Why Did Peter The Great Not Develop Russia's Commercial Economy

Why Russia did not develop a more Vigorous Commercial Economy as a Part of its Imitation of Western Patterns.

According to the “Russia, A Short History” by Abraham Ascher, Peter the Great in 1697 visited Europe in order to find allies against Ottoman Empire (2009. p59. pp2). However, another purpose was to have knowledge on European industrial techniques especially on shipbuilding and navy. After returning to Russia, Peter the Great started to make reforms in order to improve status of Russia and made Russia the same as Europe in economic field. Although, there were many reforms made, Peter the Great did not develop Russia’s commercial economy as a part of Westernization because of his interests and obstacles that he met on that way.

Firstly, Russia during the reign of Peter the Great was struggling with wars with Sweden, Turkey and Persia.

Peter the Great first purpose to improve industry and economical welfare of Russia was to provide the expenditure of army especially during the period of war with Sweden. Stephen Lee in his book “Peter the Great” states that in Peter the Great’s writing to senate was “money is the artery of war” (2013. p54. pp1). It is precisely demonstrated in “Peter the Great” (2013) that Russian seventy five percent of expenditures were spent to army and navy in 1701, in 1710 this number was reached to eighty percent, and at the end when wars ended it was sixty five percent (p54.pp1). According to “Russia: A Short Story” Russian’s expenditure in between1705-1707 exceeds twenty percent which had consequences in future years as well (2013.p63.pp1). Even some of the historians divided Peter the Great’s reforms in two parts: Before and after Paltava battle. This all demonstrated that in the first part of Peter the Great’s reforms he did not pay attention to any commercial economy at all and his focus was on only improving its army in order to win the war by developing

economy.
After the wars ended, Russia’s economical reforms were implemented to make Russia less dependent on import goods by raising Russia to European level. However, in this process Russia meets with the lack of capital problem which caused many obstacles in front of industrial development and as a result, weak commercial economy. In order to increase Russia’s revenue, the most effective step was increasing taxes and duties. Many of taxes were indirect as tobacco, salt and beard. Moreover, according to the statistics in “Peter the Great”, Peter increased revenue by thirty three percent before “soul tax” charged on men, women and children, after soul tax this number reached to fifty three percent (2013.p55. pp2). According to “Russia: A Short History”, by collecting that much taxes, Peter the Great got 4,500,000 rubles instead of 1,800,000 (2013.p63.pp1). By taking this step he could increase state revenue excessively despite the hardship that Russian people faced because of hard direct and indirect taxes.
After collecting sufficient revenue, Peter took next step to improve Russia’s industrial sphere, in order to develop its commercial economy.

However, he met two obstacles in his purpose. First of all, according to the book “Peter the Great” (2013) most of commodities were low quality such as woolen, linen, silks which were prepared for exportation (p59.pp3). As a result of this, Russian commodities were not compatible in the market of neither in Russia nor in the Europe. The main reason for law quality was lack of entrepreneurial industrial skills of Russian merchants and entrepreneurs. Evgenii Anisimov in his book “The Reforms of Peter the Great” wrote that most of companies were established with the help of foreign experts (1993.p140.pp5). As a consequence, Russian domestic industrial economy was backward from other European countries. This reason burdened Peter to improve its commercial economy at the period of

Westernization.
Another reason was again related to lack of capital so although Peter aimed to develop Russia’s private industries as in Europe, he could not achieve. The first consequence of lack of capital was most of merchants and nobles who have enough capital did not want to spend their money on newly-created industries. They were afraid of losing their money when the capital is lack. Peter the Great made capital investment available which was considered invaluable by some historians, so the industry became more dependent on state itself (“Peter the Great”.2013.p56.pp4). The main reason of this step was considered as Peter’s lack of financial knowledge and unplanned and unsystematic steps. As a result, Peter the Great failed to create private industries and could not compete in world economy actively.
Finally, Russian traders met many disadvantages from compare to Western countries which were discouraging them to join commercial economy of Russia. Anderson,M indicates in his book “Peter the Great” (2014) that Russian merchants and traders had higher interest on borrowed money from the state, higher shipping and insurance rate, so as a result prices of commodities were higher than their Western rivals (p194.pp2). The reason to put heavy duties on merchants was because of lacking capital in overall Russia. Consequently, providing all these money at the time of lack of capital was unimaginable for most of the merchants. They mostly traded with Western countries really passively and traded in other countries such as Ottoman’s, China’s ports (“Peter the Great” p194.pp2). Because of the disadvantages in Russian commercial economy toward most of the merchants made people less interested in development of trading and investing money on that sphere.
Moreover, Peter the Great did not develop Russia’s importing economy as well. The main reason was mostly his nationalist attitude toward Russia so he wanted to do all the best for Russia’s welfare. Although he wanted to apply Western techniques on Russia and people, his main idea was about improving Russia’s welfare so it will not be depend on any country at all. As a result of this attitude, he mostly concentrated on domestic economy in order to decrease the rate of exported commodities. He put heavy taxes on exported commodities in order to discourage people to buy foreign commodities, and he tried to open new industries to meet people’s needs. However, he failed in his step and could not achieve good commercial economy both in importing and exporting.
By analyzing all the reasons that prevent commercial economical development precisely demonstrates that most of obstacles made Russia especially Peter the Great hard to take a step to develop Russian trading relationship with European countries and East by imitating Western patterns. It would be true if we say that Russia could not rather than did not develop its commercial economy. Mostly, as we mentioned before because of the factors as lack of capital, lack of expertise and knowledge on industrial sphere, Peter the Great’s great interest toward army and the war condition at the first stage of reforms and finally, Peter the Great’s lack of planning and financial skill caused backwardness in trading at the period of Westernization. However, we cannot reject the truth that after the economical reforms of Peter the Great despite all weaknesses Russia became stronger in all spheres compare to previous years. Consequently, today’s modern Russia owes many things to Peter the Great reforms in economical life despite the fact that it was criticized by many historians.