The Russian and Ukrainian economies

The Russian and Ukrainian economies have long been peasant economies characterised by inefficient paths of communication, which restricted trade to major cities, where markets were held (once a year in the biggest of them, Novgorod).

Sources of information on the Russian and Ukrainian economies were scarce until the nineteenth century, and then things radically changed. At the beginning of the century, the Tsar invited foreign scholars to travel through the country for a few months or years, each with the eventual aim of delivering a tableau statistique based on their observations. The most striking examples were C. von Schlozer and A. von Haxthausen. By the end of the century, local zemstvo statistics, central statistical bodies and scientific societies were far more effective.

Most indigenous economic thought in the nineteenth century was based around conflicting views on the obshchina, the traditional rural institution of collective landownership. Was it an archaic institution impeding economic development or a genuine basis for a higher socialist world? A minority defended the first point of view, including B.N. Chicherin, I.V. Vernadsky and L.N. Litoshenko and B. Brutzkus during the early Soviet period. The second point of view was the most popular, defended by authorities like N.G. Chernyshevsky, M.M. Kovalevsky and N.F. Danielson. For the government, the obshchina guaranteed stability through strong social cohesion (peasants bound to their land, a life confined to tradition), but at the same time, it was perceived as a low productivity system, responsible for economic backwardness. Various reforms to abolish the obshchina were attempted at the beginning of the twentieth century with controversial success.

Industry had two roots in Imperial Russia. First, there was a centralised state-controlled and state-sponsored industry devoted to the extraction of raw materials and to military equipment. Second, there was a decentralised craft industry in the countryside, either a landlord’s small factory employing serfs or an association of workers who increased their income after fieldwork in the artel — a production cooperative. Russian cities were unlike European cities: they were almost exclusively centres of consumption of luxury goods imported for the aristocracy, where private factories were largely missing until the 1880s. Many efforts had been made by the state to extract Russia out of its industrial lethargy: Russian ministers of finance, among others, attempted to create the conditions for an industrialisation of Russia: monetary and credit reforms, extension of the railroad network, attraction of foreign investments and active foreign policies. But — and the famines of 1891, 1892 and 1902 recalled it — industry could not develop without a strong agriculture. With P.A. Stolypin’s reforms at the turn of the 1910s, for the first time the agricultural and industrial sectors seemed to develop together. Industrialisation was not abandoned after the revolution; on the contrary, it was a highly debated topic with huge practical consequences.

The various actors of the economy restlessly debated these industrial and agricultural issues. Under the old regime, society was divided into several social groups, or sosloviye, grouped under four titles: the nobility, the clergy, the urban dwellers and the peasants. These groups, while they might have had a direct connection with some empirical reality up until the first half of the nineteenth century, were not able to grasp the on-going stratification of society. A popular Russian proverb said, ‘God is in His Heaven and the Tsar is far away’. Popular wisdom captured well the fact that the Tsar was no longer the intermediary between God and the people: there were many intermediaries between the Tsar and his peasants, including new economic actors and economic thinkers. Whatever the names given to these groups (raznochintsy, intelligentsia), they represented those who swelled the cities but did not fit into the traditional sosloviye: the new professionals (merchants, industrialists, bankers), journalists, publicists, writers, artists, ruined landlords, and the growing bodies of civil servants and academics, statisticians and economists, among others, whose expertise were needed by both local and central levels of government.