Industrialisation

One of the main reasons for the reforms introduced by Alexander II was the need to turn Russia into a modern industrial state. In Western Europe industrialisation had been financed by wealthy middle-class investors but in Russia industrialisation did not result from small private investment. By the 1890s it was obvious that Russian industrial growth would have to be funded by government intervention and foreign investors and would need foreign expertise. British capitalists established textile factories in Moscow and iron works in the Donetz region. Sweden's Nobel brothers began an oil industry in Baku and by 1913 Russia was the world's second biggest oil producer.

However, in 1861 Russia was still overwhelmingly a rural country with craft-type, cottage-based industry. The total urban population was around 2 million with most of these people living in St Petersburg or Moscow, only nine other towns had populations of more than 30,000 people. The emancipation of the serfs facilitated economic growth. To meet their redemption payments peasants had to sell their grain. Railways were needed to carry this grain to the major population centres and to the ports for export. There was a shift of population from the countryside to the cities, whose population doubled in between 1863 and 1897.

By the 1890s Russia was making steady but slow industrial progress. In the 1890s Russia rapidly built up its industries. The driving force behind this change was the Minister for Finance, Sergei Witte. Witte's policy was based on:

• high tariffs to protect the young Russian industries and help them to grow
  
  
• foreign loans - Russia was attractive to investors because it had a stable currency and the government guaranteed to pay back the loans. The main foreign lenders were France, Britain and Germany.
  
  
• increased grain exports to earn the reserves of gold and foreign currencies needed to fund industrialisation. Even in times of low harvests and famines the export of grain and foodstuffs continued.
  
  
• the building of a network of railways to improve the movement of grain from rural areas to the ports. Between 1891 and 1901 the total length of Russian railways rose from 30,000 kilometres to over 56,000 kilometres. The trans-Siberian railway which linked Moscow to Vladivlostok, a distance of 7040 kilometres, was completed in 1904.

Witte also developed trade and industry on a large scale. The main focus of industrialisation was on the development of heavy industry; coal, iron-ore, steel, pig iron and oil. Other industries that grew were textiles and food-processing. Huge factories were built in or near the two largest cities, St Petersburg and Moscow. In 1913, one in four industrial workers worked in factories which employed over one thousand workers.

Under government direction, Russia in this period had a rate of economic growth higher than that of any other major European power. But the main focus concentrated on heavy industry and did little to modernise agriculture which remained backward.

Consequences of industrialisation
As the populists had feared industrialisation brought misery to the poor:

• Conditions of work in factories and mines were appalling; accidents were common. There were few laws to regulate factory employment and those which did exist were not enforced.
  
  
• Unions were banned and strikes were illegal.
  
  
• Industries outside the major cities housed workers in overcrowded barracks.
  
  
• Housing conditions in the cities were not much better. Overcrowded boarding houses, little or no sanitation and some workers had to sleep on their workbenches.

Peasants faced deteriorating living standards because the size of their land holdings declines and their payment of indirect taxes rose. Underfed, poorly paid and over taxed, growing numbers of peasants were forced to seek employment in the towns and cities adding to the overcrowding there. They joined, and swelled, the numbers of the urban poor to form a new and numerically growing working class in the large towns. The average wage was barely sufficient for the worker to support himself. In spite of the fact that trade unions were banned, strikes increased and the government called out the army to suppress them.

After 1900, the number of illegal strikes for better working and living conditions increased dramatically. In the countryside rural riots broke out in province after province. Discontent was made more dangerous for the tsarist regime by urbanisation. Nearly one in six Russians now lived in towns or cities. These workers were the targets of revolutionary groups sewing the seeds of revolution.

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