Lenin's “Own Words”(Part Four: On Economic Theory)

11. A Criticism of the Narodniks and the “Evolution” of Capitalism

Petty Bourgeois Character of "People's Production"

“The system of social-economic relations existing among the peasantry (agricultural and village-community) shows us the presence of all those contradictions which are inherent in every commodity economy and every order of capitalism: competition, the struggle for economic independence, the grabbing of land (purchasable and rentable), the concentration of production in the hands of a minority, the forcing of the majority into the ranks of the proletariat, their exploitation by a minority through the medium of merchant’s capital and the hiring of farm laborers. There is not a single economic phenomenon among the peasantry that does not bear this contradictory form, one specifically peculiar to the capitalist system, i.e., that does not express a struggle and antagonism of interests, i.e., that does not express advantage for some and disadvantage for others. It is the ‘industries’ in their diametrically opposite types; it is also the case with the technical progress of farming.

“We attach cardinal importance to this conclusion not only as regards capitalism in Russia, but also as regards the significance of the Narodnik doctrine in general. It is these contradictions that show us clearly and irrefutably that the system of economic relations in the ‘community’ village does not at all constitute a special economic form (‘people’s production,’ etc.), but is an ordinary petty-bourgeois one.” (“The Development of Capitalism in Russia,” Collected Works Vol. 3 pp. 172-73)

The Narodniks were a petty bourgeois revolutionary tendency that appeared in the Russian revolutionary movement in the latter half of the 19th century. They aimed for the liberation of the peasants exploited under the feudal tsarist system, while also opposing capitalism. This movement was progressive in terms of fighting against czarism, but because of its petty bourgeois nature, it was harshly criticized by the Marxist camp.

The fundamental idea of the Narodniks was that Russia could avoid capitalism, and make use of the agricultural communes (the mir) to leap directly to “socialism.” Therefore, they said that capitalist development was not necessary in Russia, and that the appearance of the proletariat was a “historical misfortune.”

The idea of “people’s production” became a pillar of Narodnik theory (or fantasy).  According to this idea, “communal” villages were a unique system of economic relations, representing “people’s production” with no relation to capitalism, that were a sort of natural society. Capitalism, on the other hand, was seen as the root of all evil that would destroy and upturn the idyllic agricultural relations in these communities and introduce the “power of money,” the source of evil, which would bring about exploitation, oppression, and the ruin of the peasantry. The Narodniks considered Kustar’ industries (peasant handicraft industry produced for the market) as a “people’s industry,” and a truly legitimate industry, whereas capitalistic industries were viewed as being “artificial industries” that were in contradiction with the “people’s system” of Russia. Moreover, they looked at the exploitation, difficulties, and oppression of workers within “people’s production” as resulting not from within the nascent capitalistic relations, but rather as coming from outside, in the state’s policies (of fostering capitalism).

Lenin’s criticism was thus directed at demonstrating the petty bourgeois nature of the Narodnik idea of “people’s production.” He said that the idea that people’s production was opposed to capitalism and had a non-capitalist nature was mistaken. This is the same idea held by those (even present-day “Marxists”) who see an absolute opposition between monopoly-capital and small capital. “People’s production” was petty commodity production for the market, which already included the relationship between capital and wage-labor, and continuously generated this relationship. This was an initial stage of capitalism, which represented a “universal petty bourgeois system.” The reality of small owners having limited capital and having to also engage in labor, and the possibility of wage workers becoming small owners themselves, was turned into the particular theory of the communal (= wage labor) principle, and this became the basis for the sentimental glorification of “people’s production and the denial of its capitalistic character. Their ideal was for all workers to be small owners, which is nothing but the old, bankrupt idea of Proudhon. Ultimately this comes down to the reactionary position of opposing capitalistic oppression while beautifying the preceding system which contains even worse forms of exploitation.

