The DEVELOPMENT of CAPITALISM in RUSSIA

Chapter VII. The Development of Large-Scale Machine Industry

IV. The Development of the Mining

Industry [1]

In the initial period of Russia’s post-Reform development the
principal centre of ore-mining was the Urals. Constituting a single area,
until quite recently separated sharply from Central Russia, it has at the same time an original industrial
structure. For ages the basis of the “organisation of labour”
in the Urals was serfdom, which to this day, the very end of the 19th
century, leaves its impress on quite important aspects of life in this
mining area. In the old days serfdom was the basis of the greatest
prosperity of the Urals and of its dominant position, not only in Russia,
but partly also in Europe. In the 18th century iron was one of
Russia’s principal items of export; in 1782 nearly 3.8 million poods
of iron were exported; in 1800-1815 from 2 to 1 1/2 million poods; in
1815-1838 about 1 1/3 million poods. Already “in the 20s of the 19th
century Russia was producing 1 1/2 times as much pig-iron as France, 4 1/2
times as much as Prussia and 3 times as much as Belgium.” But the
very serfdom that helped the Urals to rise to such heights when European
capitalism was in its initial period was the very cause of the
Urals’ decline when capitalism was in its heyday. The iron industry
in the Urals developed very slowly. In 1718 Russia’s output of
pig-iron was about 6 1/2 million poods, in 1767 about 9 1/2 million poods,
in 1806 12 million poods, in the 30s—9 to 11 million poods, in the
40s—11 to 13 million poods, in the 50s—12 to 16 million poods,
in the 60s—13 to 18 million poods, in 1867—17 1/2 million
poods. In one hundred years the output was not even doubled, and Russia
dropped far behind other European countries, where large-scale machine industry had given rise to a
tremendous development of metallurgy.

The main cause of stagnation in the Urals was serfdom; the ironmasters
were at once feudal landlords and industrialists, and their power was
based not on capital and competition, but on monopoly [2] and their
possessional right. The Ural ironmasters are big landowners even today. In
1890, the 262 ironworks in the Empire had 11.4 million dessiatines of land
(including 8.7 million dessiatines of forestland), of which 10.2 million
belonged to 111 Urals ironworks (forestland covering 7.7 million
dessiatines). On the average, consequently, each Urals works possesses
vast latifundia covering some hundred thousand dessiatines. The allotment
of land to the peasants from these estates has to this day not been
completed. Labour is obtained in the Urals, not only by hire, but also on
the labour-service basis. The Zemstvo statistics for Krasnoufimsk
Uyezd, Perm Gubernia, for example, estimate that there are thousands of
peasant farms that have the use of factory-owned land, pastures, woodland,
etc., either gratis, or at a low rent. It stands to reason that this free
use of the land actually has a very high cost, for it serves to reduce
wages to a very low level; the ironworks get their “own”
workers, tied down to the works and cheaply paid. [3]

Here is the way Mr. V. D. Belov describes these relationships:

The Urals enjoy the advantage, says Mr. Belov, of having workers who have
been moulded by their “original” history. “Workers in other factories, abroad, or even in St. Petersburg, have not the interests
of their factory at heart: they are here today and gone tomorrow. While
the factory is running they work; when losses take the place of profits,
they take up their knapsacks and go off as fast and as readily as they
came. They and their employers are permanent enemies. . . . The position
is entirely different in the case of the Ural workers. They are natives of
the place and in the vicinity of the works they have their land, their
farms and their families. Their own welfare is closely, inseparably, bound
up with the welfare of the works. If it does well, they do well; if it
does badly, it is bad for them; but they cannot leave it ( sic !):
they have more here than a knapsack ( sic !); to leave means to
wreck their whole world, to abandon the land, farm and family. . . . And
so they are ready to hang on for years to work at half pay, or, what
amounts to the same thing, to remain unemployed half their working time so
that other local workers like themselves may earn a crust of bread. In
short, they are ready to accept any terms the employers offer, so long as
they are allowed to remain. . . . Thus, there is an inseparable bond
between the Ural workers and the works; the relationships are the same
today as they were in the past, before their emancipation from serf
dependence; only the form of these relationships has changed, nothing
more. The former principle of serfdom has been superseded by the lofty
principle of mutual benefit.” [4]

This lofty principle of mutual benefit manifests itself primarily in
reduction of wages to a particularly low level. “In the South
. . . a worker costs twice and even three times as much as in the
Urals”—for example, according to data covering several thousand workers, 450 rubles (annually per worker) as against 177
rubles. In the South “at the first opportunity of earning a decent
wage in the fields of their native villages or anywhere else, the workers
leave the iron works, and coal- or ore-mines” ( Vestnik Finansov , 1897, No. 17, p. 265). In the Urals, however, a decent wage
is not to be dreamt of.

