The DEVELOPMENT of CAPITALISM in RUSSIA

Chapter V. The First Stages of Capitalism in Industry

III. The Growth of Small Industries After the Reform. Two Forces of
This Process and its Significance

From the foregoing there also emerge the following features of small
production that merit attention. The appearance of a new industry
signifies, as we have already observed, a process of growing social
division of labour. Hence, such a process must necessarily take place in
every capitalist society, to the extent that a peasantry and semi-natural
agriculture still remain to one degree or other, and to the extent that
diverse ancient institutions and traditions (due to bad means of
communication, etc.) prevent large-scale machine industry from directly
replacing domestic industry. Every step in the development of commodity
economy inevitably leads to the peasantry producing an ever-increasing
number of industrialists from their ranks; this process turns up new soil,
as it were, prepares new regions in the most backward parts of the
country, or new spheres in the most backward branches of industry, for
subsequent seizure by capitalism. The very same growth of capitalism
manifests itself in other parts of the country, or in other branches of
industry, in an entirely different way; not in an increase but in a
decrease in the number of small workshops and of home workers absorbed by
the factory. It is clear that a study of the development of capitalism in
the industry of a given country requires that the strictest distinction be
made between these processes; to mix them up is to lead to an utter
confusion of concepts. [1]

In post-Reform Russia the growth of small industries, expressing the first
steps in the development of capitalism, has manifested, and manifests,
itself in two ways: firstly, in the migration of small industrialists and
handicraftsmen from the central, long-settled and economically most
advanced gubernias, to the outer regions; secondly, in the formation of
new small industries and the spread of previously existing industries
among the local population.

The first of these processes is one of the manifestations of the
colonisation of the border regions to which we have referred (Chapter IV,
§ II). The peasant industrialist in the Nizhni-Novgorod, Vladimir, Tver,
Kaluga and other gubernias, sensing the increased competition accompanying
the growth of the population, and the growth of capitalist manufacture and
of the factory that constitute a menace to small production, leaves for
the South, where “artisans” are still few, earnings high and
the living cost low. In the new locality a small establishment was set up
which laid the foundations for a new peasant industry that spread later in
the village concerned and in its environs. The central districts of the
country, possessing an industrial culture of long standing, thus helped
the development of the same culture in new parts of the country, where
settlement was beginning. Capitalist relations (which, as we shall see
below, are also characteristic of the small peasant industries) were thus
carried to the entire country. [2]

Let us pass to the facts that express the second of the above-mentioned
processes. We shall first say that although we note the growth of small peasant establishments and industries, we do
not as yet deal with their economic organisation: from what follows it
will be evident that these industries either lead to the formation of
capitalist simple co-operation and merchant’s capital or constitute
a component part of capitalist manufacture.

The fur industry in Arzamas Uyezd, Nizhni-Novgorod Gubernia, began in the
town of Arzamas and then gradually spread to the surrounding villages,
embracing an ever larger area. At first there were few furriers in the
villages and they employed numerous workers; labour was cheap, since
people hired themselves out in order to learn the trade. After learning it
they left and opened small establishments of their own, thus preparing a
wider field for the domination of capital, which now controls a large
section of the industrialists. [3]

Let us note in general that this abundance of wage-workers in the first establishments of a rising industry and the
subsequent transformation of these wage-workers into small masters is a
very widespread phenomenon, bearing the character of a general rule. [4]

Obviously, It would be a profound error to deduce from this that “in spite of various
historical considerations . . . it is not big establishments that absorb
small ones, but small ones that grow out of big ones.” [5]

The large size of the first establishments expresses no concentration of the industry; it is
explained by the solitary character of these establishments and by the
eagerness of local peasants to learn a profitable trade in them. As to the
process of the spread of peasant industries from their old centres to the
surrounding villages, it is observed in many cases. For example, the
post-Reform period saw the development (as regards the number of villages
involved in industry, the number of industrialists, and the total output)
of the following exceptionally important industries: the lock and cutlery industry of Pavlovo, tanning and
boot-making in the village of Kimry, the knitting of woollen slippers in
the town of Arzamas and in its environs, [15] the metalware industry of the village of
Burmakino, the cap-making industry of the village and of the district of
Molvitino, the glass, hat and lace industries of Moscow Gubernia, the
jewellery industry of Krasnoselskoye District, etc. [6]

The author of an article on handicraft industries in seven volosts of Tula Uyezd notes as a general phenomenon
“an increase in the number of artisans since the peasant
Reform,” “the appearance of artisans and handicraftsmen in
places where there were none in pre-Reform times.” [7]

