Jacek Kochanowicz Warsaw University/Central European University

THE POLISH KINGDOM: A PERIPHERY AS A LEADER

Paper prepared for the XIV International Economic History Congress in Helsinki, Finland, August 21-25, 2006

Introduction

For a time being—in the last quarter of the 19th century—the Polish Kingdom was one

of the most industrially developed regions of the Russian Empire. This may look somewhat

puzzling, as—intuitively—borderlands, or peripheries of empires may be expected to provide

either a military buffer, or an economically auxiliary role, dependent upon (or exploited by)

the imperial centers. The aim of this paper is to shed some light on this apparent paradox. Its

focus shall be on the second half of the 19th century, when industrialization of the Kingdom

took a really fast pace. But, in order to explain this relatively short period, it is necessary to

put in a longer perspective of Kingdom’s history, and to link it to the political and economic

evolution of the Russian empire.

The Polish scholarly literature on the economic history of the Kingdom, and on its

industrial development and relations with Russia is abundant, but there is very little, if any, of

a recent vintage. Beginnings of interest in the specificity of Kingdom’s economic develop-

ment started already at the end of the nineteenth century. At that time, Rosa Luxemburg stated

in her doctoral dissertation defended in Leipzig (1898) the thesis of the decisive role of the

“eastern markets” for the industrialization of the Kingdom. This thesis, as well as a similar

formulation by Koszutski, who argued that “the industry of the Kingdom uses local labor and

foreign capital to produce for the eastern markets” (1905: 39), became a point of departure

for a very intensive research conducted mostly in the late 1950s and the 1960s. While meth-

odologically it was done within a loose Marxist framework, it kept high standards in terms of

the analysis of primary sources, particularly statistical ones. Works of such authors as Łep-

kowski (1960), Missalowa (1964-7), Jedlicki (1964), Jezierski (1967, 1984), Kołodziejczyk

(1957) or Ihnatowicz (1956, 1965, 1972) are of particular importance. Apart of monograph

studies of towns, industrial centers, and particular industries, this research—partly challenging

the thesis of Rosa Luxemburg—gave a more nuanced view of the Kingdom’s industrializa-

2

tion, and its relations with the development of the Russian Empire. Most of this work relies

heavily on statistical sources. It uses methods of descriptive statistics and some simple tech-

niques of time series analysis, without any econometric models. It is, however, very con-

scious of the quality (often dubious) of the statistical material, as well as ingenious in making

estimates.

This paper—trying to highlight the relation of the Kingdom with the Empire—refers

to this research. The paper consists of four sections. The first one, of a more theoretical char-

acter, aims at sketching briefly relations between the concepts of empire, borderlands, and

peripheries. The second looks upon the story of political incorporation of the Kingdom into

the Empire as a necessary context for understanding the workings of the economy. The next

one reconstructs the industrial development of the Kingdom. The fourth section links this is-

sue with the overall development of the Empire.

1. Empires, Peripheries, and Borderlands

The period between 1875 and 1914 is called the Age of Empire (Hobsbawm 1987) and

is characterized by a complex interactions between economic change and political power. The

driving force of economic change in the second half of the nineteenth century were various

technological and institutional innovations, often referred to as the second industrial revolu-

tion. Among technological innovations, there was mass production of steel, chemistry, elec-

tricity, and transportation. Among the institutional innovations, of particular importance were

join-stock companies and investment banks. As these innovations were based on using—for

the first time of human history—the scientific knowledge in a systematic way, North (1981:

171-186) refers to this period as the second economic revolution, the first one being the

change from hunting and gathering to settled agriculture. These changes, and particularly new

means of transportation (railways, steam ships) and communication (telegraph) contributed to

what is being now called the first globalization (O’Rourke and Williamson 1999). The overall

pace of economic growth increased in Western Europe from annual 1.71 per cent in the years

1820-70 to 2.14 percent between 1870-1913, and in per caputa terms respectively from 1.0 to

1.33 per cent (Madison 2001: 186, 187). Four industrial powers—USA, Germany, Britain,

France—produced 70 per cent of world industrial output on the eve of the First World War

(Lewis 1978).

At the end of the 19th century, there were several empires in a political sense of the

word, i.e. of complex power structures involving people of different ethnic and cultural char-

acter: the British, the French, the Dutch, the Chinese, the Russian, the Ottoman, and the Aus-

3

trian. The first three were the Western colonial empires, of which the leading one was the

British. The remaining four were traditional landed agrarian empires. Two powerful nation-

states also tried to join the league of empires, namely Germany and Japan. The United States,

while not an empire in the above sense, pursued a policy of protecting its interests in the

Western hemisphere against other players.

