discuss in Chapter 11; these roles had potential for great earnings, but also exposed
the merchant to the state’s confiscatory power if they failed to meet their expected
income. Being a merchant in Russia’s underdeveloped economy was perilous.
Russia’s trade policy over the seventeenth century accomplished its goals: indir-
ect taxes on trade constituted 40 percent of budget revenue, to which were added
monopolies awarded to foreigners; the percentage grew in the late seventeenth
century. As Jarmo Kotilaine argues, Russia had leveraged foreign trade to gain the
income and specie it needed to reform the army, win crucial wars and territory
(particularly on the western frontier and Siberia), monetize its economy, and
stimulate production of products in demand for Europe’s growing navies and industry.
By refusing to grant Europeans transit rights across Russia to India and China,
Russia preserved the income from a vibrant export trade. Government policies,
including serfdom that kept labor costs down as well as state monopolies and
protectionist fees, promoted Russia’s interests.
By the end of the century, Russia was criss-crossed with several global trade
nexuses—from the White Sea to Astrakhan down the Volga, from the Baltic to the
interior, connecting with eastern trade through Ukrainian and Volga spheres. The
Baltic was growing in importance among the key border ports. The stage was set for
further growth, as demand from Europe only increased.DOMESTIC TAX POLICY
Despite the romance of export trade transporting exotic silks and luxurious sable
and fox along mighty river routes, the foundation of Russia’s economy through the
early modern period—and the bulk of the income of the Russian state—came from
direct and indirect taxes from the towns and villages of a primarily agrarian
countryside. At home peasants produced much of what they needed for daily life,
but they turned to fairs, markets, and towns to sell surplus food and manufactured
goods to pay cash tax levies and to obtain items they did not themselves produce.
For many reasons, including the autarkic nature of Russian peasant society, towns
in early modern Russia were fewer, smaller, and less“urban”in many of the
characteristics that characterized towns in Europe. But they existed and provided
key functions of goods exchange. With its tax and otherfiscal policies, the state
exerted its most direct influence on individuals across the realm.
Domestic economic policy in Muscovy was aimed to bring in income tofinance
war, military reform, government apparatus, subvention of the elite, and the like.
Grand princes early on strove to monetize the economy by producing coinage and
shifting taxes to cash. Various principalities and towns had been minting since the
1360s or 1370s, and with Moscow’s conquests of Novgorod (1478), Tver’(1485),
and Pskov (1510), the grand princes centralized minting. Monetary reforms of
1534 – 5 standardized Novgorodian and Moscow coinage to a single system and
established standard weights and measures; coinage, however, was always in short
supply until domestic silver mines were exploited in the mid-eighteenth century.
Until then, silver coinage was produced by melting down European silver thalers.
Trade, Tax, and Production 199