V. I.   Lenin

On the So-Called Market Question



Let us now draw the conclusions which follow from the above table.

The first conclusion is that the concept “market” is quite inseparable from the concept of the social division   of labour—that “general basis of all commodity land consequently, let us add, of capitalist] production” as Marx calls it. The “market” arises where, and to the extent that, social division of labour and commodity production appear. The dimensions of the market are inseparably connected with the degree of specialisation of social labour.

“...It [a commodity] cannot acquire the properties of a socially recognised universal equivalent, except by being converted into money. That money, however, is in someone else’s pocket. In order to entice the money out of that pocket, our friend’s commodity must, above all things, be a use-value to the owner of the money. For this, it is necessary that the labour expended upon it be of a kind that is socially useful, of a kind that constitutes a branch of the social division of labour. But division of labour is a system of production which has grown. up spontaneously and continues to grow behind the backs of the producers. The commodity to be exchanged may possibly be the product of some new kind of labour that pretends to satisfy newly arisen requirements, or even to give rise itself to new requirements. A particular operation, though yesterday, perhaps, forming one out of the many operations conducted by one producer in creating a given commodity, may today separate itself from this connection, may establish itself as an independent branch of labour and send its incomplete product to market as an independent commodity” (Das Kapital, Bd. I, S. 85[4] My italics).

Thus, the limits of the development of the market, in capitalist society, are set by the limits of the specialisation of social labour. But this specialisation, by its very nature is as infinite as technical developments. To increase the productivity of human labour in, for instance, the making of some part of a whole product, the production of that part must be specialised, must become a special one- concerned with mass production and, therefore, permitting (and engendering) the employment of machines, etc. That is on the one hand. On the other hand, technical progress in capitalist society consists in the socialisation of labour, and this socialisation necessarily calls for specialisation in the various functions of the production process, for their transformation from scattered, isolated functions repeated separately in   every establishment engaged in this production, into socialised functions concentrated in one, new establishment, and calculated to satisfy the requirements of the whole of society. I shall quote an example:

Recently, in the United States, the woodworking factories are becoming more and more specialised, ‘new factories are springing up exclusively for the making of, for instance, axe handles, broom handles, or extensible tables....Machine building is making constant progress, new machines are being continuously invented to simplify and cheapen some side of production.... Every branch of furniture making, for instance, has become a trade requiring special machines and special workers.... In carriage building, wheel rims are made in special factories (Missouri, Arkansas, Tennessee), wheel spokes are made in Indiana and Ohio, and hubs again are made in special factories in Kentucky and Illinois. All these separate parts are bought by factories which specialise in the making of whole wheels. Thus, quite a dozen factories take part in the building of some cheap kind of vehicle” (Mr. Tverskoi, “Ten Years in America,” Vestnik Yevropy, 1893, 1. I quote from Nik. —on,[5] p. 91, footnote 1).

This shows how wrong is the assertion that the growth of the market in capitalist society caused by the specialisation of social labour must cease as soon as all natural producers become commodity producers. Russian carriage building has long become commodity production, but wheel rims, say, are still made in every carriage builder’s (or wheelwright’s) shop; the technical level is low, production is split up among a mass of producers. Technical progress must entail the specialisation of different parts of production, their socialisation, and, consequently, the expansion of the market.

Here the following reservation must be made. All that has been said by no means implies the rejection of the proposition that a capitalist nation cannot exist without foreign markets. Under capitalist production, an equilibrium between production and consumption is achieved only by a series of fluctuations; the larger the scale of production, and the wider the circle of consumers it is calculated to serve, the more violent are the fluctuations. It can be understood,   therefore, that when bourgeois production has reached a high degree of development it can no longer keep within the limits of the national state: competition compels the capitalists to keep on expanding production and to seek foreign markets for the mass sale of their products. Obviously, the fact that a capitalist nation must have foreign markets just as little violates the law that the market is a simple expression of the social division of labour under commodity economy and, consequently, that it can grow as infinitely as the division of labour, as crises violate the law of value. Lamentations about markets appeared in Russian literature only when certain branches of our capitalist production (for example, the cotton industry) had reached full development, embraced nearly the entire home market and become concentrated in a few huge enterprises. The best proof that the material basis of the idle talk and “questions” of markets is precisely the interests of our large-scale capitalist industry, is the fact that nobody in our literature has yet prophesied the ruin of our handicraft industry because of the disappearance of “markets,” although the handicraft industry produces values totalling over a thousand million rubles and supplies the very same impoverished “people.” The wailing about the ruin of our industry due to the shortage of markets is nothing more than a thinly disguised manoeuvre of our capitalists, who in this way exert pressure on policy, identify (in humble avowal of their own “impotence”) the interests of their pockets with the interests of the “country” and are capable of making the government pursue a policy of colonial conquest, and even of involving it in war for the sake of protecting such “state” interests. The bottomless pit of Narodnik utopianism and Narodnik simplicity is needed for the acceptance of this wailing about markets—these crocodile tears of a quite firmly established and already conceited bourgeoisie— as proof of the “impotence” of Russian capitalism!

