Absolutist Regimes Actively Blocking Industrialization

Key Insight

Many absolutist regimes, such as Austria-Hungary and Russia, actively blocked industrial and technological progress, viewing the 'creative destruction' it entailed as a threat to their political stability and the existing power structures. Absolutism is defined as rule unconstrained by law or the wishes of others, typically supported by a small elite. In Austria-Hungary, Emperor Francis I (1792-1835) embodied this, striving to preserve the status quo and famously stating to teachers in 1821, 'I do not need savants, but good, honest citizens... He who serves me must teach what I order him. If anyone can’t do this, or comes with new ideas, he can go, or I will remove him.'

Francis I implemented policies directly opposing industrial development, including banning the creation of new factories in Vienna in 1802 and prohibiting the importation and adoption of new machinery until 1811. He also vehemently opposed the construction of steam railways, stating, 'No, no, I will have nothing to do with it, lest the revolution might come into the country.' Consequently, the first railway in the empire, from Linz to Budweis, had to use horse-drawn carriages until the 1860s, designed to prevent steam engine conversion. This opposition was rooted in fears that factories would concentrate poor workers in cities, potentially challenging absolutism and undermining the feudal order by drawing labor from rural areas.

Similarly, Russia, under Tsar Nicholas I (1825-1855) and Finance Minister Count Egor Kankrin (1823-1844), feared the social changes a modern economy would bring. Kankrin actively steered funds away from industrial development, preferring to subsidize large landowners who used serfs as collateral, thereby reinforcing the feudal structure. Nicholas I expressed concern that an increasing number of factory workers would become 'a class as miserable as they are dangerous for their masters,' leading to Kankrin banning industrial exhibitions. A 1849 law severely restricted new factories in Moscow, explicitly banning cotton and woolen spinning mills and iron foundries, and requiring petitions for other industries to prevent worker concentration. Kankrin also opposed railways, deeming them an 'artificial need or luxury' that encouraged 'unnecessary travel.' This policy resulted in minimal railway development in Russia by 1870, a situation only reversed after its backward transportation network proved a severe liability in the Crimean War (1853-1856).