Abstract
This article explores the history of the Russian monopolistic companies that operated in the international market for blubber in the first half of the eighteenth century. It argues that the long-held view that the companies were unsuccessful is not supported by the statistics relating to the trade, which indicate impressive progress in terms of market revenue and the redistribution of profits. Moreover, the authorities had ambitious strategic goals for the project as a whole that entailed more than simple commercial success. The companies, in fact, were perceived as an instrument that would transform landlocked Muscovy into a leading power in the international maritime economy. The article analyzes the essence and the consequences of these conflicting perspectives.
Introduction
The early modern period witnessed rapid changes in commercial shipping and the exploitation of the marine natural resources of the North Atlantic and the European Arctic from both Western European and Russian perspectives. By the late sixteenth century, Western merchant vessels arrived in Archangelsk and therefore the enormous Eurasian empire of Muscovy made contact with the emerging global maritime trade. At the same time, blubber became an internationally important commodity. Very soon, train oil used for lighting throughout Europe formed a big internationally significant market operating through the Amsterdam exchange, the heart of the Dutch economy and the most advanced commercial hub in early modern Europe. Last but not least, Spitsbergen and its apparently limitless population of whales was discovered in the late sixteenth century. After that, European whalers became by far the most important suppliers in the dynamically expanding blubber market. Accordingly, in the seventeenth century, whaling developed into a substantial industry, which stimulated the development of broad range of other European activities – from shipbuilding to painting. 1
The Russians, however, managed to establish a stake in this commerce. The opening of the Archangelsk trade route, which connected the Russia market with Western European commerce, was vitally important for the economic development of the vast possessions of the Tsars. Having no opportunity for silver mining, the country at that time could only rely on foreign trade to obtain silver, and therefore become successful within the economic paradigm of mercantilism. 2 In order to increase the state revenue the government imposed monopolies on the exportation of commodities like caviar and potash. 3 Blubber, however, was not under monopolistic control and was therefore freely accessible to foreigners. No wonder that Dutch merchants were early entrants into the business, purchasing blubber in Archangelsk from the late sixteenth century. 4
Unlike the Europeans, the Pomors of the Russian North 5 did not normally kill and commodify whales, relying instead on the exploitation of the populations of seals and walruses, which were far more numerous and accessible in the waters of the White and Barents Sea, which is where they traditionally focused their hunting activities. In the seventeenth century, thousands of barrels of blubber were annually delivered from the hunting grounds to Archangelsk, sold to the European merchants and transported to Europe. 6
Accordingly, such extractions from the sea were significant in the foreign trade of the old Muscovy and contributed much to the development of Pre-Petrine Russian economy. The next century, however, opened the new page in the history of Eurasian empire in general and in the history of the Russian maritime activities in particular. Peter the Great and his successors completely transformed the country through a vast complex of reforms, normally conceptualized as governmental modernization and westernization. 7 In the economic sphere, the authorities tried to use joint-stock companies organized along European lines as instruments to completely reorganize Russian commerce. The development of maritime economy, including new approaches to marine harvesting and the marketing of commodities produced by the exploitation of marine natural resources, formed an essential part of this major transformation of the old Muscovy into the Russian Empire. It is notable that seven of the 18 Russian joint-stock companies active during the first half of the eighteenth century operated in the sphere of exploitation of marine natural resources – a fact that highlights the strong link between the Europeanization of Russia and development of maritime economy. 8 From this point of view the history of Russian activities in the blubber market deserves special attention.
The plan to develop Russian blubber production was probably conceived during the Grand Embassy in 1697–1698. As a part of this very famous visit to Europe, Tsar Peter I observed all the major elements of the Dutch marine harvesting system, including the whaling fleet that returned from Spitsbergen with unprecedented cargoes of blubber. These observations, supported by eloquent texts prepared by the promoters of several whaling development projects, were strong enough to trigger 60 years of governmental attempts to organize a whaling company to exploit Spitsbergen’s population of whales, with goal of becoming the dominant power in the international blubber market.
