The Socioeconomic Aspect

After 1848, Galicia, as well as Transcarpathia and Bukovyna, continued to be among the poorest regions of Europe, a fact that prompted some historians to refer to them as “a storehouse of economic absurdities.”¹ One of the major economic drawbacks of these provinces was their lack of major exports such as the wheat and sugar beets that fueled economic growth in Russian-ruled Ukraine.

The landowning elite of the province, moreover, was not eager to introduce economic changes for it feared that development, particularly industrial growth, might deprive it of cheap and plentiful labor. Thus, Galicia, Bukovyna, and Hungarian-dominated Transcarpathia remained agrarian societies, with little capital accumulation, weak internal trade, low urbanization, minimal industry, and the lowest wages and highest labor surplus in the empire. Only in the final decade of the century did faint signs of improvement appear.

Vienna’s neglect of Galicia should not leave one with the impression that it was an insignificant part of the empire. As of 1910, the province accounted for 15% of the population of the monarchy. In fact, population was one of the few growth areas in the lands inhabited by the West Ukrainians. In Galicia it jumped from 5.2 million in 1849 to almost 8 million in 1910.

Major changes also occurred in the ethnic composition of Galicia, although at first glance they appeared to be more dramatic than they were in reality. Whereas in 1849 Ukrainians constituted over 50% of the population in the province, by 1910 over 58% of the population was listed as Polish and only 40% were Ukrainians. Even in Eastern Galicia, the Ukrainian share of the population dropped to 62%. To some extent, the migration of Poles from the western to the eastern part of the province and the Polish assimilation of non-Poles, especially the Germans, accounted for these changes. Yet the main reason was the growing tendency of the Jews, whose share of the province’s population doubled from about 6% in 1831 to almost 12% in 1910, to identify themselves as Poles, at least in terms of language.

There were, however, few changes in the occupational profile of the province’s nationalities. Ukrainians remained an overwhelmingly agrarian people. In 1900 about 95% of them were engaged in agriculture. Only about 1% were in industry (what little there was of it) and a mere 0.2% in trade. Ukrainian intelligentsia, including the priests, was a small group, probably numbering between 12,000 and 15,000 individuals. (According to the calculations of Volodomyr Navrotsky, in 1876 there were about 5000 Ukrainian intelligentsia, including priests. The Poles had over 38,000, not counting the clergy.)² By comparison, their rivals, the Poles, had 80% of their people in agriculture, 6.5% in industry, 2% in trade. In 1914, the Poles had over 300 high government officials in Galicia, while the Ukrainians had only 25. Thus, despite the Habsburg reforms, it was clear that the Ukrainians had been able to make little progress in overcoming the socioeconomic disadvantages that had dogged them for centuries.

As in Russia in 1861, the emancipation of the serfs in the Habsburg empire in 1848, while improving their legal status and political rights, did not improve their economic position. Essentially, the problem was one of rising costs and declining incomes. A major burden on the peasantry was the debt owed on the lands they received in 1848. The Vienna government originally promised to cover the cost of the land transfers itself, but in 1853, after order was restored, it shifted most of the expense upon the peasantry. In addition, the peasants were subjected to direct and indirect taxes including the costs of maintaining schools, roads, etc.

But most infuriating to the peasants was the issue of the so-called servitudes. Under the conditions of the emancipation, the landlords generally retained ownership of the servitudes, that is, forests and pastures to which villagers had previously had access. This meant that the peasant now had to pay whatever price the landlord stipulated in order to obtain firewood and building materials or to feed his livestock. Usually the landowners’ price was so high that it seemed to a peasant that he had simply exchanged the legal serfdom of the pre-1848 era for the economic enserfment of the post-1848 period. Anxious to cast off the estate owners’ economic stranglehold, peasants by the thousands went to court over the servitudes issue. According to Ivan Franko, of the 32,000 servitudinal court cases between 1848 and 1881, the estate owners won 30,000.³ The outcome of these cases left little doubt about whom the Habsburg system favored.

As their costs mounted, the amount of land owned by peasants – and, therefore, their income – shrank rapidly. In 1859 the average size of a peasant holding in Eastern Galicia was 12 acres; in 1880 it slipped to 7 acres; and in 1902 to 6 acres. Or, to put it differently, the percentage of peasants who could be classified as being poor, that is, who owned less than 12 acres of land, rose from 66% in 1859 to 80% in 1902.

For peasants who sought to supplement their incomes, the prospects were not encouraging. If they hired themselves out as laborers to an estate owner, they could expect to receive the lowest wages in the empire – about one-quarter of wages paid in Austria proper. And if they were so desperate as to borrow from local moneylenders – mostly Jewish tavern-keepers in the villages and shop owners in the towns (for there were no banks) – they courted economic disaster. With interest rates ranging from 150 to 250% annually (another reason why capital stayed in moneylending rather than being invested in industry), a small loan taken out by a peasant to tide him over to the next harvest could in a short time turn into a crushing burden. Large debts were also inadvertently incurred by the naive, uncomprehending peasants: local moneylenders would often encourage them to drink or to buy on credit and, after allowing time for interest to accumulate, would present them with huge bills. When peasants could not pay their debts, their creditors either took over their land or auctioned it off.

Although peasants needed little encouragement to drink, their depressing economic plight certainly contributed to the alarming spread of alcoholism. Inducement also came from the estate owners who had a monopoly on alcohol production and from the tavern keepers who sold it. One way of inducing peasants to drink was the aforementioned extension of credit; another method was paying laborers in chits that could only be cashed in taverns.

