To what extent did the Russian economy change in the years leading to 1911?

Russias economy significantly changed in the years leading to 1911. The economy
was changed dramatically by the work of the Ministers of Finance, Nikolai Bunge,
Ivan Vyshnegradsky, Sergei Witte and Pyotr Stolypin.
Between 1881 and 1905, Russia underwent major changes to make it a more
modern state. In 1881 Tsar Alexander II has just been assassinated and Alexander III
was coming into the power. After the assassination of his father, Alexander III
introduced a manifesto stating that he had political power. In 1881 Russia was
considered to be one of Europes great power (this was judged purely on their
military strength).However, in comparison with other Western countries it was very
far behind economically. The Tsar faced many dilemmas with modernising Russia
and it was seen as a great threat to the Tsarist regime. It proved very hard to
modernise under an autocratic system.
Russia was economically backward for many reasons. It was too big, her road and
rail network was not sufficiently developed and there was no effective banking
system. However, the 1880s saw an industrial expansion in Russia. Nikolai Bunge
was Minister of Finance from 1881 to 1887 and tried to stimulate the economy by
reducing the tax burden on peasantry so they had more to spend. He undertook a
number of reforms in an attempt to modernise Russia. He consolidated the banking
system and founded the Peasants Land Bank which helped peasants buy land. The
head tax was abolished and inheritance tax was introduced. He promoted the
construction of railways and lead the first Russian labour laws, some of them aimed
at reducing child labour. Bunge bought failing private rail lines and urged that new
routes be built. Then in 1887 Ivan Vyshnegradsky took over until 1892.
Vyshnegradsky had successfully achieved a balanced budget, and ambitious railway
construction projects such as the Trans-Siberian railway pioneered by Witte attracted
foreign interest in Russia. The terms of the 1892 Franco-Russian Alliance involved
French loans to Russia for the construction of the railway, which would provide
opportunities to exploit the natural resources of Siberia. He succeeded in building up
a budget surplus and strong gold reserves, but was then sacked after the famine of
1891.
Vyshnegradskys dismissal brought in Sergei Witte in 1892 until 1903 who continued
in similar fashion to his predecessor. Witte believed that economic developments
would provide employment, raise living standards and slow down revolutionary
activity. His objectives were to abandon liberal economics and was in favour of state
intervention. Witte used state capitalism - state power to direct and control the
economy. He was impressed with the industrial revolutions that had occurred in
Western Europe and hoped to expand Russias economy in the same way. This
would require investment on a large scale. He invited western managers and experts
to advise and organise new initiatives. Most importantly, he encouraged investment
from western capitalists, into Russian industry, to encourage growth. He arranged
sizeable loans from abroad, which is also something he was later criticised for.
Imports were halted through high tariffs, thus allowing Russias growing industries a
secure market. Wittes policies required peasants to continue to move to the
expanding cities and the building of bigger factories in the cities. Statistics shows

that by 1902, half the industrial workforce were in factories employing over 1,000
workers.
Pyotr Stolypin became Interior Minister in May 1906 and quickly secured the position
of Prime Minister three months later. Stolypin attempted to find a balance between
the introduction of land reforms and the suppression of radicals. The first meeting of
the Duma took place in May 1906. After their first meeting, members of the Duma put
forward a series of demands including the release of political prisoners, trade union
rights and land reform. However, Tsar Nicholas II rejected all these proposals and
dissolved the Duma in July, 1906. Then in October, 1906, Stolypin introduced
legislation that enabled peasants to have more opportunity to acquire land. His
intention was to create a stable group of prosperous farmers (kulaks) who would
form a natural conservative political force. People living in rural areas also got more
freedom in the selection of their representatives to the zemstvo (local government
councils). At the same time Stolypin instituted a new court system that made it easier
for the arrest and conviction of political revolutionaries. Over 3,000 suspects were
convicted and executed by these special courts between 1906 and 1909. As a result
of this action the hangmans noose became known as Stolypins necktie.
Overall, the work of the Ministers had a major effect on Russias economy in a
positive way. There were some negative effects such as Stolypins necktie, but
generally the economy was changed for the better. The country advanced, not as
much as other western countries, but still a large amount considering how backward
Russia was.