BACKGROUND TO THE EMERGENCE OF AGRICULTURAL ENTREPRENEURSHIP
BACKGROUND TO THE EMERGENCE OF AGRICULTURAL ENTREPRENEURSHIP
Agricultural entrepreneurship as a type of social action arose long before the generally accepted opinion about the emergence of the capitalist mode of production in the economy. The purpose of the study is to carry out a comparative analysis of the social, historical and natural prerequisites for the emergence of agricultural entrepreneurship in Russia and European countries. When writing the article, historical-legal methods of research were used. The authors analyzed the works of domestic and foreign historians and lawyers. In Europe, by the 15th century, serf and feudal relations in the countryside were naturally transformed into capitalist relations. In Russia, in the middle of the 19th century, the abolition of serfdom and the Stolypin reforms contributed to the development of agrarian entrepreneurship. After the abolition of serfdom in Russia, stable strata of Russian society began to take shape at a rapid pace, consisting of landowners-entrepreneurs and wealthy peasants working in the likeness of farmers. Capitalist relations in agriculture depended on the transition of agricultural holdings to the commodity production of agricultural products. In the course of the study, the authors revealed differences in the historical, social and natural prerequisites for the development of agricultural entrepreneurship.
According to historians, the Hammurabi Code (1600 BC) contained accounting rules, rules of production and exchange. Capitalist relations began in ancient times in Homer’s Greece. With the collapse of the Roman Empire, the process of capitalist development in antiquity ended. Early forms of commercial exchange existed even in the pre-industrial era . On the social, historical and anthropological causes and factors that contributed to the development of agrarian entrepreneurship, on the characteristics of the first entrepreneurs who sought to expand commerce, A number of works have been written in their community, going beyond mere exchange. Max Weber, M.I. Rostovtsev also noted that elements of capitalist relations (capital, market, hired workers, production for sale in the market) existed in Babylon, Ancient Greece, Rome.
Richard Cantillon was the first in the world to formulate and introduce the concept of "entrepreneur" in the book "Essay on the Nature of Trade in General", published in London in 1755. Even then, Cantillon pointed out that the entrepreneur is operating in an uncertain and risky environment. According to the scientist, the entrepreneur was a person who expects to receive a higher price when selling goods, in comparison with the cost of their production or purchase. At the same time, according to Cantillon, entrepreneurs were not only merchants and artisans, but also people with uncertain earnings.
Chase J. Edwards believes that the history of entrepreneurship should be studied together with the history of marketing, as these phenomena are inseparable from each other.
In the works of scientists A. Smith, D. Ricardo , C. Marx the entrepreneur is defined as a capitalist who seeks to reproduce capital and to take profit from the labour force. According to J. Schumpeter the entrepreneur is an individual whose function is economic innovation, a constant search for new combinations. The entrepreneur is the main actor of economic development.
Chronology of capitalism development is considered in the following works: Max Weber, Werner Sombart , Ludwig von Mises , Eugene von Böm-Bawerk , Friedrich von Wieser , F. A. von Hayek and other authors.
2. Research methods and principles
The research was based on the work of foreign and Russian researchers on the prerequisites for the emergence of entrepreneurship in agriculture, the results of their own research and other data.
1. Statistical method. A system of techniques, methods and methods aimed at studying quantitative and qualitative patterns manifested in the structure and dynamics of the development of entrepreneurship in agriculture.
2. Historical and legal method, allowing to identify the background of the emergence of entrepreneurship in agriculture and to determine the degree of its influence on the development of social relations in the State.
3. Main results
The abolition of serfdom in 1861 was a special turning point for our country, when there was a radical turn from feudal economy to capitalist. During the period of the peasant reform, a process of unification of the organization of society and the administration of peasantry took place.
In addition to the establishment of the institution of private owners, the peasant reform established mechanisms for local peasant self-government. Peasants, according to "Regulations", received the status of "free rural peasants", accordingly acquired the rights of participation in assemblies, the right to choose representative bodies. The peasants' right to public administration was the participation of peasants in the elections of rural and county government bodies.
Responsibility for the implementation of decisions of village assemblies rested with village chiefs. The village chief was under the control of the parish authority and administrative and police authority.
The village chief had the same responsibility: to control law and order in the rural community; Ensuring the security of citizens living in rural areas; Protection of property from criminal encroachment. In order to ensure these tasks, the Chief was responsible for the suppression of criminal acts in the territory under his control, and was authorized to detain offenders and conduct preliminary investigations.
In rural societies of bonded farmers, the headman supervised the peasants' compliance with the legal demands of the landlord. The authority of the village chief included the administrative functions of imposing penalties for minor offences, for which the maximum penalty was arrest or compulsory labour up to two days.
