vodka and corruption in russia on the eve of emancipation

Vodka and Corruption in Russia on the Eve of EmancipationAuthor(s): David ChristianSource: Slavic Review, Vol. 46, No. 3/4 (Autumn - Winter, 1987), pp. 471-488Published by:Stable URL: http://www.jstor.org/stable/2498098 .

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DAVID CHRISTIAN

Vodka and Corruption in Russia on the Eve of Emancipation

Vodka was big business in nineteenth century Russia, was it is in the Soviet Union today. In the 1850s, the total turnover of the trade was at least 200 million rubles, or more than 20 percent of the value of all internal trade.' In 1859, the government's share of this huge turnover exceeded 120 million rubles, which accounted for more than 40 percent of all ordinary revenues. As Nikolai Ogarev pointed out, this huge sum was enough to cover most of the peacetime expenses of the army on which Russia's status as a great power depended.2 Figures for 1859 were certainly unusual; nevertheless, liquor revenues averaged 32 percent of ordinary revenues throughout the period from 1805 to 1862.3 Vodka was the single most important source of government revenues in this period, and the government had, therefore, a huge stake in the success and expansion of the trade.

But so did other groups. In 1860, there were 723 distilleries in the twenty-six Great Russian provinces, earning almost 17 million rubles a year in government contracts. There were also 3,890 smaller distilleries in the sixteen so-called "privileged provinces," which extended in a belt from the Baltic, through White Russia and the Ukraine, to New Russia in the south.4 All these distilleries were owned by members of the nobility, who had enjoyed a monopoly on distilling since the middle of the eighteenth century in the Great Russian provinces and from time immemorial in most of the privileged provinces.

At the same time, 216 tax farmers were engaged in the retailing of vodka and most of them belonged to the merchant estate. In the twenty-six Great Rus- sian provinces (the heartland of Muscovite Russia), the tax farmers leased monopolies on the retail trade in more than 300 distinct tax farms. Altogether, these employed more than 50,000 managers, tavern keepers, security guards, and

1. There are estimates of total turnover in Trudy kommissii, vysochaishe uchrezhdennoi dlia so- stavleniia proekta polozheniia ob aktsize s pitei (St. Petersburg, 1861) 1 (no. 12): 12-13; N. G. Chernyshevskii, "Zapiska g. Zakrevskago," Sovremennik, December 1860, "Sovremennoe obozrenie," pp. 195-215; Ia. Georg, "Vzgliad na istoriiu i sovremennoe sostoianie piteinykh sborov po velikoros- siisskim guberniiam," in Vestnik promyshlennosti, no. 3 (September 1858), 102-126; and Kolokol, March 1858, 1: 10. For N. M. Druzhinin's estimate of the value of internal trade, see P. G. Ryndziunskii, Utverzhdenie kapitalizma v Rossii (Moscow: Nauka, 1978), p. 10. For a general survey of the history of vodka in Russia, see R. E. F. Smith and David Christian, Bread and Salt: A Social and Economic History of Food and Drink in Russia (Cambridge: Cambridge University Press, 1984), chaps. 3, 4, 5, and 8.

2. A. I. Herzen and N. P. Ogarev, Kolokol (15 April 1862) (facsimile ed., Moscow, 1962), for 1862, 1: 129. Liquor revenues retain their significance in the Soviet Union. In 1979, taxes on alcohol constituted 29 percent of all taxes paid by the Soviet population (25.4 billion rubles) and 9 percent of total state revenue. See V. G. Treml, Alcohol in the USSR: A Statistical Study (Durham, N.C.: Duke University Press, 1982), pp. 30-31.

3. Calculated from figures in Ministerstvo finansov. 1802-1902, 2 vols. (St. Petersburg, 1904) 1:616-619, 622-627, 632-633.

4. Svedeniia o piteinykh sborakh, 5 vols. (St. Petersburg, 1860-1861), 3:51-61. The privileged provinces included, in addition to the Baltic provinces, the Lithuanian provinces of Kovno, Grodno, and Vil'na; the White Russian provinces of Minsk, Mogilev, and Vitebsk; the Ukrainian provinces of Kiev, Podol'e, Volyn', Poltava, Chernigov, and Khar'kov; the New Russian provinces of Ekaterinoslav, Kherson, and the Tauride; and Bessarabia.



472 Slavic Review

other workers.' Tax farming also existed in the privileged provinces, though here its scale and importance was greatly reduced, as the right to retail liquor was shared with the local nobility.

The vodka trade was not just big business; it was also an extremely corrupt business before the abolition of tax farming in 1863, for a large share of the trade's turnover was generated illegally by the tax farmers. To protect these illegal activities, the tax farmers had to pay large sums in bribes to government officials. The central government, whose own revenues depended on the commerical success of the tax farmers, had to collude. In this way, the vodka trade spun a network of corruption that embraced all levels of the government and diverted millions of rubles of entrepreneurial capital from more productive forms of investment.

This article will examine the nature, extent, and effect of this vast network of corruption. It will concentrate mainly on the Great Russian provinces in which tax farmers held a monopoly of the retail trade, for it was here that both the tax farmers and the government secured most of their income from the vodka trade.6 This article will also discuss the deeper social conflicts of which corruption was merely one manifestation. Most of the evidence on which it is based was generated during the intense debates on corruption of the late 1850s, which preceded the government's decision to abolish the tax farm at the same time as it abolished serfdom. The evidence is therefore fullest for the 1850s.7

It is logical to begin with bribery, the type of corruption most familiar to historians of the period.8 Casual bribery was widespread in Russian society. It reflected both the ancient Muscovite tradition of letting officials live off the land and a traditional Russian notion of hospitality (khleb-sol'). Its familiarity ensured popular acceptance of the necessity, and even legitimacy, of bribes. These attitudes were shared even by senior government officials. The first government enquiry into corruption, held in 1856, concluded that bribes under 500 rubles should not be counted as bribes at all. "Can one call it a 'bribe' if an official, in response to a petition, goes beyond his normal duties and sits up all night to

5. Svedeniia 3:61-66; V. A. Kokorev, "Ob otkupakh na prodazhu vina," Russkii vestnik kn. 2 (November 1858) Sovremennaia letopis', p. 42.

6. In 1859, the Great Russian provinces generated more than 70 percent of all government revenues from vodka; Svedeniia 3:10.

