Incomplete development. Why are foreign investments dangerous?
The historian, published under the pseudonym "Dmitry Zykin", in the recently published book "How to slander the great history of our country ”proves: the defeats of Russia in the Japanese and the First World Wars are not the result of the country's economic weakness, not the organizational weakness of its armed forces, but the deliberate sabotage of a part of the country's top that wanted to rise even higher. Something like a “second secret revolt” - as the initial stage of the Soviet Perestroika was called - or “millionaire revolt against billionaires” - as the First Maidan in December was called 2004. The stories about the lack of talent of commanders, poor armament and supplies, interethnic and interclass hatred are mainly the result of the imagination of liberal journalists who have been anti-state since then.
Much in this theory seems to me to be true: so, the idea of defeating a country for personal victory occurred to many in history — it suffices to recall the names of the victorious commanders of Belisarius (he came from ordinary soldiers, so his pedigree is unknown) and Albrecht Wenzel Eusebius Villemovich von Waldstein (aka Wallenstein) who fell into disgrace for fear of the growth of their influence in the army (which led to a series of defeats for the Eastern Roman and Holy Roman Empire, respectively). Or Alexei IV Isaakovich Angel, in 1203, called the crusaders to Constantinople to return the throne to his father Isaac II Andronikovich (he became co-ruler under Isaac, but eventually both were overthrown for trying to impose an additional tax on the country to pay the crusaders the promised reward, and after a couple of months of the rule of other influential figures of the crusaders declared their own Latin empire, which lasted more than half a century. Much seems plausible, but requires additional research. And one motive of the book, in my opinion, is not only of historical interest, but is also important from the point of view of the current economy.
The book contains an extensive and very impressive statistics on the success of the Russian industry in the last half century of the empire - from the moment of the abolition of 1861.03.03 serfdom (hereinafter all dates on the Gregorian calendar). Almost all the key indicators of its economy grew at the highest rate in the world. An obvious conclusion follows from this: the country was healthy, successful, there were no fundamental internal causes of the defeats. This means that all the blame lies on internal schemers and their external partners. In particular, in 1904 – 1905, Russia struggled not only with relatively small (albeit rapidly developing) Japan, but also with openly supporting it (and almost its entire fleet) Britain, and with hidden opposing excessively fast competitors - and because generously lending to Japan - the United States of America.
Funny historical detail. The British-Japanese treaty 1904.01.30 obliged each of the empires to support the other, only if it turns out to be at war with more than one state. After the attack on Russia 1904.02.09, Japan was not entitled to rely on full-scale assistance. But immediately Japan declared a tiny (at that time about half a million people) Montenegro. This automatically gave Britain the right to do whatever it deems necessary for Japan without fear of accusations of violating the world order. Russia received only a few hundred volunteers who fought bravely, but for obvious reasons did not change the balance of power (not to mention the fact that volunteers have the right to join the armed forces of any country, regardless of the state of war, they are considered to be mercenaries much more than citizens of this country who are in similar posts). How little the position of Montenegro affected the war can be seen from the fact that the Portsmouth Peace Treaty of 1905.09.05 was signed only by Russia and Japan, and peace between Montenegro and Japan was concluded in 2006, when they accidentally remembered this trifle. The prince (with 1910.08.28 - the king) Nikolai Mirkovich Petrovich-Negosh was guided by the noblest promptings (and by the long-standing proximity of states and nations: thus, his daughter Militsa was then married to the Russian Grand Prince Peter Nikolaevich, and the daughter of Stan - Anastasia - to the son of Maria Nikolayevna Romanova Georgiy Maximillianovich Beauharnais, Duke of Leuchtenberg; in 1907, Stana married Grand Duke Nikolai Nikolaevich). But half a century earlier, the publicist and literary critic Dmitry Pisarev warned: "Let our noble feelings do not darken our insightful mind." What led the Montenegrin prince to precisely this form of manifestation of noble feelings? Or - who brought?
But no political intrigue can overshadow the blatant difference in economic potentials.
