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Why steamboats for 50 years could not displace the haulers from the Volga?

 
Tags: Financial calculations | Volga | Russia | History | Economy | Transport | River transport | International Competition | Specialization | Economic growth | Standard of living | XIX century | Innovation
 

An important example that can tell a lot about the causes for slow economic growth in developing countries.

I hope this story is only essay about the history of economics. In my opinion, the history of steam technology in Russian river transport is a clear example of the typical path of any innovation to success or failure. This is a good example of how, being at a similar level of development, some societies can begin to grow rich, specializing in the most modern industries of their time, while others can stagnate and even degrade. Unfortunately, our Russian Empire is in the role of the laggards.

In 1781, the English inventor James Watt patented a steam engine, which allowed using steam energy to set in motion the components of various mechanisms. This invention led to an avalanche-like growth of the local textile industry, which was based on the replacement of more expensive manual labor with cheaper machine tools. Gradually, the invention penetrated other industries and gave rise to a phenomenon that went down in history under the name of the great industrial revolution. Watt then did not know that his invention would give the name to an entire economic era - the 19th century went down in history as the "century of steam." The massive introduction of steam engines was accompanied by an unprecedented increase in living standards - firstly in history, mankind has moved away (at least in Europe) from the paradigm of simple survival.

Clemont Robert Fulton Steamer

Clemont Steamboat Robert Fulton

In 1807, Robert Fulton successfully adapted a steam engine for the needs of movement on water, where oars and sails dominated before that. Over the course of 7 years, its Clemont steamboat successfully flew along the American Hudson River from New York to Albany. After 10-15 years, steamboats in the United States have already substantially squeezed sailing ships - in 1835, 1200 steamers operated on the Mississippi. In a similar way, the situation developed in England, France, and Holland.

And, it would seem, Russia did not lag much behind here - in 1815 the scothish man Karl Berd built the first domestic wheeled steamboat. Soon, this machine began to make regular flights between Kronstadt and St. Petersburg (in those years Petersburg was a river port, and all sea imports went to the country through Kronstadt). In 1815-1820, the first ships on the Volga tried to build and launch V. Vsevolzhsky and D. Evreinov.

Ilya Repin painted his famous painting "Barge Haulers on the Volga" in 1870-1873 (this painting is head topic picture of this article), that is, more than half a century after the first steamboats appeared on the great Russian river. In the 1840-50s, there were only 100 ships on the Volga (you can compare with the Mississippi statistics above). In the same time, in 1851 there were 300-400 thousand of barge haulers on the river.

Bark on the Volga

Bark on the Volga

It should be noted that Repin reflected the most difficult moment of the journey - the moment when the hulls were straggling the ship aground. In general, they had to pull the ship on themselves along the shore, harnessing into it like an ox, quite rarely. The essence of the technology was the delivery of anchors forward on the boat, the subsequent rotation of the hulls of the barrel and pulling the vessel after the anchor, after which the whole process was repeated again. However, we need this disclaimer only to restore the historical truth - but it does not in any way abolish the archaic nature of this way of moving the ship upstream.

For more than 50 years, the primitive haulers technologu successfully competed with the most advanced steam technology at that time. Why? After all, the steamboat could haul cargo much faster, it required less human labor, and it depended less on the seasonal labor supply of the huts (which in the summertime of haymaking massively returned to their peasant farms).

I would immediately like to dismiss some obvious and incorrect answers to the question. The first ships caused a very controversial reaction among the population. The poorly educated people of that time did not understand why this "damn machine" was moving, comparing it with a fire-breathing feature moving along the river. They talked a lot about the fact that these “smoking monsters” take away bread from the hounds and should be banned. In fact, this is a completely normal reaction to any technical innovation. In the same England there was even a movement of Luddites (who opposed the introduction of steam engines in production). But no one ever seriously took such a thing - if entrepreneurs saw a profit in a new business, they would have mastered it without problems, not paying attention to the phrases of ordinary people.

It is also hardly worth considering that Russian entrepreneurs of that time had insufficient funds to invest in capital-intensive production. Yes, building a steamboat cost a lot more than barking - the most popular Volga ship of the time. But it was not worth some unrealistic money - in Russia at that time there were enough breeders and entrepreneurs who had sufficient capital. The richest Russians of that time preferred to stay away from the new type of river vessels.

So what's the deal? Asking this question, I assumed that the answer would come down to the cheapness of hauler labor in that era. If you remember, at the beginning of our XXI century, many Russian entrepreneurs decided in practice a simple economic task: "What is more profitable to use - to hire a crew of migrant workers with a shovel or buy an excavator?" And the answer was far from always obvious. But having absorbed in the hauler-steamboat theme of the beginning of the 19th century, it became clear that the answer was not so simple and straightforward - after all, many European countries had cheap labor in those years, and there it did not become a barrage for scientific and technological progress and innovation .

How to calculate whose services are cheaper - haulers or steamboats?