The strengthening of the linkages between economic and political power, particularly

in the British case, led to the emergence of the concept of imperialism, initially treated in a

positive sense as a “white man’s burden” or la mission civilisatrice, later taken over by

Marxists and given a pejorative meaning (Hobsbawm 1987, Wolfe 1997). Imperialism com-

bined economic, political, and ideological motivations. Among the economic, the most im-

portant were attempts to control markets and sources of raw materials, indispensable for the

fast rising industrial economies of the core countries. Among the political, the wish to estab-

lish one’s own control over transportation routes, sea ports, military bases and possible colo-

nies before the competing powers would be able to do so. Finally, ideology and religion mat-

tered. Europeans though of themselves as a superior “white race,” whose mission was to

spread Western civilization and Christian religion to other parts of the world.

Whether imperialism and colonialism “paid” for the Western core countries in a

strictly economic sense—as the Marxist argued, stressing the exploitation of colonial peo-

ple—is a matter of a debate among the economic historians. Some argue, as Kennedy (1987)

for instance, that running empires involved huge costs in terms of sustaining necessary armies

and navies, and that some empires “overestreched” themselves, which eventually led to their

demise.

A word of clarification is necessary as to the concepts of “borderlands” and “peripher-

ies.” Borderland is a term denoting usually the most outward territory of the empire, be it

landed or colonial, often of a shifting and contested nature, as for example territories claimed

both by the Austrian and the Ottoman empire. The conflict over Fashoda between the British

and the French is an example of such a clash between colonial empires. Periphery is nowa-

days most often in a sense close to the world-system theory, i.e. as a part of the world-wide

division of labor, but may also be used in a everyday language sense of an opposition to the

metropolis. Sometimes, the function of a given territory as borderland and periphery may

overlap. It is perhaps proper to make a few more remarks about the ideal types of empires and

on the economic and political functions of borderlands and peripheries in various types of

empires.

4

1. Traditional agrarian landed empires. China, Rome, or Byzantium are prime exam-

ples. The bulk of the population in such an empire is peasantry. The political center imposes

its rule over the whole area, and—economically—is focused mostly on taxation, as the reve-

nues raised this way support the bureaucracy and the army. Craftsmen, traders and money-

lenders play a role subordinated to this system, serving the needs of the military and the bu-

reaucracy. Borders are shifting (expanding or contracting), the borderlands serve as a military

buffer zone where army garrisons are stationed, supported by taxation. Usually, a specialized

economic sector develops around them. Independently of the official metropolis policies, the

members of state bureaucracy treat the borderland as a source of private enrichment.

2. Traditional colonial empires. The most important cases were the Spanish and the

Portuguese empires. Colonies (peripheries, borderlands) serve, in this model, as a source of

specific—mineral or agricultural—goods, unavailable in the metropolis. Such empires are run

in a redistributive way, similar to the former case, with revenues divided between the local

governors, the planter class, and the Crown.

3. Commercial colonial empires. The British Empire and the Dutch Empire are the

best known cases. In the economy of such an empire, imports of goods unavailable in the cen-

ter is also of crucial importance, but the main agent is the commercial class, a product of early

capitalism. Taxation is important, but—apart of financing the State—it also serves as a tool

to motivate the inhabitants of the peripheries to structure the output towards the production of

goods in demand in the metropolis.

4. Empires of the era of imperialism. Their emergence is a product of the second in-

dustrial revolution, and they evolve from the previous model in times of the rapid rise of de-

mand for the raw materials for the manufacturing industries. Increasingly, the peripheries

serve as markets for goods produced in the metropolis and as investment opportunities. The

are run by a close-knit of interests of capitalist class and the modern state, as mentioned

above.

The three empires which ruled over Eastern Europe in the 19th century were, at least

initially, most close to the first model, that of the traditional agrarian empire. At the end of the

century, they started to acquire some characteristics of the last model, because they had to

compete politically and militarily with other powers, because they increasingly wanted to imi-

tate the leading powers, because part of their public was seeing some mission for their country

to play, and because they became involved in the workings of the modern, globalizing world

economy. This was also a case with the Russian empire. “Modern Russian imperialism was

5

no more or less particularist than that of the United States, Great Britain, France, Germany, or

Japan” (Rieber 1994: 322)

Eastern and Central Europe development must thus be regarded with reference to these

interrelated tendencies of economic and political nature. Eastern and Central Europe (and the

Polish lands in particular) were peripheral in a double sense. First, they were on the periphery

of the world economy, in a sense of world-system theory. Second, they were peripheral in a

political sense of their relation to the power center. Thus, an explanation of economic proc-

esses in these lands has to refer to (a) their economic relations with the world economy, (b)

their political relation to the empire they were attached to, and (c) their economic relation

with other lands of this empire.

Overall, the pace of development of Central and Eastern Europe in the second half of

the 19th century increased, but also did its lag behind the Western part of the continent (Janos

2000: 130). To a large extent, the processes in the second half of the 19th century were caused

by the industrial “pull” of Western Europe—the needs of the industrialized countries for raw

materials, which Eastern and Central Europe could satisfy now due to the extending railway

network (Berend and Ránky 1982: 21-7). But these lands also underwent a process of indus-

trialization themselves, although it was much weaker than in the West. While one sweeping

explanation is impossible, it is important to stress that an important role in this process was

played by foreigners, who were bringing business and technological know-how and facilitated

the diffusion of the technological and institutional innovations, and of foreign capital (Berend

2003: 142-57).