7. The most important single source on the tax farm in this period is the five-volume publication prepared in 1860 and 1861 by the government commission that recommended the abolition of tax farming: Svedeniia o piteinykh sborakh, 5 vols. (St. Petersburg, 1860-1861). This has been the main source for all later work on the history of the liquor trade in Russia before 1863, including I. G. Pryzhov's fascinating Istoriia kabakov v Rossii v sviyazi s istoriei russkago naroda (Moscow, 1868). The following account is also based on Svedeniia, as well as on extensive reading of the journalism, both legal and illegal, of the late 1850s. It is part of a larger study of vodka and Russian society in the early nineteenth century.

8. Among the best discussions of bribery are those in H.-J. Torke, "Das russische Beamtentum in der ersten Haifte des 19. Jahrhunderts," in Forschungen zur Osteuropdischen Geschichte 13 (1967): 7-345 (particularly pp. 224-241); P. A. Zaionchkovskii, Pravitel'stvennyi apparat samoderzhavnoi Rossii v XIX v. (Moscow: Mysl', 1978); and the brief discussion in S. F. Starr, Decentralization and Self- Government in Russia, 1830-1870 (Princeton, N.J.: Princeton University Press, 1972), chap. 1. On the USSR today, see Konstantin M. Simis, USSR: The Corrupt Society. The Secret World of Soviet Capi- talism (New York: Simon and Schuster, 1982), particularly chap. 3, "The District Mafia," which offers many suggestive parallels with local government in tsarist Russia.



Vodka and Corruption 473

copy out some decision or record? One is bound to show one's thanks, and this can in no way be called a bribe."9 Such attitudes are familiar from the literature of the period.

But the distinctive feature of the bribery associated with the vodka trade is that it involved not casual, irregular payments to individuals, but regular, semi- formal payments to whole layers of officialdom. "Every person having any degree of influence receives regular cash payments from the tax farmers, according to their influence, as well as a monthly gift of vodka."'0 The liberal, A. I. Koshelev, who had himself been a tax farmer for ten years, wrote in 1853: "The tax farmers give, and have to give, a salary [zhalovanie] to all local police officials and to many other local authorities.""II

The close social contacts between tax farmers and government officials in provincial towns, provided plenty of opportunities for establishing and maintain- ing such networks of corruption. Tax farmers and government officials moved in the same social circles and easily established relations of friendship or dependence. "The tax farmer usually plays an important role despite not having a uni- form. In every town, he usually lives on a broad scale, is known by everyone, particularly the more important citizens, is usually courteous, and even something of an epicure."'2 Indeed, a modern Kremlinologist transported to the nineteenth century would have found it quite natural that Gogol's hero, Chichikov, on arriving in the town of N. N., should have paid official calls on the governor, the vice-governor, the procurator, the chairman of the palace of the exchequer, the police chief, and, finally, the tax farmer.

Bribery started with the governors, the executive heads of the provinces. It was said that when Nicholas I called for a list of those governors who did not take bribes in the early 1850s only two could be named out of forty-five.13 From the governors, the tax farmers worked their way downwards through the bureaucratic establishment. There even existed regular payscales, calculated by government officials and based on information from "private" sources (see table 1).

If typical, this suggests that about twenty-four officials may have received regular payments in each provincial capital tax farm, while only fourteen were paid in district farms. There were at the time 28 tax farms of the first kind, and 279 of the second, a fact that would imply that a total of about 4,600 officials received regular bribes in the Great Russian provinces. Assuming that the 86,000 officials in the Table of Ranks in 1857 were equally divided between all provinces (and ignoring those serving the central government), we can see that almost 10 percent of all officials in the Great Russian provinces were implicated."4 The real proportion was certainly higher, for these figures ignore the small amounts in cash or gifts (usually vodka) paid to purely clerical officials, who were not enrolled in the Table of Ranks, as well as casual and irregular payments to other officials.

9. Torke, "Das russische Beamtentum," p. 237. 10. Ekonomicheskii ukazatel' 41 (October 1858). 11. Svedeniia 3:248-249. 12. A. Samoilov, "Vziatkodateli," pt. 1, Ekonomicheskii ukazatel' 44 (2-14 November 1857):

1,039. 13. Zaionchkovskii, Pravitel'stvennyi apparat, p. 156. 14. See ibid., p. 68.



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Table 1. Extraordinary Expenses of Tax Farmers (in rubles a year)

Recipient Provincial capital District Governor, for improving the town

and for kindergartens 3,200 Governor's chancery 1,200 Mayor 420 Secretary of police 300 200 Commissaries of police (N=3) 720 240 Precinct police officers (N=6) 360 120 District police captain 600 420 Circuit judge 500 420 Commissaries of rural police (N=3) 720 540 Permanent assessor 300 240 Secretary of rural police court 300 240 President of exchequer court 2,000 Councillor for department of liquor 600 500 Head clerk and bureau 500 Overseer of liquor 600 420

Total 11,000 3,760

Source: Svedeniia 3:114-115. These are official estimates, based on "private" sources; if anything they are on the low side.

It is not only the numbers involved in these networks that are impressive; so, too, are the sizes of the payments; for these compared very favorably with official salaries. A contemporary claimed that "the payments of the tax farmers in cash and vodka are generally higher than official salaries."'5

An extreme case is that of A. A. Panchulidze, who received tax farm payments of 24,000, or almost three times his official salary.'6 It was more usual for tax farm payments to be similar in size to official salaries. In the early nineteenth century, most governors received official salaries of 1,800 rubles, as well as "table expenses" of 1,200 rubles and often "accommodation" allowances as well. Thus, the payment of 3,000 rubles to the governor would, in most cases, have been only slightly lower than the governors' basic official salary.

Presidents of the palaces of the exchequer (which supervised liquor tax revenues) and of state domains received salaries of about 1,400 rubles and table expenses of 1,100 rubles to 1,400, as well as accomodation allowances of 300 rubles to 600, and odd extras. Assuming a total of about 3,000 rubles, the 2,000 they may have earned from the tax farm was, once again, equivalent to almost an entire second salary.

