But that is not all. In quoting his figures he means workers “united by capital”, who are “more or less dependent on the bourgeoisie”, etc. Does he know that the number of such workers is far greater than the probable number of factory and plant workers proper? Such dependence is the condition of an enormous number of handicraftsmen, who have lost almost all their independence and been very successfully “united” by capitalism. This circumstance has already been pointed out by Voyenno-Statistichesky Sbornik, which was published in 1871. More up-to-date investigations have fully confirmed this evidence. Thus we learn from Mr. V.S. Prugavin that “in Moscow Gubernia alone the number of handicraft weavers amounts to 50,000. And yet only 12 handicraftsmen attended the exhibition as exhibitors from the whole of the enormous Moscow weaving district ... The reason for this was mainly that the great bulk of handicraft weavers do not work on their own account but for more or less big masters who distribute the raw material to be worked up by the peasants at home. Briefly, in the weaving industries the domestic system of large-scale production is dominant”.  In Vladimir Gubernia “extremely varied” weaving industries play a highly important role in the economic life of the population. In the single, formerly Oparino Volost, Alexandrov Uyezd, “22 villages with 1,296 workers are employed” in wool production alone. The annual production of the handicraftsmen amounts to 155,000 rubles. Well, are not these handicraftsmen free from more or less complete dependence on the bourgeoisie? Unfortunately not. “When we direct our attention to the economy of the trade, we become aware first of all of the fact that the bulk of the handicraftsmen have no independent handicraft occupation and work for master workers or manufacturers.” Things have gone so far in this respect that in the “production 6f dyes, where the independent handicraftsman gets one and a half times as much as the dependent craftsman, the number of producers working on their own account is only 9 per cent of the total number of handicraftsmen”. 
The fact that handicraft wool production has already entered the “path of natural movement” of capitalism can be seen from the very “economics” of this industry and also from the inequality which it creates among the peasants. “The wool industry, with its sudden transitions from complete stagnation to revival during war, made them” (the craftsmen), “at least the bigger producers among them, familiar with industrial speculation, all the attraction of stockjobbing, rapid enrichment and still more rapid failures ... The enriched manufacturers  hastened first and foremost to build large buildings with nine to fifteen windows on every floor. Half the houses in the village of Korytsevo are buildings of this kind. When in the Oparino district you see a brick house, or in general a large one, you can be sure that a master manufacturer lives there.” 
In Vladimir Gubernia the cotton-weaving industry has developed most. “In Pokrov Uyezd alone there are more than 7,000 weaving looms working up two and a half million rubles’ worth of wares per year. In Alexandrov Uyezd the cotton industry has spread to 120 villages, where more than 3,000 looms are operated.” But here, too, the process of the tr ansformation of the handicraft industry into the capitalist system of large-scale production spoken of above is noticed. “It is interesting,” says Mr. V.S. Prugavin, “to observe in the trade that we are studying the gradual process of transition from the small handicraft form of production to large-scale power-loom weaving. Between these two economic forms of production there are many transitional ones: to speak of them would mean to examine the gradual process by which handicraft weaving becomes capitalist. In Pokrov Uyezd we see, for example, in cotton production, all possible forms of industrial units. The house of a handicraftsman is still the dominant form. In Pokrov Uyezd there are now 4,903 looms operated in homes, while 3,200 are used in power-loom establishments. The transitional forms are the large weaving halls – totalling 2,330 looms – which range from 6-10 looms to full sized factories of a hundred or more looms. In these large weaving halls using hand-looms the weaver’s dependence on the manufacturer is more striking, the net earnings of the craftsman smaller and the conditions of labour less favourable than in small industrial units. Another step and we are in the domain of power-loom weaving production where the craftsman weaver is already completely transformed into an operative worker. The number of large weaving halls in Pokrov Uyezd is constantly growing and of late some of them have already gone over to power-loom weaving production. The number of small independent weaver craftsmen is very limited. There are none at all in Alexandrov Uyezd, and in Pokrov Uyezd not more than 50. Although the large weaving halls do not substantially differ in any way from the small ones, their larger dimensions and their constant numerical growth show beyond doubt that there is a tendency and actual gradual approaching by the purely handicraft form of cotton weaving to the form of large-scale, factory production, the capitalist type of organisation of national labour.” 
Let us go on to other uyezds in the same Vladimir Gubernia.
“The economic organisation of cotton weaving in Yuryev Uyezd,” we read in another work by V.S. Prugavin, “generally resembles what we observed in Alexandrov and Pokrov uyezds. As in the two uyezds considered earlier, the economic conditions of cotton production have taken here the shape of the domestic system of large-scale production ... 98.95 per cent of the cotton wares produced in Yuryev Uyezd is put out by the domestic system of large-scale production and only 1.05 per cent comes from”... independent craftsmen, you think? No, “small independent manufacturers”. 