But, at the same time, these countries were dependent upon policies and economic de-

velopments in their respective empires. In particular, the economic development of the rela-

tively backward Eastern European empires can not be simply interpreted in terms of either

spontaneous (market driven) diffusion of innovations from the West, or their peripheral place

in the capitalist world-system—precisely because they often pursued policies aimed at chang-

ing their place in this system, as was the case of Russia when it pursued the active, statist in-

dustrialization policies in the 1890s, which might have provided more favorable conditions

for the local business than would be a case if a laissez faire policies were being pursued (von

Laue 1963). Also, political and military circumstances mattered. For instance, when railways

developed quickly in Russia proper, for security reasons it discriminate against constructing

them in the industrially most developed western parts of the Polish Kingdom, because they

were located west of the Vistula river and were considered as a help in a possible western

invasion (Dobroński 1981).

6

2. Political Incorporation

Since the end of the 17th century, the Russian empire was expanding to the east, to the

south and to the west. In the west, the area of this expansion was the Commonwealth of Po-

land and Lithuania. This state formation—territorially, one of the biggest in Europe (900

thousand sq. kilometers at the end of the 17th century) was, quite contrary to Russia, contract-

ing. The economies of those two state formations did not differ much in the 18th century, as

both were predominantly agrarian, although the Polish Crown lands (Poland proper) were

more urbanized and densely populated as either the Grand Duchy of Lithuania (the other part

of the Commonwealth) or Russia. Thus, it was not the difference in economic performance,

but in the way political and military power were structured that explains the Russia’s expan-

sion and Poland’s contraction.

Poland—contrary to its neighbors—had never developed absolutism, in a sense of a

concentration of powers in the hands of the monarch, the court, and the royal bureaucracy, at

the expense of the power of the nobility (Anderson 1979). Quite the contrary, until almost the

end of the 18th century it remained a sort of a medieval Ständestaat: a monarch (often a for-

eigner) was elected by the nobility, most of the formal power lay in the hands of Sejm (the

lower chamber of parliament) and in the hands of the local councils of nobility, while the real

power was in the hands of the magnates—wealthy nobles owing tens of towns, hundreds of

villages, and thousands of serfs, usually also members of the Senate and holding most impor-

tant offices of the State. Kings were often almost pawns in their hands. There was little taxa-

tion (State revenues were from the royal domain) and a very small standing army. The ideo-

logical justification was that a weak monarchy guarantees the “golden freedom” of the Polish

nobility, while at the same time a weak Poland poses no threat to its neighbors and thus is

safe.

The Polish state was an empire of sorts. Its eastward expansion started in the 15th cen-

tury with a personal union between Poland and the Grand Duchy of Lithuania and—

politically—culminated with the Union of Lublin in 1569. The socio-political mechanism of

the Polish expansion included huge grants of land for the Polish aristocracy and concomitant

inflow of the Polish settlers, the polonization of the Lithuania aristocracy, some (limited and

resisted) conversion of local population into Catholicism, and substantial migration of Jews

into these territories. As the Polish state was weak, the main agents of expansion was the aris-

tocracy.

7

While Poland remained a weak state in the 18th century, the neighboring countries—

Austria, Prussia and Russia—were developing a different system of government, much more

centralized, bureaucratic, and tailored for supporting the war machinery. Russia—particularly

since Peter the Great—became active in expanding its borders towards open sea ports in the

Baltic and in the Black Sea, in wars with Sweden and the Ottoman Empire. The Common-

wealth of Poland and Lithuania was no match for the bureaucratic-military empires, and the

partitions of the 1772, 1793 and 1795 (motivated also by Catherine the Great fear of the

French Revolution and her willingness to crush the Polish “Jacobins”), led to its disappear-

ance, and dismemberment between Russia, Austria and Prussia. While the driving forces of

the Russian Empire expansion are beyond the scope of this paper, it is worth to notice that—

until the Crimean war at least—Russia was scoring considerable successes in this expansion

despite its economic backwardness and the limited modernization of its armed forces. The

importance of the Polish lands in the process of this expansion is evident—they lay between

Russia and, in the 18th and 19th century, the most advanced (economically and military) part

of the world, the western Europe.

