The Tsarist state under contest
Je présente ici le texte envoyé à la Conférence organisée par la Société Historique russe et la Fondation pour les Perspectives Historiques, qui se tiendra le jeudi 14 septembre et qui est consacrée à « La Révolution russe, en Russie et dans le Monde ». Ce texte attire l’attention sur le fait que cette révolution fut aussi préparé par une forme d’insurrection des entrepreneurs et le triomphe des idées national-modernisatrice dans une partie des élites russes.
The Tsarist state under contest:
The rise of entrepreneur’s opposition 1906-1917
Director of Studies, EHESS-Paris
As the 100th anniversary of the October Revolution comes by, the nature of the process leading to the event, but also the commitment that it engages, continues to cause debate. Even though today the passions of the 20th century have largely fallen down, this event continues to arouse polemics and questions. The Soviet experiment, both in economy and society, has been an actual fact for almost 75 years and covered set of models – implicit or explicit – to which most observers have positioned themselves. The multiplication of the terms used to name this group testifies to this tension.
There is then an involuntary convergence between communist hagiography and the anti-communist vision of the Revolution. In the communist hagiography, the latter is presented as an essentially “working-class” revolution, which was supported by the peasantry. In the anti-communist vision, it is presented as the result of a “conspiracy”, some of the actors of which would have been in the pay of the foreigner. But neither the communist hagiography nor the anti-communist visions are able to account for the loss of legitimacy of the tsarist state. Above all, both of them are ignoring the economic and political determinants of this loss of legitimacy. At the heart of this process is an actor who actually played an important role pro-revolution from 1915 to 1917: a large part of the social group of entrepreneurs and the technical intelligentsia. And its goals, modernization but also to repel humiliation Russia suffered on the international scene in the 1904-05 war and then a form of national affirmation, were actually quite different to the goals usually described as the roots of the revolutionary movement (Peace, land and social transformation).
It is therefore necessary to revise some of our representations on the October Revolution and to ask a question: if social imbalances, in town and country, certainly played a role in the Revolution has not the nationalist factor been forgotten?
What are the real sources of the October Revolution?
Contrary to an idea that is still strongly present in textbooks and even historiography, the Revolution was not the result of an “ideology”. The fact that revolutionaries had an ideology is a fact but from it one can’t derive an understanding of so deep a social events. The Soviet economic system does not derive its origin either from the October Revolution of 1917, or even from an ideological continuity from Marx to Lenin. What is more, even the October Revolution itself was much more provoked by factors outside the reach of the Bolshevik party than by its naked will. One can discern a genesis of these characteristics, which it refers to a period prior to the October Revolution. This led to the question of anger: was the October Revolution a “socialist” revolution, inscribed in the continuity of insurrections like the Commune of Paris, or was it a national-modernizing revolution, similar to many movements that developed outside Europe, in the dominated countries from the late XIXth century and from colonized countries, from the end of the war of 1914-1918? Or, perhaps, was it a mixture of the two?
This emphasizes the different readings the October Revolution gave birth to. The October Revolution is of course subject to a reading in Western Europe and more globally the Western world, which is quite different from what it gave birth in Asia, Africa and Latin America. This can be understood as the Western world has been dominant and this very domination shaped to a large extent the perception of events. Even Russia didn’t escape this phenomenon as part of its elite want so strongly to be “Western” that it adopted without a question the westernized perception. This is not what happened in the “non-Western” world where quite different readings of the Russian revolution developed. These readings have been developed mainly in political movements themselves largely inserted into a specific and local reality. That is why the centenary approach to this revolution will give rise to widely divergent interpretations, even beyond the political oppositions between “socialists” and “conservatives”. We must therefore examine its national-modernizing dimension, or what an author called the Russian specific path in the transition to technocracy, a dimension that is just as important as the “socialist” reading, which is most generally given.
It could be convenient to claim to see in the Marxist thinking and discourse of the Second International the origin of the economic conceptions of the future Soviet leaders. This is not completely without foundation. Indeed, many borrowings can be found both in the vision of capitalism and in the hypothetical socialism of a Kautsky, a Hilferding, not to say a Parvus, among the Bolshevik leaders who were involved of this intellectual community structured around the German Social-Democracy in the Second International. But this is far from exhausting the question; for this continuity between a theory, itself evolutionary and contradictory, and the reality of a practice is just as misleading as the continuity that one might suppose between the conceptions of the leaders and the system on which they reigned.
