Empires Apart (44 page)

Concepts that Americans in particular often regard as divinely ordained – universal suffrage, the rule of law, free speech – were denied not because a megalomaniac tsar was determined to cling on to power but because an important part of society firmly believed that he should be exercising that power. The whole point of society was not to protect the rights of individuals but to promote the collective welfare. Right up to the fall of tsardom there was no common agreement that the law was even intended to produce justice in the western sense. As late as 1909 a distinguished professor of constitutional law was teaching that the proper function of law in Russia was not to ensure justice but to maintain order.

But the maintenance of order was something the Romanov regime was increasingly unable to deliver. For centuries tsarist control had relied on two factors – its monopoly of military force and the lack of any coherent counterforce. As long as the Russian population was thinly scattered over the enormous expanse of the Russian empire any internal threat could be isolated and dispatched. Towards the end of the nineteenth century that changed. Enormous factories in and around St Petersburg and Moscow provided breeding grounds for organised dissent, and when the contagion spread to the army and navy the end of the Romanovs was nigh. The factor that changed the face of Russia for ever was the force that had already determined the soul of America: industrialisation.

One of the key messages of modern American imperialism is that America became the world's most advanced industrial nation because of its free market economy, and that to achieve similar riches other nations must open themselves up to the same free market. However, as Stiglitz clearly shows in his bestseller
Globalization and Its Discontents
, in the nineteenth century it was the US federal government that created economic growth, not the free market. Furthermore the term ‘free' when applied to the economy does not mean now what it meant when America was establishing its economic predominance. Today the term means free trade, vigorous competition, minimum state intervention and an absence of corruption – conditions which (except perhaps for the absence of corruption) almost inevitably favour US multinationals. The nineteenth-century free market in America was very different. Shielded behind protective tariffs, supported by state subsidies (often dispensed in highly dubious circumstances), robber barons were left free to wield monopoly power to build enormous private empires.

After Independence one of the first acts of the new Congress had been to impose customs tariffs. It also gave preferential treatment to American traders by setting the tariffs at lower levels for imports arriving aboard American ships. One of the southern complaints before the civil war was
that high import tariffs protected northern manufacturers but meant southerners could not buy cheaper goods from overseas. Alexander Hamilton had wanted high tariffs to protect infant industries ‘in order to increase national wealth, induce artisans to immigrate, cause machinery to be invented and employ women and children'. Hamilton's proposals were not adopted in their entirety at the time, but the fact is that the US economy developed with exactly the sort of selective protection that it now stops other countries enjoying.

Russian industry was also protected from international competition by the state. One of the first industries to benefit from large-scale mechanisation in both countries was cotton weaving, which grew rapidly in Russia after a high tariff was imposed on cotton imports in 1822. By 1913 Russia ranked fourth in the world for textile production after Britain, the United States and Germany. The ability of America and Russia to gain such a high market share in an industry that Britain had once so comprehensively dominated was largely thanks to protective tariffs. In 1913 average tariff rates on imported manufactures were zero in Britain, 13 per cent in Germany, over 20 per cent in France, 44 per cent in the US and 84 per cent in Russia.

That Russia should have been following policies so contrary to the spirit of modern free markets is not surprising, but what is often forgotten is that the American industrial economy was born in conditions more like today's Russia than today's America. In the last decades of the nineteenth century corruption in America was legendary. A whisky scam in St Louis defrauded the government of millions of dollars in taxes with the connivance of senior officials, including President Grant's private secretary (who like most of those involved managed to escape punishment). In 1872 it was discovered that nearly half of the federal government's subsidy of $50m for constructing the Union Pacific railway had gone missing. One of those implicated was James Garfield, but that did not stop him being elected president (although four months into his term he was assassinated by someone who had been unable to bribe his way into government service). Grant's secretary of war was found to have
received kickbacks from men given monopolies to trade on the native reservations, and in the notoriously corrupt naval dockyards a million feet of lumber purchased for the Boston yard simply disappeared.

Many of the most notorious nineteenth-century plutocrats – like John Rockefeller, who in a series of secret deals gained control of the US oil industry, and Andrew Carnegie, the Scottish immigrant who dominated the US steel industry after introducing the radical new manufacturing processes invented in Britain by Sir Henry Bessemer – are remembered today for the charitable foundations that bear their names. But charity for Rockefeller and Carnegie was very much an afterthought, and just as representative were unreconstructed oligarchs like William Vanderbilt, who controlled much of America's transportation and sponsored imperial adventures in Central America, and Jay Gould, a railway speculator who manipulated, bribed and stole his way to a $25m fortune. Gould's exploits included cornering the market in gold to force the price up, and then using inside knowledge to sell out before the federal authorities responded. The business practices of the robber barons make modern American financial scandals seem tame. Rockefeller at one time exercised so much power that he was able to make the railway companies pay him a levy based on the amount of oil they carried on behalf of his competitors – equivalent to Coca-Cola taxing supermarkets for every Pepsi sold.

One of the most infamous plutocrats controlled a sector that produced nothing at all: John Pierpoint Morgan was the robber barons' banker. Morgan, born into the New England plutocracy and educated in Britain, Switzerland and Germany, made his first fortune during the civil war, having avoided enlistment by paying somebody to take his place, a common practice among his class. Morgan became the robber barons' chief financial fixer, putting together cartels that controlled key industries like railroads, shipping and utilities. In partnership with Rockefeller and Carnegie he created United States Steel, the world's first billion-dollar company.

