Vladimir Ilyich Lenin


Chapter I. The Theoretical Mistakes of the Narodnik Economists

IX. Conclusions From Chapter I

Let us now sum up the theoretical propositions examined above, which have a direct bearing on the problem of the home market.

1) The basic process of the formation of a home market (i.e., of the development of commodity production and of capitalism) is the social division of labour. This consists of various forms of processing raw materials (and various operations in this processing) separating from agriculture one after another and becoming independent branches of industry, which exchange their products (now commodities ) for the products of agriculture. Thus, agriculture itself becomes industry (i.e., produces commodities), and the same process of specialisation takes place in it.

2) A direct conclusion from the preceding proposition is the law governing all developing commodity economy, and the more so capitalist economy—the industrial (i.e., non-agricultural) population grows faster than the agricultural and diverts an ever-growing part of the population from agriculture to manufacturing industry.

3) The separation of the direct producer from the means of production, i.e., his expropriation, signifying the transition from simple commodity production to capitalist production (and constituting the necessary condition for this transition), creates the home market. The process of this creation of the home market proceeds in two directions: on the one hand, the means of production from which the small producer is “freed” are converted into capital in the hands of their new owner, serve to produce commodities and, consequently, are themselves converted into commodities. Thus, even the simple reproduction of these means of production now requires that they be purchased (previously, these means of production were reproduced in greater part in the natural form and partly were made at home), i.e., provides a market for means of production, and then the product now produced with the aid of these means of production is also converted into a commodity. On the other hand, the means of subsistence of the small producer become the material elements of the variable capital, i.e., of the sum of money expended by the employer (whether a landowner, contractor, lumber-dealer, factory owner, etc., makes no difference) on hiring workers. Thus, these means of subsistence are now also converted into commodities, i.e., create a home market for articles of consumption.

4) The realisation of the product in capitalist society (and, consequently, the realisation of surplus-value) cannot be explained without clearing up the point—1) that the social product, like the individual product, resolves itself in terms of value into three parts and not two (constant capital + variable capital + surplus-value, and not only into variable capital + surplus-value, as taught by Adam Smith and the entire school of political economy that came after him and before Marx), and 2) that in its natural form it must be divided into two big departments: means of production (consumed productively) and articles of consumption (consumed personally). By establishing these main theoretical propositions, Marx fully explained the process of realisation of the product in general and of surplus-value in particular in capitalist production, and revealed that it is utterly wrong to drag the foreign market into the problem of realisation.

5) Marx’s theory of realisation also threw light on the problem of national consumption and income.

From what has been said above, it follows automatically that the problem of the home market as a separate, self-sufficient problem not depending on that of the degree of capitalist development does not exist at all. That is why Marx’s theory does not anywhere or ever raise this problem separately. The home market appears when commodity economy appears; it is created by the development of this commodity economy, and the degree to which the social division of labour is ramified determines the level of its development; it spreads with the extension of commodity production from products to labour-power, and only in proportion as the latter is transformed into a commodity does capitalism embrace the entire production of the country, developing mainly on account of means of production, which occupy an increasingly important place in capitalist society. The “home market” for capitalism is created by developing capitalism itself, which deepens the social division of labour and resolves the direct producers into capitalists and workers. The degree of the development of the home market is the degree of development of capitalism in the country. To raise the question of the limits of the home market separately from that of the degree of the development of capitalism (as the Narodnik economists do) is wrong.

That is why the question of how a home market is being formed for Russian capitalism reduces itself to the following: How and in what direction are the diverse aspects of the Russian national economy developing? What constitutes the connection between and interdependence of these diverse aspects?

The next chapters will be devoted to an examination of data containing the answers to these questions.

  VIII. Why Does the Capitalist Nation Need a Foreign Market? |  

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