Economy of a Surviving Kerensky Republic

[ggarner57]

I was reading on the rise of Lenin within Russia, and the book repeatedly stated that Russia had enormous economic potential, enough that if Communism hadnt taken root it would have become one of the world's leaders in industry potentially.
A combination of Brest-Litovsk, civil war, and isolation prevented this from happening however.

If the Kerensky Government hadn't fallen, how would Russia have developed economically?

 

[Deleted member 1487]

I was reading on the rise of Lenin within Russia, and the book repeatedly stated that Russia had enormous economic potential, enough that if Communism hadnt taken root it would have become one of the world's leaders in industry potentially.
A combination of Brest-Litovsk, civil war, and isolation prevented this from happening however.

If the Kerensky Government hadn't fallen, how would Russia have developed economically?

Eh, no Russian industry was never world quality and they'd likely remain a raw material exporter with domestic industry to service their needs and perhaps getting some European states using their like China: a source of cheap, low skill manufacturing that takes advantage of slave labor like wages. At best they get stuck in a middle income trap.
Russia under Kerensky would likely have languished in the same crap that affected Weimar until they get a dictator. They'd be ahead of the USSR in some ways, well behind in others. At best they could hope not to get shut out of world trade, try and find some foreign investment, and hope the entire system doesn't collapse when the Great Depression hits. Really it was Communism that insulated them from the worst of the Depression; if they have a capitalist semi-democratic regime in place during the late 1920s then they definitely end up with Fascism and a Nazi-like philosophy (they were brutally anti-semitic under the Czar and had a very racist pan-Slavic ideology that had all the hallmarks of Nazism with a Russian twist, so that is very likely to end up really nasty when the accumulated problems of the post-WW1 system added up and implode with the Depression).
https://en.wikipedia.org/wiki/Pan-Slavism#Pan-Slavism_in_Russia

 

[ggarner57]

Eh, no Russian industry was never world quality and they'd likely remain a raw material exporter with domestic industry to service their needs and perhaps getting some European states using their like China: a source of cheap, low skill manufacturing that takes advantage of slave labor like wages. At best they get stuck in a middle income trap.
Russia under Kerensky would likely have languished in the same crap that affected Weimar until they get a dictator. They'd be ahead of the USSR in some ways, well behind in others. At best they could hope not to get shut out of world trade, try and find some foreign investment, and hope the entire system doesn't collapse when the Great Depression hits. Really it was Communism that insulated them from the worst of the Depression; if they have a capitalist semi-democratic regime in place during the late 1920s then they definitely end up with Fascism and a Nazi-like philosophy (they were brutally anti-semitic under the Czar and had a very racist pan-Slavic ideology that had all the hallmarks of Nazism with a Russian twist, so that is very likely to end up really nasty when the accumulated problems of the post-WW1 system added up and implode with the Depression).
https://en.wikipedia.org/wiki/Pan-Slavism#Pan-Slavism_in_Russia

That's a good analysis, I took the conclusions with a grain of salt, even if the USSR had the natural resources and industrial capacity they managed to muster. My biggest question would be their involvement in Eastern Europe without Communism, and how trade with the rest of the world would've looked. If nothing else, they would have other nations much more willing to trade with them.

 

[Deleted member 1487]

That's a good analysis, I took the conclusions with a grain of salt, even if the USSR had the natural resources and industrial capacity they managed to muster. My biggest question would be their involvement in Eastern Europe without Communism, and how trade with the rest of the world would've looked. If nothing else, they would have other nations much more willing to trade with them.

After WW1 Russia would have been fucked. There was no one to invest in them, France and Britain were broke, the US needed to be paid back, their biggest trade partner Germany was a mess due to Versailles, so they'd languish in political uprisings and potential collapse until Germany was rehabilitated enough to resume trade and buy up their raw material exports assuming Russian infrastructure was repaired enough to export it. Of course they'd need to buy German goods. Likely Russia would end up becoming a greater ally of Germany without A-H being a stumbling block and Poland potentially as an independent nation that both Germany and Russia hated.

