Lenin examines Struve's analysis of the term “capitalism”, which is used loosely. Struve gives examples of a “very narrow” and “very broad” concept of the term, without setting out any precise attributes. Marx himself does not give precise, fixed definitions, because that would conflict with his materialist method, in which concepts as merely mental reflections of reality must themselves evolve and change over time, just as material reality changes. Lenin says that Struve again asserts his refusal to be infected by orthodoxy, by saying, ““Marx himself,” says he, “viewed the process of the transformation of commodity production into commodity-capitalist production as perhaps more precipitate and straightforward than it is in actual fact” (p. 127, footnote).” (p 437)
Lenin attempts to defend “orthodoxy” by arguing that whilst commodity production occurs in all modes of production “only in capitalist production is that form of the product of labour general, and not exceptional, isolated, accidental.” (p 437) However, I think that both Struve and Lenin are wrong. They are wrong, because I don't think that Marx does believe in this precipitancy, and he is right. A look at what Marx writes in Theories of Surplus Value, Chapter 17 illustrates this point. The fact that independent producers are “direct” producers does not at all mean that commodity production is not generalised amongst them. For one thing, all producers could spend 75-80% of their time in labour producing use values for their own immediate consumption, but that still means that they all spend 20-25% of their time producing commodities, and this cannot in any sense be said to be time spent in a way that is “exceptional, isolated” or “accidental”. They engage in this activity of producing commodities for various reasons. Firstly, the same recognition of the benefits of a social division of labour, and of trade, on the basis of the resultant comparative advantage that was also recognised in the primitive commune, is knowledge that is inherited by all future societies. The primitive communes traded with each other, but as it dissolves, this trade becomes something which now invades the relations between households within each community.
Direct production does not, and never has, meant that each producer, each household, spends 100% of their labour producing use values solely for its own consumption. It means only that it produces solely with the aim of meeting its own consumption needs. It achieves much of that by producing the use values it consumes directly, but it also achieves it partly by producing use values that it will exchange with others, in order to obtain the other use values required for its consumption, i.e. commodities.
This is the point that Marx makes in Theories of Surplus Value, Chapter 17, where he sets out the error of Mill, Say and Ricardo – Say's Law. Say's Law is wrong, Marx says, because it makes this assumption of direct production, of commodities being produced only for consumption. This situation only exists Marx says in conditions where the producers exchange commodities via barter. Under barter, it is true that every producer produces only to consume. They either consume directly what they have produced, or they exchange it so as to get the products they wish to consume. Supply, therefore, does create its own demand, so that there can be no overproduction.
Now, its clear that this production and exchange of commodities goes back 10,000 years, and there is nothing exceptional in it. Every household spends time producing products that it consumes and time producing products that it exchanges via barter to get other products it requires for consumption – including productive consumption. For example, every village would be likely to have a blacksmith who engaged in metal work and undertook work making tools, mending ploughs, shoeing horses etc. Every household would require these commodities not for their own unproductive consumption, but for productive consumption in undertaking its own production. In order to obtain these products for their consumption, the peasant household would exchange, in barter, either a quantity of its own produced commodities, or else a quantity of labour service. In Africa, Ralph Piddington tells us that a peasant from the Heh tribe who orders a spear from the smith works on the smith’s land while he is making the spear. (“An Introduction to Social Anthropology” p 275.)
The more producers of specific commodities produce only that commodity the more they can only take other commodities in exchange for it. A blacksmith who has no time to work his own land will rent it to others, or sell it. In a money economy, which exists long before capitalism, they will sell the commodities for money. And Marx points out that money itself arises thousands of years ago, demonstrating that commodity production and exchange had become generalised, and was not at all exceptional, isolated or accidental. Money is, after all, as Marx says, the general commodity itself, and acts as the proxy for abstract labour. Again, in Theories of Surplus Value, Chapter 17, Marx sets out that it is precisely this intervention of money that makes overproduction of commodities possible, irrespective of capitalist or non-capitalist production.
“At a given moment, the supply of all commodities can be greater than the demand for all commodities, since the demand for the general commodity, money, exchange-value, is greater than the demand for all particular commodities, in other words the motive to turn the commodity into money, to realise its exchange-value, prevails over the motive to transform the commodity again into use-value.”
(TOSV2, Chapter 17, p 505)
Indeed, its the failure to recognise this, Marx says, that leads Mill, Say and Ricardo to assume a condition that is not just prior to capitalism, but is prior to money economy itself, i.e. to the exchange of commodities on the basis of barter.
As soon as money arises, the individual producers begin to find that they must produce things not for their own consumption, but as commodities, in order to obtain money. They must obtain money, because, increasingly it is in money that they must pay rent to the landlord, tithes to the church, and taxes to the state. They increasingly produce the commodities they previously exchanged in barter to be sold for money, and to use the money to buy the commodities required for their own consumption.