The basic idea for such a company was to monopolize the Archangelsk blubber market in order to generate high profits for reinvestment in the development of whaling at Spitsbergen. As a result of this whaling initiative, and the subsequent reorganization of sea-reliant activities in general, Russia was to become a real maritime power, not just politically, but also economically. Several companies, led by important individuals and families, were afforded control of the business successively, with Prince Alexander Menshikov (1703–1721) followed by the privileged merchant family of Evreinovs (1731–1734), Baron Petr Shafirov (1734–1739), Baron A. K. von Schemberg (1739–1742), and Count Petr Shuvalov and his descendants (1748–1768). In 1723–1731 and 1742–1748, the monopoly belonged to the state, and therefore it was only during 1722–1723 that a free blubber market was in operation. 9
This story can be studied from several perspectives. The economic history approach describes the eighteenth century as the time when the Russian economy was transformed, a process that ‘manifested itself in institutional changes and a steep rise in demand for Western technology’. 10 The most important result for the economic historian is the fact that eventually the Russian merchants managed to achieve significant progress in the international markets for several traditional export commodities produced by commercialized agriculture and the extraction of natural materials. 11 This approach seems rather simple and is often described as a case of relatively late industrialization and therefore backwardness. 12
I argue, however, that from the point of view of the maritime historian the sources permit a far more detailed and revealing analysis. We have to consider these blubber and/or whaling companies as essential parts of governmental mechanisms designed to transform the old landlocked seventeenth-century Muscovy into a Europeanized Russian Empire intent on becoming an active participant in the international maritime commerce and an influential actor in the global market.
This article discusses the subject in three parts. First, it analyzes the complicated interrelations between the governmental strategies of the reorganization of the Russian marine harvesting through the system of privileged companies, and the practical economic activities of these companies in the international market of blubber. Second, it examines the Arctic blubber industry controlled by the monopolistic companies to illuminate the extent to which Russian economic agents valued and utilized the natural resources of the Arctic Ocean from an economic perspective. Finally, I will analyze the market results achieved in order to assess the success of the strategies used by different actors in this business.
The eighteenth century Russian blubber commerce in the eyes of observers and historians: The problem of success
The idea of economic modernization as it existed in the eighteenth-century Russian Empire was based on a particular interpretation of the economy of previous century. The authorities treated it as unsatisfactory and even non-existent. For instance, Alexander Vorontsov, the head of College of Commerce and one of the most influential Russian officials of the second half of the eighteenth century, noted in a report he provided in 1762 for the Empress Catherine II that the blubber industry of the Russian North ‘is not new and is already known for 60 or 70 years’. 13 This remark demonstrates that for him the history of marine mammal exploitation by the Russian Pomors in the White and Barents Sea area only started at the very end of the seventeenth century, with previous hunting activities warranting no attention at all. In other words, he did not consider the marine harvesting of the area as an industry prior to state intervention that aimed to create a modern system of marine natural resource exploitation on the European model.
The success of governmental efforts to reorganize the marine harvesting through the system of privileged companies is, however, questionable. The activities of these blubber companies has been traditionally described as ‘disastrous’ in the historical literature. This paradigm was established as early as 1782 by Mikhail Chulkov. In his Historic Description of the Russian Commerce, he argued that the blubber industry was growing after the monopoly was cancelled and the companies dissolved in 1768, and therefore he had to conclude that a free economy invariably develops better than one under monopolistic control. 14 Within this paradigm, subsequent Russian historians have described the activities of monopolistic companies as unsuccessful and even calamitous. 15 Researchers have generally used statistical data to support this catastrophic narrative. We can see two broad perspectives – in a sense, two quantitative scales used to assess the success of the blubber monopolistic projects. The first is the hunting approach, with observers and researchers answering the simple question: how many whales were killed by the Russian whalers and how does this compare in an international perspective (in relation to, say, the output of Dutch whalers)? For instance, E. Webermann demonstrated the backwardness of the Russian blubber industry by contrasting the four whales killed by Russian whalers in 1726–1729 with the productivity of their Dutch colleagues, who took an average of 281 whales per year during this period. 16 The other quantitative scale is the number of barrels of blubber sold to the foreign merchants in Archangelsk. Here, researchers resolutely consider the growing exportation in absolute numbers after the abolition of monopolies as clear evidence that the companies failed and the free market was the road to economic success. 17
I contend, however, that both arguments are unsustainable. Adopting the hunting approach, one has to believe that killing the whale is the end of the story – which is definitely wrong because the intention of a company is to earn money, not to exterminate whales at any cost. Killing the whale (or the walrus) was just the first step. The number of animals killed depends on the hunting strategy and effort, population dynamics and weather conditions. What is important is the ratio of gains and expenses for each whale taken. It is much better from an economic point of view to kill one whale at a profit than to kill hundreds of animals at a loss. From the second perspective, we have to suppose that foreigners bought all the blubber offered and paid the required price, and that the international blubber market invariably enjoyed good conditions and unlimited capacity – which is obviously wrong on both counts. The number of barrels of commodity exported from a given port depends on the market conjuncture, price dynamics and logistical strategies. In essence, the financial result is the only way to evaluate success or failure. Once again, the merchant who managed to sell one barrel of blubber profitably did much better than the one who sold hundreds of barrels at a loss, as the ultimate goal is to generate money, not to supply European consumers with blubber. In other words, we have to study the financial side of the story to obtain an accurate appraisal of the value of the commodification of the Arctic Ocean’s natural resources through international commerce. Moreover, the question of failure and success can only be studied through an understanding of the goals and tasks that the economic actors set for themselves. In other words, we have to build the link between their expectations and estimations, their practical activities on the market, and their financial results. And then we need to set the objectives and operations of the principal actors against the expectations of contemporary observers who created sources that historians have used to build their particular narratives.