Of course you'd have to lay out a scenario of what the situation was that got Kerensky to survive and what the post-war situation looked like to get a serious in depth answer. As a general answer German trade is crucial to Russian capitalist recovery and Germany and Russia would stand to benefit each other quite a bit, much like the Reichswehr-Soviet politics of OTL. Russia probably would end up moving away from France without France's investment in her recovery and toward Germany due to trade. That would end up being a scary combo, as a non-Soviet Russia prevents the Nazis from getting into power based on anti-semitism:
https://en.wikipedia.org/wiki/Jewish_Bolshevism#Nazi_Germany

Instead the post-WW1 Germany loves the complementary trade they can get from the Russians (raw materials for industrial goods) and doesn't have any major friction points in the Balkans anymore against Russia. Depending on whether the Great Depression brings a Fascist regime into power in Germany, Fascist Russia, Germany, and later Italy could all be a significant power block if something like the Axis pact develops:
https://en.wikipedia.org/wiki/German–Soviet_Axis_talks#Soviet_counterproposal_agreement

A Fascist Eur-asian power bloc including China could develop against the French-British-Japanese. I course I'm wildly speculating and that could all be bunk depending on the scenario.

 

[John Fredrick Parker]

OK, two responses, one to wiking and one to the OP:

First (as I'm sure everyone knows), the Russian economy was growing at breakneck rates in the years and decades before WWI, with GDP per capita, food production, and the industrialization sector all pushing going up and up. Now, it may not be fair to say "communism" stopped all that, since Russian modernization did continue apace in the late 20's, 30's, etc. (and yes, Stalinism did insulate the economy from the effects of the Depression, FWTW). But the way the Bolsheviks came to power, specifically the brutal Red Terror and the Russian Civil War, set back the Russian people and economy back the previous economic growth decades (plus it, by which I mean the war, caused one of the worst famines in Russian history).

So no Bolsheviks Revolution (or at least not taking complete control), no Brest-Litovsk, no civil war, and no subsequent isolationism -- all mean the 1920's are much better economically for Russia than OTL, so much so that even having their economy affected by the Great Depression wouldn't likely make them worse off materially.

Now, all that said, the OP is problematic -- speculating on if "the Kerensky Government hadn't fallen" overlooks a lot of issues with the Provisional Government at the time, and with Kerensky as a leader in general. I won't get into it here, but the best PoD you could give Kerensky in particular -- avoiding the clusterfuck of the Kornilov Affair -- would not be near enough to protect future events from his stupidity, much less keep a government that was supposed to be provisional in power.

Now, if you're not particular toward keeping that one guy in power, I do have some ideas for you.

 

[MrP]

After WW1 Russia would have been fucked. There was no one to invest in them, France and Britain were broke, the US needed to be paid back, their biggest trade partner Germany was a mess due to Versailles, so they'd languish in political uprisings and potential collapse until Germany was rehabilitated enough to resume trade and buy up their raw material exports assuming Russian infrastructure was repaired enough to export it.

Infrastructure is a big one. A huge country like Russia is extremely dependent on a working infrastructure to keep its economy going, and by 1917 the Russian infrastructure was a mess. In turn, fixing the infrastructure would require a strong central government, and Kerensky doesn't look like he was up to the job.

 

[Deleted member 1487]

OK, two responses, one to wiking and one to the OP:

First (as I'm sure everyone knows), the Russian economy was growing at breakneck rates in the years and decades before WWI, with GDP per capita, food production, and the industrialization sector all pushing going up and up.

2.4% real growth per annum isn't breakneck, A-H was growing even faster. The issue is that both economies were horribly backwards and they were growing because of temporary external investments and demand (in the case of Russia in terms of military expansion that included their rail sector). French investment was set to taper off with the end of the upgraded rail system program and the 1914-17 military expansion. Its easy to register larger growth when you are massively retarded in your development, just like China today. But remember a big part of that growth was in military sectors, German outsourcing of factories, and raw material exploitation for export to German and other European markets. That growth is unlikely to continue at even that pace without continued additional French bankrolling of Russian military expenditures, which wasn't going to continue forever. Too much is made of Russian pre-WW1 industrial development; much more was happening during WW1 in terms of industrial expansion/development due to major Entente assistance.

The problem is that postwar even without the problems of the Civil War and Revolution there is still going to be massive political unrest and labor issues. Demand is going to collapse in the industrial sector without military spending, which was going to collapse without external loans that would shut off due to the French being broke and France, Britain, and the US demanding repayment of wartime loans, while the nation's infrastructure had been badly worn down and destroyed during the war. Russia was just as badly destroyed by the war into 1917 as France, but had far less capital to recover on. Germany isn't going to provide reparations that would even make a dent in Russian budget problems and the German markets are not going to be able to absorb what Russia had to export: food and raw materials. Russian industry wasn't particularly advanced enough to compete against foreign competitors on the open market either. Unless they do what the Soviets did and liquidate the art treasures and Czarist palaces to pay for imports Russia is pretty much screwed by continued capitalism. They've got massive political problems with Kerensky and the various separatists and revolutionaries floating around, plus will have to deal with the fallout of the lack of economic recovery after the war.

