associated with industries that relied upon state provision of labor to produce
them—potash, caviar, tar, pitch, blubber oil—or represented items in high demand
(caviar, rhubarb, tobacco) whose supply the state could readily control. Kahan and
Boris Ananich remind us that the share of exports taken up by state monopoly
goods was modest, only about 10–15 percent of exports. The state never claimed
control over the majority of important export items, such asflax, iron, tallow, and
grain, and pursued a trend over the century of encouraging private enterprise over
state control. Peter I, for example, dropped state claims on monopolies of almost all
export items in 1719 in order to encourage private trade. Catherine II released most
state monopolies to the market in 1763, except for potash and iron (which were
released in 1773) and alcohol and salt.
Alcohol and salt were the most consistent and lucrative state monopolies.
Temporarily lowering the poll tax as a concession to peasants, Shuvalov raised
prices on them, producing a 2.7 time boost in indirect tax revenues. He also curried
favor with the nobility by awarding it in July 1754 exclusive right (along with state
distilleries) to make alcohol. Before the 1750s, production was diversified and the
sale of vodka and salt was handled directly by towns and villages; now sales of
noble-produced alcohol were farmed out to merchants. In one decade after 1749
the alcohol monopoly rose from 12.8 percent of all state income to 21.2 percent.
Overall for these two products, by the 1760s, alcohol constituted 25 percent of
state income, salt another 7–10 percent.
The state managed its monopolies in two ways:fiscal agents directly managed the
sale of some of these products, and others the state farmed out on contract. Many
ministers in Empress Elizabeth’s court benefited from lucrative monopoly con-
tracts, but Catherine II, perceiving that such farming led to corruption and rarely
yielded maximum income for the state, abandoned the practice on most monop-
olies save salt and alcohol. In 1763, for instance, she reclaimed the contract on
customs collections and took direct control, creating a Customs Chancery. In a
liberalizing measure, in the 1760s Catherine II opened up the purchase of liquor
sale contracts to all social groups—nobles, townsmen, state peasants, even serfs—
and in the 1775 reform she put the sales of alcohol on gubernia Treasury boards.
They were expected to award local contracts and keep tighter oversight. In 1795 the
system was further opened up when landowners were allowed to sell directly to state
stores, bypassing middlemen.
Tax farming, therefore, was not common; unlike France and the Ottoman
empire, Russia used it sparingly (for the liquor monopoly primarily), for good
reason. Such venality sacrificed revenue to corrupt tax farmers, encouraged abuse of
the population, and, most importantly, decentralized state control over regional
elites. Realistically, Russia also lacked propertied elites with resources to invest in
many different tax farms. In any case, Russia’s vaunted central control in this case
avoided a pitfall that might well have weakened the state.
Catherine II’s economic policies moved in a liberalizing direction, opening up
economic opportunity to more social groups. In this she was influenced by
Physiocratic advisors who had sparred since the 1750s with mercantilist advocates.
Some of Catherine II’s other liberalizing steps include the gradual opening up in
326 The Russian Empire 1450– 1801