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How Far Were the Economic Reforms of Witte the Most Important Development Within Russia Between 1881-1903?


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How far were the economic reforms of Witte the most important development within Russia between 1881-1903? (30 marks)
It is a compelling argument that the reforms of Witte were the most important development in Russia between 1881-1903. Witte, as Finance Minister, was in a unique position to improve the great power status of Russia by improving the one thing that was holding the country back; it’s economy. There were several strands to his economic development of Russia such as establishing better communication between east and west by building the Trans-Siberian railway, using state intervention to increase the production of primary industries such as iron, coal and oil and opening up the vast potential of Siberia. However, to a lesser extent it can be argued that Witte’s policies had little effect on Russia, as it remained a largely peasant society with the serfs being tied to their land through crippling debts due to redemption payments. Also, the industrialisation of Russia led to social unrest which may in turn have led Russia to regress. Finally, other developments such as Russification and the repressive policies of Tsar Alexander III, again may have negated any positive change that Witte’s reforms brought.
Some historians argue that the policies of Witte were the most important in the development of Russia between 1881-1903. This is a compelling argument because unlike the previous finance ministers, he tackled the issues that were really holding the economy back, namely the lack of reliable communication between west and east Russia and the lack of a middle class to invest in, and drive forward, industry. The cornerstone of Witte’s economic reforms was the building of the Trans-Siberian railway. This was started 1891 and completed largely by 1903. This linked the capital of St. Petersburg in the west with Vladivostok in the East. This meant that for the first time, the vast plains of Russia, including Siberia, could be easily accessed and thus the potential for economic development was opened such as turning the wastelands of Siberia into farm land for growing grain for export. The building of the railway was significant for Russia because it allowed for migration of people for the first time and also a way of being able to transport goods and thus ultimately export them overseas to create the capital that the state needed to invest in its industrialisation drive. Another reform of Witte was to stimulate the economy through the use of state intervention. This was done because Russia had no middle class and therefore there was no one who could invest in opening up new factories and mines. Therefore Witte decided to invest state money into the opening of coal mines in the Caucauses and oil fields in Baku. Coal, iron, steel and oil production all increased dramatically during this time. This meant that the Government was now able to make a profit and sell its goods overseas. It also now had the capacity to open up factories to make manufactured goods, such as the Putilov steel works in St.Petersburg. The reforms also meant that Russia’s military benefitted, as the Government were now able to invest in machinery needed to fulfil its expansionist plans such as the ambition to expand Russian territory into Manchuria. Thus, overall, the reforms of Witte were the most important development in Russia between1881-1903 because they enabled Russia to industrialise and thus maintain its position as a great power, alongside the other countries of Europe. Without industrialisation, Russia would have remained a backward power and would have had lost its ability to influence world affairs.
Some historians may argue that Witte’s reforms actually damaged the development of Russia because they created massive social unrest. Peasants who migrated from the countryside into the towns found themselves to be worse off than before. Both the living and working condition were appalling. Many people worked in large factories of over 1,000 plus workers and had to work long hours for very low pay. There were very few regulations about working conditions, with foremen being allowed to beat their workers and no compensation if a worker suffered an accident. This all led to major social unrest, with workers forming unions to demand for change. During this period demonstrations were brutally suppressed by the Tsars guards, the Cossacks, and this only served to heighten tensions. Also, many people were living in overcrowded and unsanitary conditions. It was not unusual to find sixteen people living in one apartment and often there was no running water. Cholera and other epidemic disease were rife. Thus although Witte’s development may have been crucial in reforming Russia, it can be argued that they held back the development of the country because the people were becoming increasingly annoyed with the Tsars and the government and thus were less likely to do as they said.
Other historians would argue that the reforms of other finance ministers such as Bunge and Vyshnegradsky were also important in developing Russia and could be argued to be the foundation of Witte’s policies. However, this is a less compelling argument because they did not tackle the main issues that held the economy back, namely transport and the lack of a middle class to drive the economy forward. Bunge was the first Finance Minister to try and tackle the fact that Russia was a not exploiting its vast potential and thus his policies should be seen as significant. He set up the Peasants Land Bank, which gave peasants loans to increase their land holdings. However, the policy was not very successful because it was too small to be effective. His predecessor Vyshnegradsky, relied heavily on foreign investment to industrialise Russia. This may have provided short-term impetus into the economy, but ultimately, removed any benefits of industrialisation from the country, into foreign hands. He also had a policy of exporting grain to other countries, which proved to be disastrous in 1891 when there was widespread famine. Thus, both of these Finance Ministers’ policies were unable to make any real, positive change in Russia and did not help Russia to industrialise on a mass scale, as was needed.
Finally, it could be argued that other reforms were also important in the development of Russia at this time. For example, the policy of Russification brought the people of Russia closer together. The policy meant that Russia became the official language which meant that people were better able to communicate more efficiently, which was good for trade and thus the country became more unified. However, the negative impact of this policy was that minority groups such as the Jews were marginalised and were not able to access the best jobs and thus this was bad for Russia because the talent that the country had was not being exploited and thus Russia was not able to develop as quickly as it should have. Therefore, despite other developments taking place in Russia at this time, nothing was as important or had as impressive an impact as the policies of Witte.
Overall, the economic reforms of Witte were the most important in the development of Russia between 1881 and 1903. Although he was building on the policies of previous Finance Ministers, it was Witte who had the vision and the drive to tackle the real issues that were holding Russia back. However, some may argue that the developments that he made ultimately created unrest, both socially and politically, which the Russian government were ill-equipped to deal with. However, one must not lose sight of the fact that Russia needed to industrialise if it was to maintain its great power status, and thus, regardless of the impact of Witte’s reforms, his developments were the most important in Russia between 1881-1903.

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