N.I. Bukharin and E. Preobrazhensky: The ABC of Communism


Chapter 2: The Development of the Capitalistic Social Order

§ 14 The struggle between small-scale and large-scale production (between Working Ownership and Capitalistic Non-working Ownership)

The struggle between small-scale and large-scale capital in manufacturing industry. Huge factories, sometimes employing more than ten thousand workers, and having enormous machines, did not always exist. They appeared by degrees, growing up upon the remnants of artisan production and small-scale industry when these were undergoing ruin. In order to understand why this came about, we must first of all take into account the circumstance that, under private property and commodity production, a struggle for buyers, competition, is inevitable. Who is the winner in this struggle? He is the winner who knows how to attract buyers to himself and to wrest them from his competitors. Now the chief means for the attraction of buyers is to offer commodities for sale at a lower price.1) Who can sell at a very low price? This is the first question we have to answer. It is obvious that the large-scale producer can sell more cheaply than the small-scale producer or the independent artisan, for the large-scale producer can buy more cheaply. Large-scale production has in this respect many advantages. Above all, large-scale production has this advantage, that the entrepreneur who commands much capital can install better machinery, and can procure better tools and apparatus generally. The independent artisan or the, small master finds it very difficult to get along; he cannot usually command a power plant; he dares not think of installing better and larger machines; he has not the wherewithal to buy them. Nor is the small capitalist able to procure the, newest machines. Consequently, THE LARGER THE UNDERTAKING, THE MORE PERFECT IS THE TECHNIQUE, THE MORE ECONOMICAL IS THE LABOUR, AND THE LOWER IS THE COST OF PRODUCTION.

In the large factories of the United States and Germany there are actually scientific laboratories where new and improved methods are continually being discovered. Thus science is wedded to industry. The discoveries made in such a laboratory remain secrets of the enterprise to which it is attached, and bring profit to that enterprise alone. In small-scale production and hand production, one and the same worker conducts nearly all the stages of production. In machine production, on the other hand, where numerous workers are employed, one worker is responsible for one stage only, a second worker for a second stage, a third for a third, and so on. In this way, under the system known as the division of labour, the work goes much quicker. How great is the advantage of this system was made manifest by some American researches instituted in the year 1898. Here are the results. The manufacture of 10 ploughs. By hand labour: 2 workers, performing 11 distinct operations, worked in all 1,180 hours, and received $54. By machine labour: 52 workers, performing 97 operations (the more numerous the workers, the more varied the operations), worked in all 37 hours and 28 minutes, and received $7.90. (We see that the time was enormously less and that the cost of labour was very much lower.) The manufacture of 100 sets of clock wheels. By hand labour: 14 workers, 453 operations, 341,866 hours, $80.82. By machine labour: 10 workers, 1,088 operations, 8343 hours, $1.80. The manufacture of 500 yards of cloth. Hand labour: 3 workers, 19 operations, 7,534 hours, $135.6. Machine labour: 252 workers, 43 operations, 84 hours, $6.81. Many similar examples might be given. Furthermore, small manufacturers and hand workers are quite unable to undertake those branches of production for which a highly developed mechanical technique is essential. For instance, the manufacture of locomotive engines and ironclads ; coal mining; and so on.

Large-scale production effects economies in every direction: in buildings, machinery, raw materials, lighting and heating, cost of labour, utilization of waste products, etc. In fact, let us suppose that there are one thousand small workshops, and that there is one large factory which produces the same quantity of commodities as all the little workshops put together. It is much easier to build one large factory than a thousand small workshops; the raw materials for the workshops will be used far more wastefully; lighting and heating will be much easier in the case of the large factory; the factory will have the advantage in the matter of general supervision, cleaning up, repairs, etc. In a word, there will unquestionably be in all respects an economy, a saving, in running the large factory.

In the purchase of raw materials and of all that is necessary for production, large-scale capital is likewise at an advantage. The wholesale buyer buys more cheaply, and the goods are of better quality; furthermore, the great factory owner is better acquainted with the market, knows better where to buy cheaply. In like manner, the small enterprise is always at a disadvantage when entering the market as seller. Not only does the largescale producer know better where to buy cheaply (for this purpose, he has travellers; he conducts his business in the exchange, where news concerning various commodities is always coming in; he has commercial ties extending almost all over the world): in addition, he can afford to wait. If, for instance, the price of his product is too low, he can retain it in his warehouses, pending a rise in prices. The small producer cannot do this. He lives from hand to mouth. As soon as he has sold his product, he begins to use for immediate expenses the money he has received; he has no margin. For this reason he is forced to sell willy-nilly, for otherwise he will starve to death. It is obvious that this is a great disadvantage to him.

