had been increasing, but had employed very primitive technical methods. The firm of
Nobel Brothers immediately put its enterprise on a solid footing. No expense was spared
to optimise production; the company introduced technical improvements, established special
laboratories, and fundamentally transformed the methods used in oil refining. Oil pipelines
were laid to transport oil from the well-head, and huge tanks were built for oil storage.
Tanker ships and barges began to be used for river and sea transport, while on the railways
special tank wagons were introduced, specially equipped for carrying oil. The refineries were
connected to the docks by kerosene pipelines.23
The Nobels were followed to Baku by other Western investors. The flood
of capital quickly transformed the out-of-the-way town into one of the great
industrial and cultural centres of the empire. By the end of the century, Russia
was outstripping the US in oil output. Baku oil was of increasing interest to the
British. At that time, the British empire lacked sufficient proven resources of
oil on its territory, and the importance of this strategic resource was growing
rapidly. At a time when conflict with Germany was in the offing, control over
the Baku oilfields was becoming a crucial question not only from an economic
point of view, but also from a military and political one. The British company
Shell arrived in Baku, establishing the Russian General Oil Corporation for
the specific purpose of operating in the country. Together with Nobel, Shell
came to control more than half of oil extraction in Russia, and 75 per cent of
the trade in Russian oil. In the years 1910–14 alone, British investments in the
field amounted to 134.6 million rubles, compared to a mere 9.58 million rubles
of Russian capital (this, moreover, was in a period when Russian capital was
enjoying a boom period).24 By this time, the Russian General Oil Corporation
had outstripped both Shell and Nobel.
The history of the Grozny oilfields resembles that of Baku. Development of
this resource was begun by Russian entrepreneurs, but it soon emerged that they
lacked both capital and technology. In 1894, the joint-stock firm I.A. Akhverdov
and Company, which controlled the oilfields, tried to find investors in Britain.
The British in turn approached Belgian and Dutch banks, with the result that
the joint-stock company Pétroles de Grosnyi was founded in Brussels a year
later. Eventually, the whole enterprise was taken over by Belgian interests. Other
Grozny enterprises suffered a similar fate.
Foreign capital played a considerable role even in such seemingly internal
Russian matters as the development of urban transport. In Moscow there
were two companies running horse-drawn tramways. The ‘First Company’
was under Russian control, while the ‘Second Company’ was Belgian. In 1891
they concluded an agreement on joint use of the lines. ‘Under this agreement,
the technical administration of both enterprises would be carried out locally
by the Russian company, and the financial management by the Belgian firm,
which received several places on the board of the former.’25 Later, the transition
from horse to electrical traction on the tramlines of Russia’s first capital was
made with the help of German capital.
The situation in other cities was analogous. Horse-drawn and electric trams,
a Kharkov observer complained in 1908, were a highly profitable commercial
undertaking. ‘This is why hordes of foreign capitalists descend like vultures on
every city where the question of building tramways is even raised.’ As calculated
by this observer, the Belgian tramway concession in Kharkov, Kremenchug and
other centres had served to enrich foreigners, while ‘leaving the cities as dirty,
ill-lit and badly run as before’.26
Having unmasked the self-interest of the foreign investors who were taking
their profits out of the country, the author of the above-cited pamphlet appealed
to his home city to start building and operating tramways, and to spend the
proceeds on improving the city.27 This compelling decision, it seemed to him,
was impeded only by a lack of imagination and entrepreneurialism on the
part of his fellow citizens, who at every step let obvious benefits slip through
their fingers. In reality, the inability of Russian entrepreneurs and bureaucrats
to get by without the help of foreigners had far more profound causes. Unlike
the Kharkov citizen who tried to defend the city of his birth from Belgian
tramway operators, most economists of the time saw no problem with the
influx of foreign capital.
IMPORTED CAPITALISM
When people spoke to Witte about the problems that might be associated
with foreign capital, he simply replied that to be alarmed on these grounds
meant ‘to be ignorant of your own great history, to not believe in yourself
and in your own great strength’.28 In Russia, references to the country’s ‘great
history’ have traditionally meant that the government is trying to conceal the
fact that it lacks any other argument. Official economists in later times have
also argued along these lines. In 1990, when attracting foreign capital was once
again proclaimed as state policy, A.G. Dongarov published a brochure entitled
Foreign Capital in Russia and the USSR which aimed to prove that the effect of
Western entrepreneurs on the Russian economy had been exclusively favourable.
‘It was Russia that exploited foreign capital in the interests of its development,
and not foreign capital that dictated goals in its own interests, for example, the
extraction of raw materials for export.’29
What foreign capital was seeking in Russia early in the twentieth century was
not raw materials, which could be had readily enough from other sources, but
profits that substantially exceeded European norms. This was well understood
by the prominent economist M. Tugan-Baranovsky, who was acutely aware that
the Western capital that was entering Russia was seeking ‘colonial’ super-profits:
‘The markets that Britain seeks thousands of versty off in remote countries of
Africa and Asia is opened up for the Russian manufacturer in his immediate
neighbourhood, thanks to the railway line.’30 The movement of capital from
‘old’ bourgeois countries to ‘new’ ones is a natural phenomenon, the basis of
global progress and development. Tugan-Baranovsky was perfectly aware of
the source of the exceedingly high profits to be had in the ‘new’ markets:
Russian industrial capital feeds not only on the juices of the workers whom it exploits, but
also on the juices of other, non-capitalist producers, above all peasant agriculturalists. The
peasant who buys a plough or a scythe for a price twice the cost of production contributes
even more to the high rate of profit of Hughes, Cockerill and other owners of metal goods
factories than do their own workers. It is this chance to shear the sheep twice, so to speak,
to burn the candle at both ends, that is the secret behind the attractiveness of Russia to
foreign capitalists.
It follows that in practice, the arguments about the narrowness of the internal
market in the Russian empire make no sense either.
For capitalist industry, the market is even more attractive in those countries in which, as in
Russia, natural wealth is present in abundance, while the mass of the population has not
yet broken with the previous archaic economic forms.31
The finance minister is a dashing horseman, but his steed is ill-fed and worn-out. It is simply
a peasant horse, true, very hardy and patient, but however much you spur it on and scourge
it with the whip, it cannot reach the speed of a thoroughbred.36
The readiness to ‘spur on’ and ‘scourge’ the ‘peasant horse’ gave rise to tensions
which, as they gradually accumulated, created the preconditions for a social
explosion. The economic successes of the years from 1895 to 1900 prepared
the way for the political shocks of 1905.
In Russia in the late nineteenth and early twentieth centuries, the relations
between ‘centre’ and ‘periphery’ that became typical for Latin America only
from the mid 1970s were tested for the first time. After a crisis of overaccumula-
tion of capital in the ‘centre’, a debt crisis on the ‘periphery’ inevitably followed.
From 1847, every serious crisis in the West was accompanied by an outflow of
capital from Russia. As early as 1861–66, according to Strumilin’s calculations,
no less than 455 million gold rubles was taken out of Russia.37
Around the turn of the twentieth century, this problem began taking on
even greater dimensions. According to a modern scholar, Russia between 1881
and 1913
paid a sum of more than five billion rubles in interest and principal on its state loans, that
is, half as much again as it received. In practice, it did not import capital, but exported it. In
this respect, however, Russia was no different from the other countries that made up the
periphery of world capitalism in the late nineteenth century.38
capital, German and French financiers came to play an increasingly large role
in the Russian market.
According to Ronin’s calculations, ‘on average, about 40 per cent of the
shares of eighteen Russian banks, whose founding capital made up about
75 per cent of the capital of all the forty-six commercial joint-stock banks
operating in 1914, were held by foreigners’.41 Western investors also began
to play a growing role in provincial financial markets. French banks aided in
share issues by the Merchant Bank in Rostov-on-Don, and by the Siberian
Bank. In the Russian-Asian Bank, French capital made up about 60 per cent
of the total.42 French capital also played a considerable role in the Russian-
Chinese Bank, which opened in 1896 in connection with the building of the
Trans-Siberian Railway. The same bank also financed the construction of the
Manchurian Railway. The dominant position of the French in these projects
aroused the concern of Witte, on whose initiative the State Bank acquired a
substantial proportion of the shares in that credit establishment. Even after
the intervention of the government, however, French influence in the enterprise
remained particularly strong.
German capital also took part in the railway programmes, but on a much
lesser scale than its French counterpart. The position of German investors in
the sector gradually declined, while the presence of British capital in the market
for railway securities began to grow.
Around the turn of the century, the links between Russian industry and the
Paris stock exchange became strong and self-perpetuating. Among the host
countries for British investments, Russia was only in tenth place, and in 1911
was behind both Peru and Uruguay. For French capital, however, the Russian
empire had become a key area of expansion. In 1897, 6 million francs were
invested in Russia; and in 1902, according to various estimates, the figure was
around 9–10 billion francs – constituting almost half of all the French capital
invested in Europe.43
with these institutions, and took part in their work. In 1911, the Ministry of
Trade and Industry stated that
In Russia, the government is one of the main consumers, and the fate of many branches of
industry depends to an important degree on state orders. Aside from the metal industry,
which supplies the state railways and the artillery and naval departments, there are also,
for example, the textile, leather and other sectors of industry.45
Russia that year was 24. Meanwhile, the Belgians alone reported setting up a
total of 35 enterprises in the country in that year. ‘It might be supposed’, a
contemporary observer noted ironically, ‘that foreigners are more readily able
to find out which enterprises they have put their savings into, and what belongs
to them.’49
Benefits would continue to flow from this situation only so long as the strong
ruble and high grain prices kept pumping capital into Russia, and while a
protectionist tariff underpinned the growth of industry. For this model, the
next slump in the world economy proved fatal. This time, the Russian empire
was not only a victim of the global disorder, but also one of the sources. As
noted by contemporaries, the world economic crisis of 1899–1900 began with
an ‘overheating’ of the Russian economy, and only then ‘spread little by little
throughout Europe’.50 The completion of the great railway projects in Siberia
and the Far East brought a sharp contraction in orders for the metallurgical
industry; then, in a chain reaction, demand fell in other sectors as well. This
hit foreign investors hard, who then began to curtail their activity in Russia.
Inevitably, the effect was felt on the Paris stock exchange.
Spilling over into a world crisis, the economic downturn devastated world
prices for raw materials. As soon as world grain prices began to falter, a shudder
passed through the edifice of the St Petersburg state apparatus.
An ‘overheating’ of the economy had already been apparent in Russia in
1898 and 1899. The funds that were borrowed on the French financial market
were insufficient to maintain growth. The St Petersburg government tried to
obtain money from Britain and the US, but without great success. In London,
Russia was still viewed as a rival power threatening the interests of the British
empire in Asia. On the Berlin stock exchange, large quantities of ready money
were simply not available. Moreover, the moment was extremely inopportune.
In 1898, the first signs of an impending crisis had been felt on the European
money market, and credit had become more expensive. The situation in 1899
was even worse.
In 1900, faced with a financial crisis, foreign holders of Russian securities
began dumping them. The French alone sold securities worth approximately
100 million rubles, and roughly the same sum in gold was taken out of Russia.51
To restrain the flight of capital, Witte was forced to introduce more and more
favourable terms for the foreign owners of Russian securities. This led to new
problems. When the Russian authorities in 1901 decided to float a new 4 per
cent loan in Paris, they met with open political pressure. The French government
demanded concessions, mainly in the economic field. The funds borrowed in
Paris had to be spent at least in part on orders placed with French factories
or with companies owned by French capital. St Petersburg replied to these
demands with a formal refusal, but in fact fulfilled them. Foreign enterprises
that had been in a difficult position because of the economic crisis that was
sweeping the country began receiving new orders. This, however, was no longer
enough; the demands of the French became still more harsh. Witte justified
himself by reminding his partners that in line with the principles of a liberal
economy, ‘every industrialist who undertakes business stands to gain or to
lose’.52 Unfortunately, Western leaders who zealously preach liberalism to
credulous natives are invariably deaf to such appeals when these are aimed
in their own direction. The dependence of St Petersburg on Paris was by
now so great that in each specific case Witte was forced to yield. He consoled
himself, while informing Paris of another concession, by reminding the French
Minister of Finance, J. Caillaux, that the decision did not ‘accord with the
sound principles of banking policy which I am charged with defending’. Witte
was taking this step ‘solely in order to please you, my dear colleague, and the
French government’.53
The starting point for the 1905 revolution was the defeat suffered by St Petersburg
in the Russo-Japanese War. But this conflict itself had profound causes, rooted
in the maturing crisis of the world system and in the contradictory role played
within this system by Russia. In Pokrovsky’s view, this war was a ‘skirmish
around the forward posts’ of Anglo-American and German imperialism.
The interests of Russian imperialism itself had a secondary significance in all this, just as they
played a secondary role even in the conflict of 1914. To the extent that Russian capitalism
was active here, it was as an old commercial capitalism, not as a new financial or even
industrial capitalism.54
The rivalry between Germany and Britain in fact manifested itself long before
the First World War, in the most unexpected places and in the most unusual
forms. The first skirmish between German and British interests was the Boer
War. The behaviour of the Boers, who had shown unexpected toughness in a
dispute with the mighty British empire, and who in effect were the first to begin
hostilities, cannot be explained without taking into account German military
aid and diplomatic promises which they had received in Berlin. The strategy of
the Boers was founded on expectations of a great war that would soon begin
in Europe, and which would undoubtedly distract the British forces. At that
point, however, the German empire was not ready for a direct conflict. When
this finally became clear even to the most radical Boer military leaders, they
not only made peace with London but also turned themselves into consistent
defenders of British imperial interests in Africa.
Russia’s war with Japan unfolded against a background of the world economic
crisis that had been precipitated by the ending of Russian railway construction
in the Far East. The British empire stood clearly with Japan, which, with British
help, had succeeded not only in building a first-class navy, but also in training
its sailors. Berlin, on the other hand, did everything it could to encourage
St Petersburg to go to war. Nevertheless, to view the Russo-Japanese conflict
simply as a manifestation of Anglo-German rivalry would be grossly simplistic.
It is worth noting that in another text, the same Pokrovsky provides a far more
detailed explanation of the causes of the war. Russia’s ambivalent position
as a semi-peripheral, or more precisely, as a peripheral empire, was especially
obvious in the area of colonial policy. On the one hand, Russia’s own economic
development depended on processes occurring in the West. On the other hand,
the Russian state, as an empire, was sufficiently strong – at least in military
respects – that it could take part in the European colonial expansion. Here,
Russian capital simultaneously defended its own interests and acted as a bearer
of Western influence, helping to draw more and more new territories into the
world system. In the process, Russia both served the interests of the nascent
global ‘centre’ and competed with it.
This ambivalent and contradictory nature of Russian capital explains the
problems encountered by Russian colonial policy, which was completely
successful only where it did not meet with serious resistance from other world
powers. In Central Asia, China, Korea, Mongolia and Persia, Russian expansion
developed alongside the expansion of other empires, with which St Petersburg
at times competed and at other times collaborated.
Beginning in the 1870s, a feverish race to acquire colonies unfolded against a
background of stagnation in the European and North American markets. The
impulse which the industrial revolution had provided to the world economy
was now to a significant degree exhausted. The development of technology had
become evolutionary; as a result, qualitatively new products and new markets
were no longer appearing. The growth of capitalism now depended on the ability
of the leading powers to expand their empires. Russia participated in this process
alongside Britain, France, Belgium and Germany, playing a subordinate role
but zealously protecting its own interests. In the ‘Great Game’, the Russians
had ultimately been forced to renounce ideas of expanding into Afghanistan,
but the British empire was now also forced to reckon with the presence of a
new military force on the very borders of India. In competing with the British
in Persia, the Russian government tried to emulate its rivals, but the resources
available to the two sides were unequal. As a Soviet historian noted, ‘while
stubbornly pursuing a policy of “capitalist conquest” of Persia, the Russian
autocracy took this policy to the most absurd lengths’.55 Instead of deriving
benefits from its expansion, St Petersburg was forced to spend ever-greater
sums for minimal results. The rivalry with Britain proved futile. The situation
was redeemed by the Anglo-Russian Agreement of 1907, which provided for a
dividing-up of spheres of influence in Persia, Afghanistan and Tibet.
In the same fashion, Russian expansion in the Far East, backed by railway
projects and French investments, began to falter in the early twentieth century as
it encountered resistance from Japan, behind which stood the might of Britain.
The completion of the Trans-Siberian Railway opened up the possibility of
incorporating Siberia fully in the world market system. But now as never before,
ice-free harbours were needed in the Far East. Japan became Russia’s enemy
not because it was competing with Russia for colonial mastery over Korea and
China; the real reason was that Japan, through this rivalry, impeded the access
It is typical that Siberia as a colony began to interest the Russian government and Russian
capitalism precisely in the period when grain prices were at their lowest, when it was
exceedingly important for Russia to find some way of increasing the amount of raw produce
it was pouring onto the grain market, because this produce was bringing lower and lower
returns, and new regions had to be found from which to extract it….57
If the tsarist regime felt Russia’s lag behind the ‘old’ empires of Britain and
France to be something normal and irremediable, the rapid rise of Japan signified
the collapse of all the Russian government’s hopes of playing a more weighty
role in the world, and testified to the failure of the path to modernisation that
the Russian authorities had chosen. The identity of the foe was clear, but the
funds needed for victory were now lacking. The defeat suffered by the Russian
fleet in the battle of Tsushima was not principally the result of talent on the
part of the Japanese Admiral Togo, or of incompetence on the part of his
opponent Admiral Rozhestvensky, but of fundamentally different levels of
military technology. The entire Japanese fleet was made up of ships of a single
generation, while the Russian squadron, along with its three modern battleships,
included obsolete vessels incapable of seriously resisting the Japanese. Leading
a flotilla of old, slow vessels, the new Russian dreadnoughts could not exploit
their superiority since they were unable to operate at full speed or to manoeuvre
effectively. In addition, it later emerged, the Russian naval gunners had been
supplied with defective shells that were incapable of doing any serious damage.
Precisely the same occurred as at the Battle of Alma; the enemy stood off at a
safe distance, and bombarded the Russian squadron as if its ships were targets
on a firing range.
Tsushima could be interpreted as a symbol of the bankruptcy of the Russian
government’s entire modernisation strategy. Rapid development in particular
sectors, and the establishing of modern enterprises, could not by themselves make
up for overall backwardness. Ultimately, this ballast of underdevelopment sank
the advanced elements of the economy. While Western societies developed in
more or less even fashion and at the same pace, in Russia every attempt to speed
up ‘movement along the road of progress’ simply increased the disproportions
and made the problems more intractable. The old did not prevent the rise of
the new, but it was the old that imposed its logic and rules. Modern social
layers and structures were fastened to a system of archaic social relations, and
could not reveal their potential to the full. By the beginning of the twentieth
century, Russian society as a whole resembled Admiral Rozhestvensky’s ill-
fated squadron.
The country was on the brink of revolution. To resolve the accumulated
contradictions without radical social and political change was impossible, and
modernisation of the economy, begun but not completed during the years of
peasant reform, remained on the agenda. Not only did radicals talk of the
impending revolution, but liberals as well. The officials of the state administra-
tion took this threat very seriously as well. It is striking, however, how dimly
the character of the looming revolution was perceived by most of the future
participants in this historic drama.
Liberal society dreamt of a successful ‘Europeanisation’ of the state, of
the abolition of tsarism and of the introduction of ‘normal’ capitalist modes
of operation. However paradoxical it might seem, Russian liberals, who
traditionally had by no means been hostile to socialism, referred in this case
to Karl Marx; in Marxism, they saw proof that the universal triumph of
capitalism over patriarchal and feudal structures was inevitable. If all countries
were bound to pass through capitalism, backward Russia was destined also
to travel the ‘Western road’ and to catch up with the advanced countries
of Europe. Revolution was essential in order to do away with the ‘relics of
serfdom’, and to clear the way for the new liberal-bourgeois Russia. Only one
thing remained unclear: what were the social forces that would carry out this
salutary overturn?
The real Russian bourgeoisie showed no particular signs of being a
revolutionary class. The big capitalists of St Petersburg had close ties to the
central bureaucracy; the state was their business partner and main source of
orders. The Moscow entrepreneurs, the owners of the textile mills, were more
radical-minded; they had an interest in broadening the internal market, and
this would require an increase in the purchasing power of the peasantry, the
main consumers of textile products. For these entrepreneurs, reforms that
would improve the situation of the peasants were indispensable. Even this
more left-wing faction of the bourgeoisie, however, was not at all inclined to
revolution. Meanwhile, the provincial capitalists often outstripped even the
local landowners and government officials in their barbarism and reactionary
views. Finally, all sections of the bourgeoisie had begun to sense the danger
from the growing working class, and consequently felt the need to be defended
by the state.
Unlike the situation in England and France, where during the revolutionary
period the bourgeoisie led a broad popular movement, the Russian capitalists
grew increasingly conscious of the difference between their interests and those of
the masses. The Russian entrepreneurs depended on foreign credit, guaranteed
by the government, and consequently on political stability. It is quite under-
standable that these entrepreneurs should have been conservative. The political
position of the Russian bourgeoisie in the late nineteenth century was thus ‘the
diametrical opposite of the classical models of Western history’.58 The petty
and middle bourgeoisie, living on their sales to the domestic market, were weak,
provincial and ill-educated, while the upper bourgeoisie were dependent on
foreign capital and were ‘tied hand and foot to the landowners’.59
In such circumstances, any political crisis hit directly at the interests of the
entrepreneurs. The intertwining of bourgeois and landowner interests thus
occurred at a whole range of levels. The money obtained through the semi-
serf exploitation of the peasantry was deposited in the banks and was used
to finance private industry. In the countryside, landowner agriculture was the
main partner for urban capital. In the West, the ending of feudal exploitation
in the countryside had preceded industrialisation, but in Russia, to a significant
degree, industrialisation took place on the basis of funds acquired through
the exploitation of rural labour using patriarchal and semi-serf methods. In
Britain, the aristocracy and bourgeoisie had become intertwined as the changes
wrought by the revolution had been consolidated; in Russia, the same process
occurred prior to and ‘in place of’ a bourgeois revolution. There, capitalism and
bureaucratic, quasi-serf-holding autocracy were, so to speak, Siamese twins.
With its characteristic bureaucratic inefficiency, autocratic rule of course acted
as a brake on the development of the country – or more precisely, on the
development of ‘modern’, ‘advanced’ forms of capitalism – but the bourgeoisie
could not do without it. Russian capitalism was so intimately linked to the
patriarchal order and to the authoritarian state that for the country’s bourgeois
the collapse of the autocratic regime meant inevitable catastrophe. The leaders
of British industry might allow themselves a certain democratism, but Russian
entrepreneurs needed a harsh state authority. Where the Western bourgeoisie
would readily compromise, their Russian counterparts had no option except
to appeal to the government.
Chaadaev once observed ironically: ‘Russian liberals are like midges swarming
mindlessly in a ray of sunlight. The sun, in this case, is the sun of the West.’60
This ‘cowardice’ of Russian liberalism, this inability of bourgeois ‘progressives’
to resist government policy, was stressed constantly by socialist writers, including
not only Lenin and Plekhanov, but also people of far more moderate views.
‘The further east you go in Europe, the more weak, base and cowardly the
bourgeoisie becomes in political terms’, Engels once declared, and in Russia
these words were repeated by none other than the young Pyotr Struve, later to
become a leading ideologue of the counter-revolution and an active figure in
the White movement.61 Pokrovsky reacted to this formula with irony: ‘What,
is ever-increasing baseness some mysterious, mystical property of the Eastern
bourgeoisie?’62 It was, of course, no accident that many liberal politicians
including Struve regularly revised their outlook, and moved further and further
to the right. The bankruptcy of liberalism in Russia was predicated on the
weakness and organic dependency of the Russian bourgeoisie itself. Describing
the Russian merchants of the late eighteenth century, who resorted constantly
to help from the state, had neither the skills nor the desire to participate in
free competition, and who exploited serf labour, a modern-day scholar notes
that these people still had not ‘attained the level of bourgeois morality’.63 The
early twentieth century had brought few changes to this picture. Historians
have been forced to state that the image of the Russian industrialist, ‘shielded
from competition by the protectionist system, employing the crudest forms of
exploitation, endlessly importuning the authorities for privileges, and politically
intertwined with tsarism, was indeed unattractive’.64
In 1903–05, the bourgeoisie, to use Pokrovsky’s expression, ‘played at making
revolution’.65 Russian industrial capital was forced to speak out against the
autocracy, but could neither be consistent in this struggle nor lead it to victory.
During the October political strike of 1905, many factory-owners continued
to pay their striking workers. The limited freedoms which the tsar’s October
Manifesto conceded under pressure from the workers could never be considered
even the beginning of constitutional monarchy in Russia; clearly, the struggle for
democracy was far from reaching its culmination. The events of the revolution,
however, quickly changed the bourgeoisie’s way of thinking.
The ‘backwardness’ of Russia did not signify by any means that once the
‘progressive forces’ willed it so, the country could pass through all the stages
that Western civilisation had already traversed, and at an accelerated rate. While
the French bourgeoisie in the eighteenth century had seen nothing but support
coming from further down the social scale, the Russian entrepreneurs could
not fail to perceive a danger.
Not only the proletariat, but the peasants as well were hostile towards
capitalism to a significant degree. The modern city stood counterposed to the
patriarchal village, the rich to the poor, and private property in all its forms
to the communitarian tradition. The young Lenin, polemicising in his book
The Development of Capitalism in Russia against the narodnik populists and
their belief in the special destiny of Russia, had sought to show that the small
peasant households were gradually becoming part of the capitalist economy,
and that capitalist agriculture was being born in the depths of the Russian
countryside. Lenin’s book, which was passed by the tsarist censors, met with
warm approval from the liberal intelligentsia; in it, the Westernisers found the
very picture they wanted of the Russian countryside. The debate, however, was
by no means over. For Lenin, all commodity production, and in fact any contact
with the market, was a sign of capitalist development; Chayanov, however,
recognised that forced contact with urban capitalism was not enough to turn a
peasant into a capitalist farmer.66 What was happening was the destruction of
peasant agriculture under the impact of the new market relations, rather than
the successful bourgeois transformation of the countryside.
If capitalism were to score a complete triumph in the cities, capitalist relations
would of course sooner or later emerge victorious in the countryside as well.
However, it was precisely the lack of a developed rural capitalism in Russia
that blocked any possibility of the development of bourgeois relationships ‘of
a European type’ in the cities. The overwhelming mass of peasants felt no ties
whatever to the ‘progressive bourgeoisie’. A Third Estate in the Western sense
simply did not exist.
While a Third Estate uniting the bourgeoisie with the ordinary masses did
not exist in Russia, the peasants were linked very closely to the workers, and
what united them was not so much hostility to the autocratic state as a shared
dislike for ‘city moneybags’.
In 1905, Pokrovsky wrote, the countryside gained the upper hand over the
cities, ‘imposing rural ideals on the urban revolution’.67 The hatred that had built
up over decades was a symptom not so much of an impending revolution, as of
an inevitable social catastrophe. Even if the bourgeoisie were not fully conscious
of this fact, they could not help but feel a sense of threat. If liberal politicians
prior to 1905 could still have illusions concerning the possibility of a popular
bourgeois-democratic bloc, the events of the first Russian revolution clarified
everything once and for all. With practical experience now of revolutionary
turmoil, the bourgeoisie turned rapidly to the right. This was the case not only
with liberal intellectuals, who, as the former ‘legal Marxist’ Sergey Bulgakov put
it, felt ‘the breath of the antichrist’.68 Large-scale capital in Russia had never
shown any particular interest in democratic change, and after October 1905, it
began to cool to the idea of constitutional reform as well.
In Vekhi – a collection of articles published immediately after the revolution
by Pyotr Struve, Sergey Bulgakov and other prominent, highly talented
commentators of liberal bent – the rightward turn was declared openly: better
a compromise with the autocracy than an uncontrolled social explosion. The
more acutely the need for radical change made itself felt, the more counter-
revolutionary the bourgeoisie became. For Marxist thinkers who had been
raised on the textbooks of German social democracy, this situation came as a
complete surprise.
Analysing the Russian experience of 1905, Max Weber came to the pessimistic
conclusion that capitalist development did not, in and of itself, automatically give
birth to bourgeois democracy; indeed, it represented an obstacle to democracy
arising. Political freedom had appeared in the West ‘in unique circumstances’
involving great geographic discoveries, the rise of the urban culture of the late
Middle Ages, the Reformation, and so forth. These circumstances would never
again be repeated, and capitalism was being shaped by quite new and different
social conditions.
It would be quite ridiculous to hope that present-day capitalism (this inevitable outcome
of economic development), as it has been imported to Russia and installed in America, is
somehow connected with ‘democracy’ or even with freedom (in any sense of this word).
The question is quite different: what, in these circumstances, are the chances of democracy,
freedom, and so on surviving in the longer term? They will survive only if the nation shows
a decisive will in its determination not to be a herd of sheep.
The revolution of 1905 shook the regime, but did not bring about its overthrow.
To the surprise of many, tsarism made concessions relatively quickly. The mass
political strike in October culminated in the tsar’s manifesto ‘granting’ freedom
of speech and of the press, and legalising opposition parties. The regime
manoeuvred, trying not only to lower the temperature of the revolutionary
struggle, but also to adapt at least somehow to the new requirements of
capitalist development.
The St Petersburg bureaucracy gave the country a whole series of clever
and well-educated administrators who, to one degree or another, recognised
the necessity for modernisation. The most outstanding figures of this era were
Witte and Stolypin, the two heads of the Russian government who were in office
during the years of revolution and of the reaction that followed.
Within the bureaucracy, Witte and Stolypin were almost polar opposites.
Witte drafted the October Manifesto that established the State Duma – a
feeble half-measure, but nevertheless a functioning structure of representa-
tive power. Stolypin, while limiting the already weak influence of the Duma,
implemented agrarian reform. Witte put his stake on political liberalisation as an
indispensable precondition for overcoming backwardness, while Stolypin tried
to substitute economic reforms for political changes. Both supported a restricted
liberalism, but in practice their strategies were fundamentally different. Witte
helped the regime to adapt to the revolutionary crisis, while Stolypin used
repressive measures to smash the revolutionary movement. Both, however,
were able to carry out their reforms only because of the pressure from the
revolutionary forces. Both sought to ensure that modernisation would continue
within the framework of the old regime, and both with the help of reforms did
their utmost to avoid revolution.
Comparing the trends in world grain prices and the problems in the life
of nineteenth-century Russian society, Pokrovsky found an obvious interde-
pendence. Grain prices in the markets of Berlin and London had only to rise,
and the Russian elites were possessed by a desire for liberal and reformist
initiatives. But when grain prices fell, the yearning for change of the ruling
groups declined as well. The times of depressed prices invariably coincided
with periods of reaction.
In this respect, the Stolypin reforms were the culmination of the ‘grain’
cycles of Russian public life. The government took decisive steps to accelerate
development and to modernise the country according to the Western model. But
unlike previous periods of reform, the Stolypin years combined liberal initiatives
Despite the growth of industry, the available workforce increased more rapidly
than the ability of urban and rural capital to provide people with purposeful
and productive work. The industrial proletariat increased in numbers. But as
Pokrovsky notes, the number of landless peasants was also growing ‘like a
snowball’. By early in 1915, when the reform finally expired under the impact
of the war, some 30 per cent of the peasants who had left the communities
had sold their allotments.75 In other words, instead of becoming Western-style
farmers, people had been turned into day-labourers, rural proletarians and
lumpenproletariat. On the other hand, the increased supply on the labour
market, clearly outstripping the growth of industry, restrained the growth of
wages. Social discontent increased, and political tensions in society rose. In other
words, Stolypin’s reform had the same consequences as many other attempts at
modernisation in the countries of the periphery: while somewhat increasing the
rate of development, it simultaneously created new sources of social tension.
Stolypin tried to relieve this tension by introducing state programmes to
support peasant households – a move which, as he himself acknowledged,
‘might recall the principles of socialism’. It was true, he added, that if this
was a principle of socialism, then it was of ‘a state socialism which has been
employed repeatedly in Western Europe, and which has had real and substantial
results’.76 Such are the ironies of history; even Stolypin, the state official who
perhaps put more effort into ensuring the capitalist transformation of Russia
than anyone before or since, could not implement capitalist modernisation
without resorting to ‘socialist’ methods.
Stolypin’s reform ended with a marked increase of social stratification in the
countryside and the appearance of a mass of impoverished people who, after
being given guns in 1914, in 1917 became the mass base of support not only of
the Bolshevik party, but of all the more radical forces of the Russian revolution.
The rise of a rural bourgeoisie did not do away with the landowners or their
estates, and new problems and contradictions were piled onto the unsolved
ones from the past. The kulaks created an internal market for Russian industry;
purchases of agricultural machinery increased and demand for consumer
goods expanded. Nevertheless, the growth of kulak households was limited,
and as a result the new rural entrepreneurs never provided a base of support
for the regime. The attitude of the kulaks to the landowners was extremely
aggressive. Earlier, it had been possible to speak of conflict between peasants
and landowners; now, the peasants still hated the landowners, but no longer
felt a sense of solidarity with one another.