Naturally and inseparably connected with the low wages and servile status
of the Ural workers is the technical backwardness of the Urals. There
pig-iron is smelted mostly with the aid of wood fuel, in old-fashioned furnaces with cold or slightly
heated blast. In 1893, the number of cold-blast furnaces in the Urals was
37 out of 110, while in the South, there were 3 out of 18. A mineral-fuel
furnace had an average output of 1.4 million poods per year, while a
wood-fuel furnace had one of 217,000 poods. In 1890 Mr. Keppen wrote:
“The refining process of smelting pig-iron is still firmly
established in the ironworks of the Urals, whereas in other parts of
Russia it has been almost entirely displaced by the puddling process.” [19]
Steam-engines are used to a far less extent in the Urals than in the
South. Lastly, we cannot but note the seclusion of the Urals, its
isolation from the centre of Russia owing to the vast distance and the
absence of railways. Until quite recently the products of the Urals were
transported to Moscow mainly by the primitive method of
“floating” by river once a year. [5]

Thus the most direct survivals of the pre-Reform system, extensive
practice of labour-service, bonded condition of the workers, low
productivity of labour, backwardness of technique, low wages, prevalence
of hand production, primitive and rapaciously antediluvian exploitation of
the region’s natural wealth, monopolies, hindrances to competition,
seclusion and isolation from the general commercial and industrial march
of the times— such is the general picture of the Urals.

The mining area in the

South [6] is in many respects the very opposite of the Urals. The South is in the period of formation and is as young as the Urals are old and the system prevailing
there “time-hallowed.” The purely capitalist industry which
has arisen here during recent decades recognises no traditions, no
social-estate or national divisions, no seclusion of definite sections of
the population. There has been a mass influx of foreign capital, engineers
and workers into South Russia; and in the present period of boom (1898)
entire factories are being brought there from

America. [7]

International capital has not hesitated to settle within the tariff wall
and establish itself on “foreign” soil: ubi bene , ibi patria [8]

....

The following are statistics on the displacement of the Urals by
the

South [20] :

These figures clearly show what a technical revolution is now taking place
in Russia, and what an enormous capacity for the development of productive
forces is possessed by large-scale capitalist industry. The predominance
of the Urals meant the predominance of serf labour, technical backwardness
and

stagnation. [9]

On
the contrary, we now see that the development of metallurgical industry is proceeding faster in
Russia than in Western Europe and in some respects even faster than in the
United States. In 1870 Russia produced 2.9% of the world output of
pig-iron (22 million poods out of 745 million), and in 1894—5.1%
(81.3 million poods out of 1,584.2) ( Vestnik Finansov , 1897,
No. 22). In the last 10 years (1886-1896) Russia has trebled her output of
pig-iron (32 1/2 to 96 1/2 million poods), whereas it took France, for
example, 28 years to do so (1852-1880), the U.S.A. 23 years (1845-1868),
England 22 (1824-1846) and Germany 12 (1859-1871; see Vestnik Finansov , 1897, No. 50). The development of capitalism in the young
countries is greatly accelerated by the example and the aid of
the old countries. Of course, the last decade (1888-1898) has been a
period of exceptional boom, which, like all capitalist prosperity, will
inevitably lead to a crisis; but capitalist development cannot proceed at
all except in spurts.

The introduction of machinery into production and the increase in the
number of workers have been much more rapid in the South than in the

Urals. [10]

Thus we see that in the Urals the increase in the use of steam-power was
only some 2 1/2 times, whereas in the South it was sixfold ; the
increase in the number of workers in the Urals was 1 2/3 times, whereas in
the South it was nearly fourfold . [11]

Consequently, it is capitalist large-scale industry that rapidly increases the number of workers, at the same time
enormously increasing the productivity of their labour.

Alongside of the South, mention should be made of the Caucasus, which is
also characterised by an amazing growth of the mining industry in the
post-Reform period. The out put of oil, which in the 60s did not even
reach a million poods (557,000 in 1865), was in 1870—I.7 million
poods, in 1875—5.2 million poods, in 1880—21.5 million poods,
in 1885— 116 million poods, in 1890—242.9 million poods, in
1895—38k million poods and in 1902—637.7 million poods. Nearly
all the oil is obtained in Baku Gubernia, and Baku “from an
insignificant town has turned into a first-class Russian industrial
centre, with 112,000 inhabitants.” [12]

The

enormous development of the extraction and processing of oil has given
rise in Russia to a greater consumption of kerosene that has completely
ousted the American product (increase of personal consumption with the
cheapening of the product by factory processing), and to a still greater
consumption of oil by-products as fuel in factories, in works and on the
railways (increase of productive consumption). [13]

The number of workers in the mining industry of the Caucasus has also grown very
rapidly: from 3,431 in 1877 to 17,603 in 1890, i.e., has
increased fivefold .

