The existence of merchant capital, and the significance of the merchant on its own, therefore, does not at all prove beyond doubt that what existed was a capitalist organisation of production or that “commodity economy is money economy, is capitalist economy,” (p 427). What signifies that this is a capitalist organisation of the economy, as Marx describes, in Theories of Surplus Value, is this. In previous modes of production, when commodity producers are ruined, rather than the usurer or merchant, to whom they are indebted, taking over the means of production, and employing the producer as a wage worker, the producer is instead reduced to becoming a slave or serf. It plays a reactionary role, turning back the productive relations to a more primitive stage. The reason for this is two-fold. Firstly, markets are not large enough to justify commodity production on the scale required for capitalist production, and secondly, the forces of production are not themselves sufficiently developed so that a capitalist producer could introduce machines that would significantly undercut existing handicraft production. Moreover, in order to justify the introduction of machines, capitalist production must itself be large enough to warrant their use, and that requires that the market is large enough to absorb that output. When the market reaches a certain size, it justifies the merchant or money lender taking over the means of production of ruined producers, and employing them as wage labourers. Now, a simple division of labour results in the output having a lower individual value than that of other handicraft producers. The merchant capitalist is able to sell this increased output into an expanding market, and now in addition to the commercial profit, they make from buying commodities below their value, they also extract surplus value from the labour of the producer, to whom they now only pay the equivalent of wages for the labour they provide. It is this which characterises the condition as being capitalist organisation of production.
“... the predominance of capitalist exploitation in our handicraft industries has long been known, but the Narodniks ignore it in the most shameless fashion.” (p 427)
The reason for the low wages was that, because the producers continued to be individual producers, isolated in their own cottages, the conditions for them coming together, collectively, in a single workplace, where they could form a trades union, were also undermined. That continues to apply where it is only a small workplace, and where an employer can simply dismiss all or part of the workers, and replace them. The petty-bourgeois “anti-capitalists” of today often point to large employers like Amazon or Wal-Mart, and their anti-union practices, whilst, like the Narodniks, saying nothing about the millions of small capitalists whose anti-union policies are even worse, and whose treatment of workers is also much worse. The fact remains that it is only in the larger workplaces where effective trades union organisation is possible. The fact that in some of these workplaces, workers have not organised is a symptom of the degree to which the position of the working-class has weakened, from the mid 1980's onwards, and has still not recovered.
“In almost every issue of their magazines and newspapers dealing with this subject, you come across complaints about the government “artificially” supporting large-scale capitalism [whose entire “artificiality” consists in being large-scale and not small, factory and not handicraft, mechanical and not hand-operated] and doing nothing for the “needs of people’s industry.” Here stands out in full relief the narrow-mindedness of the petty bourgeois, who fights for small against big capital and stubbornly closes his eyes to the categorically established fact that a similar opposition of interests is to be found in this “people’s” industry, and that consequently the way out does not lie in miserable credits, etc.” (p 427-8)
That the Tories and their counterparts should promote such reactionary nonsense is understandable, because they are the political representatives of this small, private capitalist class, but the fact that similar ideas can be found emanating from the Labour Party, and its counterparts, along with elements to its Left, shows the extent to which the labour movement itself has become imbued with petty-bourgeois ideas, and is failing even to fulfil the function of progressive social-democracy, in representing the interests of large-scale socialised capital.
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