Merchants

Merchants [купці; kuptsi]. A social class in precapitalist societies, involved in trade. Under conditions of modern capitalism merchants are part of the capitalist or entrepreneurial classes.

Ukraine’s merchant class first appeared in Kyivan Rus’, where domestic trade played an important part in economic life. Merchants sold arms, jewelry, and other items of artisan production made in Kyiv, Novgorod the Great, and Chernihiv to all parts of the realm. The southern regions of Kyivan Rus’ supplied the northern parts with grain. Salt mined in Galicia was also a significant commodity of trade in the period. Fairs, which existed in most of the larger towns of Kyivan Rus’, played an important role in the development of trade. Kyiv was the most important center of trade, with (according to eyewitness accounts) eight fairs at the beginning of the 11th century. Rus’ was also active in foreign trade with Byzantium, Central Europe, Central Asia, and the Far East. Merchants from Armenia, Poland, Moravia and Bohemia, Germany, Italy, France, and Arab lands established a presence in Kyiv, and some settled there permanently. In the early 11th century Kyiv had colonies of Venetian, German, and Far Eastern merchants.

Until the mid-11th century the Kyivan princes and their retainers dominated foreign trade and often combined trade activity with plunder. From the second half of the 11th century, as Kyivan society became more developed, professional merchants emerged whose services the princes would use. The largest contingent of merchants in Kyivan Rus’ in the period, however, consisted of townsmen involved in trade, primarily for the domestic market. Merchants, together with the nobility, dominated Rus’ towns. Merchants were often unpopular with burghers and urban dwellers since they used their monopoly control of certain commodities to increase prices. In 1113, for example, Kyiv’s population revolted against the merchants to protest their unfair trade practices (see Kyiv Uprising of 1113).

The Tatar-Mongol invasions in the mid-13th century dealt a serious blow to trade and to the development of Ukraine’s merchant class. For a period of time most trade with the East ceased. The subsequent incursion of Ottoman forces and of the Crimean Tatars in the 14th and 15th centuries also served to limit trade. In the 15th and 16th centuries, under Lithuanian and Polish rule, the further development of distinctive social groups and the growth of the urban population (which expanded the domestic market) promoted the development of Ukraine’s merchant class. The fact that Ukrainian cities and towns served as intermediaries in trade between Western Europe and the East was also of great significance for the growth of the country’s merchant class. Under Polish rule, however, Orthodox (Ukrainian) merchants were the objects of discriminatory policies that strengthened the position of Polish and German merchants in Ukrainian towns. Ukrainian merchants remained a significant force in Western Ukrainian towns, where they were closely interrelated with the region’s nobility. The rise of the Cossacks as a social force in the early 16th century served to strengthen the Ukrainian merchant class since many Cossacks were involved in trade.

The last decades of the 17th and first decades of the 18th century were characterized by a large and intensive expansion of trade and Ukrainian merchant prosperity in Left-Bank Ukraine under the Hetman state, an expansion owing to a number of factors. First, Western Europe had been starved of Ukrainian raw materials because of the disruption of commercial relations during the period of the Ruin and was eager to resume trade. The Ukrainian market, hitherto denied access to Western European manufactured goods for similar reasons, showed a high demand for imports. Second, because Russian merchants had not been granted a privileged position, Ukrainian merchants were the most active participants in the burgeoning trade with Western Europe. Finally, the development of a money economy, the accumulation of merchant capital, and the increase in the size of landholdings in Left-Bank Ukraine contributed to a growth in production which necessitated the search for new Western markets. Trade involved a significant portion of the population, as is indicated by the fact that approximately 46 percent of the Left-Bank population, that is, roughly 450,000 people, lived in towns. Almost one-third of the urban population was engaged in commerce, approximately 10 percent as merchants. Initially the Cossacks, particularly the Cossack starshyna, were the most important merchants, but as trade developed, merchants arose from among the burghers of Ukrainian towns to play a dominant role.