At lower levels of officaldom, official salaries were so measly that the relative importance of tax farm payments was even greater. Thus, a payment of 600 rubles or 420 rubles to a district police captain would have been about twice the official

15. Samoilov, "Vziatkodateli" 1:1,039. 16. Zaionchkovskii, Pravitel'stvennyi apparat, p 76; I. V. Selivanov, "Zapiski," in Russkaia starina,

June 1880, pp. 293-294; Kolokol, 1 November 1858.




salary of only 250 rubles.17 The "overseers of liquor," the government officials in charge of the official vodka warehouses, received official salaries of about 114 rubles a year but are reputed to have earned anywhere from 400 rubles to 1,000 rubles a year from the tax farmers.'8 In Samara province in the early 1850s, K. K. Grot found that all police officials and most civil officials accepted tax farm payments simply in order to support themselves.'9 This finding is hardly surprising, for official salaries had remained fixed for over half a century, while the value of the paper ruble had steadily fallen.20

Those who did not receive bribes fell into two categories. The first were those who were simply too insignificant:

The liquor tax farmers measured the specific gravity of each official more surely than the Table of Ranks. Those who received most from the farmers stood high in the official hierarchy. Those who received little, stood low, and those who received nothing at all were small fry. The extent of tax farm payments determined the significance of provincial officials in the eyes of their superiors. Those who received most could bring a larger tribute to St. Petersburg and could more easily earn the favor of the higher levels.2'

The second category were the small numbers of those too fastidious to accept bribes. Far from being rewarded for their honesty, such officials were generally regarded as either ridiculous or dangerous. Sometimes, the tax farmers made a point of paying what they would have received to their subordinates, "so that their honesty serves no purpose but to make them an object of ridicule to those who serve under them."22 But the penalty for honesty could be worse:

Most officials show little respect for an honest subordinate, but will view him as a Utopian, a restless "frondeur." Further, to refuse a bribe is to ensure the enmity of the rich and influential caste of tax farmers, who will always work for the removal of an honest official. And sooner or later they will succeed.... As the laws are complicated and the formalities innumera- ble, an official is bound to have broken some, and that is enough.... As a result, once an honest official has earned the enmity of the tax farmers, his superior will leave him to their mercy, public opinion will not shield him, and he will be left with nothing but his conscience.23

All in all, most senior and middle-rank provincial government officials clearly received unofficial salaries at least comparable in size to their official salaries, and sometimes higher. In other words, they received two salaries, one from their official employer for ensuring the due execution of the law, the other from the tax farmers for ignoring the law.

17. Zaionchkovskii, Pravitel'stvennyi apparat, pp. 74-76. 18. [K. K. Grot], Konstantin Karlovich Grot kak gosudarstvennyi deiatel'. Materialy dlia ego bio-

grafii i kharakteristiki, 3 vols. (Petrograd, 1915) 1:114; Svedeniia 3:114-115. 19. Grot, Materialy 1:8. 20. Zaionchkovskii, Pravitel'stsvennyi apparat, pp. 73-75. 21. Ibid., p. 155. 22. Koshelev, cited in Svedeniia 3:250. 23. N. Hersewanoff, Des fermes d'eau-de-vie en Russie (Paris: Bonaventure et Ducessois, 1858),

pp. 22-23.



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In such an environment, attitudes to tax farm bribes were inevitably lenient. To accept them was safe and socially acceptable, as well as profitable. Official connivance and popular indulgence combined to hide the stink of tax farm bribes so effectively that few officials felt any qualms about accepting them. "Let's admit it frankly: money taken from a tax farmer is not even reckoned a bribe-these are almost legal salaries, in short, guiltless earnings [bezgreshnye dokhody]."24 Some officials were even horrified at the thought that such payments might be improper, like the minor official in one of Saltykov-Shchedrin's 'Provincial Sketches' who remarks that:

Nowadays, nowadays, if you please, they are saying that you must not even take money from the tax farmer! And I tell you that that is merely the result of free-thinking. Taking from the tax farm is like finding money on the road and not picking it up. . . . Lord! In my opinion, the tax farmers are just like prostitutes-the same sort of devils. Both give it to everyone.25

Such attitudes explain why a contemporary could say of a governor of Archangel province: "He was not a bribe taker, though he did receive from the tax farmers an annual gift of 3,000 or 4,000 silver rubles."26

A minority of more predatory officials came to see tax farm payments as a right. The most notorious example was A. A. Panchulidze, who ruled Penza province for almost twenty years "in the style of a medieval turkish pasha in a conquered province."27 In the early 1840s, he received 2,000 rubles a year from each of the province's twelve tax farmers. One tax farmer recorded that when he asked for a delay in payment:

the governor attacked him, and with his gubernatorial hands seized the wallet from the man's pocket, and took all the money he found, with no receipt. Of course, the young man tried not to give it up, but he was robbed anyway and, running down the staircase, dishevelled and with torn clothes, he be- stowed on the governor the title of "robber" together with several other tender endearments.28

How significant were bribes from the point of view of the tax farmers themselves? They were, of course, burdensome. (In one of Saltykov-Shchedrin's Pro- vincial Sketches, the local tax farmer is portrayed as waking one morning from a dream in which, "he didn't have to pay officials in cash or vodka, and the taverns could stay open from before midday to after midnight."29) But how large a burden were they?

That depended partly on the turnover of the particular tax farm. In general, the turnover of tax farms that included provincial capitals was larger than that of district tax farms. Koshelev estimated in the early 1850s that

24. Ekonomicheskii ukazatel' 41 (October 1858); and see Koshelev's remarks in Svedeniia, 3:249. 25. M. Saltykov, Sobranie sochinenii (Moscow, 1951) 1:68. 26. Zaionchkovskii, Pravitel'stvennyi apparat, p.'155. 27. Ibid., p. 158. 28. Kolokol, 1 November 1858. This article led to an enquiry, as a result of which, Panchulidze

was dismissed. 29. Saltykov, Sobranie sochinenii 1:143.




a small district tax farm will spend around 5,000 silver rubles on "extraordinary expenses," as well as supplying 600 buckets of vodka at no cost. The expenses of a provincial capital farm are incomparably greater. There money is paid in larger quantities and to larger numbers; and vodka is given out not only to officials, but also to private individuals known for their willing- ness to denounce or incriminate others.30

Total payments to officials in the Great Russian provinces may have amounted to about 1.4 million rubles in the late 1850s (see table 1). Alexander Herzen received information which gave the higher figure of 5 million rubles for the early 1850s, together with another 2 million rubles worth of free vodka, making a total payment of 7 million.3' As a percentage of the tax farms' share of total turnover from vodka sales of 56 million rubles (see table 2), these estimates make up 3 percent and 13 percent. Evidence from a district tax farm in Novgorod province in 1856 lists payments of 2,500 rubles in "gifts to officials," as well as 836 buckets of vodka worth about 4,600 rubles, or a total of 7,000 rubles worth in bribes. This total was about 5 percent of the tax farms' total turnover.32 There is no way of knowing which of these figures is most typical.33 What is clear, though, is that the amounts involved are far smaller than the amounts generated through commercial corruption. It seems that local government officials may have been selling their services very cheaply indeed.

