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Posted: April 12, 2025
In the decades before the 1917 October Revolution, the Russian Empire’s economy was still overwhelmingly agricultural. 80%+ of Russians worked the land, which remained the paramount economic factor. Industry was increasing at the turn of the 20th century, in the urban centres, with the blooming proletariat playing a decisive role in Russia’s three coming revolutions.
A cornerstone political and economic moment in Russian history was the 1861 Emancipation of the Serfs by Tsar Alexander II. Serfdom kept the Russian Empire’s economy more medieval and feudal much later than the Western European capitalist powers. Russian serfdom differed slightly from slavery, with the serf tied inseparably to their lord’s land, rather than being the lord’s outright property. Emancipation, however, kept massive financial burdens on the theoretically free peasants. Appropriated land was divided 50/50 between a few thousand landlords and tens of millions of peasants (each received a ~15-30 acre plot). The imperial government paid the landlords for all appropriated land, passing these debts on to the peasantry. The serfs now paid the Tsar for their freedom which, as anyone who’s been in debt knows, is no freedom at all.
The peasantry’s living standards remained dire, thanks to serfdom redemption payments, backwards agricultural methods, and extremely unequal land distribution. The Tsar remained Russia’s greatest landlord, flanked by ~30,000 landed barons. This aristocratic class owned ~189m acres, more total land than the 50m poor or middle peasants held, with their average estate (5,400 acres) >200x larger than the average peasant plot.
Industrialization accelerated in the 1890s, led by Sergei Witte and mostly financed by Western European capital (especially French), with an emphasis on railroads (Russian railroad fever lagged behind the British, American, French, and German strains by decades). The peasant agricultural commune, with communal land, and collective taxes and redemption payments, stood in conflict with Witte’s program of economic modernization. Lenin wrote extensively about the dispossession and impoverishment of the peasant masses, who were increasingly driven from their land, to be exploited in the cities’ factories. Since the Russian monarchy’s power stemmed from the landed aristocracy, Witte’s capitalist reforms translated poorly into state power. This became horrifyingly evident when Russia was defeated by Japan in the 1904-1905 Russo-Japanese war, marking the first defeat of a European power by an Asian capitalist peer.
The 1905 Revolution occurred in part due to serious economic problems, but the resulting reforms from the failed revolution in turn failed to fix the imperial economy’s structural issues. With a serious economic downturn in 1905, public sentiment then further soured with the destruction of two-thirds of the imperial naval fleet by the Japanese in the decisive May 1905 Battle of Tsushima. A general strike in St Petersburg (along with ongoing rural peasant protests), led to the dramatic high point of the 1905 Revolution, Father Gapon’s march to the Winter Palace. While trying to present a petition to the Tsar, hundreds of workers were mowed down by Tsarist police, on what has come to be known as Bloody Sunday.
From an economic standpoint, the 1905 Revolution did assuage some of the masses’ concerns. The burdensome serfdom redemption payments were abolished, and trade unions and strikes, both banned prior to 1905, were made legal. However, the conservative constitutional and land reforms under Prime Minister Pyotr Stolypin, the listless duma (parliament), and violent repression of workers, failed to rectify structural economic ills. Per Lenin, Stolypin’s elimination of the peasant commune in favour of free landholdings was ‘the last valve that could be opened in the overheating steam machine of the Tsarist regime without liquidating large land ownership.’
The imperial Russian economy began to grow once again by 1909, but the industrial base, soon to be tested by World War I, seriously lagged behind other European capitalist powers. The Russian Empire ranked fifth in industrial production, but well behind the leading industrial nations (United States, United Kingdom, and Germany). Certain industries grew rapidly in the two decades prior to World War I, like coal production (306%), oil (65%), gold (43%), copper (375%) cast iron (250%), iron and steel (224%). Globally, the Russian Empire grew the second most wheat (behind the USA), produced and exported the most butter, and was responsible for 50% of rye crops, 50% of egg exports, and 80% of flax production, among other crops. Yet due to its much larger population, Russian GDP per capita in 1913 was $1,488/person, below the global average of $1,524, and 3.5x and 3.3x lower than the USA and UK, respectively.
Once World War I broke out, the horrors of total industrial warfare became immediately evident. On both sides of the conflict, state command over key industries effectively mobilized resources like never before, unfortunately towards killing and destruction. Weaker Russian state capacity and infrastructural networks created compounding issues in agriculture, production, and transportation. 15 million men, and millions of horses, were drafted, the vast majority from the countryside, hollowing out the Empire’s agricultural base. These soldiers and animals, who formerly produced the food, now needed to be fed by those who remained to work the fields.
As would later happen to other less developed capitalist powers like the Austro-Hungarian and Ottoman empires, the Russian Empire was soon swept from the historical stage, as the largest imperial casualty of World War I. The 1917 February Revolution left Alexander Kerensky’s social democratic government in place of Tsar Nicolas II. Support for Kerensky’s policy of continuing Russian involvement in the war dwindled, outstripped by the Bolshevik policy of revolutionary defeatism (Lenin’s notion that WWI was an inter-imperialist war in which workers would only kill each other, and never their true capitalist enemies, so the imperialist war should be turned into a civil/class war within each country). With the ever-worsening conditions for soldiers, workers, and peasants, the Kerensky government soon joined the Tsarist Empire in history’s dustbin, as the October Revolution brought the Bolsheviks to power, buoyed by the toiling classes.
Our next post in this series will cover the years 1918-1928, examining the economics of the Russian Civil War (and accompanying imperialist invasion by more than a dozen nations), including war communism and the New Economic Policy.
If you're interested in these ideas, don't hesitate to reach out. This project is a conversation, not a lecture, so all good faith feedback is encouraged, especially from trained economists.
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