The Effectiveness of Wittes Economic Reform in Russia
When Sergei Witte became minister of finance in Russia in 1892 he recognised that the economy had to be modernised if Russia was to become a world power on a par with the west.
The Industrial Revolution that had taken place in the west had led to its massive economic growth and an increase in power and Empire building. Being able to buy cheap, raw materials like oil and coal from Russia fuelled part of the west’s industrial revolution.
Witte decided that Russia needed state Capitalism to modernise. He borrowed capital and encouraged investment from the west and large factories began to produce heavy industry like steel. Witte imposed
…show more content…
Wittes economic policy seemed to be working as by 1897 the Russian currency, the Rouble, was put on the Gold Standard which gave it value in exchange with other currencies. But there were other problems that were beginning to undermine Wittes visions for a successful economy. Although a brilliant mind, Witte was not an easy man to get on with and he was not popular with the Tsarist court or the government. Change was resisted and Witte had no support for his vision of a richer, more powerful, modernised Russia.
There was also conflict with the military commanders who pushed their needs for transport and military hardware to the top of the economic agenda. These conflicts interfered with Wittes plans and so by the time of the Great Trade Recession at the turn of the century, critics could identify three major weaknesses in his economic reform. Witte paid
To drive his economic reform through without support or interest from the Tsarist court or the government Witte (who was German) brought in many experienced foreign industrialist and capital from the west to manage and finance his projects. This was not at all popular with the Tsar or Russia who did not trust him. Wittes industrial projects were always large and on a grand scale. He failed to nurture light engineering projects which would have helped to modernise
This was achieved with the emancipation of the serfs. Still without a middle class, the government played a strong role in the early decisions with industrialization. The tsar during this time, Alexander II, had a great railroad network created that allowed for more efficient use of Russia’s plentiful natural resources.
This demonstrates that since the stress of waging war was tremendous, it should be no surprise that the first war could be a primary cause of the Russian Revolution. Moreover, the major powers of Europe hurt Russia in World War I; yet, by 1917, all the combatants horrifically suffered from the strains of war economically, proving this to be a long-term cause. This was, to a great extent, considerable because the military defeats and social strains of World War I had created a crisis in Imperial Russia. Before, Russia had some military accomplishments and they were on their way to being successful. Nevertheless, their triumphs were not long-standing; hence, Russia was not able to be victorious due to the fact that Russia decreased in economy because of the limitations in Russia. Similarly, restraints included the shortage of food and the huge problems with getting the obligatory materials for the army during World War I, which shows that this was momentous. Along with Russia being defeated and having a scarcity of supplies, Russia also showed economic oppression due to the pressure in jobs workers faced.
The Stability of Russia in 1914 In 1914 Russia's stability was questionable; the Tsar's regime had been under considerable strain due to the unsuccessful uprising in 1905. The Tsar still had the support of the army, which helped to put down many attempts at revolution. However, there was still brewing resentments about the harsh conditions of the Tsar's government that threatened to explode at any time.
The Soviet Union, which was once a world superpower in the 19th century saw itself in chaos going into the 20th century. These chaoses were marked by the new ideas brought in by the new leaders who had emerged eventually into power. Almost every aspect of the Soviet Union was crumbling at this period both politically and socially, as well as the economy. There were underlying reasons for the collapse of communism in the Soviet Union and eventually Eastern Europe. The economy is the most significant aspect of every government. The soviet economy was highly centralized with a “command economy” (p.1. fsmitha.com), which had been broken down due to its complexity and centrally controlled with corruption involved in it. A strong government
Economically, Russia was in a lot of danger. Thus they took out a loan from France. In one respect in indicated instability in that they now relied on another country which was risky. However simultaneously it depicted how Russia was trying to overcome the backwardness. Nevertheless; linking back to Stolypins social reforms, it as well had knock on affects on agricultural affairs. As now, they were becoming more reliant and independent in their farming. As well it encouraged them to get jobs; in turn improving Russia’s industry. By 1914 only 17.8% of factories had less than 100 workers and 41.4% had more than a 1000 workers. In this respect indicating stability with Russia or at least Russia was stabilising.
