Witte And The Economy

Question 1

What was the state of the Russian economy pre-1890?

Answer 1

• The Russian economy was stagnant with little to no industrial output pre-1900
• The industrial output was less than half of other western powers
• Britain’s GDP was more than triple that of Russia

Question 2

What were the problems Witte identified?

Answer 2

1. Insufficient capital
2. Lack of technical/managerial expertise
3. Insufficient manpower

Witte knew industrialisation had to ‘come from above’. Due to a lack of middle class, there was no population competent or resource enough to drive an Industrial Revolution.

Question 3

What were the aims of financial policy?

Answer 3

• Mobilise the peasantry (the workforce and 82% of population)
• Improve transport and infrastructure (would allow transport of goods and resources)
• Invest into industry
• Improve Russia’s position I’m international market (couldn’t mass produce)

Question 4

How was improvement on heavy industry a success?

Answer 4

• Coal output tripled (could now fuel machinery to industrialise)
• Iron and steel production increased from 9 to 76 million
• By 1899 the state owned 2/3 of metallurgical production and controlled 70% of the railway - Witte used this as a ‘springboard for heavy industry’

Question 5

How was the mass expansion of railways a success?

Answer 5

• By 1913 there was 43,850 miles of track (in 1866 there was only 3,000)
• The Trans-Siberian Railway connected isolated parts of the country to major cities (improved transportation and mobilised population)

Question 6

How was the mass expansion of railways a failure?

Answer 6

The Trans-Siberian Railway was largely symbolic and unfinished in parts.

Counter judgement: Still improved transport and acted as symbol of power

Question 7

How were foreign loans, investment, and expertise successful?

Answer 7

• Foreign companies, engineers, and experts from places like France, Britain, Germany, and Sweden came to help improve industry (invested in industry and helped compete in international market)
• Received a loan of 900 million roubles from France

Question 8

How were foreign loans, investment, and expertise a failure?

Answer 8

• Led to arguments that Russia had become reliant on loans
• Could cause Russia to be dragged into political alliances they didn’t want
• Would have to pay back the loans with interest - 900mil with interest from France alone

Question 9

How was the Gold Standard a success?

Answer 9

Linked the currency to the value of gold

• Helped stabilise currency against inflation
• Allowed Russia to trade more with other countries - they had more confidence in their fiscal policies

Question 10

How was taxation a success?

Answer 10

Witte increased taxes on items such as kerosene, alcohol, and salt

• Peasants had to sell more grain to pay for taxes which gave Witte more grain to sell abroad
• Wages were kept low to maximise profits which were invested into industry
• High tariffs on foreign goods to promote Russian industry

Question 11

How was taxation a failure?

Answer 11

The extortion of the peasantry sowed the seeds for revolution
- Peasants had to sell more grain to pay for taxes - less food for them
- Low wages = low standard of living
- High tariffs on foreign goods = high prices on agricultural machinery that couldn’t be easily made in Russia

Question 12

What are the criticisms of Witte?

Answer 12

• High taxes + Low wages = government resentment
• Led to mass movement to cities, increased urbanisation caused social tensions and poor working/living conditions
• Did not improve agricultural methods
• Did not improve soft industry

Most of Witte’s decisions disadvantaged the peasantry - 82% of the population