Bread upon the Waters: The St. Petersburg Grain Trade and the Russian Economy, 1703-1811

Chapter 7. Exports

180 Chapter 7 R Exports Peter’s primary motive for seizing and holding the delta of the Neva was to open a path through which Russia’s abundant and relatively inexpensive commodities could enter the European and world markets. For most commodities, his plan succeeded, but for cereals, Russia’s most abundant and relatively inexpensive commodity, it failed. As a capital city and metropolis, St. Petersburg consumed nearly all the grain and flour it received from the interior provinces. Managing the grain balance and moderating flour prices in the city under those conditions led the imperial government to restrict and even prohibit the export of grain and flour from St. Petersburg even though it wanted very much to improve Russia’s balance of payments and increase the treasury’s income from the tariff. Russia as a whole had an abundance of grain, some of it aching for a market at home or abroad, but in most years St. Petersburg received approximately enough of it—more than enough in some years but barely enough, if that, in others—to feed itself. Eighteenth-century Russians generally assumed that exports depleted supplies and raised domestic prices and that cereals prices could be influenced though not precisely controlled by permitting or restricting their export. As a result, policy disputes over exporting grain divided those who favored higher exPorts 181 prices from those who favored lower ones. For most of the eighteenth century and on into the nineteenth, those who wanted to moderate domestic prices by limiting exports from St. Petersburg usually prevailed, but prices rose nevertheless , advancing in intermittent surges from the 1760s through the first decade of the nineteenth century and reaching once unimaginable heights. Did exports from St. Petersburg and other Russian ports lie behind the rise in Russia’s domestic grain prices? The distinguished Russian historian Boris Mironov has argued that they did and that Russia’s entry into the European market elevated Russian prices to levels elsewhere in Europe. Based on a detailed analysis of grain prices in European Russia over more than a century, his argument deserves serious attention, but it assumes the existence of a unified “all-Russian market” and ignores the difficulty and in important cases practical impossibility of transporting grain from one locality to another. But if exports did not cause the rise in Russian grain prices, what did? For decades eighteenth-century Russians attempted to answer that question and in the process exposed their biases, their ideologies, and the influence of contemporary economic theories. Prisoners of their time, they overlooked a causal explanation that seems obvious to a modern understanding of economics. export poliCy On November 28, 1744, the Senate decreed a ban on the export of grain and flour from St. Petersburg. After a substandard harvest in the interior provinces, the price of flour was rising in St. Petersburg, but the Senate did not present its ban on exports as a response to the temporary decline in supply. Instead, it cited the long-term structural problem of transporting enough grain and flour from the interior to satisfy the city’s needs as its population continued to increase. St. Petersburg, it explained, was now the residence of the imperial court, the garrison, the guards regiments, the fleet, office workers, important personages, and “others of all ranks and worth,” but its grain supply was constrained by the city’s location: Cereals come to St. Petersburg from interior Russian towns by one route only, and cereals do not come from elsewhere by other routes; as is known to all, very little grain is grown in the area around St. Petersburg: and thus for such a multitude of residents, for filling the treasury’s storehouses, and for the sustenance of private people a great quantity of cereals is required. But in years past when the export of cereals from St. Petersburg was permitted, it was observed that the price rose in St. Petersburg because of such shipments, which was not without harm to those residing there.1 The Senate’s decree emphasized the peculiar situation of St. Petersburg with respect to its supply of grain and flour. The balance of supply and demand in that city did not replicate the grain balance in Russia as a whole; instead, it was 182 exPorts a balance between the limited quantity of these foodstuffs delivered each year through the single waterway over the divide and the growing number of...