Lenin quotes Krasin's conclusion from this expansion of Department I.
““We have seen here,” says the author, “how accumulation takes place in department I, the production of means of production as means of production: . . .this accumulation takes place independently both of the progress of the production of articles of consumption and of the personal consumption itself, no matter whose it is” (page 15/3).” (p 84)
But, as Lenin points out, its wrong to say that this expansion of Department I is independent of Department II. For one thing, an expansion of Department I also requires an expansion of variable-capital. Department I must employ more workers, and these workers need wage goods to consume, which requires that Department II also employ more workers to produce them, and these additional workers also require additional wage goods to consume. Moreover, ultimately, the only purpose in expanding Department I is so as to produce additional means of production for Department II, who needs them because demand for consumption goods rises.
“... evidently, by using that term the author merely wanted to stress the specific feature of the scheme, namely, that the reproduction of I c—constant capital in department I— takes place without exchanges with department II, i.e., every year a certain quantity of, say, coal is produced in society for the purpose of producing coal. It goes without saying that this production (of coal for the purpose of producing coal) links up, by a series of subsequent exchanges, with the production of articles of consumption—otherwise, neither the coal-owners nor their workers could exist.” (p 84)
Lenin sets out a process of accumulation in which the technical composition of capital rises, as a result of rising productivity, i.e. a given mass of labour processes a growing mass of raw material. He assumes 50% of profit is accumulated. The table is presented below.
There are some minor innacuracies, but they do not affect Lenin's conclusion that accumulation occurs fastest in the production of means of production for the production of means of production, i.e. Department I (c), then means of production for production of means of consumption (Department I (v + s), and finally in production of means of consumption (Department II [v + s].
What if this rise in productivity that lies behind the rise in the organic composition of capital, c:v, were such, Lenin says, that v was reduced to zero. In individual cases that might be possible, he says. In that case, accumulated surplus value would go straight to Department I (c). It would require no additional labour to process this additional raw material. Consequently, there would be no requirement for additional wage goods production, and so for accumulation in Department II. All growth would come from Department I, with stagnation in Department II.
“That would, of course, be a misuse of the schemes, for such a conclusion is based on improbable assumptions and is therefore wrong. Is it conceivable that technical progress, which reduces the proportion of v to c, will find expression only in department I and leave department II in a state of complete stagnation? Is it in conformity with the laws governing capitalist society, laws which demand of every capitalist that he enlarge his enterprise on pain of ruin, that no accumulation at all should take place in department II?” (p 88)
Lenin's argument, here, however, seems flawed, because, if as he says, a similar rise in the technical composition arose in Department II, with v being reduced to zero, Department II would increase its output, but could only find a market for these additional commodities from amongst Department I and II capitalists, which seems to create the problem of realisation of surplus value that Marx describes in Capital III, Chapter 15.
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