“modernization.”The term should be used with caution, as it evokes a model that
has been critiqued as Euro-centric (for discounting the greater strength of Eurasian
and Asian economies compared to the European throughout the early modern era)
and as deterministic, as if early modern trade led inexorably to modern capitalism.
Certainly, in Russia such commercialization and economic opening did not occur.
Its economic model, like its political one, was state driven and state focused, as befit
an ambitious state in a situation of very limited resources. Transit trade, export
trade,fiscal and industrial policy, the development of the merchant class—all were
shaped by the state for the sake of state income. In taking such a tack, Russia was
making the best of its limited natural, human, and political resources and became
remarkably successful in its goals.
Russia’s foreign trade in the sixteenth and seventeenth century was what Jarmo
Kotilaine calls demand driven; Russia profited from selling goods for export and
collecting customs on transit goods. It was a simple trade model: most export was in
foreign hands and export was generally raw materials. Its balance of trade was good,
as Russia did not offer a large market for purchase of foreign goods, certainly in
these centuries. There was little wealth to be spent, peasant villages were autarkic
(increasingly so as serfdom was established by 1649) and peasant manufacturing
relied on locally available raw materials.
Foreign demand for Russian forest goods—naval supplies such as timber, iron,
and rope, flax, linen, and leather—from northern Europe, and England in
particular—increased exponentially from the sixteenth century. England, France,
and the Netherlands were constructing merchantfleets and navies, all dependent
on materials that Russia could offer. Furs continued to be in demand for Europe’s
growing middle classes; burgeoning European regions of textile and leather manu-
facturingflourished with Russian raw materials. Similarly, demographic growth
and commercialization in the Ottoman empire, Persia, and China in these centuries
kept demand for Russian furs and raw materials stronger than ever. Russia profited
from foreign trade in several ways: by selling monopoly goods (a small portion), by
charging protectionist tariffs and by selling monopolies to foreigners.
TRADE ROUTES AND PRODUCTS: THE NORTHERN
EUROPEAN CONNECTION
Russia’s trade with northern Europe had gone through Novgorod since ancient
times, but once Muscovy had conquered that city in 1478, its rulers tried to
establish a port on the Baltic to take direct advantage of foreign trade (see Map
2.1). Frustrated in that before 1700, the fortuitous arrival of English merchants in
the 1550s kick-started trade between Russia and northern Europe on terms most
advantageous to Russia.
As noted in Chapter 2, the English Muscovy company won tax-free trade rights
in 1555 after Anthony Chancellor landed on the shore of the White Sea. The
Muscovy Company was allowed to maintain warehouses at Kholmogory, Vologda,
and even Moscow. By 1557 English were purchasing rope walks in Kholmogory to
188 The Russian Empire 1450– 1801