Russian monopolies in the blubber market: Turnover and prices
The most appropriate research approach is to work through the process of commodification in stages to evaluate the profitability at each point. This section explores whether blubber production and commerce in the time of monopolistic companies was profitable. That is the only way to get understanding of the result of governmental efforts to reorganize the system of Russian marine harvesting.
Analyzing the dynamics of the blubber trade, we should remember that the business comprises interactions between several groups of human and non-human actors. Blubber production is one of the most telling examples of what John Richards described as the ‘World Hunt’. From the environmental point of view, producing blubber meant the commodification of an increasing variety of species of marine mammals, a ‘massive living biomass [that] was a resource free for the taking’. 18 In other words, the resource was a common property that nobody was interested in controlling or protecting. This means that the resource base of blubber production in the eighteenth century was much poorer than it had been in the previous period. L. Hacquebord estimated the Greenland whale population on Spitsbergen before commercial whaling started as comprising approximately 46,000 whales. In the second half of the seventeenth century, when the climate and ice patterns encouraged whales to concentrate in Spitsbergen waters, in some years the whalers killed more than 2,000 animals during the season. However, about 1715, the ice conditions changed and the remaining whales escaped from the most destructive hunting zones ‘and the success of the whaling at Spitsbergen decreased dramatically’. 19 In other words, the Russian whalers appeared in Spitsbergen waters a bit too late.
As for the walruses, the population of Spitsbergen before hunting stood at about 25,000, and after 200 years of hunting the archipelago still had approximately 10,000 animals. 20 No research has been undertaken on the population of walruses outside Spitsbergen, and little is known about seals and beluga whales, although it is undeniable that the hunters ‘considered the wealth of resources at Spitsbergen to be inexhaustible’. 21
The commodification of these animals required different strategies, methods and technologies, a differential that is important from an economic point of view. European whalers departed in spring and returned home in autumn. This hunt required significant investment in large vessels, relatively sophisticated instruments, and sizeable, well-trained crews. 22 The Russians used two methods of blubber harvesting. The easiest way was to kill seals on the ice of the White Sea from February to April during the spring migration. This hunt required minimal investments and attracted annually several thousand Pomors. The walrus hunters were a much smaller group of blubber producers who departed in summer and spent more than a year in distant hunting grounds like Spitsbergen and Novaya Zemlya. These expeditions required much heavier investment and therefore hunters exploited many of the available natural resources to make their expeditions profitable. 23 The result of their efforts, however, was the same from a market point of view. The train oil extracted from whale fat differs little from the oil obtained from the fat of walrus or seal. The whalers therefore killed walruses if there were no whales around. 24 Nor did Russian walrus hunters hesitate to take available whale products. For example, on 28 December 1722, Lazar Fedorov, the servant of Stephan Ivanov Lopukhin, sold in Kola 12 poods (about 200kg) of whalebones ‘stranded by the Sea’. 25 These products were obtained from dead whales found on the shore, not from the whales killed by hunters.
The hunters therefore were the first human agents in the process by which the fat of marine mammal progressed to the international market. Importantly, not all the dead animals were commodified, as some of them were just lost. For whaling, the proportion of animals lost was about 20 per cent. 26 For the Russians, the percentage is unknown, although it was probably high considering that the technology of walrus hunting was based on the massacre of the animals. The Pomors killed hundreds of walruses, but did not possess the technical ability to take all the blubber, while the capacity of barrels and ships were limited. 27 Accordingly, the number of killed animals does not offer a good measure of the economic importance of the blubber industry. On the other hand, the quantity of blubber on the market does not reflect the total number of killed animals.
As soon as the hunters returned to harbour, they not only had to face customs officials, but also middlemen, which meant representatives of the company during the monopoly era. Those two groups were intimately connected and normally worked together when it came to dealing with the hunters, who were generally intent on selling their haul for the highest possible price. The relationship of customs official, middlemen and hunters hinged on the prevailing market price of blubber, which was generally expressed by the pood or by the barrel. Whereas the pood is a weight measure equal to 16.38kg, the barrel – known as ‘kardelka’ or ‘kartelka’ 28 – was required by law to have a capacity of seven poods (about 115kg). 29 In practice, such measurements led to complications. The hunters used all the barrels they could get for blubber. For instance, in 1712, Semen Melentiev of Archangelsk reported that of the ten barrels of blubber he transported (eight ‘kartelka’ barrels and two barrels ‘of the red drinks’), the ‘kartelka’ barrels contained about 20 poods of blubber each. 30 The owner of this blubber, Semen Chudakov, did not concur. According to his account, he purchased ‘150 poods of blubber in 10 barrels made in Germany’, emphasising that he paid 10 altyns (0.3 rubles) per pood. 31 This means that on average there were 15 poods of blubber per barrel (close to a kwarteel), with the price per pood fixed at 4.5 rubles per barrel, as against 2.1 rubles for the seven poods per barrel required by law.
