29

p Tsarist Russia, despite her swift capitalist development and high concentration in industry, was very far behind the world’s leading capitalist countries. Her national income per head (within the U.S.S.R.’s present boundaries) was oneseventh of the U.S. figure, one-fifth of the British, one-third of the French, and just over one-third of the German. Russia’s national wealth per head came to no more than 13.5 per cent of the U.S. figure. And in fixed capital accumulation—a crucial sector of the national wealth—Russia was farther behind; her industrial plant and equipment, i.e., her production facilities were worth less than one-twentieth of the U.S. figure.

p One cause of this was the lopsided structure of the Russian economy. The major part of the national income came from agriculture, where labour was least productive.

p The structure of Russian industry did not match up to the needs of a country that wanted to develop independently. Output of producer goods was low. Domestic production covered only one-sixth of the demand for metal-working lathes, one-quarter for textile plant, one-eighth for steam 30 Table 3 Struclurc of Russian and U. S. National Incomes in 1913 (per cent) Russia U.S.A. Agriculture, forestry and fishing . Industry ..... 54.0 21.8 24.1 34.0 Transport . . . 8.9 14.2 Huilding ........ 7.1 fi.7 Trade ...... 8 2 22.0 Total . . . 100.0 100.0 Sources: S. N. Prokopovich, Estimated National Income of 60 Gubernias of European Russia, 1900-1913, Moscow, 1818, p. 64 (Russ. ed.); Historical Statistics of the United States. 17S9-1945, Washington, 1949, p. 14. engines, and one-tenth for spare parts for industrial machinery. Producer goods made up approximately one-third of industrial production, as compared with two-thirds in the U.S.A.

p It is not surprising therefore that Russian gross industrial output was one-eighth of the American, and one-thirteenth in per head terms. Industrial labour productivity in Russia was one-ninth of the U.S. level.

p In summing up the general state of Russia’s economic life on the eve of the First World War, Lenin wrote: “In the half century since the liberation of the peasants the consumption of iron in Russia has increased fivefold, but Russia still remains an unbelievably, unprecedentedly backward country, poverty-stricken and half-savage, four times worse-off than Britain, five times worse-off than Germany and ten times worse-off than America in terms of modern means of production."  [30•1 

The full extent of the economic lag and its tendencies are apparent from the following figures. In 1900 Russia’s per head production of pig iron was one-eighth of the American, one-sixth of the German, and one-third of the French. Yet, thirteen years later the gap had increased to oneeleventh of the American, one-eighth of the German, and 31 one-fourth of the French. The oil figures tell the same story: in 1900, Russia produced 9 per cent less than the U.S.A., but 81 per cent less in 1913.

Table 4 National Income and Industrial Growth in Russia and U.S.A., 1000-13 (per cent) liussia U.S.A. Overall national income growth . 2.8 3.6 net industrial production . . . 3.8 4.0 Per head national income .... 1.2 1.7 net industrial output per head of population . 2.0 2.6 Sources: S. N. Prokopovich’s estimate in P. I. Lyashchenko, A Jlistory of the National Economy, Vol. II, Moscow, 1956, pp. 348-49 (Uuss. ed.); Historical Statistics of the United States, 17S9-1945, pp. 14, 26, 231.

p By the end of the last century railway construction in Russia was well under way, but while it helped to develop industry and expand the home market, its scope was inadequate in relation to the country’s territory and population. In length and density of track per 10,000 population, Russia lagged far behind the U.S.A. and Europe’s major capitalist countries (see Table 5).

p Agriculture was the chief source of livelihood for over four-fifths of the people of Russia, and provided the state with most of its resources. Yet in 1913 net agricultural production stood at about 60 per cent, and per head agricultural production at 40 per cent of the corresponding U.S. indexes.

p Russia’s industrial workers had a much lower living standard than their American comrades. In 1913, Lenin estimated that industrial wages were 4 times lower than in the U.S.A., and average farm wages 4.6 times lower.  [31•1  The material condition of most Russian peasants was much worse.

p The cultural level of Russia’s working people, mostly peasants, was one of the lowest in Europe. According to the 32 Table 5 Railways in Russia arid Major Capitalist Countries in 1913 (1,000 km) Railway track per 1,000 sq km per 10,000 population U.S.A. . . 402.0 63.4 68.0* 40.8 38.1 51.3 117.8 3.2 76.2 121.7 41.7 9.5 5.1 10.3 8.3 Germany Russia France ...... Great Jiritain * Within the 1939 Soviet boundaries. Source: The World Economy. Collection of Statistical Materials. 1913-1927, Moscow, 1928, pp. 272-74, 670-72 (Russ. ed.). 1897 Census, only 21 per cent of the population could read or write. Four-fifths of all children and adolescents had no schooling at all. On this score Lenin wrote: “There is no other country so barbarous and in which the masses of the people are robbed to such an extent of education, light and knowledge—no other such country has remained in Europe; Russia is the exception."  [32•1  By comparison with America, Russia had one-fourth the number of people studying per 1,000 population. Lenin went on to say that “America is not among the advanced countries as far as the number of literates is concerned. There are about 11 per cent illiterates and among the Negroes the figure is as high as 44 per cent. But the American Negroes are more than twice as well-off in respect of public education as the Russian peasantry".  [32•2 

p One of the main reasons for Russia’s backwardness was the survivals of feudalism and serfdom in every aspect of economic, political and social life. Draught animals and mainly wooden implements were common to Russian £arms; just prior to the 1914-18 war Russia had 8 million oneblade and 3 million multi-blade wooden ploughs (and 6 million iron ploughs) and 5,700,000 wooden harrows. 33 Harvesting machinery and steam threshers were the preserve of the big and medium landowners. Though there were less than 30,000 big landowners in 1913, they had as much land (70 million dessiatines  [33•1 ) as 10 million peasant farmers. This gave a big landowner on average as much land as 330 poor peasant families; the average poor peasant holding amounted to 7 dessiatines, compared with the big landowner’s 2,300 dessiatines.

