Sunday, 4 April 2021

The Economic Content of Narodism, Chapter 4 - Part 8

The reality of Russian agriculture was that large amounts of the peasant's production went to cover redemption payments, taxes, interest payments and merchant's profit. Of the rest, its distribution amongst the peasantry, as a whole, was not at all even. Yet, Struve ignores all of this complex of social relations, and simply notes that “production is insufficient”

Lenin then turns to an examination of the basis of Struve's errors, and also of the contending position of Danielson. Danielson makes the same mistake that many Marxists do. Danielson notes that the relative surplus population arises because capital introduces labour-saving technologies. That means that the same amount of output can be produced by less labour. The “freed” labour then constitutes part of the relative surplus population. But, in fact, this is not all Marx says on this matter. He talks about a process in which labour is both repelled and attracted. The introduction of the labour-saving technology does not occur in a vacuum. The introduction of this new technology, that replaces older technology – intensive accumulation – occurs alongside an accumulation of capital. Even if the new technology means that a smaller physical mass of fixed capital is employed, it processes more material, so that an increase in the accumulation of circulating capital is required. More workers, machines etc. are employed to produce this additional material. But, the rise in productivity created by the new technology causes the price of the end product to fall, and this means the demand for it rises. 

In addition, the relative surplus population causes wages to fall, and surplus value to rise, which means that the mass of profit, and so potential for additional accumulation rises. Where the new technology is introduced this releases variable-capital – and potentially fixed capital where one machine replaces two. Some of this is absorbed as additional circulating constant capital, as more material is processed, but the rest can now be used in some other sphere, including new, high profit/high growth spheres. So, what occurs is that output grows relative to labour, but this does not at all mean that labour is reduced in absolute terms. On the contrary, Marx explains how it results in a growing mass of capital, growing mass of profit, and growing level of employment. Marx's argument against those who claimed that the freed labour would simply be used producing the new machines etc. by contrast, was that there was no automatic mechanism bringing that about, and that, often, it was not the displaced workers that found work, as the expansion occurred, but their children. 

Danielson, in the same way, ignores this fact that, alongside the relative displacement of labour, caused by the growth of large-scale machine industry, goes an expansion of employment, as production and the market expands. As the market expands, its not only the large scale factories that expand. They, in turn, create a home market for a range of inputs, as well as to meet the consumption needs of their workers. This expansion of the home market means that the number of handicraft producers, meeting these needs, also expands. He, 

“disregards the parallel fact of the growth of handicraft industries, which expresses the deepening of the social division of labour.” (p 463) 

And, Lenin notes, 

“It is a known fact that our handicraft industries have grown and that a mass of new ones have appeared since the Reform. The theoretical explanation of this fact and of the capitalisation of other peasant industries is also known; it was given by Marx to explain the “creation of the home market for industrial capital” [Capital I, Chapter 30]”. (Note *, p 463) 

The “anti-imperialists” also fail to understand this basic function of the role of large scale capital in bringing about an increase in the size of the domestic market, in developing economies, and the consequent development of domestic capital. They can only see “super-exploitation”, “unequal exchange”, “dependency”, and “the development of underdevelopment”, and so fail to recognise the progressive role that this multinational capital performs.

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