A Geographic Analysis of Russian Economic Development, c. 1700-1913
Russia’s economic growth is widely considered a matter of short, often forced bursts of state-induced development in the Russian heartland. The general consensus held for decades, as one historian suggests, is that Russia was not a major industrial power prior to World War I, with the majority of Russians still engaged in agrarian labor and a low degree of urbanization.
The primary aim of this project is to trace the development of industry in the Russian Empire between 1700 and 1913, with a particular focus on the peripheral regions of the empire. It is most commonly assumed that the vast majority of Russia’s economic development, particularly its industrialization in the latter half of the nineteenth century, took place in the so-called “Russian Heartland,” a term used to refer to the core regions of Central Russia, Northwestern Russia, the Volga Region, and Southern Russia. While there is undoubtedly a degree of accuracy to this statement, this projects seeks to explore the degree to which economic development occurred in Russian borderlands, what types of industries developed in these areas, and the level of investment that was put into corporate activities in the empire’s periphery.
This project is centered around the use of RUSCORP: A Database of Corporations in the Russian Empire, 1700-1914. This database, compiled by Thomas C. Owen and first published in 1989 (with subsequent revisions in 1992 and 1993), consists of the profiles of over 4500 corporate charters granted by the tsarist government. These profiles measure headquarters and operations locations, company functions, starting capital, price of shares, managerial attributes, and numerous other attributes. While the information provided is extensive, it does not provide a perfect picture of capitalism in the Russian Empire. As Owen notes in the preface, “Many corporations chartered by the imperial government never went into operation, and months or even years often elapsed between the date of application for a charter and the commencement of business activity.”
Owen’s own studies utilizing the database have mostly served the purpose of tracing the development of capitalism in Russia, notably challenges in the development of sustainable corporate activity. Owen uses trends of industrialization and capitalist development in the Tsarist period to explain challenges in the late-Soviet period. In his notable 1995 study on Russian corporate capitalism, he determines that “the antipathy toward capitalism among most social groups in prerevolutionary Russia emerged once again with undiminished force, to judge by the distrust of the free market shown by Soviet bureaucrats, workers, and peasants in the era of perestroika.”
Owen’s study highlights the geographic concentration of economic development in Russia, claiming that Moscow and St. Petersburg were the locations for more than half of all corporate headquarters in the eighteenth and nineteenth centuries. He does acknowledge the significance of other cities, notably Warsaw, Kiev, Odessa, Riga, Kharkov, Lodz, Baku, and Rostov-on-Don.
For the purposes of this project, I have identified fifteen regions within the Russian Empire. It is noteworthy that not all regions were under the rule of the Russian Empire for the entirety of the identified time period, which is reflected in the temporal aspect of Russian corporate development. Nonetheless, even regions outside of the domain of Russian rule were often subject to considerable Russian influence, with the empire serving as a dominant economic power in Eastern Europe, the Caucasus, and Central Asia for most of its existence. The identified regions of the Russian Empire are the Arctic, Baltic Region, Belarus, Caucasus, Central Asia, Central Russia, Crimea, Far East, Northwestern Russia, Poland, Siberia, Southern Russia, Ukraine, Ural Region, and Volga Region.
Additionally, Russian corporations developed bases of operations outside of the empire itself, reflecting a degree of foreign investment on the part of Russia. Regions outside of the Russian Empire in this database include Africa, the Balkans, East Asia, Western and Central Europe, Scandinavia, South Asia, and Western Asia.
Corporate Operations Across the Empire
Despite the claims of Falkus and other historians of the Soviet era, more recent analyses have suggested that by the end of its imperial period, Russia was on a path toward industrial dominance. One historian notes that prior to the outbreak of World War I, Russia was the fifth-largest industrial power in the world, on par with Austria-Hungary and surpassed only by the United States, Great Britain, France, and Germany. More so, Russia’s rate of industrial growth between 1885 and 1913 surpassed all of those nations aside from the United States.
One measure by which economic development in the Russian Empire can be analyzed is through the locations of corporate headquarters. While this view does not give a complete analysis of Russian economic activity, it does help to identify the primary regions of Russian commercial development.
Unsurprisingly, the majority of Russian corporate headquarters existed within the regions of Central and Northwestern Russia, based around the empire’s largest cities of St. Petersburg and Moscow. Likewise, the somewhat sizable number of corporate headquarters in Ukraine is not unlikely, given Kiev’s historical significance as the site of the first Russian state. What is more intriguing is the level of corporate development in the Kingdom of Poland and the Baltic Region, given that these were not part of the original Russian Empire until its conquest of the Polish-Lithuanian Commonwealth in 1793.
However, this only provides information on corporate headquarters. For commercial and financial industries like banking, retail, trade, and the service sector, this information is likely sufficient, given that many of the operations of these companies took place in those regions. However, for extractive industries and manufacturing, a closer look into the location of operations gives a sense of the geographic distribution of investment.