The second conclusion is that “the impoverishment of the masses of the people” (that indispensable point in all the Narodnik arguments about the market) not only does not hinder the development of capitalism, but, on the contrary, is the expression of that development, is a condition of capitalism and strengthens it. Capitalism needs the   “free labourer,” and impoverishment consists in the petty producers being converted into wage-workers. The impoverishment of the masses is accompanied by the enrichment of a few exploiters, the ruin and decline of small establishments is accompanied by the strengthening and development of bigger ones; both processes facilitate the growth of the market: the “impoverished” peasant who formerly lived by his own farming now lives by “earnings,” i.e., by the sale of his labour-power; he now has to purchase essential articles of consumption (although in a smaller quantity and of inferior quality). On the other hand, the means of production from which this peasant is freed are concentrated in the hands of a minority, are converted into capital, and the product now appears on the market. This is the only explanation of the fact that the mass expropriation of our peasantry in the post-Reform epoch has been accompanied by an increase and not a decrease in the gross productivity of the country[1] and by the growth of the home market: it is a known fact that there has been an enormous increase in the output of the big factories and works and   that there has been a considerable extension of the handicraft industries—both work mainly for the home market—and there has been a similar increase in the amount of grain circulating in the home markets (the development of the grain trade within the country).

The third conclusion—about the significance of the production of means of production—calls for a correction to the table. As has already been stated, that table does not. at all claim to depict the whole process of development of capitalism, but only to show how the replacement of natural by commodity economy and of the latter by capitalist economy affects the market. That is why accumulation was disregarded in the table. Actually, however, capitalist society cannot exist without accumulating, for competition compels every capitalist on pain of ruin to expand production. Such expansion of production is depicted in the table: producer I, for example, in the interval between the 3rd and 4th periods, expanded his output of c threefold: from 2 e to 6 c; formerly he worked alone in his workshop—now he has two wage-workers. Obviously, that expansion of production could not have taken place without accumulation: he had to build a special workshop for several persons, to acquire implements of production on a larger scale, and to purchase larger quantities of raw materials and much else. The same applies to producer IV, who expanded the production of b. This expansion of individual establishments, the concentration of production, must of necessity have entailed (or increased, it makes no difference) the production of means of production for the capitalists: machines, iron, coal, etc. The concentration of production increased the productivity of labour, replaced hand by machine labour and discarded a certain number of workers. On the other hand, there was a development in the production of these machines and other means of production, converted by the capitalist into constant capital which now begins to grow more rapidly than variable capital. If, for example, we compare the 4th period with the 6th, we shall find that the production of means of production has increased 50 per cent (because in the former case there are two capitalist enterprises requiring an increase of constant capital, and in the latter, three): by comparing this increase with the   growth in the production of articles of consumption we arrive at the more rapid growth of the production of means of production mentioned above.

The whole meaning and significance of this law of the more rapid growth of means of production lies in the one fact that the replacement of hand by machine labour—in general the technical progress that accompanies machine industry—calls for the intense development of the production of coal and iron, those real means of production as means of production.” It is clearly evident from the following statement that the author failed to understand the meaning of this law, and allowed the schemes depicting the process to screen its real nature from him: “Viewed from the side this production of means of production as means of production seems absolutely absurd, but the accumulation of money for money’s sake by Plyushkin[6] was also (?!!) an absolutely absurd process. Both know not what they do.” That is precisely what the Narodniks try their utmost to prove—the absurdity of Russian capitalism, which, they aver, is ruining the people, but is not providing a higher organisation of production. Of course, that is a fairy-tale. There is nothing “absurd” in replacing hand by machine labour: on the contrary, the progressive work of human technique consists precisely in this. The higher the level of technical development the more is human hand labour ousted, being replaced by machines of increasing complexity: ‘an ever larger place is taken in the country’s total production by machines and the articles needed for their manufacture.[2]

These three conclusions must be supplemented by two further remarks.