Because Ukrainian trade was relatively lucrative, it came to the attention of Russian officials, especially when Russian state finances reached a state of crisis as a consequence of Peter I’s reforms and wars. Although the tsar attempted to interfere with Ukrainian commerce before the Battle of Poltava (1709), his efforts were largely unsuccessful because of the Hetmanate’s autonomy. After the defeat of Hetman Ivan Mazepa at Poltava Ukraine's trade and its merchants came under the control of the Russian state and of a few Russian merchant houses which had a privileged relationship to that state. Ukrainian trade routes were ordered redirected to Russian ports; trade in a wide range of commodities was disallowed; and high export duties and new taxes were imposed. Russian commercial institutions and practices were extended into the territory of the Hetman state, notably the Russian treasury’s monopoly of trade in a series of goods and commodities, and the gosti (‘guests’)—privileged Russian merchants who acted as the state’s agents in collecting state revenues (customs duties and excises), and through whom the treasury traded in prohibited goods. Those measures sounded the death knell for Ukrainian merchants. The number of merchant bankruptcies increased dramatically in the 1710s and 1720s. Equally fatal for Ukrainian merchants were the bans on imports imposed by Russia.

The new conditions resulted in a penetration of the Ukrainian market by Russians. To avoid paying double duties Ukrainian merchants started hiring Russians to transport their goods and also engaged Russian partners. Since Russian traders were not subjected to the same tax burdens and duties as Ukrainians, many Russian merchants migrated to Ukraine and started competing directly with the local population. Although Ukrainian merchants and hetmans protested against those conditions, they were unable to stop them or their consequences. By the end of the 18th century Russian merchants had conquered the Hetman state. They also dominated the growing merchant class in Southern Ukraine. The 1832 census showed that of the 32,000 merchants who belonged to the merchants’ guild, 22.2 percent were Ukrainians, 52.6 percent were Russians, and 20.9 percent were Jews. There were no Ukrainians in the upper or first guild (involved in foreign trade), only 15 percent in the second, and 26 percent in the third. The third guild largely operated locally, an indication of the thoroughness with which the internal Ukrainian market had been conquered.

In Right-Bank Ukraine, under Polish rule until the end of the 18th century, Ukrainian merchants suffered rapid decline because of Polish policies. The abolition of Cossackdom permanently undermined the juridical and economic position of an important sector of Ukraine’s merchant group. The old feudal order was reimposed in Right-Bank Ukraine by Polish nobles, who began to take private ownership of towns and direct control of the most lucrative branches of trade. Discrimination against Orthodox Ukrainian burghers further undermined the indigenous merchant class. Ukrainian merchants went bankrupt, some escaped to Left-Bank Ukraine, Moldavia, or the Zaporozhian Sich, and many slipped back into the peasantry.

In Russian-ruled Ukraine merchants were formed into a separate estate and granted their own guild structure by tsarist decrees of 1775 and 1785. The 1897 general population census noted 30,456 members of the merchant estate in Ukraine, of whom only 11.7 percent were Ukrainians. Jews and Russians formed the majority among the merchants. After the abolition of serfdom in 1861 and with the growth of industry, some merchants transformed themselves into manufacturers and became part of the capitalist class. The economic backwardness of the Russian Empire was such, however, that merchant capital never played the leading role in industrialization there that it did in Western Europe. At the beginning of the 20th century merchants continued to dominate foreign trade, but their role in internal trade declined. In 1917, merchant guilds and estates were abolished.

In Western Ukraine under Austrian rule, Ukrainians played an insignificant role in the merchant class. That class was dominated by Jews, Poles, Germans, Hungarians, and Romanians. In the 1920s and 1930s in Western Ukraine under Polish rule, there developed a small Ukrainian merchant class which had to face many discriminatory economic policies.

BIBLIOGRAPHY
Ohloblyn, O. A History of Ukrainian Industry (Munich 1971)
Nestorovych, V. Ukraïns'ki kuptsi i promyslovtsi v Zakhidnii Ukraïni, 1920–1945 (Toronto–Chicago, 1977)
Koropeckyj, I. (ed). Ukrainian Economic History: Interpretive Essays (Cambridge, Mass 1990)
Kotliar, M.; et al (eds). Torhivlia na Ukraïni XIV–seredyna XVII stolittia: Volyn' i Naddniprianshchyna (Kyiv 1990)
Hurzhii, I., Hurzhii, O. Kuptstvo Kyieva ta Kyivshchyny XVII–XIX stolit' (Kyiv 2013)

Bohdan Krawchenko

[This article originally appeared in the Encyclopedia of Ukraine, vol. 5 (1993).]




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