The increased grain prices of the 1900s were followed by another deterioration
in market conditions after 1911. The record for exports was reached in that year,
when 824 million pudy of grain were exported.77 After this, the situation grew
steadily worse. Strangely, the onset of the new period of economic difficulties
coincided with Stolypin’s resignation and disgrace. As well as problems with
trade, there were now political ones; because of the Balkan War and the conflict
between Turkey and Italy, the Turkish government closed the Bosphorus, dealing
a heavy blow to exporters of Russian grain. Competition from Germany was
also increasing. Thanks to high productivity, East Prussian agriculture was able
to sell grain profitably on the world market, despite paying more for labour. In
1912, 114 tons of German rye were imported into Russia! ‘The Russian grain-
importing provinces, mainly those of the north-west, Pskov, Novgorod, and
so forth, found it cheaper to bring in low-priced German rye than to buy the
expensive Russian product’, Pokrovsky reports. ‘This was a real scandal.’78 In
this instance, patriotic appeals on their own would no longer suffice; restrictive
tariffs had to be imposed on German grain.
Favourable conditions in the world grain market were crucial for the success
of the Stolypin reforms. Strictly speaking, it was such conditions that had
made the reforms possible. Now, the situation was changing literally before
people’s eyes.
Growing industry required new investment. During the crisis of 1900,
industrial capital in Russia had become more ‘national’, since French investors
had repatriated their funds. Now, however, Russian entrepreneurs were faced
with the small size of the internal market. In the countryside, Stolypin’s reforms
had given rise to a layer of well-off peasants able to buy not only consumer
goods, but sometimes also agricultural equipment. This layer, however, was
extremely narrow. Moreover, and despite protectionism, the dependence of the
Russian empire on imports was constantly increasing, and the trade balance was
deteriorating. Drawing a balance sheet of the pre-war years, Tugan-Baranovsky
stated: ‘In Russia, the industrial upturn led to a significantly more rapid growth
of imports than of exports.’79 By 1913 it was obvious, as economic journals of
the time testified, that the limits of growth had been reached.
The crisis of the ‘Stolypin model’ struck in 1914, when, after several years of
solid economic growth, the situation ‘unexpectedly’ worsened and barricades
again appeared on the streets. To many people in St Petersburg, the war with
Austria-Hungary and Germany did not seem such bad news. In any case, it
seemed the best, if not the only, way to avert the looming revolution.
The liberal historical tradition of the twentieth century was inclined to view the
First World War as an annoying episode, a political catastrophe that interrupted
the proper and on the whole successful development of Russia. Accordingly,
the revolution of 1917 was also just ‘an appalling misprint of history, which
crept in for no legitimate reason, and which might just as well not have been’.80
Politics once again ‘obstructed’ socio-economic development; ‘interests of
state’, by demanding participation in European coalitions, overturned the
generally favourable course of history, and brought to nothing the efforts of
Witte and Stolypin.
Unfortunately, Russia was far from being an accidental participant in the war
of 1914–18. The course of events that preceded the First World War – events,
moreover, that were primarily economic in nature – had made both the war
itself and Russia’s participation in it inevitable.
There was no serious antagonism on the part of the St Petersburg government
towards Germany, but the logic of events drove the Russian rulers into conflict
with Berlin’s main partners, Austro-Hungary and Ottoman Turkey. The desire
of the Russian empire to seize control of the straits that connected the Black
Sea with the Mediterranean, already the cause of several wars in the eighteenth
and nineteenth centuries, remained unchanged in the early twentieth century. In
the words of Pokrovsky, the conquest of the straits was ‘a cardinal question for
Russian commercial capital’.81 In earlier times, Britain had invariably stood in
the way of this Russian ambition. By 1914, however, the situation had changed
radically. Until 1905, fears had been held in London that Russia would invade
India. When an Anglo-Russian Agreement governing relations between the
two powers on colonial questions was signed in 1907, the British diplomats
discovered, not without astonishment, that officials in St Petersburg were no
less afraid of British penetration into Central Asia via Afghanistan than the
British were fearful of a Russian attack on India. The British ‘solemnly promised
not to undertake anything of the sort, and to see to it that no threat came from
Kabul either’.82
Since 1902 an Anglo-Japanese treaty had been in force, guaranteeing the
security of India in the case of such a turn of events. But after the catastrophic
defeat suffered by Russia in its war with Japan, the British elite finally realised
that their fears had been completely unjustified. A warming of Anglo-Russian
relations began. If Japan had ensured the defence of British interests in Asia
against Russia, then Russia would defend the interests of the British empire in
Europe against Germany. A ‘heartfelt agreement’ with France completed the
building of the coalition. In this entente, each partner had its own particular
interest. Russia’s concern was the straits, which the British promised to take
from Turkey. It should be said that in this case London made an honest effort
to fulfil its promise; in 1915 the Australian and New Zealand Army Corps
(ANZAC) landed on the Turkish coast. However, the operation to seize the
straits ended in defeat.
Nevertheless, the desire to take possession of the straits was not the sole, and
perhaps not the main cause impelling Russia not merely to enter into the world
conflict, but to be one of its main instigators. A Franco-Russian military alliance
against Germany had been concluded as early as 1893, against a background
of the massive loans supplied to the tsar’s government by Parisian bankers. In
the words of the Soviet historian B.V. Ananyich, the loans which St Petersburg
obtained on the Paris money market from the late 1880s were ‘the foundations
on which the edifice of the Franco-Russian alliance would soon be erected’.83
In 1888 the sum of 500 million francs was borrowed; in 1889, two new loans
for 2 billion francs were obtained; and in 1890 and 1891, another five loans
totalling 1.5 billion francs. At first, the Paris officials were extremely unen-
thusiastic about the floating of Russian loans in France. Gradually, however,
an understanding began to dawn of the valuable political opportunities that
were opening up as the debt owed by the Russian empire increased. In 1894,
the French government did everything it could to complicate the procedure
for allowing Russian securities to be quoted, arguing that even without this
move, the local financial market was overloaded with them. This, indeed, was
completely correct; data for 1897 show that on the Parisian stock exchange,
the decline in the flow of foreign capital was not apparent in all sectors by any means, and
together with previous investments, the funds coming from abroad continued to occupy
almost the same dominant position as in the late nineteenth century. The time when Russian
capitalism would be freed completely from foreign dependence was still a long way off.87
Consequently, the main and almost the only creditor of tsarism once again remained the
French bourgeoisie. Because the success of Witte’s economic programme depended on a
constant inflow of capital, the direct result of tsarism’s failed attempts to take out loans on
the international market had to be, and indeed was, a further increase in the dependency
of Russia on the French stock exchange.88
The revolution of 1905 provided the Paris banks and finance ministry with a
new opportunity to strengthen their position in Russia. Amid the political and
military catastrophes that were shaking the country, the Russian government
was acutely short of money. The necessary sums were found in diverse places
throughout Europe. In 1906 a banking pool was formed, involving financiers
from Britain, Holland and Austria, but the decisive role was again played by
France. Private initiative, meanwhile, went hand-in-hand with the support of
the French government, without whose participation the bankers would never
have resolved to dispatch their money to a country wracked by revolution. In
sum, a government that had clearly lost the confidence of its own people was
supplied with a loan of 843.75 million rubles. Witte described this loan as ‘the
salvation of Russia’.89 The French scholar R. Girault summed up the result of
this operation in far more pragmatic fashion: ‘For at least two years, the tsar’s
government lost its financial independence.’90
The loan of 1906 was a sort of political guarantee extended by Paris to St
Petersburg. Such gifts, of course, had to be paid for. According to Ronin,
It is extremely significant that the initiative for the large-scale investment of French capital in
Russia was not taken by Russian but by French banks. After the defeat of the 1905 revolution
and Stolypin’s ‘stabilisation’, the Parisian bankers regained their faith in the opportunities
to be had in Russia. From this point began the organised assault of French financial capital
on the Russian economy.91
While the tsarist government needed French loans to preserve stability, industry
needed money for development. Arriving in Russia, however, French bank
capital found that to a significant degree the site was already occupied. Until
the mid 1900s, German investors were dominant in Russia. Now, a veritable
battle for Russia unfolded between French and German financiers. As Vavilin
has noted,
From their earliest origins, the Russian banks developed with the direct participation of
foreign capital. In the 1860s and 1870s more than ten banks in Berlin, Hamburg, Frankfurt,
Königsberg and elsewhere took part in organising Russian banks. When the foreign banks
lent their capital, they appointed their representatives to the boards of the Russian banks
in order to exert direct control over the banks’ affairs. The helplessness of the Russian banks
and their need for foreigners is evident from the fact that all their main official functions
were carried out by foreigners. There were not yet any Russian banking specialists, so it was
necessary to invite experienced Germans and to learn from them. Hence the first Russian
bank assembled its staff on the recommendations of the Berlin banking house Mendelson
and Company, and of Rothschild in Paris.92
In the six largest St Petersburg banks of that period, foreigners owned more
than half the shares. In Russia’s 22 largest establishments, foreigners again
owned about half the shares, and in the six largest, more than half.93 In all these
institutions, the dominant position was held by Germans. Ronin notes that
French capital only made a decisive entrance onto the scene late in 1907. With a noticeable
recovery under way, it sought to gain a strong foothold for itself in the Russian banking
system. Since the largest banks were in the German orbit, French capital set about reorganising
second-ranking banks in the largest cities, and within a few years transformed them into
first-class establishments. Still later, and in a more modest degree, British capital started
showing an interest in Russian banking. Thanks to the combined efforts of Paris, Berlin and
London, the Russian banking system on the eve of the war was overwhelmingly controlled
by European financial capital.94
Berlin and the City of London over the placing of these loans. Ultimately, they
were placed in Britain, and in the view of contemporaries this was a ‘major
victory’ for the British.96 These British successes, however, no longer had any
independent significance. In the Russian market, the British were increasingly
acting in a single bloc with French and Belgian investors.
In its rivalry with the German banks, French capital was victorious, according
to scholars, because it was ‘highly concentrated’.97 The French banks were
closely interconnected, supported one another, and avoided competition among
themselves. In addition, the Paris money market was simultaneously a source of
funds both for the Russian government and for the private sector. The increasing
influence of French banks in Russia made an impact on politics, while the
growing political closeness strengthened the economic ties.
Contemporaries also saw ‘subjective’ reasons for the success of the French. In
the view of Professor Levin, who in 1918 published a history of investment in
Russia, the failure of the Germans was in large measure due to the peculiarities
of their business culture. British, Belgian and French capital came in ‘impersonal’
form, while from Germany came ‘not only capital, but also people.’ These people
were not always to the liking of local entrepreneurs, especially since the German
banks, which had close ties to industry, invariably sought to ‘combine the export
of capital with the export of goods’.98
The view in Russia was summed up as follows: ‘The Germans regard the
placing of capital abroad as a means of expanding their economic and political
influence, and go to extreme lengths in their enthusiasm for this.’99 Experience in
fact showed that French investments were by no means politically neutral either.
Still less could this be said of the long-standing British business presence in
Russia. The problem, of course, lay not only in a clash of cultures, but in the fact
that the structures of financial capital in France and Germany were different.
The French rentiers were not burdened by obligations to their industries, while
the German model combined financial and industrial capital in a unified whole.
It was this that lay behind the rapid growth of the German economy in the
late nineteenth century. In the Russian market, however, these same features of
German business became a weakness. Russian industrialists perceived German
investors as competitors, while Franco-Belgian capital became dissolved in the
Russian business environment, and was regarded almost as local.
The fierceness of the rivalry between French and Germans in Russia constantly
increased. After 1910, Europe was clearly divided into two opposing blocs,
the Anglo-French entente and the German-Austrian alliance of the central
powers. A clash between them was inevitable. By the beginning of the war,
capital of British and Franco-Belgian origin was dominant both in Russia’s
financial sector and in its industry. As Vavilin remarks, by 1914 the total sum
of French capital invested in the Russian empire was ‘more than the capital of
all other nationalities’. If we take into account the make-up of the international
coalitions, the picture becomes even clearer.
The countries of the entente (France, Britain, Belgium, America and Italy) accounted for
1,681,085,600 rubles, that is, for 75 per cent. The share of German and Austrian capital came
to 449,143,200 rubles, or only 20 per cent. This huge preponderance of entente capital over
its German and Austrian counterpart reveals with particular clarity the material basis for
the foreign policy of the tsarist autocracy. In the war of 1914 to 1917, Russia had inevitably
to be on the side of the entente.100
In many ways, the battle for Russia waged by French and German capital in
the early twentieth century recalls the Anglo-Dutch rivalry in the seventeenth
century. In both cases, the clash that unfolded in the Russian market was merely
part of a global conflict. The Dutch gained the upper hand in Russia, but the
results of this victory were finally annulled by the overall defeat suffered by
Holland in its struggle with the British. The victory of French over German
capital determined the role that Russia would play in the First World War. The
fruits of this victory, however, were brought to nought by the military defeats
which Russia suffered, and by the revolution of 1917.
Both the Russo-Japanese War of 1904 and the First World War were natural
results of the accumulating contradictions between the leading world and
regional powers. Rivalry between the ‘old’ and ‘new’ empires inevitably led
to armed conflict. People had been waiting for this clash ever since the 1880s.
Germany, Japan and other powers that had been too late to participate in
dividing up the world, but which had accumulated a formidable industrial and
military potential, sought to put the situation right with the help of force. The
‘old’ empires, which now included Russia, were obliged to defend themselves.
Several times the diplomats managed to postpone the war, but preventing it
was not within their power.
Lagging behind its more dynamic rivals in terms of economic development,
but still an important military power, Russia found it advantageous to hasten
the conflict. The aggressive behaviour of the Russian government in the Far
East in 1904 led to the war with Japan; later, Russian actions in the Balkans in
1912 and 1914 brought increased tension to relations with Austria-Hungary,
and ultimately provided the trigger for the world war. In neither case were these
simply chance errors of tsarist diplomacy.
For Russia, the war brought catastrophic military defeats, which shook not
only the state but society as a whole to its foundations. After three years of
uninterrupted military failures, and more than 1 million dead, the Russian army
was transformed from a traditional support for the regime into a demoralised
mass that readily assimilated revolutionary propaganda. Tsarism collapsed,
and as it seemed, buried Russia itself beneath its fragments. The bourgeoisie
survived the autocracy by only a few months. Backward capitalism and the
tsarist bureaucracy were doomed to perish together, neither of them able to
survive any longer without the other. The bourgeoisie was incapable of building
a new order on the ruins of the old; it could not prevent social, economic and
political chaos. In short, it had not become a ruling class in the full sense.
The democratic republic that arose on the ruins of tsarism did not manage
to last out the year. It was replaced by the ‘republic of the Soviets’, which owed
its rise far more to elemental revolutionary forces than to the political will of
the victorious Bolshevik party. The ‘republic of the Soviets’, meanwhile, could
not exist for long in its original form, giving way to the party dictatorship of
the Bolsheviks. The ‘power of the Soviets’ became the ‘Soviet power’.
With the transfer of the capital from St Petersburg to Moscow and the shifting
of the government to the Kremlin, a symbolic balance sheet was drawn up of
the entire period of Russian history that had begun with the Northern War
of Peter the Great and ended with the defeat in the First World War. The
strategy, pursued over two centuries, of integrating Russia into the capitalist
255
world system had led ultimately to a revolution aimed against both the Russia
of St Petersburg and the entire world system of which Russian tsarism had been
part. In summing up the lessons of the revolution, Lenin wrote:
What if the complete hopelessness of the situation, multiplying tenfold the strength of the
workers and peasants, has opened up for us the possibility of a different approach to setting
in place the basic premises of civilisation, an approach different from that taken in all the
states of Western Europe?1
In reality, both the revolution itself, and the coming to power of the Bolsheviks
whom Lenin headed, were outcomes of the crisis of the world-system and of the
downfall of the Russian elites who had been incorporated into this system.
BOLSHEVISM
With their tight organisation and faith in their historic mission, the Marxist-
Bolsheviks were in essence the only party capable of restoring order in a
country that was experiencing the disintegration of its economic and social
system. Compared to the Mensheviks, the Bolsheviks were not simply the
more ideologically radical wing of social democracy (ideological radicalism
was a characteristic of many Menshevik leaders as well). The strength of the
Bolsheviks lay in their ability to act in the interests of their social base, without
reflecting on theoretical subtleties – to act quickly, and often harshly.
In Russia, social democracy from the very first represented an alternative
variant of modernisation. If the liberals sought to base themselves on the
relatively civilised section of the elites, the Marxists found support in the most
modern section of the lower orders – industrial workers in the large urban
centres, and the urban intelligentsia. Born of the development of industry and
the spread of European forms of culture, these social layers at the same time
– and unlike the bourgeoisie – were without ties to the old regime; consequently,
they were far more ready to head up the new modernisation.
This explains both the strong and the weak sides of the Bolsheviks’ politics.
On the one hand, the Bolsheviks were determined defenders of urban interests;
on the other, they showed mistrust and hostility to the patriarchal countryside.
It took about a year of civil war, accompanied at first by severe defeats for
the Bolsheviks, before the new government saw the peasants not as savages
requiring to be civilised, if necessary with the help of cannon and machine-
guns, but as allies in the social revolution. The Bolsheviks were a party of the
cities, and their rule during its first months was not so much a dictatorship of
the proletariat, aimed against the overthrown bourgeoisie, as a dictatorship of
the city over the countryside.
The rise of the Bolsheviks to power was entirely to be expected, but it does
not follow from this that the Bolsheviks themselves were ready for power. To
an important degree, four years of unprecedentedly savage civil war, economic
ruin and social chaos had disorganised the camp of the victors. The economic
policies which the party of Lenin and Trotsky pursued years from 1917 to 1919
Emerging victorious from the civil war, the Bolsheviks made the transition
to the New Economic Policy (NEP), envisaging a combination of centralised
management of state industry with the development of the free market, especially
in agriculture. In the years from 1918 to 1920 the peasants, after receiving the
land, had found that they could not dispose of what they produced on it; the
city, through the ‘surplus appropriation’ system, took everything it needed by
force. The NEP, when it succeeded war communism, began by replacing ‘surplus
appropriation’ with a tax in kind on food. Most of the grain now remained
in the hands of the peasants, and could be traded on the market. The peasant
proprietors had finally gained what they had been fighting for; both the land
and its produce now belonged to them. The transition to a market economy
in 1921 and 1922 under the banner of the NEP not only failed to stop the
bureaucratisation of the regime, but accelerated it.4 Under war communism
the power of the Bolsheviks at the local level had been despotic, but not
bureaucratic. The entire apparatus of a local revolutionary commissar might
consist of a few sailors with a machine-gun, and the sum total of their functions
might be to seize grain from the peasants and supply it to the hungry cities. In
one place their behaviour might be savage, and in another extremely liberal,
depending on their disposition. Often there were no written instructions, and
if there were, no one read or followed them. The questions of account-keeping
and of administrative correspondence simply did not exist. Sometimes, with
hindsight, local revolutionary leaders were shot for arbitrary excesses. Or they
might be promoted and transferred to the centre, sometimes for the very same
actions. Decisions taken in Petrograd did not apply in Moscow, and those
taken in Moscow did not have force in Kiev. A number of soviet republics had
been established immediately on the territory of the former Russian empire,
often with different political rules.5 Intensified persecution of enemies of the
revolution was accompanied not only by sharp discussions within the party,
but also by the legal activity of various groups of opposition socialists – left
Mensheviks, sections of the anarchists, communist-revolutionaries, Ukrainian
borot’bisty, and so forth. Non-government newspapers were shut down, then
reappeared; censorship was introduced, then again abolished.
With the shift to the NEP, a stop was put to all this. Factions within the
Bolshevik party were banned, and the legal opposition in the Soviets was
suppressed. A wave of repression against opposition socialists in 1921 and
1922 was the first sign that political life was being ‘normalised’, and that the
repressive apparatus was being assigned new tasks. It was not the struggle
against counter-revolution that now took centre stage, but the crushing of
dissidents and inconsistent followers within the revolution’s own camp. The
apparatus sensed its power, and sought to consolidate it. Along with the Tran-
scaucasian Federation, the independent soviet republics of Ukraine and Belarus
lost their formal self-determination, and in 1922 were officially incorporated
into a single Soviet Union, though even the local communist parties doubted
the wisdom of this decision. Lenin’s project of a federation of equal partners
was unquestionably much more democratic than that of Stalin, who called for
turning the former independent states into autonomous territories within the
framework of Russia, completely subordinating these national regions to the
power of Moscow. Nor is there any doubt that a natural desire for unification
existed; the workers and peasants of Ukraine and Belarus who supported the
Bolsheviks during the civil war had understood perfectly that victory for the
‘Reds’ would mean reunification with Russia. The creation of a single union
apparatus, however, was an important landmark on the road to the formation
of a new bureaucratic elite.
The party apparatus was also put in order. At the outset of the revolution
the Leninists, who had broken definitively with social democracy, renamed
themselves; from being the Russian Social Democratic Workers’ Party
(Bolsheviks), they became the Russian Communist Party (Bolsheviks). In the
1920s the party was again renamed, from ‘Russian’ to ‘All-Union’. Every change
of name reinforced the changes in the internal state of the organisation. The new
All-Union Communist Party (Bolsheviks) possessed a far more rigid structure
than the clandestinely organised Russian Social Democratic Party (Bolsheviks),
By excluding Russia from the world system, the revolution of 1917 paradoxically
transformed it from a peripheral country into merely a backward one. The idea
that ‘backwardness’ was at the core of the problem assumed the need for an
‘acceleration’ of development, which in turn required a more active involvement
in the world economy and an expansion of the sale of resources on the world
market. But this in turn would simply intensify the country’s dependency. To its
ideologues, modernisation represents a kind of race, in which, naturally, there
are those who get first place and those who get last place. In such a contest,
as at the racetrack, one can always speculate as to why one of the runners has
sprinted ahead or lagged behind. The relations between the centre and the
periphery, however, are formed according to a quite different principle. The
resources furnished by the periphery serve to speed up the ‘run’ of the centre.
The histories of Russian ferrous metallurgy in the eighteenth century, and of
grain production in the nineteenth, provide obvious examples. The more actively
the periphery competes, the further it lags behind, and the more it helps the
West to sprint ahead. Furthermore, while the countries of the periphery pass
through all the same phases as the West, they do so not so much with a delay
as in a different fashion. In other words, the relationship in this case is not the
one between two independently running participants in a race, but is more like
the relationship between horse and rider. Both of these arrive at the same place,
reach the same goal, but do so in a different state. The horse can neither choose
its goal nor outrun the rider, unless it throws him off. The modernisation in the
Soviet Union was in essence just such an attempt to throw off the rider, while
continuing the race in the same direction as before.
Soviet industry no longer served the accumulation of capital in the West, but
the question arose of where it would obtain the resources it needed in order to
catch up with the ‘advanced countries’. The theoreticians of Bolshevism were
faced with a dual question: how to carry out modernisation, while at the same
time pursuing the party’s ideological goal of making the transition to socialism.
The Marxist tradition had assumed that socialism would triumph in the
developed industrial countries, while the practice of the Russian revolution had
made it necessary to approach the problem from the other end. Modernisation
and the transformations involved in creating socialism would not follow one
after the other, but would have to proceed simultaneously.
Nikolay Bukharin, who quickly became the main ideologue of the party
following the death of Lenin, proposed that socialism could be built – gradually
and relatively painlessly – in a single backward country. The main enemies of
the revolution had already been defeated, and the new social problems that had
arisen in Russia since the Bolshevik victory, Bukharin maintained, were not
especially serious. Citing Lenin, he argued repeatedly that conflict between the
working class and the peasantry was ‘by no means inevitable’.7 The familiar
pressure on the countryside needed to be continued in order to obtain additional
resources for industrialisation, but the main stimulus for industrial development
should become market demand. Light industry, according to Bukharin, should
receive priority for development, but the pace of industrialisation should depend
on the capacity to absorb goods of the domestic market, with its mainly peasant
purchasers. In other words, Bukharin hoped to retrace the road travelled during
the rise of industrial society in Britain and the United States, and with minimal
conflicts. Britain, however, had developed under the conditions of a worldwide
monopoly; it had almost no competitors, and for a whole era outstripped its
competitors, remaining the ‘workshop of the world’ throughout almost the
entire nineteenth century. Toward the end of the nineteenth century, Germany
and the US caught up with it. The pace of economic development accelerated as
international competition grew more acute, and technology came to be renewed
more often. Countries that expanded their industrial capacity more slowly
were doomed to chronic ‘structural’ backwardness. The most important thing
was no longer the number of industrial plants, but their quality – that is, the
technology applied in them.
The concentration of financial resources in the state sector allowed growth
rates to be accelerated. Britain had needed more than a century to create its
economic capacity; Russia might move two or three times as fast, but even this
was not enough in the twentieth century. Meanwhile, the historical circumstances
provided few chances to repeat the ‘Western road’.
Later, Soviet ideologues would argue for high rates of industrialisation on the
basis of the military threat from the West. The danger of war was quite real,
as subsequent events would confirm. The international situation in the 1920s,
however, did not suggest that a new world war was inevitable. Fascism had not
yet triumphed in Germany, and a united front of left forces might still have
prevented Hitler from coming to power. Even if there had not been a military
threat, however, the pace of industrialisation needed to be accelerated. This
was required by the very social basis on which Bolshevism rested.
After the defeats in the First World War and the subsequent revolution, the
new state that was founded on the territory of Russia possessed not only a new
ideology and a radically altered elite. As a political current, the Bolsheviks
had emerged from the Russian progressive movement, and viewed the goal
of social development as ‘overcoming backwardness’. Unlike their bourgeois
predecessors, however, the Bolsheviks had an excellent grasp of the limited
nature and ineffectiveness of all previous attempts at modernisation. If these
attempts had not failed, the Bolsheviks would never have come to power.
The social base of Bolshevism was the working class, and in the broader
sense, the industrial city, whose interests the Bolsheviks defended fiercely and
without compromise in the years from 1917 to 1920. As a result, the Bolshevik
leadership was faced with the need to continue the industrialisation that had
been begun by Witte and Stolypin, resting on the new sectors that had been
established at the beginning of the twentieth century, but doing this through
completely different methods and at a quite different rate.
The revolution of 1917 was accompanied by the exclusion of Russia from the
world economy.8 Such a development had never been foreseen by the Bolsheviks.
The world system, however, had been thrown into disarray by the world war.
With Russia’s customary economic life now impossible to maintain, the old
system of relations between city and countryside collapsed, and participation
by Russia in the international division of labour was reduced to a minimum.
The repudiation by the Bolsheviks of the debts of the tsarist regime ruined
large numbers of the French petty bourgeoisie, but the financial markets in
Paris and London understood perfectly that these debts could not be repaid
in any case. One way or another, they would have to be written off along with
the other costs of the war.
In order to accelerate its development, Russia was compelled to review the
nature of its relations with the world system. Paradoxically, the events of the
war had made this task easier. Russia did not tear itself loose from the world
system, but merely refused to return to its previous place when the system began
to be reconstructed in the early 1920s.
The Bolshevik revolution, the nationalisation of industry and the repudiation
of the tsarist debts excluded Russia from the global process of capital
accumulation, but not from the world market. Indeed, participation in the
world market was integral to the hopes of accelerated industrialisation held by
the country’s leaders. When Russia set out on this road, it would not be able to
get by without technology transfers and purchases of equipment. During the
1920s Russian grain reappeared on the world market, but Bolshevik economists
lamented the ‘still minuscule scale of exports’.9
The exporting of grain was required to finance the acquisition of essential
technology. Meanwhile, the cutting off of the Soviet Union from the world
capital market made it possible to stop the draining of resources from the
country, and to concentrate all the available means on the principal tasks.
In essence, all the leaders of the party were united around this programme,
not only the ‘centrist’ Stalin and the ‘right-wing’ Bukharin, but even the Left
Opposition of Trotsky, which saw no alternative to venturing onto the world
market. The only disagreements concerned the question of how to get hold of
the grain. While Bukharin, supported at that point by Stalin, sought to develop
the independent peasant holdings, Trotsky by contrast warned of the threat
posed by the formation of a rural bourgeoisie, and called for obtaining the
grain through ‘pressure on the kulaks’.
The main economist among the leftists was Yevgeny Preobrazhensky, who
advanced his own theory of ‘primitive socialist accumulation’. In his view,
industrialisation could not proceed without the extracting of resources from the
countryside. In relation to the ‘socialist’ cities, the ‘petty bourgeois’ countryside
would have to play the same role as the periphery in relation to the centre during
the period of primitive accumulation under capitalism.
The more a country making the transition to the socialist organisation of production is
economically backward, petty-bourgeois and peasant in composition, and the smaller the
inheritance which the proletariat of this country receives for its socialist accumulation fund
at the time of its social revolution, the more socialist accumulation will be forced to rely on
the exploitation of pre-capitalist economic forms….
In other words, ‘the state economy cannot get by without exploiting petty
production, without the expropriation of part of the surplus product of the
countryside and of artisan producers’.10
In practice, this ‘expropriation’ was carried out through railway charges,
monetary emission, the credit policies of state banks, and most importantly,
through trade. Preobrazhensky in this case rested his arguments on the practice
that already existed in Russia during the NEP period. The market in foodstuffs
was divided into planned and private sectors. Part of the grain was purchased
by the state from the peasants and collective enterprises at fixed prices, while
the peasants were able to sell the rest independently. Not surprisingly, the
state purchases were made at low prices, as was recognised both by the Left
Opposition and by the supporters of Bukharin. Naturally, the peasants tried
to compensate for the low prices in the planned sector of the economy by
raising prices on the free market, but here as well the state held the advantage;
by raising the prices of manufactured goods, it took back part of the funds
which the peasants had obtained in the private sector. This was described as
the ‘price scissors’, or simply as the ‘tribute’ which the village had to pay to the
city in the name of industrialisation.
Preobrazhensky stressed that the prices policy in the state sector had to be
constructed in such a way that when the peasants bought manufactured goods,
they subsidised industry. In turn, ‘socialist protectionism’ had to defend national
enterprises, while the monopoly of foreign trade would make it possible to sell
cheap agricultural produce at world market prices, and so to obtain ‘surplus
income’. In this way, foreign trade would subject petty rural production to ‘the
pump of socialist accumulation’.11 These formulations aroused the indignation
of Bukharin, who declared that describing the relations between city and
countryside as ‘exploitation’ meant to ‘call the proletariat an exploiter class’.
To talk in such terms meant to ‘miss the whole essential character of the process,
not to understand its objective significance, to play at analogies’, and also to
expound views that threatened to ‘destroy the worker-peasant bloc’.12
For all this, Bukharin made no suggestion as to where else the funds for
developing industry might be obtained. Once the discussion turned to the
‘price scissors’ between agricultural and industrial products, he showed an
unexpected ease in agreeing with Preobrazhensky: ‘Yes. There is no doubt
whatever about that.’13
For Bukharin, the problem lay not in politics but in ideology. It was possible
to act, but not to talk about what one did. Funds could be expropriated, but it
was unacceptable to call this ‘exploitation’. Resources could be redistributed
from the countryside to the cities, but declaring this to be a strategy of the
state was inadmissible.
Nor, for his part, did Preobrazhensky insist that the products of the countryside
be expropriated on a massive scale. To do this, as the radical economist saw
it, would be to kill the goose that laid the golden egg. To the contrary, petty
production needed to be supported, so that it could provide the resources on the
basis of which industry could be developed over a prolonged period. Comparing
‘primitive socialist accumulation’ with the primitive accumulation of capital,
Preobrazhensky stressed that the proletariat would behave far better toward the
countryside (the internal periphery) than the bourgeoisie behaved in relation
to its colonies.
Here the task of the socialist state does not consist in taking less from petty-bourgeois
producers than capitalism took in the past, but in taking more out of the greater income that
will be ensured to petty production by a general rationalization, including of the country’s
small-scale economy.14
moderate. They stressed that there was no question of any forced unification
of the holdings of the middle peasants.
The large-scale collective farm is not counterposed to the individual holdings of the poor and
middle peasants as a force hostile to them, but creates bonds with the peasants as a source
of assistance, as an example of the benefits of large-scale farming, and as an organiser of
collaboration in gradually uniting them in large-scale agriculture.19
The conference resolutions spoke repeatedly and in detail about the ‘help’
provided by the state and the collective farms to the individual enterprises of
the middle peasants.
The Soviet authorities were thus forced to strike a balance and to seek
compromise decisions, trying to hold fast to a ‘golden mean’ between the
developing of industry and keeping the loyalty of the countryside. In such a
situation, sharp differences could not help but arise within the leadership. The
factional struggle grew fiercer, ending in the defeat of the Left Opposition.
Nevertheless, the views of the left continued to exert a substantial influence
within the party.
The First Five-Year Plan, finally approved in April 1929, was quite radical,
foreseeing a sharp acceleration of industrialisation, but it too made no mention
of dramatic changes in the countryside. Almost immediately, however, events
forced corrections to the plans of the Soviet leadership. These events were
domestic as well as international. The precarious balance of the NEP system
had collapsed beneath the blows of a dual crisis.
By the late 1920s, the policy of levying ‘tribute’ from the countryside in order
to fund industrialisation had begun to show serious signs of breaking down.
The further the state lowered the purchase prices for grain, the harder it became
to meet the plan targets for grain collection. The peasants reduced their grain-
sowings, changing to other, more profitable crops. The result was not only
shortages of food in the rapidly growing cities, but also a shortage of foreign
currency. However acute the grain problem, it would not have been so painful
for the Soviet authorities had grain not been the country’s main export. As
Bukharin pointed out, for industry to be developed, imports of equipment
had to be paid for using ‘agricultural foreign currency’.20 As a result, the Soviet
leadership could afford neither to sharply increase the purchase prices, nor to
allow a substantial fall in the production of wheat.