Data on prices used by the companies to purchase blubber from the hunters is sparse, especially for the Menshikov company, the earliest firm. Petr Shafirov, the Menshikovs’ major commercial partner, wrote in a letter in 1726 that the Menshikovs Company, when it existed from 1703 to 1721, purchased blubber for 3.5 rubles per barrel. 32 However, other sources offer a much more mixed picture. For instance, Mikhailo Okladnikov, the agent of the company, in 1715 recorded that he purchased 322 poods from Iakov Kotkin of Mezen in 46 ‘measured barrels’ of walrus blubber (7 poods per barrel) and paid 3 rubles per barrel and in total 138 rubles. 33 In general, according to the report from the Archangelsk customs office, the blubber prices on the market in the early eighteenth century fluctuated between 2 and 3.6 rubles per barrel, and these numbers look very probable. 34 Noticeably, the prices on this market were obviously rather stable throughout the period under study. In 1742, the purchase price per barrel was 2.45 rubles, and in 1743 it was 2.95 rubles. 35 In other words, the purchase price normally fluctuated between 2.5 and 3 rubles per barrel, with 3.5 rubles as a maximum.
Making a deal with foreign merchants was the next stage. The company owners normally tried to sell all the blubber to one buyer according to an advance contract. The price in these deals was approximately twice as high as that at the purchase stage. In general, the foreign merchant had to take into consideration blubber prices in Europe and therefore the international market obviously influenced the situation in Russia and vice versa. Figure 1, which is based on general data relating to blubber exportation from Archangelsk, indicates that there were significant fluctuations in the amount of blubber exported, with the total quantity annually sold to the foreigners ranging from 1,000 to 9,000 barrels. The blubber market appears to have peaked in the mid-1720s and mid-1750s. The overall numbers vary according to different sources, as the figures for 1743 and 1745 highlighted in Figure 1 suggest. However, the trends are similar in both datasets.
Blubber market in Archangelsk, 1709–1767.
How did these numbers compare at the international level? An impression can be gleaned by comparing the dynamics of the blubber market in Archangelsk with the catches of the German whalers on Spitsbergen (see Figure 2). The comparison is based on the calculation of the average catches for decades in quarters, with the Russian barrel (‘kardelka’) considered as one half of the Dutch quarter (‘kwarteel’).
Blubber exports (Archangelsk), and German whaling (Spitsbergen), 1700–1769 (average per decade).
As Figure 2 shows, the Archangelsk export market was relatively stable, whereas German whaling production trended steeply downwards to the 1730s, before stabilizing broadly in line with the blubber market of the Russian North. Explaining the fluctuations in the Russian market is not easy, although both natural and social factors played a part. The hunting season could easily be more or less productive due to population dynamics or natural migrations. It should be noted that Russian sources contain information only on the legal trade. In other words, in the table and in the graph we can see only the blubber that was recorded in the customs office twice: first, it was observed by the customs officials when it was delivered from the sea; second, it was counted when the Company delivered it to a buyer. But some of the output went unrecorded (see below), and the intention of the actors to sell their production on the ‘white’ or on the ‘black’ market is important to an understanding of the economic situation. Even so, the absolute numbers of killed animals, and the absolute numbers of sold barrels, do not reflect the success or failure of an enterprise. To get a deeper insight into the performance of companies, we have to look at their financial data, as presented in the Table 1.
Financial results of blubber trade in Archangelsk, 1715–1748.
The data infer that profitability rates in the trade were relatively high, with total profits extending to 13,000–15,000 rubles. To delve further into such financial indicators, it is necessary to examine the relationship between buying and selling prices for the years when data on both prices is available (Table 2).
Purchase and sale prices in the blubber market, 1715–1746 (rubles per barrel).