Rural societies were part of rural counties. In order to regularize the administration and administration of justice, a township assembly was established in the townships as an institution of public local peasant self-government, consisting of a meeting of elected representatives of peasants and officials of the township. The parish council met monthly to address issues within its competence. However, all decisions were controlled by the Zemstvo chief and could be revoked by the District Congress. Any decision of the parish assembly could be appealed to the county congress. The parish assembly as a body of local self-government of peasants almost without any changes existed until 1917. For administrative and minor criminal offences, the district court could rule on charges of disobedience to police officers, spreading of false rumors, petty theft, fraud, mismanagement or drunkenness, etc.
According to historians who conducted studies of the process of formation of the state administration of Russia, peasant self-government in Russia was limited within the peasant estate and carried out within the parish and rural society. The tsarist administrative authority, having developed instructions on the management of the bodies of peasant self-government, actually strictly controlled and constrained their activities. Any autonomy of rural societies and township bodies of local self-government was constrained by a complex three-tier system of noble-administrative supervision and guardianship. Thus, the tsarist administration, represented by local self-government bodies, received another additional free executive body of the tsarist administration, which became the administrative-police link in the system of state administration of Russia. These bodies actually facilitated the collection of taxes, ransom payments, recruitment kits, the performance of state and Earth duties, the settlement of land disputes. Thus, domestic historians note the tendency to maintain the class of inferiority, the limitation and isolation of peasants after the reforms. With the abolition of serfdom, the Tsarist power failed to create conditions for economic growth and the capitalization of peasant farms, and the country missed the opportunity to implement a major agrarian reform, combined with peasant self-government. In fact, there has been a process of conservation of local land ownership and peasant community.
The very fact of the abolition of serfdom was a turning point in the historical movement of our State, as the system of economic and legal arbitrariness, manifested in the deprivation of personal, economic and social rights and freedoms of citizens, was destroyed. The abolition of serfdom opened up new prospects for the majority of the Russian population (80% consisting of peasants), as the country created new opportunities for the broad development of market relations.
According to the "Regulations on peasants emerging from serfdom", for peasants in different regions of Russia, the size of the land plot intended for redemption was determined. Depending on the region, land allocation rates depended on the quality and fertility of the land. Thus, in the black-earth regions of Russia, peasants were given plots from 1,5 to 4 tithes, and in non-black-earth – from 1 to 7 tithes, in the steppe provinces – from 3 to 12 tithes. In parallel with the emancipation of peasants, the beginnings of local peasant self-government, the system of courts and judicial organization were created. But the problem of maintaining class incompleteness, limited rights and insularity of peasants after the reforms for Russia has not been solved. Fifty years after the beginning of the peasant reform, peasants' rights were not equated with those of other higher estates of nobles and landlords.
The well-known researcher of the Russian peasant economy A.V. Chayanov in the work "Peasant economy" gives data for 1909-1913 on the share of peasant farms in the volume of grain production in our country. He writes: "...on the eve of the First World War peasant farm gave 88% of Russian grain, landowners produced 21%" . According to A.V. Chayanov, by 1914 the capitalist system had already developed in Russia. Thus, in Russia at the beginning of the XX century formed the sign of capitalist way of agricultural production – domination of commodity production.
Adam Smith was a classic of capitalist economics. The scientist got fame thanks to his famous scientific work «Research about nature and causes of wealth of nations». In it, the scientist formulated the concept of the existence of a self-contained closed economic system, supported by the selfish individual’s desire for personal benefit, encouraging him to produce and sell goods that are saturating world markets. The «invisible hand of the market» is the best-known aphorism of the scientist, used to demonstrate the solvency and self-sufficiency of the capitalist system, the sustainability of which is based on the egoism of the economically active person, called «entrepreneur». According to this effective mechanism, the scientist believes that goods and services are being redistributed worldwide.
The opinions of researchers on the essence of the entrepreneur and his activity were different. Unity of opinion in one – the entrepreneur in his activity became a participant of coordination and combination of many factors: land, capital, labour, human factor, that is, factors necessary for organization of production, sale and provision of services. Researchers from China, Yuan Yuan Chen and Haining Wangbelieve that entrepreneurship development is linked to land reforms in the state.
According to the logic proposed by Adam Smith, the development of the manufactory, as the first private commercial enterprises in the world, preceded the development of agriculture. By the nature of things, food production had to take precedence over luxury goods produced by artisans in cities.