In 1927, a grain collections crisis broke out. Grain prices on the private market
increased rapidly. This turn of events could have been expected. Throughout
1925–28 the Bolsheviks had regularly lowered the state purchase prices for grain,
forcing out resources for export. In 1928, crop failure in the North Caucasus
led to marked shortages of rye and wheat. Purchase prices were raised, but
even then they remained 4 per cent lower than in 1925–26. Prices in the planned
sector were now less than half those on the private market.21
Analysing the grain collection crisis many decades later, the economist
Andrey Kolganov noted a clearly unfortunate coincidence that was, however,
the natural result of earlier policy:
These circumstances might not have had such an appreciable effect on the situation with
grain collections, had it not been for two factors. In the first place, although the reduction
in the turnover of grain in the state sector and in the amount of grain supplied by the state
to the urban population was not significant, this occurred at a time when industry and the
urban population were growing rapidly, presenting a growing demand for food. It was this
that caused the jump in prices on the private market. The second factor was the fall in grain
exports that was associated with the acute shortage of supplies for the internal market. In
1928–29, grain exports were only 3.27 per cent of the level in 1926–27.22
Exports of grain were indeed falling sharply, from 2.18 million tons in the 1926–
27 season to 344,400 tons in 1927-28. Worse still, to maintain food supplies to the
cities it proved necessary to import 248,200 tons of grain from abroad, spending
the equivalent of 27.5 million rubles in foreign currency for this purpose.23
Accordingly, the programme for the importing of machinery and equipment,
on which the success of industrialisation depended, was not fulfilled.
The crisis of grain collections led to new divisions in the party. Bukharin
recognised that the failure was ‘connected with an incorrect prices policy, with
the huge gap between prices for grain and for other products of agriculture’.24
Stalin’s group, by contrast, accepted the arguments of the left, who declared
that the main problem was ‘sabotage’ by the kulaks, who were hiding grain.
Nevertheless, the crisis of grain collections would not have been fatal to the
social and political equilibrium that had been reached in post-revolutionary
Russia, had it not coincided with completely opposite processes in the world
economy. At the same time as grain prices were rising rapidly on the internal
market, on the world market they were falling just as fast. The ‘scissors’ were
working in reverse. The nearer the West drew to the beginning of the Great
Depression, the lower world grain prices became. Back in 1926 Kondratyev
had stated that during a ‘declining wave’ on the world market, ‘agriculture
experiences a more profound depression, agricultural commodities fall more
markedly in price, and their purchasing power declines in relative terms’.25
The strategy for Soviet industrialisation was based on the expectation that
by exporting grain, the state could acquire equipment and technology. Taken
together, the combination of falling world grain prices, rising prices on the
domestic market, and reduced exports led to a critical situation. The industri-
alisation programme was threatened with collapse.
By the beginning of 1928, the shortfall in grain collections amounted to
128 million pudy compared to the previous year. In the capital, no solution
was found except to use repression against the countryside. Stalin summed up
the problem in the clear, simple terms that were characteristic of him: ‘It is
better to put the screws on the kulak and to extract his grain surplus… than to
spend foreign currency that has been put aside in order to import equipment
for our industry.’26
The Bolshevik leaders did not have a ready-made plan. As late as the summer
of 1928, Stalin had written that it was ‘impossible to wage a struggle against
the kulaks by means of dekulakisation’, and that talk of abandoning the NEP
was ‘counter-revolutionary chatter’.29 By the autumn, however, the situation
had changed fundamentally. There was an urgent need to come up with a
solution, and one was duly found: ‘complete collectivisation’. The kulaks would
be repressed; other malcontents would be declared to be ‘kulak sympathisers’,
and sent after them; the private peasant holdings would be abolished; the
implements and livestock would be seized, and everyone would be herded into
collective farms under the control of the state.
Significantly, the sharp change of course at first evoked total disbelief in the
supporters of Trotsky and other activists of the Left Opposition. The decisions
that had been made contradicted everything that Stalin had said and done in the
preceding years. ‘The struggle that has been proclaimed against the right-wing
deviation and against conciliatory attitudes to it’, the Bulletin of the Opposition
wrote, ‘is just as much a parody of real struggle as the celebrated self-criticism
was a parody of criticism.’30 The assessments by the oppositionists were dictated
by their ideological standpoints, but also by the experience of the 1920s. In the
course of this period Trotsky had come to a firm conclusion: ‘The politics of the
Stalin leadership consist of short zigzags to the left and profound ones to the
right.’31 In 1927, oppositionists had been beaten up in the streets for trying to
take part in a demonstration commemorating ten years of the revolution while
carrying placards that stated: ‘Turn the fire to the right – against the kulak, the
nepman and the bureaucrat.’32
The shift by the Stalinist majority in the party leadership in 1928 and 1929
from supporting a balance between city and countryside to launching a fierce
attack on the peasants did not flow logically from the ‘centrist’ course that Stalin
and his associates had been pursuing. It is only with hindsight that historians
have been ready to chart elegant schemes in which the leadership would first take
its revenge on the left, then deal a blow against the right. In reality there was no
plan prepared in advance, and could not be, since Stalin and his comrades-in-
arms had foreseen neither the grain collection crisis nor the Great Depression.
The Trotskyists in their publications were thus completely correct in describing
the course followed by the leadership as dictated by necessity. What the oppo-
sitionists failed to recognise was how profoundly the new circumstances would
change not only the course of the party, but also the very nature of the Soviet
regime. The decision which Stalin and his closest associates took amid the
danger of an economic catastrophe contradicted not only the views of Bukharin
and other ‘moderate’ leaders, but also the Five-Year Plan, the decisions of
the party’s Fifteenth Congress and Sixteenth Conference, and the positions
expressed earlier by Stalin himself. The party chief was forced to acknowledge
this. However, he declared, the situation had changed, and the earlier decisions
had to be ‘laid to one side’.33
In his own fashion, Stalin was correct; the situation really had changed. The
change, however, had not come in the Russian countryside, where the peasants
had no wish to be drafted one and all into the collective farms, and where they
resisted collectivisation in whatever way they could, but in the world system.
The Great Depression not only altered the rules of the marketplace, but also
heralded massive international shocks. The spectre of a new world war was
becoming more and more easy to make out. Consequently, the programme of
industrialisation had to be speeded up, whatever the cost. The Great Depression
in the West helped propel Russia to the ‘Great Turning Point’. Collectivisation,
accompanied by the widespread slaughter of livestock, the disintegration of
farm enterprises, and later by the deaths of massive numbers of people, threw
production in the Soviet countryside into turmoil for decades. Nevertheless, it
created the conditions for the rapid growth of industry.
The cost of ‘progress’ turned out to be appalling. According to official Soviet
figures, more than 1 million ‘dekulakised’ peasants were banished to places
little suited to supporting human life. Those who actively resisted were shot
or sent to prison camps. The problem of acquiring grain for industrialisation,
however, was solved:
Each year from 1928, the gross harvests of grain declined, if we do not count the unusually
favourable year of 1930. Nevertheless, grain collections and exports increased. In 1930, 77.2
million tons of grain were harvested, and 4.8 million tons were exported; in 1931, when only
69.5 million tons were harvested, exports were 5.2 million tons.34
The official history of the Soviet economy states that throughout the whole
period of the Great Turning Point, the main source of foreign currency receipts
remained grain exports.
In the years from 1929 to 1932, Soviet grain exports reached their highest levels of the entire
period before the Second World War…. From the exporting of grain, the Soviet government
gained foreign currency to the value of 444.5 million rubles.35
The old slogan ‘We shall go hungry, but we shall export!’ had once again become
a guide to action.
The growth of exports was combined with a sharp increase in the urban
population. By contrast, agricultural output declined following the shocks
of collectivisation. There was also a shortage of consumer goods, which
continually grew more expensive, something which had a particular impact in
the countryside. By 1930 and 1931 the threat of famine had become very real,
and when the grain-growing regions were affected by drought in 1932, the ‘food
supply difficulties’ turned into a genuine tragedy.
In line with bureaucratic logic, grain was invariably collected where the
original plans had decided, with no regard for the situation in the various
localities or even for the drought. The result was the famine of 1932–33. At
this time the country was producing enough grain to avoid catastrophe. The
grain was collected, however, precisely in the regions which in the original plans
had been designated as fertile, and which were now suffering from drought. At
the height of the famine, documents testify to above-plan deliveries of rye and
other types of grain for export.36
By no means everyone approved of the choice that had been made in favour of
exports. Documents in the Russian State Economic Archives show that in 1930
some officials argued that it was essential to reduce food exports ‘in connection
with the food supply problems in our country’, and that ‘the people in charge of
Soviet foreign trade had definite doubts concerning the advisability of exporting
foodstuffs even in 1931’.37 Such views, however, were regarded as mistaken.
As a result of the global economic crisis, world trade turnover fell by two-thirds.
Prices declined as well. To Stalin, this represented a historic opportunity.
A real chance had appeared for the Soviet state to obtain machinery, equipment and metals
on the world market in the quantities required. It was also clear that the new opportunity
to expand imports could not last long.38
Equipment prices did indeed decline, but very unevenly. Prices for construction
equipment fell by 4–6 per cent, but for some types of machinery the decline
was as much as 30 per cent. The Soviet organisations that imported technical
goods stated that the prices for electrical equipment had fallen by 17.5 per cent.
Meanwhile, the prominent German firm Karl Zeiss had begun charging 10 per
cent less for its optical goods, and 13 per cent less for its measuring instruments,
while also extending the time allowed for payment of its credits.39
The trouble was that the prices for Soviet exports were falling even more
rapidly than the prices of imported equipment. Receipts of foreign currency
from exports came to only 60.5 per cent of the sum projected in the Five-Year
Plan, while in terms of physical volume 95 per cent of the plan targets had
been met.40 The unique ‘opportunities’ provided by the worldwide crisis had
turned into monstrous costs. The official Soviet sources as well were obliged
to recognise this.
It is a well-known fact that during the period of crisis the prices for agricultural products
fell by more than the prices of industrial goods. As a result, the Soviet state during those
years lost 1,873 million rubles on its exports, while saving 772.6 million on its imports.
Consequently, our country lost 1,100.4 million rubles in foreign currency as a result of the
fall in prices on the world market.41
The lower the price of grain, the greater the requirement to export it. The
main importer of Soviet goods during that period was Britain. Despite the
lower prices, the overall value of British imports from the Soviet Union rose
after the beginning of the depression from £21.1 million in 1927 to £34.2 million
in 1930.42 According to figures from the Soviet trade office in London, the
USSR in 1930 accounted for 13.3 per cent of the wheat imported into Britain.
In the first nine months of 1931, the Soviet share reached 24.5 per cent.43 To
compensate for the fall in prices, it was necessary not only to increase grain
exports (which caused prices to fall still further), but also to expand the range
‘The statistics for foreign trade’, Trotsky wrote in 1931, ‘are increasingly becoming
the determining figures where the plans and tempi of socialist construction are
concerned.’51 Despite the shortage of foreign currency, the plan for imports of
machinery was even overfulfilled (at 105.6 per cent of the projected figure), while
for imports as a whole the level was only 48.6 per cent. The share of imports
represented by means of production was as high as 90 per cent.
By the end of the Five-Year Plan the Soviet Union held first place in the world for imports
of machinery and equipment. In 1931 around a third, and in the following year around half
of all world exports of machinery went to the USSR.52
Metals were imported in large quantities, making up for around 20 per cent
of expenditures of foreign currency. There was a particular shortage of high-
quality steel, which had to be purchased abroad. Since foreign currency was in
chronic short supply, the state was prepared to export anything and everything,
from gold, oil and furs to the pictures in the Hermitage Museum. Postage
stamps, coins and antiques were sold. The trade encountered difficulties due
to a shortage of expert personnel. The Soviet trade office in Berlin explained
that it was in acute need of an auctioneer, but that it had no such person.53
The Berlin firm of J.H. Stolow tried to monopolise the sale of Soviet postage
stamps in Germany, but its relations with Moscow proved erratic. The owners
of the company, the Stolov brothers, maintained that in the conditions of
the depression their clients were short of money and that it was necessary to
provide them with goods on credit. In return, the Stolovs tried to engage the
attention of their Soviet partners by promising that they could ‘easily put an
end’ to contraband, since they knew all the smugglers personally. Their account
of the brilliant prospects for the struggle against contraband ended with a
specific request: ‘We ask you to send us an acknowledgement in which you
guarantee to keep all our denunciations secret.’54 The reaction in Moscow to
these suggestions was unenthusiastic, since the Soviet authorities had developed
their own, unique method for waging the fight against contraband. From now
on, new Soviet postage stamps would first appear in foreign philatelic shops,
and only after a certain period in Soviet post offices. In this way, the Soviet
officials concluded, they could ‘saturate the foreign market, without facing
any competition’.55
At the height of the world crisis, and amid the shocks of collectivisa-
tion, measures were taken to attract foreign tourists to the USSR. Despite
the ‘unfavourable conjuncture in the world tourism market’, the People’s
Commissariat of Foreign Trade considered the prospects for attracting
tourists to be reasonably good.56 In practice, the successes were insignificant,
not only because of the generally difficult conditions, but also because of lack
of personnel and resources. To obtain goods for export, the official accounts
reported proudly, special conferences were convened in the union republics and
In view of the fact that 90 per cent of dogs have coats suitable for the fur trade, the
People’s Commissariat of Foreign Trade should be requested to propose to the People’s
Commissariat of Supply of the USSR that state purchases of dogs should be transferred to
the fur industry.59
The results of this initiative were soon felt, as can be seen from a protocol of the
Central Black-Earth Province: ‘To note the marked acceleration by the hunting
union of the killing of dogs during the summer, with the aim of obtaining
skins.’60 However, it was found that summer was the least suitable time for
hunting dogs. The quality of the skins declined. Consequently, it was decided
to adopt a special resolution ‘on the struggle against stray dogs, aimed at killing
the maximum number of dogs during winter, and maintaining their population
during the spring and summer periods’.61
Cats were not spared either; it was explained that their skins could be exported
too. The massacre of animals reached such a scale that measures had to be taken
to regulate the slaughter. ‘In order to maintain the basis for fur production’ it
was decided to stop ‘the catching of dogs and cats during the period from 1
April to 1 November’.62
Small wild animals fared no better. A conference in the Central Black-
Earth Province discussed the question ‘of the autumn procurement of moles,
hamsters and mole-rats’.63 It was proposed that ‘exportable breeds of rabbits’ be
developed; at the same time, it was found that ‘diseases of rabbits, and measures
for dealing with these illnesses’ had not been studied.64 It was noted that the
state purchasers were required to hand over to the People’s Commissariat of
Foreign Trade ‘all waste material suitable for fur and other production’.65
The minutes of the export conferences are littered with complaints about
the failure to meet plan targets and about the poor quality of goods. The
quantities of defective products, innumerable reports state, had reached ‘colossal
dimensions’.89 Chairs made using specially imported equipment were unfit for
sale abroad. ‘Offal of low quality’, the records state, was being sent for export.90
The Soviet trade office in London complained that by all measures, the goods
had ‘deteriorated significantly’.91
The reasons for this deterioration can readily be grasped if we take the
example of poultry production. Conference participants reported that the
poultry processing works were unable to function normally, since ‘the feeding
pens were severely overcrowded’; as a result, birds were killed ‘without having
been fattened, despite having been in the feeding pens for thirty days’.92
The poor-quality work was due to the difficult situation in which the workers
found themselves. ‘The living conditions of the workers are quite impossible’,
it was reported.
There are no hostels, no political study areas, no dining-rooms. The food supply is inadequate,
which affects the availability of labour power.93
The conferences called for increasing the material stimuli for workers to improve
output, and for ‘putting an end to irresponsibility, ill-discipline and wage-
levelling’.94
The rates at which products were unloaded were ‘catastrophically low’. On
page after page, the conference minutes acknowledge ‘the catastrophically low
level of fulfillment of the plan for export deliveries’ or the failure of a ‘two-
week export campaign’, and so forth.95 At times, a philosophical mood seizes
the authors of the documents, and they include in the records such remarks as
that ‘if the supply situation does not improve, the prospects will be dismal’.96
Not surprisingly, ‘a mood of disorganization’ was observed among the workers
of Sovkavpushnina, and the administrative heads of other departments were
called upon to ‘do away with the demoralised mood that has arisen’.97
In 1932, only eight of out of 23 provinces that had been assigned export
targets fulfilled them. Nevertheless, the overall goal was attained. At the cost
of vast effort and desperate, poorly organised, inefficient work at the local level,
the industrialisation programme received the foreign currency it needed.
To some degree, Soviet industry made up for the shortage of funds for purchasing
the goods that were required. In the conditions of drastic worldwide economic
decline, import substitution was a necessity. The Soviet Union thus became
the first country in the world to produce synthetic rubber on a large scale. The
development of the chemical industry made it possible to replace, or reduce
to a minimum, imports of acids, fertilisers, dyes, plastics, coke and nitrates.
Exploration for new mineral deposits was begun, followed by the development
of discoveries.
In many cases, programmes such as these had not been foreseen in the original
plan. The more machinery was imported, however, the more the Soviet Union
needed to replace other types of imports. In other words, the ‘exclusion’ of the
Soviet Union from the world market and the creation of a ‘closed economy’
was largely the result of the processes taking place in 1929–32 in the world
market itself. In 1931, the same chaos that reigned in other sectors prevailed
in the departments concerned with importing equipment. The officials in
charge recognised that in the question of planning, there was ‘no clarity and
no possibility of establishing whether plans had been fulfilled’.98 People did
not understand how to work with Western firms; officials of the People’s
Commissariat of Foreign Trade were warned ‘to observe closely the actions
of representatives of foreign firms, and not to permit them such things as to
wander about our institutions finding out in advance what we are going to
order from them’.99
By the end of 1931 the situation had begun to improve somewhat. Prices for
goods exported from the USSR had begun to rise, as had the efficiency of the
Soviet foreign trade organisations. Because the conditions of the depression
meant that a substantial proportion of goods were sold on credit (and the
conditions of the credit became more advantageous the worse the situation of
the company), the Soviet foreign trade organisations were able to settle their
debts and place new orders.
From 1932, imports of equipment steadily declined as the output of the
Soviet machine-building industry expanded. The new Soviet industry was
constructed on the basis of the most advanced technology of its time. The main
importer of Soviet goods, political obstacles notwithstanding, was still Britain.
During the depression years it remained ahead of Germany in this capacity;
between 1929 and 1931 the British took 23.7 per cent of Soviet exports, with
the Germans accounting for 21.4 per cent.100 The United States, by contrast,
imported very few Soviet goods. It was the US, however, that became the main
supplier of equipment. In 1930 it accounted for 31.2 per cent of all technical
goods imported to the Soviet Union, and in the first quarter of 1931, for no
less than 42.8 per cent.101
The Soviet leadership had made its choice in favour of the country that
possessed the most modern technology. By the mid 1920s the United States not
only held first place for the technical re-equipping of industry. The conveyer-belt
production methods first introduced in the plants of Henry Ford, along with the
forms of organisation of labour that corresponded to them, had dramatically
increased efficiency and had brought about genuine mass production. Most
sectors of Soviet industry were set up from the start on the basis of Fordist
technologies, without passing through earlier phases.
The accelerated growth of industry bore fruit during the Second World War.
Comparing the results of the industrialisation between 1928 and 1940 with the
growth of industry from 1900 to 1913, the liberal sociologists L.A. Gordon
and E.V. Klopov concluded that Stalin’s modernisation was far more successful
than the reforms of Witte and Stolypin.
Each of these periods of equal length was followed by an armed conflict between our country
and one and the same foreign enemy. The war acted as a sort of examiner, testing the results
of what had been achieved. In the second case, moreover, the examiner was far more ‘strict’
than in the first. Throughout the First World War Germany and its allies were fighting on
two fronts, and could direct only a minor part of their armed strength against Russia; the
majority of their forces remained in the Western theatre of military operations. For three
of the four years of the Great Patriotic War, the Soviet Union waged what was virtually a
one-on-one struggle against fascist Germany. Not a third, as in the years from 1914 to 1918,
but approximately three-quarters of the German armed forces were concentrated against
us from 1941 to 1945. Nevertheless, pre-revolutionary Russia suffered military defeat, while
the Soviet Union crushed fascism.102
In both cases, the industrialisation was based on the exporting of grain and the
exploitation of the countryside, though Stalin’s measures for their harshness and
effectiveness were in a quite different league from either the financial pressures
of Witte or the repressions of Stolypin. But was this forcible extraction of
funds from the countryside the main condition for success? Unquestionably
not; the achievements of the First Five-Year Plan were predetermined not by
the repression directed against the peasants, but by the fact that Soviet Russia
was not a participant in the international process of capital accumulation. It
was this disassociation from the world system, or delinking, to use the term
employed by Samir Amin, that made it possible to concentrate the USSR’s
resources on the priority task of industrialisation. It was this independence of
the world capital markets that allowed Soviet industry to record thoroughly
respectable growth rates as early as the mid 1920s.
By contrast, the repression aimed at the peasantry, the universal collectivi-
sation and the shift to totalitarianism in 1929–32 were to a significant degree
(though not exclusively) the result of the worldwide economic crisis that affected
Soviet Russia differently from Germany or the US, but no less fatefully.
It is obvious that no ‘external circumstances’ can exonerate the people who
exiled and killed peasants, who later wrought massive vengeance on party
activists, ‘Old Bolsheviks’ and the intelligentsia, and who in the 1940s sent
whole peoples into exile. The triumphant bureaucracy pursued its own ends,
which had less and less in common with the socialist ideals proclaimed by the
revolution. The formation of a bureaucratic elite in Russia and its political
victory were accomplished facts by the end of the 1920s. The turn toward a
‘Soviet Thermidor’, of which Leon Trotsky spoke, was already in full swing
under the NEP. Nevertheless, it was the world crisis from 1929 to 1932 that lent
Stalinism the form in which it entered history. It was this crisis that gave birth
to totalitarianism in the USSR, just as it resulted in the victory of Nazism in
Germany. But unlike German Nazism, Stalinist totalitarianism represented
the continuation of a revolution, and even during its most appalling years still
bore the traces of a human face. It was thanks to this that the later softening of
the regime, the famous ‘thaw’ of the 1960s and the new flowering of ‘initiative
from below’ in all spheres of life, eventually became possible.
the regime became much harsher, that repression began on a massive scale, and
that a wave of terror swept across the country. Nevertheless, the transition from
authoritarianism to totalitarianism that took place between 1929 and 1932 is
depicted as something natural and inevitable, flowing automatically from the
very essence of the revolution and of communist ideology. Even if this were true,
the question would remain unanswered of why this transition occurred precisely
at this time, and assumed such a form; of why it was so abrupt and unexpected,
catching everyone involved, including Stalin himself, quite unawares.
Collectivisation proved to be a decisive stage in the transforming of the Soviet
system from an authoritarian to a totalitarian one.105 The rural Soviets, which
had earlier retained a certain autonomy with relation to the party organs, finally
lost all their independence. The last serious opposition, the group of Bukharin,
Rykov and Tomsky, was smashed. Open discussions within the party came to an
end. The cult of Stalin the individual rapidly took shape. The cult of the great
leader is a characteristic trait of Bonapartist regimes, and during the twentieth
century it was incorporated into the ideological arsenal of totalitarianism.
After collectivisation, the economy of the Soviet Union was completely
statised; the formal independence of the collective farms concealed adminis-
trative control which at times was even more rigorous than in the official state
sector. Any form of private or collective administrative activity that was not
included in the system of centralised management was eliminated. It was in the
years of the ‘Great Turning Point’ that the Soviet economy took on its closed
character, separating itself off from the world market. To a significant degree,
this transition to a ‘closed economy’ was of a forced nature. It resulted from
the chronic shortage of funds and from the oppressed condition (following
collectivisation) of agriculture, which earlier had played the role of the main
export sector.
During the civil war the dictatorship of the Bolsheviks had been harsh,
but inconsistent; massive repressions had been mounted against ‘counter-
revolutionary elements’, at the same time as relatively free discussions had
been held with Mensheviks, anarchists and other opposition groups. With the
transition to the NEP, the power of the Bolshevik party had become far more
consolidated; this was when the opposition parties were finally banned. But even
when the Soviet power finally took on the form of a one-party dictatorship in
1921–22, it was not yet totalitarian. The Soviet regime corresponded fully to a
type of revolutionary authoritarianism that was well known in the history of
Western Europe. Lenin was perfectly correct when he compared the Bolsheviks
to the Jacobins. Neither group had any regard for the rules of formal democracy.
Nevertheless, this was still something short of total domination, penetrating all
the pores of society and subordinating to itself all forms of public life.
The society of the 1920s was based on a compromise between the cities,
which were in the hands of the Bolsheviks, and the countryside, which retained
a good deal of economic independence. The power of the Communist Party
was limited, as was its ability to exercise economic control. Numerous political
forces during the 1920s therefore had reason to hope for a softening of the
authoritarianism and for a democratisation of the Soviet regime. The Left
In the twentieth century the United States replaced Britain as the world’s leading
capitalist country. The rise of the US as a world power is usually considered to
have begun during the First World War, when the US was transformed from a
debtor to a creditor country, and its armed forces played a decisive part in the
victory of the entente over Germany in 1918. No less important for the world
system, however, were the consequences of the Russian Revolution of 1917.
For two centuries Russia had played a substantial role in the development of
European capitalism; as a supplier of raw materials, as a market, as an importer
of ‘free’ capital, and as a debtor country. With the departure of Russia from
the world system, a great deal changed.
At the same time as Western European capital was ‘losing’ Russia, US capital
was finally assimilating Latin America. Unlike Britain or France, the US had
important resources of raw materials. These resources were on the territory
of the US itself, not in remote colonies, and there was no need to defend
them constantly. Moreover, the US possessed an enormous internal market
and had its ‘own’ Latin American periphery, located immediately to the south
of the Rio Grande. With the departure of Russia from the world system, these
advantages of the US became far more obvious. When the Soviet Union also
gradually quit the world grain market after collectivisation, the US was left as
the unquestioned leader in this area as well. The American elites, unlike the
German ruling class, did not pursue a course of struggle against the ‘old’ world
power, that is, Britain. To the contrary, the US acted as a force guaranteeing, up
to a certain point, the survival and inviolability of the British empire. The old
world power stood in increasing need of this support as the external threats it
faced grew more serious. Ultimately, the partners changed places. The Second
World War transformed the US into the leader of the West. Nevertheless, the
US was only able to consolidate and shape this leadership thanks to the Cold
War with the USSR.1
That the coalition partners would turn on one another after defeating Germany
in 1945 was not hard to predict. Nevertheless, it was far from obvious in the
spring and summer of 1945, when the foundations of the post-war world system
were being laid, that this hostility would develop so rapidly, that it would take
so acute a form, or that it would result in the rigid division of the planet into
two blocs headed by the two superpowers.
The Soviet Union was neither intent on a new confrontation, nor ready
for it. The destruction wrought by the war with Germany had been too
283
great. During the meetings in Yalta and Potsdam, Stalin had not concealed
his intention to keep within his sphere of influence the Eastern European
countries liberated (or occupied) by the Soviet army, but at that time Moscow’s
ambitions did not extend any further. This is why Moscow in 1946 and 1947
displayed caution and a readiness to make concessions, while the US behaved
with increasing assertiveness.
In the post-war period, an exception on the European continent was Finland,
which to an important extent ended up under the influence of the Soviet Union,
but which retained its Western social, political and economic institutions. This
situation was possible because Finland, unlike Eastern Europe, was not under
occupation. But if we look at the policies implemented by Moscow and by
the communist parties under its control in the ‘liberated countries’, we find
that at first it was not very different from what was happening in Finland.
In Bulgaria the communists declared that they were entering a government
which, if we are to believe its protestations, had ‘no intention of establishing
a communist regime’.2 In Romania a popular-democratic government was
established with participation by liberals, and the king remained on the throne.
The police and state security organs, controlled by colleagues of the Soviet
authorities, even persecuted opponents of the monarchy, and on 8 November
1946 the communist newspaper Era Nuoa stated that ‘the people of Romania
have faith in their king’.3
In Hungary, multi-party elections were held in November 1945, with the
Communist Party receiving only 17 per cent of the votes. In the governing
coalition, the Communists received only four cabinet portfolios out of 15. In
subsequent elections in July 1947, the communists achieved somewhat better
results, but still won the support of only 21.5 per cent of voters.
In Poland in 1945 an administration was formed with the participation
of supporters of Moscow and of representatives of the émigré government
which during the war had been based in London. In Czechoslovakia, the most
developed of the countries occupied by the Soviet Army, the policies of the
pro-Moscow Communist Party were also conspicuously moderate, even though
the communists had considerable influence. A coalition government was set
up, with liberal forces included. Nationalisation decrees, that had the support
not only of the left but also of a significant part of the political centre, did
not affect medium-sized businesses. Workers’ councils began operating in the
enterprises. On 26 May, free elections were held, and the Communists received
38 per cent of the votes. In Slovakia, 62 per cent of the votes went to the
Democratic Party, which was running against the communists. The latter could
rule only in coalition with the Social Democrats, who held nine government
portfolios out of 26.
Naturally, the Eastern European republics in 1945 and 1946 were by no means
model democracies. The Soviet representatives paid very close attention to the
foreign policy of their new allies. From time to time, people who had fallen out
of favour with the new authorities were persecuted (these latter often included
left-wing politicians who demanded a more radical course). This persecution,
however, bears no comparison with what ensued in Eastern Europe after the
Cold War began in earnest.
Late in 1947, against the background of a rapid deterioration of Soviet-US
relations, a sharp turning-point was reached in Eastern Europe. The territory
of occupied Germany was divided into two states. Arising in the west was
the Federal Republic of Germany. In response to the ‘splitting policy of the
Western powers and of German reaction’, a German Popular Congress was
held in the Soviet Zone, and on 11 October the formation was announced of
the German Democratic Republic, ‘the first workers’ and peasants’ state in
German history’.4
That autumn proved fateful for all of Eastern Europe. In Czechoslovakia the
state security organs, controlled by people loyal to Moscow, began a struggle
against ‘conspirators’, a category to which the most influential opponents of the
Communist Party were assigned. Purges and reshuffles began in the structures
of power, culminating in February 1948 in the formation of a new government
that was a coalition only in name. Similar events occurred throughout the
Soviet sphere of influence. Opposition parties were dispersed and outlawed,
while dissidents were repressed or banished to the West. Virtually all sectors
of production were nationalised; Polish agriculture was an exception, with the
peasants continuing to stubbornly resist collectivisation. Systems of centralised
economic management, closely replicating the Soviet one, were constructed.
Before long, the victims of the mass repressions included communists as
well. After the Yugoslav Communist Party under Josip Broz Tito declared
its independence, reprisals began against ‘Titoists’ throughout the Soviet
sphere of influence. There were not in fact any Titoists in these countries,
but Moscow’s representatives single-mindedly exterminated or exiled all local
communist leaders who enjoyed authority among the masses – in the process
dealing a preventive blow aimed at ensuring that the ‘Yugoslav scenario’ was
not repeated.
Moscow’s logic was simple; the Cold War needed political consolidation.
Ideologues from the communist parties declared that the harsh measures were in
response to the policies of the US in Western Europe, policies that amounted to
an attempt to ‘go on the offensive against the forces of democracy and progress,
headed by the Soviet Union’.5
The truth was that both in the dividing of Germany into two states, and in
the creation of two opposing military blocs on the territory of Europe, the first
steps had been taken by the United States. It was the US that had first developed
a nuclear weapon, and that had used it against Japan. The monetary reform
carried out in the Western occupation zones of Germany, the proclaiming there
of the Federal Republic, the founding in April 1949 of the North Atlantic
Treaty Organisation (NATO) and the establishing of other military blocs
along the borders of the USSR were clear provocations to Moscow to adopt
corresponding measures. Meanwhile, the people in the Kremlin were far from
being pacifists either. The Soviet reaction was not only quick in coming, but in its
severity exceeded anything that anti-communist ideologues might have dreamed
of. By mid 1948 all the steps taken by the West had received retrospective moral
The Soviet Foreign Ministry had to deal with relatively open resistance from military
circles to even the most limited plans to shift the stance on the German question away
from the rigid repetition of old slogans and ideas. The affair reached the point of fierce
disputes between Stalin and representatives of what came later to be called the military-
industrial complex.8
and Western Europe. The peak of the confrontation between the two systems
was the Cuban missile crisis of 1962, when, in response to the stationing of
American missiles in Turkey, the Soviet leadership tried to install its own missiles
in Cuba, which had experienced revolution not long before. The Caribbean crisis
put the world on the brink of a new war, in circumstances where the position
of the USSR was clearly weaker than that of its ‘potential adversary’. After
the crisis had been resolved by diplomatic means, the inevitable conclusions
were drawn in Moscow. While the USSR continued to expand its weaponry,
seeking parity with the US (this was achieved by the early 1970s), it also put its
stake on the policy of ‘peaceful coexistence’, later to be renamed the ‘policy of
relaxing international tensions’, or, more succinctly, détente.
Although the slogans of peaceful coexistence and détente were addressed
formally to the entire capitalist world, in practice the main addressees were
the countries of Western Europe. Achieving a rapprochement with them was,
of course, simply impossible without entering into negotiations with the US.