Table 1 indicates that the monopolistic companies used their market position to enhance mark-up rates to the level of 70–100 per cent in most years. In other words, every ruble spent for purchase of blubber earned up to two rubles on the market. No wonder that this commerce attracted attention from high level officials and aristocrats. Noticeably, 1725, when the blubber market was free, is an evident exception, when both purchase and sale prices decreased and the mark-up was just 16 per cent. Therefore, Petr Shafirov, in a letter written in 1726, was absolutely right when he reported that a free market for blubber was directly related to low prices. Moreover, he argued, the hunters were happy to sell their haul to the big company for a fixed price and immediate payment, whereas on the free market the local merchants agreed to hold low prices and were reluctant to pay out immediately because their income was oppressed by foreigners. 36
Illegal trade and governmental control
The price differential explains why both the blubber producers and foreign merchants wanted to circumvent the prohibitions and to deal with each other directly. The size of the illegal trade is not easy to estimate; however, it was among the major concerns for the staff of monopolistic companies. The cases of illegal trade recorded in the documents of the tax service shed light on the practices of the blubber market, as the cases of Semen Chudakov in 1711 and Evstrat Pochinkov in 1712 amply demonstrate. In outline, the two stories were similar. Both men had sold consignments of blubber to foreign merchants in contravention of the law. This was exposed by taxation officials and the offenders were forced to pay penalties. The details of the cases are revealing. Evsrat Pochinkov in 1711 sold 13 barrels of blubber he himself had delivered in in the previous year from Grumant (Spitsbergen), 37 while in 1712 Chudakov tried to resell 10 barrels he purchased a bit earlier from Fedor Orlov, a peasant who was involved in the marine mammals hunt. 38 Therefore, Chudakov acted as a small trader, demonstrating that the hunters were not interested in observing monopolistic rights and were ready to take opportunities to break the rules. The price data in these deals explain this phenomenon. According to the report, Semen Chudakov purchased blubber for 10 altyns (0.3 rubles) per pood, which is 2.1 rubles per standard barrel of seven poods. 39 It is very doubtful that the hunter Fedor Orlov willingly agreed to sell the products of his hunt much cheaper than the price offered by Menshikov company (according to the customs office report it was 3 rubles per barrel, or 10 altyns per pood if the commodity was sold by weight). 40 So, if all the data is accurate, we may suppose that either the purchase price in Archangelsk in 1712 was 2.1 rubles per barrel or less, or Semen Chudakov was able to control the hunter. Be that as it may, he managed to sell the blubber to Samuel Gartside for 13 altyns and 2 dengas (0.4 rubles) per pood, which is equal to 2.8 rubles per barrel. 41 The interest of Samuel Gartside is perfectly understandable; Semen Chudakov obviously offered a low price, as, according to the customs office report, the Company sold blubber in that year for 5 rubles per barrel. 42 Evstrat Pochinkov managed to do better. He agreed with a merchant from Hamburg (whose name he could not remember) to deliver blubber at 4 rubles per barrel. 43 As this information was used by the administrators to calculate penalties, the figures cited are open to doubt. Yet the mechanism looks very simple: the hunters have tried to sell their haul either to small traders or directly to foreigners. For their part, foreign merchants tried to contact the hunters directly to purchase the blubber without dealing with the company. These deals were made illegally during the summer fair. For instance, Evstrat Pochinkov met his contractor near the ‘Big Guest House’ (Gostinnyi Dvor), the commercial hub of Archangelsk, on a pier named ‘The Dutch Bridge’ (Gollandskii most). 44
After the participants agreed the conditions of the deal, the blubber was delivered to the buyer. The sources describe this process as an impressive operation. For instance, Evstrat Pochinkov delivered the barrels aboard a ship concealed under the firewood. 45 The plan of Semen Chudakov was far more complicated. In winter, he delivered the barrels on sledges to a ship that was frozen in the ice in one of the branches of the Northern Dvina in a place called Maimaksa. There, he ordered the waged sledge drivers to put the barrels on the ice and leave the place. When alone, he entered a small hut built on the ice near the ship to negotiate the deal with contractors beyond the public gaze. 46
The necessity to hire people to transport blubber was perhaps the major problem for the illegal traders. The waged accomplices reported both Semen Chudakov and Evstrat Pochinkov to the authorities. Acting on this initial information, the taxations official (fiscal), Iakov Markov, started an investigation that entailed interrogations and searches. Eventually the criminals had to pay a penalty that was calculated as double the profit they would have gained had they operated in the prescribed way: that is, by selling the blubber to the company. 47
Illegal commerce therefore involved representatives of all actors engaged in the blubber industry. The hunters and the merchants excluded from company profits tried to build their own network, while company agents and state officials endeavoured to keep the market under their total control. The extent of the black market is impossible to gauge with precision. However, it is reasonable to suppose that the significant increase in blubber transactions in Archangelsk under free market conditions in 1725, in contrast to the Menshikov monopoly in previous years (see Figure 1), was at least partly based on the transformation of the black market into the legal trade recorded by the customs officials.