I mean when your creditors have become debtors themselves you're not in a good position to raise the necessary capital for recovery. Germany at least was far more internationally economically necessary to rehabilitate with US loans, while Russia primarily serviced German raw material demand and their domestic industry service domestic demand (largely government military related). As the primary domestic buyer has to make budget cuts to balance the budget (military spending), then the knock on effects cascade down the rest of the economy. Unless France and Britain want to buy up Russian exports to subsidize her economy Russia's in a terrible place post-war to recover and get actual growth.

 

[Deleted member 1487]

Infrastructure is a big one. A huge country like Russia is extremely dependent on a working infrastructure to keep its economy going, and by 1917 the Russian infrastructure was a mess. In turn, fixing the infrastructure would require a strong central government, and Kerensky doesn't look like he was up to the job.

Exactly. Kerensky stayed in the war in 1917 due to the promise of post-war recovery loans, which IOTL weren't particularly available given the US was the only one with money to loan and the GOP won the 1918 and 1920 elections effectively cutting Europe off. So the US reneges on post-war recovery loans, demands the pre-war creditors of Russia repay their war loans (and Russia her war loans) leaving her with a vast capital deficit and no recovery. As bad as things were in Germany until 1924 Russia will be far worse. You'd have to abandon capitalism and just go to a centrally planned economy to recover with some elements of the Soviet NEP and hope people are willing to buy up your exports of food and raw materials while you maintain strict capital controls like the Nazis did in the 1930s. I don't think any Russian government outside the Soviets had the stability and force to pull that off, least of all the unstable interim government of Kerensky. Likely the economic situation collapses Kerensky's government and causes a civil war for control in 1918-19, just starting after the war, not during.

 

[David T]

Let's leave aside Kerensky--of all the possible political futures Russia faced in 1917, his continuing to lead was one of the *least* likely. The more general question is how a non-Bolshevik Russia would have fared economically. See https://groups.google.com/d/msg/soc.history.what-if/IJJ8eV04na0/tzoo2zxLUJYJ for a long thread on "Robert C. Allen's argument (pp. 33-7 of *Farm to Factory: A Reinterpretation of the Soviet Industrial Revolution*) that the Tsarist economic boom could not have continued..."

 

[John Fredrick Parker]

<snip>

Well this is a very intelligent answer, and I may not be up to arguing it. Still...

I don't see why Russia, after the war, necessarily would be unable to get loans or find customers abroad to export her goods to. On the latter, the USSR did find trading partners in the US and elsewhere, despite being, you know, them; and in either case, I would think the reason western investors and governments didn't see Russian economic recovery as a priority the way, say, Germany might, could have something to do with the new regime ditching them during the war, and being, well, them. ("Kill the bourgeoisie and bring about World Revolution" doesn't exactly bring investors lining up.) Hell, even with all this, the US organized a fair amount of famine relief in the early 20's, which could have just as well been capital investments in a world where there hadn't been an RCW.

So in a TL where Russia stayed in the war to the end, didn't have a Red Terror, etc, I would think that in the peace that follows the US financial sector (or parts of it) could very well see the Russian Recovery as a worthy investment, and Britain, France, and others could be more receptive toward the importing of Russian goods. And mind you, none of this is to say the Russian government won't be some kind of socialist; just that it won't be the kind of absolute level of central planning and bureaucratization adopted OTL.

Or maybe your right, and the Russian economy was just such that they were never going to get near enough foreign investment and trade to economically recover no matter what they did, and only a Total Bolshevik Dictatorship stood any real chance of saving Russia from economic stagnation and calamity.

 

[Deleted member 1487]

I don't see why Russia, after the war, necessarily would be unable to get loans or find customers abroad to export her goods to. On the latter, the USSR did find trading partners in the US and elsewhere, despite being, you know, them; and in either case, I would think the reason western investors and governments didn't see Russian economic recovery as a priority the way, say, Germany might, could have something to do with the new regime ditching them during the war, and being, well, them. ("Kill the bourgeoisie and bring about World Revolution" doesn't exactly bring investors lining up.) Hell, even with all this, the US organized a fair amount of famine relief in the early 20's, which could have just as well been capital investments in a world where there hadn't been an RCW.