The bureaucratic consequences of corruption on this scale were considerable; for it reduced the government's control over its own officials by creating a sort of competition for their services between government and tax farmers. As com- rnercial considerations weighed more heavily than moral considerations, the tax farmers were bound to gain the upper hand on any issue of importance to them. Every official who accepted such payments knew what was expected in return: "The receipt of a payment from the tax farmers means that the official must, at the very least, look through his fingers at all the abuses of the tax farm, and that no complaints or denunciations against the tax farm or its employees can be proceeded with."34 "Nowadays," as one writer put it, "the police officials are themselves farmed out to the tax farmers."35 The same could have been said for the vast majority of senior local government officials.

Many who received such payments went further and served the tax farmers with assiduity and skill. As K. K. Grot pointed out, the liquor supervisors inevitably serve the tax farmers better than the treasury.36 But they were not alone. The situation is described vividly in what must be one of the earliest of Russian detective novels. "The Tax Farm Affair" was based on detailed knowledge of the

30. Koshelev, cited in Svedeniia, 3:249-250. 31. Kolokol (1 March 1858) 1: 10. 32. Kitarra, Publichnyi kurs, Vinokureniia, chitannyi po priglasheniiu Ministerstva finansov, 3 vols.

(St. Petersburg, 1862, 1866, 1868), 1: 57-59. 33. It is of some interest to compare these figures with the average percentage of income spent

on bribes by illegal entrepreneurs in the USSR today. Simis guesses that even in less-corrupt regions of the USSR, "underground entrepreneurs expend around 15 to 20 per cent of their incomes on bribery" (Simis, USSR: The Corrupt Society, p. 168).

34. Koshelev, Svedeniia 3:249. 35. Moskovskie vedomosti, no. 142, 17 June 1859. 36. Grot, Materialy 1:114.



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trade.37 It traces the attempt of an honest government investigator to expose the corrupt practices of a tax farmer, and the immense difficulties he faced in dealing both with the extremely able employees of the tax farm, and the many government officials who were in its pay and served it with skill and enthusiasm.

As Herzen pointed out, the ultimate consequence of corruption on this scale was to create some doubt as to who were the real employers of the thousands of local government officials in the Great Russian provinces.

The curious result [of the tax farm regulations] is that the government gives its own officials a salary so that they will serve honestly, and at the same time forces the tax farmers-and provides them with the means-to bribe these same officials to commit dishonest acts! And what do the officials do? Naturally, they serve those from whom they receive most, that is, the tax farmers, and, by the by, they also pocket a salary from the government.... In other words, the government has no officials-they all serve the tax farm, some by cooperation, others by connivance or silence.38

As the extent of tax farm bribery became a matter of public debate in the late 1850s, the government could no longer ignore the demoralizing effect of tax farm bribes on its own bureaucracy. Tax farm bribes not only undermined the government's moral authority; they also reduced its real authority in the provinces. Yet there were no easy solutions, for the influence of the tax farmers extended to the central government as well. At this level, though, it took subtler forms.

There is no hard evidence of direct bribery of central government officials,39 but it probably occurred. Alexander Herzen claimed that Knyazhevich, the minister of finance in 1859, had received bribes to defend the tax farmers. Another source claimed in 1859 that the director [upravliaiushchii delami] of the Committee of Ministers and the head of the department of general business of the Ministry of Internal Affairs jointly owned a tax farm in a Volga province through an inter- mediary who was a ruined tax farmer.40

Even without direct bribery, the tax farmers enjoyed considerable influence over the central government. Several times in the 1850s, governors were repri- manded by the Ministry of Finance for excessively strict enforcement of the tax farm regulations.41 On occasion, the tax farmers could bully even the autocratic Nicholas I. In 1850, for example, it was discovered that no ordinary vodka was on sale anywhere in St. Petersburg, though the tax farm regulations required that it be available. The emperor ordered an enquiry. Immediately, a delegation of tax farmers complained to the Ministry of Finance that the vodka taxes could be paid only if the government continued to protect sales of more expensive drinks. Indeed, they explained frankly that it was precisely on this understanding that they had bid high at the auctions for the 1851-1855 tax farms. Ten days after the emperor had ordered an enquiry, he cancelled his own order, and things returned to normal.42

37. V. N. Elagin, "Otkupnoe delo," Sovremennik no. 9 (1858) ("Slovesnost"'), pp. 185-264; no. 10 ("Slovesnost"'), pp. 347-426.

38. Kolokol, March 1858. 39. Torke, "Das russische Beamtentum," pp. 234-235. 40. Kolokol, 1 June 1859; Russkaia starina, no. 3 (1880), p. 573. 41. See, for example, Grot, Materialy 1: 172- 173. 42. Svedeniia 1: 180-182.




For the government to find itself wriggling in this way in the interests of entrepreneurs from the merchantry involved in one of the more disreputable branches of commerce was distinctly embarrassing. But money was power; and there was no arguing with merchants, however sordid their trade, when their activities brought in more than one-third of all government revenues.

Bribery and other, subtler, forms of covert political influence can be seen as forms of bureaucratic corruption. They were ways of buying influence; and they appeared, therefore, in relations between the tax farms and the government bureaucracy. From the point of view of the tax farmers, they counted as costs. Bureaucratic corruption was quite distinct from "commercial corruption," which consisted of illegal or semilegal devices for raising money from the vodka trade. It appeared in relations between the tax farmers and the Russian Empire's millions of vodka drinkers. From the point of view of the tax farmers, it counted as a form of income. Commercial corruption is a less-familiar form of corruption to historians, but it was, in many ways, the more important form in this context. For it was through commercial corruption that the tax farmers raised a large portion of the vodka trade's huge turnover, and it was, therefore, through commercial corruption that much of the government's own income was raised. Bureaucratic corruption was merely a means to this end, and it involved far smaller amounts of money.

To understand the various forms of commercial corruption, it is necessary to know something of the regulations under which the tax farmers operated. These were extremely complex, as the government had fiddled endlessly with their details since tax farming became general in the Great Russian provinces in 1767. The 1850 statute, for example, included 517 articles in 28 separate chapters.43 But the general structures of the trade are not hard to grasp.

In the Great Russian provinces, distilling was carried out by the nobility, but all the vodka they produced was then bought up by the government. The government then resold it (at a handsome profit) to the tax farmers. The tax farmers leased regional monopolies on the vodka trade (the regions generally coincided with the uezd or district), bidding for each tax farm at auctions held every four years in the senate building in St. Petersburg. The government encouraged potential bidders by providing official statistics on the population, the number of taverns, the official allocation of vodka, the value of government taxes, and the volume and value of sales of different kinds of drinks in previous years for each tax farm." But the wise tax farmer also used other, unofficial sources on the profitability of any tax farms on which they might bid.

