Saturday 19 December 2015

Capital III, Chapter 20 - Part 11

As Marx says, in contrast to the ancient world, merchant capital now necessarily pushes forwards to capitalist production. Lenin detailed the same effects in Russia, as set out in his writings against Economic Romanticism, and particularly in “The Development of Capitalism in Russia”.

At the time Marx was writing Capital, he noted,

“Unlike the English, Russian commerce, on the other hand, leaves the economic groundwork of Asiatic production untouched.” (p 334)

But, even by the time Engels was publishing the work, the situation had changed, causing him to note,

“Since Russia has been making frantic exertions to develop its own capitalist production, which is exclusively dependent upon its domestic and the neighbouring Asiatic market, this is also beginning to change.” (Note 51, p 334)

There are two ways in which this transition is effected. Either the merchant themselves becomes a producer, in order to obtain the quantity and quality of commodities they require, to meet the needs of their markets, or else the merchant simply takes control of the production process, turning independent workers effectively into employees.

That is done via a variety of means such as the putting-out system, where merchants buy material and then supply it to cottage workers who work it up, selling the finished product back to the merchant. Or else, the merchant may operate via one or more sweatshops, whereby they contract with a small master for the supply of commodities. The master occupies no better position than their workers, but is forced to “sweat” this labour in order to keep prices to a minimum, to ensure sale to the merchant. In essence, the merchant simply appropriates the surplus value produced by the workers.

“This system presents everywhere an obstacle to the real capitalist mode of production and goes under with its development. Without revolutionising the mode of production, it only worsens the condition of the direct producers, turns them into mere wage-workers and proletarians under conditions worse than those under the immediate control of capital, and appropriates their surplus-labour on the basis of the old mode of production.” (p 334)

Again, Lenin notes the same thing in Russia. The conditions of workers in the handicraft sector was worse than that for workers employed by small manufacturing capital, which was in turn worse than for workers employed by the big industrial capitals.

“There is, consequently, a three-fold transition. First, the merchant becomes directly an industrial capitalist. This is true in crafts based on trade, especially crafts producing luxuries and imported by merchants together with the raw materials and labourers from foreign lands, as in Italy from Constantinople in the 15th century. Second,the merchant turns the small masters into his middlemen, or buys directly from the independent producer, leaving him nominally independent and his mode of production unchanged. Third, the industrialist becomes merchant and produces directly for the wholesale market.” (p 335)

The latter was the case with, for example, Boulton and Watt, and particularly for those former workers and artisans such as Wedgwood, who develop their businesses from crafts into industrial capitalist enterprises.

“In the Middle Ages, the merchant was merely one who, as Poppe rightly says, "transferred" the goods produced by guilds or peasants [Poppe, Geschichte der Technologie seit der Wiederherstellung der Wissenschaften bis an das Ende des achtzehnten Jahrhunderts, Band I, Göttingen. 1807, S. 70. — Ed.] The merchant becomes industrialist, or rather, makes craftsmen, particularly the small rural producers, work for him. Conversely, the producer becomes merchant. The master weaver, for instance, buys his wool or yarn himself and sells his cloth to the merchant, instead of receiving his wool from the merchant piecemeal and working for him together with his journeymen. The elements of production pass into the production process as commodities bought by himself. And instead of producing for some individual merchant, or for specified customers, he produces for the world of trade.” (p 336)

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