It need hardly be said that large-scale production enjoys an additional advantage, in the matter of credit. If a great entrepreneur has urgent need of money, he can get it. Banks will always lend money to a solid' firm at a comparatively low rate of interest. But hardly anyone will give credit to the small producer. If he can borrow at all, exorbitant interest will be demanded. Thus the small producer easily falls into the hands of the usurer.

All these advantages attaching to large-scale enterprise explain why smallscale production must invariably succumb in capitalist society. Largescale capital crushes the small producer, takes away his customers, and ruins him, so that he drops into the ranks of the proletariat or becomes a tramp. In many cases, of course, the small master continues to cling to life. He fights desperately, puts his own hand to the work, forces his workers and his family to labour with all their strength; but in the end he is compelled to give up his place to the great capitalist. In many instances, one who seems to be an independent master is in truth entirely dependent on large-scale capital, works for it, and cannot take a single step without its permission. The small producer is frequently in the toils of the moneylender. Ostensibly independent, he really works for this spider. Or he is a dependent of the purchaser of his commodities. In other cases he is a dependent of the shop for which he works. In the last instance, though apparently independent, he has really become a wage worker in the service of the capitalist who owns the large shop. It may happen that the capitalist provides him with raw materials, and sometimes with tools as well; in Russia many of those engaged in home industry are in this position. In such cases it is perfectly clear that the home worker has become a satellite of capital. Another form of subordination to capital is that in which small repairing workshops are grouped around a large undertaking, so that they are, as it were, mere screws in the wall of the big building. Their independence is only apparent. We sometimes see that small masters, independent artisans, home workers, traders, or petty capitalists, when they have been driven out of one branch of manufacture or commerce, enter some other branch in which large-scale capital is less powerful. In many cases, persons who have been ruined in this way become small traders, pedlars, and the like. Thus largescale capital tends, step by step, to replace small production everywhere. Huge enterprises come into existence, each employing thousands or tens of thousands of workers. Large-scale capital is becoming the ruler of the world. The working owner is disappearing. His place is being taken by large-scale capital.

As examples of the decline of small-scale production in Russia, let us consider the home workers. Some of these, such as furriers and basketweavers, worked with their own raw materials and sold to anyone who would buy. In course of time the home worker began to work for one particular capitalist; this is what happened in the case of the Moscow hatmakers, toymakers, brushmakers, etc. In the next stage, home workers procure the raw materials from their own employer, and thus pass into bondage to him (e.g. the locksmiths of Pavlovsk and of Burmakino). Finally, the home worker is paid by his employer at piecework rates (the nailmakers of Tver, the bootmakers of Kimry, the matmakers of Makarieff, the knifeforgers of Pavlovo). The hand-loom weavers have been similarly enslaved. In England, the expiring system of small-scale production was nick-named the sweating system', owing to the abominable conditions that prevailed. In Germany, during the period 1882 to 1895, the number of small enterprises diminished by 8.6 per cent; the number of middle-sized enterprises (those employing from 6 to 50 workers) increased by 64.1 per cent; and the number of great enterprises increased by 90 per cent. Since 1895 a notable number of middle-sized enterprises have also been crushed out. In Russia, the victory of the factory system over home industry has been fairly rapid. The textile industry (weaving) is one of the most important branches of manufacture in Russia. If we consider the changes that have taken place in the cotton industry, if we compare the number of factory workers with the number of home workers, we are able to judge how rapidly the factory system is displacing home industry. Here are the figures:

Year   Number of factory workers   Number of home workers
1866   94,566   66,178
1879   162,691   50,152
1894-95   242,051   20,475

In the year 1866, for every hundred workers engaged as weavers in cotton factories, there were 70 weavers working at home; in the years 1894-5, for every hundred factory workers there were only 8 home workers. In Russia the growth of large-scale production was extraordinarily rapid because foreign capital undertook its direct organization. By the year 1902, large enterprises were already employing nearly half (40 per cent) of all the Russian industrial workers.

In 1903, in European Russia, the factories employing more than 100 workers numbered 17 per cent of all factories and workshops; and of the total number of workers engaged in factories and workshops 76.7 per cent worked in these large factories.

The victory of large-scale production all over the world entails much suffering for small producers. Sometimes whole occupations perish and entire districts are depopulated (e.g. the Silesian weavers in Germany, the Indian weavers, etc.).

(B) The struggle between small-scale and large-scale capital in agriculture. The same struggle between small-scale and largescale production which is carried on in industry, occurs also under capitalism in agriculture. The landlord, who administers his estate just as the capitalist administers his factory; the rich peasant, grasping and usurious; the middle peasant; the poor peasant, who often accepts a job from the landlord or the rich peasant; and the agricultural labourer - we may compare this agricultural series with the industrial series of great capitalist, small capitalist, independent artisan, home worker, wage worker. In the country, as in the town, extensive possessions give an advantage when compared with small.

