T HE economic development of pre-war Russia wasalways marked by certain traits which were notfound in Western Europe. From one aspect her economic system seemed more akin to the undeveloped countries of Asia than to her industrial neighbours on the West. From another aspect her industrial development surprised one by its very maturity, and her manufacturing centres had a spiritual unity with the Ruhr valley, with Manchester or the Clyde. While less than IS per cent of the population lived in towns, and less than 10 per cent were engaged in industry, the urban industry which existed was mostly equipped and organised on quite modern lines. While domestic industry still employed some 4 million persons (or nearly double the number employed in factories) and covered about 30 per cent of the total production, l and while, moreover, it continued to flourish and to grow, the number of workers employed in factories with more than 1000 hands was almost as great as in U.B.A_, there being over 450 of such enterprises, covering 47 per cent of all factory workers. 2

The somewhat unique character of this development appears largely to be explained by the very late survival of

68 R U S S I A NEe 0 NOM leD EVE LOP MEN T S peasants for an obrok money payment became fairly general, an impetus was given to the growth of non-feudal factories, established by merchants of capital, and employing wagelabour; for the obrok payment left the peasant free to move into the towns and hire himself for wages. Then for the first time could the bourgeois entrepreneur compete on equal terms with the feudal proprietor who had plentiful supplies of serf labour. Indeed, the former came to have the advantage in competition, since the freely-hired labour proved everywhere more efficient than the bondmen; while a severe decline of agricultural prices in the twenties drove peasants off the land and filled the towns with cheap labour. 1 But it is here that we meet another of those paradoxes of Russian development: precisely this change caused a decline in the factory system to set in, since it now actually became cheaper for the capitalist, at any rate in textiles, to assume the role of Verleger, or " merchant manufacturer," and to give out work to be done on the domestic system. With the passing of bonded labour the factory, as an establishment where work was organised under the whip of an overseer, lost its raison d'etre, until this was restored to it with the introduction of power-machinery after 1846. The result was a large development of the kustar peasant industry, particularly in textiles, in the first half of the 19th century, as a severe competitor of the older" possessional factories."2 TIle initial effect of the Emancipation of the Serfs in 1861 was to cause a set-back to industry, particularly to the iron industry which had continued to rely very largely on serf labour. 3 But with the opening up of the Donetz area in the course of the next decade, and the introduction of the power-loom, the industrial revolution may be said to have definitely begun. The period between 1886 and 1890 showed the same speculative stock exchange activity as characterised England in the

E CON 0 M leD EeL I N E 69 'thirties and 'forties; and 1870 saw in Petrograd the first modern strike. 1

The economic development of Russia along modern capitalist lines came, therefore, somewhat late; and not until the 'nineties did Count Witte's vigorous transport development do for the economic unification of Russia on a more attenuated scale what Bismarck had done for the unification of Germany. Even so, many of the pre-conditions which in Western Europe favoured the rapid growth of capitalist industry were imperfectly matured. A certain class of considerable merchants existed in the towns; but they had little political influence, and hardly represented in 1900 as important a class as existed in the German towns in 1830. A significant class-differentiation was appearing in the villages. A class of peasant capitalists was in its beginnings, and was graduating from village usurers and middlemen, through organising kustar industry and small workshops, to be fully-fledged proprietors, like Morossov, of up-to-date factories in the towns, often buying up the" Cherry Orchard" of impoverished nobility on the way. At the bottom of the scale a landless class was forming, providing the cheap labour for the kllstar industry, and eventually drifting into the towns as seasonal workers or as more or less regular factory hands. But both these tendencies were beginning rather than matured. Russia's intelligentsia was not a class steeped in a commercial milieu, with one eye close fastened on the problems of a cash register as were the scribes and prophets of English Manchester liberalism. Born of the poorer nobility and the peasantry, it had its roots in the village rather than the counting-house, and often had few surviving social roots at all, and its social creed as a result was woven of abstractions much in the manner of the German liberalism of 1848. Though the existence of large factories laid the basis for a developed proletariat which was highly class-

NEe leD T conscious and had its strikes, both economic and political, and its unions so far as these were allowed, a large section of the workers was seldom separated by more than a few years from the village, returned there on the first favourable opportunity, and remained half-peasant in character and affections. The number of hewers in the Donetz mines or of workers in the textile mills, for instance, always declined considerably in tIle harvest months and revived again in late autumn.