In January 1914, Kokovtsov was removed from office. I. L. Goremykin was appointed prime minister, and P. L. Bark was placed in charge of the Ministry of Finance. After Bark's appointment the government proclaimed a 'new course' in economic policy. However, the First World War destroyed their plans. After the war began, bread exports across European borders and the
Black Sea straits nearly halved (from 647.8 million pood to 374 million pood). Grain was Russia's main export, and Germany was an important trading partner. As a result, Russia lost its positive balance of trade as regards European commerce and a negative balance of trade developed across Asian borders as well. England became a key importer of Russian goods.[409] The war led to fewer joint-stock companies being founded. The abolition of the spirits monopoly at the beginning ofwar dealt a sharp blowto the budget. On 23 July / 5 August Nicholas II signed a decree prohibiting paper money to be exchanged for gold and expanding the State Bank's issuing authority.[410]1. L. Goremykin's government believed these would be temporary wartime measures. However, the gold standard proved incapable of surviving the First World War, not just in Russia, but throughout the world.
With the onset of the war, given state military orders, government control over industrial production inevitably increased.[411]
Conclusion
Russia did not enjoy total entrepreneurial freedom, even on the eve ofthe First World War, when political parties and bourgeois organisations had formed inside the country. Until 1917 Russia retained a system where joint-stock companies required state permission to incorporate. The tsar ignored suggestions from industrialists, bankers and scholars to tear down the barriers hampering the development of free enterprise. For example, Nicholas II did not react to a paper given to him on this topic by the famous economist Professor I. Kh. Ozerov. He drew the government's attention to the fact that Russian industrialists were starting their companies abroad, in France and England, where there wereno legal obstacles. I. Kh. Ozerov tried to convince Nicholas II to eliminate restrictions for the European population of Russia, noting the United States' success as regards co-operation between people of different nationalities in the development of American productivity.[412] The idea of Americanising' the Russian economy was rather widespread in economic literature during the First World War. However, it cannot be said that it was universally accepted in
Russian financial circles. For example, the Riabushinskiis, leading representatives of Old-Believer enterprises, tied their hopes to a rebirth of Europe after the war and thus viewed the United States as a dangerous opponent.82
Just before the war, in July 1914, the Council of Congresses of the Representatives of Trade and Industry sent the Council of Ministers a memorandum arguing that a special meeting was needed to discuss measures to develop Russia's productivity. This question continued to be discussed in business circles during the war, along with the possibility of building wide-scale and 'cultured' capitalism in Russia.83 But how should this 'cultured capitalism' lookin Russia? The answer to this question is one ofthe complex riddles ofhistory. Ruth Roosa, who dedicated many years to the study of bourgeois societal organisations in Russia, offered her theory on this mystery. She concluded that 'Russian society under the auspices of its business class in the twentieth century might well have had more in common with the moderate socialism of Scandinavia, the syndicalism of Italy in the 1920s, the authoritarian rule of Poland and the Baltic states between the wars, or the pattern of industrial organization that emerged in postwar Germany than with the open and competitive society that has been the American ideal.'84 Whether or not this is true, one thing is certain: the government's role in Russia's economic development under any conditions would have been very significant given Russia's social and economic traditions, and the history of the formation of its entrepreneurial class.
The distinctive features of Russia's economic development and the degree of its backwardness have been a constant source of debate for historians. Until the beginning of the 1930s, Soviet historiography featured lively polemics on this subject, with a variety of viewpoints. At the end of the 1930s the Short History of the All-Union Communist Party was published. In it, pre-revolutionary Russia was described as a backward country dependent on foreign capital. This viewpoint became mandatory for all students of Russian economic history in the Soviet Union. After Stalin's death, at the end of the 1950s and beginning of the 1960s, a new polemic resurfaced on the distinctive features of Russia's economic development. Ultimately, the prevailing theory was one that said Russia belonged to the group of countries with a neither very advanced nor very backward level of economic development.85 In Western historiography until the beginning ofthe 1980s Alexander Gerschenkron's theories dominated:
82 Anan'ich, Bankirskie doma, pp. 126-7.
83 M. V Bernatskii, 'Pravitel'stvennyi nadzor nad kommercheskimi bankami', Promyshlen- nost' i Torgovliia, 19/221 (14 May, 1916).
84 R. Roosa, Russian Industrialists in an Age of Revolution (Armonk: M. E. Sharpe, 1997), p. 160.
85 K. N. Tarnovskii, Sovetskaiaistoriografiiarossiiskogo imperializma (Moscow: Nauka, 1964).
he argued that Russia had been backward and the government's intervention in the economy had been exceptional. However, in later years his views have been revisited and revised.86 Inparticular, Paul Gregory has suggested a new concept of the distinctive features of Russian economic development. He believes that Russia possessed a market economy on the eve of the war, that agriculture, 'despite serious institutional problems, grew just as quickly as in Europe', and that 'if Russia had remained on a market-oriented model of development after the war, its indicators of economic growth would have been no less than before the war': in other words, the pace of Russia's development would have surpassed the European average.87
86 A. Gerschenkron, Europe in the Russian Mirror: Four Lectures in Economic History (Cambridge: Cambridge University Press, 1970); Economic Backwardness in Historical Perspective (Cambridge, Mass.: Harvard University Press, 1962).
87 P. Gregory, Ekonomicheskii rost Rossiiskoi imperii (konets XIX-nachala. XX vekov) (Moscow: Rosspen, 2003), pp. 248-9, trans. from the English (P. Gregory, Economic Growth of the Russian Empire: New Estimates and Calculations). Also see P. Gatrell, The Tsarist Economy 1850-1917 (London: Macmillan, 1986).
410
On 27 July / 9 August this decree was discussed in the State Duma and State Council and became a law. See A. L. Sidorov,
411
See I. F. Gindin,
pp. 272-3.