In general, in the whole of the north-west of Vladimir Gubernia “the spinning and weaving factories employ nearly all the free labour-power and almost the whole of the population here has become factory workers, so that small handicraft production here is nothing more than the last survival of a once vigorous handicraft industry. Of course, the ownership of the land has preserved for the peasant in this region certain features of the agriculturist, especially in places where the soil is fertile, but he is hardly less subordinate to capital than any other factory worker not possessing his own house ... Many pure craftsmen, in spite of all their apparent independence in production, are completely dependent on middlemen who in substance are manufacturer-customers not belonging to any firm”. 
In the Shuya cotton-weaving district as far back as in the late sixties and early seventies “with the opening of new mechanical weaving mills the rural population began rapidly to be attracted to the big factories and to be transformed into a pure factory class of workers. Thus the rural work of the weavers finally lost the last trace of independence which it enjoyed in work in the ‘weaving halls’, those low, stinking sheds filled with looms and packed with workers of both sexes and all ages”. 
It would be a mistake to think that the facts described are true only of Moscow and Vladimir gubernias. In Yaroslavl Gubernia we see exactly the same thing. Even N.F. Stuckenberg in his Description of Yaroslavl Gubernia  spoke of the weavers of Velikoye village, of whom he counted 10,000, as independent producers. He wrote this essay on the basis of Ministry of the Interior figures relating to the forties. At that time and “up to 1850 linen production in the village of Velikoye was a purely peasant and handicraft one. Every peasant house was a linen factory. But in 1850 the peasant Lakalov of that village installed weaving looms, began to purchase yarn from Tula Gubernia and gave some of it to the peasants to weave. Many others followed his example and thus linen factories began to appear: The Velikoye factories gave out as much as 30,000 poods of yarn every year to the peasants not only of that village but also of Kostroma and Vladimir gubernias. Up to 100,000 pieces of linen were woven by the villagers in Velikoye alone in 1867 ... As recently as a few years ago only the women in Velikoye were engaged in cloth-weaving, but now, with the introduction of improved weaving looms, weaving has become almost exclusively an occupation for men and boys from the age of ten”.  This last change means that weaving has already secured a more important role in the distribution of employment among the members of the village families. This is indeed so. Flax spinning and linen weaving are now “the main trade of the peasants in the area around Velikoye village”. The role played by the factory in peasant handicraft weaving can be seen from the fact that “with the development in this locality of flax-spinning and scutching factories and of chemical linen bleaching establishments the flax industry is developing there year by year”. 
In Kostroma Gubernia flax spinning and weaving have provided and are providing “earnings for peasants of both sexes, especially in the villages of Kineshma, Nerekhta, Kostroma, and Yuryevets uyezds”. But here, too, the trouble is that “with the development of flax-spinning factories the weaving of linen articles out of home-spun yarn has declined drastically in the region because the peasants have seen the impossibility of competing with factory production of yarn and have begun to dress the flax more carefully and sell it instead of spinning it into home-made yarn and making their own linen”.
It must not be forgotten that home-weaving sometimes provided an occupation for the whole peasant family, for nine months, i.e., three-quarters of the year. Where will that family apply its labour now that with the “introduction of spinning looms and power-loom weaving the hand weaving and dressing of articles have decreased by more than half”? It is easy to understand where. “The peasants prefer to work in the nearest factory rather than to weave articles at home.” 
Some branches of handicraft production in Kaluga Gubernia are apparently exceptions to the general rules we have pointed out. There peasant weaving is beating the big dealers’ factories. Thus ribbon and braid production “appeared in Maloyaroslavets Uyezd with the establishment in 1804 of the merchant Malutin’s cotton-braid factory, the production of which rose from 20,000 rubles to 140,000 in 1820.as a result of the equipment with Rochet mill looms, on which one worker can weave 50 ribbons or braids at once. But after the same type of looms began to be used in peasant weaving in the district, the production of Malutin’s factory dropped to 24,000 rubles by 1860 and finally the factory was closed altogether”. From this our exceptionalists will conclude that Russian handicraftsmen are not afraid of capitalist competition. But such a conclusion will be just as light-headed as all their other attempts to establish some kind of economic “laws”. First, if the independent handicraftsman did indeed triumph over Malutin’s factory, it had still to be proved that the victory could be a lasting one. The history of the weaving trade in the same gubernia gives strong reasons for doubting this. The first cotton-weaving factory opened on the estate of P. M. Gubin in 1830 was also unable to withstand competition from village producers, and handicraft weaving flourished until 1858. But “since that time machine-operated, power-loom factories have been introduced with steam-engines which, in turn, have begun to oust hand weaving. Thus, in Medyn Uyezd there were formerly 15,000 hand looms, but now there are only 3,000”.  Who can guarantee that as regards braid and ribbon production further technical improvement will not tip the scales in favour of the big capitalists? For industrial progress is constantly accompanied by a relative increase in constant capital which is extremely harmful to small producers. And besides, it would be a big mistake to think that in the examples quoted the struggle was between independent producers, on the one hand, and capitalists, on the other. Gubin’s factory was undermined not by the independent producers but by “larger weaving establishments in the peasant houses” which immediately lowered the “piece pay in the factories”. The struggle was between big and small capital, and the latter was victorious because it intensified the exploitation of the working people. It was the same in ribbon and braid making. “Masters”, not independent handicraftsmen, have purchased Rochet looms. The weaver, braid-maker and ribbon-maker increasingly lose all trace of independence, so that they are obliged to choose between the local manufacturers and the “masters”, who “get the warp from the Moscow manufacturers, weave it in their domestic factory and pay by the arshin or give it out to other peasants and then deliver the ready-made commodity to the manufacturer”. Many of these masters have, in their way, quite a big business, and they are being transformed into real “ manufacturers”. In Maloyaroslavets Uyezd two cotton-weaving “handicraft factories” employ as many as 40 workers; five cotton braid-making peasant factories in Ovchinino and Nedelnoye volosts have 145 looms and 163 workers, a cotton ribbon factory in Ovchinino Volost has seven looms and eight workers, and so on.  In the “handicraft” brocade production of Moscow Gubernia there are “peasant brocade factories with a turnover of hundreds of thousands of rubles”. 