Contradictions of Capitalism and the Market Problems

“The problem of realization is how to find for each part of the capitalist product, in terms of value (constant capital, variable capital and surplus-value) and in its material form (means of production, and articles of consumption, specifically necessities and luxuries), that other part of the product which replaces it on the market.” (Ibid. p. 46)

The theoretical weakness of Narodnism was concentrated in the question of markets. For this reason, Lenin made an effort to clarify this problem. The theoretical genealogy of the Narodniks could be traced back from Sismondi, at the beginning of the nineteenth century, through to Robertus, and then Rosa Luxemburg. The characteristic of this theoretical lineage is a superficial explanation of the contradiction of crisis as resulting from an inability to realize surplus value. It was thought natural for constant and variable capital to be realized since they are related to production as well as consumption. But surplus value would not be realized because it had to be consumed by capitalists, and was too massive for this to occur. This difficulty of realization was seen as the precise source of capitalist crisis and the difficulties for capitalism.

They argued further that to overcome this difficulty it was necessary to always expand foreign markets, and that since this possibility was limited in Russia, capitalism would be stillborn and restricted.

However, the problem of the “difficulty” of realization is not simply a problem of the realization of surplus value. The problem is how the each part of the product is exchanged in terms of value and material form. In the second volume of Capital, Marx reached a solution to this problem. In fact the real problem is the realization of constant capital. The capital of 4,000 in Department I can be directed again to production since it stems from the means of production. However, for the capital of 2,000 in Department II this is not possible since this is composed of the production of materials of consumption. It is thus necessary for an exchange to take place between the 1,000 variable capital and 1,000 surplus value in Department I., and the 2,000 capital in Department II.

This is where the actual difficulty and basis of the problem lies, but Narodnik scholars were not even aware of this problem. The problem is essentially the same in the case of expanded reproduction (= accumulation) as well. The starting point here is the question of whether there is profit in the means of production, and the need for one part of the surplus value within the consumption materials to be turned into capital. However, this fact does not mean that the realization of surplus is impossible, since first of all it is possible for these parts to be exchanged. This does not indicate the incapacity of realizing surplus value, but a contradiction inherent to capitalism wherein the expansion of the market is mainly carried out by means of the growth of the means of production. In other words, it indicates “production for the sake of production,” or production that does not expand consumption.

Contradictions and Progressiveness of Capitalism

“Recognition of the progressiveness of [capitalism’s] role is quite compatible with the full recognition of the negative and dark sides of capitalism, with the full recognition of the profound and all-round social contradictions which are inevitably inherent in capitalism, and which reveal the historically transient character of this economic regime. It is the Narodniks -- who exert every effort to show that an admission of the historically progressive nature of capitalism means an apology for capitalism -- who are at fault in underrating (and sometimes even ignoring) the most profound contradictions of Russian capitalism, by glossing over the differentiation of the peasantry, the capitalist character of the evolution of our agriculture, and the rise of a class of rural and industrial allotment-holding wage-laborers, by glossing over the complete predominance of the lowest and worst forms of capitalism in the celebrated ‘handicraft’ industries.” (Ibid. p. 596)

The Narodniks criticized Marxists for recognizing the historical necessity and progressiveness of capitalism, calling them, for example, the “defenders of the power of money.” However, it was the Marxists who, more than anyone else, strongly evaluated the tendency in the inherent tendency of capitalism to resist control. The development of capitalism brings a wide stratum of workers under the rule of big capital, raises the productive power of social labor, socializes labor, and brings workers together and encourages their organization, and without these conditions the ultimate victory of socialism would not even be posed as a question.