Therefore, according to A. Smith, cultivation and soil fertility improvement, as a business activity, had to precede urban growth. Most likely, according to A. Smith, artisan cities in Europe were created in places with the best agricultural development and high soil fertility. Thus, in those parts of the earth where the land and climatic conditions were most favorable for agriculture and were gathering a high yield of food, saturated markets, there were formed future artisan cities, become the prototype of modern European developed cities of the world. As artisans settled in places of abundance of cheap and affordable food, favorable conditions for agricultural development initially contributed to the development of the market of capitalist production. According to A. Smith, the development of trade and European cities was a consequence of the rise of agriculture in parts of Europe.
A. Smith discusses his vision for a free economy and analyses the factors that have contributed to the wealth of some peoples and the poverty of others. For example, the scientist notes the quality and effectiveness of English legislation that establishes the security of rights of users and tenants of land parcels. English law guaranteed that tenants would be reimbursed in the event of property expropriation. According to the scientist, the strength of land ownership in tenants was equivalent to ownership.
In the world’s history of capitalism, England plays a significant role. England is considered a classical country of capitalism. By the end of the 17th century, England had become the vanguard of capitalism, keeping the place to this day. According to experts, the example and role of this country have influenced the world processes in the economy. Wayne G. McPhersonbelieves that indigenous entrepreneurship by the State can contribute to the maintenance of indigenous culture, which can be seen as having a long-term intrinsic value that is an integral part of the country’s identity.
The advent of the first weaving mills led to an increase in demand for wool and an increase in the cost of raw materials, which in turn led to an increase in pastures that replaced even arable land. Capitalist relations, as the basis of economy and meaning of existence, originated in the cloth industry, increasing the production of tissues for the internal and external market required the development of sheep breeding.
Since the time of Aristotle, scholars around the world have been thinking about the causes of the wealth of some peoples and the poverty of others. According to Helge Bergline, entrepreneurship creates wealth. In his essay «Politics» Aristotle gives examples of the ability of people to earn wealth by buying up property and then profitable sale or leasing of economic objects, for example oil mills during the increase of olive harvest. The author provides examples of profitable commercial transactions, which proves the fact of entrepreneurial activity during the life of the scientist and his description of the historical period. It is interesting to see the opinion of Aristotle, that every individual aspires to wealth, and the rich economic developed states are created by effective literate managers, ensuring the process of improving the well-being of citizens and the growth of the state economy.
Theodore Vladaselnotes that the origins of entrepreneurial behaviour are not yet fully understood and considers entrepreneurship as a driving force for innovation, job creation and growth. Theodore Vladasel holds the view that individual preferences, abilities, education and financial resources are potential dispositional determinants of entrepreneurship
There are other incidental factors that influence the causes of the economic situation of States. A.A. Ausanon the example of England and Spain proves the influence of management decisions made by elites of countries. It is known that by the 16th century England and Spain were in equal starting positions. The countries had about the same number of working people, the states engaged in foreign policy expansion. In 300 years, these countries could have been expected to be at close levels of development. In the 19th century, however, England became the leading world power and Spain one of the most backward countries in Europe. The reason for this, the scientist sees in the form of management and the procedure for making managerial decisions. The administration of England, including the distribution of taxes, passed to the Parliament by the 16th century, and in Spain, administrative decisions were made by the King. As a result, Spain was unable to dispose effectively of the wealth collected from its colonies. As you know, kings spent money on military campaigns and luxury items. In England, on the basis of the well-considered decisions of Parliament, the prerequisites for attracting investment were created.
According to K. Marx, «the mill created feudalism, and the steam machine - capitalism». Crafts workshops in Europe became factories and manufactures. Artisans became workers, and factory owners and loan sharks became bankers and capitalists. The new ruling class alienated the old feudal landowners. Thus, for three to five generations in Europe there was a process of transition from an agrarian society, where the majority of the population was engaged in a subsistence economy, to an industrial capitalist society.
Consider the Russian experience of the formation of agrarian entrepreneurship. According to the most authoritative historian V.O. Klevkovsky, outer nature has an impact on the development of people, but due to the fact that nature in different parts of the globe releases unequal amount of solar energy, heat, light, water, the characteristics of people, their mentality depend on such unevenness. On the basis of natural, geographical and climatic conditions, different States shall be built according to form of government, political regime, territorial arrangement.
V.O. Keychevsky regarded human being as the totality of human life among the surrounding nature, where man is part of nature itself. According to the scientist, the person, society and nature of the country are the main historical forces driving the flywheel of history. The movement of historical development is influenced by the external nature, relations between people, based on their goals and aspirations.