The most reliable way to answer a similar question is to conduct a numerical experiment. But before proceeding to the calculations, it is necessary to understand the parameters by which the competition is. We write them carefully in the table (all data covers the time period of the beginning of the XIX century):

Hauler's barks First steamboats
Cost of the ship 4,000 rubles in bills 108,000 rubles in bills
Speed ​​against the current 11 km / day 54 km / day
Cargo capacity 156 tons 100 tons
Service life 8 years 7 years
Personnel costs 60 rubles with navigation bills (40 rubles salary to burlak + 20 rubles food costs) 200 rubles with bills season
Duration of the season 8 weeks (“Burlak Putin”, the period of “big water”) 150 days a year (from freezing to freeze-up)
Fuel Not applicable Consumption of firewood by the steamer 6 fathoms per day, the cost of felling wood - 10 rubles with fathoms

In general, the most difficult part in such retroeconomic studies is to take the correct initial data for the calculations. I do not pretend to the scientific nature of my conclusions, but I wanted to achieve a certain accuracy.

As it turned out, the hardest thing with monetary units. The ruble in silver and the ruble with banknotes in the first half of the century are essentially two different currencies, between which there even existed its own exchange rate (which changed greatly in time). Most sources do not contain information in which specific quantities the price is expressed - the range of values ​​is enormous. In my calculations, I tried to collect data from several sources (fortunately, the type of ruble was still indicated sometimes), compare them with each other, and choose the average and most realistic level. I did the same with quantitative indicators. You can see links to data sources in the attached excel file - and even correct the calculation if necessary.

Let's say we need to take goods from Nizhny Novgorod to Rybinsk (a popular hauler route of the time) - that is, upstream of the Volga. We take the load equal to 100 tons - a typical steamboat of the beginning of the year before last could handle it, and the bark, if desired, could be built with the necessary carrying capacity. The flight would be completed with the following parameters:

Hauler's barks First steamboats
Travel time 44 days 9 days
Cargo 100 tons 100 tons
Number of ship units 0.6 1
Human resources 31 bourlack Team of 21 people
Fuel Not applicable 53 logs

Obviously, you need to compare the total cost of transportation - by means of depreciation, it will be possible to compare different initial costs for the purchase of the vessel, different duration of the season and useful lifes. Having done all the calculations, we get the following result:

In rubles with banknotes Hauler's barks First steamboats
Depreciation 253 906
Salary 1441 247
Fuel (firewood) 0 529
Total 1694 1682

Cheap labor is only part of the problem

The total cost of transportation turned out to be suspiciously similar. Given the high margin of error for incoming data, this is most likely just a coincidence. However, this also means that in the prices of the beginning of the XIXth, both technologies had the right to life - none of them had an overwhelming advantage.

As we expected, when transported by steamships (more capital-intensive technology), the bulk of the cost is the depreciation of the vessel. With a short useful life, the difference in the price of the vessel (108 and 4 thousand rubles in bank notes) is catastrophic. This is taking into account the fact that the hauler bark will be in transit for 44 days (with a total length of the navigation season of 56 days) - that is, almost annual depreciation of the bark is included in the cost of this transportation. A steamboat will be in transit for only 9 days with a duration of the season of 150 days - which means that only a small part of the cost will be depreciated for this trip. When transporting cargo using hauler traction (more labor-intensive technology), most of the costs are paid to the workers. At the same time, the problem here is not so much in the size of the salary (the difference in the salary of the steamboat team and haulers per year was not so critical), but in the lower turnover of the vessel - for the same money a professional team will manage to complete more flights in the season.

A lot of scientific research is devoted to the question of why the industrial revolution began precisely in England, although Watt's steam engines in the world tried to be implemented everywhere. The main conclusion of these studies - the reason lies in the high relative cost of labor in Albion. The population of England was not so great, the salary was at a relatively high (relative to other countries) level, and the introduction of capital-intensive technologies made it economically feasible. And for the same reason, the same technologies did not take root in China and India (these countries were among the leaders of the world economy before the era of the industrial revolution). A large population, relatively cheap labor - the introduction of machines simply did not pay off. As a result, the classical principle of comparative advantage according to David Ricardo comparative advantages principle has worked - England began to specialize in the production of technological (for that time) textile products, while China and India missed the point and were forced to specialize in cheap commodities. As a result, Europe was rapidly growing rich, and Asia was plunged into poverty and gradually fell into complete dependence on Europe.

An important conclusion of our calculations is that in those years Russia was closer to England rather than to Asian countries.

Yes, hauler work was cheap - but not catastrophically cheap. Even the introduction of the very first, cheapest and most primitive steamboats was quite realistic in terms of cost. But improving steam technology is nothing more than an engineering task and a matter of time. A huge reserve of steam vessels remained unused - a potential opportunity to increase their carrying capacity at times.