It is mistaken and nonsensical to reject the historical progressiveness of capitalism because of its contradictions and instability. Such a standpoint ultimately spreads illusions and beautifies the old relations of production. What were the old relations of production in ? This was subjection of the peasantry to the small-scale cultivators and “regional bloodsuckers.” This was not simply their plunder, but an affront to their personal dignity. Even if it can be said that these old relations of subordination were only replaced by new ones, this was still a step forward for the direct producers that brought them closer to ultimate liberation. “Capitalism is progressive in its significance precisely because it has destroyed the old cramped conditions of human life that created mental stultification and prevented the producers from taking their destinies into their own hands.” (“The Economic Content of Narodnism,” Collected Works Vol. 1 p. 414)

On top of this, even the instability of capitalism can be a cause of progress. This encourages the advancement of social development (consider how an economic crisis can act as a strong lever for the concentration of capital), sweeping more and more people into the vortex of social life, and forcing them to reflect on the social system and think about a system that would be truly suitable to human beings. The position of the Narodniks of seeking to expand medieval social bonds (e.g. the community) to society as a whole has something in common with narrow-minded trade unionism today that clamors for the “containment of [economic] rationalization.”

“Sismondi naturally arrived at the theory that capitalism and the capitalist employment of machines were ‘dangerous’ and urged the necessity of ‘retarding,’ ‘moderating’ and ‘regulating’ the growth of capitalism, and, as a consequence, he became a reactionary. The fact that Sismondi’s doctrine fails to understand the historical role of machines as a factor of progress is one of the reasons for the modern theory regarding it as reactionary.” (“A Characterization of Economic Romanticism,” Collected Works Vol. 2 p. 186)

The Narodniks expressed a distrust of the factory system of large-scale industry, and said that Marxists wanted to boil peasants in the kettle of industry. In this passage, in response to a Narodnik scholar who defended Sismondi saying that, “Sismondi was not an enemy of machines and inventions,” Lenin said that the problem relates to the significance of machinery in capitalist society. To say that under capitalism the use of machinery is “harmful” and leads to the exploitation of workers in a new form is insufficient and one-dimensional. From the standpoint of the ultimate liberation of the proletariat, it is reactionary to use this as a justification to reject the introduction of machinery. This is because, even prior to the situation of introducing new machinery, workers are suffering under the weight of exploitation. It is not necessarily the case that the civilized, refined exploitation is more “harmful” than the old, shoddy exploitation. Therefore, the question is whether or not to recognize the significance of the role of machinery as a “progressive factor within this system.” It would be reactionary for anyone to take an ambiguous standpoint regarding this point.

“The bourgeoisie makes it its business to promote trusts, drive women and children into the factories, subject them to corruption and suffering, condemn them to extreme poverty. We do not ‘demand’ such development, we do not ‘support’ it. We fight it. But how do we fight? We explain that trusts and the employment of women in industry are progressive. We do not want a return to the handicraft system, pre-monopoly capitalism, domestic drudgery for women. Forward through the trusts, etc., and beyond them to socialism!” (“The Military Programme of the Proletarian Revolution,” Collected Works Vol. 23, p. 81)

In postwar Japanese capitalism as well, a decisive turning point was reached with the merger of the Hachiman Ironworks and Fuji Ironworks. With the advancing concentration of capital, even among monopoly capital ever greater monopolies are created, the ruling power of monopoly capital is reinforced, and the oppression of the working masses deepens through rising prices, managed prices, and intensified management of operations. However, for Marxists, this centralization is at the same time “progressive,” and an inevitable development of history. Unlike the petty bourgeoisie, Marxists are not backward looking, and do not oppose monopoly from the utopia of a “fair” capitalism where free competition could reign. The working class does not supporting monopoly concentration and fight against it, but unlike the petty bourgeoisie they have no reason to fear this. The working class does not fight to turn monopoly capitalism back into liberal capitalism, and holds no reformist liberal fantasies about controlling monopolies through banning monopolies and fair trade commissions, but rather fights against monopoly capital in order to supercede it and achieve socialism, fighting for the future rather than the past. This is the practical conclusion that stems from the dialectical thinking of Marxism and Leninism. This way of thinking is completely different from the Communist and Socialist parties who refer to themselves as “progressive” (kakushin), but basically represent the petty bourgeoisie.  From their perspective, Lenin would be said to be glorifying monopoly capital. The fact remains, however, that this is how Lenin criticized the Narodniks.

