Russian Industralization

Assuming that World War One does not break out as it did OTL in 1914, how large and industrialized was the Russian Empire on track to reach by 1930?

My assumption is that the Tsardom would have little issue adopting social policy as did the rest of Europe when faced with the upheval caused by massive and rapid industralization, and as such there exists nothing which could retard economic projections barring a war.

So, how large was the Russian economy projected to grow, and if you're up for it, what are the geopolitical consquences? Would the UK seek an entente with Germany given what would be a renewed threat to India which might actually get off the ground given Russian infrastructure. Would the Russians more forcefully push the Balkan issue if it means total war with Germany, or would they deem it not worth the blood and treasure? Would the Germans throw Austria-Hungary under the bus to solve the Balkan issue and court Russia into breaking their alliance with the French?
 
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kernals12

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Assuming that World War One does not break out as it did OTL in 1914, how large and industrialized was the Russian Empire on track to reach by 1930?

My assumption is that the Tsardom would have little issue adopting social policy as did the rest of Europe when faced with the upheval caused by massive and rapid industralization, and as such there exists nothing which could retard economic projections barring a war.

So, how large was the Russian economy projected to grow, and if you're up for it, what are the geopolitical consquences? Would the UK seek an entente with Germany given what would be a renewed threat to India which might actually get off the ground given Russian infrastructure. Would the Russians more forcefully push thr Balkan issue if it means total war with Germany, or would they deem it not worth the blood and treasure? Would the Germans throw Austria-Hungary under the bus to solve the Balkan issue and court Russian into breaking their alliance with the French?
According to the late Angus Maddison, Russia's gdp per capita was 30% of the US level in 1913. That's about the same ratio as modern Mexico. Russia would've industrialized but they probably wouldn't have caught up in relative terms to the west. I did a timeline where Russia catches up because Alexander II chooses to dissolve the Mir system of collective farming in favor of individually owned plots.
 
According to the late Angus Maddison, Russia's gdp per capita was 30% of the US level in 1913. That's about the same ratio as modern Mexico. Russia would've industrialized but they probably wouldn't have caught up in relative terms to the west.

Mexico has had systemetic economic issues over the past centurty whose roots lie in extreme political instability. I really don't that the two are comparable, and I really dont think that GDP per capita is a good measure of nations a economic health; lest you think that Saudi Arabia has a thriving and stable economy.
 

kernals12

Banned
Mexico has had systemetic economic issues over the past centurty whose roots lie in extreme political instability. I really don't that the two are comparable, and I really dont think that GDP per capita is a good measure of nations a economic health; lest you think that Saudi Arabia has a thriving and stable economy.
Mexico has actually been a beacon of political stability in Latin America, it has had no revolutions, military coups, or civil wars since 1934 (in terms of good governance and democracy, not so much). Ultimately the reason why some countries are poorer than others is a lack of investment in physical and human capital.
 
I've seen several views on this, ranging from something like 30% of the US, to a best case of 60% of the US by 1930. One of these showing the lesser amount was flawed in it assumed growth in the US would continue at the rate over the decades previous to 1914. In fact US growth measured in items like factory construction, port expansion, mineral extraction was falling off and for reasons beyond those connected to the Great War. i.e.: Railroad track used and freight car loading seem to have actually been declining or stagnant before 1914.
 

kernals12

Banned
I've seen several views on this, ranging from something like 30% of the US, to a best case of 60% of the US by 1930. One of these showing the lesser amount was flawed in it assumed growth in the US would continue at the rate over the decades previous to 1914. In fact US growth measured in items like factory construction, port expansion, mineral extraction was falling off and for reasons beyond those connected to the Great War. i.e.: Railroad track used and freight car loading seem to have actually been declining or stagnant before 1914.
30% of what?
 
Mexico has actually been a beacon of political stability in Latin America, it has had no revolutions, military coups, or civil wars since 1934 (in terms of good governance and democracy, not so much). Ultimately the reason why some countries are poorer than others is a lack of investment in physical and human capital.

Thats four years after my question on the status of the Russian economy; a state that in no way experienced the turmoil of Mexico. If the Tsardom was anything, it was stable. Breaking its authority took a real shock, and as such the Mexican state is behind Russia by many years barring the shock of World War One.

Nevermind a whole host of other differences ranging from geoography to foreign dependency.
 
I've seen several views on this, ranging from something like 30% of the US, to a best case of 60% of the US by 1930. One of these showing the lesser amount was flawed in it assumed growth in the US would continue at the rate over the decades previous to 1914. In fact US growth measured in items like factory construction, port expansion, mineral extraction was falling off and for reasons beyond those connected to the Great War. i.e.: Railroad track used and freight car loading seem to have actually been declining or stagnant before 1914.

Assuming 45%, where would this put its industrial output relative to Germany?
 

kernals12

Banned
Thats four years after my question on the status of the Russian economy; a state that in no way experienced the turmoil of Mexico. If the Tsardom was anything, it was stable. Breaking its authority took a real shock, and as such the Mexican state is behind Russia by many years barring the shock of World War One.