The Russian Empire was then several times richer than the Japanese - but the navy of Japan surpassed the First Pacific Squadron, not only because the Russian fleet was mainly divided between the Baltic and Black Seas, but also because of a full ship repair base (not to mention shipbuilding) there were neither Port Arthur and Dalniy leased by Russia in 1898, nor even Vladivostok, which was being mastered since 1860. For the current repair, the ships returned to the Baltic, and on the way back they managed to work out a noticeable share of the overhaul resource. In the meantime, the Second Pacific Squadron was being formed in the Baltic, the blocked Liaodong Peninsula fell with the First Squadron, and even the Second and Third Squadrons, numerically almost equal to the Japanese, were numerically the fleet, were defeated in the Tsushima Strait. The book assures: Admiral Zinovy Petrovich Rozhdestvensky deliberately put the ships entrusted to him in a losing position. But, in my opinion, one fatigue after a trip across three oceans was enough for a noticeable weakening of our sailors, and Rozhestvensky could not conduct full-fledged exercises on a campaign, again, due to the limited survivability of the main units. He did not have a repair base on the entire route. Even there was only one parking lot - in Madagascar, owned by France friendly at that time (there the Second Squadron waited for the Third to arrive - under the command of Nikolai Ivanovich Nebogatov; he had the shameful role to surrender to the Japanese ships still afloat after being shot off at Tsushima Island ) Russia did not have its own (or at least leased) bases: Port Arthur was the first long-term lease experience.
The situation was similar on land. The accumulation and supply of forces depended entirely on the Trans-Siberian Railway. This unique transport facility is an undoubted pride of the Russian technology, and, moreover, it was built incredibly quickly. But at that time the main line was single-track, and trains went through the Baikal by ferry, only a few cars at a time: the working movement on the Circum-Baikal road began 1904.10.01, and full-fledged operation - 1905.10.29. Therefore, at the end of the war, Russian troops in the Far Eastern theater of operations numerically caught up with the Japanese, acquiring by that time (as I noted in the article “Losing accumulation of forces. The Japanese war and today's Ukraine”) the habit of defeat.
Meanwhile, the need for a Far Eastern shipbuilding base and a high-performance railway from edge to edge of the empire was evident even a couple of decades before the war with Japan (for example, with the participation of Russia in the suppression, together with other great powers of the past, the uprisings of the “forces of harmony and justice” In China in 1899 – 1901, the main difficulty for us was the accumulation and supply of troops). And many other - even if not so noticeable - causes of weakness were also known long before this weakness (alas, objective and justly noted by both contemporaries and descendants) led to the fact that in two wars in a row the country's tension was too great and turned into attempts of particularly smart politikantropov to stir up the water and catch fish in it.
Why did they not eliminate them? After all, to build a double-track railway is not at all twice as expensive as a single-track railway: let's say, the volume of embankments and notches due to slopes depends little on the number of tracks. Yes, the ship repair plant, although undoubtedly more complicated than small port workshops, is so beneficial in its work that a port with such a plant is a source of enormous additional income. And so on the entire list of the then Russian weaknesses: the elimination of any of them required funds that were insignificant compared with the additional benefits.
Did the decision makers of that time not see this benefit? But then the criticism of them is fair and their current defense in the book under discussion is erroneous. Or maybe one of them deliberately provoked a weakening of the country - and then the book is right in everything? In a word, I want to repeat the refrain of the speech of State Duma deputy Pavel Nikolaevich Milyukov 1916.11.14: “Stupidity or treason?”
Alas, there is a reason far more dangerous than stupidity with betrayal combined - poverty. The Great Empire, at least from the beginning of the 18th century, experienced an almost constant budget and trade deficit. She now and again borrowed money from her own business people (and gave them most often by transferring to them the right to collect any tax - payback, which caused the hardest abuse in collecting this tax: in the literature of the second half of the XIX century, the farmer is one of the most disgusting types ), then from foreigners. Its industrial development after the abolition of serfdom was critically dependent on foreign investment. She simply didn’t have enough money for a two-way Transsib or Far Eastern shipbuilding (and for full-fledged fortification: Port Arthur should have been strengthened much better according to the original plan, and then he could have been under siege for a couple of years. But due to poor funding, a significant part of the dominant heights in the vicinity was left without defenses and armaments, so they had to be handed over almost without a fight, and it was from them that the Japanese shot the city, the port and the ships blocked in it for a long time and without any obstacles; orablay until the failure of the further defense has lost its meaning).
