8
Trade, Tax, and Production
No one was going to get rich from taxing the peasant economy in Russia’s extreme
climate and location. Direct taxes on the populace did provide a steady and
important part of the Russian budget, but the state always supplemented with
income from export and transit trade. It was transit trade from the forests to the Silk
Road that attracted Rus’traders to this part of the world in the ninth century, and
capturing trade depots and key river routes determined the directions of Muscovy’s
territorial expansion. These were the centuries when a truly global economy was
developing: European maritime empires were linking already vibrant maritime and
overland routes from Africa to Asia and along the old Silk Road into one global
nexus of goods, as well as people and ideas. Globalization was not a solely European
phenomenon: while their fast and capacious ships exponentially expanded the
amount of goods that traversed seas and continents, European tradersfit themselves
into established trade and merchant nexuses. Overland Eurasian caravan routes,
Red Sea maritime trade, busy shipping channels between India, the South China
Sea, and Southeast Asia, all provided links and local manpower to the networks that
powerful new European ships and navigation made truly global. The challenge to
Russia was to join in and hold its own.
This was difficult, as Russia had relatively little to offer in the market. What
Russia offered was raw materials of the forest (furs, timber), some semi-
manufactured goods (hemp, leather), and strategic geography. European merchants
coveted Russia’s Volga route, seeking a fast and safe passage to markets to the
Middle East and beyond. In the seventeenth century Central Asian caravan trade
was disrupted, and Russia, busily constructing a network of fortresses along the
southern edge of Siberia, offered an alternative route, as Morris Rossabi showed.
Hardly a commercial powerhouse, Russia lacked specie, capital, corporations,
investment and banking infrastructures, and experienced merchants; it could
hardly compete with merchants who possessed all of the above. So Muscovy’s
rulers navigated these challenges by doing what its peers were also doing in early
modern centuries. As Matthew Romaniello remarks, they designed protectionist
fiscal policy with an eye to bringing in specie, holding the foreigners at bay and
protecting domestic merchants and industry.
At the same time the government engaged actively in domesticfiscal policy,
striving to maximize income even from a subsistence agrarian economy and to
diversify sources of income by developing industry. Russia’s economic policy—
protectionist to the outside world, interventionist towards its subjects—in the
seventeenth century laid the foundations for what some scholars call its