Only the US had money to loan after WW1 and Russia is a bad investment, much worse than Germany. Germany was Russia's big customer pre-WW1 and post-WW1 everyone put up tariff walls to rebuild their economies. The US was a competitor to Russia in most ways in terms of exports, both exported food and the US stole Russia's market in Europe and wouldn't want to give that back. By the time of the Dust Bowl Russia can reclaim their export position, but that's a long time to wait. Same on oil, Russia was a big exporter, but the US was #1 and controlled oil prices, preferring to cap them at a dollar, which limits was Russia can do. Famine relief is quite a bit different than investing that money in Russia BTW.

So in a TL where Russia stayed in the war to the end, didn't have a Red Terror, etc, I would think that in the peace that follows the US financial sector (or parts of it) could very well see the Russian Recovery as a worthy investment, and Britain, France, and others could be more receptive toward the importing of Russian goods. And mind you, none of this is to say the Russian government won't be some kind of socialist; just that it won't be the kind of absolute level of central planning and bureaucratization adopted OTL.

Why would the US see Russia as a worthy investment? They were more interested in getting paid back by the Europeans, not making more loans to them. Germany would like IOTL suck up most of the excess foreign loans, while Russia is a politically unstable mess that can't afford to pay back what they already owe. Like Russia defaults after the GOP Congress refuses to honor Wilson's pledge to organize government backed rebuilding loans and then cannot raise capital at all. A similar thing happened to Germany in 1934 when Schacht defaulted on German US debt to recover her capital stocks; Germany was cut off from US capital markets. Russia was nothing to US export markets or import markets either, especially after WW1, so they have no government interest in making banks make the loans, nor any hope of getting the fragile government to pay anything back, as they had spent most of their gold stocks during the war. Now they could do what the Soviets did and invest heavily on gold mines to raise money to have cash to spend, but that requires investments that only a centrally planned economy was able to force.

Or maybe your right, and the Russian economy was just such that they were never going to get near enough foreign investment and trade to economically recover no matter what they did, and only a Total Bolshevik Dictatorship stood any real chance of saving Russia from economic stagnation and calamity.

I think Russia would likely have to abandon any sense of a free market except at a low level to raise the necessary capital to rebuild. But that strong central planning requires a strong central government that the provisional government was not, nor would it be popular. The advantage the Soviets had was they won a brutal war by force and maintained a police state to enforce their rule, so they had the ability to force central planning and a heavily controlled market system that they allowed. A democratic government just doesn't have that ability, especially if they are internally fragile and have a wrecked economy. Unfortunately there are some situations were dictatorship works better to fix things, which is why the Romans had to suspend republican rule in times of crisis to fix things; hell that's why the US had to move to a strong centrally planned economy with heavy political controls in both WWs and during the US Civil War. Stalin was necessary to force industrialization on Russia. Likely a Fascist regime could/would have done the same out of necessity due to the world not really caring what happened to Russia so long as they didn't go communist.

Of course as Germany recovers enough to trade again Russia would get the foreign trade they needed to start recovery and I'm sure they would get some world trade just as the Soviets did IOTL. The big question though is more political: can they get a regime that can control the country enough to have a functioning economy/international trade? You'd need to get that sorted out first and the Allies would probably have an interest in putting troops into Russia to help them get politically stable enough to run the economy and raise the necessary money to pay back loans.

 

[John Fredrick Parker]

On the U.S. and Russia having divergent economic interests and the former constituting a poor investment to the latter -- I have to defer to your knowledge on this.

But your other point, on Russian political instability, I think is overly deterministic. The brutal civil war was absolutely avoidable, and a functioning central government, based on compromise and democratic accountability (which yes, is not the PG) was in reach. Had the Entente negotiated the war's end early 1917, had Kerensky not idiotically fired Brusilov, had Lenin died in the aftermath of the July Days -- any number of things could have gone differently, to give Russia a real chance at this.

-----

I will say, of these three scenarios, I don't know how to even speculate on the political ideology and economic policies of two of them, since that would mean speculating on a hypothetical (possibly earlier) national assembly election conducted in a different national context. Unfortunately, since they are closest to the OP, I can't really offer anything new beyond "Kerensky was a moron, would likely would not last as leader of Russia".