From Russia to Europe: Price difference and the estimated profit
It is instructive to compare the dynamics of blubber prices in Archangelsk with those in Europe. As discussed above, company owners and projectors perceived the monopoly as a device was to extract more money from foreign merchants by forcing them to share with the Russians the profit they could make through reselling Russian blubber on the European market. The best way to see the mechanics of this is to compare the prices that prevailed in Russia with the prices of train oil on the Amsterdam exchange. Considering the available means of transport, it is appropriate to compare prices at the summer fair in Archangelsk with the prices in Amsterdam during the autumn or winter of the same year. Additionally, account should be taken of the fact that the Russian standard barrel was half of the size of the Dutch barrel, while the ratio of the ruble to the guilder was approximately 1:2.7. Therefore, to make prices comparable, the Russian price needs to be calculated in rubles per barrel multiplied by 5.4. The results of these calculations are presented in Table 3.
Prices on the blubber markets of Archangelsk and Amsterdam.
Source: Nicolaas Wilhelmus Posthumus, Nederlandsche Prijsgeschiedenis (Leiden, 1943), http://www2.scc.rutgers.edu/memdb/search_form_postpr.php, Request ‘Train-Oil, 1700–1750’. Rouble rate: Chulkov, Istoricheskoe, 372.
The data is too scarce to discuss any connections or even dependence between the prices on the blubber markets of Archangelsk and Amsterdam. What is notable, however, is the strong fluctuations of prices in Amsterdam, where in a single year the minimum and maximum prices could deviate substantially. On the contrary, monopolistic companies in Russia managed to keep prices relatively stable. While the blubber prices in Amsterdam decreased in the mid-1740s, they were relatively high in Russia, decreasing significantly prospective profits for foreigners. This was during a time of state monopoly, when the governmental blubber company managed to earn almost two rubles for each ruble invested. In other words, every barrel brought to the treasury seven guilders of pure profit, while the foreign merchants could earn about five, not to mention taxes and transportation costs. At the same time, when prices were high in Amsterdam foreigners probably earned much bigger profits than the Russians. The most important conclusion, however, is the fact that the possibility of manipulating prices guaranteed Russian monopolists some profit regardless of the state of the international blubber market – which was not the case for the whalers. For instance, between 1720 and 1729, Dutch whalers killed a total of 12,270 whales in the waters between Greenland and Spitsbergen, with only 11,259 whales killed in the next decade. Nevertheless, the more productive period brought them loss, whereas the less productive decade was quite profitable. 48
The companies obviously considered foreign merchants, rather than whales or walruses, as their major target. The companies wanted to earn silver, and foreign merchants were definitely needed to fulfil this objective as they delivered silver directly to Russia. The companies were evidently quite successful in fighting for money. The international blubber market in their imagination was the place where prices were always higher than in Russia, and therefore the price is never too high for the foreigners. Moreover, the companies kept prices relatively stable for the hunters as well. The margin of 100 per cent meant that from other perspective the company gave to the hunter half of the money obtained from the foreigner. In other words, the companies were quite successful in terms of the goals they were seeking to attain.
Conclusion
The poor reputation and allegedly calamitous entrepreneurial record of Russian blubber companies in the eyes of the eighteenth-century observers and subsequent historians needs explanation. As the data indicate, these monopolistic companies achieved financial success in a competitive market, which is normally considered the most important performance indicator for a commercial institution. Yet the government perceived the companies as failing and the entire project was cancelled in 1768, when Catherine the Great opened the blubber market to all interested merchants.
The explanation for this apparent contradiction lies in the sphere of images and intentions. Two concepts are instrumental to this reasoning. The economic imaginary is the first. Indeed, if we take imaginaries as ‘semiotic systems that frame individual subjects’ lived experience of an inordinately complex world and/or inform collective calculation about this world’ then we have to agree that economic imaginaries ‘develop as economic, political and intellectual forces seek to (re)define specific subjects of economic activities … and to articulate strategies, projects and visions oriented to them’. 49 This idea eventually provides the key to the strategies used by Russia’s blubber companies, which should be understood in terms of how the companies ‘thought’ the international market worked, and which niche in that market they wished to occupy. In other words, we have to examine the interconnections between the economic vision of the Russian imperial elite and the international trade in Russian primary commodities.
The idea of ‘Natural Capital’ is the second concept. It relates to a belief in the inexhaustible extent of the natural resources of the White and Barents Sea regions in the commercial strategies adopted by monopolistic companies. Identifying the environment as a fundamental determinant of economic development is somewhat simplistic, 50 but it does highlight the role of Russian natural resources in the formation of long-term development strategies that, in turn, sought to define the place of Russia in the world economy. Indeed, Natural Capital differs from environmental determinism in that it is to be ‘thought’ and discussed in economic terms, meaning that it facilitates the inclusion of nature in the economic imagination.