The process of détente reached its apogee during work on the Agreement
on Security and Cooperation in Europe. In July 1973 the Finnish capital,
Helsinki, saw the opening of a conference aimed at preparing this document.
For many years, Soviet diplomacy had been seeking such a pact. Taking part
in the discussions, alongside representatives of the European countries, were
delegations from the US and Canada. In 1975 the work of the conference
culminated in the signing of the Final Act, which proclaimed the principles
of peaceful coexistence and of the inviolability of borders on the European
continent. The same document, however, also mentioned the need to respect
the fundamental rights and freedoms of citizens; from this time, dissidents in
the Soviet Union were able to refer to the obligations which the Kremlin had
officially undertaken, but which it was refusing to fulfil.
The Soviet leadership declared triumphantly that from then on, an
atmosphere of ‘mutual trust and confidence in the free, independent and
peaceful development of each country’ would take shape in Europe.9 Behind
these optimistic assessments lay concealed a hope that the countries of Western
Europe, feeling themselves secure, would gradually begin taking their distance
from the US.
EFFORTS AT REFORM
By the early 1970s, the Soviet Union could unquestionably consider itself a
successfully developing state. At the very least, the tasks which had confronted
the country in the previous period had been successfully resolved. Industri-
alisation had been carried through, the war had been won, nuclear ‘parity’
with the US had been achieved, universal literacy had been brought to the
population, and what was arguably the world’s best system of education and
advanced science had been established. Since 1953, moreover, mass terror had
been brought to an end. At the Twentieth Congress of the Communist Party of
the Soviet Union the party’s new leader, Nikita Khrushchev, not only revealed
the crimes of Stalin. By criticising his predecessor, he provoked a long-lasting
political discussion and gave rise to a whole generation of people for whom
rejection of Stalinism was linked intimately to faith in the Soviet system,
on the basis that the system had proven its ability to correct its ‘mistakes’.
However limited the freedoms of the Soviet population might be, the changes
in comparison to Stalinist times were thoroughly real; the system had evolved
from totalitarianism to authoritarianism. Although most of the institutions of
authority and control that had been founded in the 1930s remained in place,
the pressure they exerted on society was clearly weaker.
Nevertheless, and despite the obvious successes, the Soviet Union as early as
1959 was encountering growing difficulties. The growth rates of the economy,
though still impressive, had begun a steady decline. The consumer demand
that had awakened under peacetime conditions was not being satisfied. Living
standards were rising more slowly than the party had promised, and most
importantly, the ideological foundations of the regime were increasingly being
placed in doubt.
Paradoxically, the Soviet Union was the victim of its own success. The
centralised system and mobilisational economy set in place in the 1930s as the
Soviet answer to the challenge of the Great Depression had been effective in
the times of industrialisation and war. Now, when the country had already been
industrialised, and life had settled into a peaceful pattern, these methods were
simply failing to work. The political reforms of the 1950s and early 1960s had
proven insufficient. They had freed people, creating the conditions for open or
semi-open discussion of the problems, but had not created a mechanism for
solving these problems in practice.
The need for new reforms was not denied by the party hierarchs who, in 1964
and 1965, after Khrushchev had been replaced, announced that they would
pursue a course aimed at creating a more flexible and decentralised system of
economic management.
Leonid Brezhnev and his associates, who headed the Communist Party of the
Soviet Union in 1964, came to be viewed in hindsight as a group of inveterate
conservatives, who sought in every possible way to block the processes of democ-
ratisation of society and to prevent changes to any aspect of life. In the first
years of their rule, however, they behaved quite differently. Even the sacking
of Khrushchev from his post as party leader can be viewed in a certain fashion
as proof of democratisation; for the first time in Russian history the country’s
leader was removed by peaceful means, and, having lost power, did not suffer
repression. Supporters of democratisation continued to be published in the
journal Novy Mir.
The economic reforms were planned as a new and important stage in the
changes, one that would lead not only to increased efficiency in production, but
also to a broadening of democracy. It is usually considered that the reforms of
1964 and 1965 were aimed at ensuring a ‘harmonious’ combination of plan and
market in the economy. Elements of market relations, however, had existed in
the Soviet system ever since the ending of ‘war communism’. The main task of
the reforms was not to implant market elements in the Soviet economic order,
and not even to expand the sphere of action of these market relations; above
The rejection of reform was consolidated politically only in the mid 1970s.
This period marked the beginning in the Soviet Union of the era of ‘stability’,
or ‘stagnation’ as it was later termed. The triumph of the policy of ‘stability’
became possible thanks to changes that were occurring in the world capitalist
economy.
The turning point came in 1973 when, during the latest Arab-Israeli War,
oil prices rose sharply. The Arab countries tried to exert influence on the
West, which supported Israel, through the mechanism of an oil embargo. In
political terms, this strategy was a complete failure. With the rise in oil prices,
the importance of Israel as an outpost of the West in the Middle East even
increased. In economic respects, however, the position adopted by the Arab
countries in the autumn of 1973 had far-reaching consequences.
The dramatic rise in oil prices was not just the result of political decisions.
On the contrary, these political decisions were based on long-term trends in
the world economy, trends which finally surfaced in the early 1970s. During the
Great Depression and the Second World War the Fordist economic model had
triumphed in the West. This was a system of conveyor-belt technology and mass
consumption in which workers acted not only as the producers of goods, but
also as their consumers. In the absence of rising working-class living standards,
the industrial growth risked choking on itself. State regulation, the redistribu-
tion of income to the benefit of the most deprived sections of society, and
programmes of social welfare and education for the masses became an economic
necessity, a guarantee against a repetition of crises of overproduction such as
the one which had shaken capitalism in 1929–32. The regulation of markets,
proposed in the late 1920s by the renowned British economist J.M. Keynes,
became normal practice for most governments irrespective of their ideological
orientation. In place of the state, acting as the ‘night watchman’ of capitalism,
came the welfare state, in which moderate leftists held strong positions.
This system, however, had obvious limitations. While preserving the stability
of capitalism, it cost the capitalists more and more dearly. The bourgeois elite
had to buy social peace at the cost of concessions to the workers, and in the
eyes of the capitalists, this cost was becoming excessive. After the former
colonial countries had won their independence and become the ‘Third World’
(in distinction to the ‘First World’ of the rich West and the ‘Second World’
of the communist states), the situation grew still more complex. Along with
the latest ‘reconstruction’ of capitalism in the mid twentieth century, relations
between the centre and the periphery changed as well. Western agriculture
was modernised. Exporting foodstuffs ceased gradually to be the lot of the
‘peripheral’ countries, which instead were called upon to supply ever-increasing
quantities of industrial raw materials.
The Third World sought to improve its position in the world system by
using the same methods of regulation that had been tried out in the West, and
also through revolutionary overturns. Earlier, the prosperity of the advanced
countries had been maintained by a flow of cheap resources from the colonial
world; now, the relations between ‘centre’ and ‘periphery’ entered a crisis.
By the early 1970s the latest cycle of global economic upturn was coming
to an end. The technological potential of Fordist production was essentially
exhausted, and growth was beginning to peter out. A side-effect of the Keynesian
model was the continual growth of state spending, leading to increased inflation.
‘Weak financial discipline’ became the Achilles’ heel of the system. So long as
the growth rates of production exceeded the rates of inflation, no one suffered
especially as a result of the budget deficit. But from the early 1970s, the situation
changed radically. Growth rates started to decline, and trying to maintain them,
governments flung ever-new financial resources into the furnace of the economy.
But this was not enough; the devalued money had no effect. ‘Stagflation’ set in,
combining economic stagnation with high inflation.
In 1973, during the Middle East war, the Arab countries tried to make use of
oil as a weapon. World prices for oil increased rapidly. The stream of inflationary
funds that had banked up in Western Europe and the US during the years of
Keynesian policies surged in a single direction.
This served to enrich a section of the ‘peripheral’ elites. But with no possibility
of investing their capital profitably at home, and no mechanism that would
allow them to keep their funds in their own countries, the oil elites began
making deposits in Western banks. The result was a crisis of overaccumulation.
The banks had no idea what to do with the money that was pouring into their
accounts. There was an urgent need for the funds to be invested somewhere,
so as to bring a return. For potential debtors, it seemed that an exceptionally
favourable situation had arisen. Money could be borrowed at interest rates that
were lower than the rate of inflation. The bankers simply had no alternative; any
other approach would have meant that the ‘free’ capital would have remained
unused, with the financiers incurring a direct loss.
For the Soviet Union, the changes occurring in the West represented a unique
chance. At one and the same time, the possibility had appeared of obtaining
additional funds from the sale of oil at increased prices, and of using cheap
credits to buy technology and equipment. For Western creditors in turn, the
USSR seemed almost the ideal debtor. Possessing developed industries and a
relatively modern society, the country could launch major investment projects,
and these would require credits. The Soviet Union could successfully ‘absorb’
Western technologies. Meanwhile, the USSR had oil; consequently, there was
every reason to hope that the debts would be repaid regardless of how effectively
the credits were employed.
Between 1970 and 1975, the foreign trade turnover of the USSR increased by a factor of 2.3
in current prices. Such a rapid growth of foreign trade had not been observed in any of the
post-war five year plans, including in the years when the initial level of trade turnover had
been low, and when achieving high growth rates had been much easier.11
However, the growth was due mainly to the increase in energy prices, and also to
dramatically increased exports of raw materials and semi-finished products.
The structure of Soviet exports accurately reflects the specialised role which
the country was taking on in the international division of labour. In 1970,
machinery and equipment had made up 21.5 per cent of these exports; by 1987
this figure had fallen to 15.5 per cent, consisting, moreover, mainly of sales to
developing countries and to allied states. Imports of machinery and equipment
had risen from 35.6 per cent to 41.4 per cent. Exports of energy, meanwhile,
had increased over the same period from 15.6 per cent of total Soviet exports to
46.5 per cent.12 Sales of raw materials to the West had also become an important
source of income for other Eastern Bloc countries, following in the wake of the
USSR. By the early 1980s, the CMEA countries were supplying 8 per cent of
the energy consumption of Western Europe, after almost doubling their sales
of energy on the world market compared with the 1960s. The share of energy
sources in the exports of the CMEA countries to the West reached 58.8 per cent
in 1979, after amounting to only 14.5 per cent in 1971–75. The greater part of
this energy, naturally, was exported from the Soviet Union.13
The USSR was developing according to the principle ‘If we have oil, we
don’t need reforms’. Meanwhile, Soviet industry was rapidly becoming more
dependent on imported machinery and technology, and in some cases, on
imported raw materials as well. Between 1971 and 1975, imports were used to
meet approximately 15 per cent of the demand for new industrial equipment.14
This figure would not have been particularly significant for another country,
but for the Soviet Union, which for many years had relied on its own strength,
it signified the beginning of dramatic changes. Moreover, imports were playing
a growing role in supplying the country with advanced technology, not because
Soviet science was incapable of developing this technology, but because the
Soviet economy was more and more often unable to put its own innovations
to work. In just the same way, the Soviet leaders put their stake on increased
imports ‘as a way of raising the living standards of the Soviet people’.15 In the
process, they effectively recognised the inability of the Soviet economy to cope
with the task of producing consumer goods and of coming up with products
that would satisfy the country’s own population. At the same time, and against
a background of failed efforts to improve agriculture, the USSR’s dependence
on food imports steadily increased.
According to official figures, foreign trade rose ‘at a noticeably more rapid
pace than had been set down in the overall plan projections’.16 In this area,
unlike the case with other sectors, the figures were not overstated, and as a result
Soviet statistics even understated the growth rates of foreign trade compared
with the economy in general. In the same fashion, the importance of Western
countries as partners of the Soviet Union also increased. In 1970, trade with the
West had accounted for 21.3 per cent of overall Soviet foreign trade turnover;
by 1976, the figure was already 32.9 per cent.17 Soviet ideologues began talking
of a ‘turn by the economy toward the foreign market’.18
From the point of view of abstract theory, this turn did not pose any serious
threat to the Soviet Union. By signifying that a more open economy was in
formation, it also held out the prospect of a more free society. In practice,
however, everything was far more complex. The turn to the foreign market
was not the result of processes of democratisation in the USSR, but on the
contrary, of an attempt to slow down these processes and to substitute for them.
In similar fashion, collaboration with the West provided a way of maintaining
the old system of authority and administration, thus acting as a substitute for
the economic reforms that had been frustrated by the bureaucracy. In these
circumstances, the effect of international cooperation was not so much to
stimulate the Soviet economy and society, as to speed their disintegration.
As early as the 1970s, it was clear to experts that the ‘strategy of compensation’
that had been chosen had serious drawbacks. It was not cheap to develop
mineral deposits for export, and to transport raw materials overland for vast
distances. The extraction and transporting of oil from the USSR to the West
required major investments, far more than if it were obtained from the Middle
East. ‘As a result,’ Soviet experts acknowledged,
any expansion of the country’s energy and raw materials complex will inevitably draw off
part of the funds that might have gone to the knowledge-intensive sectors, to manufacturing
industries that show high rates of growth and of labour productivity. Moreover, the likely
brevity of the boom in energy and raw materials prices should be taken into account, even
though this boom ensures certain gains in the short term.19
COMPENSATION DEALS
The rapid growth of Soviet energy exports aroused disagreements between the
United States and the countries of Western Europe. In 1978 and 1979, West
Germany and the USSR signed agreements which opened the way for extensive
shipments of Soviet gas to Europe on a basis of compensation. Gas had begun
to be supplied to the West in the 1960s, when Austria had begun to receive
Soviet energy. Finland followed suit in 1971. It is worth noting that both these
countries, though part of the capitalist world, were neutral in political and
military terms. After the ‘oil shock’, however, military and political considera-
tions on both sides gave way definitively to economic ones. From 1973 Soviet
energy supplies were flowing to the Federal Republic of Germany, after another
year to Italy, and from 1976 to France. As the crisis in the Middle East grew
more acute, the European countries showed more and more interest in such
projects. Soviet gas could to a degree take the place of Arab oil. The gas was
cheaper, and depending on supplies from the ‘predictable’ Soviet Union now
seemed a lesser evil than obtaining energy from ‘unpredictable’ and unstable
regions of the Third World. The growth of energy supplies from the USSR
continued unabated. In 1982, Italy received from the Soviet Union more than
a third, West Germany 14 per cent, Austria 67 per cent, and Finland 100 per
cent of the gas it consumed. France obtained 14 per cent of its gas needs from
this source, with the flow increasing rapidly to approach one-third.20
Meanwhile, the sources of the gas were shifting steadily eastward. When
the Soviet Union had begun supplying gas to Austria in the 1960s, this fuel
had come from the Western Ukraine. Later, deposits in the Eastern Ukraine
had been exploited, then in Western Siberia, and finally, in the far north. To a
significant degree, the development of the Siberian resources was now occurring
on the basis of Western credits and technology, and was aimed from the first not
at the needs of the Soviet Union’s own industries, but at exports. Transporting
energy over vast distances from such remote regions required the building of
huge pipelines. The Soviet Union began taking out credits against supplies of
raw materials. Massive purchases of expensive equipment were begun. The
energy sector underwent hypertrophic development.
In this situation, collaboration with West Germany took on special
importance. As early as the 1960s, the Soviet Union had begun working with
Austria and West Germany on the principle of ‘compensation deals’. Gas was
supplied in exchange for pipes, through which the same gas was pumped across
to Europe. By the early 1980s, virtually all the gas exports were conducted on
a compensation basis. Already in 1970 the Ministry of Foreign Trade of the
USSR had concluded 60 major contracts, aimed principally at the development
of extractive industry.
The collaboration was not limited to gas. West German firms, operating on a
compensation basis, were included in the building of large chemical complexes.
Japan expressed interest in developing oil deposits on the Sakhalin shelf. France
was also included in the process. In exchange for gas, the French too supplied
pipes and equipment. In exchange for technology required by paper and cellulose
combines, they received cellulose, and so forth.
There was something symbolic, almost Freudian, in the fact that ‘compensation
deals’ became the preferred form of external ties for the Soviet leadership.
Officials in Moscow continued to console themselves with the thought that once
the shipments of raw materials were under way, Soviet industry would start
making a breakthrough ono the world market, and the conditions would appear
‘for making export sales of Soviet machinery and equipment’.21 Unfortunately,
this had no part in the plans of the Western partners, who were interested mainly
in raw materials and semi-finished products. The Soviet Union was returning
to the international division of labour to take up the same place once occupied
by pre-revolutionary Russia. Even the main partners, Germany and France,
were the same.
In the late 1970s talks began on a massive Soviet-German project. West
Germany was to receive gas in exchange for pipes and equipment needed for
the construction of the Urengoy-Uzhgorod gas pipeline, through which this raw
material was to be supplied. The agreement took its final form early in 1981.
In the same year, at a meeting of Western leaders in Ottawa, President Reagan
demanded that German Chancellor Helmut Schmidt reject the project. The
German leadership, however, did not give way, and the ‘contract of the century’,
as Soviet propagandists described it, was signed in December 1981. In the mid
1980s, Soviet experts observed, not without surprise, that economic ties with
Western Europe were broadening ‘despite the worsening of the international
situation’.22 In fact, the question of Soviet energy supplies to the West was the
setting for a clash of two strategies, neither of which promised anything good
for the Soviet system. The United States, especially after the coming to power
of the conservative Reagan administration, was seeking to isolate the USSR,
to limit trade with it, and in this way to force it to make political concessions.
By contrast, the French and German rulers calculated that the development of
trade cooperation, and a growing Soviet dependence on Western technology
and credits, would ultimately have a far greater impact on the political evolution
of their Eastern neighbour.
The Soviet leaders, meanwhile, did their best to exploit the disagreements in
the Western camp. An official Soviet study of the period states:
Unlike American companies, which often propose unacceptable conditions, the Western
European partners have expressed a willingness to supply equipment not only for gas
export pipelines, but also for internal gas mains. The credit conditions have also been
more favourable.23
From the mid 1970s, Eastern Europe became an important sales market
for German and French companies. In 1975, 22 per cent of the production of
the West German machine-building industry was sold here.24 Along with West
Germany and France, a key Soviet partner was Finland; not only because of
its geographical proximity, but also thanks to its ‘intermediate’ political status
this country acted as a broker between the two blocs, supplying goods and
technologies which could not be sold directly.
From the point of view of the Soviet leadership, the compensation contracts
were supposed to provide proof of ‘the advantages of the international division
of labour’, and an example of how ‘mutually beneficial cooperation with the
developed capitalist countries’ should be established.25
What was ultimately fatal for the USSR was the combination of increasing
military and political pressure from the US and of constantly growing economic
dependency on Western Europe. The greater the dependency became on goods
and technology from Germany, France and Finland, the more painful were
the trade restrictions imposed on the Soviet Union by the US. The greater the
involvement in the world system, the more strongly the country’s leadership
suffered from an inferiority complex due to the fact that within the framework
of this system, they were not perceived as belonging to it.
dramatically worse. For Eastern Europe, the combination of debt crisis and of
the stabilisation of oil prices proved fatal. Receiving less for its oil shipments to
the West, the Soviet Union started demanding that its partners in the CMEA
pay more for their supplies. The West, meanwhile, demanded higher interest
payments on the credits it had extended. As the American scholar William M.
Reisinger notes, the 1980 crisis in Poland and other Eastern European countries
was due not only to the inefficiency of the system, but also to external factors:
‘Western “stagflation” made it extremely difficult to repay the loans.’26
By the early 1980s, the prices the CMEA states were paying for energy were
approaching world levels. Responding to protests from the ‘fraternal countries’,
Soviet experts noted that the energy and raw materials base of the Eastern Bloc
was ‘not isolated from the world economy or from the changes occurring in
it’.27 Against the background of stabilising world resource prices, the danger
arose that the prices paid within the framework of the CMEA, prices that had
been set on the basis of medium-term agreements, could even exceed those
on the free market. The political results of the crisis were not slow in making
themselves felt.
In 1980 a workers’ revolt began in Poland, the result of which was the fall
of the communist government of the time and the appearance on the scene of
the free trade union Solidarity. The Soviet leadership vacillated between the
need to ‘restore order’ in the ‘fraternal country’, and a reluctance to repeat the
Czechoslovak scenario of 1968. In the conditions of Poland, which had old
traditions of anti-Russian resistance, such an occupation was fraught with the
danger of a real war, a prospect that was especially unwelcome when military
conflict had already begun in Afghanistan.
A solution was found when in December 1981 the Polish armed forces
themselves staged a coup, introduced censorship and banned opposition
trade unions. The ‘normalisation’ of Poland, however, diverted the energy and
attention of the Soviet leadership from less dramatic but no less important events
that were occurring in the other ‘fraternal countries’. No longer able to support
the economies of these countries with supplies of cheap resources on the former
scale, and unable to impose tight political control on them, Moscow was forced
to reconcile itself to the fact that its partners were falling increasingly into debt
dependency on the West. These partners, accordingly, reoriented their foreign
ties; exports to the Soviet Union were seen increasingly as a burden preventing
these countries from achieving their principal goal of selling goods to the West
in order to obtain the hard currency needed to pay the international bankers.
The local elites as well reoriented themselves to the West. Reisinger notes that
paradoxically, the collapse of the CMEA was caused not by political pressure
from the Soviet Union, but by the fact that the USSR’s partners made use of
their extensive economic independence. By the early 1980s, however, Moscow
simply did not have the strength or resources to pursue any other policy.
DEBTS
For the Soviet Union, increased trade with the West was accompanied by
growing foreign debts. It might seem that the changes in world prices in the
1970s would have benefited Soviet exports. The USSR’s balance of trade,
however, steadily deteriorated. In 1970, according to official figures, the trade
deficit with the developed capitalist countries had amounted to 0.36 million
rubles; in 1976 the corresponding figure was 3 million.28 The problem was that
the higher energy prices ultimately affected the prices of imported machinery,
industrial products and foodstuffs as well. While international trade ties were
booming, hard currency was in chronic short supply. The shortage of foreign
currency made it necessary to resort to barter deals, but this did not solve the
problem. The more the USSR became integrated into world trade, the more
acutely the shortage of funds was felt. The only way out was through foreign
loans. With a crisis of overaccumulation in the West, interest rates were low,
and the deals seemed highly advantageous for both sides. As delighted Soviet
commentators noted,
For the banks of capitalist countries, against the background of a crisis in the capitalist
monetary system and in conditions of general economic instability, credits and loans
advanced to the member countries of the CMEA, and especially to the Soviet Union,
represent operations in the reliable placement of their uncommitted funds, since as the
entire Western bourgeois press recognises, the socialist countries have impeccable financial
reputations.29
Initially, Soviet officials were firmly convinced that the growth of the foreign
debt was not a serious problem. In the view of the country’s leaders, the
strength of the Soviet economy was such that paying off the credits would
not be difficult even in the most unfavourable circumstances. Moreover, the
foreign trade deficit was regarded as a temporary, transient phenomenon,
associated with the current stage of the technical re-equipping of industry. In
the final analysis, the USSR had already resorted to massive imports of foreign
technology in the 1930s, and this had merely strengthened its independence.
The ‘contract of the century’ with West Germany was supposed to prove the
effectiveness of the chosen strategy.
Once gas deliveries have paid off the credits which have been advanced, the Soviet Union
will acquire a large new source of hard currency which will be used to finance imports of
machinery, equipment and other products from the capitalist states.30
In reality, the prospects were nowhere near so rosy. The flow of hard currency
increased, but the debts and the need for foreign equipment grew even more
rapidly. As the West neared the end of its crisis of overaccumulation, credit
became more expensive as well. Many investment projects which in the era
of cheap credits had seemed fully justified in commercial terms thus proved
unexpectedly to be highly expensive, and ineffective from a financial point
of view.
The debt crisis in Eastern Europe broke out in 1980 and 1981, a few years
before an analogous crisis shook Latin America. Within the Soviet Bloc, Poland
became the epicentre of the crisis. The inability of the Polish government to meet
its debt obligations to the West drove it to try to solve its financial problems by
raising prices and lowering real wages. The result was massive strikes and the
rise of the Solidarity trade union.
By 1981, Poland’s debts amounted to $24 billion. Those of the Soviet Union
were $12.4 billion; of East Germany, $12 billion; of Romania, $9.8 billion; and
of Hungary, $6.9 billion. Following the political catastrophe in Poland, the other
Eastern Bloc countries took desperate measures to reduce their indebtedness
before it took on a critical nature. To some degree this was successful; by 1984
the debts of the Soviet Union had fallen to $4.2 billion; of Romania, to $6.5
billion; of East Germany, to $6.7 billion; and of Hungary, to $5.1 billion. It was
only in Poland, where control over the economic situation had been completely
lost, that the debt continued to grow, reaching $28.1 billion.31
These efforts, however, also had their downside. Less money remained for
investment programmes, economic growth slowed still further, and living
standards stopped rising; in many cases they actually fell. While there was still
enough money for industry and social welfare, the effects on the infrastructure
were grim. The greater the sums that went to repay the debts, the greater the
need became for foreign currency. Products that earlier had been aimed at the
CMEA market were now exported to the West, if there was any hope they
might be sold there. The result was a weakening of the ties between the Eastern
European countries and a deepening of the commodity famine. By contrast,
the dependence on the world market of all the Eastern European countries,
including the USSR, increased sharply.
All this had dire effects on the development of the Soviet system during
the second half of the 1980s. Against the background of stabilising oil prices,
economic growth steadily slowed, and the foreign debt once more began rising.
The economist Sergey Glazyev noted that,
Amid the structural crisis which had been rapidly worsening since the early 1970s, the reliance
on foreign trade increased dramatically. Meanwhile the export base, which had expanded
sharply with the entry into operation of the new oil and gas facilities, later grew only slowly,
and consumed more and more resources. When programmes for increasing the output of
foodstuffs and consumer goods were adopted in the early 1980s, the burden that had been
placed on exports exceeded their potential. Obvious evidence of this was provided by the
failed ‘acceleration’ programme; it shattered against the resource limitations of the export
industries. The accumulation of disproportions in the economy exceeded the possibility of
compensating for them through an expansion of energy exports.32
the natural consequence of the strategy of structural development that had been followed
during the preceding years – an orientation toward the possibility of compensating, through
developing the country’s ‘cheap’ raw materials, for a lack of attention to the need to prioritise
the development of high technology and the consumer complex.33
But the reform policies that were initiated in the Soviet Union around the end
of the 1980s, and which reached their culmination in ‘independent’ Russia,
failed to solve the problem. In fact, they made it still worse.
When the USSR’s new leader, Mikhail Gorbachev, announced the beginning of
perestroika in the second half of the 1980s, optimists immediately began drawing
a parallel with the changes wrought by Peter the Great. Indeed, the country’s
leadership had once again turned its face to Western culture and proclaimed
the need to borrow from Western experience. On the cultural level, Gorbachev
encountered many of the same problems as Peter I. Breaking the resistance
of conservative elements within the ruling elites, both of them strengthened
Russia’s ties with Europe. Rejecting traditional values, they made the country
more open to the outside world. Here, however, the similarities end. Peter the
Great founded an empire, while Gorbachev destroyed it. Peter conquered new
lands on the Baltic, while Gorbachev lost them. Peter transformed his country
into a mighty European power, built a fleet, and forced the outside world to
reckon with Russia. Gorbachev turned a superpower into a dependent, ruined
swathe of territory.
In the final reckoning, Gorbachev did more to destroy the achievement of
Peter than any of Russia’s other rulers. This was quite understandable, since
the underlying principles of Peter’s reforms and of Gorbachev’s perestroika
differed radically from one another. Under Peter I, open access to information
and growing collaboration with the West were combined with a firm and even
aggressive military and political stance. Regardless of the objective relationship
of economic forces, the aim of Peter’s reforms was to compel Europe to accept
Russia as a new political force. While becoming part of the periphery of the
capitalist world system, the St Petersburg empire at least mounted a consistent
defence of its special political role within that system. By contrast, the rulers
of the USSR in the 1980s sought only to join ‘world civilisation’, at any price.
To achieve this, they sacrificed the country’s national sovereignty and economic
interests, and ultimately, even the very existence of their state. So far as they
were concerned, this was merely the price that had inevitably to be paid if they
were to become part of the world ruling class.
Gorbachev’s policies were, in essence, policies of capitulation. This became
still more obvious when Russia’s ruling elite came to be headed by Boris Yeltsin.
The rigidity of the economic structures, the lack of flexible mechanisms for its adaptation to
changing realities, and also the corrupting influence of the flood of petrodollars effectively
blocked any stimuli to economic development once the influx of ‘easy’ foreign currency
began to peter out. Economic growth became choked off in 1990 and 1991, giving way
to rapid decline in virtually all sectors. This was accompanied by a no less rapid decline of
exports both because of less favourable conditions for the extraction of raw materials, and
also because investment in the extractive sectors was inadequate. Between 1989 and 1991
exports fell by more than a third, returning to the level of 1981. The most painful blow was
dealt by the decline in oil shipments, the earnings from which fell by more than half. Over
the same period imports diminished by 43 per cent, which in turn had a negative impact on
internal production and exports.35
It was then that the International Monetary Fund (IMF), which had
performed its work successfully in Latin America, appeared on the scene. The
approach adopted by the IMF was simple and effective. The Fund helped
debtors cope with their short-term financial problems, but in return for this
it demanded unswerving fulfilment of its recommendations in the field of
economic and social policy. What this amounted to in practice was that in
return for the restructuring of its foreign debt, the country had to renounce
part of its sovereignty. While entering into relations with the IMF, the Soviet
leadership still vacillated, defending its honour as a superpower. But the days
of Gorbachev and his team were already numbered. They were replaced by
the team of Boris Yeltsin, on whom most of the bureaucratic elite had placed
their stake.
In striking fashion, the Soviet bureaucracy managed to turn even the crisis
and collapse of their own system to their own advantage. The disintegration of
the Soviet Union and the chaos that accompanied it created ideal conditions
for the bureaucratic elite, converting power into property, to join the global
ruling class.
This was a programme of restoration, following the same historical logic
as the restorations in seventeenth-century England and nineteenth-century
France. The restoration did not simply mean the return of the old order which
the revolution had overthrown. Its social significance lay in the reconciling of
the new elites born of the revolution with the traditional ruling class that still
held sway within the framework of the world system.
Boris Yeltsin, the former Sverdlovsk Province party secretary who in the space
of a few months had turned himself into a convinced anti-communist, was
ideally suited to this role. So too were his associates – people with impeccable
party histories, often in the capacity of ideologues. The Yeltsin team’s main
economic strategist, Yegor Gaidar, was one such hereditary member of the
ideological elite, belonging to the third generation.
The prominent journalist Oleg Davydov wrote that ‘with regard to the three
generations of Gaidars, speculation about “heredity” and “genes” is not just
empty talk. There really is something in this – something is handed on’.36 And
indeed, the grandson destroyed the conquests of the revolution with the same
unquestioning, reckless decisiveness with which the grandfather had wrought
vengeance on the enemies of this revolution (during the civil war he was
distinguished by his ruthlessness even by the standards of that terrible period).
It is striking to note, however, that neither Gaidar nor other hereditary members
of the elite uttered a single word to condemn their ancestors, the consequences
of whose actions they now fought against so desperately. On the contrary, they
continued to show pride in their pedigrees.
In fact, this apparent contradiction expresses the very essence of the
restoration. The only people able to see a contradiction here are the victims of
the authorities, those who fell beneath the wheel of Stalinist collectivisation or,
on the other hand, of the liberal reforms of the 1990s. From the point of view
of the elite, there is no contradiction present. In dealing with the enemies of the
Soviet regime, wiping out the old elite, subduing the peasants and ‘disciplining’
the workers, the leaders of the past cleared the way for a new elite which could
then take over the country. Without a revolution, there could not have been a
restoration. There would have been no possibility of seizing and dividing up
property. This very property, created with the sweat and blood of the generations
drawn into the revolutionary drama, would not have existed.
The bureaucratic elite, which rapidly turned itself into a new entrepreneurial
stratum, was in sum the main beneficiary of the Soviet experiment. Following
a 70-year pause, it was able to return the country to the world system, after
seizing hold of immensely rich resources, privatising the fruits of the revolution
and putting them up for sale. How effectively this transformed and bourgeoisi-
fied elite could manage the wealth it had appropriated was another question
entirely. As the Hungarian historian Tamas Krausz notes,
This may seem strange, but both the rise and the fall of the Soviet Union had causes in
common. The emergence and the collapse of the ‘land of the Soviets’ were both linked
organically not just with historical precedents reaching back many centuries, but also with
the question of integration into the world system, or to be precise, with the specific problems
of isolation. The ‘semi-peripheral model’, struggling for its own survival, could not free itself
from the pressure of the general laws of capitalist accumulation. It was no accident that this
model collapsed, just as it was no accident that it had been victorious.37
In the 1990s, Russian journalists and politicians were fond of reminding people
that the country was wealthy, since its subsoil contained almost all the elements
of Mendeleev’s Periodic Table. This mineral wealth, however, had not been a
secret in earlier periods of Russian history, and had been accessible then as well.
The resources had in fact been explored and developed during the era of Soviet
industrialisation. Official Russian sources admit that ‘following the collapse of
the Soviet Union not a single (!) geological expedition was sent out to explore
for new mineral deposits in our country’.1 Even the exploitation of Russia’s
natural resources, which served as the basis for the post-Soviet ‘open economy’,
thus became possible only thanks to the efforts of the preceding period.
