The DEVELOPMENT of CAPITALISM in RUSSIA

Chapter I. The Theoretical Mistakes of the Narodnik Economists

VIII. Why Does the Capitalist Nation Need a Foreign
Market?

Regarding the above-stated theory of the realisation of the product in
capitalist society, the question may arise: Does not this theory
contradict the proposition that the capitalist nation cannot dispense with
foreign markets?

It must be remembered that the analysis given of the realisation of the
product in capitalist society proceeded from the assumption that there is
no foreign trade: this assumption has already been mentioned above and it
has been shown to be essential in such an analysis. Obviously,
imports and exports would only have confused the issue, without in the least helping to clear up the problem. The mistake made by
Messrs. V. V. and N.–on is that they bring in the foreign market to
explain the realisation of surplus-value: while explaining
absolutely nothing, this reference to the foreign market merely conceals
their theoretical mistakes; that is one point. Another point is that it
enables them, with the aid of these mistaken “theories,” to
avoid the need to explain the fact of the development of a home
market for Russian capitalism. [1]

The “foreign market” merely serves them as a pretext for obscuring the development of capitalism (and,
consequently, of the market) inside the country—a pretext all the
more convenient in that it also relieves them of the need to examine the
facts which show that Russian capitalism is winning foreign markets. [2]

The need for a capitalist country to have a foreign market is not
determined at all by the laws of the realisation of the social product
(and of surplus-value in particular), but, firstly, by the fact that
capitalism makes its appearance only as a result of widely developed
commodity circulation , which transcends the limits of the
state. It is therefore impossible to conceive a capitalist nation without
foreign trade, nor is there any such nation.

As the reader sees, this reason is of a historical order. And the
Narodniks could not escape it with a couple of threadbare phrases about
“the impossibility of the capitalists consuming surplus-value.” Had they really wanted to raise the question of the
foreign market, they would have had to examine the history of the
development of foreign trade, the history of the development of commodity
circulation. And having examined this history, they could not have, of
course, depicted capitalism as a casual deviation from the path.

Secondly, the conformity between the separate parts of social production
(in terms of value and in their natural form) which was necessarily
assumed by the theory of the reproduction of social capital, and which is actually established only as
the average magnitude of a number of continual fluctuations—this
conformity is constantly disturbed in capitalist society owing to the
separate existence of different producers working for an unknown
market. The various branches of industry, which serve as
“markets” for one another, do not develop evenly, but outstrip
one another, and the more developed industry seeks a foreign market. This
does not mean at all “the impossibility of the capitalist nation
realising surplus-value,”—the profound conclusion so readily
drawn by the Narodnik. It merely indicates the lack of proportion in the
development of the different industries. If the national capital were
distributed differently , the same quantity of products could be
realised within the country. But for capital to abandon one sphere of
industry and pass into another there must be a crisis in that sphere; and
what can restrain the capitalists threatened by such a crisis from seeking
a foreign market, from seeking subsidies and bonuses to facilitate
exports, etc.?

Thirdly, the law of pre-capitalist modes of production is the repetition
of the process of production on the previous scale, on the previous
technical basis: such are the corvée economy of the landlords, the
natural economy of the peasants, the artisan production of the
industrialists. The law of capitalist production, on the contrary, is
constant transformation of the modes of production, and the unrestricted
growth of the scale of production. Under the old modes of production,
economic units could exist for centuries without undergoing any change
either in character or in size, and without extending beyond the
landlord’s manor, the peasant village or the small neighbouring
market for the rural artisans and small industrialists (the so-called
handicraftsmen). The capitalist enterprise, on the contrary, inevitably
out grows the bounds of the village community, the local market, the
region, and then the state. Since the isolation and seclusion of the
states have already been broken down by commodity circulation, the natural
trend of every capitalist industry brings it to the necessity of
“seeking a foreign market.”

Thus, the necessity of seeking a foreign market by no means proves that
capitalism is unsound, as the Narodnik economists like to picture matters. Quite the contrary. This necessity
demonstrates the progressive historical work of capitalism, which destroys
the age-old isolation and seclusion of systems of economy (and,
consequently, the narrowness of intellectual and political life), and
which links all countries of the world into a single economic whole.

From this we see that the two latter causes of the need for a foreign
market are again causes of a historical character. In order to understand
them one must examine each separate industry, its development within the
country, its transformation into a capitalist industry—in short, one
must take the facts about the development of capitalism in the
country; and it is not surprising that the Narodniks take the opportunity
to evade these facts under cover of worthless (and meaningless) phrases
about the “impossibility” of both the home and the foreign
markets.

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Notes:
[1]
Mr. Bulgakov very correctly observes in the above-quoted book: “Till
now the cotton industry, which supplies the peasant market, has been
growing steadily, so that the absolute diminution of popular
consumption. ..” (which Mr. N.–on talks about) “...is conceivable only theoretically” (pp, 214-215).
— Lenin

[2]
Volgin, The Substantiation of Narodism in the Works of Mr. Vorontsov , St. Petersburg, 1896, pp. 71-76. [3]
— Lenin

[3]
Volgin –pseudonym of G. V. Plekhanov. The work here cited is included in Vol. IX of his Works .