“What song do these figures” and facts “sing”? They convinced Mr. Prugavin that “handicraft weaving is fatally, though slowly, being transformed into a large-scale form of production”. But can this conclusion be confined to weaving? Alas! There are not a few other branches of handicraft production in which one must be blind not to notice the same process.
For example, shoemaking in Alexandrov Uyezd, Vladimir Gubernia. In this trade, “the extensive proportions of fixed and circulating capital and the negligible role or small workshops in production, the strict, detailed division of labour in big establishments and the negligible expenses from the general turnover for the purchase of labour-power – all this bears witness to the fact that we are dealing with a process which is passing from the stage of a craft to the level of a manufacture”. 
Or again the leather handicraftsmen who “are continually decreasing numerically”, because of competition from big works. “The works, thanks to their better conditions, material as well as technical, are able to work better and more cheaply than the handicraftsmen. There can be no doubt that the leather handicraftsmen will find it difficult to hold out against competition from factory production, which better satisfies modern demands.”
And finally the production of starch and treacle. In Moscow Gubernia “this industry is concentrated in 43 villages in which there are 130 establishments, 117 producing starch and 13 treacle. There are not yet any big factories here as in the weaving districts, but here too handicraft production is beginning to assume a capitalist character. Hired labour plays a great part in this industry: in 29.8 per cent of the establishments it provides the only source of labour-power and in 59.7 per cent it has an equal share in production with the members of the master’s family,  only 10 per cent of the establishments doing almost without its help. The causes of this are found in the considerable size of the fixed capital, which is beyond the capacity of most of the peasants”.
The blacksmith industry in Novgorod and Tver gubernias and all gubernias in which it has a role of any importance in the life of the peasants, and all the small metal works of Nizhny Novgorod Gubernia also show a definite loss of all independence by producers.  The handicraftsmen have not yet felt competition from big industrial capital, but the role of exploiter is fulfilled with distinction by their peasant brothers or the merchants who provide them with raw material and buy their finished product.
In Nizhny Novgorod Gubernia “there are quite a number of places where the whole population live exclusively on hand-made production and differ little from factory workers as far as living conditions are concerned. This is the case in the well-known villages of Pavlovo, Vorsma, Bogorodskoye, Lyskovo and certain volosts and villages in Semyonovo and Balakhna uyezds.”  The workers here are not “united” by capital but there is no doubt that they are tied down to it and are, so to speak, the irregular army of capitalism. Their inclusion in the regular army is only a matter of time and of expediency as the employer sees it.
The contemporary condition of the handicraftsmen is so unstable that producers are often threatened with the loss of their independence merely as the result of an improvement in the means of production. For instance the craftsman I.N. Kostylkov invented four machines to make rakes. They considerably increase the productivity of labour and are, properly speaking, very cheap. Nevertheless, Mr. Prugavin expresses quite justified fears that “they will cause a very big change in the economic organisation of rake making”, in the sense, of course, of undermining the independence of the producers. Mr. Prugavin presumes that there should be “help in this case for the mass of rake-makers to give them the possibility of acquiring machines on a collective basis”. Of course it would be very good to do so, but the question is: Will it be done? Those who are now in power, we know, have very little sympathy for a “collective basis” and we really do not know whether we shall soon have a government with sympathy for such a basis; whether, for example, we shall soon have at the helm the “Narodnaya Volya party”, which would lay the “foundation of the socialist organisation of Russia”. And as long as that party only talks about seizing power, matters can change only for the worse: the present candidates for the proletariat may become proletarians in reality tomorrow. Can this fact be ignored in a study of economic relationships in contemporary Russia? There are several million handicraftsmen in our country and many branches of handicraft production are partly changing and have partly changed into the domestic system of large-scale production. According to information collected as early as 1864 “the approximate number of workers in the villages engaged in manufacturing cotton goods from the manufacturers’ yarn” (only workers of that category!) “was about 350,000”. To say after this that the number of our industrial workers does not exceed 800,000 means to study Russia only by means of statistical exercises of clerks, district police officers and non–commissioned officers.
