II. The Town and Capital

Urban Russia is a product of the most recent history, or more exactly of the last few decades. By the end of the reign of Peter I, in the first quarter of the eighteenth century, the urban population amounted to a little over 328,000, about 3 per cent of the country’s population. By the end of that century it amounted to 1,301,000, about 4.1 per cent of the whole population. In 1812 the urban population had grown to 1,653,000, which was 4.4 per cent. In the middle of the nineteenth century the towns still counted only 3,482,000, or 7.8 per cent. Finally, by the last census (1897) the urban population was put at 16,289,000, which gives about 13 per cent of the whole population.

If we have in mind the town as a social and economic formation, and not as a mere administrative unit, we must admit that these figures do not give a true picture of the development of the towns: Russian state practice knows wholesale promotions to the rank of town, as well as wholesale demotions from it, for purposes very far removed from scientific considerations. Nevertheless these figures bear clear enough witness both to the insignificance of the towns in pre-reform Russia and to their feverishly rapid growth over the last decade. According to Mr Mikhailovsky’s calculations, the increase of the urban population between 1885 and 1897 was 33.8 per cent, more than twice as high as the general increase in the country’s inhabitants (15.25 per cent), and almost three times as high as the increase in the rural population (12.7 per cent). If we add the factory villages and settlements, the rapid growth of the urban (non-agricultural) population shows still more strikingly.

But the modern Russian towns differ from the old ones not only in the size of their population but in their social type as well: they are centres of commercial and industrial life. Most of our old towns played almost no economic part at all: they were military and administrative posts or field fortresses, their population was one of servitors maintained from the state treasury, and the town was in general an administrative, military and tax-gathering centre.

If a population not in state service settled within the town walls or in the suburbs in search of shelter from enemies, this in no way prevented it from going on farming as before. Even Moscow, the largest town of old Russia, was, in Mr Milyukov’s definition, simply “a royal manor, a considerable part of whose population was in one way or another connected with the palace as its retinue, guard or household servants. Of the 16,000-odd households counted in Moscow by the census of 1701, not even 7,000 (44 per cent) belonged to townsmen and craftsmen, and these consisted of the population of the state suburbs working for the palace. The remaining 9,000 belonged to the clergy (1,500) and to the ruling estate.” Thus the Russian town, like the towns of the Asiatic despotisms and unlike the handicraft and trading towns of the Middle Ages, played a purely consuming role. While the Western town of the same period more or less victoriously upheld the principle that craftsmen had no right to live in the villages, the Russian town set itself no such aims whatever. Where, then, was manufacturing industry, where was handicraft? In the village, alongside agriculture. A low economic level, together with the intense rapacity of the state, left no room either for accumulation or for a social division of labour. A summer shorter than in the West left a longer winter leisure. All this led to manufacturing industry not separating itself from agriculture, not concentrating in the towns, but remaining in the village as an auxiliary occupation alongside farming. When, in the second half of the nineteenth century, the broad development of capitalist industry began with us, it found not urban handicraft but chiefly the rural cottage industry of the kustars. “For a million and a half factory workers at the most,” writes Mr Milyukov, “there are in Russia to this day no fewer than four million peasants engaged in manufacturing industry in their own villages while not giving up farming. This is the very class from which… the European factory grew, and which took no part at all… in the creation of the Russian one.”

Of course, the further growth of the population and of its productivity created a basis for a social division of labour, and therefore for urban handicraft; but under the economic pressure of the advanced countries this basis was at once seized by large-scale capitalist industry, so that urban handicraft had no time to flourish.

The four million kustars are the very elements that in Europe formed the core of the urban population, entered the guilds as masters and journeymen, and later increasingly remained outside the guilds. It was precisely the stratum of craftsmen that made up the predominant population of the most revolutionary quarters of Paris in the epoch of the Great Revolution. This fact alone, the insignificance of urban handicraft, has immeasurable consequences for our revolution.

The economic essence of the modern town consists in its working up the raw materials delivered by the country; the conditions of transport therefore have decisive importance for it. Only the building of the railways could so widen the circle of regions supplying the town as to make possible the gathering together of masses of a hundred thousand; and the need for such concentrations was created by large-scale factory industry. The core of the population in the modern town, at least in a town of economic and political importance, is the sharply differentiated class of wage-labour. It is precisely this class, still essentially unknown to the Great French Revolution, that is destined to play the decisive part in ours.