p The landed estates were therefore the economic basis for preserving what was left of feudalism. The impoverished peasant, indentured in every possible way, continued to toil for the landowner. By 1913, in various parts of Russia, the share of land tilled by peasants on the metayage basis was between 21 and 68 per cent of their own land. Virtually half of all the peasant farms remained essentially sub-marginal, producing practically no marketable produce and therefore unable to purchase goods in exchange. The remnants of serfdom kept the peasants poor and oppressed, reduced purchasing power in the country, and restricted the internal market for industry. The rapid social differentiation given a fresh impetus after the 1905 revolution made things much worse for the great bulk of the peasants. By 1912, more than 31 per cent of all Russian farms were horseless.

p The social and cultural backwardness of the Russian countryside stunted initiative, preserved the old routine farming methods and kept farming technically and economically backward. Development was held up by the semifeudal nature of agrarian relations, and rested mainly on obsolete techniques and scattered small-scale commodity subsistence and near-subsistence farms. The three-field system predominated. Only 4 per cent of the arable land was under industrial crops. Consequently, in 1913 Russia had to import about one-half of her requirements of cotton, over 80 per cent in raw silk, and a large part of her wool.

p Russia attracted substantial capital investment from abroad. At the turn of the century Russian capital was unable to sustain a sufficiently high rate of capital accumulation or create its own technological base for development and this impelled her ruling circles to encourage foreign investments. On the eve of the First World War, Russia accounted for 34 27.5 per cent of French invested capital, 23.4 per cent of the Belgian and 15.4 per cent of the German with total foreign investment in Russian industry amounting to more than 2,000 million rubles, or almost one-third of all the jointstock invested in Russia. Although native Russian capital dominated the economy, foreign capital was being invested faster: between 1900 and 1913, foreign capital grew by 85.5 per cent and Russian capital by only 59.3 per cent. The former held sway in a number of leading industrial sectors, notably mining, metal-working and machine-building. Onehalf of the capital invested in the coal mines of the Ukrainian Donets Basin was foreign. In iron ore, oil and metallurgy, foreign investment was as high as 80 per cent.

p The influx of foreign capital certainly played some part in developing the economy and raising the level of technology. But the cost was excessive. Foreign capital was predatory and every year took away from Russia much more in super-profits. In the 14 years just before the war, foreign investment in Russian industry totalled 1,198 million rubles, which produced a net profit for export of 1,767.5 million rubles.

p Between 1894 and 1913, total foreign payments, excluding repayments of foreign loans, amounted to over 2,800 million rubles, much more than the book value of basic capital in Russian industry accumulated by 1913 over many decades. Another important way of robbing Russia was the granting of loans to the tsarist government to finance its anti-national home and foreign policy. On the eve of the war, Russia had the world’s largest external debt. From 1895 to 1914 it rose by 144 per cent to 5,000 million rubles, with the state revenue at 4,600 million rubles. Between 1900 and 1913, debt repayments by the Russian government came to 2,400 million rubles. Russia’s chief creditor was France, which accounted for 80 per cent of the foreign debt.

p Russia’s economic backwardness also told on the pattern of her exports. Although millions of Russian peasants lived a life of starvation, hundreds of millions of rubles were earned every year on the sale of grains and other farm produce. Official government policy was “starve, but export”.

p Participation in the imperialist world war only added to the country’s economic misery. By the end of the war, the national income had fallen by more than a quarter, from 35 16,400 million to 12,200 million rubles. In the first year, military expenditure absorbed 27 per cent of the national income; by the third year of hostilities, it was eating into over 50 per cent of the national income. By the end of the war, the disorganisation of industry, agriculture and transport had reached catastrophic proportions.

p According to the 1917 Census, at least one-third, sometimes as many as one-half, the farms in most gubernias had no labourers. The mass requisitioning of horses for the army had removed the basic productive force from agriculture: in 50 gubernias of European Russia, the number of draught horses had declined from 17,900,000 in 1914 to 12,800,000 by 1917, i.e., almost 30 per cent. This situation had a damaging effect on the principal agricultural crops. As a result, the country was faced with a terrible food crisis and famine. Spreading unemployment added to the plight of the workers in town and country.

p Lenin summed up the situation in the following words:

p “The war has created such an immense crisis, has so strained the material and moral forces of the people, has dealt such blows at the entire modern social organisation that humanity must now choose between perishing or entrusting its fate to the most revolutionary class for the swiftest and most radical transition to a superior mode of production.... The war is inexorable; it puts the alternative with ruthless severity: either perish or overtake and outstrip the advanced countries economically as well... . That is the alternative put by history."  [35•1 

The Russian proletariat, and later the Soviet people, took up the challenge of history and resolutely tackled the most difficult economic problems that were crucial to the fortunes not only of Russia but of all mankind.