The next question in the theory of the home market is the following. We know that the value of a product in capitalist production resolves into three parts: 1) the first part replaces the constant capital, i.e., the value that existed previously in the shape of raw and auxiliary materials, machines and instruments of production, etc., and that is merely reproduced in a certain part of the finished product; 2) the second part replaces the variable capital, i.e., covers the maintenance of the worker; and, lastly, 3) the third part constitutes the surplus-value, which belongs to the capitalist. It is usually granted (we state the question in the spirit of Messrs. N.–on and V. V.) that the realisation (i. e., the finding of a corresponding equivalent, sale in the market) of the first two parts presents no difficulty, because the first part goes into production, and the second into consumption by the working class. But how is the third part—surplus-value—realised? It cannot, surely, be consumed in its entirety by the capitalists! So our economists come to the conclusion that “the way out of the difficulty” of realising surplus-value is “the acquisition of a foreign market” (N.–on, Sketches, Part II, § XV in general, and p. 205 in particular; V. V., “The Excess in the Market Supply of Commodities” in Otechestvenniye Zapiski [Fatherland Notes ], 1883, and Essays on Theoretical Economics, St. Petersburg, 1895, p. 179 and foll.). The writers mentioned explain the need for a capitalist nation to have a foreign market by the suggestion that the capitalists cannot realise their products in any other way. The home market in Russia, they say, is shrinking because of the ruin of the peasantry and because of the impossibility of realising surplus-value without a foreign market, while the foreign market’s closed to a young country that enters the path of capitalist development too late—and so, it is declared as proven that Russian capitalism has no basis, is still-born, a claim founded on mere a priori (and, moreover, theoretically incorrect) assumptions!
When expressing his views on realisation, Mr. N.–on evidently had in mind Marx’s theory on this subject (although he said not a single word about Marx in this part of his Sketches), but he absolutely failed to understand it and distorted it beyond recognition, as we shall see in a moment. This explains the curious fact that his views coincided in all essentials with those of Mr. V. V., who cannot possibly be accused of “not understanding” theory, for it would be the height of injustice to suspect him of even the slightest acquaintance with it. Both authors expound their theories as though they are the first to have dealt with the subject, and have reached certain solutions “all by themselves”; both of them most sublimely ignore the arguments of the old economists on the subject, and both repeat old errors that have been most thoroughly refuted in Volume II of Capital.[1] Both authors reduce the whole problem of the realisation of the product to the realisation of surplus-value, evidently imagining that the realisation of constant capital presents no difficulties. This naive opinion contains a most profound error, one that is the source of all further errors in the Narodnik theory of realisation. As a matter of fact, the difficulty of explaining realisation is precisely one of explaining the realisation of constant capital. In order to be realised, constant capital must be put back again into production, and that is directly practicable only in the case of that capital whose product consists of means of production. If, however, the product which makes good the constant part of capital consists of articles of consumption, it cannot be directly put back into production; what is required is exchange between the department of social production that makes means of production and that which makes articles of consumption. It is this point that constitutes the whole difficulty of the problem, a difficulty unnoticed by our economists. Mr. V. V. presents the matter, generally speaking, as if the aim of capitalist production is not accumulation but consumption, advancing the profound argument that “into the hands of a minority flows a mass of material objects in excess of the consuming power of the organism” (sic !) “at the given stage of their development” (loc. cit., 149) and that “it is not the moderation and abstemiousness of the manufacturers which are the cause of the superfluity of products, but the limitations and insufficient elasticity of the human organism (!!), which fails to increase its consuming power at the rate at which surplus-value grows” (ibid., 161). Mr. N.–on tries to present the matter as though he does not regard consumption as the aim of capitalist production, as though he takes account of the role and significance of means of production in regard to the problem of realisation; as a matter of fact, however, he has no clear idea whatsoever about the process of the circulation and reproduction of the aggregate social capital, and has become entangled in a host of contradictions. We shall not stop to examine all these contradictions in detail (pp. 203-205 of Mr. N.