Russian and foreign researchers of history of Russia and peasants are methodologically similar in their undertakings, initially having reasoning about Russian history, scientists focus attention on the influence of climatic, geographical, economic, Social factors on peculiarities of formation and development of the Russian state and way of economy in the country’s economy from the moment of its inception.
Historian R. Pipesresearches peculiarities of the history of Russia meticulously analyzes natural and social phenomena and their consequences for the country. The scientist makes simple and understandable conclusions, that under unfavourable climatic conditions, remoteness of territories and the lag of average yield of Russian farmers from the average indicators in Europe, any investment in agriculture was senseless.
The geographical factor is especially important for Russia, as before the emergence of railways, the population of the country dragged a miserable existence. For the most part, the population remained poor for long periods of time, and poverty limits the choice of economic and entrepreneurial activity.
The social position of the Russian serf was significantly different from that of a slave in North and Central America. The situation of the Russian peasant was much better than that of the peasants, for example in Ireland. Russia has had an excess of good food and cheap food. Each Russian family lived in its own log house, not in slave barracks.
The farmer worked in the field under the supervision of his father or older brother, not the overseer. A serf farmer owned the products of his work. The Russian peasant had better food and housing than in Ireland or Scotland. The Russian peasants did not know the poverty in which Irish peasants could find themselves. The food of the peasants was rough, but in abundance, the houses were simple but dry and warm. Peasants in Russia grew cabbage and cucumbers in their gardens. These foods were central to the diet after bread. Since ancient times, the tradition of salt cucumbers and quack cabbage, the national drink was kvas. Thus, researchers believed that the main motive of peasant labor was personal consumption of food in order to survive in harsh climatic conditions, rather than the desire to accumulate funds and engage in agricultural entrepreneurship. Labor, because of its worthlessness and inefficiency for most peasants, was meaningless, and peasants treated labor as punishment. Meagre harvests only fed the peasant population without creating surpluses and thus did not provide capital for the peasant economy.
Peasant farms in Russia collected from one acre 300 kg. That is, the average Russian yield is 3-4 times behind the European. One acre of sown wheat in Russia by the end of the 19th century produced seven times less than in England, half as much as in France. Thus, the productivity of Russian agriculture before the abolition of serfdom was the lowest in Europe. Now suppose that the peasants of Western Europe had such superiority in harvesting, accumulated their surplus and became rich for three hundred years in a row, becoming full-fledged entrepreneurs engaged in agricultural production.
It does not sound absurd, but Russian peasants had virtually no markets, that is, to grow agricultural products for sale, was a pointless exercise. The potential buyer could only be a citizen. In Russia at the end of the 18th century, citizens made up 3% of the population of the country, but the population of the city itself can be called urban conditional, since many yards had their own vegetable gardens, where the non-urban population produced their own food. The few and few Russian cities were mostly military or administrative centers. The export of Russian grain abroad began to be actively carried out from the middle of the XIX century, when the industrial developed European countries began to accept cheap Russian grain, seeing this as a benefit.
According to A. Smith «the development of trade and industry of cities was the cause of the rise and development of the village and European agriculture». That is, the rise in yields in medieval Europe was originally associated with urban growth. The emergence of numerous artisans in the cities has stimulated the development of agriculture and agriculture in Europe.
No significant wealth in Russia has been earned from agriculture. Therefore, investment in agricultural production was not great, yields were low, and the grain market was underdeveloped. The main technological tool of agricultural production of the Russian ploughman was sokha, so the depth of ploughing did not exceed 10 centimeters.
Our domestic historians V.O. Koltevskiy, N.M. Karamzin, N.I. Kostomarov, S.M. Solovyev, V.N. Tatishchev, S.F. Platonov also believe that the history of Russia and its people is influenced by nature, climate, geographical position, length of roads. This is how V.O. Key wrote about the history of his country: "Studying the history of any people, you understand that the cradle of every people is the nature of his country". The scientist believed that geographical and physical conditions had a significant impact on the course of the historical development of our country.
The researchers identify the following factors that influenced the course of Russian history: nature; Flat area; neighborhood of Russia with Central Asia; Clashes between nomads and settled populations; the value of rivers on the Russian plain; nature’s influence on folk character. Saridakisalso highlights the factor of family ties, which influences both the development of agrarian entrepreneurship and the course of the history of states.
V.O. Korkinevsky notes that the action of historical forces and elements of the hostel differently influenced the development of European societies and the Russian state. In this connection, Russian society has acquired a unique composition, and history has received a special type of movement. The scientist gives an example of the influence of weighty forces, for example, raids of nomads and Muslim conquerors on the development of Russian trade, and in general of the national economy for the future period. Throughout the world, the river system has facilitated trade. In the first centuries of our history, the main part of the Slavic population was concentrated in the black-earth area of the Dnieper.