In practical terms, the owners of monopolistic companies considered the fat of marine mammals as a commercial resource in a relatively narrow sense. Within their economic imagination, the difference between the product of a whaling and a walrus hunt simply did not exist as these commodities were sold together on the market. Having a limited understanding of their task as market expansion allied to profitable price manipulations, the companies aimed to redistribute revenue from foreign merchants to Russian hunters. Quite noticeably, the market data demonstrate that the owners had clear understanding (at least theoretically) of the link between the success of the company and the improvement of the economic situation for the local hunters through relatively high purchase prices. In essence, within an economic imagination based on a simple redistribution of profits, with a share being reserved for the state and the local population, the companies were seemingly successful.
On the other hand, the authorities imagined whales as the Natural Capital that would completely transform the region. In this setting, walrus fat produced by a backward traditional economy was very different to the fat of whales delivered by an advanced new industry. Accordingly, company privileges were not granted to support the market success of the companies, but to provide the base of a significant social transformation. In the eyes of the authorities, company owners were supposed to build a new world – Europe in the Arctic – rather than fill their own pockets. The result was not achieved, of course, and we can still discern traces of governmental disappointment in the historical literature.
Footnotes
Funding
The paper was written in a framework of the project ‘Natural resources in history of Russia: economic institutes, communities of experts and infrastructures’ funded by the Russian Science Foundation, N 16-18-10255.
1.
Jan de Vries and Ad van der Woude, The First Modern Economy: Success, Failure, and Perseverance of the Dutch Economy, 1500–1815 (Cambridge, 1997), 257–65; John F. Richards, The World Hunt: An Environmental History of the Commodification of Animals (Berkley, 2014), 127–41.
2.
Jarmo T. Kotilaine. ‘Mercantilism in Pre-Petrine Russia’, in Jarmo Kotilaine and Marshall Poe, eds., Modernizing Muscovy: Reform and Social Change in Seventeenth-Century Russia (London, 2004), 137–66.
3.
Maria Solomon Arel, ‘The Arkhangel’sk Trade: Empty State Coffers, and the Drive to Modernize – State Monopolization of Russian Export Commodities under Mikhail Fedorovich’, in Kotilaine and Poe, eds., Modernizing Muscovy, 168.
4.
Jan Willem Veluwenkamp, Arkhangel’sk. Niderlandskie predprinimateli v Rossii 1550–1785 (Moscow, 2006), 29.
5.
‘Pomors’ – literally ‘people of the sea’ – is the traditional name used to describe the Russian population of the White and Barents Sea area.
6.
See Alexei Kraikovski, ‘“The Sea on One Side, Trouble on the Other”: Russian Marine Resource Use before Peter the Great’, The Slavonic and East European Review, 93 (2015), 39–65.
7.
Simon Dixon, The Modernisation of Russia, 1676–1825 (Cambridge, 1999).
8.
Thomas C. Owen, Russian Corporate Capitalism: From Peter the Great to Perestroika (Oxford, 1995), 18.
9.
See Alexei Kraikovski, ‘Good Fisheries vs. Bad Fisheries: Ideological and Scientific Base for the Governmental Projects of Modernization of Russian System of Marine Harvesting in the Eighteenth Century’, in Cristina Joanaz de Melo, Estelita Vaz and Ligia Costa Pinto, eds, Environmental History in the Making, II: Environmental History, 7, (Cham, 2017), 49–72.
10.
Arcadius Kahan and Richard Hellie, The Plow, the Hammer, and the Knout: An Economic History of Eighteenth-Century Russia (Chicago, 1985), 1.
11.
Kahan and Hellie, The Plow, 3.
12.
William L. Blackwell, Beginnings of Russian Industrialization, 1800–1860 (Princeton 2015), 82–3.
13.
Russian State Archives of Ancient Documents (hereafter RGADA), coll. 1261, inv. 6, f. 67, p. 66 back.
14.
See Mikhail Chulkov, Istoricheskoe opisanie rossiiskoi kommertsii, I, No. 2 (St. Petersburg, 1782), 490.
15.
See, for instance, Stepan Ogorodnikov, Ocherk istorii goroda Arkhangel’ska v torgovo-promyshlennom otnoshenii (St Petersburg, 1890), 183; Mikhail Belov, Istoriia otkrytiia i osvoeniia Severnogo Morskogo puti (Moscow, 1956), 1, 344; Ivan Ushakov, ‘Kolskaia zemlia’ Izbrannye proizvedeliya (Murmansk, 1997), 1, 177.
16.
Ernst Webermann, ‘Kitobojnyj promysel v Rossii’, Izvestiia Moskovskogo kommercheskogo instituta. Kommerchesko-tekhnicheskoe otdelenie, 19, No. 2 (Moscow, 1914), 56.
17.