After 1847, the Great Russian tax farm was administered under a system devised by a tax farmer, V. A. Kokorev, and first introduced in the four-year period beginning in 1847.45 It appeared under the forbidding title of the 'Excise- Farm Agency' (Aktsizno-otkupnoe kommissionerstvo). The key idea of the plan

43. Polnoe sobranie zakonov (1850) 24,058. 44. These were published from the late 1820s under the title: Kratkoe obozrenie piteinykh sborov

... I by the Ministry of Finance. They are described in A. G. [N. Gersevanov], 0 p'ianstve v Rossii i sredstvakh istrebleniia ego (Odessa, 1845), pp. 14-17.

45. On Kokorev, see P. L. Liebermann, "V. A. Kokorev: An Industrial Entrepreneur in Nine- teenth Century Russia," (Ph.D. diss., Yale University, 1981); and Kokorev, in Modern Encyclopedia of Russian and Soviet History, ed. J. L. Wieczynski (New York: Academic, 1976-) 17:99-100.



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was that no profits would be made by the tax farmers from sales of the ordinary, unfiltered and unflavored, vodka known as polugar. The name, polugar, means half-strength, because it was supposed to be sold at 40 percent alcohol by volume, or roughly half the strength normally attainable with a double distillation. Polugar was to Russian drinkers what vin ordinaire was to their French counterparts. By law, polugar was supposed to account for between 50 percent and 80 percent of all vodka sold. In selling it, the tax farmers and the taverns they managed were supposed to act merely as government agents or commissioners, selling at a standard strength (40 percent alcohol by volume) and standard price (3 rubles for a bucket).46 They received no salary apart from a commission of 10 percent to 15 percent, which was supposed to cover costs.

Profits were permitted, though, on certain other transactions. These included the sale of polugar above a fixed quota, and the collection of various excise articles-excises on distilling and brewing and license fees from taverns and inns. The tax farmers were also allowed to sell a small portion of the vodka they purchased from the government in "improved" forms and at higher prices. Generally, though, "improvement" meant little more than filtering ordinary vodka through charcoal or sand and adding flavorings. The scheme looked attractive to the government, for Kokorev had shown, in a preliminary experi- ment in Orel province, that it could significantly increase government revenues.

In fact, as any experienced tax farmer could tell at a glance, Kokorev's scheme left so little room for legitimate profits, that the system could only work if many of its provisions were ignored, a challenge made easier by the shoddy drafting of the regulations. A few calculations should make this clear.

Under the regulations for the 1859-1863 tax farms, taverns were supposed to sell 50 percent to 80 percent of their vodka in the form of polugar, at 3 rubles a bucket or at slightly higher prices for sales by the glass. This regulation should have limited the amount of improved vodka that could be sold at higher prices, for few working-class consumers (particularly in rural areas) could afford more expensive drinks if cheap polugar was readily available. Yet the government itself, after buying vodka at an average price of 72 kopecks a bucket from distillers, resold it to the tax farmers at an average price of 2.41 rubles a bucket, as well as receiving, on average, 1.99 rubles in tax.47 As the yield of the excise articles was insignificant, most costs had to be recouped from sales. This meant that, merely to cover the cost of vodka (including the government's 500 percent profit), the tax farmers would have had to charge at least 4.40 rubles a bucket. Even this price left no room for other running costs or for the payment of interest on capital, let alone for any profits. Clearly, the real average retail price of vodkas of all kinds had to be at least 5 rubles or 6 rubles.

Under such conditions, the tax farmers had to prevent the sale of polugar at the legal price of 3 rubles. The fact that they were willing to assume this commercial challenge suggests that they knew it could be met. Given the government's stake in the huge revenues from vodka sales, they knew the government would have to help. This understanding was the foundation of what one contemporary

46. The bucket, or vedro, was the standard measure. It was equal to 12.3 liters. 47. A. Korsak, "O vinokurenii," in Obzor razlichnykh otraslei manufakturnoi promyshlennosti

Rossii (St. Petersburg, 1865) 3:332-337. These figures are consistent with, and may be based on, the figures in Svedeniia 3:92, and 4:177, and 277-281.




referred to delicately as the "entente cordiale" between the tax farm and local government officials.48 As Kokorev himself admitted in the late 1850s: "what is really sold at the tax farm auctions is an exemption from the rules."49

The point is worth stressing-corruption was not a mere side-effect of the tax farm's operations; it was its very life blood. It had been a feature of the tax farm for many decades, but it was even more important under Kokorev's scheme than before.50 As Koshelev wrote in 1853:

For the tax farm to exist without corruption is now impossible. The whole atmosphere of the tax farm is such that no one even thinks of abiding by the legal conditions. They think of only one thing-how to get around the regulations, and to extract the maximum advantage from their obscurity and imprecision.5'

Denied profits from sales of polugar, how in fact did the tax farmers cover their huge outlays? They did so primarily by forcing customers to buy the more expensive vodkas.

Certainly, the tax farmers are obliged to sell polugar at the fixed price of 3 rubles a bucket, but try to find some. "We've run out," you'll be told, "come back tomorrow." On the other hand, you can find as much "special vodka" as you like, that is, flavored vodka. These flavorings are all based on honey and molasses added in tiny quantities to the vodka, which itself has been filtered through sand or charcoal. Neither the price nor the strength of "special vodkas" are fixed. The tax farmers can dilute them as much as they like and charge whatever they like. This is the peculiarity on which all the calculations of the tax farmers are based.52

Under Kokorev's system, illegal price inflation of this kind was the predom- inant form of commercial corruption, and the source of most of the tax farmers' illegal revenues.

The tax farmers and their employees also used many other tricks from the publican's traditional repertoire: False measures were used, money was loaned usuriously in taverns, and drinks were adulterated, usually with water. This last device was particularly important. A modest estimate has it that on average vodka was diluted by 10 percent, while other sources suggest that the figure was 30 percent or more.53 In effect this meant that water could be sold at the price of alcohol. A contemporary remarked: "Moses may have worked a miracle when he drew water from a rock, but to turn water into gold requires no miraculous

48. A. Samoilov, "Vziatkodateli," pt. 1:1,039. 49. Kokorev, "Ob otkupakh," p. 42. 50. This claim should be qualified. After selling their basic quota of vodka, tax farmers received

extra amounts at a cost price of about a ruble. Some contemporaries argued that if they had concen- trated on selling large quantities of good vodka, rather than on exploiting monopoly prices, they could have sold at 3 rubles and still made profits. If so, then their strategy must be regarded as a commercial choice rather than an unavoidable necessity. Korsak, "0 vinokurenii," pp. 345-346.