To illustrate the structure of industry in the South let us take the data
for the coal industry in the Donets Basin (where the average mine is
smaller than in any other part of Russia). Classifying the mines according
to number of workers employed, we get the following picture: [14] (See
Table on p. 493.)

Thus, in this area (and in this one only) there are extremely small
peasants’ mines, which, however, despite their great number, play an
absolutely insignificant part in the total output (104 small mines account
for only 2% of the total coal output) and are marked by an exceedingly low
productivity of labour. On the other hand, the 37 largest mines employ
nearly all of the total number of workers and produce over 70% of the
total coal output. Productivity of labour increases parallel with the
increase in the size of the mines, even irrespective of whether machinery
is used or not (cf., for example, categories V and III of mines, as to
quantity of steam-power and output per worker). Concentration of
production in the Donets Basin is steadily increasing: thus, in the four
years 1882-1886, of 512 coal consigners, 21 dispatched over 5,000
wagon-loads (i.e., 3 million poods) each, making 229,700 wagon-loads out of 480,800, i.e., less than half. In the four years 1891-1895, however,
there were 872 consigners, of whom 55 dispatched over 5,000 wagon-loads
each, making 925,400 wagon-loads out of 1,178,000, i.e., over 8/10 of the
total

number. [15]

The foregoing data on the development of the mining industry are
particularly important in two respects: firstly, they reveal with
exceptional clarity the essence of the change in social-economic relations
that is taking place in Russia in all spheres of the national economy;
secondly, they illustrate the theoretical proposition that in a developing
capitalist society there is a particularly rapid growth of those branches
of industry which produce means of production, i.e., articles not of
personal, but of productive, consumption. The replacement of one form of
social economy by another is particularly clear in the mining industry,
because here the typical representatives of the two forms are distinct
areas. In one area there is the old pre-capitalist world, with its
primitive, routine technique, personal dependence of a population tied to
place of residence, firmly established social-estate traditions,
monopolies, etc.; while in the other area one finds a complete break with
all tradition, a technical revolution, and the rapid growth of purely
capitalist machine industry. [16]

This example brings out in bold relief the mistake of the Narodnik
economists. They deny the progressive nature of capitalism in Russia,
pointing to the fact that in agriculture our entrepreneurs readily resort
to labour-service and in industry to the distribution of home work and
that in mining they seek to secure the tying down of the worker,
legislative prohibition of competition by small establishments, etc., etc. The illogicality of such arguments and their
flagrant distortion of historical perspective are glaring. Whence, indeed,
does it follow that the efforts of our entrepreneurs to utilise the
advantages of pre-capitalist methods of production should be charged to
our capitalism, and not to those survivals of the past which retard the
development of capitalism and which in many cases are preserved by force
of law? Can one be surprised, for instance, at the southern mine owners
being eager to tie the workers down and to secure the legislative
prohibition of competition by small establishments, when in the other
mining area such tying down and such prohibitions have existed for ages,
and exist to this day, and when in another area the ironmasters, by using
more primitive methods and employing cheaper and more docile labour, get a
profit on their pig-iron, without effort, of “kopek per kopek and
sometimes even one and a half kopeks per kopek”? [17]

Should we not, on the contrary, be surprised at the fact that, under these
circumstances, there are people who are capable of idealising the
pre-capitalist economic order in Russia, and who shut their eyes to the
most urgent and pressing necessity of abolishing all obsolete institutions
that hinder the development of capitalism? [18]

On the other hand, the data on the growth of the mining industry are
important because they clearly reveal a more rapid growth of capitalism
and of the home market on account of articles of productive consumption
than on account of articles of personal consumption. This circumstance is
ignored by Mr. N.–on, for instance, who argues that the satisfaction of
the entire home demand for the products of the mining industry “will
probably take place very soon” ( Sketches , 123). The fact is
that the consumption of metals, coal, etc. (per inhabitant), does not and
cannot remain stationary in capitalist society, but necessarily increases . Every new mile of railway, every new workshop, every
iron plough acquired by a rural bourgeois increases the demand
for the products of ore-mining. Although from 1851 to 1897 the consumption
of pig-iron, for example, in Russia increased from 14 pounds per head to 1
1/3 poods, even this latter amount will have to increase very considerably
before it approaches the size of the demand for pig-iron in the advanced
countries (in Belgium and England it is over 6 poods per inhabitant).