On a large farm, it is comparatively easy to introduce up-to-date methods. Agricultural machinery (electric or steam ploughs, harvesters, cutters and binders, drillers, threshers, steam threshers, etc.) is almost beyond the reach of the small farmer. The independent artisan cannot think of installing expensive machinery in his little workshop; he has no money to pay for it, nor could he turn such machinery to good account even if he could buy it. In like manner, the peasant cannot buy a steam plough, for, if he had the money, a steam plough would be of no use to him. A great machine like this, for its profitable utilization, needs a large area of land; it is valueless on a patch where there is hardly room for a fowl-run.

The efficient utilization of machinery and tools depends on the area of land under cultivation. For the full utilization of a horse plough we need 30 hectares of land; for that of a set comprising driller, harvester, and thresher, about 70 hectares; for a steam thresher, about 250 hectares; for a steam plough, about 1,000 hectares. Recently, machines driven by electric power have been used in agriculture; for these, also, large-scale farming; is indispensable.

As a rule, only for farming on the large scale is it practicable to undertake irrigation, to drain swamps, to provide field drainage (the laying of earthenware pipes in the fields to carry off superfluous water), to build light railways, and so on. In agriculture, just as in manufacturing industry, where work is done on a large scale we save upon tools and machinery, materials, labour power, fuel, lighting, etc.

In large-scale farming, there will be per desyatina less waste space between the fields, fewer hedges, ditches, and fences; less seed will be lost in these waste areas.

Furthermore, the owner of a large farm finds it worth while to engage expert agriculturists, and he can work his land by thoroughly scientific methods.

In matters of trade and credit, what applies to industry, applies also to agriculture. The large-scale farmer is better acquainted with the market, he can await favourable opportunities, he can buy all he needs more cheaply, can sell at a better price. Only one thing remains for the small competitor; he struggles with all his might. Small-scale agriculture is able to continue in existence only through strenuous labour, in conjunction with the restriction of needs, with semi-starvation. Thus alone can it maintain itself under the capitalist régime. It suffers still more severely owing to heavy taxation. The capitalist State lays crushing burdens upon the smallholder. It suffices to remember what tsarist taxation signified to the peasant Sell all you have, so long as you pay your taxes.'

In general it may be said that small-scale production is far more tenacious of life in agriculture than in manufacturing industry. In the towns, the independent artisans and other small-scale producers are for the most part rapidly undergoing ruin, but in the rural districts of all countries peasant farming still leads a tolerably sturdy existence. Nevertheless, in the country, too, the impoverishment of the majority proceeds apace, only here the results are less obvious than in the towns: Sometimes it seems, as far as the amount of land is concerned, that an agricultural enterprise is very small, when in reality it is quite an extensive affair, because much capital has been put into it, and because it employs a considerable number of workers; this applies, for instance, to market gardens in the neighbourhood of large towns. Sometimes, on the other hand, those who seem to be independent smallholders are really for the most part wage workers; sometimes they are employed on neighbouring farms, sometimes they engage in seasonal occupations elsewhere, and sometimes they work in the towns. What is happening to the independent artisans and to the home workers, is in like manner happening to the peasants of all lands. A few of them become 'kulaks' (liquor sellers, usurers, rich peasants who by degrees round off their possessions). Some of them manage to struggle on as they are. The remainder are ultimately ruined, they sell their cow and their nag, becoming 'horseless men'; finally, the plot of land goes the way of the rest, the man will either settle in the town or make his living as an agricultural labourer. The 'horseless man' becomes a wage worker, whereas the kulak, the rich peasant who hires workers, becomes a landlord or a capitalist.

Thus in agriculture a vast quantity of land, tools, machines, cattle, horses, etc., passes into the hands of a small group of capitalist landlords, for whom millions of workers labour, and upon whom millions of peasants are dependent.

In the United States, where the capitalist system has developed more fully than elsewhere, there are great estates which are worked like factories. And just as, in factories, only one product is turned out, so it happens on these farms. There may be huge fields where nothing but strawberries are grown, or gigantic orchards; enormous poultry farms; colossal wheat fields, worked by machinery. Many branches of agricultural production are concentrated in a few hands. In this way, for example, there comes to exist a chicken king' (a capitalist into whose hands is concentrated, more or less completely, the rearing of chickens), an egg king', and so on.

§ 15 The dependent position of the proletariat; the reserve army of labour; women's labour and child labour

Under capitalism, the masses of the population are to an increasing extent transformed into wage workers. Ruined artisans, home workers, peasants, traders, minor capitalists - in a word, all who have been thrown overboard, who have been driven down by large-scale capital, fall into the ranks of the proletariat. The more that wealth undergoes concentration and passes into the hands of a small group of capitalists, the more do the masses of the people become the wage slaves of these capitalists.