So far our handicraftsmen are still peasants. But what kind of peasants! From a so-called subsidiary trade handicraft production has been transformed in many places into the staple item of the peasant’s income. This places agriculture in a dependent, subordinate position. It feels all the vacillations of our industry, all the vicissitudes of its development. The same Mr. Prugavin says that “the disruption of the peasant economy” of the weavers in Vladimir Gubernia is the inevitable consequence of our industrial crises. Once agriculture thus depends on industrial labour, there is no need to be a prophet to foretell the time when the weavers’ peasant economy will be ultimately ruined: that ruin coincides with the transition of “the domestic system of large-scale production” to the factory system. The former handicraftsman will have to give up one of his occupations in order not to be deprived of both. And he will naturally prefer to give up the land which, in the industrial zone of Russia, is far from paying the taxes and dues imposed upon it. Instances of peasants giving up land already occur now.
According to Mr. A. Isayev, the village of Velikoye which we mentioned above “ceased long ago to be an agricultural village. Only 10 to 15 of the total number (up to 700) of householders cultivate the soil, while most of the villagers can no longer use a plough or even a scythe ... These ten to fifteen householders and peasants in the neighbourhood of Velikoye rent the communal land from the people in Velikoye at the rate of a ruble a dessiatine of ploughland” (with such a high rate of “land rent” it is easy enough to give up the land altogether, be it noted incidentally). “The situation of cattle-rearing corresponds entirely to the low level of grain cultivation: there is hardly one cow and one horse to three households ... The Velikoye peasant has lost all resemblance to a peasant.”
But is this process observed only in the village of Velikoye? Voyenno-Statistichesky Sbornik noted the fact that the cotton handicraft industry “is in many places a subsidiary occupation; but there are places where it is the main and even the only one.”  Similarly, “shoemaking is now the principal means of subsistence of the Kimry peasants and has pushed agriculture into the background. Nobody who studies the Kimry region can fail to notice the number of abandoned strips of land: one is struck by the decay of agriculture,” Mr. Prugavin informs us. Like a true Narodnik, he consoles himself with the thought that “at present it is not the industry itself that is to blame so much as the unfavourable conditions in which agricultural labour is placed” and that most of the craftsmen “have not yet finally abandoned their land”. But, first, the Report of the Imperial Commission for the Study of the Present Condition of Agriculture, which we have already quoted, shows, contrary to Mr. Prugavin, that precisely the majority of the Kimry peasants have “abandoned the land” for ever.  Secondly, all that he says on this subject is a fairly doubtful consolation. No matter who or what causes the fall of agriculture, it is an existing fact, as a result of which many craftsmen will soon be able to free themselves altogether from the “power of the land”. Of course, this process could still be slowed down now by providing agriculture with better conditions. But here again we face the question: who will provide it with those conditions? The present government? They do not want to. The revolutionary party? It cannot yet. And by the time the sun rises you can be wading in dew – by the time our revolutionaries acquire strength enough to carry out their reform plans, peasant agriculture may be but a memory in many places.
The decline of agriculture and the disintegration of the old “foundations” of the peasant mir are the inevitable consequence of the development of handicraft production, under the actual conditions, of course, not under the possible conditions with which our Manilovs [8*] console themselves and which will be a reality we know not when. For example, in Moscow Gubernia “frequent relations” (of the craftsmen) “with the Moscow trading world have a disrupting influence on the relations of common law; the mir has no say in dividing out family property, which is governed by the elders or the volost court ‘according to the law’; the father shares his property among his children by testament ... after the death of the husband the childless widow is deprived of immovable property” (the house) “which goes to the relatives on the husband’s side, while she receives one-seventh of the inheritance”.  How the same handicraft industry, when it reaches a certain degree of development, tends to undermine agriculture can be seen from the example of starch and treacle production.
“A characteristic fact in the industry we are investigating is the extreme unevenness with which plots are distributed between the householders ... Thus, in the village of Tsibino, Bronnitsy Uyezd, 44.5 per cent of all the land intended for 166 households is in the hands of only 18 factory owners (from among the peasants), each of them having 10.7 personal allotments, while 52 prosperous peasants have only 172 personal allotments, or 3.3 per household. It is understandable that the more paying the industry becomes, the more the factory owners will be stimulated to lay their hands on as much land as they can, and it is quite possible that the 35 householders who now cultivate their plots by using hired labour will find it more profitable, when the rent is raised, to give up cultivating their plots and hand them over to the factory owners. Exactly the same thing is encountered in other villages in which starch and treacle production is more or less developed.”
But that is enough; we are not studying handicraft industry in Russia. All we want is to point out the indisputable facts which show beyond refutation the transitory situation of our national economy. While those who have made the safeguarding of the people’s interests the main aim of their life close their eyes to the most significant phenomena, capitalism is going its way: it is ousting independent producers from their shaky positions and creating an army of workers in Russia by the same tested method as it has already practised “in the West”.
“Thus, hand in hand with the expropriation of the self-supporting peasants, with their separation from their means of production, goes the destruction of rural domestic industry, the process of separation between manufacture and agriculture ...”