While this visualization suggests a majority of economic development in the Russian Heartland, it does highlight notable economic operations in the Baltic Region, Caucasus, Crimea, Poland, and Siberia. Furthermore, some of these regions became the site of industrial activities that were not widespread in the empire’s core.
As the graph above indicates, certain regions were dominated by particular industries. One noteworthy case involves chemical manufacturing in the Caucasus, which accounted for 34.68% of corporations headquartered and 37.61% of corporate operations in the region. These corporations, many of which engaged in petroleum refining and manufacturing, were likely centered around the region’s noteworthy oil reserves. The Caucasus had the highest proportion of oil and gas extraction across all regions, an industry likely to develop alongside chemical manufacturing. Similarly, Crimea’s geography can serve as a partial explanation for the types of industry that developed in the region. The above analysis of corporate operations shows that 20.38% of the corporate operations in Crimea were centered around transportation services. A closer look at the records within this region shows that many of these corporations were focused on water transportation, which is unsurprising given the region’s prime location on the northern coast of the Black Sea.
The more urbanized regions, specifically Central Russia, Northwestern Russia, Poland, the Volga Region, and Ukraine, had a relative diversity of industry functions, often centered around manufacturing (note that categories such as “Misc. Manufacturing) contain a wide array of industry functions). Meanwhile, more of the rural regions were focused primarily on resource extraction. For example, 36.21% of the industrial operations in Siberia were centered around mining. This trend is hardly unexpected, though it is important to note that significant sectors of food processing and manufacturing developed in the region.
Financial Analysis of Industrial Development
Despite these figures, the presence of corporate operations does not necessarily indicate significant economic activity. One measure that can be used to measure this activity is the amount of available capital for each corporation. The map below shows the distribution of corporate operations by industry, with mark sizes indicating the financial standing (and by extension, overall size) of the corporation as a whole.
This map demonstrates a large imbalance in the availability of starting capital based across industries. When analyzing these results further, the data shows that railroad companies as a whole obtained a far greater amount of starting capital than any other industry, with textile manufacturing, business/financial services, and miscellaneous manufacturing trailing significantly behind. Given that railroads were seen as catalysts for development, reducing transportation costs and enabling large-scale economic organization, it is not surprising that substantial investment was funneled into these corporations. As a result, these companies received massive subsidies from the government upon their formation.
It is important to note that railroad corporations developed in Russia much later than other industries, with the majority coming to fruition in the early twentieth century. Industrialization in Russia tended to occur in short, sporadic periods of growth. Owen identified three key periods of what he refers to as “bursts of entrepreneurship: during and after the Crimean War (1854-58), the mid 1860s-70s, and the period between 1908-13.
Unlike other industries, railroads were consolidated into a handful of very large corporations. Many of these railroad companies received significant foreign investments required for construction projects and as a result, were carefully monitored and regulated by the government.
Analyzing the Emprie’s Periphery
The comparatively large sums of capital investment in the areas of Northwestern and Central Russia, Ukraine, and the Volga Region is to be expected. The rates and types of capital investment and industrial development into the peripheral regions of the Russian Empire can help to understand economic motives for expansion. In this study, I am defining the “periphery” of the Russian Empire to include the following regions: the Baltic Region, Caucasus, Central Asia, Crimea, Far East, Poland, and Siberia. These areas lay outside of the traditional Russian Heartland and while some were developed and urbanized considerably, especially Poland and the Baltic Region, they are on the outer edges of the Russian Empire and had differing experiences in administration and development.
At the time of its integration into the Russian Empire, Poland was, on a per capita basis, wealthier than most of Russia. Upon annexation by Russia, which began with the First Partition in 1772 and concluded with the Third Partition in 1795, Poland had already undergone significant industrial development. The Polish administration enjoyed considerable autonomy compared to other regions of the empire, allowing it to avoid the bureaucratic delays and turbulent policy shifts associated with the Tsarist government. By the end of the nineteenth century, Poland had developed an extensive rail network and the city of Łódź had grown to rival Moscow in textile production.
As the map above indicates, the largest concentrations of industrial operations were in the Baltic Region, Poland, and the Caucasus, though considerable economic activity existed in Siberia and Central Asia. There is a surprising amount of diversity in each of these regions, even less-developed areas, suggesting that expansion of the empire did not solely take place for the purpose of resource exploitation, which is common trait associated with European empire.
Nonetheless, some regional specialization did take place in the peripheral regions. Unlike the core regions of Russia, which were often dominated by textile production and other manufacturing enterprises, the peripheral regions of the empire were more proportionally engaged in chemical production and transportation services. The manufacture of consumer products (textiles, woolens, sugar processing, furniture, etc.) were often controlled by Russian-born capitalists, while foreign investment was more common within industries in the periphery, notably heavy industries and resource extraction.