Nevermind a whole host of other differences ranging from geoography to foreign dependency.
When I first mentioned Mexico, I was referring to today. Mexico's gdp per capita in 2017 is around 30% of the US level.
 
When I first mentioned Mexico, I was referring to today. Mexico's gdp per capita in 2017 is around 30% of the US level.

I know. Im saying that you cant compare the two because Mexico did not achieve political stability until, as you stated, 1934. You cant then say that Mexico today is what Russia would be barring WW1 if Mexico finally possessed the central authority to kickstart its economic development 40 years after the Russian authority decided it was time that they should start.

Assuming that WW1 doesnt happen, Mexico is 40 years behind in that regard. Thats without the other, massive differences between the two.
 
Assuming 45%, where would this put its industrial output relative to Germany?

I won't try to guess at this point, & don't have any references at hand. Waiving away the Bolshevik revolution & leaving about any other sort of government in 'Russia' has large knock on effects of Europes & the worlds economy. Waiving away the Great War as well has others. It looks like all sorts of large and small feed back loops in Europes trade.

I would point out Russia has a huge pile of barely exploited raw materials. Something Germany lacks, other than coal.
 
I won't try to guess at this point, & don't have any references at hand. Waiving away the Bolshevik revolution & leaving about any other sort of government in 'Russia' has large knock on effects of Europes & the worlds economy. Waiving away the Great War as well has others. It looks like all sorts of large and small feed back loops in Europes trade.

I would point out Russia has a huge pile of barely exploited raw materials. Something Germany lacks, other than coal.

Im not so much trying to waive the Great War, but delay it.

If you have any books on the subject of Imperial Russias economy during this period, i would appreciate getting them.
 
Sorry, no specific books here, just some misc remarks scattered across sorted publications. Probably old almanacs and statistical digests from that era are a place to look. You have to work out the trends yourself since those summarize data in a 'snap shot'. I'd also recommend doing some reading on Kondratiefs study of capitol investment cycles. There is a certain amount of superficial follow up on this and some BS, but the core theory illuminates a possible course in the European or global economy.
 
Russia's economy was full of promise and peril. It can go either way depending on how the regime adapts to issues as they emerge. From the collapse of Witte's policies in 1898 to 1906, Russia was in an economic recession where industrial growth fell from 9.5% per year to just 1.5% or less than the population growth. After a wave of economic reforms following the 1905 violence, Russia's growth soared back to 7.5%. More importantly, agriculture also grew after 1905 when it had been stagnant relative to population for decades

The major reforms after 1905 include an easing of the passport restrictions on peasant movement, a reduction in holidays and the ability to sell land.

Russia's growth is probably even faster in the post reform era. Village incomes soared and increased mechanization freed up a large amount of village labor. This argues for a large increase in village craft industries- where most Russian industrial production was done and where we have little good data.

There remained many bottlenecks to Russian growth- a truly bizarre tariff schedule following mercentilist principles would be a big one. Raw materials were subject to a heavy tax. Russians paid three times the international price for iron for example. This curtailed the growth of any industry that used iron. The increased cost exceeded the value of protection for Russian industry. Machinery was also heavily taxed. On average, it cost twice as much to build a factory in Russia as it did in Germany

How deep do you want to go here? Russian economic history is a pet topic of mine. Wrote plenty of papers on it and can talk for hours on this
 
Russia's economy was full of promise and peril. It can go either way depending on how the regime adapts to issues as they emerge. From the collapse of Witte's policies in 1898 to 1906, Russia was in an economic recession where industrial growth fell from 9.5% per year to just 1.5% or less than the population growth. After a wave of economic reforms following the 1905 violence, Russia's growth soared back to 7.5%. More importantly, agriculture also grew after 1905 when it had been stagnant relative to population for decades

The major reforms after 1905 include an easing of the passport restrictions on peasant movement, a reduction in holidays and the ability to sell land.

Russia's growth is probably even faster in the post reform era. Village incomes soared and increased mechanization freed up a large amount of village labor. This argues for a large increase in village craft industries- where most Russian industrial production was done and where we have little good data.

There remained many bottlenecks to Russian growth- a truly bizarre tariff schedule following mercentilist principles would be a big one. Raw materials were subject to a heavy tax. Russians paid three times the international price for iron for example. This curtailed the growth of any industry that used iron. The increased cost exceeded the value of protection for Russian industry. Machinery was also heavily taxed. On average, it cost twice as much to build a factory in Russia as it did in Germany

How deep do you want to go here? Russian economic history is a pet topic of mine. Wrote plenty of papers on it and can talk for hours on this

I want to touch on tarrifs more specifically to begin. From what I gathered the Russian government was attempting an import-substitution style industralization with the tax on raw materials that you metnioned. I feel that if the theory was ever to work, it would be with Russia and its vast deposits of minerals.
 
