Reutern's successors as finance minister generally shared his overall views on the government's role in economic policy. But this does not mean that Russia's economic policy after Reutern was unchanged. In many ways, economic policy depended on the general direction of politics and the personality of the minister. In this regard, the views and activities of N. Kh. Bunge as finance minister are quite revealing. Bunge was a distinguished professor and rector of the University of Saint Vladimir in Kiev and the author of numerous works on the history of finance and monetary circulation, trade and credit. He headed the Finance Ministry from February 1881. The appointment of a university professor to such a prestigious governmental post was very unusual. In part it can be explained by the fact that Bunge was well known to the Romanovs. In the beginning of the 1860s he taught financial law to Grand Duke Nicholas, the eldest son of Tsar Alexander II, and in the 1880s he taught the future Tsar Nicholas II. Bunge was very familiar with contemporary Western economic theory and could evaluate the experience of industrial development in Europe and the United States. In his academic writings Bunge devoted much effort to studying the relationship between private enterprise and state involvement in Russia's economic development.
As a teacher, Bunge tried to persuade the future emperor Nicholas II that he should avoid the extreme characteristics of Nicholas I's policies of state intervention in the economy. Bunge believed that the state should aid private initiative only when the state's interests made this truly necessary.[367] He was worried by the state's increasing role in the economic life of the empire. In the second half of the 1890s, in his famous 'Notes from the Afterlife', Bunge wrote that on the eve of the Crimean War, 'the private hand' in 'spiritual and material life' had been far too restricted.
The disappointment felt by everyone during the Crimean War led to a domestic policy... which expected everything from private initiative, but this policy revealed itself sometimes in such deplorable forms that reasonable people began once again to cry out for governmental oversight and control, and even for replacing private with state activity. We are continuing in this direction even now, when people want the government to take over the grain trade and supply a population ofa hundred million. It seems impossible to continue on in this direction unless you assume that the government should plow, sow and reap, and then publish all the newspapers and magazines, write stories and novels and make progress in the fields of art and science.[368]
Bunge believed that Russia lagged behind Western Europe in industrial development by a half-century. He argued that one reason for this was that
Russian lacked modern legislation regulating factories.[369] In the beginning of the 1880s, Bunge introduced new factory legislation. On 1 June 1882, a lawwas passed forbidding the employment of minors in factories. For adolescents aged 12-15 an eight-hour work day was established. In 1882 a Factory Inspectorate was established under the Ministry of Finance. On 3 June 1886 a law was published which regulated relations between factory owners and workers. The new Factory Inspectorate was charged with enforcing this law. Bunge also thought that workers should receive a share of an enterprise's profits, as this would relieve some social tensions. Bunge formulated his opinions on the workers question by relying on Western models: the Swiss government, for example, had built special workers quarters in Bern, and he often used the dye plants of Leclarke in England as an example of a model enterprise.[370]
Bunge developed and implemented a range of other economic reforms. One of his most important tax reforms was the elimination of the poll tax in 1886. This became an important step on the path to replacing estate-based taxation with property-based taxation. In the beginning of i885 Bunge introduced an additional 3 per cent duty to the trade tax (promyslovyi nalog) and three years later a 5 per cent tax levy was added to incomes from monetary capital.[371]On 12 June 1886 the emperor authorised a law changing state peasants' obrok into payments towards purchasing their land. Thus, the opportunity arose for these peasants to become full landowners.[372] Bunge was a staunch opponent of the existing system of collective responsibility (krugovaia poruka) and of the passport system, because they hindered the free movement of the peasants.[373]At his initiative a passport reform was developed. However, following Bunge's resignation in December 1886, the reform got caught in bureaucratic red tape until the beginning of the 1890s.
The policy of forced industrial development
The poor harvests of 1883 and 1885 worsened an already unstable economic situation. Bunge's attempts to fix the budget deficit were unsuccessful. Advocates of a new course of state policy took advantage of this failure: The chief procurator of the Synod K. P. Pobedonostsev, the editor of the newspaper Moskovskie vedomosti M. N. Katkov, and their supporters spoke out against the liberal reforms. They argued that 'a People's Autocracy' was a distinctive, natural form of rule for Russia. In their view, the Russian nobility should be the connecting linkbetween the tsar and the people. Katkov's influence on Alexander III and state policy in the 1880s was so significant that in bureaucratic circles he and Pobedonostsev were seen as a second government alongside the legal one.[374] The central aim of Katkov and Pobedonostsev's economic programme was to strengthen autocratic power by developing domestic industry. They favoured protectionism, maintaining paper-money circulation, tight control over the stockmarket and private enterprise, using state monopolies (wine and tobacco) as a resource for taxation, and economic support for large landowners. The development of domestic industry was supposed to go together with the strengthening of communal landownership in the villages.
Pobedonostsev and Katkov began to campaign against Bunge in the press as early as autumn 1885. In January 1887 Bunge left the post of finance minister and was appointed to the prestigious but less influential position of chairman of the Committee of Ministers. I. A. Vyshnegradskii, who was close to Katkov, became the minister of finance. Vyshnegradskii was a former professor of mechanics, director of the Petersburg Technological Institute and also well known in the entrepreneurial world as a leading figure in the Petersburg Water Company and vice-chairman of the South-western Railways. But Katkov sought not only Bunge's resignation, but also that of the foreign affairs minister, N. K. Giers, and he hoped to replace the two 'Germans' with his own proteges, I. A. Vyshnegradskii and I. A. Zinovev respectively. But Katkov was not able to realise his plans fully: in the summer of 1887 the influential editor of Moskovskie vedomosti died.
I. A. Vyshnegradskii aligned himself with the Moskovskie vedomosti group long before his appointment to a ministerial post, and he actively supported Katkov's attacks on Bunge. In the middle of 1885, S. Iu. Witte, the young manager ofthe South-western Railways, joined the group. Vyshnegradskii set a goal - to eliminate the budget deficit. He quickly came to the conclusion that introducing a monopoly on tobacco was unrealistic and also decided against starting a monopoly on wine.
367
See N. I. Anan'ich, 'Materialy lektsionnykh kursov N. X. Bunge 60-80x godov XIX veka',
368
A letter found in N. Kh. Bunge's papers, 1881-1894. RGIA, Fond 1622, op. I, d. 721, l. 52.
369
L. E. Shepelev,
pp. i38-9.
372
N. I. Anan'ich, 'K istorii otmeny podushnoipodati v Rossii',
373
For the connection between these two phenomena in the government policy of the i880s-90s, see M. S. Simonova, 'Otmena krugovoi poruki', IZ, 83 (1969): 159-95.
374
V A. Tvardovskaia,