Not suprisingly, the health of the West Ukrainians was the most neglected of all the empire’s subjects. Whereas, in 1900 there was one hospital per 295 inhabitants in Austria, in Galicia the ratio was 1 per 1200. Over 50% of the children died by age of 5, usually as a result of epidemics or malnutrition. But perhaps most shocking was the fact that about 50,000 deaths a year were attributed to malnutrition, that is, famine. In a famous book, “The Misery of Galicia,” the Polish author Stanislaw Szczepanowski claimed that the productive capacity of a Galician was one-fourth of an average European while his food consumption was one-half.⁴ Little wonder that at the turn of the century the life span of a West Ukrainian male was six years less than that of a Czech and thirteen years less than that of an Englishman.

Being an agrarian, sedentary people, the Ukrainian peasants felt an extremely powerful attachment to their native soil and only the most pressing conditions would force them to leave it. By the late 19th century, it was clear that such conditions were at hand and many peasants were confronted with the heartrending necessity of emigrating. Like their brethren in Russian-ruled Ukraine, the West Ukrainians would have to go halfway around the world in search of more promising opportunities. However, unlike the East Ukrainians who migrated eastward to the shores of the Pacific, the West Ukrainians moved westward across the Atlantic to Brazil, Canada, and, most often, to the United States. Towns and commerce

Only about 10% of Galicia’s inhabitants lived in towns and cities. As might be expected, the percentage of Ukrainians in urban centers was quite small: in 1900 over 75% of the province’s urban dwellers spoke Polish; only 14% used Ukrainian and the rest communicated in German.

As everywhere, the main economic function of cities and towns was trade and commerce. And to speak of trade in the West Ukrainian lands is to speak of the Jews because they completely dominated this sector of the economy. It was the Jews who acted as the middlemen between the village and the town. Jewish peddlers brought modern products (such as matches and kerosene) to isolated villages and Jewish merchants bought up peasant crops for sale in the towns. In the towns themselves, almost all the shops and stalls in which a peasant could buy finished products, such as cloth, boots, or iron pots (which were produced by Jewish artisans), were owned by Jews. If the peasant lacked cash to buy these products, the Jewish merchant would offer credit. In short, it was the Jews who pulled the peasantry into the money economy centered in the towns.

In exchange for their services, Jewish merchants attempted to extract the highest possible profits. To many non-Jews it appeared that these gains were not only excessive, but illgotten. For example, after studying the economic relationship between Jews and Ukrainians in Transcarpathia, a Hungarian economist of Irish descent, Edmund Egan, reported to the government that while the administration, magistrates, and estate owners contributed to the woeful plight of the peasantry, the main fault lay with the Jews, who as moneylenders, merchants, and tavern-keepers, were “dispossessing the Ruthenians of their money and their property.”⁵ But although the peasantry resented the exploitative practices of many Jewish merchants, it realized that any type of economic activity was practically impossible without Jewish participation. This view was clearly reflected in a secret Habsburg police report, sent to Vienna in 1890, about the attitude of Ukrainian peasants: “Except for their daily bread, the peasants are dependent on the Jew at every stage of their lives. He serves as their customer, counselor, agent, and factotum, in the full sense of the word. And if we wanted to banish them, the peasants would be the first to demand their return. Although the Jews exploit to the full the advantages accruing from this status and, by granting interest-bearing loans, control not only the peasants but also the clergy, it would be a mistake to speak of a prevalence of anti-Semitism in the sense of racial hatred.”⁶

It should be emphasized, however, that most Jews were themselves poverty stricken and had few alternative means of making a living. In the late 19th century, their occupational profile was 15% leaseholders and tavern-keepers, 35% merchants, 30% artisans, and 20% miscellaneous occupations. Most Jewish traders were petty merchants, but a tiny minority was exceedingly wealthy and influential and carried on much of the large-scale trade in Galicia. Industry

Given the competition from the industrialized western provinces, the unfavorable government policies, and the lack of a domestic market, industry obviously had little chance to develop. Moreover, there was a dearth of capital. Until the 1890s, there were no commercial banks, Jewish capital was concentrated in trade and moneylending, and wealthy Poles had their money invested in land. Paradoxically, in Galicia the construction of railroads, which began in 1852, retarded rather than encouraged industrial growth.

Prior to the coming of the railroads, the little industry that did exist, such as glassworks or textile and leather production, was protected from external competition by the province’s relative isolation. However, when the railroad brought a flood of western goods, many local industries collapsed. Much of the manufacturing that survived was of the handicraft variety, of which the numerous Jewish tailors and shoemakers were typical representatives. Large-scale enterprises were concentrated mainly in lumbering, encouraged by the presence of vast forests and the great need for building materials in the West, and in alcohol production.

By the 1890s, however, there were signs of improvement. In the preceding decade, three banks were established and they became a source of funding for large industrial projects. Polish magnates, such as Prince Andrzej Lubomirski, lobbied in Vienna for support for industrial development, and in 1901 an association of factory owners was formed. In the 1870s and 1880s, the production of oil in the area of Drohobych and Boryslav, financed mainly by Austrian and English capital, developed rapidly. And prior to the First World War, the Galician oil wells produced close to 5% of the world’s oil.

Slowly but steadily, the proletariat grew and by 1902 it numbered about 230,000 full and part-time workers. Of these 18% were Ukrainians, 24% Jews, and the remainder Poles. As in Russian-ruled Ukraine, this very “young” class still had strong ties to the villages and many Ukrainian and Polish workers returned to agriculture after working part of the year in industry. These changes, however, were gradual and relatively modest in scale and the West Ukrainian lands remained far behind other provinces in the empire in terms of economic development.