Annual EBHS Conference, 39th Annual Economic and Business History Society Conference

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The Role Of Old Believers’ Enterprises: Evidence From The Nineteenth Century Moscow Textile Industry
Vadim Kufenko, Danila Raskov

Last modified: 2014-05-19


The early accumulation of capital and the pioneering of capitalist enterprise have been undertaken in many countries by heterodox religious communities. The role of Old Believers (further OB) in the early development of Russian industry and trade was noted by many economic historians (Blackwell 1965, Gerschenkron 1970, Beliaeff 1979, Stadnikov 2002, Kerov 2004, Raskov 2012). This paradoxical phenomenon was expressed by Gerschenkron (1970, p. 21): “The worshippers of religious immobility, the irrational adherents to letter and gesture appear as energetic modernizers in their very rational economic pursuits”. Indeed, the OB since the Great schism of 17th century and their anathematization in 1667 managed to survive and obtain leading positions in Russian 19th century industry. The main purpose of our paper is to collect and analyze the evidence on the role of OB in Moscow textile industry through 19th century. The confessional data include official revisions and archive sources (protocols, synodicons, necropolises, correspondence and internal documents) dating from 1808 to 1905. The industrial data cover the textile industry for 1832 – 1890 which allows us to analyze the economic role of the OB in a dynamic dimension.In the empirical part, we find out the following facts and trends: firstly, the OB were over-proportionately represented in the textile industry, which is an indirect evidence of higher propensity to entrepreneurship; secondly, in some sub-sectors of the textile industry, the OB firms were prevailing (in wool-weaving); thirdly, since 1832 to 1871 we observe a relatively stable share of OB in the textile industry, especially wool and cotton production, with a sharp decline after 1871; fourthly, according to the distributions the OB, firms tended to employ more labour.Therefore, according to the empirical data for 1832 – 1890 the OB firms enjoyed over-proportionate shares in turnover and in labour especially in the wool subsector (1843-1871). However, the OB firms were not more efficient in terms of turnover per worker. A decline after 1871 can be partly explained by the sample limitation and general trends in industry. It appears that the OB firms indeed demonstrated an impressive performance, keeping in mind the fact that a new wave of repressions were initiated by Nikolay I (1825 – 1855).In addition, we discuss theories that could be helpful in explaining the success of the OB.    The Max Weber's hypothesis is partly applicable since the OB denied luxury, promoted secular ascetics and fair conduct, enforced with religious rules and stimulated saving and reinvestments. However, we show that their minority status (Petty-Gerschenkron) urged creation of formal and informal institutions, fostered accumulation of human capital through bookkeeping in order to save manuscripts from repressions and stimulated the development of social capital in order to maintain production, distribution and sales networks. Additional analysis is intended to sort the contribution of various factors: ethics, minority status and institutions to the success of the OB in 19th century Russia.