V. I.   Lenin

On the So-Called Market Question



What conclusions does the author of the paper draw from these investigations made by Marx? Unfortunately, he does not formulate his conclusions very precisely and definitely, so that we have to make our own judgement of them from certain remarks which do not fully harmonise with each other. Thus, for example, we read:

We have seen here,” says the author, “how accumulation takes place in department I, the production of means of production as means of production: . . .this accumulation takes place independently both of the progress of the production of articles of consumption and of the personal consumption itself, no matter whose it is” (page 15/3).

Of course, it is wrong to speak of accumulation being “independent” of the production of articles of consumption, if only because the expansion of production calls for new variable capital and, consequently, articles of consumption; evidently, by using that term the author merely wanted to stress the specific feature of the scheme, namely, that the reproduction of I c—constant capital in department I— takes place without exchanges with department II,i.e., every year a certain quantity of, say, coal is produced in society for the purpose of producing coal. It goes without saying that this production (of coal for the purpose of producing coal) links up, by a series of subsequent exchanges, with the production of articles of consumption—otherwise, neither the coal-owners nor their workers could exist.

Elsewhere, the author expresses himself much more feebly: “The principal movement of capitalist accumulation,” he says, “takes place, and has taken place (except in very early periods) independently of any direct producers, independently of the personal consumption of any stratum of the population” (p. 8). Here, reference is made only to the predominance of the production of means of production over the production of articles of consumption in   the course of the historical development of capitalism. This reference is repeated in another passage: “On the one hand, the typical feature of capitalist society is accumulation for accumulation, productive but not personal consumption; on the other hand, typical of it is precisely the production of means of production as means of production” (p. “21/2). If by these references the author wanted to say that capitalist society is distinguished from the other economic organisations which preceded it precisely by the development of machines and the articles necessary for them (coal, iron, and so forth), then he quite right. In technical level capitalist society is higher than all others, and technical progress is expressed precisely in the fact that the work of machines pushes human labour more and more into the background.

Instead of engaging in criticism of the author’s insufficiently clear statements it will, therefore, be better to turn straight to Marx and see whether it is possible to draw from his theory the conclusion that department I “predominates” over department II, and in what sense this predominance is to be understood.

From Marx’s scheme quoted above the conclusion cannot be drawn that department I predominates over department II: both develop on parallel lines. But that scheme does not take technical progress into consideration. As Marx proved in Volume I of Capital, technical progress is expressed by the gradual decrease of the ratio of variable capital to constant capital (v/c), whereas in the scheme it is taken as unchanged.

It goes without saying that if this change is made in the scheme there will be a relatively more rapid increase in means of production than in articles of consumption. Nevertheless, it seems to me that it will be worth while making that calculation, firstly, for the sake of clarity, and secondly, to avoid possible wrong conclusions from that premise.

[In the following scheme the rate of accumulation is taken as constant: half of the surplus-value is accumulated and half is consumed personally.]

[The reader may skip the following scheme and pass straight to the conclusions on the next page. The letter a stands for additional capital used for the expansion of production, i.e., the accumulated part of surplus-value.]


and so forth.[4]

Let us now compare the conclusions drawn from this scheme concerning the growth of the various parts of the social product:[5]


We thus see that growth in the production of means of production as means of production is the most rapid, then comes the production of means of production as means of consumption, and the slowest rate of growth is in the production of means of consumption. That conclusion could have been arrived at, without Marx’s investigation in Volume II of Capital, on the basis of the law that constant capital tends to grow faster than variable: the proposition that means of production grow faster is merely a paraphrase of this law as applied to social production as a whole.

But perhaps we should take another step forward? Since we have accepted that the ratio v to c+v diminishes constantly, why not let v decrease to zero, the same number of workers being sufficient for a larger quantity of means of   production? In that case, the accumulated part of surplus-value will be added straight to constant capital in department 1, and social production will grow exclusively on account of means of production as means of production, complete stagnation reigning in department[1] II.[2]

That would, of course, be a misuse of the schemes, for such a conclusion is based on improbable assumptions and is therefore wrong. Is it conceivable that technical progress, which reduces the proportion of v to c, will find expression only in department I and leave department II in a state of complete stagnation? Is it in conformity with the laws governing capitalist society, laws which demand of every capitalist that he enlarge his enterprise on pain of ruin, that no accumulation at all should take place in department II?

Thus, the only correct conclusion that can be drawn from Marx’s investigation, outlined above, is that in capitalist society, the production of means of production increases faster than the production of means of consumption. As has been stated already, this conclusion follows directly from the generally known proposition that capitalist production attains an immeasurably higher technical level than production in. previous times.[3] On this point specifically Marx expresses himself quite definitely only in one   passage, and that passage fully confirms the correctness of the formula given:

What distinguishes capitalist society in this case from the savage is not, as Senior thinks, the privilege and peculiarity of the savage to expend his labour at times in a way that does not procure him any products resolvable (exchangeable) into revenue, i.e., into articles of consumption. No, the distinction consists in the following:

alpha) Capitalist society employs more [Nota bene] of its available annual labour in the production of means of production (ergo, of constant capital), which are not resolvable into revenue in the form of wages or surplus-value, but can function only as capital.” (Das Kapital, Bd. II, Seite 436.)[6]


[1] I do not mean to say that such a thing is absolutely impossible as an individual case. Here, however, we are not discussing special cases, but the general law of development of capitalist society. —Lenin

[2] I shall explain the point by the following scheme:

        I: 4,000c + 1,000 v + 1,000 s = 6,000
        II: 1,500 c + 750 v + 750 s = 3,000
        ——– I: (1,000 v + 500 s) = II: 1,500 c
        ——– I: 500 s are accumulated, added to I: 4,000 c
        —- I: 4,500 c + 1,000 v + (500 s) = 6000
        —- II: 1,500 c + 750 v+ 750 s = 3,000
        I: 4,500 c + 1,000 v + 1,000 s = 6,500
        II: 1,500 c+ 750 v + 750 s =3,000
        ——– I: (1,000 v + 500 s) = II: 1,500 c
        ——– I: 500 s are accumulated as before, and so forth. Lenin

[3] That is why the conclusion drawn can be formulated somewhat differently: in capitalist society, production (and, consequently “the market”) can grow either of account of the growth of articles of consumption, or, and mainly, of technical progress, i.e., the ousting of hand by machine labour, for the change in the proportion of v to c expresses precisely the diminution of the role of hand labour. —Lenin

[4] The scheme of expanded reproduction taking account on technical progress is given exactly as it is in V. I. Lenin’s manuscript; occasional   inaccuracies in figures do not affect the line of argument and the general conclusions.

[5] The column “Means of production as means of consumption” contains the total sum I (v+m). which includes the part intended for accumulation. It should be borne in mind that part of the newly created value in Department I is embodied in instruments and materials which are not means of production for Department II, but additional means of production (exceeding replacement) for Department I. The part of the produced means of production intend-ed for Department II, and that remaining in Department I can be seen from the magnitude of the constant capital that actually functions in both Departments in the following year.

Two errors slipped into V. I. Lenin’s manuscript, viz.: 3,172 instead of 3,172 1/2, and 10,828 1/1 instead of 10,830, as can be seen from the scheme given in the text.

[6] See K. Marx, Capital, Vol. II, Moscow, 1957, p. 438

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