Nicholas I

Nicholas I’s reign illustrates the book’s argument that rulers may resist economic progress not because they lack knowledge of its benefits, but because they fear the political changes progress could bring. Facing an absolutist system built around serfdom and the landed aristocracy, Nicholas and his finance minister, Egor Kankrin, sought to preserve a rural social order. Their policies limited industry and mobility, sustaining the existing political pillars at the cost of broader economic development.

Rule and the Fear of Political Change

Nicholas came to power in December 1825 amid an attempted coup by military officers known as the Decembrists, whose program called for radical social change. The episode shaped his understanding of the threat to his rule. In a letter to Grand Duke Mikhail, he declared, “Revolution is on Russia’s doorstep, but I swear that it will not penetrate the country while there is breath in my body.” The book connects this fear directly to his later resistance to the social consequences of a modern economy: industrialization might concentrate workers in cities and unsettle the hierarchy on which his authority depended.

That political anxiety operated within a deeply extractive economic system. Serfdom bound at least half the population to the land: serfs were required to work three days each week without pay on their lords’ estates, could not freely move or choose an occupation, and could be transferred between owners. The book emphasizes that these arrangements were not merely impediments to prosperity in the abstract. They were part of the power structure Nicholas’s government aimed to preserve, with landed elites among the regime’s central supports.

Kankrin’s Policies and the Rural Order

Count Egor Kankrin, finance minister from 1823 to 1844, became a key figure in opposing social and economic changes that might weaken the existing order. Nicholas’s rule and Kankrin’s policies reinforced one another: the tsar feared political disruption, while his finance minister advanced measures that favored the landed aristocracy and kept society agrarian. The book presents their opposition to industry as a political choice, not simply a failure to recognize more productive economic policies.

Soon after taking office, Kankrin reversed a proposal by his predecessor, Gurev, to establish a government-owned Commercial Bank that would lend to industry. He reopened instead the State Loan Bank, which had closed during the Napoleonic Wars and had originally been established to provide subsidized loans to large landowners. Those borrowers had to pledge serfs as collateral, restricting access to feudal landowners. Kankrin transferred assets from the Commercial Bank to finance the State Loan Bank, leaving less funding available for industry. The arrangement directed public resources toward the regime’s established constituency and away from potential economic alternatives.

Industry, Workers, and the Limits on Factories

Nicholas’s own statements make the social rationale for restricting industrial growth explicit. Addressing manufacturers at an industrial exhibit in Moscow, he argued that both the state and manufacturers had to attend to the growing number of workers. He called for their “energetic and paternal supervision” and warned that, without it, workers might become a class dangerous to their masters. In the book’s analysis, this was not a neutral concern about administration: it expressed fear that the new workforce created by industrialization could become a political force.

The government acted on that apprehension. At Nicholas’s urging, Kankrin banned several industrial exhibitions that had previously offered occasions to display new technologies and encourage their adoption. After revolutionary uprisings spread through Europe in 1848, Moscow’s military governor, A. A. Zakrevskii, warned Nicholas against allowing gatherings of people who might join movements and disturb public order. In 1849 a law sharply limited the number of factories that could open in any part of Moscow. It prohibited new cotton- and wool-spinning mills and iron foundries; other industries, including weaving and dyeing, needed permission from the military governor to open factories. Cotton spinning was eventually banned outright. The stated purpose of the restrictions was to prevent further concentration of potentially rebellious workers in the city.

Railways and the Costs of Preserving Stability

The same resistance extended to transportation. Before 1842 Russia had only one railway: the Tsarskoe Selo Railway, a seventeen-mile line linking Saint Petersburg with the imperial residences at Tsarskoe Selo and Pavlovsk. Kankrin opposed expanding railways because he believed they encouraged socially dangerous movement. He dismissed them as something that did not necessarily answer a natural need, but rather an artificial one or a luxury, and objected to the travel from place to place they enabled.

The contrast between this policy and the country’s economic needs is central to the book’s argument. Russia’s extractive institutions, including serfdom, constrained people’s choices and held labor in place; restrictions on factories and railways further limited industrial development and movement. The outcome was not presented as an unavoidable consequence of ignorance. Nicholas and Kankrin faced incentives to protect the landed aristocracy and guard against political change, and their policies followed those priorities. By treating social mobility and industrialization as threats to stability, the regime preserved its established power at the expense of the changes that might have fostered wider prosperity.