V. I.   Lenin

On the So-Called Market Question



The main premise of the author of the paper is the assumption of the “general and exclusive domination of capitalist production.” Proceeding from that premise he expounds the   contents of Chapter XXI of Volume II of Capital (Part III—“The Reproduction and Circulation of the Aggregate Social Capital”).

Here Marx sets out to investigate how social production replaces the part of the product which serves to satisfy the personal needs of the workers and the capitalists, and that which goes to form the elements of productive capital. Hence, in Volume I, the investigation of the production and reproduction of an individual capital could be limited to an analysis of the component parts of capital and the product according to their value— Las is shown in Volume I of Capital the value of the product consists of c (constant capital) + v (variable capital) +s (surplus-value) 1— but here the product must be divided into its material components, because that part of the product which consists of the elements of capital cannot be used for personal consumption, and vice versa. In view of that, Marx divides aggregate social production—and consequently, the aggregate social product—into two departments: I) the production of means of production, i.e., the elements of productive capital—commodities which can serve only for productive consumption, and II) the production of means of consumption, i.e., commodities that servo for the personal consumption of the working class and the capitalist class.

The investigation is based on the following scheme [Arabic numerals indicate units of value—millions of rubles, for example; Roman numerals indicate the above-mentioned departments of social production. The rate of surplus-value is taken at 100 per cent]:

I 4,000c + 1,000v + 1,000s = 6,000 /Capital =7,500 II 2,000c + 500v + 500s = 3,000 \Product =9,000

Let us begin by supposing that we are dealing with simple reproduction, i.e., let us assume that production does not expand, but remains permanently on its former scale; this means that the capitalists consume the whole surplus-value unproductively, that they expend it for their personal needs and not for accumulation. Under those circumstances it is obvious, firstly, that II 500 v and II 500 a must be consumed by the capitalists and the workers in   the same department II, since that product exists in the form of means of consumption intended for the satisfaction of personal needs. Further, 1 4,000 c in its natural form must be consumed by the capitalists in the same department I, because the condition that the scale of production remains unchanged demands the retention of the same capital for the next years production of means of production; consequently, the replacement of this part of capital also presents no difficulty; the corresponding part of the product existing in the natural form of coal, iron, machines, etc., will be exchanged among the capitalists engaged in producing means of production and will serve them, as before, as constant capital. Thus, there remains I (v+s) and II c. I 1,000 v+I 1,000s are products existing in the form of means of production, and II 2,000 c—in the form of means of consumption. The workers and capitalists in department I (under simple reproduction, i.e., consumption of the entire surplus-value) must consume means of consumption to the value of 2,000 [1,000 (v)+1,000 (s)1.To be able to continue production on the previous scale, the capitalists in department II must acquire means of production to the extent of 2,000 in order to replace their constant capital (2,000 II c). It is evident from this that I v+I s must be exchanged for II c, because, if they are not, production on the previous scale will be impossible. The condition for simple reproduction is that the sum of the variable capital and surplus-value in department I must be equal to the constant capital in department II: I (v + s) =II c. In other words, that law may be formulated as follows: the sum of all the new values produced in the course of a year (in both departments) must be equal to the gross value of the product existing in the form of means of consumption: I (v + s) + II (v + s) = II (c + v + s).

Actually, of course, there can be no simple reproduction, both because the production of the whole of society cannot remain on the previous scale every year, and because accumulation is a law of the capitalist system. Let us, therefore, examine how social production on an expanding scale, or accumulation, takes place. Where there is accumulation, only part of the surplus-value is consumed by the capitalists for their personal needs, the other part being   consumed productively, i.e., converted into the elements or productive capital for the expansion of production. Therefore, where there is accumulation, I (v + s) and II c cannot be equal: I (v + s) must be greater than II c in order that part of the surplus-value in department I (Is) may be used for the expansion of production, and not exchanged for means of consumption. Thus we get

A. Scheme of Simple Reproduction:
I 4,000 c+l,O0O v+1,000 s=6,000
II 2,000 c+ 500 v+ 500 s=3,000
I (v+s) =11 c.
B. Initial Scheme of Accumulation:
I 4,000 c+4,000 v+1 000 s—6,000
II 1,500 c+ 750 v+ 75.0 s=3,000
I (v + s) > II c.

Let us now see how social production must proceed if there is accumulation.

First year.

I 4,000 c+1,000 v+l,000 s=6,000 (Capital =7,250
II 1,500 c+ 750 v+ 750 s=3,000 (Product=9,0005

I (1,000 v +500 s) are exchanged for II 1,500 c (as in simple reproduction).

I 500 s are accumulated, i.e., go to expand production, are converted into capital. If we take the previous division into constant and variable capital we get

I 500 s=400 c+100 v.

The additional constant capital (400 c) is contained in the product I (its natural form is means of production); but the additional variable capital (100 v) must be obtained from the capitalists of department II, who, consequently, also have to accumulate: they exchange part of their surplus-value (II 100 s) for means of production (I 100 v) and convert these means of production into additional constant capital. Consequently, their constant capital grows from 1,500 c tot ,600 c; to process it additional labour-power   is needed—50 v, which is also taken out of the surplus-value of the capitalists of department II.

By adding the additional capital from department I and department II to the original capital we get the following distribution of the product:

I 4,400 c+l,100 v+(500 s)=6,000
II 1,600 c+ 800 v-l-(600 s)=3,000

The surplus-value in parentheses represents the capitalists’consumption fund, i.e., the part of surplus-value that does not go for accumulation, but for the personal needs of the capitalists.

If production proceeds on the previous scale, at the end of the year we shall get:

I 4,400 c+1,100 v+1,100 s=6,600 (Capital =7,900
II 1,600 c+ 800 v+ 800 s=3,200 (Product=9,800

I (1,100 v +550 s) are exchanged for II 1,650 c; the additional 50 c are taken from 800 II s land the increase of c by 50 causes an increase of v by 251.

Further, 550 I s are accumulated as before:

550 1 s=440 c+1i0 v
165 II s=110 c + 55 v.

If to the original capital we now add the additional [to 1 4,400 c—440 C; to 11100 v — 110 v; to 111,600 c – 50 c and 110c; and to II800 v—25 v—and55v], we shall get:

I 4,840 c+1,210 v+(550 s) =6,600
II 1,760 c+ 880 v+(560 s) =3,200

With the further progress of production we get

I 4,840 c+1,210 v+1,210 s=7,260 (Capital 8,690
II 1,760 c+ 880 v+ 880 s=3,520 (Product =10,780

and so forth.

Such, in essence, are the results of Marx’s investigations in the reproduction of the aggregate social capital. These investigations (the reservation must be made) are given here in a most concise form; very much that Marx analyses in detail has been omitted—for   example, circulation of money, replacement of fixed capital which is gradually worn out, and so forth—because all this has no direct bearing on the question under review.


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