Owing to the continuous decay of the middle strata and classes, the number of the workers always exceeds the requirements of capital. For this reason, the workers are bound hand and foot by capitalism. The worker must work for the capitalist. If he refuses, the employer can find a hundred others to take his place.

But this dependence upon capital has another cause besides the ruin of new and ever-new strata of the population. The dominion of capital over the workers is further strengthened by the way in which the capitalist is continually turning superfluous workers into the street and making of them a reserve of labour power. How does this come about? As follows. We have already seen that every factory owner endeavours to reduce the cost of production. This is why he is continually installing new machinery. But the machine commonly replaces labour, renders part of the workers superfluous. The introduction of new machinery signifies that some of the workers will be discharged. Among those hitherto employed in the factory, a certain number will be thrown out of work. Since, however, new machinery is perpetually being introduced in one branch of production or another, it is clear that unemployment must always exist under capitalism. For the capitalist is not concerned to provide work for all, or to supply goods to everyone; his aim is to secure increasing profit. Obviously, therefore, he will discharge any workers who are unable to produce for him as much profit as before.

In actual fact, we see in all capitalist countries a huge number of unemployed workers in every large city. Among the ranks of these unemployed we find Chinese and Japanese workers, ruined peasants who have come from the ends of the earth in search of work; we find lads fresh from the country, ex-shopkeepers, and ex-artisans. We find also metal workers, printers, textile workers, and the like, men who have worked in factories for years, and have then been thrown out of employment owing to the introduction of new machinery. They all combine to form a reserve supply of labour power for capital, to form what Marx termed the reserve army of labour. Owing to the existence of this reserve army of labour, owing to perennial unemployment, the dependence and subjection of the working class continually increase. With the aid of new machinery, capital is able to extract more gold from some of the workers, while the others, the superfluous workers, are thrown into the street. But those who have been thrown into the street constitute a scourge in the hands of the capitalist, a whip which he uses to keep in order those who remain in employment.

The industrial reserve army gives examples of complete brutalization, destitution, starvation, death, and even crime. Those who are out of work for years, gradually take to drink, become loafers, tramps, beggars, etc. In great cities - London, New York, Hamburg, Berlin, Paris - there are whole quarters inhabited by these out-of-works. As far as Moscow is concerned, Hitrof Market furnishes a similar example. Here, we no longer find the proletariat, but a new stratum, consisting of those who have forgotten how to work. This product of capitalist society is known as the lumpenproletariat (loafer-proletariat).

The introduction of machinery also led to the employment of women's labour and child labour, which are cheaper, and are therefore more profitable to the capitalist. In earlier days, before the introduction of machinery, special skill was requisite for the work of production, and sometimes a long term of apprenticeship was indispensable. Some machines can be managed by children; all that is necessary is to move the arm or the leg until fatigue becomes overpowering. This is why, after the invention of machinery, the labour of women and children came to be more widely used. Women and children offer less resistance than male workers to capitalist oppression. They are more submissive, more easily intimidated; they are more ready to believe the priest and to accept everything they are told by persons in authority. Hence the factory owner often replaces male workers by females, and compels little children to transmute their blood for him into the golden coins of profit.

In the year 1913, the number of women workers of all kinds (i.e. not manual workers alone) was as follows: France, 6,800,000; Germany,9,400,000; Austria-Hungary, 8,200,000; Italy, 5,700,000; Belgium, 930,000; USA, 8,000,000; England and Wales, 6,000,000. In Russia, the number of women workers continually increased. In 1900, the women workers numbered 25 per cent of all factory workers; in 1908, they numbered 31 per cent; in 1912, 45 per cent. In some branches of production, the women outnumbered the men. For example, in the textile industry, out of 870,000 workers in the year 1912, 453000 were women - more than half, over 52 per cent. During the war, the number of women workers increased enormously.

As regards child labour, this flourishes in many places, despite prohibitions. In countries of advanced capitalist development, as for instance in the USA, child labour is met with at every turn.

This leads to the break-up of the working-class family. If the mothers, and very often the children as well, go to the factory, what becomes of family life?

When a woman enters the factory, when she becomes a wage worker, she is from time to time exposed, just like a man, to all the hardships of unemployment. She, likewise, is shown the door by the capitalist; she, likewise, joins the ranks of the industrial reserve army; she, just like a man, is liable to undergo moral degradation. Associated with this we have prostitution, when a woman sells herself to the first comer in the street. Nothing to eat, no work, hunted from everywhere; and even if she has work, the wages are so low that she may be compelled to supplement her earnings by the sale.of her body. After a time, the new trade becomes habitual. Thus arises the caste of professional prostitutes.