The decade of reforms that began with the disintegration of the Soviet
Union and the coming to power of Boris Yeltsin, and which culminated in the
presidency of Vladimir Putin, saw a fall in productive output unprecedented in
peacetime. Industrial production and gross domestic product (GDP) shrank by
more than half. This substantially exceeded the losses suffered by the Russian
economy as a result of the First World War and the revolution, and even of the
damage wrought by the Second World War.2 This was not, however, simply a
decline in production. Against the background of the destruction of industry
and the fall of living standards, a redistribution of property was taking place,
together with a radical restructuring of the economy. By the mid 1990s, Russia
was already radically different from the Soviet Union.
The internal market, undermined by the impoverishing of the population
and by the shortage of funds available to enterprises, contracted sharply. The
importance of the external market, in which Russia as before figured mainly as a
supplier of energy sources and other raw materials, increased accordingly. Foreign
debt grew rapidly, but unlike the situation in Soviet times it was exacerbated by
capital flight, which became the favourite sport of the new owners of Russian
enterprises. The economy was privatised almost completely. The result was the
rise of a narrow stratum of self-satisfied, irresponsible nouveaux riches, who,
thanks to the facile touch of journalistic commentators, came to be known as
‘new Russians’. Arising in parallel was a new middle class, quite satisfactorily
paid but few in number, and concentrated almost exclusively in Russia’s two
capital cities.
By the end of the 1990s, Russia’s economy had become capitalist only in part.
Still present were the features of ‘Soviet corporatism’. Workers in many cases
depended more on their enterprises for their existence than on the market for
their labour. The bureaucracy remained a self-sufficient force, able if need be
304
to spoil the lives even of the wealthiest citizens, and property which had been
seized illegally could not be effectively defended even by the law.3
From the point of view of liberal ideologues it was this incompleteness, this
unfinished character of the new Russian capitalism, that was the source of all the
problems. Invariably, however, the attempts to ‘complete’ reform, undertaken with
striking persistence over ten years, either failed or exacerbated the very problems
they were supposed to solve. Russian society on the threshold of the twenty-first
century, for all its post-Soviet peculiarities, had taken on all the characteristic
traits of peripheral capitalism, and was obeying the logic of this system. The
dependent position of workers, the miserable wages and weak internal market
represented competitive advantages for the raw materials monopolies that
operated on the world market. Russia’s financial problems became inseparable
from the processes unfolding in the global economy. Corruption was a natural
reaction by the state apparatus to social stratification.
The resemblance between Russia and the countries of the Third World grew
stronger as the structural reforms, enacted according to the prescriptions of the
International Monetary Fund, went ahead. In the early 1990s the world system
was being reconfigured under the aegis of the sole remaining superpower, the US.
The new economic programme clearly expressed the interests of finance capital
and the transnational corporations, whose power had been enhanced under the
new conditions. The ideological basis of the new programme was neoliberalism,
proclaiming a return to the free market values that had prevailed in Britain
in the late eighteenth century. Its political formula became the ‘Washington
Consensus’, supported with greater or lesser enthusiasm by the elites of
almost the entire world. The social formula of the Washington consensus was
a consolidation of the ruling class on a transnational level beneath the leadership
of the United States. The economic programme foresaw a single set of measures
for all – privatisation, deregulation, liberalisation of prices and the freedom to
export capital. These prescriptions were urged by Western experts with identical
zeal in every country, from Zimbabwe to Russia. The programme did not bring
any benefits to the peoples of Africa or Latin America, but its effect was unques-
tionably to make Russia more similar to Zimbabwe.
The Russian economy was now fully incorporated into the world system,
included in the global division of labour that reflected the interests of the
transnational corporations that held sway in the new, changed world that
followed the collapse of the USSR. The dream of the reformers that Russia
would be integrated into the world economy and the global community had
been realised. Russia had once again become a source of raw materials and
financial resources for the West.
FOREIGN DEBT
Throughout the 1990s, the government had made servicing the foreign debt
one of its most important priorities. Accordingly, the IMF and the World
Bank had become the main partners and consultants of the new administra-
tive elite. Vice-Premier Yegor Gaidar, the member of Yeltsin’s team who held
responsibility for economic reform, did not conceal the fact that his programme
matched in full the recommendations coming from the Western experts. The
first document to formulate the economic policy priorities of the new Russia
was the Memorandum of 27 February 1992, addressed not to the Russian
population, but to the heads of the IMF in Washington. American scholars
note that in taking this step, ‘the Russian government was acknowledging the
West’s leading role as a participant in reform planning. The Western approach
had prevailed in the Kremlin’.4
The formal reason behind the government’s action was the catastrophic state
of Russian finances, and the inability of the authorities to pay off the foreign
debt. Collaboration with the IMF, however, did not bring the anticipated quick
relief. In their book The Tragedy of Russian Reforms, Peter Reddaway and
Dmitri Glinski write:
Gaidar’s priority was clearly to obtain foreign financial support, not domestic political
backing. But even this task was not successfully fulfilled, since what Russia got in early
1992 was IMF conditions in exchange for (at least initially) no money.5
The government’s need for money was undoubtedly acute, but the alliance
which Yeltsin and Gaidar made with the IMF also solved another problem they
faced, a problem which in strategic terms was arguably far more important.
Collaboration with the West and the fulfilment of its demands were indispensable
conditions if the changing Russian elite were to join the world ruling class. The
decision to carry out privatisation was not in any way the result of pressure
from the IMF or the World Bank. The Russian leaders themselves were intent
on seizing property, and needed no prompting from across the ocean in order
to do this.
Nevertheless, collaboration with Western financial institutions was essential
if the property that was seized during the orgiastic plunder of national assets
that began in 1991–94 was to be recognised in law, and if the new owners were
to be rendered respectable. With the help of the IMF this goal was achieved
to a considerable extent, though, as later experience showed, not fully. With
the Yeltsin regime beginning to totter, and amid growing danger that the
leader himself would fall, reports of Russian corruption began appearing in
the Western press. Attempts began in Europe and the US to bring to justice
Moscow figures who were implicated in money-laundering; the culmination
of these efforts was the arrest in the US of Pavel Borodin, the former head of
Yeltsin’s presidential administration. But the passions in the West abated once
President Putin had taken office in Russia, and the political situation again took
on an appearance of stability. Through this process, the Russian elites learnt a
lesson that had long been familiar to elites in the Third World: their status in
the global community depended not only on the amount of property they had
managed to steal, but also on their ability to effectively control their country,
while supporting its participation in the world system.
Where foreign debt was concerned, the intervention of the IMF did nothing
to ensure salvation. As in other peripheral countries, foreign debt turned into
By the late 1990s the oil and gas complex was providing approximately 20 per
cent of Russia’s gross domestic product, around 45 per cent of exports, and 60
per cent of foreign currency earnings.7 The energy industry also remained the
principal creditor of the other sectors of the economy. As world prices for oil
and gas rose in the first years of the new century, the importance for Russia of
the ‘energy export economy’ even increased. By this time the revenues from oil
extraction within the country were put by experts at
between 75 and 89 billion dollars per year, of which less than a quarter represented the cost of
labour and capital. The rest consisted of natural rents, redistributed to the benefit of capital.
The state, despite owning the source of the rents, received less than 30 to 35 per cent.8
was 182 million. Not surprisingly, access to the internet developed as a privilege
of the capital cities and of those social strata that in one way or another had
been drawn into the world economy, or which had participated in the redistri-
bution of power and property.
Wage levels also differed qualitatively, depending on whether workers were
linked to the export sector or not. In Soviet times it had been possible to talk of
such things as ‘the average wage in industry’. In the new Russia such categories
lost all meaning. The average wage of a gas industry worker in the late 1990s
was 392 per cent of the national average. In non-ferrous metallurgy the figure
was 192 per cent; in science, 82 per cent; in light manufacturing, 51 per cent;
and in agriculture, 46 per cent.11 Scientists and scholars in turn were divided
into a narrow group who received Western grants and an impoverished majority
whose work was not of interest to Western institutions, or who lacked ties to
potential sponsors. The few ‘stars’ enjoyed a prosperous existence and agreeable
conditions of work thanks to their fame in the West. By comparison, the dire
state of the research institutes that survived by renting out their premises
appeared even more catastrophic. Even if many of these bodies had been
thoroughly ineffective and in need of reorganising, their decline hit hard at
the entire system for the training of scientists and scholars, since there was
nothing to take their place. University graduates either sought work abroad or
found jobs in more or less prosperous companies that had nothing to do with
their areas of specialisation.
Just like social stratification, the inequality between regions also became
more marked. The incomes of the population in the most prosperous regions
were ten times higher than in those that lagged futhest behind. Not surprisingly,
the most prosperous zones included the capital cities, and also the provinces in
which export production was concentrated.12
In the other sectors, a profound desolation reigned. Machinery wore out and
buildings fell into disrepair, while housing and communal services fell into decay.
Money ceased being spent on raising the qualifications of industrial workers.
As the 1990s neared their end, and industry began to revive, enterprises found
themselves almost completely lacking in young workers with adequate levels of
training. Overall, the scientific and industrial workforces were ageing.
The shortage of investments, however, was not due to a lack of funds. The fact
that there was enough money in the country was shown by the scale on which
the new Russian property owners and the subsidiaries of foreign companies were
sending capital abroad. Assessing the outflow of capital across the country’s
borders, Andrey Kolganov writes:
This outflow exceeded all the foreign investments and loans received by Russia during the
reform period many times over. During the 1990s it was estimated at one to two billion
dollars per month, and various experts put the total sum that was taken out of the country
illegally at between 150 and 250 billion dollars. During the period of economic growth in
1999 and 2000, the drain of capital even increased somewhat.13
Experts put the scale of capital flight from Russia during the second half
of the 1990s at around 30 per cent of exports, with a peak value of between
$20 billion and $25 billion per year. Contrary to the impression created by the
press, even the capital that was exported illegally was not, for the most part,
criminal in origin. Those who owned it did, however, evade Russian taxes. The
funds taken out of Russia represented ‘a cheap source of capital for the world
economy’.14 A significant proportion of the ‘foreign’ investments in Russia
around the beginning of the new century also represented the return of part
of the capital which had taken flight. This explains the fact that a good deal of
this money came from Cyprus, which was favoured by Russian businessmen as
an offshore zone. As scholars observed,
such capital obviously did not bring with it to Russia any significant managerial, scientific
or technical experience. In practice, it was simply a means of providing credit from abroad
to Russian enterprises (given the weakness of the banking system), or represented a
strengthening of control by its effective owners over Russian enterprises.15
In the view of most experts, the fluctuations of the Russian political climate
and the financial collapse of 1998 did not have any obvious impact on the
exporting of capital from Russia. For the most part, the outflow of capital
had nothing to do with unfavourable economic conditions. Quite the reverse;
in the year 2000, when the Russian economy achieved record growth rates for
the post-Soviet period, exports of capital increased in proportion. Between 1999
and 2002, exporters of energy, and later also of metals, received vast sums for
the goods they sent abroad, but this had little effect on the investment climate
within Russia. Something like an investment boom was of course observed,
but exports of capital did not cease. Successful Russian companies set about
investing money in acquiring foreign firms, turning themselves into transnational
corporations. As Kolganov notes,
Even the most solidly established of them, such as Gazprom made very limited productive
investments. The economic growth of 1999 and 2000, which was accompanied by a
significant growth of investments in the oil and gas sector, failed even to make up for the
inadequate investment during the preceding period.16
Kolganov concludes from this that the oligarchy had no serious interest in
modernising the Russian economy. This, of course, was perfectly true. The
problem, however, was not only with the interests of the oligarchy. So long as
the model that was established in the 1990s for integrating Russia into the world
system remained, any serious attempt at modernisation would be doomed to
encounter insurmountable obstacles.
In the 1990s Russia began to serve the international process of accumulation;
like other peripheral countries, it redistributed funds to the benefit of the centre.
According to Interior Ministry figures, exports of capital from Russia in 2000
amounted to approximately $11.5 billion, with as much as 80 per cent of
this sum sent to the US. Meanwhile, total foreign investments in the Russian
economy came to $7.9 billion. Most of the foreign investments came from
offshore zones.17
DEINDUSTRIALISATION
post-revolutionary period been lost, but also what had been achieved under
Witte and Stolypin.
Source: Mirovaya ekonomika. Global’nye tendentsii za 100 let. Moscow, Yurist, 2003, pp. 509–10.
The initial stage in the plunder of Russian assets gave rise to the grotesque breed
of the ‘new Russians’ – semiliterate businessmen, often with a criminal past
and invariably with bandit habits. These comical individuals, however, never
really controlled the country’s life. Real economic power gradually became
concentrated in the hands of the new elite that controlled the largest oil, gas
and metallurgical companies. Emerging from the ranks of the old bureaucracy,
this elite transformed itself, topping up its ranks with ‘fresh blood’ and changing
its culture and behaviour.
By the mid 1990s the process of transition was essentially complete. Serious
entrepreneurial clans, their leaders dubbed ‘oligarchs’ by the press, had taken
shape. The origins of their capital lay in their control over the exporting
of raw materials and semi-finished goods to the world market. Exports of
resources grew in proportion as Russian industry collapsed; in this respect,
the crisis and decline represented an important condition for the successful
accumulation of capital.
Control over exports, combined with a catastrophic fall in the exchange rate
of the ruble, guaranteed that ‘real’ financial resources would be concentrated in
the hands of the oligarchs. The devaluation of the ruble led to the dollarisation
of the economy, and this in turn meant that the dominant positions in Russia
would be held by firms which received a steady flow of Western currency. The
entrepreneurial clans that had taken over the exporting of raw materials dictated
the rules of the game not only in the economy, but also in politics, culture and
the mass media.
The oligarchic brand of capitalism that had been established in Russia by the
mid 1990s was linked closely to the peripheral nature of the economy. The one
would have been impossible without the other. The inclusion of the Russian
Federation in the world economic system as a supplier of raw materials and
as a market for the transnational companies presupposed the formation of
a corresponding oligarchic elite, its power and wealth based on the parasitic
exploitation of the country’s resources and of what remained of the productive
potential created by Soviet industrialisation. Meanwhile, the power of the
oligarchy made attempts to implement any other scenario of development
economically and politically impossible.
The state, which had been given its constitutional form by the coup of 1993,
when the legally elected parliament had been shelled by tanks, could only have
been authoritarian. The 1993 constitution not only bolstered the overweening
ambitions of Yeltsin, who sought to be both an autocrat and a ‘democratic’
president at once, it also created a political system agreeable to the oligarchic and
bureaucratic elites, a system in which the people had almost no ability to influence
the authorities, whoever might hold office. The new state structures combined
the authoritarianism of an executive power that rested on electoral fraud with
the legal existence of a parliamentary opposition and with real freedom of the
press; neither of the latter had any influence on ‘serious politics’. In this respect,
the Russian state took on once again the features of the tsarism of 1905–14,
with the sole difference that the formal restoration of the monarchy (repeatedly
discussed within the Russian elite) was not found necessary. The old model of
the monarchy had been replaced by a more ‘modern’ oligarchic republic.
the oligarchs depended on exports, and the high exchange rate left exporters
disadvantaged. The important consideration, however, was not the needs of
Russian industry, which was being smothered by this policy, but the interests of
raw materials exporters. For them, the decisive factor was not the ruble exchange
rate, but the world price of oil. Russia was inundated with cheap imports, and
local industry, unable to withstand the competition, was expiring. But as the
distinguished American economist Joseph Stiglitz correctly noted, the elevated
exchange rate, though catastrophic for the country as a whole, was ‘a boon’ for
the elite.22 The privileged layers could purchase luxury items at advantageous
prices, while also sending money abroad. The largest exporters were at the
same time the owners of the main banks, which invested money in financial
operations, the exporting of capital, and the importing of goods.
The elevated exchange rate therefore ultimately suited the oligarchy. The
overvalued ruble was even more agreeable to the transnational corporations
which shipped goods into the impoverished country, and to financial speculators
dealing in Russian state bonds. ‘The IMF worried that a devaluation of the
ruble would set off a new round of inflation,’ Stiglitz writes. ‘Its insistence on
Russia maintaining an overvalued currency and its supporting that with billions
of dollars ultimately crushed the economy.’23 Despite the unswerving fulfilment
of the recommendations of the Western experts, the promised economic growth
did not ensue.
Thus, at the time of the East Asia crisis, Russia was in a peculiar position.
It had an abundance of natural resources, but its government was poor. The
government was virtually giving away its valuable state assets, yet was unable to
provide pensions for the elderly or welfare payments for the poor. The government
was borrowing billions from the IMF, becoming increasingly indebted, while
the oligarchs, who had received such largesse from the government, were taking
billions out of the country. The IMF had encouraged the government to open
up its capital accounts, allowing a free flow of capital. The policy was supposed
to make the country more attractive for foreign investors; but it virtually was a
one-way door that facilitated a rush of money out of the country.24
The flight of capital and the decline of industry left the government without
money. The country’s leadership, which consciously served the oligarchs (and
which at times consisted of members of the oligarchy) did not see any great
tragedy in this. Some state spending, however, had still to be financed, especially
since this was demanded by business itself, seeking to enrich itself out of state
revenues whenever the slightest opportunity appeared. The state deficits were
covered by borrowing on both the external and internal markets. Russia’s
internal debt turned into a gigantic financial pyramid, the collapse of which
became only a question of time.
By the late 1990s the policies of the free market, pursued on a global scale
on the basis of the Washington Consensus, had led to their predictable result
– a world crisis of overproduction. This crisis began in the countries of East
Asia, to which a significant proportion of world industry had now migrated.
The contraction of output in Asia was accompanied by a growth of monetary
instability in the global economy, and by a fall in demand for oil. Both had
KEYNESIANISM RUSSIAN-STYLE
The collapse of the ruble, which demoralised the oligarchic elite, proved a
blessing for the economy. Imports fell rapidly, and Russian enterprises felt more
confident as the cheaper ruble increased their competitiveness. Meanwhile,
Western firms, seeing no possibility of exporting products to Russia but fearing
the loss of their markets, started investing money and transferring technology
in order to produce within the country. This spontaneous import substitution
brought a noticeable revival of industry. With the oligarchs in confusion and
the population embittered, President Yeltsin was left with no choice but to
appoint a government capable of implementing a real change of economic
course. The new Prime Minister was Yevgeny Primakov, with Yury Maslyukov
as his vice-premier in charge of the economy. Both were determined opponents
of neoliberalism.
Instead of struggling to maintain the ruble exchange rate, the new cabinet
set about stimulating production and developing the internal market. The huge
wage debts that had accumulated in the state sector began to be paid off. To
the amazement of the neoliberal experts, inflation grew much more slowly
than the increase in the volume of paper money. Prices on the market had
been unjustifiably high, and as cash appeared in people’s hands, prices even
started falling, adjusting their levels to meet effective demand. Industry in Russia
began to expand. The defence industries restored their output to some extent,
the lion’s share of the credit growth went into the stock market, contributing to its
unjustifiably rapid rise. Instead of inflation in the consumer market, there was inflation of
financial assets.25
This pumping-up of the economy with credit led to massive stock market
speculation, destabilising the world system. Governments that were faithful
to the Washington Consensus limited their spending, but no one took steps to
restrain credit and stock market speculation. Over ten years, paper money did
not become cheaper, but speculative financial capital grew out of all proportion
to the increase of production. The devalued ‘non-cash’ money could for the
time being be converted freely into perfectly valid cash. All that was needed was
some mechanism that would allow this to be done, and one such mechanism
was the rise of oil prices in 2000 and 2001. A sort of ‘inflationary overhang’ had
appeared in the economies of the West; now the ‘superfluous’ money poured
into the oil market. As this shift proceeded, the dollar ‘overhang’ collapsed.
Having become an ‘oil currency’, the ruble unexpectedly strengthened,
and a stream of cheap dollars poured into Russia, supporting the growth of
production and the illusion of prosperity. But this growth, which in 1999 and
2000 had shown impressive results, was extremely unstable. Enterprises resumed
production, but there was almost no investment. As Delyagin notes, the revival
of industrial production after the crisis ‘was in many respects “purchased” at
the cost of a deterioration of the situation in other areas, above all through
a fall in the real incomes of the population and a complete collapse of the
financial sector’.26
Recovering from the shock it experienced in 1998, the oligarchy quickly re-
established its position. Primakov’s government, with its Keynesian measures,
had effectively saved its political opponents. As soon as the improvement in the
economy became obvious, the oligarchy regained its self-confidence. A decision
by Yeltsin resulted in the Primakov government being sacked. Then in January
2000 a new president took office in the Kremlin – Vladimir Putin, who had
been chosen by Yeltsin as his heir.
The political project mapped out by the new administration was uncannily
reminiscent of the course selected in the early 1970s by Leonid Brezhnev.
While acutely aware, since the crash in 1998, of the weaknesses of the Russian
economy, the ruling groups had no intention of fundamentally altering it,
especially since Russian society, demoralised and confused by the changes of
the preceding years, posed no serious danger to the elite. So long as oil prices
favoured the country, Putin and his team could avoid taking any initiatives,
while at the same time convincing the people – and the members of the elite
themselves – that Russia was entering a new era of order and stability. At first
glance, everything seemed to be going well. The gold reserves of the central
bank were increasing, the foreign debt was being paid off, and industry was
continuing to grow, though at markedly slower rates.
Closer examination, however, revealed a darker side to this success. The
growth of industry was not linked to any serious investment. The new owners
were still using the equipment and technology bequeathed to them by the Soviet
state. All that was happening was that the production which had been sharply
curtailed in the 1990s was being resumed. Even here, the achievements were not
brilliant. In 2003, after four years of growth, the rate of utilisation of industrial
capacity was only 55 per cent. Only in the energy sector and metallurgy, the
leading areas of development, were the rates of utilisation better, at 79 per cent
and 70 per cent respectively.27
The Russian authorities considered one of their major achievements to be
the renewal of grain exports in 2002. While the Soviet Union had regularly
imported grain, the new post-Soviet Russia, despite having lost the grain-
growing provinces which had become part of the independent Ukraine and
Kazakhstan, was able to enter the world market as an exporter. This would
indeed have been an important success, had it not been for one thing: this
victory had been achieved not so much because of a sharp rise in output, but
rather because of a decline in internal consumption. The Moscow newspaper
Rodnaya Gazeta stated: ‘Our agriculture has returned to the hallowed old
model… of 1913. Russia is again sending abroad the “excess” grain from
undernourished provinces.’28
In Soviet times the main reason for the imports was a shortage of feed grain
for stock. The numbers of stock, which had fallen dramatically during the
collectivisation period, were restored only after the Second World War, and
with immense difficulty. During the years of neoliberal reform another massive
slaughter of stock began, exceeding even what had happened during the col-
lectivisation years. The areas sown diminished as well. The large cities did not
feel the effects of these developments, since the gap in supplies was immediately
filled by imports. But the countryside, the small towns and the poorest layers
of society felt the consequences immediately.
The Chief Sanitary Inspector of Russia Gennady Onishchenko has testified that the food
intake of Russians has fallen by a thousand calories from the figure of 3200 that was
projected during the well-fed 1980s. An authoritative state commission has acknowledged
that the main cause of high death rates is an inadequate and unbalanced diet – more
simply, malnutrition.29
Even at such a price, Russia was unable to consolidate its place on the world
grain market; in 2003 the exports fell sharply. But at the same time, Russia had
come to the fore as an arms exporter. Throughout the 1990s, experts close to
the government had explained the failure of the reforms on the basis that
the structure of production in the Soviet Union was weighted to an unusual degree in
favour of the defence sectors. Under the new economic conditions, such a serious collapse
was inevitable.30
The weakness of Russia’s position was revealed fully in the spring of 2003,
during the war in Iraq. This conflict, which had begun as a clash between the US
and the Arab world, culminated in a diplomatic stand-off between Washington
and a German-French coalition opposed to unleashing war. To the surprise of
many observers, and to its own considerable astonishment, the Putin adminis-
tration in the Kremlin came down strongly on the side of Germany. During the
first days of the Iraq conflict, Russian official declarations and the tone of the
television broadcasts reminded many people of the anti-American propaganda
of Soviet times. These harsh words, however, came not from the leaders of a
superpower but from the cautious leadership of a poor country looking around
constantly at its influential European neighbours.
The decisiveness of the Russian leadership was not the result of a clear grasp
of the country’s national interests, or of any considered strategy. During the
1990s a system had been established under which Russia depended politically
on the US, and economically on Germany. The importance of Germany is
obvious if we examine the structure of the investments that foreign capital had
made in Russia by the first years of the new century.
On 1 January 2003, according to official data, total foreign investments in
Russia amounted to $43.93 billion. German investments amounted to $8.15
billion, while the US held third place with $5.52 billion. Second place was held
by Cyprus, with $5.63 billion; it was through circulation in Cyprus that Russian
money was able to avoid taxes.31 It is noteworthy, meanwhile, that the German
investments were directed mainly into production, which cannot be said of the
operations by American capital in Russia. Still greater was the importance of
Germany for the Russian raw materials and energy sector, the bulk of whose
export production went to German buyers.
It was the US that dictated the political agenda to Russia, but among foreign
investors in Russia and the foreign partners of Russian firms, German capital
gradually came to occupy the leading positions. This system worked well so
long as Germany sought to remain inconspicuous in its international dealings,
and, at least verbally, expressed solidarity with the US. In the early years of the
new century, however, the unfolding crisis of the world system undermined this
precarious equilibrium. The situation grew more acute with the appearance on
the world market of a new global currency, the euro. As many scholars have
justly noted, the unification of European currencies (effectively on the basis of
the German mark) represented something more than an attempt at expansion
on the world financial market. There are abundant grounds for ‘regarding the
introduction of a single European currency as a geopolitical project’.32 After
the American-German contradictions surfaced, the Moscow leadership was
thrown into confusion. Once it became clear that Germany and France would
obtain a majority on the United Nations Security Council even without Russia,
President Putin made haste to issue a decisive declaration in order to prove to
the European partners that they needed him.
The Kremlin’s radicalism perplexed the Russian elite, and by the summer of
2003 Moscow was trying to go into reverse, doing its utmost to show its loyalty
to Washington. But as in previous world conflicts, Russia was not a free agent;
it was being squeezed between opposing blocs. The Russian market and Russian
resources were playing too important a role in Berlin’s European strategy. As
the political weakness and economic instability of European integration were
revealed, it became increasingly vital to consolidate a firm ‘core’ of a united
Europe. The global economic downturn that had begun with the new century
had placed the dominant neoliberal models in question. The competition
between capitals was growing more acute. The Cold War had finally ended,
and together with it, undisputed American leadership had vanished into the
past. The new European Union had entered into competition with the US,
and Russia in turn had become the raw materials base and geopolitical ‘rear’
of the European coalition. From the moment when the US set out to seize the
oil of Iraq and to bring the resources of the Middle East under its control,
the importance for Western Europe of Russian energy multiplied many times
over. It was not important that the oil extracted in Siberia and the far north
was expensive. It remained a global strategic resource.
As in the early twentieth century, Russia was being drawn into global rivalry,
not as an independent force but as a hostage country without the ability to
influence events. Compared to tsarist times, the position of the new Russia was
even weaker. The Russian elite had far less capacity for action; its self-confidence
was much weaker, and it enjoyed far less support within society.
AN UNFINISHED NATION
tsarist times. The St Petersburg empire, for all its peripheral character, had
nevertheless been capable of playing an independent role in world politics. The
new Russia which arose amid the ruins of the Soviet experiment had no such
ability. In a certain sense, it managed to synthesise all the worst traditions of both
the St Petersburg period and the tsarist era. It inherited the imperial mentality
without the empire, and the national inferiority complex without the enthusiasm
for social change. Within the new Russia an elite took shape that despised its own
country to a degree that took on comic elements. At least initially this elite was
consistently ‘defeatist’, in the sense that it was the failure of the Soviet Union
in the Cold War that ensured the elite access to new privileges and allowed it
to integrate itself into the world ruling class. This was an elite typical of those
that exist during restoration periods – self-satisfied, devoted to the search for
immediate pleasures, and irresponsible. Opposing it, however, was an opposition
that drew its inspiration from the darkest periods of Russian history and from
the most retrograde ideologies, both home-grown and imported. Uniting the
leaders of the official opposition was a sort of ideological compromise that
combined clericalism, nostalgia for the totalitarian aspects of the Soviet past,
ethnic nationalism and Islamophobia. Political discussion was reduced to
disputes between an elite that was incapable of modernising the country, and
an officially recognised ‘counter-elite’ that had no wish for modernisation.
This situation was extremely advantageous for the oligarchic capitalism that
triumphed in Russia in the 1990s. The situation persisted, however, not only
because it suited the authorities, but also thanks to the severe psychological
depression that gripped society after the catastrophe it had suffered. This
depression began slowly to be overcome only around the turn of the new
century. The years of economic growth, for all their limitations, did not pass
in vain. An indication of the changes was provided by the labour conflicts of
2002 and 2003, which above all affected the sectors that were among the most
‘globalised’ and integrated into the world economy, such as air transport and
the mining of nickel and rare metals. The new situation was recognised by the
press, in reports such as the following:
in Russia, thanks to the connivance of the authorities and the exceptional greed of the
property-owners, the conditions have arisen for the development of a genuine trade union
movement. The workers in the successful enterprises, understanding the scale of the profits
they are bringing their corporations, have shown a readiness to fight in order to raise their
social status.33
And among the middle class in Russia’s capital cities, left-wing views became
fashionable.34
By the end of 2003 it had become clear that the ‘stabilisation’ brought by
the high prices on the oil market would not last indefinitely. Putin’s associates
recognised this better than anyone. The Kremlin’s answer to the imminent
problems was to ‘tighten the screws’, increasing the degree of authoritarian-
ism. The system of ‘managed democracy’ became increasingly less democratic
and more managed. At the same time, blows were aimed at the oligarchic clans
that refused to accept the new rules (above all, at the company YUKOS, whose
leaders finished up in prison or abroad). This ‘struggle against the oligarchs’,
however, did not change the structure of the economy in any way, and neither
did it alter the character of Russia’s relations with the world system. In the best
national traditions, Russian capitalism transformed itself from oligarchic in
nature to bureaucratic, without ceasing to be backward and peripheral.
In the early 1990s the scientific intelligentsia had seen themselves as a potential
counter-elite, that might succeed the dying party bureaucracy. Individual members
of ‘educated society’ did in fact achieve impressive heights in government and
business, but most of the intelligentsia saw their position decline catastrophi-
cally. Alla Glinchikova notes that
Some perceived the liberal slogan of privatisation in the name of freedom, progress and the
overcoming of stagnation as a path to weakning and doing away with informational and
administrative inequality and privileges. Others, by contrast, saw it as a means of consolidating
inequality and privilege. Both elites put their stake on economic and technological change,
expecting positive results for themselves.35
It was more than obvious who prevailed in the 1990s, but how complete and
definitive this victory would be remained unclear. Russia’s peripheral integration
into the world economy, and the oligarchic model of social and political
organisation that corresponded to this integration, had brought the country
to such an acute crisis, and to such obvious and insoluble problems, that a new
round of social conflict was inevitable.
Russian society turned out to be too educated for the economy that arose in
Russia on the basis of the neoliberal reforms of the 1990s. Despite a dramatic
fall in living standards, Russia was ‘living beyond its means’, since the newly
established social system could not supply the population with even the
minimal conditions for a civilised existence. On the other hand, neither the
state bureaucracy nor the oligarchy could allow themselves to ‘take the reforms
to the logical limit’.
In the early 1990s, Russia experienced a social catastrophe, expressed in a
sharp fall of living standards for the majority of the population, accompanied
by an equally dramatic rise for the property-owning layers. The decline of
consumption on the internal market was the clearest indicator of the changes
that were occurring. In 2003 the liberal newspaper Novaya Gazeta reported that
in the 1980s, ‘consumer spending per citizen amounted to $500 per month. The
figure now is $60.’ According to data cited by the same newspaper, ‘a sum of
$1.5 trillion of Russia’s working capital’ had been ‘burned up by the “reforms”’.
These resources, it was reported, had been ‘siphoned off abroad’.36
In such conditions, not even the completely irresponsible elite that held power
in Russia at the beginning of the new century could risk a second catastrophe.
It was clear that the appeal for Russians to ‘live within their means’ signified
a demand for the final liquidation of all the social and cultural gains of the
twentieth century, gains dating not only from the Soviet period, but also from
the times of Witte and Stolypin. Post-Soviet Russia had finished up as a country
in which the majority of the population had a miserable standard of living,
sustained only through state subsidies and grants. The same also applied to the
existing level of education and qualifications of the workforce. The struggle
around the surviving elements of the systems of education and science took
on a drawn-out character, a sort of positional warfare. Attempts to overcome
the crisis of these systems invariably failed, but equally ineffectual were efforts
at the definitive ‘reform’ (that is, liquidation) of the systems, which had clearly
become ‘redundant’ for a peripheral economy. The question of reform of the
military was also left hanging.
In the early twenty-first century, Russia again faced a parting of the ways.
Ahead lay either a rapid new advance, aimed at overcoming the country’s
peripheral position in the world system, or renewed decline, fraught this time
with the decay of society and with national disintegration.
In the late 1980s and early 1990s, the propaganda of the triumphant restoration
argued persistently that the sacrifices made by the Soviet population during
the twentieth century had been pointless, and that their achievements had been
insignificant. The sacrifices were indeed monstrous, and by no means always
essential. But they were not pointless. The achievements of the Soviet period
were entirely real. This does not justify Stalinism, just as the changes that
occurred in Europe in response to the Napoleonic Wars do not, on the moral
plane, justify authoritarianism and aggression.