The factory and industrial system not only brings the proletariat forward into the front positions but also cuts the ground from under the feet of bourgeois democracy. Its support in the epoch of the earlier revolutions was the urban petty bourgeoisie: the craftsmen, small shopkeepers and so on.

Another cause of the disproportionately great political role of the Russian proletariat is the fact that Russian capital is in considerable part an immigrant. This fact had as its consequence, in Kautsky’s opinion, that the growth of bourgeois liberalism did not keep pace with the growth in the numbers, strength and influence of the proletariat.

Capitalism, as has been said above, did not develop with us out of handicraft. It conquered Russia with the economic culture of all Europe behind it, with, before it, as its nearest competitor, the helpless village kustar or the wretched urban craftsman, and, as its reservoir of labour-power, the half-beggared peasant cultivator. Absolutism from various sides helped the capitalist enslavement of the country.

First of all it turned the Russian peasant into a tributary of the world stock exchange. The absence of capital within the country, with the state’s constant need of it, created the ground for usurious terms in foreign loans. The bankers of Amsterdam, London, Berlin and Paris, from the reign of Catherine II down to the ministry of Witte and Durnovo, worked systematically at turning the autocracy into a colossal stock-exchange speculation. A considerable part of the so-called internal loans, that is, those floated through internal credit institutions, differed in no way from the foreign loans, since they found their real placing with foreign capitalists. Proletarianising and pauperising the peasant by the weight of taxation, absolutism turned the millions of the European stock exchange into soldiers, battleships, solitary-confinement prisons and railways. The greater part of these expenditures is, from the economic point of view, completely unproductive. An enormous share of the national product went abroad in the form of interest, enriching and strengthening the financial aristocracy of Europe. The European financial bourgeoisie, whose political influence in the parliamentary countries has grown continuously over the last few decades, pushing back the influence of the commercial and industrial capitalists, did indeed turn the Tsarist government into its vassal; but it could not, did not wish to, and did not, become a component part of the bourgeois opposition within Russia. In its sympathies and antipathies it was guided by the principle that the Dutch bankers Hope and Co. had formulated as long ago as the terms of the loan to Paul in 1798: “the payment of interest must be made regardless of any political circumstances whatever”. The European stock exchange was even directly and immediately interested in the preservation of absolutism: no other national government could have assured it such usurious interest. But the state loans were not the only road by which European capital immigrated into Russia. The same money that had soaked up a good share of the Russian state budget returned to the territory of Russia as commercial and industrial capital, attracted by its untouched natural wealth and, above all, by its unorganised labour-power, unaccustomed to resistance. The last period of our industrial boom, 1893–99, was at the same time a period of increased immigration of European capital. Thus capital, still remaining European in considerable part and realising its political power in the French or Belgian parliament, mobilised a national working class on Russian soil.

In subjugating the economically backward country, European capital carried its chief branches of production and communication across a whole series of intermediate technical and economic stages that it had had to go through in its homeland. But the fewer obstacles it met on the road to its economic domination, the more insignificant its political role turned out to be.

The European bourgeoisie developed out of the third estate of the Middle Ages. It raised the banner of protest against the rapacity and violence of the first two estates in the name of the interests of the people, whom it wished to exploit itself. The medieval monarchy of estates, on its way to becoming bureaucratic absolutism, relied on the population of the towns in its struggle against the claims of the clergy and the nobility. The bourgeoisie used this for its own rise within the state. Thus bureaucratic absolutism and the capitalist class developed at the same time, and when they came into hostile collision with each other in 1789, it turned out that the whole nation stood behind the bourgeoisie.

Russian absolutism developed under the direct pressure of the Western states. It adopted their methods of administration and rule long before a capitalist bourgeoisie had had time to arise on the soil of the national economy. Absolutism already had at its disposal an enormous standing army and a centralised bureaucratic and fiscal apparatus, and was running into unpayable debts to the European bankers, at a time when the Russian towns still played an entirely insignificant economic role.

Capital burst in from the West with the direct assistance of absolutism, and in a short time turned a whole series of old, archaic towns into centres of industry and trade, and even created in a short time enormous commercial and industrial towns on entirely empty ground. This capital often appeared at once in the shape of huge impersonal joint-stock companies. In the decade of the industrial boom, 1892–1902, the fixed capital of joint-stock companies grew by two milliards, whereas in the period 1854–92 it had increased by only 900 millions. The proletariat found itself at once concentrated in enormous masses, while between it and absolutism stood a capitalist bourgeoisie few in numbers, cut off from the “people”, half foreign, without historical traditions, inspired by the thirst for gain alone.