In big towns, prostitutes are found in very large numbers. In such cities as Hamburg and London, these unfortunates are reckoned by tens of thousands. Capital uses them as a source of profit and enrichment, organizing vast brothels on capitalistic lines. There is an extensive international commerce in white slaves. The towns of Argentina used to be the centres of this traffic. Especially repulsive is child prostitution, which flourishes in all European and American towns.

In capitalist society, as better and better machinery is invented, as larger and larger factories are built, and as the quantity of commodities increases, there is a concomitant increase in capitalist oppression, the industrial reserve army becomes more degraded and impoverished, and the working class grows more dependent upon its exploiters.

If private ownership did not exist, if everything were co-operatively owned, a very different state of affairs would prevail. Then people would shorten the working day, would husband their strength, economize toil, enjoy ample leisure. When the capitalist introduces machinery, his concern is for profit; he does not think of reducing the working day, for he would only lose by this. The capitalist does not use machinery to emancipate people, but to enslave them. As capitalism develops, an ever-increasing proportion of capital is devoted to machinery, enormous buildings, huge furnaces, and so on. On the other hand, the proportion of capital expended upon the wages of labour grows continually smaller. In earlier days, when hand labour still prevailed, the expenditure upon looms and other gear was trifling; nearly all the expenditure of capital was upon the wages of labour. Now, conversely, much the larger portion is devoted to buildings and machinery. The result is that the demand for working hands does not keep pace with the increase in the number of proletarians, does not suffice to absorb the influx of those who are ruined by capitalism. The more vigorous the advance of technique under capitalism, the more cruelly does capital oppress the working class; for it grows ever harder to find work, more and more difficult to live.

§ 16 The anarchy of production; competition; crises

The miseries of the working class continually increase concomitantly with the progress of manufacturing technique. Under capitalism this progress, instead of bringing advantages to all, brings increased profit to capital, but unemployment and ruin to many workers. There are, however, additional causes for the increasing misery.

We have already learned that capitalist society is very badly constructed. Private ownership holds sway, and there is no definite plan whatever. Every factory owner conducts his business independently of the others. He struggles with his rivals for buyers, competes' with them.

The question now arises whether this struggle becomes enfeebled or intensified as capitalism develops.

At first sight it might seem that the struggle is enfeebled. In actual fact, the number of capitalists grows continually smaller; the great fish eat up the small fry. Whereas in earlier days ten thousand entrepreneurs were fighting one with another and competition was embittered, since now there are fewer competitors it might be imagined that the rivalry would be less acute. But this is not so in reality. The very opposite is the case. It is true that there are fewer competitors. But each one of these has become enormously stronger than were the rivals of an earlier stage. The struggle between them is greater, not less; more violent, not more gentle. If in the whole world there should rule only a few capitalists, then these capitalist governments would fight with one another. This is what it has come to at long last. At the present time the struggle goes on between immense combinations of capitalists, between their respective States. Moreover, they fight with one another, not solely by means of competitive prices, but also by means of armed force. Thus it is only in respect of the number of competitors that competition can be said to diminish as capitalism develops; in other respects it grows continually fiercer and more destructive.2)

One more phenomenon must now be considered, the occurrence of what are termed crises. What are these crises? What is their real nature? The matter may be stated as follows. One fine day it appears that various commodities have been produced in excessive quantities. Prices fall, but the stock of goods cannot be cleared. The warehouses are filled with all kinds of products, for which there is no sale; buyers are lacking. Needless to say, there are plenty of hungry workers, but they receive no more than a pittance, and cannot buy anything in excess of their usual purchases. Then calamity ensues. In some particular branch of industry the small and middle-sized undertakings collapse first, and are closed down; next comes the failure of the larger enterprises. But the branch of production thus affected bought commodities from another branch of production this latter bought from a third. For instance, tailors buy cloth from the cloth makers; these buy wool from the yarn spinners; and so on. The tailors come to grief, and in consequence there are no customers for the cloth makers. Now the cloth makers fail, and their failure reacts upon the firms that supply them with woollen yarn. Factories and workshops everywhere close their doors, tens of thousands of workers are thrown on the streets, unemployment grows to unprecedented proportions, the workers' life becomes even worse. Yet there are plenty of commodities. The warehouses are bursting with them. This was continually happening before the war. Industry flourishes; the manufacturers' businesses work at high pressure. Suddenly there is a crash, followed by misery and unemployment, and business is at a standstill. After a time, recovery sets in; there comes a renewed period of excessive activity, to be followed in turn by a new collapse. The cycle is repeated over and over again.

How can we explain this absurd state of affairs, wherein people become paupers in the midst of wealth?

The question is not easy to answer. But we must answer it.