–on’s Sketches ); that would be too thankless a task (and one already performed in part by Mr. Bulgakov[2] in his book Markets Under Capitalist Production, Moscow, 1897, pp. 237-245), and furthermore, to prove the justice of the appraisal given here of Mr. N.–on’s arguments, it will suffice to examine his final conclusion, namely, that the foreign market is the way out of the difficulty of realising surplus-value. This conclusion of Mr. N.–on’s (essentially a mere repetition of the one drawn by Mr. V. V.) shows in most striking fashion that he did not in any way understand either the realisation of the product in capitalist society (i.e., the theory of the home market) or the role of the foreign market. Indeed, is there even a grain of common sense in this dragging of the foreign market into the problem of “realisation”? The problem of realisation is how to find for each part of the capitalist product, in terms of value (constant capital, variable capital and surplus-value) and in its material form (means of production, and articles of consumption, specifically necessities and luxuries), that other part of the product which replaces it on the market. Clearly, foreign trade must here be excluded, for dragging it in does not advance the solution of the problem one iota, but merely retracts it by extending the problem from one country to several. The very same Mr. N.–on who discovered in foreign trade “the way out of the difficulty” of realising surplus-value, argues about wages, for example, as follows: with the part of the annual product which the direct producers, the workers, receive in the shape of wages “only that part of the means of subsistence can be drawn from circulation which is equal in value to the sum total of wages” (203). How, the question arises, does our economist know that the capitalists of a given country will produce means of subsistence in just the quantity and of just the quality requisite for their realisation by wages? How does he know that in this connection the foreign market can be dispensed with? Obviously, he cannot know this, and has simply brushed aside the problem of the foreign market, for in discussing the realisation of variable capital the important thing is the replacement of one part of the product by another, and not at all whether this replacement takes place in one country or in two. With respect to surplus-value, however, he departs from this necessary premise, and instead of solving the problem, simply evades it by talking of the foreign market. The sale of the product in the foreign market itself needs explanation, i.e., the finding of an equivalent for that part of the product which is being sold, the finding of another part of the capitalist product that can replace the first. That is why Marx says that in examining the problem of realisation, the foreign market, foreign trade “must be entirely discarded,” for “the involvement of foreign commerce in analysing the annually reproduced value of products can...only confuse without contributing any new element of the problem, or of its solution” (Das Kapital, 11, 469).[3] Messrs. V. V. and N.–on imagined that they were giving a profound appraisal of the contradictions of capitalism by pointing to the difficulties of realising surplus-value. Actually, however, they were giving an extremely superficial appraisal of the contradictions of capitalism, for if one speaks of the “difficulties” of realisation, of the crises, etc., arising therefrom, one must admit that these “difficulties” are not only possible but are necessary as regards all parts of the capitalist product, and not as regards surplus-value alone. Difficulties of this kind, due to disproportion in the distribution of the various branches of production, constantly arise, not only in realising surplus-value, but also in realising variable and constant capital; in realising not only the product consisting of articles of consumption, but also that consisting of means of production. Without “difficulties” of this kind and crises, there cannot, in general, be any capitalist production, production by isolated producers for a world market unknown to them.
[1] Particularly astonishing in this connection is Mr. V V.’s audacity, which transcends all bounds of literary decency. After enunciating his theory, and betraying his utter unfamiliarity with Volume II of Capital, which deals specifically with realisation, he goes on to make the quite unfounded statement that “in building up my propositions I used” Marx’s theory!! (Essays on Theoretical Economics, Essay III. “The Capitalist Law (sic !?!) of Production, Distribution and Consumption,” p. 162.) —Lenin
[2] It will not be superfluous to remind the contemporary reader that Mr. Bulgakov, and also Messrs. Struve and Tugan-Baranovsky whom we shall quote rather often later on, tried to be Marxists in 1899. Now they have all safely turned from “critics of Marx” into plain bourgeois economists. (Note to 2nd edition.[4]) —Lenin
[4] Here and elsewhere, footnotes indicated as Note to 2nd edition are those written by Lenin himself when he prepared the second, 1908 edition of this work.
[3] Karl Marx, Capital, Vol. II, Moscow, 1957, p. 470.
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