The Russian Empire in which Lazar Kaganovich grew up was convulsed by upheavals which threatened the very survival of the state. Under Nicholas II, the autocracy sought to transform itself into a modernizing state. The industrialization drive, directed by finance minister Sergei Witte in the 1890s, had a profound impact on the whole country. The defeat of the imperial navy and army by Japan in the Far East in 1904–5 administered a major shock to the state. Peasant resentments and working-class protests ignited the abortive 1905 revolution. The dynasty's claims to legitimacy were seriously compromised. The tsar's gestures toward constitutional reform by means of the October Manifesto were followed by a new repression under Piotr Stolypin combined with an attempt to reform agriculture. From 1909 onward, the rearmament drive stimulated economic recovery. The tsarist regime was beset by the dilemma of promoting industrial development while dealing with the backwardness of agriculture, and preserving Russia's standing as a major power while addressing the demands for domestic reform.

The autocracy was heavily dependent on the support of privileged society and of the backing provided by the state administration, the police and the armed forces. The advocates of constitutional reform drew on a narrow base of middle-class support. Peasant radicalism posed a direct threat to the existence of landed interests. The working class, although numerically small, was characterized by its radical temper.