ABSTRACT
Two crucial factors shaped the development of Russian capitalism: the disproportionate role played by foreigners and the direct involvement of the state. Foreigners played such a pronounced role because Russia lacked the capital resources and technical skills necessary for extensive industrial development. Foreign investment eventually accounted for one-third of the total industrial investment in Russia, with a particular concentration in such basic industries as iron, coal, chemicals, and oil production. Foreign loans to the Russian government also provided the capital the state needed when it took over the job of building Russia’s railroad network in the 1880s. As always in Russia, the state mobilized the nation’s resources because no institution or
social class was able to do the job. In fact, despite the gradual development of a Russian bourgeoisie after 1860, the state’s role in the national economy increased with each passing decade between 1861 and 1900.