The tragedy is that the restoration has not in any way set right the consequences
of the crimes and errors committed by the revolutionary and postrevolutionary
regimes. It was the catastrophe of the 1990s that proved in hindsight the positive
significance of the Soviet experience. Paradoxically, it was the destruction of the
results of the Soviet modernisation during the period of neoliberal reforms that
really put the results of the twentieth century in question, and which threatened
to render pointless all the sacrifices that had been made. Objectively, therefore,
the actions of the reformers represented not the overcoming of the crimes of
Stalin, but an aggravation of them. To resurrect those who died in the gulag
is no longer possible. But to destroy most of what was created, and which was
paid for in blood, in millions of lives and in millions of mutilated fates – the
reformers proved fully capable of this.
The historical self-consciousness of Russians has consistently been centred
on searches for a ‘golden age’, for a splendid past. For the Muscovite tsardom,
this splendid past was Kievan Rus, and the Byzantine empire that became fused
with it into a single cultural myth. Peter the Great sought to cast out this myth,
turning for inspiration to the culture of the West. But his era itself became
a cultural myth for succeeding generations. In identical fashion, imperial St
Petersburg represented the lost golden age for many people in the Soviet period,
and after the collapse of the USSR the Soviet experience itself entered the
category of the ‘splendid past’. History was transformed into myth, which has
to be subjected to criticism at least so that its real roots can be understood.
At the same time, and even while rejecting mythological exaggerations,
one cannot help seeing something strikingly tragic in Russian history. The St
Petersburg period represented a 200-year-long attempt by the Russian elites to
occupy a fitting place in the world system, while playing by the prescribed rules.
Properly speaking, this attempt began not with the founding of St Petersburg,
but much earlier, with the policies of Ivan the Terrible – in effect, from the very
moment when the capitalist world system arose. All of this culminated in the
disaster of the First World War and in the revolution of 1917. The collapse of
tsarist Russia and the triumph of Bolshevism were in no way accidental. They
were prepared not only by the whole course of previous Russian history, but
also by the whole history of the world system.
323
INTRODUCTION
1. P. Chaadaev, Polnoe sobranie sochineniy i izbrannye pis’ma, vol. 1. Moscow, Nauka, 1991,
p. 330.
2. Ibid., p. 534.
3. Malaya sovetskaya entsiklopediya. Moscow, OGIZ RSFSR, 1939, p. 386.
4. Pravda, 12 January 1939.
5. M.N. Pokrovsky, Russkaya istoriya v samom szhatom ocherke (ot drevneyshikh vremen do
kontsa XIX stoletiya), parts 1 and 2, 7th edn. Moscow and Leningrad, GIZ, 1929, p. 3.
6. Samuel Huntington, The Clash of Civilizations. New York, Simon and Schuster, 1996.
7. N.Ya. Danilevsky, Rossiya i Evropa. Moscow, Izvestiya, 2003, p. 42. It is curious that in the
foreword to this edition of Danilevsky’s book his theories are directly counterposed to the
Marxist understanding of the world system. Meanwhile, the superiority of the ‘civilisation
approach’ is argued in extremely odd fashion. It turns out that the world system approach,
by revealing Russia’s peripheral character, arouses pessimism, while Danilevsky’s ideas
put Russians in an optimistic frame of mind. Theories of society, it seems, should not be
evaluated on the basis of how truthfully they explain reality, but according to the mood they
evoke in the reader. Meanwhile, it is not out of place to recall that pessimism and optimism
are subjective matters. World system theory does not in any way assert that the countries
of the periphery are doomed inevitably to dependence on the West. This theory merely
explains why these countries cannot solve their own problems without changing the world
system as a whole.
8. Ibid., p. 54.
9. Ibid., p. 45.
10. Ibid., p. 55.
11. Ibid., p. 50.
12. For a brilliant description of the Crusades as a clash of Western barbarism with Eastern
enlightenment, see Tariq Ali, The Clash of Fundamentalisms. Crusades, Jihads and
Modernity. London and New York, Verso, 2003.
13. Andre Gunder Frank, ReOrient. Berkeley, Los Angeles and London, University of
California Press, 1998.
14. Here we should recall the point made by Robert Brenner, one of Wallerstein’s main critics,
that it was agrarian capitalism, and not the rise of a new world system, that lay at the basis
of the early bourgeois revolutions.
15. Especially notable here is the work of William Robinson on the transnational bourgeoisie
(see, for example, his Transnational Conflicts: Central America, Social Change and
Globalization. London, Verso, 2003).
16. Within the framework of the school of world-system analysis, a discussion has unfolded
on ‘pure’ and ‘impure’ capitalism. While Rosa Luxemburg, like most of the later members
of this current, stresses the presence of ‘non-capitalist’ elements within the world system,
Wallerstein by contrast calls for all these relationships to be considered bourgeois on the
basis that they have been ‘inserted’ into capitalism. Such an approach fails to reveal the
actual contradiction of the system, which gains from the possibility of using unfree labour
and other ‘cheap’ methods of exploiting people and resources, while these relations on the
other hand represent a brake on the development of peripheral countries, placing the local
bourgeoisie in a notoriously ambiguous and weak position (as became clear in the course
of the revolutions of the twentieth century).
17. M. Pokrovsky, Ocherki po istorii revolyutsionnogo dvizheniya v Rossii XIX i XX vv. Moscow
and Leningrad, GIZ, 1927, p. 10.
326
18. Ibid., p. 8.
19. Among Marxists, Kondratyev’s theory found both ardent supporters and categorical
opponents. Most Soviet economists of the 1920s met it with fixed bayonets; a significant
reason for this had to do with Kondratyev’s populist past. Like the other outstanding
economist of the time, A.V. Chayanov, Kondratyev could not be considered fully at home
among the Marxists in ideological and methodological terms. In Western Marxism, by
contrast, the theory of long waves found support, influencing the ideas of Immanuel
Wallerstein and Ernest Mandel. Kondratyev perished in the Stalinist repressions, and was
finally rehabilitated in the Soviet Union in the mid 1980s. The prominent Soviet economist
Stanislav Menshikov, calling on his colleagues to arm themselves with the theory of long
waves, argued that ‘the roots of Kondratyev’s theory of long waves lie in Marxism’ (S.M.
Menshikov and L.A. Klimenko, Dlinnye volny v ekonomike. Kogda obshchestvo menyaet
kozhu. Moscow, Mezhdunarodnye Otnosheniya, 1989, p. 23). One can agree with this
only in part. Kondratyev’s conclusions were based on his summarising of empirical
material, something that is perfectly possible without the help of Marxism. Meanwhile,
an explanation of the nature of long waves does indeed need to be incorporated into the
Marxist theoretical arsenal.
20. Even if we suppose that all the people born in a particular period have something in
common, we are nevertheless unable to explain what this ‘something’ is, or to predict the
future of the people concerned. To refer to the ‘influence of the stars’ is merely to make a
spectacle of our impotence. Just as unsustainable is the attempt by Andre Gunder Frank to
detect Kondratyev cycles in remote history. The economies of ancient Egypt or China were
unquestionably cyclical, but the meaning of these cycles should be understood not according
to Kondratyev, but in line with the views of the biblical Joseph; agrarian production
depended on natural climatic cycles, which beset society as if from outside, in the form of
floods, droughts, overpopulation, the exhaustion of soils and other calamities summarised
in the marvellous image of the lean cows. By contrast, Kondratyev’s cycles are determined
by the internal logic of capitalist development, by the exhaustion of the potential of the
dominant technological model, by the limits to the development of the market, and by the
overaccumulation of capital. Even though Kondratyev’s cycles are uneven in duration (and
because of this, make chronological forecasts meaningless), an especially important point is
that Kondratyev himself saw the extent to which the transition from one cycle to another is
linked to major upheavals.
21. N.D. Kondratyev, Problemy ekonomicheskoy dinamiki. Moscow, Ekonomika, 1989, pp. 199–
200.
22. Menshikov and Klimenko, Dlinnye volny v ekonomike, p. 24.
23. Ibid., p. 33.
24. See Ibid.
25. Kondratyev, Problemy ekonomicheskoy dinamiki, p. 200.
26. Ibid., p. 211.
27. Ibid., p. 219.
28. Ibid.
29. Ibid., p. 207
30. Ibid., p. 205.
31. Oprichnina was a term for both a regime of direct (emergency) rule, introduced by Ivan the
Terrible in some Russian provinces which were exempt from traditional law, and for the
organisation formed to actually run these provinces, in practice through intimidation and
terror, recognising no rules or limits to the tsar’s power.
32. Notes on Russia by Marquis de Custin. Moscow, 1990, p. 127.
CHAPTER 1
1. It is curious that Russian historians, relying above all on the data from the chronicles, should
assign fundamental importance to the trade with Byzantium. Western authors, basing
themselves on Russian sources, are also convinced that all the trade was with Constantinople,
while ‘relations with the Orient were sporadic and isolated’ (D. MacKenzie and M.W. Curran,
A History of Russia, the Soviet Union and Beyond, 4th edn. Belmont, Calif., Dorsey Press,
1993, p. 43). Meanwhile Scandinavian scholars, relying on archaeological data, have come
to the directly opposite conclusion that the trading relations of Rus were ‘with Muslims
rather than Byzantines’ (B. Sawyer and P. Sawyer, Medieval Scandinavia. From Conversion
to Reformation, circa 800–1500. Minneapolis and London, University of Minnesota Press,
1993, p. 146). The point is that Byzantine coins are very rare in Scandinavian hoards, while
Arab ones are numerous. Large numbers of Arab coins have also been found in Russian
hoards of the same period. The truth is obviously that the ‘Arab’ and ‘Greek’ commercial
currents reinforced one another.
2. N.M. Karamzin, Istoriya gosudarstva rossiyskogo, Book 1, vols I–IV, St Petersburg, Zolotoy
Vek, 1997, p. 98; V.P. Adrianova-Perets (ed.), Povest’ vremmenykh let, 2nd edn. St Petersburg,
Nauka, 1996, p. 13.
3. Karamzin, Istoriya gosudarstva rossiyskogo, Book 1, p. 98.
4. S.M. Solovyev, Sochineniya, Book 1. Moscow, Mysl’, 1988, pp. 240–1.
5. M. Pokrovsky, with N.M. Nikol’sky and V.N. Storozhev, Russkaya istoriya s drevneyshikh
vremen, vol. 1. Moscow, Mir, 1913, pp. 109, 95. The importance of trade to Kievan Rus
has been the topic of heated historical discussions. Klyuchevsky assigned it fundamental
significance, while in the Soviet period the accepted approach was to stress the agrarian
nature of the Old Russian economy. For Soviet authors, it was important to demonstrate
the similarity between Rus and Western Europe, and so once again to prove the unity of the
historical process. The question is not, in fact, how widespread agriculture was in Kievan
Rus (there is no doubt that it was the land that fed the bulk of the population), but the
relative importance of trade and agriculture for the formation of the state. On its own,
medieval agriculture simply could not have produced a surplus product in the quantities
needed to support wealthy cities and the powerful Kievan state over a prolonged period.
It is significant that in polemicising with Klyuchevsky, the leading Soviet scholar of the
Kievan period, B.D. Grekov, did not deny the importance of trade, but merely argued – in
thoroughly convincing fashion – that Russia possessed relatively developed agriculture and
stock-raising. Meanwhile, Grekov acknowledged that ‘the wealth of princes, boyars and
merchants did not lie in grain’ (B.D. Grekov, Kievskaya Rus’, Moscow and Leningrad, GIPL,
1953, p. 54). The American historians MacKenzie and Curran also remark that ‘the bulk of
the population derived a livelihood from agriculture’, while trade was vitally important for
‘princes and their retinues’ (MacKenzie and Curran, A History of Russia, p. 47).
6. B.A. Rybakov, Kievskaya Rus’ i russkie knyazhestva XII–XIII vv. Moscow, Nauka, 1982,
p. 5.
7. Arab sources record of the Volga Bulgars that in 922 they ‘had officially adopted Islam, were
pursuing a settled way of life, lived in towns, and as well as occupying themselves with trade,
were also engaged in agriculture’ (N.I. Ashmarin, Bolgary i chuvashi. Kazan, 1902, p. 119).
The case with the Khazars is somewhat more complex. The French historian René Grousset
writes: ‘Although they never adopted a sedentary or agricultural way of life, as sometimes
said, they had built a coherent state, enriched by trade and with a relatively high culture,
thanks to their contacts with Byzantium and with the Arab world’ (R. Grousset, The Empire
of the Steppes: A History of Central Asia. New Brunswick, Rutgers University Press, 1991,
p. 180). Arab sources, however, testify to the Khazars making the transition from herding
to agriculture. If early references to the Khazars describe them as herders, in later ones it is
stated that in spring the population of the largest Khazar city, Itil, ‘went out into the fields
to perform agricultural work’ (Mezhdunarodnye svyazi Rossii do XVII veka. Moscow, AN
SSSR, 1961, p. 45). The question, however, is not simply one of how life in Itil was organised.
It is impossible to construct an enduring state without a settled population. Meanwhile, it is
of course true that in medieval states, beginning with those of the early Arabs and Turks, the
agrarian population were not always members of the ruling national group.
8. See M.N. Tikhomirov, Drevnerusskie goroda. Moscow, Izdatel’stvo politicheskoi literatury,
1956.
9. It is indicative that despite using ‘Marxist’ terminology, most historians of the Soviet period
showed little interest in the question of how the economy of Kievan Rus functioned; of
how production was organised; and of what technologies were employed. Grekov devotes
particular attention only to the organisation of the feudal estates, though he acknowledges
that it was not to these estates that the princes and boyars owed their wealth. Trade and
manufacturing receive almost no attention, and culture is examined at more length than
technology. N.Ya. Froyanov, while providing detailed studies of the role of the princes, of
the organisation of the armed retainers and of the situation of the peasants, has nothing
whatsoever to say about the merchants. In describing the medieval cities, he fails to touch
on either trade or manufacturing, limiting himself to the political role of the cities and their
links with the countryside. Economic and technological development is a matter of even
greater indifference to I.N. Danilevsky, who is writing in the post-Soviet period, and hence
is free from even the ritual requirements of ‘Marxism’.
10. A.V. Nazdratenko, Drevnyaya Rus’ na mezhdunarodnykh putyakh. Mezhdistsiplinarnye
ocherki kul’turnykh, torgovykh, politicheskikh svyazey IX–XII vv. Moscow, Yazyki Russkoy
Kul’tury, 2001, p. 78.
11. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 1, p. 104.
12. Ibid., p. 119.
13. Sawyer and Sawyer, Medieval Scandinavia, p. 149.
14. G.G. Litavrin, Vizantiya i slavyane. St Petersburg, Aletaya, 1999, p. 442.
15. V.O. Klyuchevsky, Sochineniya. Moscow, Mysl’, 1988, vol. 1, p. 167.
16. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 1, p. 109.
17. Klyuchevsky, Sochineniya, vol. 1, p. 168.
18. Polnoe sobranie russkikh letopisey, vol. 2, St Petersburg, 1908, p. 97.
19. See Solovyev, Sochineniya, Book 1, p. 695.
20. Litavrin, Vizantiya i slavyane, p. 425.
21. Cited in Solovyev, Sochineniya, Book 1, p. 154.
22. Karamzin, Istoriya gosudarstva rossiyskogo, Book 1, p. 136.
23. Russkiy istoricheskiy sbornik, vol. VI, Moscow, 1843, p. 357.
24. Rybakov, Kievskaya Rus’ i russkie knyazhestva XII–XIII vv., p. 382. See also G.I. Os’kin and
N.N. Marichev, Izuchenie boevogo proshlogo nashey Rodiny. Moscow, Prosvechenie, 1971.
25. Quoted in Solovyev, Sochineniya, Book 1, pp. 154–5.
26. Ibid., p. 155.
27. See Rybakov, Kievskaya Rus’ i russkie knyazhestva XII–XIII vv., pp. 380–3.
28. See M.I. Artamonov, Istoriya Khazar. St Petersburg, Lan’, 2001.
29. Grousset, The Empire of the Steppes, p. 181.
30. Artamonov, Istoriya Khazar, p. 361. According to Artamonov, it was the adoption of
Judaism which resulted in the decline of Khazaria, since the hereditary religion of the
‘chosen people’ could not unite Khazar society. ‘The Khazar Jews failed to take account of
the fact that religion acts as a powerful factor for social unification even when the economic
base has no need of it’ (ibid., p. 624). Here, the principles of national consolidation which
emerged in Europe in the modern era appear to Artamonov to be self-evident and universal.
In fact, these principles have nothing in common with the ethno-political system of the
medieval East, where religious and ethnic diversity did nothing to impede the founding and
development of empires. Rus, which defeated the Khazars, was also a heterogeneous society.
The decline of Khazaria was predetermined by the fundamental inequality of forces in the
struggle which the khanate was forced to wage simultaneously against Kiev, Byzantium and
the Turkic tribes.
31. Ibid., p. 364.
32. Ibid., p. 586.
33. Ibid., p. 587.
34. Grousset, The Empire of the Steppes, p. 182.
35. Quoted in Sawyer and Sawyer, Medieval Scandinavia, p. 148.
36. Karamzin, Istoriya gosudarstva rossiyskogo, Book 1, p. 145.
37. Quoted in A.L. Yakobson, Srednevekoviy Krym. Moscow and Leningrad, Nauka, 1964,
p. 55.
38. The Scandinavian name for Rus, Gardarika, means ‘land of fortresses’, or ‘land of towns’.
See A. Grishin-Almazov, Zolotoy vek ili neskol’ko statey po istorii Kievskoy Rusi. Moscow,
1998, p. 73.
39. L.V. Zvorikin, N.I. Os’mova, V.I. Chernyshev and S.V. Shukhardin, Istoriya tekhniki.
Moscow, Sotsekgiz, 1962, p. 66.
40. See M.N. Tikhomirov, Drevnerusskie goroda. Moscow, Gospolitizdat, 1956; Mezhdunarodnye
svyazi Rossii do XVII veka. Tikhomirov stresses that by no means all towns were located
on trading routes; some were on the sites of old tribal centres. This, however, does not
alter the general picture. The towns ensured military and administrative control over the
rural population, that is, the extraction of the surplus product that was indispensable for
maintaining the commercial economy of Kievan Rus. As a rule, the rise of towns in the
absence of trade was inconceivable during the Middle Ages, whether in Russia or in Western
Europe.
41. N.Ya. Danilevsky, Drevnyaya Rus’ glazami sovremennikov i potomkov (IX–XII vv.). Moscow,
1998, p. 84.
42. T.M. Kalinina, Drevnya Rus’ i strany Vostoka v X v. Srednevekovye arabo-persidskie istochniki
o Rusi. Moscow, Otkrytoe Obshchestvo, 1976, p. 15.
43. Ibid., p. 17.
44. C. Brinton, J.B. Christopher and R.L. Wolf, A History of Civilization. Volume 1, Prehistory
to 1715. Englewood Cliffs, NJ, Prentice-Hall, 1956. Here the American authors attribute the
development of the market in Russia exclusively to the influx of Byzantine silver. As we see
from other sources, this is not entirely correct. More significant is the fact that the authors
follow Russian historians in ascribing the subsequent decline of Rus to Byzantine influences
and to the Tatar invasion.
45. Noting the large number of Arab coins that arrived in the Viking lands from Rus, P. Sawyer
remarks that this is not necessarily evidence of trade; the coins might simply have been
stolen. This, however, cannot explain why the flow of silver from Rus was so marked during
a period when there were no major wars between Slavs and Scandinavians. The robbery of
traders was commonplace in medieval Europe, but even more typical was robbery for the
sake of trade, as for example when the peoples of the north were robbed so that their furs
could be sold at a profit in the south. Moreover, the traders did not carry large amounts
of silver with them. The only way to seize large numbers of coins at any one time was by
capturing a town. Russian towns were well fortified (old Ladoga already had stone walls
in 860), and on the whole, neither Russian nor Scandinavian sources record the capture
of Russian towns by Vikings in the tenth and eleventh centuries. More credible is Sawyer’s
suggestion that the silver was ‘the pay of mercenaries’ (P. H. Sawyer, Kings and Vikings.
London and New York, Methuen, 1982, p. 113). Byzantine coins reached the north in
similar fashion, but it is important to recall that in Rus, unlike in Byzantium, the Vikings
were not only mercenaries but also part of the local feudal elite. Consequently they received
not only wages, but also a share of wartime plunder, and a portion of the various feudal
dues and taxes.
46. V.L. Yanin, Denezhno-vesovye sistemy russkogo srednevekov’ya. Moscow, 1956, p. 293.
47. Nazdratenko, Drevnyaya Rus’ na mezhdunarodnykh putyakh. Mezhdistsiplinarnye ocherki
kul’turnykh, torgovykh, politicheskikh svyazey IX–XII vv., p. 113.
48. See Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 1.
49. Karamzin, Istoriya gosudarstva rossiyskogo, Book 1, p. 125.
50. See V.N. Smirnov, Ekonomicheskie svyazi Drevney Rusi s Vizantiey i Severnym
Prichernomor’em v VIII–XV v. Leningrad, 1980, p. 8.
51. Yakobson, Srednevekoviy Krym, p. 77.
52. Artamonov, Istoriya Khazar, p. 609.
53. Solovyev, Sochineniya, Book 1, p. 243.
54. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 1, p. 97.
CHAPTER 2
1. N.M. Karamzin, Istoriya gosudarstva rossiyskogo, Book 2. St Petersburg, Zoloty Vek, 1997,
pp. 196–7.
2. Ibid., p. 197.
3. L.V. Zvorykin, N.I. Os’mova, V.I. Chernyshev and S.V. Shukhardin, Istoriya tekhniki.
Moscow, Izdatel’stvo sotsialno-ekonomicheskoy literatury, 1962, p. 64.
4. M. Baring, The Russian People. London, Methuen & Co., 1911, p. 90.
5. K. Marx, Secret Diplomatic History of the Eighteenth Century, and the Story of the Life of
Lord Palmerston. Edited with an introduction by L. Hutchinson. London, Lawrence and
Wishart, 1969, p. 121.
6. See Karamzin, Istoriya gosudarstva rossiyskogo, Book 2; M. Pokrovsky, with N.M. Nikol’sky
and V.N. Storozhez, Russkaya istoriya s drevneyshikh vremen, vol. 1. Moscow, Mir, 1913.
7. N.M. Karamzin, Istoriya gosudarstva rossiyskogo, Book 1. St Petersburg, Zoloty Vek, 1997,
p. 318.
8. Khristianskiy mir i ‘Velikaya mongol’skaya imperiya’. Materialy frantsiskanskoy missii 1245
goda. St Petersburg, Evrasiya, 2002, p. 278. For a full translation of the report by Giovanni
de Piano Carpini, see G. Del’ Plano Kapini, Istoriya mongolov. G. de Rubruk, Puteshestvie v
vostochnye strany. Moscow, Kniga Marko Polo, 1997.
9. Khristianskiy mir i ‘Velikaya mongol’skaya imperiya’. Materialy frantsiskanskoy, p. 381. See
also Drevneyshie gosudarstva na territorii SSSR. Materialy i issledovaniya. 1986. Moscow,
Nauka, 1988, pp. 207–9.
10. Khristianskiy mir i ‘Velikaya mongol’skaya imperiya’. Materialy frantsiskanskoy, p. 278.
See also P. Pelliot, Recherches sur les Chrétiens d’Asie Centrale et d’Extr me-Orient. Paris,
Fondation Singer-Polignac, 1973, pp. 73–4; Drevneyshie gosudarstva na territorii SSSR.
1987. Moscow, Nauka, 1989, pp. 302–3.
11. R. Grousset, The Empire of the Steppes: A History of Central Asia. New Brunswick, Rutgers
University Press, 1991, p. 267.
12. D. MacKenzie and M.W. Curran, A History of Russia, the Soviet Union and Beyond, 4th
edn, Belmont, Calif., Dorsey Press, 1993, p. 81.
13. See R. Hilton (ed.), The Transition from Feudalism to Capitalism. London, Verso, 1992,
p. 161.
14. J. Le Goff, Tsivilizatsiya srednevekovogo Zapada. Moscow, Progress-Akademiya, 1992,
p. 103.
15. Karamzin, Istoriya gosudarstva rossiyskogo, Book 1, p. 584.
16. K.O. Morgan (ed.), The Oxford History of Britain. Oxford and New York, Oxford University
Press, 1989, pp. 187, 188.
17. R. Strong, The History of Britain. London, 1996, p. 107.
18. Henry Knighton’s chronicle, cited in ibid., pp. 106–7.
19. Morgan, The Oxford History of Britain, p. 187.
20. Karamzin, Istoriya gosudarstva rossiyskogo, Book 2, p. 203.
21. Znamya, 1988, no. 8, p. 166.
22. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 1, p. 221.
23. M. Pokrovsky, Russkaya istoriya v samom szhatom ocherke (ot drevneyshikh vremen do
kontsa XIX stoletiya), parts 1 and 2, 7th edn. Moscow and Leningrad, GIZ, 1929, p. 33.
24. Karamzin, Istoriya gosudarstva rossiyskogo, Book 2, pp. 201–2.
25. In the first chapter of his narrative, Rubruck tells of Surozh (also known as Sudak or
Soldaiya): ‘All the merchants come there, both those coming from Turkey and heading for
the northern countries, and also those coming back from Russia and the northern countries,
and wanting to cross into Turkey. Some bring ermine and squirrel skins, and other precious
furs, while others bring cotton cloth, fustian, silk materials and sweet-scented roots’ (Kapini,
Istoriya mongalov. G. de Rubruk, p. 89).
26. See V.N. Smirnov, Ekonomicheskie svyazi Drevney Rusi s Vizantiey i Severnym
Prichernomor’em v VIII–XV v. Leningrad, 1980, p. 11.
27. Mezhdunarodnye svyazi Rossii do XVII veka. Moscow, AN SSSR, 1961, p. 63.
28. See Kapini, Istoriya mongalov. G. de Rubruk, pp. 134–5, 139–40. See also Grousset, The
Empire of the Steppes, pp. 276–7.
29. The thesis that identifies the Tatar yoke as the cause of backwardness is appearing less and
less convincing even to ‘Westerniser’ historians who continue to think within the framework
of the old ‘corrupting Asiatic influence’ paradigm. A search is therefore beginning to be
made for ‘eastern-Asiatic causes’ already present in pre-Tatar Rus. The ‘flaw’ of Kievan
Rus is seen in the fact that in the time of Prince Ryurik or Prince Vladimir a strong state
existed there along with ‘collective feudal property’, while in the West ‘the development of
individual feudal property was apparent’ (Aktual’naya istoriya: Novye problemy i podkhody,
Samara, SAMGU, 1999, p. 25). It is clear that everything ‘collective’ and ‘Asiatic’ is seen as
bad, while the ‘individual’ is identical to the ‘European’, and is good. The trouble is that
such writers compare ninth-century Rus with France in the fourteenth century. If we take
the Carolingian empire, which existed in the same historical era as the Kievan state, we
find that there, as well, feudalism was developing on the basis of state power and collective
property. Moreover, feudalism could not as a matter of principle develop on any other basis,
since feudal relations took shape on the basis of the gradual ‘privatisation’ of administrative
authority by the tribal elite – by the margraves in Carolingian Europe, and by the princes
and boyars in Rus.
30. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 1, p. 140.
31. See I.G. Spassky, Russkaya monetnaya sistema, Leningrad, Avrora, 1970, p. 60.
32. See E.A. Rybina, Arkheologicheskie ocherki istorii novgorodskoy torgovli X–XIV vv. Moscow,
MGU, 1978; Spassky, Russkaya monetnaya sistema; A. Attman, The Russian and Polish
Markets in International Trade, 1500–1650. Gotheborg, Institute of Economic History,
1973.
33. Spassky, Russkaya monetnaya sistema, p. 62.
34. G.G. Litavrin, Vizantiya i slavyane. St Petersburg, Aletaya, 1999, p. 513.
35. See ibid., p. 517.
36. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 1, p. 148.
37. I.P. Magidovich and V.I. Magidovich, Istoriya otkrytiya i issledovaniya Evropy. Moscow,
Mysl’, 1970, p. 155.
38. Ibid.
39. See B. Sawyer and P. Sawyer, Medieval Scandinavia. From Conversion to Reformation, circa
800–1500. Minneapolis and London, University of Minnesota Press, 1993, p. 161.
40. German purchases in Novgorod began earlier than in Scandinavia. In the sixteenth century,
according to archaeological evidence, German coins first appeared in Novgorod, and only
from there spread further north (see P. Sawyer, Kings and Vikings. London and New York,
Methuen, 1982). With regard to the Novgorodians, however, the role of the German
merchants was already quite different; unlike the Scandinavians and Arabs, they arrived
with both weapons and cash simultaneously, and hence acted as a dominant force.
41. Ibid., pp. 158–9.
42. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 1, p. 143.
CHAPTER 3
CHAPTER 4
1. N.M. Karamzin, Istoriya gosudarstva rossiyskogo, Book 1. St Petersburg, Zoloty Vek, 1997,
p. 531.
2. M. Pokrovsky, with N.M. Nikol’sky and V.N. Storozhez, Russkaya istoriya s drevneyshikh
vremen, vol. 2. Moscow, Mir, 1913, p. 77.
3. Cited in T.S. Willan, The Early History of the Russia Company, 1553–1603. Manchester,
Manchester University Press, 1956, pp. 2–3.
4. Ibid., p. 4.
5. Ibid.
6. Perhaps influenced by Chancellor’s expedition, Tsar Ivan after a period sent his own
expedition to China, but by a land route. In 1567 he dispatched the Cossack ataman Ivan
Petrov with a letter ‘to unknown peoples’. Together with the Cossack Burkash Yelichev,
Petrov travelled from the Urals to Beijing, in Mongolia receiving a letter granting him
passage through the ‘iron gates’ of the Chinese wall. He later compiled a description of the
lands he had seen.
7. I. Lyubimenko, Istoriya torgovykh snosheniy Rossii s Angliey, vol. 1: XVI vek. Yuryev, 1912,
p. 37.
8. Drevnyaya Rus’ i slavyane, Moscow, Nauka, 1978, p. 312.
9. Lyubimenko, Istoriya torgovykh snosheniy Rossii s Angliey, vol. 1, p. 63.
10. I.P. Magidovich and V.I. Magidovich, Istoriya otkrytiya i issledovaniya Evropy. Moscow,
Mysl’, 1970, p. 178.
11. Willan, The Early History of the Russia Company, p. 54.
12. Cited in ibid., p. 14.
13. Ibid., p. 40.
14. L.I. Yunusova, Torgovaya ekspansiya Anglii v basseyne Kaspiya v pervoy polovine XVIII
veka. Baku, AN AzSSR, 1988, p. 29.
15. N. Kostomarov, Ocherk torgovli Moskovskogo gosudarstva v XVI i XVII stoletiyakh, 2nd
edn. St Petersburg, 1889, p. 24.
16. See A.S. Samoylo, ‘Proval popytki angliyskoy kompanii zakhvatit’ russkiy rynok v XVI i
pervoy polovine XVII veka’, Uchenye zapiski Moskovskogo oblastnogo pedagogicheskogo
instituta, vol. 22, 1955; N.T. Nakshidze, Russko-angliyskie otnosheniya vo vtoroy polovine
XVI veka. Tbilisi, 1956; A.I. Ivanov, ‘K voprosu o nachal’nom etape anglo-gollandskogo
torgovogo sopernichestva v Rossii’, Uchenye zapiski Komi gosudarstvennogo pedagogicheskogo
instituta, vol. 34. Syktyvkar, 1968. There is also a good deal that is ironic about the changes
in the position expressed by I. Lyubimenko. In her pre-revolutionary works she takes a
very positive view of the activity of the English in Russia in the sixteenth and seventeenth
centuries. In her works of the Stalinist period, however, she characterises the same actions
as attempts by colonisers to seize the country. (See E.A. Kosminsky and Ya.A. Levitsky
(eds), Angliyskaya burzhuaznaya revolyutsiya XVII veka. Moscow, Izdatel’stvo Akademii
Nauk SSSR, 1954, p. 2.).
17. Ivanov, ‘K voprosu o nachal’nom etape anglo-gollandskogo torgovogo sopernichestva
v Rossii’, p. 83; Nakshidze, Russko-angliyskie otnosheniya vo vtoroy polovine XVI veka,
pp. 153–4.
18. See Lyubimenko, Istoriya torgovykh snosheniy Rossii s Angliey, vol. 1, pp. 64–6.
19. Ibid., p. 98.
20. Kostomarov, Ocherk torgovli Moskovskogo gosudarstva v XVI i XVII stoletiyakh, p. 37.
21. Ibid., p. 33.
22. See Lyubimenko, Istoriya torgovykh snosheniy Rossii s Angliey, vol. 1, pp. 54–5.
23. Ibid., p. 57.
24. S.F. Platonov, Moskva i Zapad v XVI–XVII vekakh. Leningrad, Seyatel’, 1925, p. 26.
25. See Ibid.
26. N.M. Karamzin, Istoriya gosudarstva rossiyskogo, Book 2. St Petersburg, Zoloty Vek, 1997,
p. 672.
