The DEVELOPMENT of CAPITALISM in RUSSIA

Chapter VIII. The Formation of the Home Market

V. The Significance of the Border Regions. Home or Foreign
Market?

In Chapter I we pointed to the erroneous character of the theory that
links the problem of a foreign market for capitalism with that of the
realisation of the product (pp. 64-65 and foll.). Capitalism’s need
of a foreign market is by no means to be explained by the impossibility of
realising the product on the home market, but by the circumstance that
capitalism is in no position to go on repeating the same processes of
production on the former scale, under unchanging conditions (as was the
case under pre-capitalist regimes), and that it inevitably leads to an
unlimited growth of production which overflows the old, narrow limits of
earlier economic units. With the unevenness of development inherent in
capitalism, one branch of production outstrips the others and strives to
transcend the bounds of the old field of economic relations. Let us take,
for example, the textile industry at the beginning of the post-Reform
period. Being fairly well developed capitalistically (manufacture
beginning to pass into factory industry), it had gained complete command
of the market of Central Russia. But the big factories, growing so
rapidly, could no longer be satisfied with the former dimensions of the
market; they began to seek a market further afield, among the new
population colonising Novorossia, the south-east Transvolga region, North
Caucasus, then Siberia, etc. The efforts of the big factories to reach out
beyond the old markets are undoubted. Does it mean that the areas which
served as these old markets could not, in general, consume a larger
quantity of the products of the textile industry? Does it mean, for
example, that the industrial and central agricultural gubernias cannot, in
general, absorb a larger quantity of wares? No, it does not. We know that
the differentiation of the peasantry, the growth of commercial agriculture
and the increase in the industrial population have also expanded, and
continue to expand, the home market of this old area. But this expansion
of the home market is retarded by many factors (chief among them the
retention of obsolete institutions which hinder the development of
agricultural capitalism); and the factory owners will not, of course, wait
until the capitalist development of other branches of the national economy
catches up with that of the textile industry. The mill owners need a
market at once, and if the backwardness of other branches of the national
economy restricts the market in the old area, they will seek for a market
in another area, or in other countries, or in the colonies of the old
country.

What is a colony in the politico-economic sense? It was stated above that,
according to Marx, the main features of this concept are the following: 1)
the existence of unoccupied, free lands, easily accessible to settlers; 2)
the existence of an established world division of labour, of a world
market, thanks to which the colonies can specialise in the mass production
of agricultural produce, receiving in exchange finished industrial goods
“which they would have to produce themselves under other
circumstances” (see above, p. 258, footnote, Chapter IV,
§ II). Reference has been made elsewhere to the fact that the
southern and the eastern border regions of European Russia, which have been settled in
the post-Reform period, bear the distinctive features mentioned and
constitute, in the economic sense, colonies of Central European

Russia. [1]

The term colony is still more applicable to the other outer regions, for example,
the Caucasus. Its economic “conquest” by Russia took place
much later than the political conquest; and to this day this economic
conquest has not been completed to the full. In the post-Reform period
there has been, on the one hand, an intensive colonisation of the

Caucasus, [2] an extensive ploughing up of the land (particularly in the North Caucasus) by
colonists producing wheat, tobacco, etc., for sale, and attracting masses
of rural wage-workers from Russia. On the other hand, native age-old
“handicraft” industries, which are declining due to the
competition of wares from Moscow, are being eliminated. There has been a
decline in the ancient gunsmith’s craft due to the competition of
imported Tula and Belgian wares, a decline in handicraft iron-work due to
the competition of the imported Russian products, as well as in the
handicraft processing of copper, gold and silver, clay, fats and soda,
leather, etc. [3]

These products are turned out more cheaply in Russian factories, which supply
the Caucasus with their wares. There has been a decline in the making of
drinking-horns because of the decay of the feudal system in Georgia and of
the steady disappearance of her memorable feasts; there has been a decline
in the headgear industry due to the replacement of Asiatic dress by
European; there has been a decline in the production of wine-skins and
pitchers for local wine, which for the first time is now being sold
(giving rise to the barrel-making trade) and has in turn captured the
Russian

market. Russian capitalism has thus been drawing the Caucasus into
the sphere of world commodity circulation, obliterating its local
peculiarities— the remnants of ancient patriarchal isolation—and providing itself with a market for its
factories. A country thinly populated at the beginning of the post-Reform
period, or populated by mountaineers living outside world economy and even
outside history, has been turning into a land of oil industrialists, wine
merchants, big wheat and tobacco growers, and

Mr. Coupon [6] has been ruthlessly divesting the proud mountaineer of his picturesque national
costume and dressing him in the livery of a European flunkey (Gleb

Uspensky). [7] The process of rapid colonisation in the Caucasus and of the rapid growth of
its agricultural population has been accompanied by a process (obscured by
this growth) of the diversion of the population from agriculture to
industry. The urban population of the Caucasus increased from 350,000 in
1863 to about 900,000 in 1897 (the total population increased between 1851
and 1897 by 95%). There is no need to add that the same thing has taken
place and continues in both Central Asia and Siberia, etc.