During partitions of the end of the 18th century, the territories of the Duchy of Lithua-

nia were taken by Russia. After the Napoleonic wars, the same fate fell upon part of the heart-

land of Poland proper. Congress of Vienna led, in 1815, to the creation—mainly out of the

territories of pro-Napoleonic Duchy of Warsaw (1807-1815)—of the Polish Kingdom, a state

formation of approximately 128 thousand sq. kilometers and 3.3 m population. While Kresy

(frontier lands), as the former Polish eastern territories were called, were ethnically and relig-

iously mixed (Polish manors, local peasantry, towns partly Polish and partly Jewish), the

Kingdom was ethnically predominantly Polish, the denomination of the majority of its inhabi-

tants was Roman Catholic, and it was more urbanized and economically developed than the

Kresy. It was to became a heartland of Polish national consciousness formation and of Polish

nationalism. Thus, the most Western-located borderland of the Russian Empire was country

of a population of relative ethnic (Polish) homogeneity, westernized both because of the long-

term effects of the Roman Catholic Religion and because of the French influence dating from

the Napoleonic period, and developing strong nationalist and anti-Russian ideologies and sen-

timents. The nationalist sentiments resulted in two insurrections against Russia, in 1830 and

1863.

The process of incorporation of the Kingdom into the Empire was gradual. In 1815, it

got a far-reaching autonomy: language, constitution (which allowed for political pluralism),

territorial administration based upon the French (departmental) model, a separate army, a

8

monetary system, a fiscal administration. United with Russia through a person of the mon-

arch, it kept almost total independence except of foreign policy. This autonomy was drasti-

cally reduced after each of the two insurrections. The first one was a regular war between the

Russian and the Kingdom’s armies, which the Kingdom finally lost at the end of 1831. The

second was of a different kind: the insurrectionists, capitalizing upon difficult situation of the

Tsarist regime after Sevastopol, set up a wide network of clandestine organizations topped

with the National Government, and waged a long, protracted guerilla campaign (in the King-

dom proper and in Kresy), finally crushed by the Russians in the mid-1864.

After 1831 Constitution was revoked and replaced by the Organic Statute, the separate

army abolished and large Russian garrisons introduced instead, the martial law and a repres-

sive police system were also introduced. The administration became gradually subjected to

the imperial rule, departments were changed in 1837 into gubernyas, the Russian monetary

units were introduced in 1847, the Russian criminal code in 1847, and the Russian metric sys-

tem in 1849.

The remnants of Kingdom’s distinctiveness were liquidated after the 1863 uprising.

While the peasantry gained land due to enfranchisement reform of 1864, those who partici-

pated in the uprising were heavily punished by executions (around 700), exile to Siberia

(close to 40 thousands) and confiscation of property. This affected particularly the landed

nobility, who were most active in the uprising. Russian language was introduced into the ad-

ministrative and educational systems together with a large influx of Russian officials.

The Russian domination had never been fully accepted by the politically active seg-

ments of the Polish society. Secret political organizations prepared the uprising of 1863. Af-

terwards, however, the revolutionary spirit subsided and the secret political activity had been

replaced by the so-called organic work, which—thorough legal means, but also clandestine

educational activities—attempted to improve social relations and to strengthen culture in its

various dimensions. Since the last decades of the 19th century, the modern political move-

ments developed, of which one of the most important was the National Democracy, the aim of

which was to strengthen the national identity and to gain a degree of autonomy within the

Russian Empire.

3. Industrialization

In the early phases of Kingdom’s history, imperial domination had only a limited and

partial influence on its economic development because of its autonomy. In 1832 the Russian

government introduced even a custom tariff on its border with the Kingdom. However, a brief

9

survey of this development is necessary, as it laid the foundation for the Kingdom’s relatively

strong industrial position in the second half of the century.

After 1815, the Kingdom was devastated by wars and financially strained by foreign

debts, mainly to France, which the Holy Alliance winners took over. Agriculture was in par-

ticularly painful situation, as export prices were low due to the British Corn Laws, the large

estates technologically backward, and peasantry (who got personal freedom, but not rights to

the land, in 1807) burdened by land hunger, by the labor duties owned to the landlords

(changed into rent in money in the early sixties), and by high taxation. At the same time, the

Duchy left a certain legacy of capitalist development, as during this period a class of bold

entrepreneurs started to emerge mostly out of the ranks of army contractors.

Much of the change of the period 1815 to 1830 was due to the aggressive, highly sta-

tist modernization program of Prince Xawery Drucki-Lubecki, who first negotiated the

Duchy’s debts at the Congress of Vienna and then served as the Kingdom’s Minister of

Treasure. His aim was to strengthen the economy in order to maintain a relative independence

from Russia. He promoted institutional reforms by establishing a national bank and land

credit, thus attempting to give the country a sound monetary system and the landed classes a

possibility to modernize.

Moreover, Lubecki initiated industrialization by promoting the development of heavy

(metallurgical) industry and the textile industry. The results of the first venture were some-

what doubtful—technologically backward plants, subsidized by the state, were loss makers,

while the profits were made mostly by the entrepreneurs who managed to get state contracts

(Kowalska, Jedlicki and Jezierski 1958, Jedlicki 1964). The Łódź case was more success-

ful—state subsidies and tariff barriers with the West lured many weavers from the German

lands to come to the Kingdom, which led to the establishment of then still quite primitive in-

dustry which, however, in the second half of the century became one of the largest European

textile centers (Missalowa 1964-67). This is witnessed by the demographic change—the

population of Łódź increased from less than a thousand in 1820 to 15 thousand in 1850, 350

thousand in 1900, and over half a million in 1913 (Ihnatowicz 1981: 454).