“Still the manufacturing period, properly so called, does not succeed in carrying out this transformation radically and completely. It will be remembered that manufacture, properly so called, conquers but partially the domain of national production, and always rests on the handicrafts of the town and the domestic industry of the rural districts as its ultimate basis. If it destroys these in one form, in particular branches, at certain points, it calls them up again elsewhere , because it needs them for the preparation of raw material up to a certain point. It produces , therefore, a new class of small villagers who, while following the cultivation of the soil as an accessory calling, find their chief occupation in industrial labour, the products of which they sell to the manufacturers directly, or through the medium of merchants ...
“Modern industry alone, and finally, supplies, in machinery, the lasting basis of capitalistic agriculture, expropriates radically the enormous majority of the agricultural population, and completes the separation between agriculture and rural domestic industry ...” 
At present we are going through that very process of the gradual conquest of our national industry by manufacture. And this process of “bringing into existence” or at least temporarily livening many branches of small handicraft industry gives Mr. V.V. and his associates the possibility of trying to prove with apparent success that in our country there is no “capitalisation of handicraft industry”.  The meagre pay for which the handicraftsmen sell their labour somewhat retards the transition to large-scale machine industry. But in this phenomenon as in its indubitable consequences there is not and cannot be anything exceptionalist.
“The cheapening of labour power, by sheer abuse of the labour of women and children, by sheer robbery of every normal condition requisite for working and living,... meets at last with natural obstacles that cannot be overstepped. So also, when based on these methods, do the cheapening of commodities and capitalist exploitation in general. So soon as this point is at last reached ... the hour has struck for the introduction of machinery, and for the thenceforth rapid conversion of the scattered domestic industries and also of manufactures into factory industries.” 
We have seen that this hour has struck already for the uyezds of the Shuya cotton-weaving district. Soon it will strike in other industrial localities too. The giving out of work to be done “at home” is profitable to the capitalist only as long as industrial labour is a side-line and a subsidiary occupation for the handicraftsmen. The income from agriculture allows the labourer to be satisfied with an incredibly low pay. But as soon as this income ceases, as soon as corn-growing is finally ousted by industrial labour, the capitalist is obliged to raise the wage to the level of the famous minimum of the worker’s requirements. Then it is more profitable for him to exploit the worker in the factory, where the productivity of labour is increased by its very collectiveness. Then comes the era of large-scale machine industry.
Cotton spinning and weaving are, as we know, the most advanced branches of modern capitalist industry. That is why the process which has only just set in, or perhaps not yet quite set” in in other productions, is there almost complete. At the same time the phenomena observed in more advanced branches of industry may and must be considered prophetic as regards other spheres of industry. What happened there yesterday can happen here today, tomorrow or in general in a not distant future. 
Mr. Tikhomirov does not acknowledge the successes of Russian capitalism. We ourselves are prepared to say to our bourgeoisie: “What thou dost, do quickly.” [11*] But, “fortunately or unfortunately”, they do not need to be urged on. Mr. A. Isayev, in his objections to the Russian “state socialist’s” book, drew the reader’s attention to our manufacturing industry. [12*] He was of the opinion that the recent Russian exhibition could provide the best answer to premature rejoicings over the allegedly wretched “destiny of capitalism in Russia”.
“The class of fibrous materials is worth developing”, he said, “it holds out prospects of millions. We have a fair number of factories, even for linen production, which bring a million to a million and a half yearly. And in the cotton goods class the figure of one million is a completely negligible one. The Danilov Manufacture produces 1.5 millions’ worth a year, the Gübner factory 3 millions’, the Karetnikovs factory 5.5 millions’, the two Baranov firms 11 millions’, the Yaroslavl manufactory association 6 millions’, the Prokhorovs’ 7 millions’, the Krenholm Manufacture up to 10 millions’, and so on. The sugar mills also give an enormous production of 5, 6 and 8 millions’ worth. Even the tobacco industry has its millionaires ... And the figures for 1878–1882 show a large expansion in production, which slowed down during the Russo-Turkish War”.
