Gerhart Von Schulze-Gaevernitz on the Peculiarities of Industrial Development in Russia

The article examines the analysis of the state of Russian industry in the second half of the 19th century, undertaken by a prominent representative of the German historical school, G. von Schulze-Gaevernitz. He pointed out a number of significant disadvantages of the industrialization process: high concentration and high cost of capital, low labor productivity, weak specialization of enterprises and the combination of various stages of the production process, a significant rejection rate, extremely difficult working and living conditions for workers, high costs of administration and wages, etc. However, the author interpreted the causes of these phenomena one-sidedly, without taking into account the differences in the natural and geographical conditions of the empire and Western Europe, and the inevitable qualitative costs that accompanied the country's «catching up» development with accelerated transformation. Nevertheless, Schulze-Gaevernitz was optimistic about the prospects for the development of Russian industry. He argued that as economic ties with the West expand, Russia's «mercantilistic isolation» disappears, entrepreneurial activity increases, and a European psychological type develops among the general population. At the same time, the author attributed the success of large-scale industry primarily to borrowing the experience of advanced countries and attracting foreign capital, but at the same time clearly underestimated the role of domestic entrepreneurship. Schulze-Gaevernitz based his general conclusions on the study of cotton production, and all comparisons with the West were based only on the same industry in the United Kingdom. In addition, he limited his research mainly to the textile enterprises of the central provinces, without paying due attention to other industrial areas, which had their own specifics.