While the modern manufacturing industry emerged in the Kingdom in the 1840s (tex-

tiles, heavy industry, some machine making), the period of a really fast development starts in

the late the 1860s, with another jump in the 1890s (Table 1).1 The spread of industrialization

1 Table 1 gives a general overview of industrial development, but it is important to note that any kind of aggre-gate statistics is based on estimates, as the basic data is incomplete.

10

was, not surprisingly, spatially uneven. The most visible it was in three centers—in the War-

saw industrial region, the Łódź industrial region, and in the Dąbrowa Basin.

Warsaw industrial region was the biggest in the Kingdom (Łepkowski 1960, Misztal

1962). Its early development, related to the capital role of Warsaw in the Commonwealth of

Poland and Lithuania, and somehow also boosted by the efforts of Kingdom’s government in

the 1820s, was suppressed due to the political effects of the 1831 uprising. The second half of

the century, and particularly its last quarter speeded up the industrial development. Once the

Warsaw-Vienna railway was completed and other railways developed, Warsaw became the

biggest junction, linked also with the Dąbrowa Basin region of heavy industry. In contrast to

two other regions, the industries here were diversified, although a leading role was played by

various metal industries (tools and machines production, among others), also electrical indus-

tries were of importance. There were several smaller cities in the region apart of Warsaw,

which played a leading role, with population rising from 250 thousands in 1866 to 900 thou-

sands in 1914.

The early beginnings of the Łódź region were laid by a massive influx of weavers

from Prussia, bankrupted at home by the loss of Polish markets after partitions. They started

with domestic production of wool and linen textiles, later replaced with manufacture technol-

ogy due to support of the State and some landowners. In the 1830s, some manufacturers

moved to cotton and also were introducing mechanization, the output of cotton rose quickly in

the second half of the century (Table 2). Technological conversion (mechanization of spin-

ning and weaving, introduction of steam power) took pace in the 1870s, and a number of large

factories had been established (Ihnatowicz 1963, Łukasiewicz 1963). At this stage, a consid-

erable role had been played by foreign capital. But the textile industry remained diversified,

and modern factories, employing large number of workers, were accompanied by small-scale

firms, often relying on the putting-out system, with little attention paid to the conditions of

labor employed.

Beginnings of the Dąbrowa Basin are related to the discovery of coal deposits at the

end of the 18th century. Zinc smelting started to develop on this basis, also the government of

the Polish Kingdom established a number of metalworks, but the locally available coal proved

to be inadequate for ironworks. The demand for coal was boosted by the construction of War-

saw-Vienna railway in 1845-48, and ongoing development of railway network. In the 1870s

the state ironworks were privatized. Since the second half of this decade, industrial develop-

ment speeded up, statistically witnessed by a jump of coal production from 0.2 m tons in 1872

to 1.4 in 1882 and 2.9 in 1892, as well as by the increase of pig iron output from 0.7 thou-

11

sands ton in 1878 to 11.1 in 1880 and 74.0 thousands ton in 1890 (Kaczyńska 1981). This

increase of production was accompanied by the establishment of several large join stock com-

panies with German and French capital. Also, the industries diversified and apart of finished

goods they were also producing intermediate and capital goods. Parallel to the metal sector,

also other industries developed, chemical in particular.

The fast pace of industrialization was accompanied by demographic and social change

more rapid than before. There was a visible speeding up of the population growth (Table 3).

The increase of population per decade is two to three time faster in the second than in the first

half of the century. Discussion of reasons of the faster increase of population in the second

half of the century is beyond the scope of this paper, only two brief points may be made on

this issue. First, it was a result of the changes in the agricultural sector of economy (emanci-

pation of peasantry, prices much better than before the corn laws were repelled in 1949, and

some technological progress reaching also the peasantry) than in the industrial sector. Second,

it affected the industrial development through an easy availability of cheap labor. Not only the

population increase witness to modernization, also apparently the standards of living had risen

to some degree, at least in the cities, as witnessed by the increase of the average consumption

(Table 4).