---
Notes:
[1]
Sources: Semyonov, A Study of Historical Data on Russian Trade and Industry , Vol. III, St. Petersburg, 1859, pp. 323-339. Military Statistical Abstract , section on mining industry. The

Ministry of Finance Yearbook , Vol. I, St. Petersburg,
1869. Statistical Returns for Mining , for 1864-186i,
St. Petersburg, 1864 1867 (published by the Scientific Committee of the
Corps of Mining Engineers). I. Bogolyubsky, Essay in Mining Statistics for the Russian Empire , St. Petersburg,
1878. Historico-Statistical Survey of Russian Industry ,
St. Petersburg, 1883, Vol. I (article by Keppen). Statistical Returns for the Mining and Metallurgical Industries of Russia in 1890 ,
St. Petersburg, 1892. Ditto for 1901 (St. Petersburg, 1904) and for 1902
(St. Petersburg, 1905). K. Skalkovsky, Mining and Metallurgical Productivity of Russia in 1877 , St. Petersburg, 1879. The Mining and Metallurgical Industry of Russia , published by the Department of
Mines for the Chicago Exhibition, St. Petersburg, 1893 (compiled by
Keppen). Returns for Russia for 1890 , published by the Central
Statistical Committee, St. Petersburg, 1890. Ditto for 1896,
St. Petersburg, 1897. Productive Forces of Russia , St. Petersburg, 1896, Section VII. Vestnik Finansov for
1896-1897. Zemstvo Statistical Returns for Ekaterinburg and Krasnoufimsk
uyezds of Perm Gubernia, and others.— Lenin

[2]
When the peasants were emancipated, the Ural ironmasters particularly
insisted on, and secured the retention of, a law prohibiting the opening
of any coal- and wood-burning establishments within the area of their
undertakings. For some details, see Studies , pp. 193-194. (See
present edition Vol. 2, The Handicraft Census of 1894-95 in Perm Gubernia . – Ed .)— Lenin

[3]
The Ural worker “is . . . partly a cultivator, so that work in the
mines is of good assistance to him on his farm, although the pay is lower
than in the other mining-and-metal districts” ( Vestnik Finansov , 1897, No. 8). As we know, the terms on which the Ural
peasants were emancipated from serf dependence were made to correspond to
their position in the mining industry. The mining and works population was
divided into workmen having no land, who had to work in the industry all
year round, and agricultural labourers, having allotments, who had to do
auxiliary jobs. Highly characteristic is the term that has survived to
this day, namely, of Ural workers being “debtbound.” When, for
example, one reads in the Zemstvo statistics “information about a
team of workers bound by debt to their jobs in the shops of the Arta
works” one involuntarily turns to the title-page to see the date: Is
it really ninety-four, and not, say, forty-four? [21] — Lenin

[4]
Transactions of the Commission of Inquiry into Handicraft Industry , Vol. XVI, St. Petersburg, 1887, pp. 8-9 and foll. The same
author later goes on to talk about “healthy people’s” industry!— Lenin

[5]
For a description of this floating see Crags by Mr. Mamin
Sibiryak. In his writings this author vividly portrays the specific life
of the Urals, which differs very little from that of the pre-Reform
period, with the lack of rights, ignorance and degradation of a population
tied down to the factories, with the “earnest, childish
dissipations” of the “gentry,” and the absence of that middle stratum of society (middle class and other intellectuals) which is
so characteristic of capitalist development in all countries, not
excluding Russia.— Lenin

[6]
In mining statistics the term “South and South-West Russian”
means the Volhynia, Don, Ekaterinoslav, Kiev, Astrakhan, Bessarabia,
Podolsk, Taurida, Kharkov, Kherson and Chernigov gubernias. It is to these
that the quoted figures apply. All that is said further on about the South
could also be said (with slight modifications) of Poland, which forms
another mining area of outstanding significance in the post-Reform period.— Lenin

[7]
Vestnik Finansov , 1897, No. 16: The Nikopol-Mariupol Co. ordered
a pipe-rolling mill in America and had it brought to Russia.— Lenin

[8]
Where it is well, there is my country.— Ed .