These and many other facts led Mr. Isayev to conclude that “large private capital production in Russia is growing uninterruptedly”.  Nor is he alone of this opinion. The last All-Russia Exhibition convinced Mr. V. Bezobrazov that in our industry “the progress of the last ten years (since the 1870 Petersburg Exhibition) is obvious; in comparison with the state of affairs twenty-five years ago this progress of our industry – particularly manufactory – is enormous: the industry is unrecognisable in many respects ... Besides improvement in the quality of products we must also note the enormous expansion in all branches of our industry during the last 25 years. This expansion is especially remarkable in the last decade, since the end of the crisis caused by the abolition of serfdom and the Turkish War. To see this one has only to compare our manufacturers’ bills with the reports given by the latest official Ministry of Finance statistics. These are for 1877. Comparison of the figures for manufactory production in 1877 and 1882 (figures for the latter from bills) shows a tremendous increase in the quantity of products for these five years: it has doubled in many big enterprises.  A very large number of factories have been established in the last five years. Industries for processing fibre (silk, broadcloth, linen and cotton) hold first place. Our cotton industry has been enormously developed; some of its products can stand comparison with the most up-to-date and beautiful in Europe”.  These conclusions drawn by scientists are fully confirmed by the correspondent of Vestnik Narodnoi Voli quoted above, who personally observed the “enormous successes” of large-scale production in our country. Finally, foreigners who have written or who write about Russia say the same thing. They already place some branches of our industry on a level with those of Western Europe. Thus, sugar production, according to Ed. de Molinari, is “au premier rang de l’industrie de l’Europe”.  In 1877 Russian refined sugar even appeared on foreign markets, particularly in France. Alongside of such facts the striving towards and influx of foreign productive capital in our country is a sure sign that capitalism finds there a convenient field of development. We see that foreign capitalists are looking with growing attraction towards Russia and let slip no opportunity of founding new industrial establishments there. What would be the meaning of that tendency if industry there were really developing as “sluggishly” as it seems to Mr. Tikhomirov? But the fact is that this opinion is defended mainly for the sake of a doctrine for the triumph of which our exceptionalist writers are prepared to ignore a whole series of absolutely categorical facts. “Sluggish development” is a feature not so much of Russian capitalist production as of those of our revolutionaries whose programmes cannot conform to our contemporary reality.
And what about capitalist accumulation, money circulation in the country and credit operations? Their successes are in truth enormous. Before 1864 we had hardly any private credit establishments; this year “the State Bank capital reached 15 million rubles and various individuals deposited 262.7 million rubles at interest, out of which sums only 42 million rubles were expended on the needs of trade (23.1 million were issued against bills of exchange and 18.6 million as subsidies on securities)”. Thirteen years have elapsed and the state of affairs has changed beyond recognition. “By 1877 the capital of all the credit establishments already totalled 167.8 million rubles and individuals deposited 717.5 million at interest (percentage, current account, time deposits, etc.), i.e., capital increased by 1,018 per cent, current accounts, deposits, etc., by 173 per cent, in all, by 220 per cent; consequently, these sums more than trebled. At the same time their distribution also completely changed. In 1864 15 per cent only of these sums was issued in subsidies or on bills of exchange, but by 1877 96 per cent, that is, almost the whole of the sums, was invested in the bills of exchange or subsidies ... Subsidies rose from 1864 to 1877 from 18.6 million by 337.9 million, or by 1,829 per cent. The growth of the accounting operations – trade operations in the narrow sense – was still greater in the same time: from 23.7 million the sum of account bills rose to 500 million rubles, i.e., by 2,004 per cent!! While the sums invested at interest increased, their mobility was more than doubled. In 1863 the investments circulated less than twice, but in 1876 4.75 times.
“Credit and the railways hasten the transformation of natural economy into money economy. And money economy – commodity economy, is capitalist economy; consequently, both credit and the railways hasten the turning of the economic conditions of production under which the producers are the owners of the instruments of production into conditions under which the producers become wage-labourers.” 
The facts quoted need no further comment. They show clearly and convincingly that it is high time for us to stop shutting our eyes to reality, at least in respect of the manufacturing industry, and to come to the conviction that this reality has little in common with the naive illusions typical of the Narodnik period of our movement. It is time for us to have the courage to say that in this field not only the immediate future but the present of our country, too, belongs to capitalism. All the conditions of exchange, all the production relations are increasingly shaping in a manner favourable to capitalism.
As for markets, we have already said that this question is by no means as insoluble as Mr. V.V. and his epigoni think. Any country’s transition from natural to money economy is necessarily accompanied by an enormous expansion of the home market and there can be no doubt that in our country this market will go over in its entirety to our bourgeoisie. But there is more to it than that. The capitalist who looks ahead can already foresee the glutting of that market and is in a hurry to secure foreign markets. Some Russian goods will naturally find an outlet even in the West, and others will go to the East in the company of “white” and other generals whose patriotic mission is “to strengthen our influence in Central Asia”. It was not a coincidence that the last congress of our mill and factory owners discussed “measures to develop trade relations with the Balkan Peninsula” and the conclusion of “trade treaties with Asia”. Practical steps have already been made in this direction and there is no reason to expect that they will fail. Relations with the East are not a novelty for Russian businessmen, and though foreign competition has often had an adverse effect on their interests, it would be a mistake to think that the countries which stepped on to the road of capitalist development before others have, or will always be able to maintain, the monopoly of cheaper transport, less expensive production and better quality. France entered upon that road later than England and yet she has succeeded in winning an honourable place in the international market. The same may be said of Germany compared with France, and so on. In the “West” there are many countries for which the industrial struggle with the more advanced countries is difficult just as for Russia, and yet it did not occur to any of the revolutionary writers in those countries to “preach exceptionalism” after the manner of our Narodniks. It is true that modern productive forces a re far ahead of the possibility to extend markets, the international market is nearing the glutting point arid periodic crises tend to merge into one solid chronic crisis. But until all this happens nothing prevents the appearance on the market of new competitors relying on some physical peculiarity of their country or some historical conditions of their social development: the cheapness of labour-power, of raw material, etc. Moreover, it is the appearance of such competitors that will hasten the fall of capitalism in the more developed countries. Naturally, a victory of the working class in England or France would necessarily affect the development of the whole civilised world and would shorten the domination of capitalism in the other countries. But all this is a matter of the future, still more or less remote, and meanwhile our capitalism can become, and we have seen that it is becoming, the exclusive master in Russia. Sufficient for the day is the evil thereof; no matter what the impending socialist revolution in the West holds out for us in the future, the evil of the present day in our country is all the same capitalist production. 