In the industrial regions, the social structure increasingly acquired a more capitalist,

class-like character. The working classes were recruited, to a large degree, from the ranks of

the peasantry, migrating to the cities from the overpopulated countryside. For the middle

classes and the bourgeoisie, of interest is their ethnic composition. The share of non-ethnic

Poles—the Jews and the Germans, but also some other groups—was very high, particularly in

Łódź (Kołodziejczyk 1957: 114-207, Ihnatowicz 1972: 187-204). Germans were migrating

from Prussia and also from more far-away located places since the first half of the 19th cen-

tury, bringing with themselves some capital, but also—what seems to be of particular impor-

tance—technical skills, managerial know-how, and market connections, and they were deci-

sive in establishing the early basis of the textile industry. Jews profited from the on-going

process emancipation, which started in the Napoleonic period (Eisenbach 1988). In the second

half of the century, increasing numbers were migrating to the Kingdom from the former Pol-

ish eastern territories and from Russia, since the imperial government introduced discrimina-

tory measures against the Jews in the central Russian lands. Jewish entrepreneurs were active

both in the very small business (shops, wholesale trade, etc.), as well as in establishing the

large industrial plants. The German and Jewish entrepreneurs served, thus, the role of “essen-

tial outsiders,” possessing human and social capital which the ethnic Poles had, apparently, in

12

short supply.2 While these entrepreneurs contributed to the economic development of the

Kingdom, their “otherness” led to the rise of anti-Semitism.

4. The Kingdom and the Empire

How the processes in the Polish Kingdom fits the broader picture of the economic de-

velopment of the Russian Empire? The process of Russia’s industrialization had a relatively

fast pace in the second half of the 19th century, with the average annual rate of growth of in-

dustrial output of 5 per cent in the period of 1860-1913, reaching 7.5 per cent during the nine-

ties It put Russia, despite its relative backwardness and low level of GDP per capita, at the

position of the fifth industrial producer in the world, after USA, Great Britain, Germany, and

France (Grossman 1973). In the sixties and early seventies, the industrialization of Russia

proceeded in the conditions of liberal economic policies, and its main stimulus was internal

demand, related to the fast rise of population. Since the mid-seventies, the government started

to rise tariffs, mainly for fiscal reasons, but that resulted in more favorable conditions for the

Russian producers of manufactured goods. In the nineties, state became actively involved in

industrialization, forcing accumulation through aggressive taxation, attracting foreign direct

investment, and rising foreign loans (von Laue 1963). While the earlier phases of economic

development largely resulted in the rise of industries producing consumer products, the nine-

ties brought about fast development of industries producing capital goods.

The Polish Kingdom, even when outpaced by other regions of the Empire, retained on

the eve of the First World War a relatively high second place among the Empire’s industrial

regions, after Moscow’s, and before St. Petersburg region (Table 5). As summarized in the

preceding section, its industrial development—and particularly the technological change—

started relatively early, which might have given it certain advantage over the industrial region

of the Russia proper. In the literature, several factors are mentioned as explaining the fast

economic change occurring in the second half of the century: the economic results of the

enfranchisement of peasantry, the solid foundations laid down by the earlier development, the

ability of the Kingdom to take advantage of technological and institutional innovations of the

day, and—last but not least—the role of the Russian markets, on which the Kingdom had a

certain competitive edge.

The peasants in this part of Poland got personal freedom already in 1807, due to the

Constitution given by Napoleon to the Duchy of Warsaw, but their rights to the land were not

2 The term comes from Chirot (1997).

13

secure. They had to perform labor duties and could easily be evicted from land on the land-

lord’s will (that was restricted in 1846). In addition, the overall situation of agriculture was

difficult because of low prices, as long as the British corn laws were in operation (until 1849).

In 1864 the peasants were given full property rights to their plots. Rents were abolished, al-

though taxes raised in order to allow the State to compensate the landowners. The enfran-

chisement was relatively favorable for peasantry, if compared either with the Prussian and

Austrian reforms of the first half of the 19th century, or the Russian reform of 1861. Not sur-

prisingly—the motives were predominantly political. The reform was an answer to a manifest

of the insurrectionist National Government (January 1863) granting peasants full rights to the

land. The Russian government wanted to neutralize peasantry by all means, and to punish the

rebellious landed gentry as well. For the peasantry, the enfranchisement—together with better

market conditions and some technological progress in the agriculture—led to the improve-

ment of their economic situation, and to the rise of their demand for industrial products, par-

ticularly textiles. In the years 1864-68 the local producers of cotton textiles could not meet the

demand and imports ere rising faster than the local output (Ihnatowicz 1956; 1965: 19).

The enfranchisement also changed the economics of the landed estates. The landed

gentry, devoid of free labor, were turning to hired labor. Due to demographic growth, there

was enough landless peasantry to supply labor. Landed estates, keen on economizing costs,

were improving and investing, which led to raising demand for agricultural machinery, fertil-

izers, etc. To a smaller degree, a similar process started with the peasantry, having now secure

rights in land.

The second factor mentioned were foundations of industrial development, laid down in

the first half of the century. As mentioned in the first part of the preceding sections, all three

most important industrial regions of the Kingdom—Warsaw, Łódź and Dąbrowa Basin—went

through a process of industrial development already in the first half of the century, what—in

particular—led to the rise of entrepreneurial class. Also, infrastructure developed, with the

beginnings of the railway construction. Thus, there were actors and conditions to respond

once the local demand, and the demand of the Russian Empire at large, started to rise.

