Leon Trotsky: 1905

Leon Trotsky: 1905: CHAPTER 2-- Russian Capitalism
regimentation. Factories based on freely hired labor were, of course, radically hostile to the social
relations of the Russia of Nicholas I. For that reason, the serf-owning nobility's point of view was wholly
that of the "free traders." As far as his sympathies were concerned, Nicholas himself entirely shared this
viewpoint. Yet the needs of the state, including fiscal needs, forced him to adopt a policy of prohibitive
taxes and financial subsidies to the factory owners. After the lifting of the embargo on the importation of
machines from England, the Russian textile industry developed entirely on the basis of ready-made
English models. During the 1840s and 1850s the German, Knopp, transferred 122 spinning factories,
down to the last nail, from England to Russia. In the textile area there even used to be a proverb:
"Where there's trouble, there's a cop, where there's a factory there's Knopp." Since the textile industry
was working for a market, it put Russia in fifth place (on a world scale) as regards the number of
spindles, despite the chronic shortage of skilled hands and even before the abolition of serfdom.
But the other branches of industry, especially ironmaking, developed hardly at all after the death of Peter.
The main reason for this stagnation was slave labor, which rendered the application of new technology
quite impossible. Cheap cotton is manufactured for the use of peasant serfs themselves; but iron
presupposes a developed industry, towns, railways, railway engines. None of this was compatible with
serfdom. At the same time serfdom was also holding back the development of agriculture, which, as time
went on, was working more and more for the foreign market. Hence the abolition of serfdom became a
pressing demand of economic development. But who could put it into effect? The nobility refused even
to consider it. The capitalist class was as yet too negligible to achieve a reform of such vast scope by any
pressure it could exert. The frequent peasant riots, which in any case bore no comparison with the
peasant war in Germany or with the Jacquerie in France, remained mere scattered outbursts and, finding
no leadership in the cities, were in themselves too weak to destroy the power of the landowners. The state
had to pronounce the decisive word. Tsarism had to suffer a cruel military defeat in the Crimean
campaign before it could, in its own interests, clear the way for capitalist development by means of the
semi-liberation reform of 1861.
This point marked the beginning of a new period of economic development within the country, a period
characterized by the rapid formation of a pool of "free" labor, a feverish development of the railway
network, the creation of seaports, the incessant inflow of European capital, the Europeanization of
industrial techniques, cheaper and more easily available credit, an increase in the number of limited stock
companies, the introduction of gold currency, ferocious protectionism and an avalanche-like growth of
the national debt. The reign of Alexander III (1881 -- 1894), when the ideology of the "uniqueness" of
Russia dominated the whole of public consciousness, starting in the revolutionary conspirator's hideout
(the narodnik movement) and ending with the private chancellery of His Majesty himself (official
"narodnost," or Russianness), was, at the same time, an era of ruthless revolution in production relations.
By setting up major industries and by proletarianizing the muzhik, European capital was automatically
undermining the deepest foundations of Asian-Muscovite "uniqueness."
The railways acted as a powerful lever for the country's industrialization. The initiative for building them
was, of course, the state's. The first railway (between Moscow and Petersburg) was opened in 1851. After
the Crimean catastrophe, the state yielded first place in railway construction to private entrepreneurs.
Yet, like a tireless guardian angel, it always stood at the back of these entrepreneurs: it assisted the
formation of stock and bond capital, it undertook to guarantee profits on capital, it showered the
shareholders' path with all kinds of privileges and encouragements. During the first decade after the
peasant reform, 7 thousand versts of railways were built Russia, 12 thousand during the second decade, 6
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