The Industrial Revolution in Russia

The Industrial Revolution in Russia

Russia, which began its industrial revolution at least a half century

behind most of the West European countries, had to meet a number of

special challenges. Russia moved to industrialisation in stages. An

uncertain experimental phase – which Russia had already experienced to

an extent before 1870 – included larger reforms that helped free up

economic change. This preliminary period was followed by more rapid

growth in a society still overwhelming agricultural. Russia had

well-developed industrial sectors by the early 20th century, but

paused well behind the West. Russia became the only society to

experience full-fledged political and social revolution after the

industrialisation process was well under way.

The reform period in the 1860s that brought limited freedom for the

serfs also produced a host of other political changes, some of which

involved economic policy. The Abolition of Serfdom in 1861, had slowed

down the creation of a large workforce, and, as such, the Russian

economy had been almost completely agrarian. Also, Russia’s previously

untouched deposits of coal and other raw materials began to be

exploited.

Government budget procedures were regularized and state bank was

created in 1866 to centralize credit and finance. Government policy

also encouraged more foreign investment.

Russia’s reform ended in 1881 with the assassination of Alexander II,

after which highly cruel policies went into effect in most quarters.

The Ministry of Finance, however, maintained a commitment to change.

The minister of finance during the 1890s, Serge Witte, dedicated his

great talents to ...

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...a traditional agriculture

and impoverished peasantry, an autocratic state and an inactive

economy, which could only be pulled into the modern age during the

1890s by a state-induced industrial boom. From 1894-1900, with state

support, heavy industry grew rapidly until the financial crisis of

1901 weakened government credit and ended the boom. During the years

1894-1900, however, backward linkages from the industrial sector were

formed with the rest of the economy. Thereby, an infra-structure was

created which, in the aftermath of the crisis of 1901-1905 and in the

context of reforms initiated in 1906, allowed the Russian economy, for

the first time to experience a phase of natural, balanced economic

growth. By 1914, Russia, thanks to the state help of the 1890s, was

well on the way to join the western European nations.