We have already learned that in capitalist society there prevails a disorder, or so to say an anarchy, of production. Every factory owner, every entrepreneur, produces for himself, on his own responsibility, and at his own risk. The natural result in these circumstances is that sooner or later too many commodities are produced - there is overproduction. When there was production of goods but not of commodities, when, that is to say, production was not effected for the market, then there was no danger of overproduction. It is quite otherwise in the case of commodity production. Every manufacturer, in order that he may buy what he requires for further production, must first of all sell his own products. If in any particular place there is a stoppage of machinery on account of the anarchy of production, the trouble quickly spreads from one branch of production to another, so that a universal crisis ensues.

These crises have a devastating influence. Large quantities of goods perish. The remnants of small-scale production are swept away as if by an iron broom. Even the big firms often fail.

Most of the burden of these crises is of course borne by the working class.

Some factories close down altogether; others reduce production, working only half-time; others are temporarily closed. The number of unemployed increases. The industrial reserve army grows larger. Simultaneously there is an increase in the poverty and oppression of the working class. During these crises, the condition of the working class, bad at the best of times, grows even worse.

Let us consider, for example, the data of the crisis of 1907-10, affecting both Europe and America, in fact the whole capitalist world. In the United States, the number of unemployed trade unionists increased as follows: June, 1907, 8.1 per cent; October, 18.5 per cent; November, 22 per cent; December, 32.7 per cent (in the building trades, 42 per cent; in the dressmaking trade, 43.6 per cent; among tobacco workers, 55 per cent). It goes without saying that the total number of unemployed, taking into account the unorganized workers as well, was still larger. In England, the percentage of unemployed in the summer of 1907 was 3.4 to 4 per cent; in November, it rose to 5 per cent; in December, to 6.1 per cent; in June,1908, it reached 8.2 per cent. In Germany, during January, 1908, the percentage of unemployed was twice as great as during the same month of the previous year. Like conditions were observable in other countries.

As regards the falling-off in production, it may be mentioned that in the United States the production of cast-iron, which had been 26,000,000 tons in 1907, was only 16,000,000 tons in 1908.

In times of crisis, the price of commodities falls. The capitalist magnates, eager to continue profit making, do not hesitate to impair the quality of production. The coffee-growers of Brazil dumped innumerable sacks of coffee into the sea in order to keep up prices. At the present time the whole world is suffering from hunger and from the nonproduction of goods, the result of the capitalist war. For these things are the offspring of capitalism, which decreed the disastrous war. In times of peace, capitalism was overwhelmed by a glut of products, which, however, did not advantage the workers. Their pockets were empty. The glut brought nothing to the workers except unemployment, with all its attendant evils.

§ 17 The development of capitalism and of class. The intensification of the class struggle

We have seen that capitalist society is affected by two fundamental contradictions, two fundamental ills. In the first place, it is 'anarchistic'; it lacks organization. In the second place, it is in fact composed of two mutually hostile societies (classes). We have also seen that, as capitalism develops, the anarchy of production, finding expression in competition, leads to everincreasing strife, disorder, and ruin. The disintegration of society, far from diminishing, is actually increasing. Now all this arises from the splitting-up of society into two portions, into classes. As capitalism develops, this severance, this cleavage between classes, likewise continues to increase. On one side, that of the capitalists, all the riches of the world are heaped up; on the other side, that of the oppressed classes, is an accumulation of misery, bitterness, and tears. The industrial reserve army gives birth to a stratum of debased and brutalized individuals, crushed to the earth by extreme poverty. But even those who remain at work are sharply distinguished from the capitalists by their manner of life. The differentiation of the proletariat from the bourgeoisie continually increases. Formerly there was quite a number of lesser capitalists, many of whom had close relationships with the workers and lived little better than these. Things are very different today. The lords of capital live in a manner of which no one dreamed in earlier days. It is true that the workers' standard of life has improved in the course of capitalist development. Down to the beginning of the twentieth century, there occurred a general rise in wages. But during this same period, capitalist profits increased still more rapidly. Today there is a great gulf fixed between the toiling masses and the capitalist class. The capitalist now leads an entirely different sort of life; he himself produces nothing. The more capitalism develops, the more exalted becomes the position of the small group of extremely wealthy capitalists, and the wider grows the chasm between these uncrowned kings and the millions upon millions of enslaved proletarians.

We have said that the wages of the workers have risen on the whole, but that profit has increased still more rapidly, and that for this reason the chasm between the two classes has widened. Since the beginning of the twentieth century, however, wages have not risen but fallen; whereas during the same period profits have increased as never before. Hence there has during recent years been an exceptionally rapid increase in social inequality.