[9]
It goes without saying that the Ural ironmasters depict the situation
somewhat differently. Here is a sample of their eloquent complaints at
last year’s congresses: “The historical services rendered by
the Urals are common knowledge. For two hundred years all Russia ploughed
and reaped, hammered, dug and hewed with the products of Ural
factories. The Russian people wore on their breasts crosses made of Ural
copper, rode on Ural axles, used fire-arms made of Ural steel, cooked
pancakes on Ural frying-pans, and rattled Ural pennies in their pockets
The Urals satisfied the requirements of the entire Russian
people. . .” (who used scarcely any iron. In 1851 the consumption of
pig-iron in Russia was estimated at about 14 pounds per inhabitant, in
1895—1.13 poods, and in 1897—1.33 poods)
“. . . producing articles to suit their needs and tastes. The Urals
generously (?) squandered their natural wealth, without chasing after
fashion, or being carried away by the making of rails, fire grates and
monuments. And in return for their centuries of service—they found
themselves one fine day forgotten and neglected” ( Vestnik Finansov , 1897, No. 32; Results of Mining Congresses in the Urals ). Indeed, what neglect of “time-hallowed”
institutions. And it is all the fault of insidious capitalism, which has
introduced such “instability” into our national economy. How
much nicer it would be to live in the old way, without “being
carried away by the making of rails,” and to cook oneself pancakes
on Ural frying-pans!— Lenin

[10]
Mr. Bogolyubsky estimates the number of steam-engines used in mining in
1868 at 526 with a total of 13,575 h.p.— Lenin

[11]
The number of workers in iron production in the Urals in 1886 was 145,910,
and in 1893—164,126, in the South 5,956 and 16,467. The increases
are 1/3, (approx.) and 2 3/4-fold. For 1902 there are no data on the
number of steam-engines and horse-power. The number however, of mine
workers employed (not including saltminers) in 1902 in the whole of Russia
was 604,972, including 249,805 in the Urals and 145,280 in the South.— Lenin

[12]
Vestnik Finansov , 1897, No. 21. In 1863 the population of Baku
was 14,000 and in 1885—45,700.— Lenin

[13]
In 1882, over 62% of the locomotives were fueled with wood; in 1895-96,
however, wood fueled 28.3%, oil 30% and coal 40.9% of the locomotives
( Productive Forces , XVII, 62). After capturing the home market,
the oil industry went in quest of foreign markets, and the export of oil
to Asia is growing very rapidly ( Vestnik Finansov , 1897, No. 32)
in spite of the a priori predictions of certain Russian
economists who love to talk about the absence of foreign markets for
Russian capitalism.— Lenin

[14]
Data taken from list of mines in Returns for the Mining and Metallurgical Industries in 1890 .— Lenin

[15]
From data of N. S. Avdakov: Brief Statistical Survey of the Donets Coal Industry , Kharkov, 1896.— Lenin

[16]
Latterly the Urals, too, have begun to change under the influence of the
new conditions of life; and this change will be still more rapid when the
Urals are tied closer to “Russia” by railway lines. Of particular importance in this respect will be the proposed connection by
rail of the Urals and the South with a view to the exchange of Ural
iron-ore for Donets coal. Till now the Urals and the South have scarcely
competed with each other, having worked for different markets and existed
mainly on government contracts. But the abundant rain of government
contracts will not go on for ever.— Lenin

[17]
Article by Yegunov in Reports and Investigations of Handicraft Industry , Vol. III, p. 130.— Lenin

[18]
For example, Mr. N.–on levelled all his complaints solely against
capitalism (cf., in particular, his observations on the southern mine
owners, Sketches , pp. 211 and 296) and thus utterly distorted the
relation between Russian capitalism and the pre-capitalist structure of
our mining industry.— Lenin

[21]
Lenin refers to Material for the Statistics of Krasnoufimsk Uyezd, Perm Gubernia , Vol. V, Pt. 1 (Zavodsky district), Kazan, 1894, on
p. 65 of which there is a table headed “Information on a team of
workers bound by debt to their jobs in the shops of the Arta works in
1892.” [p. 486]

[19]
Lenin quotes here The Mining and Metallurgical Industry of Russia . Published by the Department of Mines. International Columbia
Exhibition, 1893, in Chicago, St. Petersburg, 1893, p. 52. [p. 488]

[20]
In the first edition of The Development of Capitalism in Russia the table
contained the figures for the years 1890 and 1896. In the second edition
these figures were omitted. Furthermore, the figures for 1897 differed
somewhat from those for the same year cited in the second edition. The
corresponding part of the table as it appeared in the first edition was as
follows:

The figures for 1897 given in the first edition had a footnote, also
omitted in the second edition, stating:—“In 1898 the pig iron
output in the Empire is estimated at 133 million poods, of which 60
million poods were produced in the South and 43 million poods in the Urals
( Russkiye Vedomosti [ Russian Gazette ], 1899, No. 1).” [p. 489]