As can be seen from the above tables, the first steamboats in terms of carrying capacity were even inferior to barks. As a result, one of the main advantages of capital-intensive technologies did not work - the economies of scale. In order to transfer 2 times more cargo with the help of barks, it was required to increase the number of haulers by 2 times according to a simple linear law. To transfer more cargo with the help of steamboats, it would be necessary to build a large steamer and equip it with a more powerful steam engine. At the same time, costs would grow less than 2 times. As a result, quickly enough the barks would not be able to compete with the steamboats. Ilya Repin at the end of the century would not have painted his famous painting and would not have caused the anger of the Minister of Transport.

Important problem is expensive firewoods

So what was the problem? Could businessmen of that time not know how to count money and could not make settlements similar to ours? Of course not. Better take another look at our table:

In rubles with banknotes Burlatsky barks First steamboats
Depreciation 253 906
Salary 1441 247
Fuel (firewood) 0 529
Total 1694 1682

Please note that with the shipping technology almost a third of the cost was spent on fuel - in other words, the firewood used to heat the Watt's steam engine stove. Unlike the cost of the ship, fuel costs, as well as labor costs, are usually linear - which means that with an increase in cargo on board they will grow at about the same speed. No matter how strange it may sound for a forest country with the largest territory in the world, Russia of the 19th century experienced an acute shortage of firewood.

You can easily find online the memories of Smolny institutes - young women were often doomed to spend the night in unheated rooms and suffer from regular colds. Any city employee in employment asked whether compensation for firewood is included in his salary - this was not allowed to everyone, usually starting with a certain title or rank. The owners of Moscow lounges, who rented a house to give receptions in it, suffered greatly - the majority of the cost of maintaining the house in winter was heating. The stove masters of those years were far from always professionals in their field - stoves were often built so that the wood burned quickly, without giving significant heating.

Unloading firewood on Admiralteyskaya Square, retro

Unloading firewood at Admiralteyskaya Square in St. Petersburg

All forests around Moscow and large cities in the 19th century were cut down almost to the root. Forests farther and farther away from major cities, which led to an increase in transportation costs for the delivery of firewood - and, as a result, increased prices even more. The price of firewood fluctuated greatly throughout the Russian Empire - it was lower in the forest regions, and especially high near cities and in the steppe south of the country. The poor were forced to heat their stoves as much as they could - with straw, cabbage tufts, brushwood, manure - a tree was too expensive a resource. Throughout the 19th century, firewood was the main and only fuel that a huge empire knew - no measures were taken to search for coal deposits, and oil development at the Baku fields began only closer to the end of the century. Sometimes there was a paradoxical situation - coal brought from England was cheaper, taking into account the adjustment for heat capacity, than Russian native firewood. The problem with the lack of wood fuel was solved only closer to the beginning of World War I. Production enterprises were gradually switching to coal, the price of firewood fell, and ordinary citizens were able to enjoy the heat in their houses and apartments for several years before the war.

As a result, capital-intensive technologies require fuel - and the huge empire had the same huge problems with it

Therefore, returning to the reasons for the industrial success of England, it is important to focus not only on expensive labor, which motivated the introduction and improvement of machine tools, but also on the availability of a large amount of cheap energy. In England, at the end of the XVIII century, coal was mined in huge volumes - and was cheap. Coal is an equally important part of English success, but in Russia the fuel puzzle did not add up in those years.

There was no infrastructure and desire to create it

I probably said the main thing. But steamboats on the Volga were not only hindered by expensive firewood. There were other factors that led to the collapse of the enterprises of Evreinov and Vsevolzhsky, and warned other entrepreneurs from experimenting with steam technology on the river.

Steamboats in that era often ran aground. Full-scale work on the creation of a shipping fairway was completed on the Volga only in the 20th century, and in those days the depths were determined by natural factors. There was no dredging practice, there were no marks of shallow and deep places. This was not a big problem for the bark that the barge haulers lead — they harnessed themselves into the ship if necessary and moved it from a shallow place. To take the ship aground, it was necessary to call the same barge haulers, which are very difficult to find in the season. If the steamer broke down, then it was necessary to go for the master to the capital at all, and this meant whole days and weeks of downtime, which negated the main advantages of the technology.

Finally, the ships were forced to take firewood along the entire route - this, of course, reduced the overall carrying capacity of the vessel. There were no warehouses with firewood along the Volga, that is, there was no opportunity to “refuel” along the way. By the way, in the modern world electric cars go through a similar problem - infrastructures for their maintenance are simply not enough, and in such conditions the economic parameters of the technology itself are fading into the background.

To create an infrastructure for a fundamentally new industry - you need either a very large player or the state, it’s quite difficult for private capital to master it. But the XIX century was a time of a spontaneous, poorly regulated market, with all its inherent advantages and disadvantages. The Russian authorities of those years, for the most part, simply watched the spontaneously developing process. But as a result of such a policy, at the end of the century they could only criticize Repin for putting the country in an unfavorable light before the European monarchs and at a fast pace to catch up. The industrial revolution took place in Russia at the end of the 19th century according to a catch-up scenario.

Why do some countries, cities or companies achieve economic success, while others are in poverty? Why is economic growth so weak and income inequality constantly increasing? How can new technologies change the global economic landscape? On this site we look at the most important global trends from the perspective of an economist.

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