13. В.С. Пругавин, «Кустарь на выстаке 1882 года», Москва 1882, стр.9. [V.S. Prugavin, The Handicraftsman at the 1882 Exhibition, Moscow 1882, p.9.]
14. Ibid., p.10.
15. Note that they are also of peasant origin.
16. V.S. Prugavin, op. cit., p.11.
17. Ibid., p.13.
18. The total number of looms in Yuryev Uyezd is 5,690; of these 5,630 work for big masters and 60 for small manufacturers. What remains in the hands of independent producers? See The Village Community, Handicraft Industries and Agricultural Economy of Yuryev Uyezd, Vladimir Gubernia, Moscow 1884, pp.60-61.
19. See Statistic Records of the Russian Empire, Issue III, Material for the Study of Handicraft Industry and Manual Labour in Russia, St. Petersburg 1872, p.198.
20. Ibid., p.200.
21. Статистические труды Штукенберга, статья X, «Описание Ярославской губ.», СПБ 1858. [Statistical Works of Stuckenberg, Essay X, Description of Yaroslavl Gubernia, St. Petersburg 1858.]
22. See above-quoted issue of Statistic Records, pp.149-50.
23. See Report of the Imperial Commission for the Study of the Present Condition of Agriculture, Appendix I, Section 2, p.166.
24. Ibid., pp.170-71.
25. Ibid., Section 2, pp.158-59.
26. Ibid., Section 2, pp.158-59.
27. Statistic Records, Issue III, p.308.
28. V.S. Prugavin, The Handicraftsman at the 1882 Exhibition, p.28.
29. The situation of the workers in these businessmen’s families can be seen from the following words of Mr. Erisman: “A mirror factory owner’s son, asked by us whether he was employed at coating mirror glass with mercury, answered: ‘No, we take care of ourselves’.” Erisman, ibid., p.200.
30. See the article The Blacksmith Industry in Uloma Volost, Cherepovets Uyezd, Novgorod Gubernia in the Report already quoted.
31. Statistic Records of the Russian Empire, Issue III, p.83.
33. “In this village, peasant and land-poor single peasant households number 670, but not more than 70 householders cultivate grain and make use of all the land belonging to the village” (these no longer engage in shoemaking). Report, Section 2, p.153. This information was obtained from “the elders and peasants of Kimry Volost”.
34. Prugavin, The Handicraftsman at the 1882 Exhibition.
35. [Italics by Plekhanov.]
36. [Italics by Plekhanov.]
37. Das Kapital, 2. Aufl., S.779-80. [9*]
38. Those who have grasped the essence of the domestic system of large-scale production will understand how the process referred to takes place. Let us give some explanatory facts just in case. “Print manufacturers generally print either on other people’s cloth according to orders from outsiders or on their own wares, buying yarn and giving it to be woven in different places.” Successful business by print manufacturers is bound to lead to an intensified giving out of the yarn to be woven “in different places and consequently to the development of small handicraft industry. Handicraft cotton production has extensively developed with the participation of many capitalist merchants who, buying cotton yarn, either warp it in their own establishments and then give it out to weavers or give it unwarped to masters who, only doing the warping and giving it out in the villages, are middlemen between the capitalists and the weavers”. Voyenno-Statistichesky Sbornik No.IV, pp.381 and 384-85. The firm Sawa Morozov Sons, which employs 18,310 permanent workers, also has 7,490 “occasional” workers. These “occasional” workers are in reality nothing but handicraftsmen who owe their living to large-scale industry. Such facts, which bear an unambiguous relation to capitalism, move the Narodniks so much as to make them forget the simplest truths of political economy.
29. Kapital, S.493-94. [10*]
40. [Note to the 1905 edition.] Subsequently these thoughts of mine were not badly developed in a number of studies by Mr. Tugan-Baranovsky.
41. Yuridichesky Vestnik, January 1883. Article Novelties in Economic Literature, p.102.
42. In making this comparison account must be taken of the inaccuracy noted above and the incompleteness of our official statistics on which production figures for 1877 are based. But on the whole, Mr. Bezobrazov’s conclusions are borne out also by his personal observation. “I myself,” he says, “was able to note the increase in our manufactory during my travels in the Moscow industrial region.”
43. Economiste français, 26 Août, 1882, Lettres de Russie, par Wlad. Besobrasoff.
44. See Journal des Economistes, Juillet 1883, L’industrie du sucre en Russie.
45. Николай—он, «Очерки нашеро пореформенного общественного хозяйства», Слово, 1880, кн.10, стр.86-135. [Nikolai—on, Outlines of Our Social Economy Since the Reform, Slove, 1880, No.10, pp.86-135.]