This is generalised commodity production and exchange taking place thousands of years before the development of capital or capitalism. The basis of production and exchange continues to be direct consumption. As barter, it takes the form C – C, and when money intervenes C – M – C. But, it is money which brings about the dissolution of these conditions. As soon as money intervenes, Marx shows, Say's Law is no longer valid, because instead of producing in order to exchange for some other specific commodity – supply creating its own demand – the individual producer may produce solely in order to obtain the general commodity money, and having obtained this money, there is no compulsion for them to spend it immediately in exchange for some other commodity. So, the overproduction of one or all commodities can occur, because the demand for money is greater.
So, individual producers may now overproduce, and this creates the conditions in which they may be ruined. In precapitalist modes of production, this results in them becoming slaves or serfs. The same intervention of money, and the fact that it can be saved/hoarded, rather than immediately spent, is also what makes possible the emergence of capital, but it can only emerge in its antediluvian forms as merchant or usurer's capital. The direct producer produces and exchanges commodities on the basis of C – M – C, but this opens up the possibility of C – M, without M – C, or of M - C being delayed. It opens the possibility for M to be hoarded. Now, this hoarded M may be loaned to desperate producers, who need money to pay rents and taxes, to buy necessaries, because they have not been able to sell their own commodities to obtain the money required and so on. Now, this money acts as Usurer's Capital. The usurer demands payment for its use, in the form of interest M – M`, so that it becomes self-expanding value. But, it can also take the form of merchant capital, the owner of the hoarded money agreeing to buy up the overproduced commodities of commodity producers, but at prices below their value, so that, for them, it is no longer C – M – C, but M – C` - M`, so that, again, their capital is self-expanding value.
Here, once more, we see society in which commodity production and exchange by individual producers is generalised, and far from exceptional, accidental or isolated, and, although capital now exists, it is not productive-capital, but capital only in its antediluvian forms, which as Marx says means that capitalism itself cannot develop. So, Lenin's description of capitalism as being defined by this generalised commodity production is wrong. Capitalism certainly does require such generalised commodity production, it is a necessary, but not sufficient condition. In fact, generalised commodity production exists long before capitalism itself. For it to develop into capitalism, a series of other conditions are required, as Marx sets out in Theories of Surplus Value.
In short, the market for a range of commodities must become large and concentrated enough, and the advantages of the division of labour must become significant enough that it becomes profitable for the usurers and merchants to buy up the means of production of the ruined producers, and to then employ those producers as wage labourers. It is then that the characteristic feature of industrial capital arises, i.e. that labour-power itself becomes a commodity. Its on this basis that capitalist production, as large scale production (even at the stage of the Putting Out System, or handicraft manufacture)) is able to undercut the remaining independent handicraft producers and, on the basis of increasing division of labour, and utilisation of machinery, to obtain an increasing share of the market.
So, its clear that Marx does not at all see anything precipitate in this process, but sees it as something which evolves over thousands of years of increasingly more generalised commodity production and exchange, which brings about the development of the general commodity, money, which acts to dissolve production as direct production, initially bringing about the ruin of some producers who are reduced to slavery and serfdom, whilst enabling the development of usurer's and merchant capital. It is the further development of this generalised commodity production and exchange, which, as populations grow and markets become larger, and more concentrated, and technology develops, enables the division of labour to provide cost-saving advantages to large-scale production, which, as Marx describes, in Theories of Surplus Value, can only, initially, be capitalist production, because it is only the individual capitalist who has the motivation and the means to concentrate and centralise the scattered means of production, so as to obtain these advantages from large-scale production, and, thereby, produce profit.
Marx does not believe there is anything precipitate about the evolution of capitalism, and nor, likewise the development of Socialism, and nor, given his historical materialist theory, based upon the unfolding of natural laws, would you expect him to believe anything else. Speaking of the gradual evolution of the socialist society, Marx writes in the Grundrisse,
“As the system of bourgeois economy has developed for us only by degrees so too its negation, which is its ultimate result." (p 712).
“Undoubtedly, the contrasting of the Russian system to capitalism, a contrast based on the technical backwardness of our national economy, on the predominance of hand production, etc., and so often resorted to by the Narodniks, is quite absurd, since capitalism exists both where technical development is low and where it is high; in Capital Marx repeatedly stresses the point that capital first subordinates production as it finds it, and only subsequently transforms it technically. Undoubtedly, the German Hausindustrie and the Russian “domestic system of large-scale production” are capitalist-organised industry, for not only does commodity production dominate, but the owner of money also dominates the producers and appropriates surplus-value. Undoubtedly, when the Russian “land-holding” peasantry is contrasted to West-European capitalism—something the Narodniks are so fond of doing—that, too, merely shows a lack of understanding of what capitalism is.” (p 437-8)
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