Firstly, what has been said does not negate the “contradiction in the capitalist mode of production” which Marx spoke of in the following words: “The labourers as buyers of commodities are important for the market. But as sellers of their own commodity—labour-power—capitalist society tends to keep them down to the minimum price” (Das Kapital, Bd. II, S. 303, No. 32)[7] it, has been shown above that in capitalist society that part of social production which produces articles of consumption must also grow. The development of the production of means of production merely sets the above-mentioned contradiction aside, but does not abolish it. It can only be eliminated with the elimination of the capitalist mode of production itself. It goes without saying, however, that it is utterly absurd to regard that contradiction as an obstacle to the full development of capitalism in Russia (as the Narodniks are fond of doing); incidentally, that is sufficiently explained by the table.

Secondly, when discussing the relation between the growth of capitalism and of the “market,” we must not lose sight of the indubitable fact that the development of capitalism inevitably entails a rising level of requirements for the entire population, including the industrial proletariat. This rise is created in general by the increasing frequency of exchange of products, which results in more frequent contacts between the inhabitants of town and country, of different geographical localities, and so forth. It is also brought about by the crowding together, the concentration of the industrial proletariat, which enhances their class-consciousness and sense of human dignity and enables them to wage a successful struggle against the predatory tendencies of the capitalist system. This law of increasing requirements has manifested itself with full force in the history of Europe—compare, for example, the French proletariat of the end of the eighteenth and of the end of the nineteenth centuries, or the British worker of the 1840’s[3] and of today.   This same law operates in Russia, too: the rapid development of commodity economy and capitalism in the post-Reform epoch has caused a rise in the level of requirements of the “peasantry,” too: the peasants have begun to live a “cleaner” life (as regards clothing, housing, and so forth). That this undoubtedly progressive phenomenon must be placed to the credit of Russian capitalism and of nothing else is proved if only by the generally known fact (noted by all the investigators of our village handicrafts and of peasant economy in general) that the peasants of the industrial localities live a far “cleaner” life than the peasants engaged exclusively in agriculture and hardly touched by capitalism. Of course, that phenomenon is manifested primarily and most readily in the adoption of the purely outward, ostentatious aspect of “civilisation,” but only arrant reactionaries like Mr. V. V. are capable of bewailing it and seeing nothing in it but “decline.”


[1] This may he a debatable point only in relation to the agricultural industry. ‘Grain production is in a state of absolute stagnation,” says Mr. N. —on, for example. He bases his conclusion on the data for only eight years (18711878). Let us examine the data for n longer period; an eight-year period is, of course, too short. Let us compare the statistics for the 1860’s [Military Statistical Abstract, 1871], the 1870’s [N.—on’s data] and the 1880’s [Returns for Russia, 1890]. The data cover 50 gubernias of European Russia and all crops, including potatoes. Lenin


[2] Naturally, therefore, it is wrong to divide the development or capitalism into development in breadth and in depth; the entire development proceeds on account of division of labour; there is no “essential” difference between the two features. Actually, however, the difference between them boils down to different stages of technical progress. In the lower stages of the development of capitalist technique—simple co-operation and manufacture—the production or means of production as means of production does not yet exist: it emerges and attains enormous development only at the higher stage—large.scale machine industry. —Lenin

[3] Cf. Frederick Engels, The Condition of the Working-Class in England in 1844. That was a state of most horrible and sordid poverty (in the literal sense of the word) and of utter loss of the sense of human dignity. —Lenin

[4] See K. Marx,Capital, Vol. 1, Moscow, 1959 p. 106.

[5] Nik.—on or N.—on was the pseudonym of N. F. Danielson, one of the ideologists of liberal Narodism of the 1880s and 1890s. The book by Nikolai—on quoted here is called Sketches on Our Post-Reform Social Economy, St. Petersburg, 1893.

[6] Plyushkin, a character in N. V. Gogol’s Dead Souls. The name Plyushkin, a tight-fisted landlord, has come to typify extreme avarice.

[7] See K. Marx, Capital, Vol. II, Moscow, 1957, p. 316 (footnote 32)

  V | VII  

< backward     document index     forward >
Works Index   |   Volume 1 | Collected Works   |   L.I.A. Index