For much of the period between the civil war and the arrival of Theodore Roosevelt it was men like J. P. Morgan and John D. Rockefeller who determined the course of American history rather
than the ever-changing occupants of the White House. Most political leaders did what they were told. US senators at that time were selected by state legislatures rather than by direct election, and very few reached the Senate without ‘support' from local industrialists or left the senate poorer than when they had entered.

Particularly powerful were the railway oligarchs. It is worth quoting at length the words of one of America's most eminent historians Samuel Eliot Morison:

The power of an American transcontinental railway over its exclusive territory approached the absolute. A railroad could make an industry or ruin a community merely by jiggling freight rates. The funds at their disposal, often created by financial manipulation and stock watering, were so colossal as to overshadow the budgets of state governments. Railway builders and owners had the point of view of a feudal chieftain. Members of state legislatures were their vassals, to be coerced or bribed into voting ‘right' if persuasion would not serve. In their opinion, railroading was a private business, no more a fit subject for government regulation than a tailor's shop. They were unable to recognise any public interest distinct from their own. In many instances the despotism was benevolent; and if a few men became multimillionaires, their subjects also prospered. But others were indifferent to all save considerations of private gain. By distributing free passes to state representatives, paying their campaign expenses and giving ‘presents' to their wives, they evaded taxation as well as regulation. By discriminating freight charges between localities and individuals, they terrorised merchants, farmers and communities. Through the press and professions they wielded a power over public opinion comparable to slave-owners over the old South.

Morison's description of post-civil war society as feudal is accurate, but in a sense American society had always been feudal. The original southern colonies had been feudal estates and the plantation owners and New England merchants who instigated the American Revolution exercised
quasi-feudal powers in their communities. The essence of Hamilton's view of democracy was government by an elite on behalf of the people. What was new in the period after the civil war was that the oligarchs made little pretence to be governing on behalf of the people; indeed they made great pretence of not governing at all. For perhaps the first time in history the most powerful men in society remained outside the formal structures of government. Their objectives were entirely mercenary, and in the new doctrines of
laissez-faire
capitalism they found an ideology sanctifying their creed of greed: the wealth of nations derived from their efforts, and the role of government was to do nothing more than to ensure that they were not interfered with. The institutions of democracy were not torn down by the new feudal lords but simply bypassed.

The contrast with Russia was stark. There too nascent capitalists were at work but in a far less attractive environment. How do you bribe a tsar who has everything? The relative performance of the railways showed the inherent differences between autocracy and American democracy. For the tsars railways were a strategic not merely economic imperative. The Trans-Siberian railway was the world's longest, built not just to facilitate the exploitation of Siberia's mineral riches but to tie the empire together and allow rapid movement of troops to the eastern provinces. Great efforts were put into developing extensions into China and Manchuria, but within the Russian heartland railway connections were minimal. In America railways criss-crossed the nation in a tangled web that would have horrified a rational planner, but at least they existed. Despite the magnificent achievement of the Trans-Siberian, Russia remained in the era of the horse and cart when America was moving from steam trains to the automobile.

Although most of Russian industry was less developed than its American counterparts this did not imply that Russian civilisation was somehow more backward. The United States was beginning to excel in what might be called practical learning, but in the more intellectual pursuits like literature and science it often lagged behind – despite being free of the heavy hand of autocracy. In Russia the Academy of Sciences,
brainchild of Peter the Great, was founded in 1725, and had an enormous impact on scientific development. By contrast the US Congress did not set up the National Academy of Science until 1863. Some tsarist scientists became world famous. Ivan Pavlov's animal experiments gave English the word ‘pavlovian' and Pavlov himself a Nobel prize, Nikolai Lobachevski was the first person to develop non-Euclidean geometry, Dmitri Mendelev created the periodic table of chemical elements and the Baltic German Friedrich Struve founded the Pulkovo observatory outside St Petersburg. Russian women were among the first in the world to receive doctorates in scientific disciplines ranging from pure mathematics to zoology. The mathematician Sophie Kowalevski was the first woman in Europe to become a full professor, although she had to go to Sweden to do so.

Tsarism was both a spur to scientific advance, by actively sponsoring research, and a hindrance when scientists reached the ‘wrong' conclusions. The works of physiologist Ivan Sechenov were suppressed for their supposed atheism – a problem still encountered by scientists of evolution in America today. Many Russian scientists became political dissidents, for example the biologist and leading anarchist Prince Peter Kropotkin. Police broke up the last lecture given by the great chemist Dmitri Mendelev because they thought he might use it to incite a student uprising. In America too science and politics were never completely segregated; Benjamin Franklin achieved fame in both fields.

The difference between science in the two nations is less in what was achieved than in what is now remembered. Although in the eighteenth and much of the nineteenth centuries both Russian and American scientists were outside the mainstream of scientific development, at that time centred on western Europe, American history has since been incorporated into ‘western' experience. Thus Benjamin Franklin is widely remembered as one of the most important figures in the history of science, while his contemporary Prince Mikhail Lomonosov who played an almost identical role, and even did research in many of the same subjects, for example electricity, is now largely forgotten.

Whatever the intellectual attainments of Russian scientists, the practical application of science was far more limited in Russia than in America. The world's first oilwell was drilled by Russian engineers near Baku in the late 1840s, a decade before America's first oilwell in Pennsylvania in 1849, but it was in America that oil corporations quickly achieved preeminence. Economic and industrial development across the Atlantic was on an altogether grander scale. One consequence of this was that the political power of the robber barons who controlled that development was far more pervasive. In Russia a powerful group of oligarchs emerged but they never exercised the influence over government of their American counterparts, and the industrial sector itself formed a much smaller part of the overall economy. Nevertheless, by the end of the nineteenth century the manufacturing and mining industries in Russia were becoming far more important than they had been.