The third factor is the technological and institutional innovation. As Łukasiewicz finds

in his detailed study of the technological change in the industries of the Kingdom of Poland,

[o]nly the faster pace of technological breakthrough and [...] its earlier completion could win for the industries of either the Kingdom or the Empire the vast markets of the Empire of the Tsars. The Kingdom won this race (Łukasiewicz 1963: 308).

14

In textiles, the process consisted on mechanization of spinning and weaving, as well as intro-

duction of mechanical power. In metal and machine making industries, on the introduction of

large scale, mechanized factories. In ferrous metallurgy, on the replacement of charcoal by

mineral fuels. The process of technological change, already advanced in the years 1855–1864,

was completed in 1865-79 in textiles and metal and machine making industries, and in metal-

lurgy in mid-eighties (Łukasiewicz 1963). Technological change was paralleled by the institu-

tional change, characteristic for the second industrial revolution. As size of the plant and nec-

essary investment increased, enterprises were taking form of joint stock companies. Also,

banks were established in Warsaw and in Łódź, the most important among them being Bank

Handlowy in Warsaw (1870, the biggest financial institution in the Kingdom), Bank Dyskon-

towy (1871), Bank Handlowy in Łódź (1872), also Bank Kupiecki in Łódź. Besides, there

were branches of Russian banks, as well as number of smaller banking houses.

Last but not least, of enormous importance were the relations with the Russian Em-

pire. The Kingdom’s nascent industries had access to Russian market since 1815 until a cus-

tom border had been established in 1832, after the November uprising. In 1851, the Kingdom

was again incorporated into the Russian custom area, then Łódź became a competition for

Moscow textile industries. When in 1877, the Russian Empire, introducing tariffs in gold, and

than rising tariffs in 1881, 1885 and 1890 turned into protectionist policies (mainly against

the German imports), the already well-developed Kingdom’s firms could easily take advan-

tage of it, and exports to Russia started to rise quickly (Table 6). While until the 1870s the

domestic market was a driving force of industrial development, since then the Kingdom was

increasingly producing for the Russian markets (Ihnatowicz 1956). An important part of these

exports were textiles, in which the Łódź industrialist were capable of being competitive in the

Russian markets, as the steady rise of exports to Russia shows (Table 7). The Kingdom’s

competition threatened interests of Moscow industrialists, they lobbied for the government aid

(Luxemburg 1898, Jezierski 1967: 173-6). As a result, it tended to disfavor the Polish King-

dom producers by means of tax policies and railway tariffs. Thus, while between the emanci-

pation of the peasantry and the mid-1870s the main stimulus for the industrial development

was the local market of the Kingdom, later it proceeded mostly due to the market pull of the

Russian Empire.

The most comprehensive statistical and economic analysis of the external economic

relations of the Kingdom was provided by Jezierski (1967). According to his findings, during

the second half of the 19th century the external trade of the Kingdom reoriented from West to

East (Russia), while the structure of exports changed from raw materials to manufactured

15

products. The rise of the overall volume of trade was particularly fast between 1850 and 1870,

to decline somewhat in the 1870s. The 1880 was a turning point—since this year, until 1900,

the volume of trade with Russia was rising very fast, while that with the West declined. In the

first decade of the 20th century there was a reversal—the rate of growth of trade with the West

was now higher than with the West. In the structure of the Kingdom exports to Russia, manu-

factured goods dominated, while in the imports—raw materials. Thus, simplifying a bit,

Kingdom’s place of in the Empire economy was that of processing of raw materials for the

Russian markets. Of particular importance were the last two decades of the 19th century, the

peak of success of Kingdom’s exports to the Empire. Once the Russian industrialization ma-

tured, the Kingdom lost it comparative advantage.

Concluding Remarks

For Russia, the reasons for keeping the Polish Kingdom within the Empire were pre-

dominantly political and military, as its territory was the main communication route to the

West, and a possible springboard of Western invasion. This was not easy because of the rising

Polish nationalism, witnessed by two armed insurrections. As a reaction, the over the 19th

century the autonomy of Poles was gradually reduced and finally abolished, and the imperial

rule strengthened and consolidated. Among the Polish elite, after the failed 1863 uprising, the

romantic dreams about regaining independence being buried, the ideological climate in the

Kingdom was also favorable towards economic development, as revolutionary sentiments lost

popularity leaving space for “organic work,” of which economic development—together with

education—was an important part. Also, many ambitious Poles were making careers in Russia

proper as businessmen and industrialists (Szwarc 1995).

The Kingdom’s industrial leap forward started after 1864 (the emancipation of peas-

antry) and the Kingdom was a bit ahead of Russia proper in the process of industrialization.

