USSR Science, Business, Custom Culture during 1914-1924

Recent years have seen a considerable controversy concerning the pace and nature of Imperial Russian economic growth during the years 1885-1914 and its relationship to the subsequent economic changes, which took place under Soviet (1917-1991) and post-Soviet rule (1991-5).

Historians investigating economic change in this period have engaged in a chimerical quest for early capitalist market prototypes to provide a basis for understanding how the so-called, current Russian “economic reform” programme might be accomplished. In this context, the established picture of late nineteenth and early-twentieth economic development, associated with the work of the late Professor Gerschenkron, has come under vigorous attack by Professor Gregory and others.

For Gerschenkron Russia was at that time the most backward of European countries, with a traditional agriculture and impoverished peasantry, an autocratic state and a stagnant economy, which could only be dragged into the modern age during the 1890s by a state-induced industrial boom. From 1894-1900, with state support, heavy industry grew rapidly until the financial crisis of 1901 undermined government credit and ended the boom. During the years 1894-1900, however, backward linkages from the industrial sector were forged with the rest of the economy.

Thereby an infra-structure was created which, in the aftermath of the crisis of 1901-1905 and in the context of agrarian reforms initiated in 1906, allowed the Russian economy, for the first time, to experience a phase of spontaneous, balanced economic growth. For Gerschenkron the crises of 1901-1905 were a turning point. Constitutional reform in 1905 paved the way, for the first time, for political freedom. Economic reform paved the way for spontaneous free-market growth. By 1914, Russia, thanks to the state initiative of the 1890s, was well on the way to joining the club of western European nations - a destiny that was only thwarted by war in 1914 and revolution in 1917.

In contrast, Gregory suggests that from 1894 Russia experienced a phase of market-induced, balanced economic growth with agriculture and consumer good industries playing the major role and state-promoted heavy industry being of minimal importance.2 Nor was this boom very much influenced by the government's financial difficulties in 1901, but, with only a brief interruption in 1905, continued unabated until 1914 before a down-swing in economic activity, coincident with income redistribution towards labour, occurred as per capita output fell to 1928/32. Subsequent to these changes, Soviet governments achieved sustained economic growth - but without a comparable growth in economic welfare.

From 1928/32 growth was only maintained through massive increases in investment, enhancing the amount of capital per worker and a progressive reduction in consumption which fell (in 1937 prices) from an 83% share of national income in 1928 to 55% in 1937, 52% in 1955 and 51% in 1975. Both authors, however, using 1885 as their base year, see the period 1894-1900 as marking Russia's “take off.” Accordingly, they view the preceding period of economic stagnation from 1885-1894 as marking the close of a protracted phase when the economy conformed to pre-industrial ...