V. I.

Lenin

In Issue No. 4 of Zhizn, Mr. P. Nezhdanov examined articles by me
and other authors on the market theory. I intend to reply to only one of
Mr. Nezhdanov’s assertions— that in my article in Nauchnoye Obozreniye , issue No. I for this year, I “distorted my struggle
against the theory of third persons.” As far as the other questions are
concerned, those raised by Mr. P. Nezhdanov in respect of the market
theory and, in particular, of P. B. Struve’s views, I shall confine myself
to a reference to my article in reply to Struve (“Once More on the
Theory of Realisation”; the delay in its publication in
Nauchnoye Obozreniye was due to circumstances over which the
author had no control).

Mr.P. Nezhdanov maintains that “capitalist production does not
suffer from any contradiction between production and consumption.” From
this he concludes that Marx, in recognising this contradiction,
“suffered from a serious internal contradiction” and that I
am repeating Marx’s error.

Ibelieve Mr. Nezhdanov’s opinion to be a mistaken one (or one based on
a misunderstanding) and cannot see any contradiction in Marx’s views.

Mr.P. Nezhdanov’s assertion that there is no contradiction between
production and consumption in capitalism is so strange that it is only
to be explained by the very special meaning that he attaches to
the concept “contradiction.” Mr. P. Nezhdanov is of the opinion
that “if there really were a contradiction between production and
consumption that contradiction would provide a regular surplus-product” (p. 301; the same in the final theses,
p. 316). This is an utterly arbitrary and, in my opinion, utterly incorrect interpretation. In
criticising my assertions on the contradiction between production and
consumption in capitalist society, Mr.

P. Nezhdanov should (I think) have told the reader how I understand that
contradiction and should not have limited himself to an exposition of
his own views on the essence and significance of that contradiction. The
whole essence of the question (which has given rise to
Mr. P. Nezhdanov’s polemic against me) is that I understand the
contradiction under discussion quite differently from the way in which
Mr. P. Nezhdanov wishes to understand it. I did not say anywhere that
this contradiction should regularly [1] produce a surplus-product; I do not think so and such a view cannot be
deduced from Marx’s words. The contradiction between production and
consumption that is inherent in capitalism is due to the tremendous rate
at which production is growing, to the tendency to unlimited expansion
which competition gives it, while consumption (individual), if it grows
at all, grows very slightly; the proletarian condition of the masses of
the people makes a rapid growth of individual consumption impossible. It
seems to me that any one reading carefully pages 20 and 30 of my
Studies (the article on the Sismondists cited by
Mr. P. Nezhdanov) and page 40 of Nauchnoye Obozreniye (1899, No. 1) [2] can convince himself that, from the outset, I gave only this meaning to the contradiction between production and consumption in
capitalism. Indeed, no other meaning can be ascribed to this
contradiction by one who adheres strictly to Marx’s theory. The
contradiction between production and consumption that is inherent in
capitalism consists only in this, that the growth of the national wealth
proceeds side by side with the growth of the people’s poverty; that the
productive forces of society increase without a corresponding increase
in consumption by the people, without the employment of these productive
forces for the benefit of the working masses. The contradiction under discussion, understood in this sense, is a fact that does not. admit
of any doubt and that is confirmed by the daily experience of millions of
people, and it is the observation of this fact that leads the working men
to the views that have found a full scientific expression in Marx’s
theory. This contradiction does not, by any means, lead inevitably to the
regular production of a surplus-product (as Mr. Nezhdanov would like to
think). We can quite well imagine (if we argue from a purely theoretical
standpoint about an ideal capitalist society) the realisation of the
entire product in a capitalist society without any surplus-product,
but we cannot imagine capitalism without a disparity between
production and consumption. This disparity is expressed (as Marx has
demonstrated clearly in his Schemes) by the fact that the production of
the means of production can and must out strip the production of articles
of consumption.

Mr. Nezhdanov, therefore, was completely mistaken in his deduction that
the contradiction between production and consumption must regularly
provide a surplus-product, and this mistake led to his unjustly accusing
Marx of inconsistency. Marx, on the contrary, remains consistent when he
shows:

1)that the product can be realised in a capitalist society (it goes
without saying that this is true if proportionality between the various
branches of industry is assumed); that it would be incorrect to introduce
foreign trade or “third persons” to explain this realisation; 2)that the theories of the petty-bourgeois economists ( à la
Proudhon) on the impossibility of realising surplus-value are based
on a complete misunderstanding of the very process of realisation in general; 3)that even with fully proportional, ideally smooth realisation we cannot
imagine capitalism without a contradiction between production and
consumption, without the tremendous growth of production being accompanied
by an extremely slow growth (or even stagnation and worsening) of consumption
by the people. Realisation is due more to means of production than to
articles of consumption—this is obvious from Marx’s Schemes; and from
this, in turn, it follows inevitably that “the more productiveness
develops, the more it finds itself at variance with the narrow basis on which the conditions of consumption rest” (Marx). [8] it is obvious from all the passages in Capital devoted to the
contradiction between production and consumption [3] that it is only in this sense that Marx understood the
contradiction between production and consumption.