It is perfectly clear that this social inequality, in its continued growth, must sooner or later lead to a clash between the workers and the capitalists. If the contrast between the two classes were diminishing, if the life conditions of the workers were becoming approximated to those of the capitalists, then, of course, we might look for a 'time of peace on earth and goodwill towards men'. What actually occurs, however, is that in capitalist society the worker is day by day farther removed from the capitalist instead of drawing nearer to him. The inevitable result of this is a continuous accentuation of the class war between the proletariat and the bourgeoisie.

Bourgeois theorists put forward many objections to such a view. They would like to show that in capitalist society the condition of the working class undergoes continuous improvement. The socialists of the right wing sing the same tune. Writers of both these schools contend that the workers grow gradually richer, and can look forward to becoming petty capitalists themselves. Such expectations have been falsified. In actual fact the condition of the workers as compared with' that of the capitalists has persistently grown worse. Here is an example drawn from the United States, the land of most advanced capitalist development. If we consider the purchasing power of labour (that is to say, the quantity of necessaries which the workers can buy), taking the years from 1890-99 as a standard at 100, the purchasing power in various years was as follows: 1890, 98.6; 1895, 100.6; 1900, 103.0; 1905, 101.4; 1907, 101.5. This means that the workers' standard of life has undergone practically no improvement. The quantities of food, clothing, etc., bought by the average worker in 1890 was increased by no more than 3 per cent in subsequent years; this was the utmost rise in the purchasing power of his wages. But during the same period the American millionaires, the industrial magnates, were making enormous profits, and the quantity of surplus value they were receiving was increasing to an immeasurable extent. As far as the capitalist standard of life, capitalist luxuries, and capitalist incomes, are concerned, it is obvious that these were increased many times over.

The class war arises out of the conflict of interests between the bourgeoisie and the proletariat. These interests are as essentially irreconcilable as are the respective interests of wolves and sheep.

It is plain that the capitalist will find it advantageous to make the workers work as long as possible and to pay them as little as possible; on the other hand, the workers will find it advantageous to work for the minimum hours and for the maximum wages. Obviously, therefore, since the time when the working class first began to exist, there must have been a struggle for higher wages and shorter hours.

This struggle has never been interrupted, and has never been stilled. It has not, however, been restricted to a struggle for a trifling advance in wages. Wherever the capitalist system has developed, the toiling masses have become convinced that they must make an end of capitalism itself. The workers began to consider how this detested system could be replaced by a just and comradely system based upon work. Such was the origin of the communist movement of the working class.

In their struggle, the workers have experienced numerous defeats. But the capitalist system bears within its womb the final victory of the proletariat. Why? For this reason, because the development of capitalism entails the proletarianization of the broad masses of the people. The victory of large-scale capital effects the ruin of independent artisans, small traders, and peasants; it swells the ranks of the wage workers. At each step in capitalist development, the proletariat grows more numerous. It is like the Hydra, the many-headed monster of fable; if you cut off one of its heads, ten new ones grow. When the bourgeoisie suppressed a working class rising, it thereby strengthened the capitalist system. But the development of this capitalist system ruined petty proprietors and peasants by the million, throwing them under the feet of the capitalists. By this very process it increased the number of proletarians, the enemies of the capitalist class. But the increase in strength of the working class was not numerical merely. In addition, the working class became more strongly integrated. Why did this happen? Because, as capitalism developed, there was an increase in the number of great factories. Each great factory assembles within its walls a thousand workers, sometimes as many as ten thousand. These workers labour shoulder to shoulder. They recognize how their capitalist employer is exploiting them. They perceive that to each worker his fellow-workers are friends and comrades. In the course of their work the proletarians, united in the factory, learn how to unite forces. They more readily come to an agreement one with another. That is why, as capitalism develops, there is not merely an increase in the number of the workers, but an increase in working class solidarity.

The more rapidly huge factories extend, the more rapidly does capitalism develop, and the more speedy is the ruin of independent artisans, home workers, and peasants. The faster, likewise is the growth of gigantic cities with millions of inhabitants. Finally, in large towns, there is gathered together upon a comparatively restricted area an immense mass of persons, and the great majority of them belong to the factory proletariat. These masses are housed in foul and smoky quarters of the town, whilst the small group of the master class, the owners of all things, lives in luxurious mansions. The numbers of those constituting this small group are continually diminishing. The workers incessantly increase in numbers and their solidarity grows ever greater.

Under such conditions, the inevitable increase in the intensity of the struggle cannot fail in the long run to lead to the victory of the working class. Sooner or later, notwithstanding all the wiles of the bourgeoisie, the workers will come into violent collision with the master class, will dethrone it, will destroy its robber government, and will create for themselves a new order, a communist order based on labour. In this manner, capitalism, by its own development, inevitably leads to the communist revolution of the proletariat.