Of the third scenario: long story short, it is considered likely to result in an initial government by coalition Bolshevik and Socialist Revolutionary parties, in both the Soviets and National Assembly, which, due to not signing the Brest-Litovsk Treaty, is far less isolated and present at the Versailles negotiations. Since this is pretty far from "Kerensky government survives", I imagine discussing this further would be considered off topic.

So yeah, that's where I am now on this.

 

[Faeelin]

Eh, no Russian industry was never world quality and they'd likely remain a raw material exporter with domestic industry to service their needs and perhaps getting some European states using their like China: a source of cheap, low skill manufacturing that takes advantage of slave labor like wages. At best they get stuck in a middle income trap.

Much like East Asia or Eastern Europe, in OTL, I think.

 

[Faeelin]

Only the US had money to loan after WW1 and Russia is a bad investment, much worse than Germany.

Sorry, but I just laughed. Russia will demand reparations from Germany, and will help France get its pound of blood. A surviving Russia is terrible news for the Weimar Republic

The US was a competitor to Russia in most ways in terms of exports, both exported food and the US stole Russia's market in Europe and wouldn't want to give that back.

Where was grain cheaper to obtain during this period? Also, I imagine France would prefer Russian grain over American, if only to prop up an ally.

I'm not sure you can really claim the USSR avoided the Depression. How do you think they acquired the materials they imported during the 1930s?

 

[Faeelin]

Of the third scenario: long story short, it is considered likely to result in an initial government by coalition Bolshevik and Socialist Revolutionary parties, in both the Soviets and National Assembly, which, due to not signing the Brest-Litovsk Treaty, is far less isolated and present at the Versailles negotiations. Since this is pretty far from "Kerensky government survives", I imagine discussing this further would be considered off topic.

Of course, a surviving Russian government at *Versailles would be interesting. "How will Russia repay its war debts? Like France, by bleeding Germany."

The occupation of Silesia will be fun!

 

[Deleted member 1487]

Sorry, but I just laughed. Russia will demand reparations from Germany, and will help France get its pound of blood. A surviving Russia is terrible news for the Weimar Republic



Where was grain cheaper to obtain during this period? Also, I imagine France would prefer Russian grain over American, if only to prop up an ally.

I'm not sure you can really claim the USSR avoided the Depression. How do you think they acquired the materials they imported during the 1930s?

Good luck getting blood from a stone.

AFAIK France was a net grain exporter post-WW1 once it got back its best farmland and demobilized its farmers.

I didn't say the USSR avoided the Depression, but it insulated itself far better than most other countries.

 

[ggarner57]

Let me adjust that- Kerensky doesn't have to be in power. I just mean the Government itself. Also, Silesia would pretty obviously Russian, wouldn't it?

 

[Tom_B]

Once again Kerensky is taken too seriously and Chernov ignored. Kerensky's government was a provisional government and that means it was not intended to last very long. It was supposed to be replaced by the Russian Constituent Assembly https://en.wikipedia.org/wiki/Russian_Constituent_Assembly

Absent a Bolshevik takeover or Kerensky becoming a dictator the result is that SR's led by Chernov take over. The most probable result is Chernov leads the government but I will allow a slightly better than handwaving argument that Chernov does not want to occupy the position directly but permits Kerensky to stay on as long he is willing to play ball and do what Chernov wants.

The bottom line is SR dominated Russian republic and the question is how well they do in running the economy and whether of not people like Kolchak lead an armed resistance to them. Also the SR's are more likely to let peripheral regions leave. So some of those resources like Baku's oil may not be Russian after all.

 

[Deleted member 1487]

Let me adjust that- Kerensky doesn't have to be in power. I just mean the Government itself. Also, Silesia would pretty obviously Russian, wouldn't it?

No it wouldn't belong to them, but they could get Upper Silesia for the Poles, along with Posen. There were far too many Germans in Silesia to take it whole cloth, but they could carve parts of it off like IOTL. The question is does Russia keep Poland ITTL? If so then they probably don't get the Polish corridor. The Russians wouldn't want more Germans that's for sure.

 

[ggarner57]

No it wouldn't belong to them, but they could get Upper Silesia for the Poles, along with Posen. There were far too many Germans in Silesia to take it whole cloth, but they could carve parts of it off like IOTL. The question is does Russia keep Poland ITTL? If so then they probably don't get the Polish corridor. The Russians wouldn't want more Germans that's for sure.

Russia existing would certainly screw Wilson in Versailles over Poland. If Poland existed, He would have to deal with a much smaller one (which, if he was just going over ethnically Polish areas anyway, it should've been.)