After Russia's terrible defeat in the Crimean War, Tsar Alexander II realised that economic efficiency had to improve if Russia were to remain a major power in Europe. The majority of the Russian population were serfs -- slaves for the aristocrats. Having seen the successful economies of nations like Great Britain, Alexander II believed that granting the serfs freedom would boost the Russian economy.

The Emancipation Edict
In 1861, the Tsar approved the Edict of Emancipation, which consisted of some 22 separate pieces of legislation. It did not change the economic status of the landowners as they still owned all of the land except the serfs' houses. Feudal taxes still had to be paid to the government but no longer to the landlords.

The peasants bought the right to farm land with a 49 year mortgage (redemption payments) and the government used these payments to pay compensation to the nobles. The government set the price ranges and the quantities of land to be bought. The landlords were compelled to sell and the peasants forced to buy from the nobles. The land was actually owned by the village mir (community) and the peasants only had the right to farm the land. Plots of land within the mir were worked by peasants on a rotating basis.

Household serfs were freed with no rights to land. Peasants lost the privilege to hunt and collect firewood from the forests surrounding the nobles' property.

Results of the Emancipation Edict
The freed serfs resented paying for land that they believed was theirs by right, and objected to the landlords keeping the best quality land. They correctly argued that the repayment price usually grossly overvalued the land. The mir proved to be a barrier to progress, preventing initiatives. Nobles were unprepared for an economy without serf labour and spent almost half the repayments on debts. Russia was floundering as an agrarian nation.

Unsurprisingly, there was a great flock of peasants to the cities. Former household serfs found their prospects limited in the rural areas and many farming peasants were fed up with the mir system. Alexander opened Russia to foreign capital, allowing factories to be built, in which the masses of peasants could work. By 1898, industrialization resulted in a massive increase in production.

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