A similar view is expressed by Moscow statisticians. [8]

We can support this view with statistics regarding the date of origin of 523 handicraft establishments in 10 industries of
Moscow

Gubernia. [9]

Similarly, the Perm handicraft census revealed (according to data showing
the time of origin of 8,884 small artisan and handicraft establishments)
that the post-Reform period is characterised by a particularly rapid
growth of small industries. It will be interesting to take a closer glance
at this process of the rise of new industries. The production of woollen
and semi-silk fabrics in Vladimir Gubernia began recently, in 1861. At
first this was a peasant outside occupation, but later “subcontractors” made their appearance in the villages, who
distributed yarn. One of the first “factory owners” at one
time traded in groats, buying them up in the Tambov and Saratov
“steppes.” With the building of railways, grain prices were
levelled out, the grain trade became concentrated in the hands of
millionaires, and so our merchant decided to invest his capital in an
industrial weaving enterprise; he went to work in a factory, learnt the
business and became a “subcontractor.” [10]

Thus, the formation of a new “industry” in this locality was due to the fact that the
general economic development of the country was forcing capital out of
trade and directing it towards industry. [11]

The investigator of the industry we have taken as an example points out that the case he has described is by no means an
isolated one: the peasants who earned their living by outside employments
“were pioneers in all sorts of industries, carried their technical
knowledge to their native villages, got new labour forces to follow their
example and migrate, and fired the imagination of the rich muzhiks with
stories of the fabulous profits which the industry brought the workroom
owner and the subcontractor. The rich muzhik, who used to store his money
away in a chest, or traded in grain, paid heed to these stories and put
his money into industrial undertakings” ( ibid .). The boot
and felt industries in Alexandrov Uyezd, Vladimir Gubernia, arose in some
places in the following way: the owners of calico workrooms or of small yarn-distributing shops, seeing that handweaving was
declining, opened workshops of another kind, sometimes hiring craftsmen so
as to get to know the trade and to teach their children. [12]

To the extent that large-scale industry forces small capital out of the branch of production,
this capital flows into others and stimulates their development in the
same direction.

The general conditions of the post-Reform period which called forth the
development of small industries in the rural districts are very vividly
described by investigators of Moscow industries. “On the one hand,
the conditions of peasant life have greatly deteriorated during this
period,” we read in a description of the lace industry, “but
on the other, the requirements of the population, of that part which lives
under more favourable conditions, have considerably increased. [13]

And the author, using the data of the region he has taken, notes an increase in the number
of those owning no horses and raising no crops, side by side with an
increase in the number of peasants owning many horses and in the total
number of cattle belonging to peasants. Thus, on the one hand, there was
an increase in the number of persons in need of “outside
earnings” and in search of industrial work, while on the other, a
minority of prosperous families grew rich, accumulated “savings,” and were “able to hire a worker or two, or
give out work to poor peasants to be done at home.” “Of
course,” the author explains, “we are not dealing here with
cases where individuals who are known as kulaks, or blood-suckers, develop
from among such families; we are merely examining most ordinary phenomena
among the peasant population.”

So then, local investigators point to a connection between the
differentiation of the peasantry and the growth of small peasant
industries. And that is quite natural. From the data given in Chapter II
it follows that the differentiation of the agricultural peasantry had
necessarily to be supplemented by a growth of small peasant industries. As
natural economy declined, one form of raw-material processing after
another turned into separate branches of industry; the formation of a peasant bourgeoisie and of a rural proletariat increased the demand for
the products of the small peasant industries, while at the same time
supplying free hands for these industries and free money. [14]

---
Notes:
[1]
Here is an interesting example of how these two different processes occur
in one and the same gubernia, at one and the same time and in one and the
same industry. The spinning-wheel industry (in Vyatka Gubernia) is
ancillary to the domestic production of fabrics. The development of this
industry marks the rise of commodity production, which embraces the making
of one of the instruments for the production of fabrics. Well, we see that
in the remote parts of the gubernia, in the north, the spinning wheel is
almost unknown ( Material for a Description of the Industries of Vyatka Gubernia , II, 27) and there “the industry might newly
emerge,” i.e., might make the first breach in the patriarchal
natural economy of the peasants. Meanwhile, in other parts of the gubernia
this industry is already declining, and the investigators believe that the
probable cause of the decline is “the increasingly widespread use
among the peasantry of factory-made cotton fabrics” (p 26). Here,
consequently, the growth of commodity production and of capitalism is
manifested in the elimination of petty industry by the factory.— Lenin

