Lenin goes on to describe how, as a result of competition, “savings” accumulate in the hands of the larger producers, which are then transformed into capital. As the previous examples showed, it monopolises marketing, enabling merchants and larger producers to buy up the products of the smaller producers at prices below their value – and even more below the individual value of the commodities for these smaller less efficient producers. It is then able to sell these commodities in more distant markets. The merchant capital organises capitalist manufacture via the Putting Out System, and the creation of workshops and manufactories. An increasing number of artisans are turned into wage workers, dependent on the market to meet their needs. The market expands, and increased competition within it leads to more rapid development of technique and technology to reduce cost and improve competitiveness. Large-scale production engenders large-scale machine industry.
“And when this capital, having grown strong and enslaved millions of working people and whole districts, begins openly and brazenly to exert pressure on the government and turns it into its lackey—our ingenious “friends of the people” raise a howl about “the implanting of capitalism,” about its “artificial creation”!” (p 218-9)
Lenin then turns to an analysis of peasant farming which is one of the few actual examples provided by Krivenko. However, once again, Lenin points out, instead of analysing this data in detail, Krivenko provides aggregated and average statistics that completely distort the real situation. The data is collated from the budgets of peasants in the Voronezh Zemstvo. It is contained in appendices to the Statistical Returns for Voronezh Gubernia, Vol. II, Part II. Peasant Farming in Ostrogozhsk Uyezd, Voronezh, 1887, as provided by Zemstvo statistician Scherbina.
Krivenko not only uses aggregated and average data, but, instead of dividing the peasant households on the basis of economic criteria, divides them on the basis of legal status, as being either former state peasants or former landlords' peasants. On this basis, he identifies a greater degree of the former as against the latter, but fails to notice that this difference, approximately 3:2, is minor compared to the difference within each of these groups, which is of the order of 10:1.
Lenin again takes the total 24 household budgets, and divides it into three, reflecting the different economic categories of household. Lenin analyses the data according to a number of measurements. For example, on the basis of Krivenko's division, he notes that the average expenditure of former state peasants is ₽541.3, whereas for former landlords peasants it is ₽417.7. But, Lenin points out that, within the category of former state peasants, one has an expenditure of ₽84.7, whilst another has an expenditure of ₽887.4! On what basis is it rational to include two such extremely divergent households in the same category? Indeed, Lenin points out that, within the data, there was the example of a German colonist whose expenditure was ₽1,456.20. On the basis of the classification that Lenin makes, into rich, middle and poor peasants, the average expenditures are ₽855.86, ₽471.61, and ₽223.78 respectively, or a ratio of 4:2:1.
The next category examined is expenditure for personal consumption. On Krivenko's basis, the figures are ₽13.4 p.p. for former state peasants, and ₽12.2 p.p. For former landlords peasants. But, on Lenin's basis, the figures are ₽17.7, ₽14.5, and ₽13.1 respectively. When the breakdown into the type of consumption is examined, the difference between the richer and poorer households becomes even clearer. Taking Krivenko's basis, and examining meat and dairy produce, the figures are ₽7.7 and ₽5.2. On Lenin's basis, they are ₽11.7, ₽5.8, and ₽3.6.
Next, income is examined. Krivenko says that the income of former state peasants exceeds that of former landlords peasants by 53.7%. The overall average is ₽539, ₽600 for state peasants and ₽400 for landlords peasants. But, on Lenin's basis, the figures are ₽1,053.2, ₽473.8, and ₽202.4.
Next the value of capital employed is analysed. According to Krivenko, the figures are ₽1,060 and ₽635. But, on Lenin's basis, the figures are ₽1737.91, ₽786.42, and ₽363.38. Lenin notes that the difference is even greater when examining the value of implements owned. The figures are ₽111.80, ₽48.44 and ₽16.04.
But, the most striking variation is apparent in examining the economic strength of the different households by looking at the difference between income and expenditure. The richer households have a net income of ₽197.34, the middle peasants of ₽2.19,whilst the poor peasants have a deficit of ₽21.38. In the middle category, out of 11 farms, 5 ran at a deficit. Moreover, this does not take into account interest payments on any debts. Its obvious that this provides a more realistic appraisal of the actual situation, compared to Krivenko's analysis, in which, on average, a net income of ₽44.11 is obtained by all households.
All of the six prosperous peasant households employ wage labourers. It means they do not have to resort to “industries”, which means engaging in some form of domestic industry alongside their agricultural production. In total, only 6.5% of their budget was devoted to such activity.
“...moreover, these industries—as Mr. Shcherbina in one place remarks—are of such a type as “carting,” or even “dealing in sheep,” that is, such as, far from indicating dependence, presuppose the exploitation of others (precisely in the second case: accumulated “savings” are converted into merchant capital). These peasants own 4 industrial establishments, which yield an income of 320 rubles (5% of the total).” (p 222)
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