In the nineteenth Century the Russian Empire was the least industrially developed of the Great Powers. The humiliating Russian defeat in the Crimean War (1854–6) at the hands of Britain and France, with their more advanced armaments, convincingly demonstrated how the lag in Russian industry hampered and frustrated the military and political actions of the Tsars on the international stage.

Russia had long endeavoured to overcome industrial backwardness through state action. In the first quarter of the eighteenth Century Peter the Great used state power and serf labour to establish the iron industries of the Urals and to build St Petersburg as ‘a window onto Europe’. In the 1890s, urged on by his Finance Minister Sergei Witte, Nicholas II used state finance and state power to accelerate the development of the capital goods industries. But the industries of the other Great Powers were also developing rapidly. In 1913 Russia still remained the least industrially developed of the Great Powers. Her industry was responsible for only 21 per cent of net national income. This included 15 per cent from large-scale industry, which employed a mere 4 per cent of the labour force.

In October 1917 the Bolsheviks came to power with the objective of constructing a socialist society in the former Russian Empire. The economic foundation of the new society would be an industrial working class, expanded to include the majority of the population, and managing a technologically advanced industry.