The second example is an article by Yuzhakov, “Quotas For People's Landownership in Russia”, in Russkaya Mysl, 1885, No. 9). This people's landownership was supposed to be such that excluded capitalism and exploitation, but, in fact, achieves neither.
“As the minimum for “people.” As landownership he took such allotments as would cover “cereal food and payments,” while the rest, he said, could be obtained by “employments.”. . . In other words, he simply resigned himself to a state of affairs in which the peasant, by maintaining connection with the land, is subjected to a double exploitation—partly by the landlord, on the “allotment,” and partly by the capitalist, in “employments.”” (p 245)
This condition leaves the peasant denied free movement, and so tied to the land, and the oppression of their local landlord. It also means they are unable to seek better paid employment outside their local area, and so undermines their capacity to sell their labour-power at its best price. It strengthens the position of local capitalist employers, and so leaves the peasant doubly disadvantaged, once as a peasant, in relation to the landlord, and secondly as a wage worker, in relation to the capitalist. Moreover, this condition means a persistence of all those medieval conditions that produce what Marx calls “the idiocy of rural life”. It places the peasants in a position in which they suffer a “cowed and crushed spirit, killing all hope that the oppressed class will fight, let alone be victorious—this semi-medieval condition is the nec plus ultra of the outlook and ideals of the “friends of the people.”” (p 245)
The Narodnik position was neither fish no fowl. It did not want the revolutionary progressive effects of capitalism, which smashed apart all of the basis upon which the “idiocy of rural life” and semi-Asiatic, feudal society rested, but nor did they want a continuation of the evils and oppression which that feudal society entailed.
“They are entirely satisfied with liberal measures on the existing basis... (p 246)
Lenin describes the schema-mongering agenda of the Narodniks, as set out by Krivenko. Krivenko says that businesses can be divided into three categories: 1) the uncapitalised, 2) those in which capitalisation has occurred, and 3) those that can contend with large-scale industry for existence.
In the first category, Krivenko says, “petty production can freely exist.” Yes, it can, Lenin says, but can it be free from the effects of the market, competition and commodity production? In other words, so long as these producers are led into the production of commodities, they are led into competition against each other, and the very process set out by Marx explains, therefore, why some of these producers will fare well and expand whilst others will fare badly and contract. Those that fare well will be able to acquire more animals, machines and so on, which will increase their competitiveness, so that they grow even faster, whilst those that fare badly will become even less competitive until they are forced out, and must become wage labourers, whilst the former group consolidate into a small class of capitalist producers.
Krivenko then has to explain how those in his third category can exist and compete with those in his second category, the already existing, large-scale capitalist businesses. Krivenko puts forward a number of suggestions. These businesses, to compete, must also be large-scale and have large amounts of fixed and circulating capital, or, alternatively, they must benefit from other counterbalancing influences, such as cheap credit, the eradication of middlemen, the artel form of farming, removal of employers profit, an assured market, invention of cheaper engines and technical improvements, and finally, some reduction in wages.
A Workers State, or even a large worker owned cooperative federation, with access to pooled profits, and savings via a cooperative banking system, could, as I have described elsewhere, provide cheap credit for a worker owned cooperative sector of the economy. But, the reality also is, and certainly was at the time Lenin was writing, that large-scale industrial capital not only has access to commercial credit for the purposes of working-capital, but also has access to its own large profits, and to capital markets for financing of longer term investment and capital accumulation. Large industrial enterprises are also able to vertically integrate, so as to cut out middlemen, precisely because of the scale of their operations, but, as Marx also described, the reasons that productive-capital hands over responsibility for the circulation of capital is because merchant capital reduces the costs of circulation even for those large productive capitals.
As for newer, better engines, inventions etc., its hard to see how these could be the preserve of non-capitalist enterprises. A Workers' State, or a large cooperative federation could provide a sheltered market for non-capitalist producers, but the effectiveness of this depends on the relative size and strength of the two sectors. Again, a Workers State, or a large cooperative federation, could do away with employers profit, as Marx demonstrated in relation to the Lancashire textile cooperatives. In other words, it is no longer necessary to provide for the unproductive consumption of the capitalist, financed from surplus value. All that is required is to finance the wages of the “functioning capitalists”, i.e. the professional managers, for performing the actual labour of superintendence, required to organise and supervise production.
As Lenin says, that is fine, and also the goal of Marxists, but to achieve that is not simply a matter of putting forward the appropriate administrative arrangements, precisely because the capitalists will oppose violently any such attempts. It requires a socialist revolution to bring it about, and the only force capable of that is the industrial proletariat. Of course, Lenin is describing the situation in Russia, where capitalist development was still at an immature stage. The development of large scale, socialised capital itself fulfilled the function of removing the individual employers from this position. But, other than in the case of the worker owned cooperative, it didn't remove this factor of the employers' profit It simply changed its form. On the one hand, it takes the form of the interest/dividends paid to bond and shareholders, and on the other it takes the form of the huge stipends paid to the executives and boards of directors, appointed to look after the interests of these share and bondholders.
But, as Lenin says, the true nature of the Narodniks petty-bourgeois ideology was manifest by the fact that no sooner had Krivenko made this rash statement about removing employers profit than he is led to walk back from it, and instead to propose as an alternative – reduction in wages.
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