46. [Note to the 1905 edition.] Hence it is clear that I have never shared the theory imagined by our Narodniks – which found its way from their works even into Encyclopaedia Britannica – according to which the development of capitalism is impossible in Russia because our country has no markets. My view of this question was expounded elsewhere soon after the publication of Our Differences as follows: According to the teaching of Mr. V.V., the Narodnik theoretician, “the appearance on the world market of new competitors in the form of new countries, must henceforth be considered impossible, for the market has been finally conquered by the more advanced states. Therefore V.V. doubts the future of Russian capitalism ... V.V.’s theory is not without a certain cleverness but, unfortunately, it shows complete ignorance of history. There was a time when England dominated the world market almost exclusively and her domination postponed the decisive clash of the English proletariat with the bourgeoisie. England’s monopoly was broken by the appearance of France and Germany on the world market, and now the monopoly of Western Europe is being undermined by competition from America, Australia and even India, which will naturally lead to a sharpening of relations between the proletariat and the bourgeoisie in Europe. Hence we see that Mr. V.V.’s theory is not confirmed by the actual course of events. Mr. V.V. thinks that having once become dominant on the world market the industrially more developed countries absolutely close it to the less developed countries and thus drive the latter on to the road of social reform, which reform must be undertaken by a government supposed to be above class interests, for example the Government of His Imperial Majesty the Autocrat of All Russia. But facts show just the opposite. They tell us that the less developed countries do not stand still, but gradually prepare for themselves the road to the world market and by their competition drive the more developed countries on to the road of social revolution, which will be carried out by the proletariat when it has become aware of its class task, relying on its own strength and having seized political power ...” [13*]
I now add that my arguments have been confirmed perfectly by the subsequent development of world economy and that numerous figures could be quoted in their favour both from English Blue-Books on this subject and from the reports of English consuls. I will also note, on the other hand, that I have never been a supporter of the theory of markets in general or that of crises in particular, a theory which spread like the plague in our legal literature on Marxism in the nineties. According to this theory, whose main propagator was Mr. Tugan-Baranovsky [14*], overproduction is impossible and crises are explained by the simple disproportion in the distribution of the means of production. This theory is. very gladdening for the bourgeoisie, to whom it brings the pleasant conviction that the productive forces of capitalist society will never outgrow the production relations peculiar to capitalism. And it is not surprising that Mr. Werner Sombart, one of the best theoreticians of the modern bourgeoisie, was very gentle towards it in the paper which he read on September 15, 1903, at the Congress of the League of Social Politics in Hamburg. (See Verhandlungen des Vereins fur Sozialpolitik uber die Lage der in der Seeschiffahrt beschäftigten Arbeiter und über die Störungen im deutschen Wirtschaftsleben während der Jahre 1900ff., Leipzig 1903, S.130.) The only surprising thing is that Mr. W. Sombart considers the prominent Russian scientist Tugan-Baranovsky as the father of this supposedly new theory. The real father of this by no means new doctrine was Jean Baptiste Say, in whose “course” it is given a fairly complete exposition. It is very interesting that in this respect bourgeois economics is returning to the point of view of the vulgar economist whom it avoids naming as if yielding to a commendable feeling of shame. Besides Mr. Tugan-Baranovsky, Mr. Vladimir Ilyin also professed the theory of J.B. Say in Note on the Theory of Markets (Scientific Review, January 1899) and The Development of Capitalism in Russia. In this latter work, Mr. Vladimir Ilyin, by the way, displays considerable eclecticism which shows that the theoretical conscience of a Marxist has not always been silent in him. [15*]
8*. Manilov – a character from Gogol’s Dead Souls – a vain and fruitless dreamer.
9*. K. Marx, Capital, Vol.I, Moscow 1958, pp.748-49.
10*. K. Marx, Capital, Vol.I, Moscow 1958, p.470.
11*. John, Chap.13. Words of Jesus to Judas when the latter hesitated to give his treacherous signal to the Roman soldiers.
12*. In the article “Novelties in Economic Literature” (bibliography). V.V., Destinies of Capitalism in Russia, Petersburg 1882. (Yuridichesky Vestnik [The Legal Herald], January 1883, pp.89-110.)
13*. Quotation from Plekhanov’s Note 8 to the pamphlet What Do the Social-Democrats Want?
14*. The reference is to M. Tugan-Baranovsky’s book: Industrial Crises. Essays on the Social History of England, 2nd ed., St. Petersburg,1900. There was an edition in 1923.
15*. Plekhanov’s statements about Lenin referring to the year 1905 are absolutely untrue. Here one can plainly see the Menshevik Plekhanov’s tendency to injure Bolshevism by representing Lenin’s defence and substantiation of the Marxist theory of markets as a repetition of the theories of the vulgar economist J.-B. Say. It was precisely in his work Note on the Theory of Markets that Lenin criticised Smith’s and Say’s market theory.
Last updated on 16.10.2006