Belov, Istoriia, 346; Nikolai Repin, ‘Uchastie kupechestva Evropeiskogo Severa vo vneshnei torgovle cherez Arkhangel’sk v pervoi chetverti XVIII veka’ in Petr Kolesnikov et al., eds, Materialy po istorii Evropeiskogo Severa SSSR: Severnyi arkheograficheskii sbornik, 3, (Vologda, 1973), 187.
18.
Richards, World Hunt, 147.
19.
Louwrens Hacquebord, ‘The hunting of the Greenland right whale in Svalbard, interaction with climate and its impact on the marine ecosystem’, Polar Research 18, No. 2, 378–9.
20.
Louwrens Hacquebord, ‘Three Centuries of Whaling and Walrus Hunting in Svalbard and its Impact on the Arctic Ecosystem’, Beyond Local, Natural Ecosystems. Environment and History 7, No. 2 (2001), 176–7.
21.
Ypie Aalders, ‘Perceptions of Polar Resources: A Comparison of the Animal Remains of the Russian Hunting Station Kokerineset and the Dutch Whaling Station Smeerenburg’, LASHIPA. History of Large Scale Resource Exploitation in Polar Areas. Circumpolar Studies 8 (2012), 46.
22.
See Joost C. A. Schokkenbroek, Trying Out: An Anatomy of Dutch Whaling and Sealing in the Nineteenth Century, 1815–1885 (Amsterdam, 2008), 27–9.
23.
RGADA, coll. 1261, inv. 6, f. 67, pp. 66–7 back.
24.
See for details Richards, World Hunt, 145–6.
25.
RGADA, coll. 273, inv. 1, f. 32771, p. 47.
26.
Hacquebord, ‘The Hunting’, 379.
27.
See Alexei Kraikovski, ‘Productivity and Profitability of Russian Spitsbergen Hunting in the Late 18th Century’, LASHIPA, 27–9; Margarita Dadykina, Alexei Kraikovski and Julia Lajus, ‘Mastering the Arctic Marine Environment: Organizational Practices of Pomor Hunting Expeditions to Svalbard (Spitsbergen) in the Eighteenth Century’, Acta Borealia, 34, No. 1 (2017), 50–69.
28.
Schokkenbroek, Trying Out, 17. The ‘kardelka’ or ‘kartelka’ which was derived from the Dutch ‘kwarteel’, a barrel of 232.8 litres.
29.
Polnoe sobranie zakonov Rossiiskoi Imperii (hereafter PSZ), (St. Petersburg, 1830), IV, 46. A Russian ‘kardelka’ was approximately one-half of a Dutch ‘kwarteel’.
30.
Archives of St. Petersburg Institute of History of the Russian Academy of Sciences (hereafter SPb II RAN), coll. 10, inv. 2, f. 128, p. 1.
31.
SPb II RAN, coll. 10, inv. 2, f. 128, p. 7 back.
32.
RGADA, coll. 198, inv. 1, f. 1035, p. 56.
33.
RGADA, coll. 340, inv. 1, f. 14556, p. 5 back.
34.
RGADA, coll. 1261, inv. 6, f. 159, p. 56.
35.
RGADA, coll. 1261, inv. 6, f. 159, p. 13 back.
36.
RGADA, coll. 198, inv. 1, f. 1035, p. 56.
37.
SPb II RAN, coll. 10, inv. 2, f. 128, p. 16.
38.
SPb II RAN, coll. 10, inv. 2, f. 128, p. 7–8 back.
39.
SPb II RAN, coll. 10, inv. 2, f. 128, p. 7 back.
40.
SPb II RAN, coll. 10, inv. 2, f. 128, p. 12.
41.
SPb II RAN, coll. 10, inv. 2, f. 128, p. 8.
42.
SPb II RAN, coll. 10, inv. 2, f. 128, p. 11 back.
43.
SPb II RAN, coll. 10, inv. 2, f. 128, p. 16.
44.
SPb II RAN, coll. 10, inv. 2, f. 128, p. 16.
45.
SPb II RAN, coll. 10, inv. 2, f. 128, p. 16.
46.
SPb II RAN, coll. 10, inv. 2, f. 128, p. 5–6.
47.
SPb II RAN, coll. 10, inv. 2, f. 128, p. 1–22.
48.
de Vries and van der Woude, First Modern Economy, 261.
49.
Ngai-Ling Sum and Bob Jessop, Towards a Cultural Political Economy: Putting Culture in its Place in Political Economy (Cheltenham, 2013), 165–7.
50.
See Henry Willebald, Marc Badia-Mirö and Vicente Pinilla, ‘Introduction: Natural Resources and Economic Development – What Can We Learn from History?’ in Marc Badia-Mirö, Vicente Pinilla and Henry Willebald, eds., Natural Resources and Economic Growth: Learning from History, (London and New York, 2015), 1–25.