The DEVELOPMENT of CAPITALISM in RUSSIA

Chapter I. The Theoretical Mistakes of the Narodnik Economists

IV. The Narodnik Theory of the Impossibility of Realising
Surplus-Value

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.

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Notes:
[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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