Thus, the question naturally arises, where is the border line between the
home and the foreign market? To take the political boundaries of the state
would be too mechanical a solution—and would it be a solution? If
Central Asia is the home market and Persia the foreign market, to which
category do Khiva and Bokhara belong? If Siberia is the home market and
China the foreign market, to which category does Manchuria belong? Such
questions are not of great importance. What is important is that
capitalism cannot exist and develop without constantly expanding the
sphere of its domination, without colonising new countries and drawing old
non-capitalist countries into the whirlpool of world economy. And this
feature of capitalism has been and continues to be manifested with
tremendous force in post-Reform Russia.

Hence, the process of the formation of a market for capitalism has two
aspects, namely, the development of capitalism in depth, i.e., the further
growth of capitalist agriculture and industry in the given, definite and
enclosed territory—and the development of capitalism in breadth, i.e., the extension of the sphere of the capitalist domination to new
territory. In accordance with the plan of the present work, we have
confined ourselves almost exclusively to the first aspect of the process,
and for this reason we consider it particular]y necessary to stress the
point here that its other aspect is of exceptionally great
importance. Anything like a complete study of the process of colonisation
of the border regions and of the expansion of Russian territory, from the
point of view of capitalist development, would require a special
work. Suffice it to mention here that Russia is in a particularly favoured
position as compared with other capitalist countries, due to the abundance
of free land accessible for colonisation in her border regions. [4]

To say nothing of Asiatic Russia we have also in European Russia border regions
which, because of their exceeding remoteness and bad means of
communication, are still very poorly connected economically with central
Russia. Let us take, for instance, the “Far North”
—Archangel Gubernia; the boundless stretches of territory and their
natural resources are still exploited very slightly. One of the principal
local products, timber, was until recently exported mainly to England. In
this respect, therefore, that part of European Russia was a foreign market
for Britain without being a home market for Russia. The Russian
entrepreneurs naturally envied the British, and now, with the extension of
the railway line to Archangel, they are jubilant at the prospect of
“elevated moods and business activity in various branches of
industry in the region.” [5]

---
Notes:
[1]
“. . . It was thanks exclusively to them, thanks to these forms of
people’s production, and on the basis of them that the whole of
South Russia was colonised and settled.” (Mr. N.–on, Sketches , 284). How wonderfully broad and comprehensive is the
term: “forms of people’s production”! It covers whatever
you like: patriarchal peasant farming, labour-service, primitive
handicrafts, small commodity-production, and those typically capitalist
relations within the peasant community that we saw above in the data on
the Taurida and Samara gubernias (Chapter II, etc., etc.— Lenin

[2]
Cf. articles by Mr. P. Semyonov in Vestnik Finansov , 1897,
No. 21, and by V. Mikhailovsky in Novoye Slovo , June 1897.— Lenin

[3]
See article by K. Khatisov in Vol. II of Reports and Investigations of Handicraft Industry , and by P. Ostryakov in Vol. V. of
Transactions of the Handicraft Commission .— Lenin

[4]
The circumstance indicated in the text has another aspect. The development
of capitalism in depth in the old, long-inhabited territories is retarded
because of the colonisation of the outer regions. The solution of the
contradictions inherent in, and produced by, capitalism is temporarily
postponed because of the fact that capitalism can easily develop in
breadth. Thus, the simultaneous existence of the most advanced forms of
industry and of semi-medieval forms of agriculture is undoubtedly a
contradiction. If Russian capitalism had possessed no range for expansion
beyond the bounds of the territory already occupied at the beginning of
the post-Reform period, this contradiction between capitalist large-scale
industry and the archaic institutions in rural life (the tying of the
peasants to the land, etc.) would have had to lead quickly to the complete
abolition of these institutions, to the complete clearing of the path for
agricultural capitalism in Russia. But the possibility (for the mill
owner) of seeking and finding a market in the outer regions in process of
colonisation and the possibility (for the peasant) of moving to new
territory, mitigates the acuteness of this contradiction and delays its
solution. It goes without saying that such a deceleration of the growth of
capitalism is equivalent to preparing its even greater extension in the
near future.— Lenin

[5]
Productive Forces , XX, 12.— Lenin

[6]
Mr . Coupon —a term adopted in the 1880s and 1890s to indicate capital and capitalists. The expression
“Mr. Coupon” was put in circulation by the writer Gleb
Uspensky in his articles “Grave Sins.” [p. 594]

[7]
See Gleb Uspensky’s article “In the Caucasus.”
Works , Vol. II, 1918. [p. 594]