51. Svedeniia 3:248. 52. Vestnik promyslennosti, no. 4 (October 1858), p. 18. 53. Svedeniia 3:92; Chernyshevskii, "Zapiska g. Zakrevskago," Sovremennik (December 1860);

"Sovremennoe obozrenie," pp. 195-215; review of Ia. Ionson, Rukovodstvo k vinokureniiu (St. Petersburg, 1859), in Trudy Imperatorskogo ekonomicheskogo obshchestva, no. 3 (1859), pp. 54-66.



482 Slavic Review

powers at all."54 One unpleasant consequence of watering down was that tax farmers had to find artificial ways of giving their products a kick. They did so often by using substances, such as arsenic, which were, frankly, poisonous.55

Undermeasuring was equally important and could account, by some estimates, for another 10 percent of the trade's real turnover.56 It was made necessary by careful government control on the size of vodka containers.57 Many customers were so used to undermeasuring that when they received a full measure of vodka, they would pour some into a special container kept by the barman, as a matter of courtesy.58 Where customers insisted on full measure, other expedients were adopted. Simplest of all was to jog the customers' arms as they measured the amount they had been served, a tactic that provoked many fights.59 Other methods were only slightly more subtle.

If someone brings their own [bucket-sized] flagon to be filled, Ivanych pours the vodka from a cask through a funnel into the flagon. As he pours, he slips a little ball of paper from his hand into the funnel. This drops through the liquid, and Ivanych taps the funnel to make sure the ball is lodged firmly in the neck. Then he lifts the funnel so that the purchaser sees that no more liquid is running out, and supposes it has all been poured. Ivanych then empties the funnel into a container kept behind the bar.60

As the funnel in this particular account contained one-tenth of a bucket, it is clear that such practices could in principle add 10 percent to the value of sales. Together, adulteration and undermeasuring may have added 20 percent or more to the real quantities of vodka retailed by the tax farmers.

Other tricks involved simple extortion. The most brutal of these were perpe- trated by the cordon guards, the private antismuggling detachments, mainly recruited from former soldiers, that were employed legally by the tax farmers to prevent the movement of vodka across the borders of the individual tax farms. The cordon guards were most active on the borderlands between the Great Rus- sian provinces and the privileged provinces, because of the huge difference in prices between the two regions.

The leader of a band of cordon guards [in Khar'kov province], a thick-set youth almost seven feet tall called Moskal'tsev, wanted to show his employer that he earned his wage, and thought up the following trick which was later exposed in court. In a bag filled with oats, he placed a large flask of smuggled vodka and threw it well away from the cordon [the frontier of the liquor farm] on the local road. At the neighboring town of B . . . it was

54. A. Korsak, "Nalogi i vinnyi otkup," Russkaia gazeta, nos. 6, 7, 9 (1858) and no. 1 (1859); this reference is from no. 9 (1858).

55. M. Medvedev, 0 khlebnom vine i ego podmesiakh (St. Petersburg, 1863), pp. 24-26; N. I. Turgenev, Rossiia i russkie, 1st Russian ed. (Moscow, 1907), pp. 210-221 [first published in French, in 1844].

56. See Kitarra, Publichnyi kurs, 1:57-59. 57. Turgenev, Rossiia i russkie, p. 211. 58. Ibid., p. 212. 59. Ibid. The practice was so common that it spawned a special verb, podtalkivat', defined by

Dal', as "an old custom of tavernkeepers"; V. Dal', Tolkovyi slovar' zhivago velikorusskago iazyka, 4th ed. (St. Petesburg, 1912-1914).

60. Moskovskie vedomosti, 19 June 1859.




market day, and in the morning many peasants passed by on their way to town. As the first came along, with a cart containing several sacks of rye, he saw the sack lying on the ground. Crossing himself, he picked it up, untied it and, seeing that it contained oats, put it on his cart and went on his way, supposing that it had been dropped by someone passing along the road before him. He approached the cordon. The guards were ready, for they knew he had picked up the vodka. They stopped the peasant and began to inspect his load carefully. They left one bag to the end and in it, to his horror, they found the smuggled vodka. The peasant swore he was innocent, tried to prove it, wept-but they had no mercy. They bound him, placed him amongst the sacks and carted him to the police. The affair ended with the peasant losing everything he was taking to market for sale, as well as a good part of his modest means.6"

Other forms of extortion were only slightly less brutal. Roadside inns, for example, had to pay the tax farmers a fee for the right to sell vodka. These payments were supposed to be negotiated, but in practice the tax farmers could set almost any price for no inn could survive without vodka. If their demands were resisted, the tax farmers simply arranged for a police raid in search of illegal liquor after first insuring that the raid would succeed.

This is the usual technique. The tax farmer sends someone to the inn. They ask for something, such as tea and then, at an appropriate moment, they take out a bottle of vodka which they have brought with them, together with a glass, and place them on the table. Meanwhile, other agents of the tax farmer wait outside the door, together with police officials. At a given signal, they enter and, as they say, "discover" the illegal vodka.62

The police would then close the tavern unless its owner immediately made lavish payments to all around.

Commercial corruption in all its many forms generated vast amounts of money directly for the tax farmers and indirectly for the government. For obvious reasons, the tax farmers did not keep public accounts, so any estimate of the turnover is bound to be rough and ready. The government's own investigations into the liquor trade, however, provide some information from which we can determine the orders of magnitude involved.

In the spring of 1859, the government conducted a secret inquiry into retail prices in response to peasant protests at the high price and low quality of the vodka sold under the new tax farms that had begun operations in January. Offi- cials of the Ministry of Finance took samples in 114 districts and towns of 9 provinces. Nowhere did they find polugar sold at the official price of 3 rubles. Instead, they generally found something described as an "improved" polugar, even though it was usally sold at "ten degrees below its proper strength."63 In the rural tax farms, prices for vodka sold by the glass ranged from 3.75 rubles to 8 rubles a bucket, with a mean of 6.10 rubles; in the provincial capital tax farms, prices ranged from 5 rubles to 10 rubles, with a mean price of 6.97 rubles. Bulk prices (for sales by the bucket or more) were lower, from 4 rubles to 6 rubles a

61. Russkii dnevnik, no. 51 (7 March 1859). 62. Svedeniia 3:282. 63. Svedeniia 4:453-454.



484 Slavic Review

bucket, but as most vodka was sold in small quantities, the higher prices are probably a better guide to average prices.64 Thus, the estimate of average retail prices that I have adopted, of 6 rubles, is, if anything, on the low side.65

Even this estimate, however, ignores sales due to adulteration and undermeasuring. The government's inspectors found adulteration levels of 10 percent but said nothing of undermeasuring. Together, these forms of corruption can be assumed to have added up to 20 percent to the effective retail price of each bucket of proper strength vodka.66 In effect, this implies a real retail price of about 7.20 rubles for each bucket of 400 polugar sold in the Great Russian provinces in 1859.