27. Lyubimenko, Istoriya torgovykh snosheniy Rossii s Angliey, vol. 1, p. 36.
28. Mezhdunarodnye svyazi Rossii do XVII veka. Moscow, AN SSSR, 1961, p. 442.
29. A. Attman, The Russian and Polish Markets in International Trade, 1550–1650. Göteborg,
Institute of Economic History, 1973, p. 6. Other Western historians also recognise the
enormous role played by deliveries of strategic raw materials. See C. Brinton, J.B. Christopher
and R.L. Wolf, A History of Civilization. Volume 1, Prehistory to 1715. Englewood Cliffs,
NJ, Prentice-Hall, 1956, p. 413.
30. Willan, The Early History of the Russia Company, pp. 280–1.
31. Cited in Lyubimenko, Istoriya torgovykh snosheniy Rossii s Angliey, vol. 1, p. 87.
32. Willan, The Early History of the Russia Company, p. 281.
33. Lyubimenko, Istoriya torgovykh snosheniy Rossii s Angliey, vol. 1, p. 97.
34. Ibid., p. 115.
35. Ibid., p. 130. See also Willan, The Early History of the Russia Company, p. 14.
36. Uchenye zapiski Komi gosudarstvennogo pedagogicheskogo instituta, vol. 11. Syktyvkar,
1963, p. 143.
37. Lyubimenko, Istoriya torgovykh snosheniy Rossii s Angliey, vol. 1, pp. 80–1.
38. For a more detailed treatment, see Attman, The Russian and Polish Markets in International
Trade, p. 25. Attman notes that until the Livonian War most of Novgorod’s exports went
through Revel, and that, in essence, Revel had grown and flourished as a transit port for
Novgorod (see p. 35).
39. See I. Wallerstein, The Modern World System I. San Diego, etc., Academic Press, 1974,
pp. 315, 319.
40. Attman, The Russian and Polish Markets in International Trade, p. 160.
41. Wallerstein considers that the policies of Ivan the Terrible helped the Russian bourgeoisie
and monarchy to avoid ‘at least for the moment, the fate of their Polish counterparts’
(Wallerstein, The Modern World System I, p. 319). The paradox is that Russia and Poland
both laid claim to one and the same place in the world system, and in this sense the failure
of the tsar to conquer Livonia can be seen with hindsight as a stroke of good fortune. In
reality, however, the military defeats suffered by Moscow in no way isolated it from the world
system, but merely forced it to become integrated on less favourable terms. Meanwhile, the
struggle between Poland and Russia for a place in the world system continued until Poland
disappeared from the map of Europe.
42. W. Kirchner, Commercial Relations Between Russia and Europe, 1400–1800. Bloomington,
Indiana University Press, 1966, p. 11.
43. Ibid., pp. 70, 77.
44. Attman notes that throughout the sixteenth and seventeenth centuries, the Vyborg trade
was a matter of concern to Swedish kings. They deliberately pursued policies aimed at
directing Russian trade through Swedish ports. In 1550, Gustav Vasa prepared a study of
the Russian market designed to serve this end. In 1640, the Swedish Peter Loofeldt, resident
in Moscow, prepared a new study in which he turned his attention to the growing activity
of the English and Dutch in Arkhangelsk, and suggested measures for strengthening the
Swedish position in the Russian market.
45. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 2, p. 108.
46. Ibid., p. 109.
47. R.G. Skrynnikov, Ivan Groznyy. Moscow, Nauka, 1983, p. 101.
48. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 2, p. 111.
49. S.F. Platonov, Ocherki po istorii smuty v Moskovskom gosudarstve XVI–XVII vekov. St
Petersburg, 1910, p. 141.
50. Ibid., p. 140.
51. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 2, p. 115.
52. Quoted in Skrynnikov, Ivan Groznyy, p. 170.
53. Ibid.
54. Ibid., p. 79.
55. Skrynnikov, Ivan Groznyy, p. 152.
56. See Willan, The Early History of the Russia Company, pp. 80–110.
57. Lyubimenko, Istoriya torgovykh snosheniy Rossii s Angliey, vol. 1, p. 44. T.S. Willan and
other writers share this point of view.
58. In popular historical literature, the assertion is often made that the tsar sought the hand of
Elizabeth herself. However, there is nothing in the documentary record to confirm this.
59. J.W. Veluwenkamp, Archangel. Amsterdam, Uitgeverij Balans, 2000.
60. Kostomarov, Ocherk torgovli Moskovskogo gosudarstva v XVI i XVII stoletiyakh, p. 37.
61. A.D. Kuzmichev and I.N. Shapkin, Otechestvennoe predprinimatel’stvo. Ocherki Istorii,
Moscow, Progress-Akademiya, 1995, p. 25.
62. Ivanov, ‘K voprosu o nachal’nom etape anglo-gollandskogo torgovogo sopernichestva v
Rossii’, p. 103.
63. Lyubimenko, Istoriya torgovykh snosheniy Rossii s Angliey, vol. 1, p. 65.
64. Ibid., p. 48.
65. Mezhdunarodnye svyazi Rossii do XVII veka, p. 442.
CHAPTER 5
20. A. Attman, The Russian and Polish Markets in International Trade, 1550–1650. Göteborg,
Institute of Economic History, 1973, p. 183.
21. S.F. Platonov, Moskva i Zapad v XVI–XVII vekakh. Leningrad, Seyatel’, 1925, pp. 57–8.
22. Kuzmichev and Shapkin, Otechestvennoe predprinimatel’stvo. Ocherki Istorii, p. 21.
23. R. Hellie, The Economy and Material Culture of Russia, p. 641.
24. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 2, p. 290.
25. S.M. Solovyev, Sochineniya, Book 5, Moscow, Mysl’, 1988, p. 459.
26. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 2, p. 302.
27. See S.G. Strumilin, Izbrannye proizvedeniya. Istoriya chernoy metallurgii v SSSR.. Moscow,
Nauka, 1967, p. 93.
28. See Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 2, p. 273.
29. Lyubimenko, ‘Moskovsky ryinok, kak arena bor’by Gollandii s Angliyey’, p. 17.
30. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 2, pp. 302–3.
CHAPTER 6
1. R. Blackburn, The Overthrow of Colonial Slavery, 1776–1848. London and New York,
Verso, 1988, p. 5.
2. Ibid., p. 11.
3. Ibid., p. 5.
4. R. Blackburn, The Making of New World Slavery. From the Baroque to the Modern,
1492–1800. London and New York, Verso, 1997, p. 515.
5. Quoted in M. Pokrovsky, with N.M. Nikol’sky and V.N. Storozhez, Russkaya istoriya s
drevneyshikh vremen, vol. 2. Moscow, Mir, 1913, p. 87.
6. Quoted ibid., p. 86.
7. See ibid., p. 14.
8. B.D. Grekov observes that prior to the sixteenth century, the grain trade in Rus was
undeveloped. It was only in the sixteenth century that grain began to play a noticeable
role on the internal and at times, external markets, ‘in connection with the changes that
had occurred in the economic life of all Europe, and of Rus in particular’ (B.D. Grekov,
Kievskaya Rus’, Moscow and Leningrad, GIPL, 1953, p. 54). See also B.D. Grekov,
Glavneyshie etapy v istorii krepostnogo prava v Rossii. Moscow and Leningrad, Sotsekgiz,
1940; B.D. Grekov, Krest’yane na Rusi s drevneyshikh vremen do XVII v, Part 2. Moscow,
AN SSSR, 1954.
9. P. Kolchin, Unfree Labor: American Slavery and Russian Serfdom. Cambridge, Mass. and
London, Harvard University Press, 1987, p. 2.
10. Ibid., p. 360.
11. M. Pokrovsky, Ocherki po istorii revolyutsionnogo dvizheniya v Rossii XIX i XX vv. Moscow
and Leningrad, GIZ, 1927, p. 9.
12. T. Astin and C. Philpin (eds), The Brenner Debate. Cambridge, Cambridge University Press,
1988, p. 99.
13. Pokrovsky, Ocherki po istorii revolyutsionnogo dvizheniya v Rossii XIX I XX vv., p. 9.
14. Ibid., p. 10.
15. Kolchin, Unfree Labor, p. 27.
16. Historians do not agree entirely on the question of the ‘commandment years’ under Ivan
the Terrible. The actual decree has not survived, either in the original or in quotations. B.D.
Grekov considers that during the years of the Livonian War the peasants were enserfed
everywhere, while Academician S.B. Veselovsky has suggested that only particular regions
were affected. For a more detailed treatment see R.G. Skrynnikov, Rossiya posle oprichniny.
Leningrad, LGU, 1975, pp. 178–80.
17. R.G. Skrynnikov, Boris Godunov. Moscow, Nauka, 1983, p. 96.
18. As Pokrovsky notes ironically, Tsar Boris was doomed by the same quandary that has
brought undone many other politicians who have tried to normalise autocracy, bringing it
within the framework of laws and regulations: ‘All police states have broken their heads on
the insoluble problem of combining “justice” with a complete lack of rights for the subjects’
(see Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 2, p. 158).
19. R.G. Skrynnikov, Sotsial’no-politicheskaya bor’ba v russkom gosudarstve v nachale XVII
veka. Leningrad, LGU, 1985, p. 324.
20. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 2, p. 221.
21. M. Pokrovsky, with N.M. Nikol’sky and V.N. Storozhev, Russkaya istoriya s drevneyshikh
vremen, vol. 1. Moscow, Mir, 1913, p. 73.
22. Later, this conflict between market demand and the needs of the peasant economy was
analysed brilliantly in the works of A.V. Chayanov.
23. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 2, p. 127.
24. Ibid., p. 135.
25. S.F. Platonov, Moskva i Zapad v XVI–XVII vekakh. Leningrad, Seyatel’, 1925, p. 106.
26. See ibid., p. 107.
27. Cited in ibid., p. 108.
28. When it expelled the English merchants from Moscow, the government of the Romanovs
was not, of course, guided exclusively by ideological considerations. The news of the
execution of King Charles in London must, however, have had unpleasant associations for
the Russian rulers, who had just survived the events of 1648.
29. V.O. Klyuchevsky, Sochineniya, vol. 3. Moscow, Mysl’, 1988, p. 125.
30. Quoted in S.M. Solovyev, Sochineniya, Book 5. Moscow, Mysl’, 1988, p. 464.
31. Platonov, Moskva i Zapad v XVI–XVII vekakh, p. 108.
32. Ibid., p. 109.
33. For a more detailed discussion, see M. Postan, ‘The Rise of a Money Economy’, Economic
History Review, 1944, vol. 14. This view is disputed by Robert Brenner, who, like most
Soviet writers on the topic, argues that serfdom was exclusively a manifestation of feudal
backwardness. In Brenner’s opinion, the development of trade was simply not capable of
undermining the personal dependence of the peasant on the landowner; consequently, the
market had, as it were, an existence in and of itself, and serfdom likewise (see Astin and
Philpin, The Brenner Debate, p. 26). Brenner’s judgement, however, is not borne out by the
factual material. As already noted, the Russian peasants prior to the end of the sixteenth
century had simply not known the forms of personal property that became established in
the course of the Time of Troubles and the Petrine reforms. Brenner and other proponents
of the ‘backwardness’ theory cannot explain why serfdom not only failed to weaken as
commodity relations developed, but grew radically stronger, or why the situation of the
Russian peasants in the sixteenth century had been more or less identical to that of their
class peers in the West, while in the time of Catherine the Great it differed little from that
of plantation slaves. Moreover, it is significant that Brenner, like the Soviet historians, never
examines the parallels in the development of the landowner and plantation economies, even
though these parallels are striking.
34. Kolchin, Unfree Labor, p. 30.
35. Blackburn, The Overthrow of Colonial Slavery, p. 5.
36. Blackburn, The Making of New World Slavery, p. 515.
37. S.G. Strumilin, Izbrannye proizvedeniya. Istoriya chernoy metallurgii v SSSR. Moscow,
Nauka, 1967, p. 109.
38. Quoted in I.P. Magidovich and V.I. Magidovich, Istoriya otkrytiya i issledovaniya Evropy.
Moscow, Mysl’, 1970, p. 202.
39. A.D. Kuzmichev and I.N. Shapkin, Otechestvennoe predprinimatel’stvo. Ocherki istorii.
Moscow, Progress-Akademiya, 1995, p. 15.
40. See ibid.
41. N.M. Druzhinin, Sotsial’no-ekonomicheskaya istoriya Rossii. Izbrannye trudy. Moscow,
Nauka, 1987, p. 336.
42. Ibid., pp. 330–1.
43. A.L. Stanislavsky, Grazhdanskaya voyna v Rossii XVII veka. Moscow, Mysl’, 1990, p. 243. It
is interesting that foreign candidates were also proposed. Some delegates preferred Archduke
Maximilian of Habsburg, others the Swedish prince, Karl Phillip (see G.L. Freeze (ed.),
Russia: A History. Oxford and New York, Oxford University Press, 1997, p. 63).
44. Ibid., p. 244.
45. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 2, p. 155.
46. Ibid., p. 148.
47. Quoted in M. Pokrovsky, with N.M. Nikol’sky and V.N. Storozhev, Russkaya istoriya s
drevneyshikh vremen, vol. 3. Moscow, Mir, 1913, p. 221.
CHAPTER 7
CHAPTER 8
1. M. Pokrovsky, with N.M. Nikol’sky and V.N. Storozhez, Russkaya istoriya s drevneyshikh
vremen, vol. 3. Moscow, Mir, 1913, p. 25.
2. M. Pokrovsky, with N.M. Nikol’sky and V.N. Storozhez, Russkaya istoriya s drevneyshikh
vremen, vol. 2. Moscow, Mir, 1913, p. 307.
3. Ibid.
4. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 2, p. 306.
Baranovsky insisted that factories based on bonded labour had nothing in common
with capitalism, and operated extremely inefficiently. Strumilin made use of Pokrovsky’s
weakness in this instance to try to demonstrate the unsustainability of Pokrovsky’s entire
approach to economic history. The Soviet academician recognised that ‘the inner content
of the hybrid form was totally capitalist’ (Strumilin, Istoriya chernoy metallurgii v SSSR,
p. 232). The principal question, however, remains unanswered: why did the development of
capitalist forms of production in Britain require free workers, and, in Russia, a workforce
made up largely of serfs? Furthermore, why did the rapid expansion of Russian industry
stimulate the development of advanced forms of capitalism not in Russia, but in the West?
Without an understanding of the general laws of development of the world economy, the
nature of Russia’s ‘hybrid’ form of capitalism cannot be understood either.
38. See Strumilin, Istoriya chernoy metallurgii v SSSR, p. 195.
39. See ibid., p. 193.
40. Russko-britanskie torgovye otnosheniya v XVIII veke. Sbornik dokumentov. Moscow, RAN,
1994, p. 9.
41. Strumilin, Istoriya chernoy metallurgii v SSSR, p. 169.
42. Russko-britanskie torgovye otnosheniya v XVIII veke, p. 12.
43. Ibid., p. 48.
44. A. Zorin, Kormya dvuglavogo orla… Literatura i gosudarstvennaya ideologiya v Rossii v
posledney treti XVIII – pervoy treti XIX veka. Moscow, NLO, 2001, p. 65.
45. Ibid., p. 82.
CHAPTER 9
1. M. Pokrovsky, with N.M. Nikol’sky and V.N. Storozhez, Russkaya istoriya s drevneyshikh
vremen, vol. 3. Moscow, Mir, 1913, p. 142.
2. Materialy po istorii sel’skogo khozyaystva i krest’yanstva v SSSR, Collection IX. Moscow,
AN SSSR, 1980, p. 246.
3. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 3, p. 143.
4. Ibid., pp. 143–4.
5. See P. Hopkirk, The Great Game: On Secret Service in High Asia. Oxford, Oxford University
Press, 1990, p. 25.
6. N.Ya. Danilevsky, Rossiya i Evropa. Moscow, Izvestiya, 2003, p. 43.
7. Quoted in Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 3, pp. 267–8.
8. Pokrovsky takes an extremely negative view of Alexander’s liberal initiatives, regarding
them simply as an attempt to deceive European public opinion. There are not, however,
any reasons to doubt the sincerity of the young tsar and in particular, of the educated
young noblemen among his associates. It is noteworthy that in Western Europe as well as
Russia, many people saw the wars against Napoleon as a liberating process, expecting that
victory would be followed by social change. This sentiment united the future Decembrists
in the Russian army with General Wilson, who in 1812 represented the British on Kutuzov’s
staff. The disappointment that set in after the victory of 1814 put Wilson on the road
to conspiracy, just like the Russian officers together with whom he had fought against
Bonaparte.
9. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 3, p. 288.
10. M. Pokrovsky, Diplomatiya i voyny tsarskoy Rossii v XIX stoletii. Moscow, 1923, p. 19.
11. Quoted in Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 3, p. 290.
12. Quoted ibid., p. 300.
13. Ibid., p. 334.
14. Quoted in M. Tugan-Baranovsky, Russkaya fabrika v proshlom i nastoyashchem, vol. 1.
Kharkov, 1926, p. 215.
15. Ibid., pp. 215–16.
16. V.I. Lenin, Polnoe sobranie sochineniy, vol. 20. Gosudarstvennoye izdatel’stvo politicheskoi
literatury, p. 173.
17. A.S. Pushkin, Polnoe sobranie sochineniy, vol. 10, Moscow, AN SSSR, 1958, p. 654.
18. D.I. Fonvizin, Izbrannye sochineniya i pis’ma. Moscow, OGIZ, p. 246.
19. Ibid., p. 212.
20. Ibid., p. 214.
21. Ibid., p. 215.
22. Ibid., p. 223.
23. Ibid., p. 265.
24. Ibid., p. 262.
25. Ibid., p. 215.
26. M.P. Fedorov, Khlebnaya torgovlya v glavneyshikh russkikh portakh i v Kenigsberge. Moscow,
1888, p. 105.
27. M. Pokrovsky, Ocherki po istorii revolyutsionnogo dvizheniya v Rossii XIX i XX vv., Moscow
and Leningrad, GIZ, 1927, p. 14.
28. Tugan-Baranovsky, Russkaya fabrika v proshlom i nastoyashchem, vol. 1, p. 213.
29. Pokrovsky, Ocherki po istorii revolyutsionnogo dvizheniya v Rossii XIX i XX vv., p. 20.
30. Lenin, Polnoe sobranie sochineniy, vol. 21, p. 261.
31. M. Pokrovsky, with N.M. Nikol’sky and V.N. Storozhev, Russkaya istoriya s drevneyshikh
vremen, vol. 4. Moscow, Mir, 1918, p. 14.
32. Ibid., p. 15.
33. S.G. Strumilin, Izbrannye proizvedeniya. Istoriya chernoy metallurgii v SSSR. Moscow,
Nauka, 1967, p. 174.
34. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 4, p. 32.
35. Ibid., p. 38.
36. L.S. Semenov, Rossiya i Angliya. Ekonomicheskie otnosheniya v seredine XIX veka.
Leningrad, LGU, 1975, p. 3.
37. See G.P. Nebolsin, Statisticheskoe obozrenie vneshney torgovli Rossii, vol. 2. St Petersburg,
1850, pp. 25–7, 139.
38. The sources disagree in their calculations of the total financial obligations of the Russian
Empire. According to A.D. Druyan, between 1841 and 1853, some 70.1 million silver rubles
were received in new loans, while 149.3 million rubles were spent on paying the interest and
principal on previous loans (see A.D. Druyan, Ocherki po istorii denezhnogo obrashcheniya
Rossii v XIX v. Moscow, 1941, p. 44). According to other calculations, loans amounting
to 101 million rubles were taken out in the period 1840–49 alone (see Semenov, Rossiya i
Angliya. Ekonomicheskie otnosheniya v seredine XIX veka, p. 82). Of particular interest is
the highly involved story of the so-called ‘Dutch loan’. At the Congress of Vienna, Britain
undertook to pay off a proportion of the debts contracted by the tsar’s government on the
Dutch financial market during the Napoleonic Wars. London and St Petersburg promised
to continue payments even if war should break out between the two countries. The King of
the Netherlands also undertook to cancel part of the debt, but only on the condition that
Belgium, which had been annexed to his possessions by decision of the congress, would
remain under his power. After the cecession of Belgium, the Dutch government stopped
making payments, but the British continued fulfilling their obligations. Marx believed that
the money the tsar saved as a result went towards suppressing the Polish revolt.
39. Semenov, Rossiya i Angliya. Ekonomicheskie otnosheniya v seredine XIX veka, p. 89.
40. K. Marx and F. Engels, Sochineniya, vol. 7. Gosudarstvennoye izdatel’stvo politicheskoi
literatury, p. 226.
41. S.G. Strumilin, Ocherki po istorii ekonomiki Rossii. Moscow, Gosudarstvennoye izdatel’stvo
politicheskoi literatury, 1960, p. 469.
42. Ibid., p. 470. For Strumilin, the crisis of 1847 posed a serious methodological problem.
This development, he concluded, was ‘unquestionably a reflection of the world capitalist
crisis within serf-holding Russia’ (ibid., p. 475). This dependency was to be explained by
the existence of elements of capitalism within the ‘serf-holding system’. Strumilin stresses,
however, that these elements of capitalism were secondary. For the Soviet academician, it
was ideologically impossible to acknowledge that this was not simply a matter of ‘bourgeois
elements’, but that the serf-holding system itself was profoundly integrated into world
capitalism, and made up an important part of it.
43. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 4, p. 38.
44. Pokrovsky notes ironically that ‘at Navarino a Russian squadron under the command of a
British admiral set fire to a Turkish fleet’ (ibid., p. 35).
45. V.I. Vinogradov, Britanskiy lev na Bosfore. Moscow, Nauka, 1991, p. 59.
46. Ibid., p. 60.
47. Ibid., p. 62.
48. The treaty between Britain and Russia signed in 1842 is also interesting as a step towards
abolishing Navigation Acts because they didn’t cover Russian ships any more. This had very
little practical significance because Russian trade was carried mainly under foreign flags.
However, it set an important precedent.
49. Semenov, Rossiya i Angliya. Ekonomicheskie otnosheniya v seredine XIX veka, p. 31.
50. Nebolsin, Statisticheskoe obozrenie vneshney torgovli Rossii, vol. 2, p. 364.
51. Voprosi genezisa kapitalizma v Rossii. Leningrad, LGU, 1960, p. 179.
52. Quoted in Semenov, Rossiya i Angliya. Ekonomicheskie otnosheniya v seredine XIX veka,
p. 40.
53. See Pokrovsky, Russkaya istoriya s drevneyshih vremen, vol. 4, p. 51.
54. Quoted in ibid., p. 48.
55. Ibid., p. 47.
CHAPTER 10
CHAPTER 11
1. S.G. Strumilin, Ocherki po istorii ekonomiki Rossii. Moscow, Gosudarstvennoye izdatel’stvo
politicheskoi literatury, 1960, p. 465.
2. W. Thompson, Global Expansion: Britain and its Empire, 1870–1914. London, Pluto Press,
1999, p. 9.
3. Ibid.
4. Ibid., p. 10.
5. P. Kolchin, Unfree Labor: American Slavery and Russian Serfdom. Cambridge, Mass. and
London, Harvard University Press, 1987, p. 370.
6. This thesis, expounded by Kolchin, contradicts the official view found in Soviet
historiography. The research by Russian historians that has been published since 1991,
however, generally confirms Kolchin’s ideas. Contrary to the thesis of Soviet historians in
the 1950s, serf agriculture remained profitable at the time when the peasant reforms began,
and labour productivity was rising. In this respect, one cannot speak of inefficiency or
of the ‘exhaustion’ of the internal possibilities of the serf system. See Boris N. Mironov,
‘When and Why was the Russian Peasantry Emancipated?’, in M.L. Bush (ed.), Serfdom
and Slavery: Studies in Legal Bondage. London and New York, Longman, 1996, pp. 346–7.
7. M. Pokrovsky, with N.M. Nikol’sky and V.N. Storozhev, Russkaya istoriya s drevneyshikh
vremen, vol. 4. Moscow, Mir, 1918, p. 99.
8. L.S. Semenov, Rossiya i Angliya. Ekonomicheskie otnosheniya v seredine XIX veka.
Leningrad, LGU, 1975, p. 155.
9. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 4, p. 66.
10. Ibid., p. 111.
11. Strumilin, Ocherki po istorii ekonomiki Rossii, p. 476.
12. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 4, p. 112.
13. See M. Pokrovsky, Ocherki po istorii revolyutsionnogo dvizheniya v Rossii XIX i XX
vv. Moscow and Leningrad, GIZ, 1927, p. 39. See also Semenov, Rossiya i Angliya.
Ekonomicheskie otnosheniya v seredine XIX veka, pp. 150–5.
14. Pokrovsky, Ocherki po istorii revolyutsionnogo dvizheniya v Rossii XIX i XX vv, p. 12.
15. The ‘American road’ could be followed only if what took place in the country was not a
reform but a revolution, and if the only social layer capable of seizing and holding power
amid conditions of universal collapse was the intelligentsia, increasing rapidly in size during
the relevant years. More than likely, the form in which the intelligentsia exercised power
would be a terrorist dictatorship. Marx and Engels warned clearly of the type of social
order that could arise as a result of such a revolution. For all the divergence in their views,
the most influential ideologues of the Russian revolutionary movement of that era, P. L.
Lavrov and P. N. Tkachev, agreed that the new order would be implanted using terror. It is
pointless to seek the reasons for this agreement in the bloodthirstiness of revolutionaries.
Tkachev foresaw a progressive, authoritarian state power in Russia, along the lines of
the Jacobin dictatorship in eighteenth-century France, while Lavrov, who hated the state
and believed in the liberation of the individual, argued that terrorism should be used by
the masses themselves under the leadership of a ‘Socialist Union’. As an example to be
imitated, he cited the American ‘Lynch law’.
16. V.I. Lenin, Polnoe sobranie sochineniy, vol. 16. Gosudarstvennoye izdatel’stvo politicheskoi
literatury, p. 17.
17. A.V. Chayanov, Krest’yanskoe khozyaystvo. Izbrannye trudy. Moscow, Ekonomika, 1989,
p. 121. The degree to which independent peasant agriculture is capitalist is a question
with importance not just for Russia. As the American economist John Roemer notes, the
success of the peasantry in Western Europe in their struggle against feudalism did not by
any means lead automatically to capitalism. Rather, it led to the rise of an economy based
on small-scale holdings, and using part of the land in common (J. Roemer, Free to Lose.
Cambridge, Mass., Harvard University Press, 1988, p. 121). Robert Brenner examines
the same phenomena (see T. Astin and C. Philpin (eds), The Brenner Debate. Cambridge,
Cambridge University Press, 1988). As American scholars analysing the experience of
Mexico have noted, the ‘Chayanov’ model of non-commercial peasant production cannot
of course be stable when the survival of the household depends on buying and selling goods
on the capitalist market (S. Cook and L. Binford, ‘Petty Commodity Production, Capital
Accumulation, and Peasant Differentiation: Lenin vs, Chayanov in Rural Mexico’, Review
of Radical Political Economics, vol. 18, no. 4, 1986, p. 24). The problem, however, lies on a
completely different plane. As peasant agriculture decays, it becomes incorporated into the
peripheral model of capitalism, which needs commodity production but which does not by
any means necessarily presuppose a thoroughgoing development of bourgeois relations in
the countryside.
18. Strumilin, Ocherki po istorii ekonomiki Rossii, p. 465.
19. P. Lyashchenko, Russkoe zernovoe khozyaystvo v sisteme mirovogo khozyaystva. Moscow,
Izdaniye Kommunisticheskoi akademii, 1927, p. 8.
20. Pokrovsky, Ocherki po istorii revolyutsionnogo dvizheniya v Rossii XIX i XX vv, p. 13.
21. M.P. Fedorov, Khlebnaya torgovlya v glavneyshikh russkikh portakh i v Kenigsberge. Moscow,
1888, p. 405.
22. Ibid., p. 413.
23. Ibid., pp. 412–13.
24. Lyashchenko, Russkoe zernovoe khozyaystvo v sisteme mirovogo khozyaystva, p. 278.
25. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 4, p. 229.
26. N.M. Druzhinin, Sotsial’no-ekonomicheskaya istoriya Rossii. Izbrannye trudy. Moscow,
Nauka, 1987, p. 347.
27. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 4, p. 107.
28. Lyashchenko, Russkoe zernovoe khozyaystvo v sisteme mirovogo khozyaystva, p. 286.
29. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 4, p. 77.
30. Ibid., p. 170.
31. G.V. Plekhanov, Sochineniya, vol. 2. Moscow, GIZ, 1923, p. 271.
32. See T. Shanin, (ed.), Late Marx and the Russian Road: Marx and the ‘Peripheries of
Capitalism’. London, Monthly Review Press, 1983, p. x.
33. K. Marx and F. Engels, Sochineniya, vol. 19. Gosudarstvennoye izdatel’stvo politicheskoi
literatury, pp. 118–19. Marx’s writings on questions of Russian populism are published in
Shanin, Late Marx and the Russian Road. See pp. 134–5.
34. Shanin, Late Marx and the Russian Road, p. 7.
35. Ibid., p. 9.
36. Marx and Engels, Sochineniya, v. 19, p. 250. In English, see Shanin, Late Marx and the
Russian Road, pp. 123–4.
37. Marx and Engels, Sochineniya, vol. 19, p. 120. In English, see Shanin, Late Marx and the
Russian Road, pp. 136–7.
38. Marx and Engels, Sochineniya, vol. 19, p. 121. In English, see Shanin, Late Marx and the
Russian Road, p. 137.
39. Shanin, Late Marx and the Russian Road, p. 19.
40. Marx and Engels, Sochineniya, vol. 19, p. 410. In English, see Shanin, Late Marx and the
Russian Road, pp. 99–122.
41. Delo, 1880, no. 12. Quoted in M. Tugan-Baranovsky, Russkaya fabrika v proshlom i
nastoyashchem, vol. 1. Kharkov, 1926, p. 434.
42. Quoted in P. Hopkirk, The Great Game: On Secret Service in High Asia. Oxford, Oxford
University Press, 1990, p. 446.
43. Ibid.
44. P. Chaadaev, Polnoe sobranie sochineniy i izbrannye pis’ma, vol. 1. Moscow, Nauka, 1991,
p. 534.
CHAPTER 12
45. Cited in L.E. Shepelev, Tsarizm i burzhuaziya v 1904–1914 gg. Leningrad, Nauka, 1987,
p. 249.
46. Cited in Ronin, Inostrannyy kapital i russkie banki, p. 104.
47. See ibid., p. 93.
48. Birzhevye Izvestiya, 1907, no. 222.
49. L. Voronov, Inostrannye kapitaly v Rossii. Moscow, 1901, p. 24.
50. Zh. Leskor, Obshchie i periodicheskie promyshlennye krizisy. St Petersburg, 1908, p. 248.
51. See B.V. Ananyich, Rossiya i mezhdunarodnyy kapital. 1897–1914. Leningrad, AN SSSR,
1970, p. 51.
52. Quoted in ibid., p. 57.
53. Quoted in ibid., p. 59.
54. Pokrovsky, Ocherki po istorii revolyutsionnogo dvizheniya v Rossii XIX i XX vv., p. v.
55. Monopolii i inostrannyy kapital v Rossii, p. 308.
56. Pokrovsky, Ocherki po istorii revolyutsionnogo dvizheniya v Rossii XIX i XX vv., p. 107.
57. Ibid., p. 106.
58. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 4, p. 376.
59. Ibid., p. 377.
60. P. Chaadaev, Polnoe sobranie sochineniy i izbrannye pis’ma, vol. 1. Moscow, Nauka, 1991,
p. 469.
61. Perviy S”ezd RSDRP. Dokumenty i materialy. Moscow, Gosudarstvennoye izdatel’stvo
politicheskoi literatury, 1958; KPSS v rezolyutsiyakh i resheniyakh s”ezdov, konferentsiy
i plenumov TsK, 9th edn, vol. 1. Moscow, Gosudarstvennoye izdatel’stvo politicheskoi
literatury, 1983, p. 16.
62. Pokrovsky, Ocherki po istorii revolyutsionnogo dvizheniya v Rossii XIX i XX vv., p. 113.
63. A.I. Aksenov, Genealogiya moskovskogo kupechestva XVIII veka. Moscow, AN SSSR, 1988,
p. 143.
64. Shepelev, Tsarizm i burzhuaziya v 1904–1914 gg, p. 257.
65. Pokrovsky, Ocherki po istorii revolyutsionnogo dvizheniya v Rossii XIX i XX vv., p. 111.
66. It is not surprising that towards the end of his life, Lenin, having gained practical experience
of ruling in a patriarchal-peasant country, became highly interested in Chayanov and began
studying his writings intently.
67. Pokrovsky, Russkaya istoriya s drevneyshikh vremen, vol. 4, p. 403.
68. S. Bulgakov, Agoniya. Paris, 1946, p. 76.
69. M. Weber, Politische Schriften. Published in Russian in Sintaksis, no. 22, Paris, 1988, pp. 94,
93, 96.
70. Pokrovsky, Ocherki po istorii revolyutsionnogo dvizheniya v Rossii XIX i XX vv., p. 117.
71. P. A. Stolypin, Nam nuzhna velikaya Rossiya. Moscow, Molodaya gvardiya, 1991, p. 52.
72. V.I. Lenin, Polnoe sobranie sochineniy, vol. 16. Gosudarstvennoye izdatel’stvo politicheskoi
literatury, p. 18.
