Competing Claims: Russian Foreign Trade via Arkhangelsk and the Eastern Baltic Ports in the 17th Century

The last Muscovite century was an era of robust economic growth and institutional innovation which marked the beginning of Russia's rise to one of Europe's great powers. Of particular importance for this development was Muscovy's growing interaction with the European West. In no other area did this dialogue assume the frequency and intensity seen in foreign trade which, according to Natal'ia Apollinar'evna Baklanova, played a more important a role in the 17th century than at any other point in Russian history. ¹ The highly monetized economy still lacked domestic sources of precious metal and thus had to replenish its stock through foreign trade. In addition, Russia's European trade partners supplied it with numerous valuable imports, not least weapons — an area where the country remained far from self-sufficient. At the same time, Russia was able to develop its export sector thanks to the strong Western demand for naval stores, hides, and skins. In the 17th century, Muscovy conducted the vast majority — usually well over 80 percent — of its foreign trade with Europe and almost all of this trade was seaborne.

The Muscovite state relied very heavily on revenues generated by foreign trade. Throughout the 17th century, indirect taxes were the single most important source of government revenueand a majority of them came from customs duties. For example, the White Sea port of Arkhangel'sk — the country's leading center of foreign trade and only direct outlet to the seas — in the 1680s generated more than R 75,000 p.a. in tolls. This figure accounted for three to four percent of the total receipts of the Russian Treasury and over one-tenth of all customs revenues. The indirect fiscal importance of Arkhangel'sk was at least twice as great when one considers transit duties collected in central and northern Russia on wares destined for the Dvina port. ² Adding impostsleviedin northwestern Russia on goods shipped to the Baltic would increase this total by at least one-third. Receipts from other exportroutes further enlarged this amount by up to one-fifth. Finally, transit leviesin the hinterlands of border points would likely take the share of foreign trade in Russian state revenues to up to one-fifth. The indirect repercussions were even greater if one considers internal trade involving inputs that were processed domestically.

The Russian state further generated revenue by monopolizing the export of particular goods and, at times, by farming out these monopolies to private merchants. Such payments are likely to have come close to R 10,000 in a typical year. The government's overall dependence on foreign trade is difficult to estimate with precision, but it is likely to have been well over one-quarter of all revenues. The total export volumes were more or less comparable to the sum total of the government budget in a typical year, and frequently much greater. ³

As important as foreign trade was to Russia, the relationship with foreign merchants was highly problematic. Export trade through the White Sea was entirely passive: Russia had no merchant navy until the Solombala shipyard was built in the Dvina estuary in the 1690s. ⁴ Thus Arkhangel'sk's existence was entirely dependent on foreign merchants operating there. In the West, Russia was after 1617 completely cut off from the Baltic and all trade had to pass through Swedish possessions.

The passivity of Russian merchants combined with another serious structural problem: an acute shortage of domestic capital. There was basically no domestic capital market and credit, when available, tended to be very expensive. There were few sustained attempts to pool capital by establishing formal partnerships so typical in the West. Instead, the Russian government, in its efforts to promote domestic merchants, continued to rely almost exclusively on appointments to the...