An analysis of the capital allotted to these peripheral enterprises gives a greater sense of their economic contribution to the empire as a whole and highlight the diversity of natural resources across the vast Russian Empire, indicating substantial value of lands beyond Central and Northwestern Russia. As the figure below indicates, substantial capital investment in chemical manufacturing and oil & gas extraction was acquired for corporations in the Caucasus, reflective of the region’s natural resources. Meanwhile, railroad investments continued to be consistently high across the Baltic Region, Caucasus, Central Asia, Poland, and Siberia. Additionally, there is an observable difference in the proportional industry breakdown between rural and urbanized regions. More sparsely populated regions like Siberia and Central Asia had more capital invested in industries tied to natural resources and agriculture; one could connect a prevalence in metal manufacturing to the close proximity of mining operations, particularly in Siberia. Meanwhile, more urbanized regions like Poland and the Baltic Region had heavier investment into the manufacture of consumer products, including textiles and food.
In analyzing economic development on the level of individual corporations, a similar pattern emerges between the Russian core and the empire’s peripheral regions. Among the identified peripheral regions, all of the ten largest corporations were railroad companies: the Altai Railroad (1912), Armavir and Tupase Railroad (1908), Semirech’s Railroad (1912), Kharkov-Nikolaev Railroad (1871), Central Caucasus Railroad (1913), Landvarovo-Romny Railroad (1871), Poti-Tiflis Railroad (1873), Achinsk-Minusinsk Railroad (1912), Baltic Railroad (1870), and Bukhara Railroad (1913).
In comparison to the list of corporations across the entire empire, the majority of the periphery’s largest corporations were founded much later, with six out of the top ten being founded during the period from 1908-1913. This suggests that the development of industry, especially the railroads, radiated outward from the more “central” regions of the empire.
Conclusion
The data presented within RUSCORP indeed confirms that the vast majority of economic development during Russia’s imperial era was indeed focused in the Russian Heartland: Central Russia, Northwestern Russia, Ukraine, and the Volga Region. These areas, home to long-established Russian cities like Moscow, St. Petersburg, Kiev, Odessa, Nizhny-Novgorod, and Kazan had the population and infrastructure to support the development of major industries.
However, this study intends to counter the notion that the peripheral regions of the Russian Empire were mostly undeveloped or that they did not contribute to the overall economic growth of Tsarist Russia. Economic development in the borderlands was smaller and slower, but followed many of the same patterns as the empire at large, while also contributing more significantly in certain industries less prevalent in the core regions of the empire. The role of railroads in the late nineteenth and early twentieth centuries was paramount across the empire, with the largest numbers of capital investment flowing into those corporations. But the investments into resource extraction and manufacturing tied to those operations were nonetheless notable in their contributions to the development of the Russian state in the years leading up to World War I.
Notes
- M.E. Falkus, The Industrialization of Russia, 1700-1914 (London: Macmillan, 1979), 11.
- Thomas C. Owen, RUSCORP: A Database of Corporations in the Russian Empire, 1700-1914(Ann Arbor, MI: Inter-University Consortium for Political and Social Research), v, https://doi.org/10.3886/ICPSR09142.v3.
- Falkus, 20.
- Falkus, 12-13.
- Thomas C. Owen, Russian Corporate Capitalism from Peter the Great to Perestroika (New York: Oxford University Press, 1995), 10.
- Owen, Russian Corporate Capitalism, 9.
- Henning Hillmann and Brandy L. Aven, “Fragmented Networks and Entrepreneurship in Late Imperial Rusia,” American Journal of Sociology 117, no. 2 (September 2011), 489, https://www.jstor.org/stable/10.1086/661772.
- Owen, Russian Corporate Capitalism, 30-31.
- Owen, Russian Corporate Capitalism, 30.
- Edward C. Thaden, Russia Since 1801: The Making of a New Society (New York: John Wiley and Sons, 1971), 317.
- Amy Shannon Liedy, “A History of the Boycott: Economic Nationalism in Russian Poland, 1880-1914,” Kennan Institute, https://www.wilsoncenter.org/event/history-the-boycott-economic-nationalism-russian-poland-1880-1914 (accessed May 12, 2019).
- William L. Blackwell, The Industrialization of Russia: A Historical Perspective (Arlington Heights, IL: Harlan Davidson, 1994), 38.
Images:
- “Historic B&W photos of Kiev, Russia (Ukraine) in the 19th Century,” Monovisions Black and White Photography Magazine, https://monovisions.com/kiev-russia-ukraine-in-the-19th-century-historic-bw-photos/ (accessed May 12, 2019).
- “Historic B&W photos of Riga, Russia (Latvia) late 19th Century,” Monovisions Black and White Photography Magazine, https://monovisions.com/riga-russia-latvia-late-19th-century-historic-bw-photos/ (accessed May 12, 2019).
- B.H. Harteveld, “V Staroy Bukhare,” in Sredi sypuchikh peskov i otrublennykh golov: Putevyye ocherki Turkestana (Moscow: Ed Mayevsky, 1913), https://coollib.com/b/288176/read (accessed May 12, 2019).