Lenin engages with Mikhailovsky's appeal to the role of the individual in history, as opposed to what he describes as materialism's reduction of the individual to a mere marionette, driven by necessity. For Mikhailovsky, this is phrased in terms of the role of “the hero and the crowd.” This was typical of the middle class individualist and idealist mindset of the Narodniks, which led some of them to individual acts of terror which went nowhere. Similar approaches can be seen by the same sociological strands today. In fact, as Lenin says, there is no conflict between materialism and the role of the individual. The point is under what historical conditions particular ideas arise, and under what conditions can they take hold and succeed.
Lenin then moves on to a question that appears peripheral, but which is, in fact, central. That is the question of dialectics, and how dialectics relates to the theory of historical materialism. Mikhailovsky uses a familiar trick amongst Marx's bourgeois critics, which is to conflate his scientific theory of history, and the dialectical method of expression that Marx sometimes uses in elaborating it. But, in so doing, they also conflate the Marxist dialectic, which is materialist, and flows from the description of real contradictions existing in the real world, and the Hegelian dialectic, which starts from an unfolding of The Idea, which is then manifest in reality.
Lenin provides a succinct account.
“What Marx and Engels called the dialectical method—as against the metaphysical—is nothing else than the scientific method in sociology, which consists in regarding society as a living organism in a state of constant development (and not as something mechanically concatenated and therefore permitting all sorts of arbitrary combinations of separate social elements), an organism the study of which requires an objective analysis of the production relations that constitute the given social formation and an investigation of its laws of functioning and development.” (p 165)
Lenin quotes from I.I. Kaufmann's “The Standpoint of Karl Marx’s Critique of Political Economy”, in Vestnik Vestropy, which Marx also cites in his Afterword to the Second Edition of Capital I. Marx said it was one of the best expositions of the dialectical method.
Lenin writes,
“The one thing of importance to Marx, it is there stated, is to find the law governing the phenomena he is investigating, and of particular importance to him is the law of change, the development of those phenomena, of their transition from one form into another, from one order of social relations to another. Consequently, Marx is concerned with one thing only: to show, by rigid scientific investigation, the necessity of the given order of social relations, and to establish, as fully as possible, the facts that serve him as fundamental points of departure. For this purpose it is quite enough if, while proving the necessity of the present order of things, he at the same time proves the necessity of another order which must inevitably grow out of the preceding one regardless of whether men believe in it or not, whether they are conscious of it or not. Marx treats the social movement as a process of natural history, governed by laws not only independent of human will, consciousness and intentions, but, rather, on the contrary, determining the will, consciousness and intentions of men.” (p 166)
So, for example, no matter how much of a hero, no matter how far-sighted an individual may have been, it would simply not have been possible for an individual, even supported by a large crowd, to have created Socialism directly from Feudalism, because, without Capitalism first fulfilling its historic mission of concentrating the individual means of production, converting them into capital, bringing about the creation of socialised, cooperative labour and production, increasing the division of labour, expanding trade, creating and appropriating surplus value, so as to accumulate capital, the material conditions upon which Socialism rests are not possible. And, note again, here, Lenin's phrasing of the question. It is not one in which different social formations exist discretely and sequentially, each being simply concatenated with another, but a process of social evolution, whereby one social formation grows into the next, as part of a process of natural history, just as the theory of Evolution shows how one species evolves into another.
As Marx says, in Capital III, Chapter 27,
“The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour. They show how a new mode of production naturally grows out of an old one, when the development of the material forces of production and of the corresponding forms of social production have reached a particular stage. Without the factory system arising out of the capitalist mode of production there could have been no co-operative factories. Nor could these have developed without the credit system arising out of the same mode of production. The credit system is not only the principal basis for the gradual transformation of capitalist private enterprises into capitalist stock companies, but equally offers the means for the gradual extension of co-operative enterprises on a more or less national scale. The capitalist stock companies, as much as the co-operative factories, should be considered as transitional forms from the capitalist mode of production to the associated one, with the only distinction that the antagonism is resolved negatively in the one and positively in the other.”
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