Lenin asks how the theory expounded by Krasin relates to the Market Question?
“True, the theory introduces a correction into the ordinary conception of the development of capitalism, but, evidently, the explanation of how capitalism develops in general does not in the least help to clear up the question of the “possibility” (and necessity) of the development of capitalism in Russia.” (p 89)
Krasin distinguishes between the development of capitalism in breadth, whereby capital spreads into spheres previously dominated by natural economy, and development in depth, whereby spheres already dominated by capital expand. Krasin presents a diagram showing the exchange relations between the capitalist spheres in the economy, and those still dominated by natural economy.
In the capitalist sphere, the surplus value is consumed productively, so that capital is accumulated, whereas in the case of the direct producers, the surplus value is consumed unproductively by them increasing consuming, buying a wider range of commodities from the capitalist sector, in the market. The conclusion from this, drawn by Krasin, is that the capitalist sector expands at the expense of the natural sector. The capitalist sector increasingly takes over the production of those commodities currently produced by the natural sector.
Krasin notes,
“From the above diagram of the development of capitalism in breadth it follows that the whole of production is most closely dependent upon consumption in ‘foreign’ markets, upon consumption by the masses (and from the general point of view it makes absolutely no difference where those masses are—alongside the capitalists, or somewhere across the ocean). Obviously, the expansion of production in A, i.e., the development of capitalism in this direction, will come to a stop as soon as all the direct producers in W turn into commodity producers, for, as we saw above, every new enterprise (or expansion of an old one) is calculated to supply a new circle of consumers in W.” (p 91)
This presentation, Lenin says, is fully consistent with the Narodnik view. That view, as presented in the diagram, sees capitalism in Russia as somehow separate from the rest of the economy. Lenin notes,
“... from which it is quite impossible to see what connection there is between the two “spheres,” the capitalist sphere and the people’s sphere. Why do commodities sent from A find a market in W? What causes the transformation of natural economy in W into commodity economy? The current view has never answered these questions because it regards exchange as something accidental and not as a certain system of economy.” (p 91-2)
Nor had the Narodniks explained where the capitalist sector of the economy itself had come from.
“... the matter is presented as though the capitalists have come from somewhere outside and not from among these very “direct producers.” Where the capitalists get the “free workers” who are needed for enterprises a, a1, etc., remains a mystery. Everybody knows that in reality those workers are obtained precisely from the “direct producers,” but the diagram does not show at all that when commodity production embraced “sphere” W, it created there a body of free workers.” (p 92)
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