[2]
See, for example, S. A. Korolenko, loc . cit ., on the movement of industrial workers to the outer regions, where part of them
settle. Transactions of the Handicraft Commission , Vol. I (on the
preponderance in Stavropol Gubernia of industrialists from the central
gubernias), Vol. III, pp. 33-34 (the migration of boot-makers from
Viyezdnaya, Nizhni-Novgorod Gubernia, to the Lower-Volga towns); Vol. IX
(tanners from the village of Bogorodskoye in the same gubernia established
tanneries all over Russia). Industries of Vladimir Gubernia , IV,
136 (Vladimir potters carried their trade into Astrakhan
Gubernia). Cf. Reports and Investigations , Vol. I, pp. 125, 210;
Vol. II, pp. 160-165, 168, 222 for general remarks on the preponderance
“all over the South” of industrialists from the Great-Russian
gubernias.— Lenin

[3]
Transactions of the Handicraft Commission , III.— Lenin

[4]
For example, the same thing has been noted in the dyeing industry of
Moscow Gubernia ( Industries of Moscow Gubernia , VI, I, 73-99), in
the hat ( ibid ., VI, Pt. I), in the fur ( ibid ., VII,
Pt. I, Sec. 2), in the Pavlovo lock and cutlery industries (Grigoryev,
loc . cit ., 37-38), and others.— Lenin

[5]
Mr. V. V. hastened to draw this conclusion from a fact of this kind in his
Destiny of Capitalism , 78-79.— Lenin

[6]
A. Smirnov: Pavlovo and Vorsma , Moscow, 1864.—N. Labzin:
An Investigation of the Cutlery Industry , etc ., St. Petersburg, 1870.—Grigoryev,
loc . cit .—N. Annensky, Report , etc ., in No. 1 of Nizhegorodsky Vestnik Parokhodstva i Promyshlennosti [ The Nizhni-Novgorod Steam-Shipping and Industrial Journal ] for 1891.— Material of Zemstvo
statistics for Gorbatov Uyezd, Nizhni-Novgorod, 1892.—A. N. Potresov, Report in the St. Petersburg Branch of the
Loan and Savings Society Committee in 1895.— Statistical Chronicle of the Russian Empire , II, Vol. 3, St. Petersburg,
1872.— Transactions of the Handicraft Commission , VIII.— Reports and Investigations , I,
III.— Transactions of the Handicraft Commission , VI, XIII.— Industries of Moscow Gubernia , VI, Pt. I, p. 111,
ibid ., 177; VII, Pt II, p. 8.— Historico-Statistical Survey of Russian Industry , II, Col. VI, Industry
1.— Vestnik Finansov , 1898, No. 42. Cf. also Industries of Vladimir Gubernia , III 18-19 and others.— Lenin

[7]
Transactions of the Handicraft Commission , IX, 2303-2304.— Lenin

[8]
Industries of Moscow Gubernia , VII, Pt. I, Sec. 2, 196.— Lenin

[9]
The data on the brush, pin, hook, hat, starch, boot, spectacle frame,
harness, fringe and furniture industries have been selected from the
handicraft house-to-house census material quoted in Industries of Moscow Gubernia and in Mr. Isayev’s book of the same title.— Lenin

[10]
Industries of Vladimir Gubernia , III, 242-243.— Lenin

[11]
In his researches into the historical destiny of the Russian factory,
M. I. T.-Baranovsky showed that merchant’s capital was a necessary
historical condition for the formation of large-scale industry. See his
The Factory , etc ., St. Petersburg, 1898.— Lenin

[12]
Industries of Vladimir Gubernia , II, 25, 270.— Lenin

[13]
Industries of Moscow Gubernia , Vol. II, Pt. II, p. 8 and foll.— Lenin

[14]
The fundamental theoretical error made by Mr. N.-on in his arguments about
the “capitalisation of industries” is that he ignores the
initial steps of commodity production and capitalism in its consecutive
stages. Mr. N.-on leaps right over from “people’s production” to “capitalism,” and then is surprised, with
amusing naïvety, to find that he has got a capitalism that is without
basis that is artificial, etc.— Lenin

[15]
In the middle of the 19th century, the knitting of slippers with designs
in coloured wools was widespread in Arzamas and its outskirts. In the
1860s ten thousand and more pairs of knitted footwear were made annually
in the town, the Nikolsky Convent and the village of Viyezdnaya
Sloboda. The wares were sold at the Nizhni-Novgorod fair, and from there
were dispatched to Siberia, the Caucasus and other parts of Russia.
[p. 341]