The class struggle of the proletariat against the bourgeoisie has assumed various forms. Three leading types of working class organization have arisen in the course of this struggle. First of all we have the trade unions, grouping the workers according to occupation. Next come the cooperatives, which are mainly concerned with distribution, for it is their aim to free the workers from the grip of middlemen and traders. Last of all we have the political parties of the working class (socialist, socialdemocrat, and communist) whose programme it is to guide the working class in its struggle for political power. The fiercer the struggle between the two classes became, the more essential was it that all sections of the working class movement should concentrate upon a single aim - the overthrow of the bourgeois State. Those leaders of the working class movement who have most perfectly realized the situation have always insisted upon the necessity for a close collaboration between all working class organizations. They pointed out, for example, the essential need for unity of action between the trade unions and the political parties of the proletariat; and they declared that the trade unions could not remain neutral' (that is to say, indifferent in political matters). The unions, they said, must march shoulder to shoulder with the political parties of the working class.

Quite recently, the workers' movement has assumed yet newer forms. The most important of these is the constitution of councils of workers' delegates (soviets). We shall have to speak of these again and again in the course of the book.


§ 18 The concentration and centralization of capital as causal factors of communism

Capitalism, as we have seen, digs its own grave. For it creates its own grave-diggers, the proletarians. The more it develops, the more does it multiply those who are its mortal enemies, and the more does it unite them against itself. But it does not merely breed its enemies. It likewise prepares the ground for a new organization of social production, for a new economic order which will be comradely and communistic. How does it do this? We shall speedily give the answer.

We have previously seen (glance at or reread §11 'Capital') that capital is continually increasing in amount. The capitalist adds to his capital, part of the surplus value which he extracts from the working class. By such means, capital grows larger. But if capital increases in amount, this implies that production must extend. The increase in capital, the growth of the amount held by one pair of hands, is termed the accumulation or concentration of capital.

We have likewise seen (refer to §14. The struggle between large-scale and small-scale production') that the development of capitalism involves the decay of small-scale and mediumscale production; that the small and medium producers and traders are ruined, not to speak of the independent artisans; we have seen that the great capitalist gobbles them all up. The capital which was previously owned by the small and medium capitalists slips from their grasp, and by various routes finds its way into the maw of the big sharks. The capital owned by the great capitalists is consequently increased by the amount which they have wrested from the lesser capitalists. There is now an accumulation of capital in the hands of one individual, an accumulation of what had previously been distributed among various hands. Now, after the ruin of the lesser capitalists, their capital has become the spoil of the victors. This accumulation of capital which had previously been dispersed is spoken of as the centralization of capital.

The concentration and centralization of capital, the accumulation of capital in a few hands, does not as yet imply the concentration and centralization of production. Let us suppose that a capitalist has used the accumulation of surplus value to buy a small factory from a neighbour, and that he keeps this factory running on the old lines. Here accumulation has taken place, but there is no change in production. Usually, however, things take a different course. In actual fact it much more frequently happens that the capitalist (because it is profitable to him) remodels and extends production, that he enlarges his factories. This results, not merely in the expansion of capital, but in the expansion of production itself. Production is conducted on an enormous scale, utilizing vast quantities of machinery, and assembling many thousands of workers. It may happen that a dozen or so of huge factories will supply the demand of a whole country for a particular commodity. Essentially what happens is that the workers are producing for the whole of society, that labour, as the phrase goes, has been socialized. But control and profit are still in the hands of the capitalist.

Such a centralization and concentrationof production actually paves the way for cooperative production after the proletarian revolution.

Had this concentration of production not taken place, if the proletariat were to seize power at a time when the work of production was carried on in a hundred thousand tiny workshops each employing no more than two or three workers, it would be impossible to organize these workshops satisfactorily, to inaugurate social production. The further capitalism has developed and the more highly centralized production has become, the easier will it be for the proletariat to manage production after the victory.



1) We are talking in the text of pre-war days. Thanks to the destructive effects of the war, at present buyers are running after sellers instead of sellers after buyers.

2) For further details see the chapter on imperialist war.


The books mentioned at the end of Chapter One. In addition read the following: Bogdanov and Stepanov, Course of Political Economy, vol. II, part 2 'The Era of Industrial Capital.' Marx and Engels, The Communist Manifesto. London, Under the Yoke of Imperialism. - Concerning the agrarian problem, consult the following works: Kautsky, The Agrarian Problem. Lenin, The Agrarian Problem and the Critics of Marx. Kautsky, Socialism and Agriculture (an answer to David). Lenin, New Data concerning the Development of Capitalism in Agriculture in the US. Lenin, The Development of Capitalism in Russia. Krzhivitsky, The Agrarian Question. Parvus, The World Market and the Agrarian Crisis.