Probably the most significant and the main difference of agriculture and bread-falling peasants of Europe and Russia is the fact that a significant part of the history of the Russian state peasants in Russia were not landowners. Peasants lived everywhere in the country on foreign lands: private (palace, church, service); state.
Peasants, working black lands, called them the lands of God, respectively state. They, realizing that they actually owned the land, harvested from it, and were the owners of the fruits and gifts that their land gave them. This provision has left its imprint on the essence of legal, economic and governmental relations. Peasants were the main taxpayers in the country.
As you know, in Europe, the cultivation of land by slaves, which prevails in antiquity, has gradually been replaced by the agriculture of free peasants, who initially leased land from large owners, giving half of their harvested land to owners. K.Marx called such peasants in his works half-harvesters, as they gave half of their own crops to the rent payments.
Serfdom disappeared in Europe by the 15th century. Since this economic form of the relationship of owners and slaves was inefficient and did not suit many, including the owners of the parcels. The serf European peasant was not interested in increasing agricultural production. It was sufficient for him to produce the necessary food for his own sustenance. Of course, this did not suit the landowners. So the serfs were replaced by half-farmers, and the latter were replaced by free peasant farmers. This process by K. Marx called the development of productive forces, the development of which was hampered by inefficient industrial relations, doomed to destruction by more progressive methods of production. That was the essence of human progress. Half-farmers, being not landowners, were engaged in agricultural production with funds lent by landowners.
In Russia, serfdom as an economic and legal form of relations between landowners and peasants actually existed until the beginning of the 20th century. The reform of 1861 on the abolition of serfdom was conditionally carried out in Russia, since within 49 years peasants had to buy land. Therefore, in fact, serfdom in Russia existed until the Stolypin reforms of 1906.
In Russia, the legal, social and economic situation of peasants V.O. Klyachevsky considered through their legal relationship to landowners.
At an early stage, this legal relationship between peasants and landowners was not legally binding or documented. Initially, these relations were natural contractual.
Thus, according to V. Kopryovsky, the legal status of the peasant is the equal party of the lease agreement of the land plot. The peasant was seen by scientists as an equal legal independent side of the land lease contract, the text of which was set out in certificates or records.
Peasant reform in Russia had a number of differences from Western counterparts, which served as a lag in the development of capitalist relations in agriculture. The reform was carried out in the interests of the state elites and the nobility. In 1906, after the events of January 1905, which in history was called the first Russian Revolution, the peasants obtained from the government the cancellation of redemption payments. But historians claim that by 1906 the peasants had already paid about 2 billion rubles, i.e. almost 4 times the real market value of land in 1861 .
In addition to the small size of the land received, burdensome duties and ransom payments, the peasant community itself has become another constraint on the development of agrarian entrepreneurship in Russia. Betting on the preservation of communal agriculture, the royal government simplified the process of collecting taxes and recruitment kits. The peasant community benefited, first of all, the authorities, as mutual responsibility and collective responsibility, in the case of violations by individual members of the community, compensated for the shortfall in tax collection. The community also contributed to the maintenance of internal law and order in the country. The negative impact of the community on the development of agrarian entrepreneurship is to restrain the personal initiative of peasants, lack of independence, to hinder the application of new agricultural techniques in the peasant economy. The preservation of a circular bond and communal land use detached the peasants from a sense of ownership and affirmed the predominance of collectivism over individualism, i.e. the concept of "we" prevailed over the notion of "i". This event marked the beginning of a significant difference in the development of entrepreneurship in agriculture in Russia from the models of western agrarian transformation. With weak concepts of ownership in the nation’s consciousness, as well as the weak position of owners in society, open the way to the action of the state-administrative bureaucracy in the country’s economy, which happened in Russia in the following century.
Despite these features of the development of capitalism in Russia, all researchers come to one conclusion, that after the abolition of serfdom, as well as a result of Stolypin reforms, the agricultural sector of Russia and agrarian entrepreneurship was developing. In Russia, the stable strata of Russian society, consisting of landowners, entrepreneurs and wealthy peasants, working in the image of farmers, have rapidly begun to develop. Capitalist relations in agriculture depended on the transition of agricultural holdings to commercial production of agricultural products. So the collection of bread in the second half of the XIX century in Russia has doubled, the grain export has increased by 5,5 times and has reached 7,3 million tons. The price of bread has increased. With the development of industrial relations in Russia, land ownership should have lost its collective character. By the beginning of the 20th century, the nobility had managed to retain 60% of its land ownership, and the number of peasant entrepreneurs was increasing.