If in fact polugar had been readily available at 3 rubles a bucket, it is hard to see how the real average price could have been much above 4 rubles. Thus, an effective retail price of more than 7 rubles a bucket implies that at least three- sevenths (or more than 40 percent) of the turnover of the vodka trade may have been earned illegally. This figure provides a rough measure of the tax farm's (and, indirectly, the government's) dependence on commercial corruption.

As some 20 million buckets of vodka (of polugar strength) were sold officially in the Great Russian provinces in 1859,67 these estimates suggest a total turnover for the Great Russian vodka trade of over 140 million rubles, of which as much as 60 million rubles may have been generated illegally. Even this figure ignores incomes from other illegal activities, such as extortion. Whatever the precise figures, they show the extent to which the tax farm, and (as long as it relied on tax farming) the government, too, depended on the continued existence of corruption, both political and commercial. The estimates also enable us to calculate the relative shares of turnover enjoyed by the government, tax farmers, and distillers in the Great Russian provinces in 1859 (see table 2).

Table 2. The Division of the Spoils, Great Russian Tax Farm, 1859*

Revenue a bucket Net revenue Share of total turnover (rubles) (rubles) (percentage) (million rubles)

Distillers .72 .72 10 14 Government 4.40 3.68 51 74 Tax farmers 7.20 2.80 39 56

Totals 7.20 7.20 100 145

*Assuming 20 percent for adulteration and undermeasuring Sources: For distillers' receipts see Svedeniia 4:278-281; for government receipts, see ibid. 3:47, but I have recalculated using the total amounts of vodka sold to tax farmers and total government receipts, from ibid. 4:177; retail prices estimated as explained above, from ibid. 4:453-463.

The best evidence on the extent of corruption comes, as we have seen, from the late 1850s. But how typical was this period?

64. Korksa, "O vinokurenii," p. 353. 65. This is the estimate adopted by Korksa, "0 vinokurenii," p. 353. 66. For the estimate of 10 percent for undermeasuring, see Kitarra, Publichniyi kurs, p. 57. 67. Svedeniia 3:35.




Evidence of extensive corruption can be found throughout the history of the tax farm, even as early as the seventeenth century. Early in the nineteenth century, the government itself became so concerned over the illicit influence of the tax farmers that it abolished tax farming and replaced it with a state monopoly between 1819 and 1826,68 but the reform was a failure. The government found, first, that it raised less revenue; second, that costs increased; and, third, that far from reducing corruption the reform merely implicated government officials directly. They began to lease taverns through intermediaries, to sell vodka from private warehouses, to sell leases on other taverns, and to engage in many other forms of commercial and bureaucratic corruption.69 As a member of the State Council commented, the new system had "ruined the morality of the officials responsible for liquor taxes, for, despite their calling, they participated directly in activities which were improper for them."70

In 1827, tax farming was reestablished. This did, at least, distance the government once more from the seamier sides of the trade. (As the minister of finance, Kankrin, admitted, the main disadvantage of the state monopoly was that "all the abuses associated with the liquor trade were now blamed directly oln the government."71) But it did little to reduce corruption.

If anything, the extent of corruption steadily increased, particularly from the 1840s, for there was a direct link between the level of corruption and the size of the bids the farmers made for the liquor tax farms. Higher bids meant that more money had to be made just to cover costs. Yet the bids steadily increased, influ- enced at least in part by the psychology of auctions:

Everyone enters the auctions with the intention of taking a farm at no more than its value. Then they get carried away, and during the final few minutes, as the auction is drawing to an end, they think: "I've already offered a lot, why not 50 or 100 thousand [rubles] more? I'll worry about how to get the money back later...." After the auctions, in order to recover their outlay they think up various wheezes which not only cover their basic obligations, but even generate profits and, if circumstances favor them, extremely large ones.72

In this way the auctions acted as a sort of ratchet, raising the stakes for both the tax farmers and the government, and thereby ensuring a steady increase in the level of corruption. In 1843-1847, the government's income from the Great Russian liquor farms was about 40 million rubles a year. At the 1847 auctions, 14.8 million were added to this and in the 1851 auctions, another 7.7 million. There was a decline of 1. 1 million in 1855 as a result of wartime conditions, but at the 1857 auctions (held only for a two-year period) another 5.6 million were added. In 1859, partly as a result of the postwar boom, the tax farm was auc- tioned off at prices that yielded a colossal increase of 29.9 million rubles in the government's annual income from vodka sales.73 By 1859, the Great Russian tax

68. Ibid. 1:75 and ff. 69. Ibid. 1:82-83. 70. Pryzhov, Istoriia kabakov, pp. 271-272. 71. Svedeniia 1:84. 72. Kokorev, "Ob otkupakh," p. 35. 73. Svedeniia 3:7, 22.



486 Slavic Review

farm alone was worth 97 million rubles to the government (and distillers), an increase of 140 percent on the figures for the 1843-1847 period and 45 percent over the figures for 1857-1858.

These sharp increases in the expenditures of the tax farmers were not accompanied, however, by any significant increase in their legitimate revenues. They could only be covered by an increase in commercial corruption. The history of the 1859 tax farms shows the process at work. These tax farms had been acquired during the astonishing speculative binge of the previous summer. They began operations in January 1859, and consumers immediately noticed sharp increases in prices and in the level of adulteration. Indeed, these changes provoked the remarkable boycott movement among the peasantry that played an important role in the government's decision to abolish tax farming.

As N. A. Dobroliubov wrote in an article on the boycott movement, "there is nothing that can be stretched for ever; eventually it has to snap."74 The growth of corruption created increasing numbers of enemies for the tax farmers: among consumers who were forced to pay higher prices, among gentry distillers who continued to sell their vodka to the state at fixed official prices, and, within the government itself, among progressive officials familiar with the economic argu- ments against monopolies and aware that the growth in corruption was sapping the authority of the government itself.

