Specifics of Russia’s Early Industrial Development under Interstate Rivalry, 18th — Early 20th Centuries

The purpose of the study is to identify the characteristics of the Russian proto-industrialization and the early stage of industrial development, based on systematization of the findings in the previous studies, and to express our findings in terms of the new institutional economic history, which was employed as the theoretical and methodological basis of the work. We update the concepts of military modernization and national military power as a maximand of economic policy. We analyze interactions between the government and market forces, the formation of industrial policy in relations to general political, military and fiscal needs of the state. Other social subjects of the Russian (proto-)industrialization are identified: entrepreneurs from the nobility, serf industrialists, members of religious sectarian groups (mainly of the ‘Old Believers’), certain ethnic groups (Germans, Jews), foreign entrepreneurs (or of foreign origin), scientists and inventors. Special reference is attributed to the knowledge production sector, primarily to the creation of institutions for patenting inventions. We discuss the argument by A. Gerschenkron on the advantages of Russia’s backwardness for her catching-up development. In concluding remarks the author formulates Smithian (related to the division of labor and specialization) and Northian (institutional) driving factors of economic growth during the Russian (proto-)industrialization. By analyzing the Northian factors, the author distinguishes between “idealistic” (influence of culture, ideology or social norms) and “stimulating” (influence of material or non-material motivations) approaches. The overall finding is that industrialization in the Russian Empire was carried out through preservation and strengthening of the established institutions, which proved relatively effective in addressing immediate problems but hampered development in the long run.