The blame for this poverty largely lies with the then ruling class. Unlike the British or German nobles, the Russians invested a very small fraction of their incomes in industrial or at least trade matters - the main issue was simply squandered. Even after the abolition of serfdom, when the permanent source of income disappeared, most nobles squandered their one-time ransom without thinking about future well-being.
The reasons for such short-sightedness can be discussed for a long time. I will note the main thing: our nobles considered participation in the work of the state apparatus as their inalienable right, and therefore they firmly counted on the government salary even in the event of the complete ruin of their personal farms. Even few people think about the sources of income of the treasury even nowadays.
So, those in Russia who combined wealth and power for the most part did not care about the development of the country's economy. Therefore, it crucially depended on investments from abroad. And there, of course, first of all they invested in those industries that could supplement already existing production or replace what is already unprofitable to develop at home: the more expensive the work force, the more profitable it is to improve its skills and use it in particularly difficult cases, bringing relatively simple production where people are cheaper.
Due to the orientation towards foreign investors, the Russian economy did not develop comprehensively. I have already cited an example more than once: France willingly invested in Russian railways of a latitudinal direction, so that mobilized Russian troops quickly got to war with Germany, but we had to finish building the meridional orientation roads necessary for establishing cooperation between production complexes in different regions in Soviet times . But it is much more important that every year our machine tool industry lagged behind the main competitors and the import share of the equipment of our enterprises became more and more (despite the fact that the first support - the tool holder - for a lathe, moved by a mechanical drive along the guides and thereby ensuring accuracy machining, invented the court mechanic of Peter I Alekseevich Romanov Andrey Konstantinovich Nartov), so that we could create new production only with the participation of foreign partners. Instrumentation was not developed either: for example, on warships not only in Japan, but also in World War I, gyrocompasses, rangefinders, even binoculars are imported. We successfully did steam engines ourselves, but things weren’t a problem with internal combustion engines: ours aviation flew on imported engines. Etc.
Foreign orientation is not profitable even in a purely commercial sense. You buy a product of its own production - the money for it will remain in the country, part of them will return to the treasury in the form of various taxes. And when you buy a foreign money goes irrevocably. Translated from financial language to technical, its production uses all local resources, including labor, while imports leave these resources unused, so the economy as a whole creates far less than it could. True, technical logic does not explain why it is more profitable to develop at our own expense, without expecting investment. Here we have to go back to the logic of financial: the investor is counting on profit, and if it is foreign, then the profit goes abroad again - at least partially. And this, as noted above, leaves the country without taxes, and local resources without use.
Mikhail Leonidovich Khazin pointed out: foreign investments are deliberately limited. If investors are counting on the withdrawal of part of the profits - they will invest only so much that foreign exchange earnings (in the period under consideration - also gold production) would be enough for the country to pay this profit. But only a few investors will create export-oriented production - in order to avoid too painful competition with their own enterprises. Therefore, the total volume of production created for foreign investment is obviously less than one would expect, looking only at available funds, theoretically looking for opportunities for use.
From general reasoning, let us turn to a comparative experiment set by the course of history itself. Almost simultaneously with the abolition of serfdom in the Russian Empire, two more large and rapidly developing states emerged in the world. 1865.05.10 arrested the president and members of the government of the Confederate States of America, which restored the unity of the United States (some military units fought before 1865.05.23). 1871.01.18 in the Mirror Gallery of the Palace of Versailles on the initiative of Prussia, which won France in the campaign launched by 1870.07.19, signed an agreement on the creation of the Second German Empire. Over the next four decades, the three powers developed under similar conditions. Moreover, RI was noticeably ahead of MUH and WGI in most of the indicators listed in the book. But behind them one at a time, there is not mentioned, but the total, covering all aspects of the economy at once, - the share of the world market: they grew faster there. These are the economic consequences of non-complex development.
But in wartime much more important is the cessation of many imports. So, the Russian chemical industry developed mainly by the Germans - and constantly needed many German-made reagents: who would create a competitor for their own money! It is clear that the war with the Germans paralyzed many enterprises. But even that which depended on the allies was stuck: it was vital for them than to quickly increase their own capabilities, and they took care of our production on the leftover principle. This is already enough to explain most of the disasters that befell the Russian Empire in its last war — without any conspiracy theories.