The relatively fast growth of Kingdom’s industrial economy was a coincidence of several

factors: the foundations laid down during the early industrial phase of the first half of the cen-

tury, the diffusion of innovations of the second industrial revolution, the availability of entre-

preneurial talent and of capital (both, often, of foreign origin), the emancipation of peasantry,

and—last but not least—the availability of huge markets of economically underdeveloped

Russia, whose own manufacturing industries could have been outcompeted for a time. This

process of industrialization was spontaneous in a sense that it was not triggered by any con-

scious state policy, as was the case with the Kingdom half-a-century earlier, with Russia un-

der de Witte, or with Japan after the Meiji restoration. The industrial boom was an outcome of

16

the activity of private business without any direct state help. At the same time, it was depend-

ent upon the Russian state in an unintended way because of the relatively favorable emancipa-

tion of peasantry, and because of Russian tariff policies since the late 1870s. Taking advan-

tage of its initial comparative advantage, the Kingdom could remain in a leading position

among the industrial regions of the Empire for a while, but this position was eclipsed with

Russia’s fast industrialization of the 1990s.

Despite its successes, the industrialization—and the overall modernization of the

Kingdom—was not without the drawbacks. First, it was one-sided and partial, as it profited

the peasantry only marginally, and it was territorially uneven. Second, it was overly depend-

ent upon Russia—Kingdom’s industries could so easily develop only as long as they had easy

access to the Russian markets and were protected there against western competition. The

paradox of the Polish history of that time was that the Polish national aspiration went against

the economic interests.

At the end, it seems worthwhile to make a few observations putting the processes of

the second half of the nineteenth century in a longer perspective, particularly in relation to the

subsequent de-linking and re-linking the economic processes in Poland from and to those in

Russia and the Soviet Union. Poland gained its independence in 1918, but the interwar period

was not particularly good for industrialization. All over the world, and particularly in Europe,

it was a epoch of dirigisme, authoritarian regimes and economic nationalism. The industrial

output of the Polish lands declined dramatically due to the war, and managed to regain its

1913 levels only on the eve of the Second World War. Among many reasons for this decline,

was the loss of the Russian markets, due to which the Kingdom developed so quickly during

the last thirty years of the nineteenth century. As a result of the Second World War, Poland

became once again incorporated into the Russian (Soviet) “empire.” Once again, the reasons

were mainly political, not economic—Soviet Union extending its buffer zone between itself

and the West. Poland industrialized quickly and intensively, although this time not according

to laissez-faire principles. Once again, the “Russian market” became important for the Polish

consumer products, among them the Łódź textiles. The end of state socialism, and the loss of

Russian demand was among the reasons of deep downturn of the industrial output in the early

nineties. The story of the following economic revival is another matter.

17

Tables

Table 1 Industrial output in the Polish Kingdom (million of rubles)

Year Industrial output 1840 8,4 1850 11,3 1864 40,5 1870 122,7 1880 171,0 1890 216,0 1900 600,0 1910 860,0

Source: Jezierski (1984), p. 238

Table 2 Output of cotton in the Polish Kingdom (million of rubles)

Year Output 1854 2 730 1860 8 091 1865 5 010 1871 10 433 1875 12 006 1879 33 237 1885 42 062

Source: Łukasiewicz (1963), p. 111, 180, 325.

Table 3 Population of the Polish Kingdom (thousands) Year Population Previous year =100 Per 1 sq.

km. 1820 3 520 27 1830 3 998 113,6 31 1840 4 488 112,3 35 1850 4 811 107,2 37 1860 4 840 100,6 38 1870 6 079 125,6 47 1880 7 105 116,9 55 1890 8 258 116,2 64 1900 10 000 121,1 78 1910 12 129 121,3 94

Source: Gieysztorowa (1981), p. 434.

18

Table 4 Average consumption in the Polish Kingdom (kg)

Year Grains Potatoes 1810 143 36

1822-1829 147 74 1841-1850 121 150 1851-1860 149 157 1861-1870 222 234 1871-1880 n.a. 317 1881-1890 203 357 1891-1900 222 405 1901-1910 229 431

Source: GUS (2003), table 61 (213). Table 5 Value of output of the main industrial regions of Russian Empire (1898, million of rubles) Region Output Moscow 755,1 The Polish Kingdom 335,5 St. Petersburg 316,7 Donetsk 246,1 South-Western 135,1 Ural 85,3 Baku 82 Transcaucasian n.a. Source: Laszczenko (1956), p. 159-60.

Table 6 Net exports of fabrics from the Polish Kingdom (million of rubles) Year Exports Year Exports 1879 9,3 1895 94,8 1880 15,6 1899 124,4 1884 51,8 1900 175,2 1885 54,1 1901 171,7 1886 76,9 1905 152,5 1891 92,9 1909 185,7 1893 103,4 1910 214,7 1894 122,9 1911 228,0

Source: Jezierski (1984), p. 137.

19

Table 7 Kingdom of Poland exports to Russia (million or rubles)

Year Exports 1840 1,0 1850 1,0 1864 11,5 1870 25,0 1880 47,0 1890 194,0 1900 395,0 1910 515,0

Source: Jezierski (1984), p. 238.

20

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