In modern times. the name "Baku" has been associated with oil. Because of the large reserves of high-quality oil. Russian rulers since Peter the Great coveted Baku: the Germans in two world wars strove to reach it: and the Bolsheviks during the Russian civil war made its possession a top priority. Since the "oil rush" of the 1870s the development of Baku's petroleum industry has been largely in the hands of foreigners - Russian, Armenian, and European investors - including Robert Nobel, brother of Alfred. who endowed the Nobel prizes. The managers and technicians of the various companies were, likewise, Russian, Armenian or foreign. By contrast, the large number of unskilled workers who toiled in the dangerous fields were a mix of peasants from central Russia, rural Azeri (rarely any from Baku), and migrant workers from Iran, mostly Azeri from Iranian Azerbaijan. whose numbers grew in the decades before World War I. Local Russian administrators classified these as "Persians." or merely lumped them together with rural Azeri, as "Muslims." Such broad brush approaches were employed with even less discrimination' by later Soviet historians. As a result of the highly visible, non-native elements in the oil industry and the belief that all "Muslims" were confined to the ranks of unskilled labor, many contemporary observers and historians who based their work on contemporary accounts mistakenly drew the conclusion that the Azeri of Baku did not play a role in the oil industry nor, by extension, in commerce. Thus emerged the false image of a "weak Azerbaijani bourgeoisie," who were continually victimized and thereby made vengeful, if powerless, by more savvy capitalists of other nationalities. A broader view of the history of trade and other branches of the 19th to early 20th century economy in Baku would correct that erroneous impression.
It was also in the 10th century that descriptions of oil in the Baku area were recorded by Arab geographers. Mas'udi wrote that nowhere else in the world could one find oil like that in Baku. Yakut Hamavi described yellow, green, and white oil (the latter for medicinal purposes) as well as black. and stated that revenues from the huge oil pits outside the city yielded daily revenues of 1000 dirhems (a valuable silver coin). Indeed. Coin hoards found in Azerbaijan attest to the vigorous international trade of the area.
The creation of the Mongol Empire in the 13th and 14th centuries, though inaugurated by terrible destruction, resulted in the imposition of uniform laws, security of goods and person. and, as a result, the creation of an enormous trading zone under the Pax Mongolica. Archaeological excavations of the 1970s in Baku's inner city unearthed a caravan saray of skillfully carved stone from the 15th century. Among the inscriptions on the stones are several in Sanskrit, indicating the distance from which merchants traveled to Baku.
Baku was not only an exchange point for goods from the Slavic north and the Middle East, commodities from the Azerbaijani hinterland were also traded in Baku, most notably carpets. cotton cloth and other fabrics, ceramics, and silks from towns such as Shemakha. The main products of the Baku area itself were salt, saffron. and seals. Oil production also continued. Geographer Mavlana Abd'al-Rashid al-Bakuvi, apparently a Baku native. wrote that from the wells of Baku, 200 mule-loads of oil were extracted daily. Under a brief period of Ottoman rule. during the late 16th to early 17th centuries. both an imperial inspector from Istanbul and the famous traveler Evliya Chelebi testified to the value of Baku oil. One Ottoman writer noted that. ships sailed daily between Baku and Gilan in Iran. carrying oil southward in return for cloth.
In the 16th century, England sought to penetrate these trade routes. England's "Russian company" was used to facilitate passage of English merchants through Muscovy to the south, especially to Iran. But the instability that followed the death of Ivan IV led the Muscovite authorities to ban the right of transit which was restored only by an Anglo-Russian trade treaty of 1734. The 17th century was not only a time when England was cut off from the Russian controlled trade routes, but when Muscovy it-self was preoccupied with internal affairs and paid less attention to southern trade. Peter I ("the Great," 1682-1725) changed that.
Although Russian troops were withdrawn after Peter's death and the lands were returned to Iran under his successor Anna (1730), it was during her reign that advantageous trade agreements were signed. One, in 1732, gave Russian merchants free transit through Iran to trade in India. A treaty of 1735 returned to Iran the cities of Derbent, Baku, and Gilan, but guaranteed Russian merchants tariff-free trade with Iran, which included, of course, the Caucasus. In the 18th century, Baku became the "foremost commercial center of the eastern Caucasus,'. where agricultural goods and silk from the Baku hinterland, as well as Russian textiles and iron, and slaves from the middle East were traded. Only Baku's harbor could offer effective shelter from the Caspian's winter storms, and most Russo-Iranian trade passed through this port. Official interest in the region. however, waned until the reign of Catherine II ("the Great," 1762-96).
Many Russians at court hoped to use the Caspian coast as a springboard to conduct lucrative trade with India. Steady efforts by the English since the 16th century had allowed them by now to outpace and outmaneuver the Russians, so that the latter faced stiff competition from established English trading companies in any efforts to expand trade with the south. So successful had the British become that Russians imported Iranian silk from London.
By the time Catherine turned her attention to the region, semi-independent khanates ("princely states") had formed in the Caucasus. Although the khans recognized the Iranian shah as their suzerain, they conducted policies independently, a practice that facilitated the Russian conquest of the early 19th century under Catherine's grandson Alexander 1(1801-25). Playing on regional rivalries, Russia conquered the khanates in two protracted wars, 1806-13 and 1826-28. By this action, Russia achieved significant strategic goals of 18th century rulers with the sole right to maintain armed vessels in the Caspian. Russia thus ensured its access to the commodities of the Caucasus and, through its trade routes, to southern commerce.
During the 19th century, the production of carpets for a wide market, rather than personal or village use, continually expanded. Caucasian carpets were displayed at the famous fair at Nizhnyi Novgorod (later, Gorkii). Foreign buyers, too, demanded the hand-woven products which soon became quite fashionable in Europe. Increasing working for the market, weavers added dates to carpets to commemorate specific events, such as the 300th anniversary of the Romanov Dynasty in 1913, and sometimes wove particular designs or inscriptions in Russian or Armenian for specific markets. Merchants might invent stories to make particular rugs more attractive to potential buyers. According to one historian, many of the weavers were Azeri, although the merchants were both Azeri and Armenian.
With respect to Soviet foreign trade, two key products of Azerbaijan became important Soviet exports: carpets, and "Russian" caviar from Caspian Sturgeon. Carpets were exported to Europe, mainly East Germany, to be sold to Western buyers for hard currency. Caviar was packaged in the fisheries, in lars with English-language labels, and exported directly leaving nearby Baku without this locally produced product. Revenues from these products went into Soviet coffers and did not benefit Azerbaijan. By the 1980s, one of the grievances of dissidents in the national republics was Russia's practice of economic colonialism.
In struggling to reclaim its commercial life, no less than in struggling to regain political independence, Azerbaijan looks to its history. There, the precedents of trade are a hopeful omen for the future. The persistence of the black market under Soviet rule reveals that the Azeris have the drive and initiative for commerce. Still needed for the creation of a genuinely entrepreneurial economy are the skills and habits of legal commerce from which Soviet power isolated them. As commercial law, protection of property, and the habits of fair trade are instilled, Azeris may increasingly reassert their historic skills.