Incidentally,Mr. P. Nezhdanov is of the opinion that Mr. Tugan-Baranovsky also
denies the contradiction between production and consumption in a capitalist
society. I do not know whether this is true. Mr. Tugan-Baranovsky himself
introduced into his book a scheme showing the possibility of the growth of
production accompanied by a contraction of consumption (which, of course, is
possible and actual under capitalism). How can one deny that we see here a
contradiction between production and consumption, although there is no
surplus-product?

Incharging Marx (and me) with inconsistency, Mr. P. Nezhdanov also lost
sight of the fact that he should have explained, as a basis for his
viewpoint, how one should understand the “independence” of the
production of means of production from the production of articles of
consumption. According to Marx, this “independence” is limited
to the following: a certain (and constantly growing) part of the product
which consists of means of production is realised by ex changes within the
given department, i.e., exchanges of means of production for means of
production (or the use of the product obtained, in natura , [4] for fresh production); but in the final analysis the manufacture
of means of production is necessarily bound up with that of articles of
consumption, since the former are not manufactured for their own sake, but
only because more and more means of production are demand ed by the
branches of industry manufacturing articles of consumption. [5]

The views of the petty-bourgeois economists, therefore, do not differ from
those of Marx because the former recognised in general the connection between production and
consumption in a capitalist society while the latter denied in general
that connection (which would be absurd). The difference is that the
petty-bourgeois economists considered this connection between production
and consumption to be a direct one , that they thought production follows consumption. Marx showed that this connection
is an indirect one , that it only makes itself felt in the final analysis , because in capitalist society consumption follows production. But the connection nevertheless exists, even if it is
indirect; consumption must, in the final analysis, follow production,
and. if the productive forces are driving towards an unlimited growth of
production, while consumption is restricted by the proletarian condition
of the masses of the people, there is undoubtedly a contradiction
present. This contradiction does not signify the impossibility of capitalism, [6] but it does signify that its transformation to a higher form is a
necessity:

the stronger this contradiction becomes, the more developed become the
objective conditions for this transformation, as well as the subjective
conditions, i.e., the workers’ consciousness of this contradiction.

Thequestion now arises: what position could Mr. Nezhdanov adopt on the
question of the “independence” of the means of production as
regards articles of consumption? One of two: either he will completely
deny any dependence between them, will assert the possibility of realising
means of production that are in no way connected with articles of
consumption, that are not connected even in “the final analysis”—in which case he will inevitably descend to the
absurd, or he will admit, following Marx, that in the final analysis means
of production are connected with articles of consumption, in which case he
must admit the correctness of my understanding of Marx’s theory.

Inconclusion, let me take an example to illustrate these abstract
arguments with concrete data. It is known that in any capitalist society
exceptionally low wages (=the low level of consumption by the masses of the people) often hinder the
employment of machinery. What is more, it even happens that machines
acquired by entrepreneurs are in disuse because the price of labour drops
so low that manual labour becomes more profitable to the owner! [7]

The existence of a contradiction between consumption and production,
between the drive of capitalism to develop the productive forces to an
unlimited extent and the limitation of this drive by the proletarian
condition, the poverty and unemployment of the people, is, in this case,
as clear as daylight. But it is no less clear that it is correct to draw
one single conclusion from this contradiction—that the development
of the productive forces themselves must, with irresistible force, lead to
the replacement of capitalism by an economy of associated producers. It
would, on the other hand, be utterly incorrect to draw from this
contradiction the conclusion that capitalism must regularly
provide a surplus-product, i.e., that capitalism cannot, in general,
realise the product, and can, therefore, play no progressive historical
role, and so on.

---
Notes:
[1]
I stress regularly because the irregular production of a
surplus-product (crises) is inevitable in capitalist society as a result
of the disturbance in proportion between the various branches of
industry. But a certain state of consumption is one of the elements of
proportion.
— Lenin

[2]
See present edition, Vol. 2, pp. 155 and 167 and pp. 58-59 of the
present volume.— Ed .

[3]
These passages are quoted in my article in Nauchnoye Obozreniye ,
1899, No. I (see present volume, p. 56, et seq.— Ed .) and are repeated in the first chapter of
The Development of Capitalism in Russia , pp. 18-19. (See
present edition, Vol. 3, p. 5657.— Ed .)
— Lenin

[4]
In its natural form.— Ed .

[5]
Das Kapital , III, 1,

289.  [9]

Quoted by me in Nauchnoye Obozreniye , p. 40 (see present volume,
p. 59.— Ed. ), and in The Development of Capitalism , 17. (See present edition, Vol. 3,
p. 55.— Ed .)
— Lenin

[6]
Studies , p. 20 (see present edition, Vol. 2, p. 155.—Ed.);
Nauchnoye Obozreniye , No. 1, p. 41 (see present volume,
p. 60.— Ed .); The Development of Capitalism ,
pp. 19-20. (See present edition, Vol. 3, p. 58.— Ed .) If this
contradiction were to lead to “a regular surplus product,” it would
signify precisely the impossibility of capitalism.
— Lenin

[7]
I bring an instance of this phenomenon in the sphere of Russian capitalist
agriculture in The Development of Capitalism In Russia , page
165. (See present edition, Vol. 3, p. 234.— Ed .) Similar
phenomena are not individual instances but are the usual and
inevitable consequences of the basic features of capitalism,
— Lenin

[8]
Karl Marx, Capital , Vol. III, Moscow, 1959, p. 240.

[9]
Karl Marx, Capital , Vol. III, Moscow, 1959, p. 299.