The entire economic structure of Russia appeared to be fully dependent on industrialization. In Document 1, a Russian finance minister presents the facts that the Russian empire is making a great transformation and that the industrial and commercial systems must be carried strongly in order for Russia to catch up with other countries economically. The details of how the production and trading of goods are so imperative makes you understand how hard the people of the industry have to work to make all of this possible. Further confirming this observation, Russian workers claimed they would rather die than live the kind of life they lived in Document 4. In Document 4, a Russian socialist witnessed a workers’ meeting during a strike. Quotes from workers like “our suffering has gone beyond all measure,” demonstrated the horrible conditions employees worked in. Another piece of evidence comes from Document 7. In Document 7, a Russian physicist analyzes the women employment in factories. It is said that they worked insane hours and were paid unjust amounts. Women who asked for a raise were just laughed at and disregarded. Within this same document it is revealed that there were children being physically forced into performing intense labor. In proving this unfair treatment, a document from an emperor or prominent political leader could be very beneficial in explaining how things were truly run in factories. However, in the end these documents serve as sufficient evidence that industrial work in Russia was not
Money was required for Russia to build their own industrial base to support themselves. To build this infrastructure they had to borrow money from other countries. In exchange Russia would give them grains. Hence, Russia’s economy depended on the peasant who had to feed themselves & the bourgeoisie.The peasants weren’t productive enough. As a result, Stalin started to collect agriculture to finance industrialization (New World Encyclopedia contributors, 2014). Economics historians believe it to be the fastest economic growth rate ever achieved. In 1932-1933 the 4th greatest famine occured in the USSR due to collectivication (Fitzgerald, 2013). The workers building and working in these industries were unpaid laborers and prisoners (New World Encyclopedia contributors, 2014). Because there was about ~7 million - 15 million prisoners in labor camps and they were working in industries, those camps were now necessary for the prosperity of Russia’s economy (The Editors of Encyclopaedia Britannica, n.d.). With all those measures in place the productions of coal, pig iron & steel increased (New World Encyclopedia contributors,
Over the period from 1855 to 1964, Russia saw various reforms and policies under the Tsars and the Communist leaders that had great impacts on its economy and society both positive and negative. Lenin definitely implanted polices that changed society and the economy for example with war communism. However whether his policies had the greatest impact is debatable and in this essay I will be assessing the view whether Lenin had the greatest impact on Russia’s economy and society than any other ruler between the period from 1855-1964.
There were also many problems in Russia after they had an Industrial Revolution. Russia had many government problems. The Russian government was a type of government that did not listen to the people. The government did as it pleased without consent from the people. The people had no say in the governing process as in the United States. Due to this there were poor working and living conditions, overpopulation, poor sanitation, not many jobs and many people were starving. The majority of the people in Russia (about ninety percent) were poor and only about ten percent were rich and they controlled the nation. This meant the majority of the nation was not being listened to.
Another reason for the fall of Tsarism in 1917 that was highlighted but not caused by the war is the fact that Russia was a difficult country to run. Russia's economy was backward compared to those of other Western countries, 4/5 of it's population were peasants, who were more often than not illiterate and lived in severe poverty. Although by 1917, improvements had been made to the
Russia’s economy is very complex and also very terrible at the same time. Many other economy’s are also like this but Russia’s is a very interesting thing to learn about. Russia’s economy has many things wrong with it that in the long run could probably affected it in a negative way. But it also has many positive things about it.The negatives and the positives are, in my opinion, are equal in Russia economy.
Russia was a country rich in raw materials that had been undisturbed by modern extraction and refining techniques until then, however, the majority of the countries resource rich areas were nowhere near any railways, with the bulk of the heavy materials such as steel, iron, coal and copper being in the Urals, almost 1,000km away from the nearest railway system in 1860. Oil, another key ingredient in industrialisation was almost 1,500km away to the south, in the Caucasus area3. This lack of transportation in a period when steam powered machines were producing the goods and steam powered trains were delivering them and leading the industrialisation in other countries like Britain, the USA and a future foe in Germany is an indicator of the distance that Russia was behind its rivals under the leadership of the Tsar. So the Tsar’s Russia was largely an agrarian one, but even in the agricultural sector Russia was lagging far behind the rest of the West in terms of the methods employed by farmers, little fertiliser was used and the labour saving machines used in countries with enormous agricultural output like the US were nowhere near as widespread in Russia. The weaknesses of the Tsar’s management of the agricultural sector were highlighted in 1891 when famine hit. Due to the heavy tax on consumer goods, peasants had been forced to sell more of their
A large part of the problem was serfdom - Russia needed millions of industrial workers, to free up land and to force the nobility to relinquish power to a certain extent. The Tsar was also aware that much of western Europe looked on serfdom as being akin to slavery, and looked down on Russia as a result. As one historian has remarked: 'The strip system, involving the use of antiquated farming implements and techniques, had long ago been abandoned on the agriculturally advanced nations. Its continued use in Russia was a major reason why the nation could not meet it's food needs. '[1]
Comparing Lenin and Stalin one finds that both were following a communist ideal but what is the communist ideal? The main principal is to share a country's wealth amongst its people. This is the theoretical side of the communist idea; the practical side requires a careful planning of the country's economy and also a system that makes sure that everybody is treated equally.
The Russian state has been characterized by its strong heritage of powerful, autocratic leadership. This domination by small ruling elite has been seen throughout Russia's history and has transferred into its economic history. Throughout the Russian czarist period, to the legacy of seventy years of communism; Russia has been a country marked by strong central state planning, a strict command economy and an overall weak market infrastructure (Goldman, 2003). Self-interest, manipulation and corruption have all been present in the Russian economy, and have greatly helped the few as opposed to the many. To this day, Russia still struggles with creating a competitive and fair market.