That socialists of the early twentieth century, and especially the Russian Bolsheviks, had a constructivist view of social reality does not imply that constructivism is practicable in reality. Nor that the regime they led was exactly what they wanted and even what they described. Moreover, the belief that a social reality can be deduced from constituted and coherent representations existing previously amounts to believing in the same type of constructivism that one can reproach the Bolshevik leaders. It is not here to deny the importance of systems of representations, but to place them in their context, and especially to consider them as evolutionary systems, because of the emergence of more or less important cognitive dissonances as a result of the unexpected effects of actions. To reject ideological monism is at the very heart of the process of criticizing absolute constructivism. And, to make ideology the main cause, whatever one’s judgment on the ideology in question, amounts to abounding in the sense of an absolute constructivism. In the revolution and in the Soviet society that emerged from it, there are as many elements of continuity as real innovations. This was very clearly explained by a great historian of the Soviet system, Moshe Lewin.
The Russian inheritage
The first is undoubtedly the model of development implemented in Russia from 1885 to 1914, a model which led both to a revolt of rural Russia and to that of a part of the entrepreneurs against the tsarist state.
This model of development is itself the result of the difficulties encountered in the abolition of serfdom. Marked by a strong amount of state control over economic activity, either directly through the action of public enterprises and the defence budget, or indirectly through monetary and fiscal policy, this model has been characterized by strong growth at least until the Russo-Japanese War of 1904-1905.
This growth has, however, been largely unbalanced; not only has it mostly been to the detriment of the rural world, which has a considerable tax burden, but it is unlikely that it could have converged with Western Europe. Not only were economic and social institutions quite different but the logic of economic development was directly impacted by the development of Western Europe, closing the hypothetic door to a “Westernized” model of development. Indeed, while it is indisputable that a social group of entrepreneurs was developing in Russia, this group was itself divided by antagonistic oppositions.
In the early years of the twentieth century there was a growing opposition between large companies (frequently with foreign capital) located in Ukraine and in the basin from Poland to St. Petersburg, often linked to foreign capital and dependent on State aid, and small and medium-sized enterprises located in the Moscow region, the Black Earth region and the Upper Volga, whose owners are in open conflict with power, both for economic and political reasons. The collusion between the economic circles linked to foreign capital (essentially the very large companies) and the circles close to the Tsar, enabled the latter to obtain from the latter all the measures necessary to ensure their domination. This will provoke anger on the part of small and medium-sized businessmen who, moreover, consider that they are far more and better than their opponents of large foreign-invested enterprises in contact with the reality of the Russian people, able to carry a modernization project that is “national” and not linked to foreign capital. This opposition was in itself very explaining of the actual state of Russia, partly sovereign but partly dominated by other countries, and was part of what Gerschenkron called “latecomer” countries. This situation has not only material consequences (in the distribution of profits and added value); it had also deep psychological consequences. The simple fact that nationalism could assume such a power is a definitive proof that Russia was belonging to the “latecomer” group of countries.
The divergence of interest and representations was compounded by other differences. The weight of minority religious communities, communities that were largely persecuted or at least discriminated – especially the “old believers” but also the Jewish community too – was considerable in the development of this indigenous capitalism. But these religious communities were not seen favourably by the high tsarist administration. The result was a latent conflict that reinforced the oppositions stemming from the development model. The opposition between the two groups turned into open conflict, both for economic and political reasons (the weight of what may be called “orthodox reaction” in the early twentieth century) in the years immediately preceding the First World War.
The tsarist government was indicted by a part of the technical and entrepreneurial elite, for it was considered incapable of promoting the interests (or at least what was considered to represent these interests) of the Russian state. Indeed, part of the elite began, from the defeat against Japan in 1905, a trial in incompetence of the tsarist elite and Nicholas II and could find in the way the tsarist regime had managed the 1904-05 War some arguments to do so. It can thus be considered that there was a profound rupture between the elite close to the Tsar and some of his advisers and that entrepreneurial and technical elite whom West calls, in his thesis published in 1975, “Muscovite progressives” they are not all, by far, originating in Moscow. As a matter of fact, the Trade and Industry Association, formed in 1906 in the tumult of the First Russian Revolution, but also in times marked by defeat against Japan and the Treaty of Portsmouth, symbolizes this crystallization of a modernizing economic elite in a complete opposition to the tsarist regime. This elite will be driven against the political power by the inertia and imperialism of the tsarist elite and will move from economic to politically modernizing positions. The nationalist, or more precisely “patriotic” base of this entrepreneurial and technical elite must not be underestimated.
This is not, in theory, different from Pobedonotsev’s theses on this point. But this modernizing elite will quickly realize that the economic modernization of Russia, which is the necessary condition for the international spread of the country and another international humiliation, is not possible without a political modernization.