In the late 1850s, a powerful, though temporary, coalition of progressive government officials, landed nobles and peasant consumers had emerged, and by 1861 Alexander II himself had decided that the tax farm had to go. In February 1860, he made a solemn promise to Ia. I. Rostovtsev, one of his closest advisers on peasant affairs, that he would treat the abolition of the tax farm as his first priority after the abolition of serfdom itself.75 The tax farmers put up a powerful defense, relying largely on the government's concern about the effects of such a reform on its own revenues. But, after a few nervous moments, the opponents of the tax farm succeeded in persuading the emperor that a reform could work.

And indeed it did. Supervised by Grot, the new system abolished the monopolies in both distilling and trading and established an excise on distilling and license fees for trading. These were collected by a new class of officials especially recruited from outside the previous system and paid salaries high enough to reduce the temptation to accept bribes. Most forms of corruption associated with the tax farm vanished. Yet the government's own revenues from the vodka trade remained at the high level of the late 1850s.76 Indeed, the change was significant enough in its political and economic implications that it should be regarded as one of the more important of the Great Reforms of the 1860s.

The reform certainly marks the end of an epoch in the history of corruption in Russia. It removed the main source of systematic corruption, and it insured that at last local government officials really were employees of the government.

Economically, the reform was equally significant, for it redirected huge sums of entrepreneurial capital from a corrupt and unproductive form of enterprise into more productive areas. Already, in the 1850s, a number of tax farmers began

74. N. A. Dobroliubov, "Narodnoe delo," Sobranie sochinenii v 9-ti tomnakh (Moscow-Leningrad, 1962) 5:249.

75. P. P. Semenov, obituary of K. K. Grot in Russkaia starina. no. 4 (1898), p. 220. 76. Smith and Christian, Bread and Salt, pp. 311-314.




to invest their profits outside of the vodka trade. Kokorev, for example, invested a fortune of more than 6 million rubles accumulated through tax farming in the Volga-Don Railroad and Steamship Company, the Transcaspian Trading Com- pany, and the foundation of Russia's first kerosene refinery. In the 1860s, he invested in the Nikolaev railroad and founded the Volga-Kama bank. Eventually, he invested money in oil, gold, and salt mining as well.77 As a Soviet historiia has argued:

The liquor tax farm constituted an extremely important source of prinmitive accumulation of capital in Russia. Benadarki, Kokorev, Mamontov, Ginzburg and many other tax farmers made themselves fortunes of millions of rubles. And from this circle of tax farmers came, later, many of the most powerful capitalists, railway concessioners and bankers.78

Thus, the abolition of the tax farm marks an important stage in the economic, as well as the political development of tsarist Russia.

Why, finally, was the vodka trade so corrupt? We have seen the immediate reason: The government was so dependent on the revenues from the vodka trace that it was forced to connive at the breaking of its own laws. The real questionl, then, is why the government insisted on issuing regulations that conflicted with its own economic interests? Why did it virtually force the tax farmers to earn their profits through illegitimate means?

There is no direct evidence, as those in the government did not think in these terms. They were simply aware of facing a rather awkward dilemma. For the historian, though, the dilemma itself is intriguing. Here I can merely suggest a possible explanation.

In a still largely feudal society, the autocracy shared the attitudes and stand- ards of the landed nobility, including its attitudes towards economic activity, what E. P. Thompson might call its "moral economy."79 This, in turn, was influ- enced by the anticommerical bias of European nobility, which had providecl a model for Russian nobles since the early eighteenth century. Industrial activities like distilling, particularly if they involved processing agricultural produce from the manorial estate, were regarded as acceptable, and even genteel, occupations. Commerce, however, still carried a social stigma, particularly if conducted too aggressively. 80

In such a world, the profession of tax farming was doubly tainted, by its frank commercialism and its equally frank corruption. This taint insured that very few nobles took it up. The profession was dominated instead by nonnoble members of the upper and middle estates, mostly from the merchantry. In the

77. Liebermann, "Kokorev, V. A." 78. A. P. Pogrebinskii, Ocherki istoriifinansov dorevoliutsionnoi Rossii (XIX-XX vv.) (Moscow,

1954), p. 34. Attempts to estimate the sums involved were made by E. S. Kozlovskii, "Vinnvc otkupa i ikh mesto v pervonachal'nom nakoplenii kapitala v Rossii," in Trudy Leningradskogo finansovo- ekonomicheskogo instituta, 1947 g., vyp. III.

79. E. P. Thompson, "The Moral Economy of the English Crowd in the Eighteenth Centulry," Past & Present 50 (February 1971): 76-136.

80. A. J. Rieber, Merchants and Entrepreneurs in Imperial Russia (Chapel Hill: University of North Carolina Press, 1982), pp. 42-45.



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1859-1863 period, for which we have most information, of the 145 tax farmers who invested over 100,000 rubles in the vodka trade, 63 percent were merchants, 20 percent were classified as government officials, 10 percent as retired army officers, and only 4 percent as nobles.8' To maintain its position as a great power, the Russian government could not afford to disdain so vast a potential source of revenues as the liquor trade, however squalid it might appear to members of the aristocratic elite of socety.

The tax farm provided a solution of sorts to this embarrassing dilemma, for it enabled the government to benefit without shame from the aggressive commercialism of the tax farm. To do so, however, it had to issue regulations that appeared to protect the consumer and distiller from the tax farmers and, thereby, distanced the government from the tax farm's sordid work. The tax farm regulations were necessary, in other words, to veil the government's embarrassing dependence on the vodka trade.

The economic success of this delicate maneuver was achieved at considerable political cost, for it conceded great informal power to an entrepreneurial class whose formal influence was still restricted. These contradictions were one expression of a larger historical process. Russia's traditional political culture and insti- tutions made little formal provision for those who lived by commerce; yet as the country modernized, their real influence grew. Denied formal expression, their power could only be expressed through informal and, in this instance, illegal channels. Corruption was the inevitable outcome of this conflict between the moral economy of Russia's upper classes and the real economic needs of the government in a rapidly modernizing world.

Thus, corruption arose from a conflict between the ideology of a traditional landed nobility and the growing influence of an embryonic capitalist class, with the government enjoying both the advantages and disadvantages of the mediator. The forms of corruption we have examined are, therefore, one expression of the sort of conflict between the economic structures of society and its social and ideological structures that Marx saw as the underlying cause of fundamental social change.

81. Svedeniia 3:61-66.



vodka and corruption in russia on the eve of emancipation

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