Foreign trade and grain prices in the Russian Empire. For or against the neoclassical theorems of trade?

Grigoryi POPOV
PhD in Economics, Assistant Professor, Moscow Technological Institute, Moscow, Russia

Elena CHIBISOVA
PhD in Economics, Assistant Professor, Plekhanov Russian University of Economics, Moscow, Russia

TERRA ECONOMICUS, 2016, Vol. 14 (no. 3),

p. 87-100
DOI: 10.18522/2073-6606-2016-14-3-87-100

This paper deals with the problem of the influence of grain export from the Russian Empire on the domestic price on bread. The counterfactual model of Russian grain marketdevelopmentis proposed, in case if grain export is ceased. The authors refer to a wider range of issues, including not only grain export of Russia in the beginning of the last century, but also to the neo-classical theories of foreign trade. The authors provide analyzes of export’s effects on the balance of payments of the Russian Empire and investmentsstructure and level. In this regard, it is proved that the growth of bread exports negatively affected investments in the manufacturing sector, and in another way in case of falling export of grain. The authors conclude that the export of labour-intensive goods from the country can provoke the outflow of capital in the country specializing in the production of capital-intensive goods, since the export of labour-intensive products reduces the demand for capital. The export of capital from the Russian Empire before the First World War was so significant that the government was forcedto turn to foreign loans. In this regard, the authors have questioned that the positive balance of payments has always positive effect on the national economy. In Russia, grain export had negative consequences in the long term, slowing modernization, however making a positive trend for the country’s agriculture, especially its Southwestern regions. However, the authors believe that increase in grain export had been predetermined by the nature of food consumption in the Russian Empire. In this context, the authors try to draw parallels with the modern situation in the Russian economy in the context of «resource curse».

Download full text in pdf

Keywords: Russian Empire; the grain exports of Russia; economic development; balance of payments; agriculture; the neoclassical theories of foreign trade

References:

A brief set of statistics on Petrograd in 1913–1914 (1915). St. Petersburg. (In Russian.)
Anfimov A.M. and Korelin A.P. (1995). Russia in 1913. Statistical and documentary handbook. St. Petersburg: Russian-Baltic information center «BLITZ» Publ. (In Russian.)
Chibisova E.I., Chibisov O.V. and Popov G.G. (2015). The demographic dead end of Russian capitalism. Thoughts aloud. Journal of Russian entrepreneurship, vol. 16, no. 21, pp. 3835–3856. (In Russian.)
Chistyakov Yu.F. (2015). Food export of the Russian Empire in XIX – early XX centuries and the socio-economic development: lessons for modern Russia. Journal of Russian entrepreneurship, no. 2(272), pp. 287–300. (In Russian.)
Dyakin V.S. (1990). Whether Stolypin had a chance? Zvezda, no. 12. (In Russian.)
Gregory P. (2003). Economic growth of the Russian Empire (late XIX – early XX century). New estimates and valuation. M.: ROSSPEN Publ. (In Russian.)
Khromov P.A. (1967). Russia’s economic development: Essays on the economy of Russia from the earliest times to the great October revolution. Moscow, 594 p. (In Russian.)
Korelin A.P. (ed.) (1916). Statistical Yearbook of the city of Moscow. Vol. 4th. 1911–1913. Moscow. (In Russian.)
Latov Y.V. (2009). Impact of oil and gas complex on the national economic security of Russia. Terra economicus, no. 1, vol. 7, pp. 91–104. (In Russian.)
Lyashchenko P.I. (1915). Grain farming and bread trading between Russia and Germany under customs taxation. St. Petersburg. (In Russian.)
Materials to the revision of the trade agreement with Germany. Vol. V. Russia. The importation, export and direction of export of the main agricultural products for the years 1884–1910 (1915). St. Petersburg. (In Russian.)
Milov L.V. (1974). Paradox grain prices and the nature of the agricultural market in Russia XIX. History of the Soviet Union, no. 4, pp. 48–63. (In Russian.)
Mironov B.N. (2010). The welfare of the population and revolution in Imperial Russia: the XVIII – beginning of XX century. Moscow: New Chronograph Publ. (In Russian.)
Nefedov S.A. (2005). Demographic and structural analysis of the socio- economic history of Russia. The end of XV – beginning of XX century. Ekaterinburg: Publishing house of the Ural State Mining University. (In Russian.)
Pokrovskiy S.A. (1947). Foreign trade and foreign trade policy of Russia. Moscow: Science. (In Russian.)
Popov G.G. and Schegolevskiy V. (2015). Demographic theory of T. Malthus and the economic history of the Russian Empire. Terra economicus, vol. 13, no. 3, pp. 67–77. (In Russian.)
Rykachev A. (1911). The price of bread and work in St. Petersburg for 58 years. Journal of Finance, no. 31. (In Russian.)
Samuelson P. (2006). Again on the international equalization of prices of factors of production. Kireev A.P. (ed.) Milestones of economic thought, vol. 6, International Economics. Moscow: TEIS Publ. (In Russian.)
Sartor V. (2011). Life node. Grain export of Russia in the XIX – early XX century. The Structural features and causes of dependence of economy of Russia. History of Russia: economy, politics, people, pp. 226–232. (In Russian.)
Sergeev V.V. (2012). The role of trade-economic factors in Anglo-Russian relations in the second half of XIX – early XX centuries. Bulletin of Kant Baltic Federal University, vol. 12, pp. 35–39. (In Russian.)
The foreign trade of Russia on European and Asian borders of 1914 (1915). St. Petersburg. (In Russian.)
Yearbook of the Ministry of Finance (1914). Vol. 1913. St. Petersburg. (In Russian.)
Zyablowsky E. (1815). Statistical description of the Russian Empire in its current state with advanced concepts of statistics and General Outlook of Europe in a statistical form. St. Petersburg: Printing House of the Senate. (In Russian.)
Brutzkus B. and Roth W.J. (1934). Russia’s Grain Exports and Their Future. Journal of Farm Economics, vol. 16, no. 4, pp. 662–679.
Kutolowski J.F. (1984). British economic interests and the polish uprising, 1861–1864. The Polish Review, vol. 29, no. 4, pp. 579–596.

Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606