Friday 3 April 2020

On The So Called Market Question - Part 6

There is a dialectical developmental process. That could be described like this. In the natural economy, direct producers (which may be village communes or peasant household) produce the majority of their own consumption requirements. They exchange some of their surplus production for other use values they require, which they cannot effectively produce for themselves. The fact that there are a range of such products, which all direct produces cannot effectively produce for themselves, itself creates the need for specialist artisan producers of these products to arise, who, from the start, produce these use values as commodities, and these artisans tend to be concentrated in towns, where markets develop. 

The requirement to pay for these commodities, as well as to pay rents and taxes, in money, means that barter is superseded by money economy. The direct producer does not produce specifically to obtain money, but sells some of their output, so as to obtain money, in order to pay rent and taxes, and buy other commodities. This creates a dynamic whereby the direct producer, even to most easily satisfy their own consumption needs, is led to produce those use values in which they have some individual advantage, because that means they obtain a greater quantity of exchange value, which then can be used to obtain the other use values they require. It inserts the social division of labour into the system of direct production. 

On this basis, this increased social division of labour means that more products are produced as commodities, so that generalised commodity production develops. In the context of a money economy, this means that some producers, as seen in the previous works discussed, begin to obtain money hoards in excess of what is required to buy the other use values required for their consumption. It means that this money then becomes capital

“This leads to the conversion of independent producers into wage-workers and of numerous small enterprises into a few big ones.” (p 93) 

Krasin's diagram, therefore, should show both of these processes, Lenin says, illustrating how capitalism arises (primary accumulation), and how, having arisen, it expands the market, and draws more products into the sphere of capitalist production, as commodities. Lenin provides an alternative table, showing this developmental process. 


The table describes six periods in the transition from natural to capitalist economy. It begins with 6 producers each spending all their time in three types of production, to meet their needs. Each producer produces 3 units of output, in each sphere a, b and c, giving 9 units in total, and so 54 units over the 6 producers. Each producer consumes their own output, leaving none traded. 

In the second period, Producer I stops producing b, and devotes their labour instead to producing c. This might be considered as, say, a peasant producer who turns their attention to being a blacksmith, and thereby specialises in producing tools, and shoeing horses etc., for their neighbours. In so doing, the division of labour raises their productivity. Their neighbours then spend less time in sphere c, making and repairing tools etc., and use that time to increase production of b, which Producer I has abandoned. They exchange some of their production of b for some of Producer I's output of c. 

Already then we have commodity production. Producer I produces a quantity of c, now specifically in order to trade it for a quantity of b, and the other producers of b now produce a quantity of it specifically to trade it for a quantity of c from Producer I. Producer I sells 3c, their surplus product, in exchange for 3b, with Producers II-VI, each exchanging 0.6b for 0.6c. The total quantity of products appearing in the market is then 6, i.e. 3b + 3c. Total production remains 54 units, but with only 48 units being directly consumed by their producer. 

Lenin actually describes these units in terms of unit of value, with a, b and c, each being 1 use value, each with a value of 3. In fact, Lenin's own table and presentation is defective, because the reason for Producer I engaging in specialisation in c, for example, as a blacksmith, is because they have some natural advantage in that sphere, so that they obtain more labour for less. It would necessarily lead to a rise in productivity, and thereby of total social production. 

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