I want to touch on tarrifs more specifically to begin. From what I gathered the Russian government was attempting an import-substitution style industralization with the tax on raw materials that you metnioned. I feel that if the theory was ever to work, it would be with Russia and its vast deposits of minerals.

Russian tariffs were not part of a sound industrialization process at all. The best guess is that they were trying to cut imports to build gold reserves for the gold standard- another horrid policy of Alexander III. Sobolev argued that revenue was the driving force

The tariffs on raw materials did spur a minor boom in iron production for example. The problem was that the price of iron soared to three times the going rate. Pig iron in Russia ran around 90 kopecks per pood while the Americans were paying less than twenty. while stimulating investment in iron mines, the policy sharply reduced demand. The increased iron mines couldn't find customers for their goods and Witte was reduced to organizing cartels to limit production and prop up the mines.

Russia would have done far better to reduce the cost of production (eliminating red tape and taxes for instance). The reduced cost would have made Russian ore competitive on the world market and they could have exported raw iron Since world iron demand was twenty times Russian, a competitive iron industry could have expanded far more than the domestic market could
 
Russian tariffs were not part of a sound industrialization process at all. The best guess is that they were trying to cut imports to build gold reserves for the gold standard- another horrid policy of Alexander III. Sobolev argued that revenue was the driving force

The tariffs on raw materials did spur a minor boom in iron production for example. The problem was that the price of iron soared to three times the going rate. Pig iron in Russia ran around 90 kopecks per pood while the Americans were paying less than twenty. while stimulating investment in iron mines, the policy sharply reduced demand. The increased iron mines couldn't find customers for their goods and Witte was reduced to organizing cartels to limit production and prop up the mines.

Russia would have done far better to reduce the cost of production (eliminating red tape and taxes for instance). The reduced cost would have made Russian ore competitive on the world market and they could have exported raw iron Since world iron demand was twenty times Russian, a competitive iron industry could have expanded far more than the domestic market could

So from what I gather, Russia instiuted tarrifs without the necessary capital preexisting to develop its nascent industrial and minerial output.

I imagine that with the necessary capital present in Russia the iron mines would naturally be invested in because local production is always cheaper in the long term due to transportation costs. It could then be coupled with a slight tarrif to put Russian iron over the competitive edge, and then spiral from there?

Does that seem sound?
 
So from what I gather, Russia instiuted tarrifs without the necessary capital preexisting to develop its nascent industrial and minerial output.

I imagine that with the necessary capital present in Russia the iron mines would naturally be invested in because local production is always cheaper in the long term due to transportation costs. It could then be coupled with a slight tarrif to put Russian iron over the competitive edge, and then spiral from there?

Does that seem sound?

Import substitution is an especially horrid economic model when applied to raw materials. From an industrialization point of view, raw material prices need to be as low as possible. By raising the cost of iron, steel and other raw materials, the tariffs were driving industry out of Russia. A good example is the destruction of the private shipbuilding in Russia. The tariffs on steel tripled the cost and yet you could import ships free of duty. Naturally, private shipbuilding almost ceased Many such examples could be found. Canned American meat sold in Britain for less than the cost of the empty can in Russia

Or we could look at sugar. Russia placed a prohibitive tariff on sugar. You simply couldn't import it. They also put a tax of 1.75 rubles per pood. The retail price in Russia was 6.1 rubles per pood but only 2.6 in Britain. Because of the high prices, Russia produced more sugar than it could use. Heavy regulations were imposed limiting sugar refinery to prop up the price. The excess was dumped on the British market for a loss. In the end, Russia got expensive sugar and British consumers got subsidies. It was a huge subsidy costing almost as much as the Navy

The Russians also placed taxes on machine tools. How can that help industrialization? Russia needed better tools- the main reason she was poor and so they taxed them. Makes no sense unless they are trying to raise revenue or preserve gold

There is an economic logic to the high tariffs on some final consumer goods. Tea and herring, for example. These were essentially luxury taxes that reduced with little market distortions Small tariffs on manufactured consumer goods could also stimulate some industries

From an industrialization point of view, Russia should have abolished the tariffs on raw materials and capital goods. This would have made Russian factories competitive on the world market and attracted investment. Even if the total investment remained the same, the cost of opening a factory would have fallen by half. As it was, most of the investment in Russia went to uncompetitive wealth destroying investments. This was especially true of iron and steel where Witte promised to buy the excess output at ludicrous prices

Russia needed capital but it also suffered from a tremendous amount of "dead capital" Capital that couldn't be put to use. Land for example. Because the peasants couldn't sell their land, they couldn't use it as collateral. It was impossible for some peasant to sell his land, buy some tools and become a cobbler for example. They couldn't even borrow against their land to buy farm tools- which would have been a real boom

There are also the huge gold and silver reserves of the government. Between 1891 and 1914, these rose by nearly 3 billion rubles or about one year of total government revenue. This just sat in the vaults when it should have been spent. It was supposed to serve as an emergency war fund but because Russia was blockaded, it couldn't be used
 
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