Russian Economy - Alexander II

Russia

Initial Years: 1855-61

• 1855: Alexander II takes throne during Crimean war → shows weakness of Russia’s infrastructure and army

• 80% of the population being serfs or peasants.

• 1861: The Emancipation Edict - 49 year redemption payments, redistribution of land.

  • Aimed to increase consumption but failed due to rural poverty,

  • Farming methods remained backward as it was increasingly divided, landlord suffered financial decline.

Alexander II’s Economic and Infrastructure reforms: 1862-70

• 1862: Establishment of the State Bank of Russia

  • Improving financial stability and investment.

  • Managed inflation and ER

  • Gold and silver backed currency

• Moscow-St. Petersburg Railway becomes key

  • Railways developed throughout 1870s (still behind West)

• Reforms in taxation centralise revenue collection

  • Burden on peasant/ rural through Zemstvo

  • Zemstvo used for infrastructure development in rural areas - hindered by lack of resources - large variation between regions + upper classes dominate.

• Military reform reduces conscription periods and modernises the army, freeing more peasants to return to agriculture.

Alexander II’s Continued reforms + financial crisis: 1870-81

• The Russian government increases reliance on foreign loans and investments, particularly from France and Britain

• Agricultural policies remain focused on maintaining the "mir" (peasant commune) system:

  • Land is collectively owned and redistributed

  • This system prevents large-scale modernisation

• 1877-1878: Russo-Turkish War strains the economy further, causing inflation and budget deficits.

• Grain exports remain the cornerstone of Russia’s economy but fail to fund widespread development.

• Partially due to economic discontent among the peasantry and intellectuals, Alexander is assassinated in 1881 by revolutionary terrorists (People’s Will)

Overview of Alexander II

• Achievements:

  • Abolition of serfdom begins the process of modernising Russia’s agrarian economy.

  • Expansion of railways and financial institutions lays the groundwork for industrial growth.

  • Zemstvo reforms improve local infrastructure in some regions.

• Limitations:

  • Redemption payments and the mir system perpetuate rural poverty and stagnation.

  • Land reforms benefit landowners more than peasants, leading to widespread discontent.

  • Agriculture remains inefficient and vulnerable to crises, hindering overall economic progress.