The Development of Capitalism in Russia

Lenin, V.I. 1977. The Development of Capitalism in Russia. Moscow: Progress Publishers. [Ch. 1-4]

The progression of these four chapters is as follows: first, Lenin reviews some theoretical issues of political economy around the development of a home market in Russia and the realization of surplus value; second, he shows the differentiation of the peasantry and its implications; third, the transition from landlord economy and corvée labor to capitalist agriculture; the fourth chapter examines the growing development of commercial and capitalist agriculture. The book is also an extended argument against Narodnik economists who argued that capitalism was an “artificial” deviation for Russia’s rural economy. They also idealized peasant and “community” economies to the point where corvée or service labor were romanticized as stumbling blocks of resistance against capitalist agriculture, which they did not see as necessarily “progressive,” as did Lenin. The basis of their analysis, according to Lenin, importantly stemmed from analytic, statistical averages that obscured stark differentiation among rural producers.

Before moving on to the chapters, the publication of the book came just on the heels of the Agrarian Question by Karl Kautsky. Lenin praises Kautsky’s book as exemplary and I know he penned a very positive review, so it’s interesting to see what Lenin underlined in Kautsky’s contribution and its parallels with The Development of Capitalism in Russia. First, there’s the importance of the division of labor in agriculture and the introduction of machinery on an increasing scale. Both works also highlight the coincidence of wage-labor and small-scale agriculture, and they both also emphasize the functionality or symbiosis of small-scale and large-scale production—even if Lenin assumed the withering away of the peasantry.

On a basic level, large-scale agriculture essentially outsourced the reproduction of labor-power to the individual laborer who farmed his small-scale plot. Echoing Kautsky, Lenin emphasized the self-exploitation of the peasant who thereby “reduce the level of their requirements below that of the wage-workers and tax their energies far more than the latter do” (27). Both Lenin and Kautsky argued that agricultural wage-workers were much better off than small-scale peasants. They were also highly critical of schemes that sought to align large-scale production with communal agriculture, which they believed simply furthered the interests of large landowners, though Kautsky was slightly more ambivalent.

Chapter 1 mainly seeks to dispel the Narodniks idea about the impossibility of a home market for the realization of surplus value—that is, the finding of corresponding equivalent sale for a product in the market—which they believed could only be resolved by the entry of/into a foreign market. As Lenin defines it, “The problem of realization 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” (46).

Lenin also retraces the importance of distinguishing productive and non-productive consumption, and argues that production—with its requisite means of production, particularly constant capital—is what drives the home economy rather than non-productive consumption. Although he says that the two kinds of consumption are linked, it still seems pretty one-sided—particularly if compared to Marx’s 1857 Introduction to the Grundrisse. Herein also lies a central contradiction of capitalism: the necessity of expanding consumption from an increasingly impoverished and relatively more populous workforce. Lenin’s main argument is that the creation of a home market is inherent to the development of capitalism itself (generalized commodity production and exchange, social division of commodified labor, etc. etc.), and he adds that by definition a capitalist country is already plugged in to foreign markets.

Chapter 2 is a rather painstaking empirical survey of peasant differentiation that simultaneously shows the faulty selective analytic methods of the Narodniks, who relied on averages that obscured the growing differentiation of the peasantry and, thus, the ongoing and organic development of capitalist agriculture. Lenin finds three different categories of peasants: 1) Peasant bourgeoisie; 2) Middle peasantry; 3) Poor peasantry. The most underprivileged of the three is actually the middle peasantry, who insist on trying to eke out a mostly subsistence existence, while the poor peasantry have given up altogether and have sought the more lucrative wage-labor and perhaps also resorted to renting their land to the peasant bourgeoisie. In any case, the bourgeoisie is ousting the two-lower classes of peasants who are becoming increasingly proletarianized, leading to a concentration of land ownership. Larger-scale and mechanized agriculture means more productive consumption and, thus, a growing home market with its linkages to nonproductive consumption, too.

In a familiar pattern, “the threads both of merchant’s capital (the loaning of money on the security of land, the buying-up of various products, etc.) and of industrial capital (commercial agriculture with the aid of wage-workers, etc,.) merge in the hands of the peasant bourgeoisie” (79). Lenin’s contribution in this chapter for his time dispels any romantic vision of the peasant economy, which were actually not that common (particularly among the left), while also destroying notions of an integral, homogenous, and monolithic Peasant class.

Chapter 3 shows the coexistence of a corvée (or labor-service) economy with a capitalist one in what Lenin defines as a transitional phases. One major aspect leading to this shift in the center of gravity toward capitalist agriculture is the differentiation of the peasantry with machinery also playing a significant role. Along with the extension of capitalist social relations, the move also implies the growing creation of a home market based on the greater emphasis on constant capital. Along with the entry of more women and children into the proletarianized peasantry

capitalism has created in the outer regions a new form of the “combination of agriculture with industries,” namely, the combination of agricultural and non-agricultural hired labour. Such a combination is possible on a wide scale only in the period of the final and highest stage of capitalism, that of large-scale machine industry, which attenuates the importance of skill, of “hand labour,” facilitates the transition from one occupation to another, and levels the forms of hire. (244)

Finally, Chapter 4 explores the commercialization of capitalist agriculture on par with the capitalist social relations of industry: “there is an ever-growing division of social labour; there is an increase in the commercial and industrial population; the agricultural population splits up into rural entrepreneurs and a rural proletariat; there is an extension of specialisation in agriculture itself, so that the amount of grain produced for sale grows far more rapidly than the total amount of grain produced in the country.

The process not only further eviscerates the remaining small holders who can’t compete with such gargantuan production schemes and growing differentiation, but also further develops the home market by creating a greater need for means of production and the consumptive needs of a growing workforce without the means to produce by itself, for itself. But Lenin sees this as an improvement on the standard of living of the peasants-turned-wage earners: “the conditions of the workers in industry are better than those of the workers in agriculture (because in agriculture oppression by capitalism is supplemented by the oppression of pre-capitalist forms of exploitation)” (271).

Finally, Lenin gives a good summary of his argument thus far:

In chapters II-IV the problem of capitalism in Russian agriculture has been examined from two angles. First we examined the existing system of social and economic relations in peasant and landlord economy, the system which has taken shape in the post-Reform period. It was seen that the peasantry have been splitting up at enormous speed into a numerically small but economically strong rural bourgeoisie and a rural proletariat. Inseparably connected with this “depeasantising” process is the landowners’ transition from the labour-service to the capitalist system of farming. Then we examined this same process from another angle: we took as our starting-point the manner in which agriculture is transformed into commodity production, and examined the social and economic relations characteristic of each of the principal forms of commercial agriculture.