Vladimir Ilyich Lenin


Chapter VI. Capitalist Manufacture and Capitalist Domestic Industry

VI. Merchant’s and Industrial Capital In Manufacture. The “Buyer-Up” and the “Factory Owner”

From the data given above it is evident that along with big capitalist workshops we always find an extremely large number of small establishments at this stage of capitalist development; numerically, these, as a rule, even predominate, although they play a quite subordinate role in the sum-total of production. This retention (and even, as we have seen above, development) of small establishments under manufacture is quite a natural phenomenon. Under hand production, the large establishments have no decisive advantage over the small ones; division of labour, by creating the simplest detailed operations, facilitates the rise of small workshops. For this reason, a typical feature of capitalist manufacture is precisely the small number of relatively large establishments side by side with a considerable number of small establishments. Is there any connection between the one and the other? The data examined above leave no doubt that the connection between them is of the closest, that it is out of the small establishments that the large ones grow, that the small establishments are sometimes merely outside departments of the manufactories, that in the overwhelming majority of cases the connection between them is maintained by merchant’s capital, which belongs to the big masters and holds sway over the small ones. The owner of the big workshop has to buy raw materials and sell his wares on a large scale; the bigger his turnover, the smaller (per unit of product) are his expenses on the purchase and sale of goods, on sorting, warehousing, etc., etc.; and so there arises the retail reselling of raw materials to small masters, and the purchase of their wares, which the manufactory owner resells as his own.[1] If (as is often the case) bondage and usury are linked with these transactions in the sale of raw materials and the purchase of wares, if the small master gets materials on credit and delivers wares in payment of debt, the big manufactory owner obtains a high level of profit on his capital such as he could never obtain from wage-workers. Division of labour gives a fresh impetus to the development of such relations of dependence of the small masters upon the big ones: the latter either distribute materials in the homes for making up (or for the performance of certain detailed operations), or buy up from the “handicraftsmen” parts of products, special sorts of products, etc. In short, the closest and most inseparable tie between merchant’s and industrial capital is one of the most characteristic features of manufacture. The “buyer-up” nearly always merges here with the manufactory owner (the “factory owner,” to use the current but wrong term, which classifies every workshop of any size as a “factory”). That is why, in the overwhelming majority of cases, data on the scale of production of the big establishments in themselves give no idea of their real significance in our “handicraft industries,”[2] for the owners of such establishments have at their command the labour, not only of the workers employed in their establishments, but of a mass of domestic workers, and even (de facto ) of a mass of quasi-independent small masters, in relation to whom they are “buyers-up.”[3] The data on Russian manufacture thus bring out in striking relief the law established by the author of Capital, namely, that the degree of development of merchant’s capital is inversely proportional to the degree of development of industrial capital.[4] And indeed, we may characterise all the industries described in § II as follows: the fewer the big workshops in them, the more is “buying-up” developed, and vice versa; all that changes is the form of capital that dominates in each case and that places the “independent” handicraftsman in conditions which often are incomparably worse than those of the wage-worker.

The fundamental error of Narodnik economics is that it ignores, or glosses over, the connection between the big and the small establishments, on the one hand, and between merchant’s and industrial capital, on the other. “The factory owner of the Pavlovo area is nothing more than a complex type of buyer-up,” says Mr. Grigoryev (loc. cit., p. 119). That is true, not only of Pavlovo, but of the majority of industries organised on the lines of capitalist manufacture; the reverse is likewise true: the buyer-up in manufacture is a complex type of “factory owner”; this, incidentally, is one of the fundamental differences between the buyer-up in manufacture and the buyer-up in the small peasant industries. But to see in this fact of the connection between the “buyer-up” and the “factory owner” some argument in favour of small industry (as Mr. Grigoryev and many other Narodniks do) means drawing absolutely arbitrary conclusions and distorting facts to fit preconceived notions. A host of facts testify, as we have seen, to the point that the combination of merchant’s capital with industrial capital makes the position of the direct producer considerably worse than that of the wage-worker, lengthens his working day, reduces his earnings, and retards economic and cultural development.


[1] Let us supplement the above by one other example. In the furnishing industry of Moscow Gubernia (information dated 1876, from Mr. Isayev’s book), the biggest industrialists are the Zemns, who introduced the making of costly furniture and “trained generations of skilled artisans.” In 1845 they established a sawmill of their own (in 1894-95 – 12,000 rubles output, 14 workers, steam-engine). Let us note that altogether in this industry there were 708 establishments, 1,979 workers, of whom 846, or 42.7%, were hired, and an output totalling 459,000 rubles. In the beginning of the 60s the Zenins began to buy raw materials wholesale in Nizhni-Novgorod. They bought timber in waggon-loads at 13 rubles per hundred planks and sold it to small handicraftsmen at 18-20 rubles. In 7 villages (where 116 are at work) the majority sell furniture to Zenin, who has a furniture and plywood warehouse in Moscow (established in 1874) with a turnover reaching 40,000 rubles. About 20 one-man jobbers are working for the Zenins.—Lenin

[2] Here is an example illustrating what has been said above. In the village of Negino, Trubchevsk Uyezd, Orel Gubernia, there is an oil works employing 8 workers, with an output of 2,000 rubles (Directory for 1890). This small works would seem to indicate that the role of capital in the local oil-pressing industry is very slight But the slight development of industrial capital is merely indicative of an enormous development of merchant’s and usurer’s capital. From the Zemstvo statistical returns we learn of this village that of 186 households 160 are completely in the grip of the local factory owner, who even pays all their taxes for them, lends them all they need (and that over many, many years), receiving help at a reduced price in payment of debt. The mass of the peasants in Orel Gubernia are in a similar state of bondage. Can one, under such circumstances, rejoice over the slight development of industrial capital?—Lenin

[3] One can therefore imagine what sort of picture one gets of the economic organisation of such “handicraft industries” if the big manufactory owners are left out of account (after all, this is not handicraft, but factory industry!), while the “buyers-up” are depicted as being “virtually quite superfluous and called into being solely by the failure to organise the sale of products” (Mr. V. V., Essays on Handicraft Industry, 150)!—Lenin

[4] Karl Marx, Capital, Vol. III, Moscow, 1959, p. 323. [p.440]

  V. The Economic Structure of Manufacture | VII. Capitalist Domestic Industry as an Appendage of Manufacture  

Works Index   |   Volume 3 | Collected Works   |   L.I.A. Index
< backward   forward >