73. Ibid., pp. 21, 20.
74. Stolypin, Nam nuzhna velikaya Rossiya, p. 52.
75. See Pokrovsky, Ocherki po istorii revolyutsionnogo dvizheniya v Rossii XIX i XX vv., p. 122.
76. Stolypin, Nam nuzhna velikaya Rossiya, p. 95.
77. See Dongarov, Inostrannyy kapital v Rossii i SSSR, p. 13.
78. Pokrovsky, Ocherki po istorii revolyutsionnogo dvizheniya v Rossii XIX i XX vv., p. 139.
79. M.I. Tugan-Baranovsky (ed.), Voprosy Mirovoy voyny. Petrograd, Pravo, 1915, p. 292.
80. A. Goryanin, Mify o Rossii i dukh natsii. Moscow, Pentagraphic Ltd, 2002, p. 185.
81. Pokrovsky, Ocherki po istorii revolyutsionnogo dvizheniya v Rossii XIX i XX vv., p. 140.
82. P. Hopkirk, The Great Game: On Secret Service in High Asia. Oxford, Oxford University
Press, 1990, p. 520.
83. Ananyich, Rossiya i mezhdunarodnyy kapital. 1897–1914, p. 12.
84. Vavilin, Inostrannye kapitaly v Rossii, p. 27.
85. Girault, Emprunts Russes et Investissements Français en Russie, 1887–1914, p. 450.
86. These figures are cited by Dongarov in Inostrannyy kapital v Rossii i SSSR.
87. Vavilin, Inostrannye kapitaly v Rossii, p. 90.
CHAPTER 13
1. V.I. Lenin, Polnoe sobranie sochineniy, vol. 45. Gosudarstvennoye izdatel’stvo politicheskoi
literatury, p. 380.
2. Voprosy Ekonomiki, 1988, no. 9, p. 123.
3. Lenin, Polnoe Sobranie Sochineniy, vol. 38, p. 63.
4. The political scientist Alla Glinchikova points out that after the revolution only four People’s
Commissariats were established to take the place of the former ministries, but that ‘in the
1920s a dramatic expansion of the administrative apparatus began’ (Mir Rossii, 2003, no. 1,
p. 114).
5. The most ‘liberal’ political regime was in the Republic of the Far East, where as late as 1922
non-Bolshevik socialist parties not only functioned openly, but also took part in the system
of government. Lenin proposed a coalition of Bolsheviks and Mensheviks as a political
solution for Georgia after it had been occupied by the Red Army, but failed to win support
among the leadership of his own party.
6. See Istoriya sotsialisticheskoy ekonomiki v SSSR, vol. 2. Moscow, Nauka, 1976, p. 268.
7. N.I. Bukharin, Izbrannye proizvedeniya. Moscow, Izdatel’stvo politicheskoi literatury, 1988,
p. 88.
8. In this case it would be more precise to use the term delinking, as employed by Samir Amin.
A brief exposition of Samir Amin’s views on questions of global development may be found
in his article ‘The New Capitalist Globalisation’, Links (Australia), nos 7 and 8.
9. P. Lyashchenko, Russkoe zernovoe khozyaystvo v sisteme mirovogo khozyaystva. Moscow,
Izdaniye Kommunisticheskoi akademii, 1927, p. 358.
10. Voprosy ekonomiki, 1988, no. 9, pp. 126, 110.
11. Ibid., p. 117.
12. Bukharin, Izbrannye proizvedeniya, pp. 90, 91, 86.
13. Ibid., p. 90.
14. Voprosy ekonomiki, 1988, no. 9, p. 111.
15. XV s”ezd VKP(b). Rezolyutsii i postanovleniya. Moscow, Partizdat, 1932, p. 126.
16. See XV s”ezd VKP(b). Dekabr’, 1927, stenograficheskiy otchet. Moscow, Gosudarstvennoye
izdatel’stvo politicheskoi literatury, 1962, p. 1443.
17. XV s”ezd VKP(b). Rezolyutsii i postanovleniya, p. 119.
18. Ibid., pp. 113–14.
19. XVI konferentsiya VKP(b). Rezolyutsii. Moscow, Partizdat, 1932, p. 28.
20. Bukharin, Izbranniye proizvedeniya, p. 406.
21. A.N. Malafeev, Istoriya tsenoobrazovaniya v SSSR (1917–1963). Moscow, Mysl’, 1964,
pp. 119–21.
22. A.I. Kolganov, Put’ k sotsializmu: tragediya i podvig. Moscow, Ekonomika, 1990, p. 107.
23. See Istoriya sotsialisticheskoy ekonomiki v SSSR, vol. 3. Moscow, Nauka, 1977, p. 328.
24. Bukharin, Izbrannye proizvendeniya, p. 404.
25. N.D. Kondratyev, Problemy ekonomicheskoy dinamiki. Moscow, Ekonomika, 1989, p. 221.
26. I.V. Stalin, Sochineniya, vol. 12. Gosudarstvennoye izdatel’stvo politicheskoi literatury,
p. 92.
27. Voprosy ekonomiki, 1988, no. 9, p. 97.
28. M. Lewin, Russia/USSR/Russia. New York, The New Press, 1995, p. 106.
29. Stalin, Sochineniya, vol. 11, pp. 124, 15.
30. Byulleten’ oppozitsii, 1929, no. 3, p. 13 (letter from Kh.G. Rakovsky).
31. Yu. Fel’shtinskym (compiler), Kommunisticheskaya oppozitsiya v SSSR. Iz arkhiva L.
Trotskogo, vol. 4. Benson, Vermont, Chalidze Publications, 1988, p. 254.
32. Ibid., p. 253.
33. Stalin, Sochineniya, vol. 12, pp. 181–2.
34. Kolganov, Put’ k sotsializmu: tragediya i podvig, p. 123.
35. Istoriya sotsialisticheskoy ekonomiki v SSSR, vol. 3, p. 309.
36. See Russian State Archives of the Economy (RGAE), fund 413, schedule 13, file 207,
pp. 144–5, etc.
37. Ibid., fund 413, schedule 13, file 203, p. 21. It is noteworthy that in 1930 and 1931, articles
appeared in the Western business press arguing that it was not to the advantage of the
Soviet Union to reduce its exports of foodstuffs, since this would result in the loss of the
markets that had been difficult to conquer.
38. Istoriya sotsialisticheskoy ekonomiki v SSSR, vol. 3, p. 309.
39. See RGAE, fund 413, schedule 13, file 233, p. 6. See also RGAE, fund 413, schedule 13, file
242, p. 15.
40. See Istoriya sotsialisticheskoy ekonomiki v SSSR, vol. 3, pp. 310–11.
41. Ibid., p. 311.
42. See RGAE, fund 413, schedule 13, file 227, p. 3.
43. See ibid., p. 6. Soviet figures show overall imports by Great Britain from the USSR in 1930
as having a value of £34,245,419 (see ibid.). Britain at this time was the main importer
of products from the USSR. The Soviet trade office in London monitored prices very
attentively; this may also have been linked to the ‘representative’ character of the British
market from the point of view of world market conditions.
44. See RGAE, fund 413, schedule 13, file 227, p. 14.
45. See ibid., pp. 8–11.
46. See RGAE, fund 413, schedule 13, file 203.
47. See RGAE, fund 413, schedule 13, file 227, pp. 8–11.
48. RGAE, fund 413, schedule 13, file 208, p. 23.
49. Kolganov, Put’ k sotsializmu: tragediya i podvig, p. 127.
50. Ibid., p. 128.
51. Byulleten’ oppozitsii, April 1931, no. 20, p. 4.
52. Istoriya sotsialisticheskoy ekonomiki v SSSR, vol. 3, p. 313.
53. RGAE, fund 413, schedule 13, file 216, p. 6.
54. Ibid., p. 13.
55. Ibid., p. 15.
56. RGAE, fund 413, schedule 13, file 203, p. 1. Here we may recall an episode from the Ilf and
Petrov novel The Golden Calf. While on the road, the heroes encounter some Americans
travelling about the countryside with an Inturist translator. Tormented by the Prohibition
then in force in the US, the Americans are seeking the recipe for samogon, Russian home-
distilled vodka.
57. Istoriya sotsialisticheskoy ekonomiki v SSSR, vol. 3, p. 310. Numerous records of the
export conferences testify to the ineffectiveness of these methods. As a rule, the month-long
campaigns proceeded ‘very feebly, without yielding any significant results’ (RGAE, fund
413, schedule 13, file 207, p. 84).
58. RGAE, fund 413, schedule 13, file 208, p. 69.
59. Ibid., p. 16.
60. RGAE, fund 413, schedule 13, file 207, p. 72.
61. Ibid.
62. Ibid., p. 108.
63. Ibid., p. 62.
64. RGAE, fund 413, schedule 13, file 208, p. 19.
65. RGAE, fund 413, schedule 13, file 207, p. 108.
66. RGAE, fund 413, schedule 13, file 208, p. 7.
67. RGAE, fund 413, schedule 13, file 208, p. 45.
68. The memoirs of Victor Serge include the following episode. ‘In Belarus, seeing that horses
were having their hair clipped and sent for export, and knowing that the animals would die
as a result, a group of women surrounded Goloded, the head of the local administration
(who was shot or committed suicide in 1937), and with unexpected fury pulled up their
sarafans, beneath which they were naked. “Now, you swine, take our hair if you’re brave
enough, but you won’t get the hair from the horses!”’ (V. Serzh, Ot revolyutsii k totalitarizmu:
Vospominaniya revolyutsionera. Moscow and Orenburg, Praksis and Orenburgskaya Kniga,
2001, p. 298. French original: V. Serge, Mémoires d un Révolutionnaire. Paris, 1978). The
truth of this story is in some doubt; it is hardly likely that the head of the government (Soviet
of People’s Commissars) of Belarus Nikolay Goloded would personally have taken part in
the state purchasing of horsehair. Nevertheless, Serge’s memoirs convey the atmosphere of
those times to perfection.
69. RGAE, fund 413, schedule 13, file 208, p. 10.
70. RGAE, fund 413, schedule 13, file 207, p. 110.
71. Ibid.
72. Ibid., p. 68.
73. RGAE, fund 413, schedule 13, file 208, p. 12.
74. Ibid., p. 47.
75. Ibid., p. 5.
76. Ibid., p. 4.
77. Ibid., pp. 6, 7, 8.
78. Ibid., p. 40.
79. Ibid., p. 68.
80. Ibid., p. 2.
81. Ibid., p. 43.
82. Ibid., p. 36.
83. Ibid., p. 74.
84. Ibid., pp. 28–9.
85. RGAE, fund 413, schedule 13, file 207, p. 44.
86. Ibid., p. 42.
87. Ibid., p. 109.
88. RGAE, fund 413, schedule 13, file 208, p. 82.
89. Ibid., p. 36.
90. Ibid., p. 25.
91. RGAE, fund 413, schedule 13, file 227, p. 52.
92. RGAE, fund 413, schedule 13, file 207, p. 25.
93. Ibid.
94. Ibid., p. 65.
95. RGAE, fund 413, schedule 13, file 208, pp. 1, 5, 72.
96. Ibid., p. 22.
97. Ibid., pp. 8, 9.
98. RGAE, fund 413, schedule 13, file 233, p. 8.
99. Ibid., p. 2.
CHAPTER 14
1. Analysing the Soviet-American rivalry, Immanuel Wallerstein in his book After Liberalism
argues that the USSR remained part of the world system throughout the entire Soviet epoch
(see I. Wallerstein, After Liberalism. New York, The New Press, 1995, pp. 10–25). Wallerstein
maintains that since the system as a whole was capitalist, the Soviet Union, irrespective of
its internal system, had to be considered part of the capitalist world. Wallerstein bases
his point of view on the argument that the USSR and the US complemented one another
in their rivalry, together guaranteeing the equilibrium of the world order that had been
established in 1945 and 1946. In paradoxical fashion, the rivalry of the two superpowers
effectively ensured a prolonged period of global stability. Here, however, Wallerstein
contradicts himself, since he has argued repeatedly and convincingly that the world system
is not a political but an economic formation. The unity of the world system is ensured not by
political control, and not even by the trade through which countries exchange their surplus
production, but by the participation of countries in the international division of labour. In
the same fashion, Wallerstein also writes of the possibility of several world systems or world
empires existing simultaneously. The Soviet Union was excluded from the capitalist system
of the international division of labour until the early 1970s; moreover, the USSR with its
satellite countries tried to establish its own parallel system of the international division of
labour under the slogan ‘socialist integration’. It was only in the 1970s that the Soviet Union
began its economic return to the bourgeois world system, and it is not surprising that at a
certain stage the result of this process would also be the transformation of the ‘internal
organisation’ of the former communist countries, as they returned to the zone of peripheral
capitalism.
2. New York Times, 22 September 1944, quoted in C. Harman, Class Struggles in Eastern
Europe, 1945-83. London, Chicago and Melbourne, Bookmarks, 1988, p. 24.
3. Era Nuoa, 8 November 1946, quoted in ibid., p. 25.
4. Istoriya diplomatii, vol. V, book 1. Moscow, Politizdat, 1974, pp. 118–19.
5. A.Kh. Klevansky, V.V. Mar’ina, A.S. Mylnikov and I.I. Pop, Kratkaya istoriya Chekhoslovakii.
Moscow, Nauka, 1988, p. 414.
6. Such sentiments were typical not just of intellectuals close to the communist movement, but
also of many critics of the Soviet system. In particular, Nikolay Berdyaev expressed such
views between 1945 and 1947.
7. Germaniya, iyun’ 1953 goda: uroki proshlogo dlya budushchego. Moscow, Institut Evropy and
Ogni, 2003, pp. 13, 15.
8. Ibid., p. 12.
9. Istoriya diplomatii, vol. V, book 1, p. 156.
10. It is noteworthy that in Poland during the time of the ‘communist regime’, the party
leadership was three times driven from office by popular uprisings – in 1956, 1970 and
during the 1980s. Each new generation of leaders began its rule promising to correct the
mistakes of its predecessors, and to a significant degree these promises were fulfilled.
11. Novyy etap ekonomicheskogo sotrudnichestva SSSR s razvitymi kapitalisticheskimi stranami.
Moscow, Nauka, 1978, p. 5. It should of course be kept in mind that the West at this time
was experiencing a bout of inflation, and that part of the ‘growth’ is to be explained simply
by the change in prices. Even in constant prices, however, the increase in trade turnover was
impressive.
12. See SSSR v tsifrakh v 1987. Moscow, Statistika, 1988, pp. 32–3.
13. See Ekonomicheskie otnosheniya stran SEV s Zapadom. Moscow, Nauka, 1983, pp. 128–9.
14. See Izvestiya, 18 February 1976.
15. Novyy etap ekonomicheskogo sotrudnichestva SSSR s razvitymi kapitalisticheskimi stranami,
p. 7.
16. Ibid., p. 29.
17. Ibid., p. 71.
18. Ibid., pp. 7–8.
19. I.S. Bagramyan and A.F. Shakay, Kontrakt veka. Moscow, Politizdat, 1984, p. 76.
20. See ibid., p. 21.
21. V.A. Brikin and B.S. Vaganov (eds), Vneshneekonomicheskie svyazy Sovetskogo Soyuza na
novom etape. Moscow, Mezhdunarodnye Otnosheniya, 1977, p. 125.
22. Bagramyan and Shakay, Kontrakt veka, p. 3.
23. Ibid., p. 26.
24. See Novyy etap ekonomicheskogo sotrudnichestva SSSR s razvitymi kapitalisticheskimi
stranami, p. 72.
25. Bagramyan and Shakay, Kontrakt veka, p. 39.
26. W. Reisinger, Energy and the Soviet Bloc. Ithaca and London, Cornell University Press,
1992, p. 152.
27. Bagramyan and Shakay, Kontrakt veka, p. 41.
28. See Novyy etap ekonomicheskogo sotrudnichestva SSSR s razvitymi kapitalisticheskimi
stranami, p. 83.
CHAPTER 15
Abbas II, Shah of Persia 110 Balkans 33–5, 37, 217, 255
Abo (Turku) 57 Baltic Sea 26, 27, 29–31, 38–40, 55–8, 65,
Adolf II, Count of Holstein 57 67–8, 70, 71, 73, 76–80, 86, 88–92, 94–6,
Afghanistan 40, 188, 218, 238, 249, 297 98, 101–2, 116, 133, 144–7, 149, 157, 159,
the ‘Great Game’ 218, 238 162, 168, 171, 172, 180, 196, 300
Africa 12, 73, 79, 145, 160, 202, 203, 212, 230, Barbados, 115
231, 237, 305 Batory, Stefan see Stefan Batory
Akema, Filimon 112 Batu (Khan of Mongols) 46–8, 50, 53, 58–9,
Alaska (Russian America) 196–7 60–1
Alcocke, Thomas 87 Belarus 73, 171, 259, 351
Aleksandr, (prince of Tver) 52, 63 Belgium 49, 191, 227, 238, 253, 343
Alexander the Great 34 investment in Russia 230–4
Alexander I (tsar of Russia) 174–5, 179, 184, Belinsky V.G. 204
342 Beloozero 42
Alexander II (tsar of Russia) 2, 198, 210 Berdyaev, Nikolay 138
Ali, Tariq 326 Berlin 113, 161, 161, 177, 186, 189, 191, 205,
al-Rashid, Harun see Harun al-Rashid 219, 227, 235–7, 245, 249–53, 273, 286,
Altay 129 317, 318
America 6, 11, 19, 73, 74–6, 77, 79, 82, 83, 89, Biron, E.I. 157, 159
106, 107, 109, 115, 116, 118, 125–8, Bismarck, Otto 251
130–3, 145, 153, 155, 156, 160, 165, 167, Black Death 11, 45, 49, 50, 59, 61, 121
178, 184, 185, 194, 196–7, 201–3, 205–6, Black Sea 13, 26, 27, 29, 30, 37, 38, 55, 56, 60,
209, 210, 214–15, 223, 231, see also 62, 69, 74, 172, 179, 187, 193, 198, 200,
United States, Latin America, Alaska 203, 249
Amin, Samir 11, 75, 279, 349 Blackburn, Robin 115, 127, 131, 338, 339
Amsterdam 107, 116–18, 149, 154, 191 Bogolyubsky, Andrey (prince of Vladimir) 47,
Anna Ioanovna (tsarina of Russia) 157–60, 162 56
Antwerp 129 Bohemia 11, 12, 28, 45, 48, 50, 55, 57, 59
Arakcheev, Aleksey 180 Bolotnikov (uprising) 121, 132
Argentina 15, 191, 209 Bolsheviks 3, 4, 182, 207, 247, 255–60, 262,
Arkhangelsk 66, 96, 97, 100, 101, 105, 108, 263, 266, 268, 269, 279–81, 349, 352
110, 111, 117, 130, 145, 162, 171, 336 Bomeliy, Yelisey 85
Armenia 7 Bonaparte, Napoleon 76, 173, 175, 200, 342,
Armenian merchants 29, 69, 157 see also Bonapartism, Napoleonic Wars
Artamonov, M.I. 35–7, 41, 329, 330 Bonapartism 174, 280–2
Asia 9, 11, 12, 16, 31, 40, 43, 48, 61, 74, 81, 82, Borodin, Pavel 306
106, 145, 157, 184, 206, 230, 231, 236, Borodino (battle) 176
249, 313–15, 332, 333, see also Central Bosnia, 193
Asia, Middle East Bourbon (dynasty) 106
Astrakhan 61, 74, 81, 83, 105, 110, 111, 157, Braudel, Fernand 11
158, 160 Brazil 115, 153, 314
Attman, Artur 68, 86, 88, 333–6, 338 Brenner, Robert 121, 326, 338, 339, 345
Augsburg (battle) 28 Brezhnev, L.I. 288, 296, 299, 316
Austerlitz (battle) 175 Britain see England
Austria 65, 98, 109, 161, 168, 169, 172, 175, Bruges 69
186, 193, 201, 202, 220, 221, 248, 251, Brunnov, F.I. 189
253, 254, 255, 293, 294 Buchier, Guillaume 53
Austria-Hungary see Austria Buchier, Roger 53
Avvakum, Archpriest 135–6 Buddhism 51
Bukhara 69, 74, 83, 110, 157, 187, 218, 272
Baku 228, 229 Bukharin, N.I. 261, 263–9, 281, 349, 350
356
Bulgar (the city) see Volga Bulgars Cold War 84, 283–7, 318, 320
Bulgaria 33–5, 193, 284 Collectivisation 19, 24, 268–70, 273, 279–81,
Byzantium 3, 11, 13, 29–33, 36–8, 40–4, 49, 283, 285, 303, 316
51, 52, 55, 56, 60, 327–31 Colonialism 22
Russian Colonialism, 217–19
Calvinists 136 Neocolonialism, 8
Canada 156, 160, 287 Columbus, Christopher 11, 74, 130
Capet (dynasty in France) 64 Cmecon (Council for Mutual Economic
Capitalism 10–14, 17–24, 72, 80, 85, 88, 93, Assistance – CMEA) 286, 292, 296–7,
108, 118, 125–6 152, 164, 167, 199, 301
201–4, 208, 212, 214–17, 221–3, 263–4, Communist Party of the Soviet Union
283, 290, 301, 326, 341–2, 343, 353 (CPSU) 1, 5, 259, 260, 268, 281, 287–90,
in Russia, 112–15, 125, 137, 149, 164, see also Bolsheviks, Soviet Union,
223–55, 304–22, 324, 344–6 Brezhnev, Stalin
and slavery, 115–17 Confucianism 9
agrarian capitalism, 204–8, 214, 326 Constantine (Russian prince) 168
‘American road’ to capitalism in agriculture, Constantinople 9, 11, 13, 31–3, 37–8, 40, 42,
205–6, 345 53, 55, 56, 60, 73–6, 168, 193, 219, 328,
‘Prussian road’ to capitalism in agriculture, 331
205–6, 246–7 Istanbul, 188, 193
mercantile capitalism 149, 175, 190 Copenhagen 66
state capitalism 352 Corn laws 190
Capitalist World-System 185, 256 Cossacks 129, 131–3, 163, 174, 218
Carroll, Lewis 75
Counter-Reformation 135, 145
Caspian Sea 26, 29, 40, 61, 83, 110, 157–60, 344
Crimea 32–4, 37, 38, 40, 41, 49, 51–3, 55,
Castellisazzione 54
60–2, 73, 81, 91, 94, 177, 188, 192, 196,
Catherine the Great (Catherine II – tsarina of
197, 200, 217, 276, see also Crimean War,
Russia) 154, 161, 162, 165–8, 173, 174,
Genoa, Tatars
193, 200, 220, 339
Crimean War 7, 20, 190, 191–201, 203–4,
‘Greek project’ 168
217–19, 223
Catholicism 28, 135, 145
Crisis of the Seventeenth Century 99–114,
Caucasus 7, 185, 188, 250, 266, 275, 276, 301
125, 134, 337
Central Asia 184, 185, 187–9, 202, 217, 218,
Cromwell, Oliver 104, 124, 164
238, 249, 251, 328
Chaadaev, Pyotr 1, 142, 219, 220, 241, 326, Crusades 9–19, 26, 27, 41, 42, 55, 74, 79, 326
340, 346, 348. Cuba 212
Chancellor, Richard 80–1, 106, 110, 335 Curzon, Lord 218
Charlemagne 27, 28, 75 Custine, Adolphe, Marquise de 25, 184
Charles I (king of England) 103–4, 339 Cyprus 309
Charles II (king of England) 104 Cyril (saint) 35–6
Charles XII (king of Sweden) 200 Czechoslovakia 284, 285
Chayanov, A.V. 207 Soviet intervention in 289
Chechens 7 see also Bohemia
Chernyshevsky, N.G. 213–14
Cherson 32–3 Danilevsky, I.N. 39, 329
China 9, 12, 47, 61, 80, 92, 111, 130, 140, 145, Danilevsky, Nikolay 7–8, 173, 326, 330, 342
212, 216, 221, 238, 315, 317, 327, 335 Danube 28, 29, 33, 35, 37, 191, 193, 194
Christianity 3, 7, 13, 29, 35–8, 51–2, 140, see Danzig 116, 117
also Orthodox Christianity, Catholicism, Dark Ages 27, 28, 30, 38, see also Middle Ages
Protestantism Davydov, Oleg 302, 354
Circassians 7 Decembrists 181–3, 192, 342
Civilisation 3, 6–12, 28–9, 61, 74, 84, 107, 220, Delyagin, Mihkail 310–11, 315, 354–5
256, 300, 326 Demidovs (trade family) 163, 165
Civilisation School of historic Denmark 29, 38, 56–8, 66–7, 71, 98, 116–17,
interpretation 6–10 145
‘Western civilization’ 143, 242 Derpt see Yuryev
Colbert, Jean-Baptiste 164 Deulino Treaty 101
relations with post-Soviet Russia 317–18 Igor (Prince of Rus) 31, 33, 63
Holy Roman Empire 28, 75 India 11, 12, 15, 43, 73, 74, 75, 80, 83, 101,
see also Prussia 105, 130, 145, 157, 160, 161, 173, 174,
Ghent 69 187, 209, 216, 218, 221, 238, 249, 315,
Glazyev, Sergey 299, 301–2 317, 319, see also England, British India
Glinchikova, Alla 307, 321, 349 Industrialisation 15, 116, 201, 221
Glinskaya, Yelena 78 in Russia 204, 223, 224, 226–30, 241
Glinski, Dmitri 306, 354 in the Soviet Union 136, 261–3, 265–7, 270,
Godunov, Boris (tsar of Russia) 85, 98, 99, 272, 277–83, 287–8, 304
103, 120, 126 deindustrialisation in post-Soviet Russia
Gogol, Nikolai 204 310–12
Golden Horde 51, 52, 63, 64, 69, 70, 73 Intelligentsia 5, 212, 214, 242, 256, 258, 279,
Gorbachev, Mikhail, 300–1
321, 345
Gorchakov, Alexander 198
International Monetary Fund (IMF) 109, 302,
Gordon, L.A. 278, 352
305, 306, 310, 312–13
Gotland 57
‘Invincible Armada’ 96, 101
Great Britain see England
Great Depression 19, 265, 267–70, 282, 288, 290 Iran see Persia
Great Moravia 28 Iraq 318–19
Great Patriotic War see Second World War Islam 8–10, 36–8, 328
Great Perm 129 Russia’s Islamic trade 42, 51
Great Silk Road 130 Islamophobia 320
Great Victorian Depression 201 Israel 290
Grekov, B.D. 76, 328, 329, 331, 338 Istanbul see Constantinople
Griboedov, Aleksandr 141, 181 Italy 10–12, 28, 39, 40, 45, 49, 50, 54, 56, 57,
Grousset, René 36, 37, 48, 328, 329, 332 62, 63, 65, 66, 71, 167, 173, 178, 202,
Gunder Frank, Andre 11, 326, 327 247, 253, 293
Ivan III 64–6
Habsburgs 75, 98, 106, 340 Ivan the Terrible (Ivan IV) 2, 19, 24, 52, 78,
Hague, The 147 81, 88–99, 102 110 111, 121, 142, 145,
Hanseatic League (German Hansa) 57, 58, 62, 148, 157, 170, 195, 323, 335, 336, 338
63, 66, 68, 71, 185 and oprichnina 72, 94, 327
Harun al-Rashid 41 relations with England 80–3, 85–7, 98, 103,
Hasse, John 81 105
Hellie, Richard 108–9, 111, 337, 338 and serfdom 120, 122, 126
Henry VII (king of England) 93 and the conquest of Siberia 127–9
Henry VIII (king of England) 93–4 Ivangorod 78, 81, 95
Henry the Lion (prince of Saxony and
Bavaria) 55, 57 Jacobinism 173–4, 281, 345
Herzen, Aleksandr 182, 204, 213
James I (king of England) 99, 102, 337
Hobsbawm, Eric 106, 337
Japan 9, 16, 80, 140, 150, 151, 202, 221–2,
Holland see The Netherlands
238–9, 249, 285, 286, 294
Holstein 57, 161
Russo-Japanese War 151, 237, 239, 249,
Holy Roman Empire see under Germany
251, 255
Hughes, John 227
Hundred Years War 64 Jenkinson, Anthony 83, 110
Hungary 28, 45, 47, 48, 51, 59, 65, 169, 184, Jerusalem 9
202, 221, 248, 284, 289, 299 Johann III (king of Sweden) 91
Hungarian invasions in Europe 28 Judaism 3, 35–7, 329
Revolution of 1848–49 169, 187 Justinian II (emperor of Byzantium) 36
see also Austria, Austria-Hungary
Huntington, Samuel 7, 326 Kabul 218, 249
Hussites 12, 48 Kafa 49, 60–2, see also Crimea, Genoa
Kalita, Ivan (Prince of Moscow) 52, 61–3, 66
Ideology 8, 9, 12, 36, 75, 113, 134–6, 189, 212, Kalka (battle) 32
244 Kalmar Union 58
in the Soviet Union 6, 262, 264, 281 Kama (river) 71,
Middle Ages 10, 13, 26, 27, 31, 36, 42, 48, 54, Nicholas I (tsar of Russia) 182–4, 187, 192,
57, 88, 110, 119, 128, 134, 140, 220, 243, 193, 195, 204
330, 331 Nikifor (Byzantine emperor) 33
Middle East 9, 15, 41, 55, 195, 290, 291, 293, Nikitin, Afanasy 74, 110
319 Nikon, Patriarch 123, 135–6
Mikhailovich, Aleksey (tsar of Russia) 104 Nizhny Novgorod 69
Milyukov, P. 138, 144, 152, 340, 341 Nogay, Khan 60
Minin, Kuzma 100 North Sea 29, 116, 117
Miroslavsky, Ilya 113 Northern Dvina (river) 80, 87, 88, 96
Mohammed (prophet) 9 Northern War 143, 146, 147, 165, 200, 255
Moldavia 194 Norway 29, 58, 67, 80, 145
Mongolia 238, 335 Novgorod 26, 27, 29–31, 39, 43, 46–7, 49, 50,
Mongols 28, 37, 45, 46–8, 51–2, see also Tatar- 53–78, 81, 88, 94–6, 100, 105, 248, 333,
Mongol invasion, Tatar yoke, Golden 336
Horde Novorossiysk 227
More, Thomas 13 Novy, Aleviz 66
Morozov, Boris 113, 123–4
Moscow 1, 45, 69, 81, 83, 86–7, 138, 141, 149, Odessa 172, 179
171, 172, 175, 176, 178, 179, 186, 218, Old Believers 135–6
229, 240, 252, 255, 259, 260, 273, 336, Oleg (prince of Rus) 27, 31
339 Onishchenko, Gennady 316
Princedom 50–2, 60–6, 70 Organisation of Petroleum Exporting
‘the Third Rome’ 75–6, 140 Countries (OPEC) 15
Orsha (battle) 91
as capital of the Soviet Union 284–7, 294,
Orthodox Christianity 3, 7, 8, 13, 18, 36, 38,
296, 297
44, 45, 56, 63, 74, 85, 112, 135, 140–1,
as capital of post-Soviet Russia 317
149, 168, 188
Trials 4
and Tatars 51–3
Muhamed Ali (Egyptian ruler) 188
Ostroukhov, P.A. 155
Muscovite Rus 18, 71–137, 139, 141, 145, 150,
Ostrovsky, Aleksandr 208
157, 336, 339
Otrepyev, Grishka (false Dmitry) 120
Muscovy see Moscow
Otto I (king of Germany) 28
Muscovy Company 77, 80, 82–3, 85–90, 95–7,
Ottoman empire see Turkey
99–103, 105, 110, 155
Pakistan 15
Napoleon see Bonaparte, Napoleon Paris 53, 129, 161, 177–9, 186, 193, 198, 205,
Narva 57, 78, 79, 89–95, 96, 101, 102, 145 213, 226–8, 231, 232, 234–7, 249–53, 262,
NATO (North Atlantic Treaty Organisation) 285, 288, 308
285 Paris Commune 24, 213
Navarino (battle) 188 Patriotic War of 1812 177,
Navigation Act 146, 157, 190, 344 Paul I (tsar of Russia) 173–4, 218
NEP (New Economic Policy) 259 Pavlov-Silvansky, N.P. 64, 324
Nepeya, Osip 81 Peace of Stolbov 101
Nesselrode, K.N. 189 Pechenegs 32, 33, 37, 47
Netherlands, The 10, 13–14, 31, 56, 68, 80, 86, Peel, Robert 189
90, 95–8, 101–13, 115, 117, 127, 129, 140, Pereyaslavets on the Danube 33–5
145–7, 149, 155, 157, 165, 168, 165, 251, Persia 29, 40, 43, 61, 62, 69, 79, 83, 98, 110,
254, 336, 343 157, 160, 184, 188, 238
Dutch trade with Russia 82–3, 89, 116, 145, Russian trade with 26, 42, 55, 61, 83, 110,
172, 175, 180, 186, 229, 256 157, 158
Dutch entrepreneurs in Russia 112, 114 English trade with 83, 98, 101. 110, 157–60,
Dutch military experts 123, 138, 142 195
Dutch colonialism 116, 155 Persian Gulf 15
Neva (river) 78, 142, 143, 171 Peter the Great (Peter I – tsar of Russia), 2–3,
Nevsky, Aleksandr 67, 78 88, 95, 107, 114, 134, 138–51, 153, 155,
New Trade Statutes 108, 110 157, 159, 161–3, 165, 171–2, 177, 200,
New York 251 220, 255, 300, 323