Why did MUH and WGI develop in a comprehensive, balanced way? Because they relied on their own funds, and not on foreign investment.
MUH after victory completely robbed the CGA. The well-being accumulated by several generations of planters and their slaves (and noticeably destroyed during the war, primarily as a result of the scorched earth tactics used by northerners during the breakout under the command of William Tecumseh Charles-Robertovich Sherman to the Gulf of Mexico, which divided the CA into two non-interacting units) overnight, officials and fraudsters (most often in one bottle) migrated to the pockets of officials from the north. The concept of “Carpetbegger” was included in American history: Northerners most often came with a single bag (bag) from a carpet (carpet), which could serve as a bed when spending the night in a cheap inn, and left with full wallets and beautiful checkbooks, sometimes right in the luggage cars with property confiscated from southerners. But this dashing robbery turned into, among other things, investments in thousands of new plants, working on the latest technologies at the time and able to press against British production.
The WGI on a peace treaty 1871.05.10 received from the newborn Third French Republic five billion francs (at the then exchange rate of 1451,5 tons of gold). Easy money first of all generated a wave of Grunds - the foundation (that is, the creation of joint-stock companies without distinct sources of income for the sake of earning on the initial public offering). Enough and other fraudulent schemes. But ultimately, almost all of the gold remained in the country and went to the creation of new plants. The British first invented the label “made in England” to distinguish their products of traditionally high quality from the German hack-work — but after a few years, the inscription “made in Germany” became a symbol of the same quality tradition.
The main thing is that when new production needs of MUH and VGI emerged, they most often found internal possibilities to meet these needs, and RI industrialists usually had to look for foreign partners who were able (and willing!) To supply the necessary equipment or components. This complicated the diversification of production, forced to concentrate in a few already well-developed industries. And thus it increased its dependence on foreign countries.
I suppose if, instead of stupid devouring their incomes, if the nobles were Russian, they were looking for ways to invest this money in the long run, they would get even more for eating: the hens capable of laying golden eggs should not be cut, but feed. Not to mention the lesser likelihood of revolutions caused by military defeats — because of them, our nobility ultimately not only eliminated as a class (that is, the place taken by the nobility in the social division of labor disappeared), but also largely physically destroyed.
The then experience was fully taken into account by the Bolsheviks. At the first opportunity, they refused to rely on foreign investment: the concession system, developed in the mid-1920s, was phased out in the first five-year plan (1927–32). Even Western (primarily from the SGA) loans received in the same first five-year period were repaid already in the second, and after that we received loans only to strengthen political relations or accelerate the development of individual industries. Thus, the non-aggression treaty of 1939.08.23 between the Union of Soviet Socialist Republics and the Third German Empire was concluded only after the trade agreement of 1939.08.19. Moreover, the credit line allocated by TGI for 200 million marks (at the then exchange rate of just over 42,3 tons of gold) we extinguished by the supply of raw materials and used for the purchase of samples of German military equipment for study and the latest German machine tools for the deployment of new own defense industries. Say squeeze into the tower tank The T-34 76,2 mm long-barreled gun was succeeded thanks to German boring machines capable of processing shoulder straps in the skilful Russian hands - bearing support - towers with a light diameter of 1420 mm (and a new turret with a 85 mm gun on a shoulder strap with a diameter of 1600 mm and a tank tower IS-2 with a 122 mm gun on a 1800 mm pursuit was already obtained on Lend-Lease American machines).
Unfortunately, for a quarter of a century - since the late Gorbachev era - the economic bloc of the Russian government has been staffed exclusively by people who are holy believers in the unlimited and beneficence of foreign investment. Incompleteness of development does not bother them at all: the purely financial logic underlying the current imitations of libertarian economic theory (the so-called Austrian and Chicago schools) does not at all consider production processes in general and technological chains in particular (I have already published more than once in magazine ”selected quotes from the founder of the Austrian school, Ludwig Heinrich Arturovich Edler von Mises, seemingly convincing to many accountants, but ridiculous for any production worker, because in them there is an obvious narration Logic of technological chains is left, where all links must be mutually agreed). If this unconventional economic orientation continues, the economic bloc awaits the fate of the Russian nobility. He is not sorry, but at the same time, he can lead the whole Russian Federation to the fate of the Russian Empire ...
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