A Characterisation of Economic Romanticism, Chapter 1 - Part 2

Chapter 1 - The Economic Theories of Romanticism 

“The distinguishing feature of Sismondi’s theory is his doctrine of revenue, of the relation of revenue to production and to the population. The title of Sismondi’s chief work is: Nouveaux principes d’économie politique ou de la richesse dans ses rapports avec la population (Seconde édition. Paris, 1827, 2 vol. The first edition was published in 1819)—New Principles of Political Economy, or Wealth in Relation to Population.” (p 134) 

The issue addressed, as Lenin says, is the same as the issue of the home market, raised by the Narodniks. 

“Sismondi asserted that as a result of the development of large-scale enterprise and wage-labour in industry and agriculture, production inevitably outruns consumption and is faced with the insoluble task of finding consumers; that it cannot find consumers within the country because it converts the bulk of the population into day labourers, plain workers, and creates unemployment, while the search for a foreign market becomes increasingly difficult owing to the entry of new capitalist countries into the world arena.” (p 134) 

These issues have been discussed in previous articles such as “On The So Called Market Question”, and as Lenin says, they are frequently raised by the Narodniks such as Danielson and Vorontsov. 

I - Does the Home Market Shrink Because of the Ruination of the Small Producers? 

Sismondi focuses on the ruination of the small independent producers, which is the process that leads to the formation of the working-class. Sismondi is motivated to seek a curbing of the development of capital, which he also sees as resulting in crises of under-consumption, as a consequence of ruination, because he was genuinely concerned at the plight of these individual producers. Malthus plagiarises Sismondi's theories, in relation to under-consumption, and also argued for the accumulation of capital to be curbed, but had no concern for the plight of the labourers. He argued for capital accumulation to be curbed by giving a larger proportion of the surplus product to the landed aristocracy, the state and other parasitic social elements, who, in spending their revenues, unproductively, would also, thereby, enable the capitalists to realise their profits. Keynes essentially reformulated Malthus' under-consumptionist arguments and solution, a century later, and modern Keynesian and post-Keynesians have not moved any further forwards, today, other than in the packaging they put around the same old arguments. Modern Monetary Theory is essentially just another variant. 

“That Sismondi deserves credit for pointing to this contradiction in the capitalist system is beyond dispute; but the point is that as an economist he failed to understand this phenomenon and covered up his inability to make a consistent analysis of it with “pious wishes.” In Sismondi’s opinion, the ruination of the small producer proves that the home market shrinks.” (p 135)

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