The absence of endogenous growth and the revolt of entrepreneurs
This reflects a second imbalance, the fact that economic growth cannot find endogenous feeding factors. The spectacular growth of 1885-1904 did not lead to a process where the enrichment of certain social groups would provide the economy with its own food. Thus, after the depression begun in 1903 and prolonged by the war of 1904-1905, the resumption of growth was largely driven by orders for equipment derived from the military budget, which led to relativize the well known these about the autonomous development of capitalism in Russia. There is undoubtedly a strong development of capitalist relations, but capitalism itself remains closely dependent on political power and the distribution of credits. Moreover, with the exception of the fiscal pressure, monetary and market relations have little to do with the rural world, which, and this is a significant difference with the development pattern of Western Europe in the 19th century, the gap between a growth driven either by exports (for raw materials) or by public (and in particular military) spending.
The banking system was still below what would have been needed for industrial development, partly because of the level of savings, but also partly because of the intrinsic instability of a sector where banks of very different nature and size could be found. The combination of large deposit banks, with a corporate structure and often linked to large foreign banks, and small banks that are often the product of industrial companies to which they also provide financing, has not contributed to the stability of the banking system. This instability has made the role of the Central Bank, either directly or indirectly, crucial for the operation of credit. The Central Bank remained the main source of refinancing for private banks, although the instruments varied over time. The rediscount increased from 30% to 12% of the sources of refinancing between 1895 and 1913, while repurchase agreements for public and private securities rose from 7% to 23% in the same period, while the current account credit remained relatively stable with a share oscillating between 63% and 61%. The importance of direct credit in refinancing is noteworthy, as this procedure will be found in the 1920s as one of the modes of financing the economy. It should be noted that, in this respect, Soviet power would only continue a practice firmly established by its predecessors.
In addition, the broad dependence of the banking system as a whole on state-led financial operations must be stressed. Whether it concerns the placement of public or private loans with a public guarantee, or the management of subsidized loans from the investment bank issued by the Central Bank, there is a dominant financing schemes controlled by the State. Under these conditions, talking about the autonomy of the banking enterprise vis-à-vis the public authorities is difficult. While it is indisputable that a number of large banks, particularly those linked to the French, German and Belgian establishments and by whom the large loans were sent out of Russia, were able to discuss equally with both the Central Bank and the Ministry of Finance, this can not be generalized to other banks. Moreover, the circulation of management personnel between posts in the administration and functions in these institutions, direct and indirect kinship ties, have largely contributed to collusion between the State and the private sector in this field.
The impact of the First World War
This leads to a second source in the origin and constitution of the Soviet economic system, the process of mobilization of the Russian economy in the course of the First World War. As with every belligerents, and Mainly France, Great Britain and Germany, Russia and Russian leaders were confronted with a situation in which modern war imposes a brutal restructuring of the economy in order to obtain the rapid increase of certain productions. And this is a major difference from the industrial mobilization experiments carried out in Germany or France. This restructuring will be largely against the government, in a climate of quasi-insurrection of small and medium-sized entrepreneurs against the tsarist senior administration. There is a direct effect of this trial in incompetence we mentioned above.
The constitution of the Military-Industrial Committees or VPK (Voenno-Promychlennie Komitety), federated by a central committee of the Ts.VPK, is an opportunity for representatives of indigenous capitalism, gathered around the Moscow Group of the Industry Association and Trade, to attempt an alliance with both the technical intelligentsia and the workers. The attempt to set up “workers’ committees” (or Rabotchie Gruppy) will lead to an open conflict with the tsarist administration that threatens to arrest the main leaders of the VPK and to ban their organizations. The dynamics of this conflict become clearer when we learn that in 1914 a number of industrialists had not hesitated to support clandestine, SR, Menshevik and even Bolshevik opposition movements. In the central organization of the VPK L.B. Krasin, director of the Russian branch of AEG-Siemens and a notorious Bolshevik militant, there are also many SR leaders. But the conflict between the Tsarist administration and the VPK is not the only characteristic of the mobilization of Russian industry.
This will give rise to a legacy of administration of the economy under a dual basis, territorial and by industrial branches, through the progressive coordination between the ministries and the VPK. This structuring will be resumed as it was after the October Revolution, and will last for practically the entire history of the USSR.
The German example
A third source is undoubtedly the German experience of the war economy, an experience that had a deep resounding in Russia. Recall that it resulted in a flexible but in the same time a coercive form of direct administration of the economy around a centralized supply agency, the KRA. It led some of its leaders, like W. Rathenau, to rapidly speak of a kind of « state socialism », or even to compare themselves, in 1918, with the Russian Bolsheviks. The Bolshevik leaders themselves who saw the German experience of the war economy as an operational model of planning also shared this perception. It is obvious that from 1915 to 1917 influence of the German economic mobilization for war has a deep and pervasive impact on Russian radicals, be they Bolsheviks, Mensheviks or even in other political parties. This experiment convinced many not just of planning and State control effectiveness but also of the efficiency (not to be confused to effectiveness) of this way of managing the economy. The anti-liberal bias, which was already here and well present in Russia, got a tremendous boost in the arm from this German experience in State control. Various stays in Russia after the October Revolution, at the beginning of the 1920s, by some of Rathenau employees or collaborators would only reinforce this trend.
