Lenin points out that, in the table, the expansion of the market does not now correspond with the degree of specialisation. That is because simple reproduction is assumed so that the surplus product of b and c is consumed unproductively by Capitalists I and IV. In other words, they both obtain 4 units of surplus value, as a result of employing wage labour. Its taken here that they simply consume these products directly rather than trading them, which is what would happen if they were engaged in a process of capital accumulation. All that is portrayed here is the process of primary accumulation, resulting in capitalist production.
In the 5th period, the workers, now spending most of their time as wage workers, can no longer support their own agricultural production. They give up half of this activity, and Capitalists I and IV step in to this production. Each worker continues to produce 1a = 3 units of value, but, now, ½a equals their own direct production = 1½ units of value, whereas the other half goes to the capitalist who returns 1 unit of value to the worker as wages. The worker, now, therefore, sees their income fall from 7 in Period 4 to 6½ in Period 5. But, alongside this “impoverishment” goes an expansion of the market, as now 26 units of output is traded compared to 22 in Period 4, 18 in Period 3 and 6 in Period 2.
In Period 6, all spheres become specialised. Producers I and IV leave agricultural production, which becomes the preserve of Producer VI. Producers II, III, and V have now also lost their farms, becoming purely wage workers employed by Capitalists I, IV and VI.
“We get the same result: the development of capitalism [independent farming on one’s own account has been fully eliminated], “impoverishment of the masses” [although the workers’ wages have risen, their consumption has diminished from 6½ to 6: they each produce 9 (3a, 3b, 3c) and give their masters one-third as surplus-value], and a further growth of the market, in which there now appears two-thirds of the social product (36).” (p 99)
Lenin draws a number of conclusions. Firstly, the concept of the market is inseparable from the concept of the social division of labour.
“The “market” arises where, and to the extent that, social division of labour and commodity production appear. The dimensions of the market are inseparably connected with the degree of specialisation of social labour.” (p 100)
Lenin quotes Marx from Capital I, to the effect that every commodity must be a use value, or else there will be no demand for it, but that the range of use values, and, therefore, size of the market, continues to expand. On the one hand, new types of use value come into existence – we did not always have mobile phones, for example – but, also, as a result of the social division of labour, and particularly as the scale of production expands, what once were only components become commodities produced by specialist producers of those components, who sell them to other producers as part of intermediate production.
The specialisation of social labour is as infinite as technical development, so that as long as humans can come up with new types of use value, or divide the production of existing use values into a series of independent spheres of production for these components, the market can continue to expand.
Lenin quotes the example of woodworking factories in the US, where this degree of specialisation into production of different end products, also saw separate production of their components, such as wheel rims, spokes and hubs, not just in different factories but different parts of the country. Globalisation and the international division of social labour is merely an extension of this same fundamental aspect of capitalism, and one of the reasons for its tremendously progressive development of the productive forces and the productive power of social labour.
“This shows how wrong is the assertion that the growth of the market in capitalist society caused by the specialisation of social labour must cease as soon as all natural producers become commodity producers. Russian carriage building has long become commodity production, but wheel rims, say, are still made in every carriage builder’s (or wheelwright’s) shop; the technical level is low, production is split up among a mass of producers. Technical progress must entail the specialisation of different parts of production, their socialisation, and, consequently, the expansion of the market.” (p 101)
Lenin is quick to point out, however, that whilst this shows that the catastrophism inherent in the Narodniks claims about the potential for a continual expansion of the market and capital were baseless, this does not mean that capitalist development can be constrained within the confines of the nation state. There is no succour for the economic nationalist proponents of the theory of Socialism In One Country from Lenin.
“Under capitalist production, an equilibrium between production and consumption is achieved only by a series of fluctuations; the larger the scale of production, and the wider the circle of consumers it is calculated to serve, the more violent are the fluctuations. It can be understood, therefore, that when bourgeois production has reached a high degree of development it can no longer keep within the limits of the national state: competition compels the capitalists to keep on expanding production and to seek foreign markets for the mass sale of their products. Obviously, the fact that a capitalist nation must have foreign markets just as little violates the law that the market is a simple expression of the social division of labour under commodity economy and, consequently, that it can grow as infinitely as the division of labour, as crises violate the law of value.” (p 101-2)
And, as with the development of the natural economy, and the nation state, alongside the development of capitalism itself, this very drive for these foreign markets creates an inevitable dynamic for them to become a single market, with the same laws and regulations, so that each capital competes on a level playing field, and all frictions preventing a free movement of capital, commodities and labour are removed. As he says in Two Tactics of Social Democracy,
““And from these principles it follows that the idea of seeking salvation for the working class in anything save the further development of capitalism is reactionary. In countries like Russia, the working class suffers not so much from capitalism as from the insufficient development of capitalism. The working class is therefore decidedly interested in the broadest, freest and most rapid development of capitalism. The removal of all the remnants of the old order which are hampering the broad, free and rapid development of capitalism is of decided advantage to the working class.”
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