Chapter VII. The Development of Large-Scale Machine Industry (4)

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 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. 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.”

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.” 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.

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 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. International capital has not hesitated to settle within the tariff wall and establish itself on “foreign” soil: ubi bene, ibi patria .... The following are statistics on the displacement of the Urals by the South:

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. 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.

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. 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.” 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). 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: (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.

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. 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”? 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?

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).