It should also be pointed out that between 1914 and 1918 the German economy experienced a number of traits, which were later considered as characteristics of the Soviet economy. There are cycles of investment, linked to the problem of shortage, and even an attempt to collectivize agriculture. It is fundamental to understand that a number of representations that are usually considered “typically Soviet”, such as the negative role of private agriculture, the vision of economic dysfunctions as a result of a level of development, are already established in Germany from 1916-1917. This, a-contrario, proves that these representations are not necessarily the product of a “Bolshevik ideology” and still less the result of a Marxist dogmatism. It is also important to understand that the investment cycle that is developing in Germany takes place in an economy where formally private ownership is dominant.
It should also be pointed out that between 1914 and 1918 the German economy experienced a number of structural forms which were later considered as « characteristics » of the Soviet economy. There were pervasive shortages, investment cycles, linked to the problem of shortages, and even an attempt to collectivize agriculture. It is fundamental to understand that a number of representations that are usually considered “typically Soviet”, such as the negative role of private agriculture, the vision of economic dysfunctions as a result of a level of development, were already well established in Germany from 1916-1917. This, a-contrario, proves that these representations are not necessarily the product of a “Bolshevik ideology” and still less the result of a Marxist dogmatism. It is also important to understand that the investment cycle that is developing in Germany takes place in an economy where formally private ownership is dominant.
The political crisis of the Russian state is thus linked to many factors: a rampant rural insurrection, a workers’ insurrection linked to the conditions of existence of the working class, but also – and this is too rarely brought to light – a growing divorce between the tsarist administration and part of the entrepreneurs and the technical intelligentsia. The combination of these contests of power led to the Revolution. The divorce of power with a part of those who should have supported it seems to us essential, both because this divorce resulted in a loss of legitimacy of this power but also because the rallying of part of this elite to the most radical fringe of the dispute gave him a significant credibility. Basically, tsarist power had lost the part in the representations and the people and part of the elite. As in 1789, the Tsar, like Louis XVI, appeared incompetent, deaf to the sufferings of the people, incapable of defending the interests of the Nation, even an agent of the foreigner. This mixture, as unjust on a number of points as it was, was as detuning in Russia as it had been in France.
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 Contact : email@example.com
 Sapir, (1995)
 Teleological interpretation of the Russian Revolution were quite numerous: Besançon, 1981; Laqueur, 1994. One can show that « Soviet Marxism » is quite foreign and even estranged to what Marx wrote: Chambre, 1974; Rubel, 1974; Chavance, 1980.
 See, Black et alii (1975) ; Brugger and Hannan (1983) ; Skocpol (1979).
 Rowney, (1989).
 Bettelheim, (1974).
 Zbynek and Scharlau, (1965)
 Lewin, (1985), (2005).
 For a more thorough analysis: A. Gerschenkron (1962a), Von Laue, (1963), and Von Laue, 1960. K.C. Talheim, (1971), R. Portal, (1966).
 Gorshkov, (2006), De Montlibert C., (2015) and (2014), Moon (2001), Mironov, (1996).
 Anan’itch, (1983).
 O. Crisp, (1953).
 This leads someone strongly opposing S. Witte policies to speak about « State socialism ». E. Tsyon (1885).
 Lyachtchenko P.I. (1950), Gregory P.R. (1985).
 Von Laue, (1963)
 C. Goldberg, (1974) West (1975). R.A. Roosa (1972), White (1973).
 Gerschenkron (1982a)
 Blackwell, (1974a).
 White (1904).
 Connaughton, (1988)
 Menning (1992)
 West, (1975).
 Goldberg (1974)
 Riasanovsky (1987)
 K.F. Chatsillo (1969)
 Portal (1966)
 D. Atkinson, (1983).
 Borovoj, (1958).
 Gindin, (1960).
 Slansky (ed.) (1910), p. 54. Coll., (1914), p.14.
 Siegelbaum (1983).
 Zagorsky (1928)
 Siegelbaum (1983).
 Volubuev and Drobizhev (1957).
 Siegelbaum, (1983)
 See Okhrana’s document published Istoritcheskii Arhiv, (1959a), pp. 8-13, and Istoritcheskii Arhiv, (1959b), 13-16. See also Rozental (1971).
 Sidorov (1973).
 Feldman, (1966).
 Rathenau (1972).
 Lenine, (1961).
 Feldman, (1966)