Defense of Free Trade (So-Called Liberalization)

“Thus, the speaker [Marx] was able to find a criterion for the solution of the problem which at first sight seemed to lead to the hopeless dilemma that brought Sismondi to a halt: both Free Trade and its restraint equally lead to the ruin of the workers. The criterion is the development of the productive forces. It was immediately evident that the problem was treated from the historical angle: instead of comparing capitalism with some abstract society as it should be (i.e. fundamentally with a utopia), the author compared it with the preceding stages of social economy, compared the different stages of capitalism as they successively replaced one another, and established the fact that the productive forces of society develop thanks to the development of capitalism. By applying scientific criticism to the arguments of the Free Traders he was able to avoid the mistake made by the romanticists who, denying the arguments have any importance, ‘throw out the baby with the bath water’; he was able to pick out their sound kernel, i.e. the undoubted fact of enormous technical progress.” (“A Characterization of Economic Romanticism,” Collected Works Vol. 2, pp. 263-4)

Marxists do not defend or promote economic “liberalization” -- since this means the development and freedom of capital -- but they do recognize its progressiveness as a fact. Neither free trade nor its termination will end the worsening position of the workers, since in either case this is nothing but the rule of capital. However, free trade crushes the old economic relations, or at least advances this destruction, urges the “development of the productive power of society,” and “only in this sense is free trade supported by Marxists.” (Marx)

This conclusion of Marxism has particular significance today. In the latter half of the 1960s in Japan, the liberalization of trade was sought, and was then realized in fact. During this period, the so-called “progressive” (kakushin) political parties (JCP and Socialist Party) opposed this liberalization on the basis of the idea that it would ruin small and medium size businesses, declining industries, and farmers, and was supposedly being forced on Japan by the United States. Their position was basically the same level as that of the Narodnik (= romanticists).

The outcome of liberalization was, as foreseen, the development of capitalism, and the overseas expansion overseas of Japanese capitalism. The Marxist proposition that the liberalization of trade means nothing but the development of freedom for capital was completely confirmed Japanese exports that were 3 or 4 billion dollars annually around 1960 reached 12 to 13 billion dollars, and the balance of trade that had continued to show deficits of around 2 billion dollars registered a surplus. Japanese commodities made advances, meaning that it became the turn of monopoly capital in the steel and textile industries to seek trade protectionism. It is clear that liberalization was one moment in the development of the productive power of society through the development of capitalism. Raw steel production increased from some 20 million tons at the outset to 60 million tons, with technology in this sector leading the world, and the overseas market became increasingly important for the steel industry. In this way, the complete bankruptcy of the one-dimensional views of the JCP theorists -- modern-day Narodniks -- has revealed been demonstrated by reality.

Lenin wrote, “Better stagnation than capitalist progress -- this, essentially, is every Naroduik’s attitude to the countryside” (“The Heritage We Renounce”), and it should be clear that this view is basically the same as that of the Socialist and Communist parties, which oppose liberalization and rationalization from a backward-looking standpoint.

The Essence of Narodnism

“Philosophizing about the possibility of ‘different paths for the fatherland’ is merely the outer vestment of Narodism. But its content is representation of the interests and viewpoint of the Russian small producer, the petty bourgeois. That is why the Narodnik, in matters of theory, is just as much a Janus, looking with one face to the past and the other to the future, as in real life the small producer is, who looks with one face to the past, wishing to strengthen his small farm without knowing or wishing to know any thing about the general economic system and about the need to reckon with the class that controls it -- and with the other face to the future, adopting a hostile attitude to the capitalism that is ruining him.” (“Economic Content of Narodnism,” Collected Works Vol. 1 p. 503)

The sentimental romanticism of the Narodniks and their philosophy of “another path” for Russia was their veil, while in fact they defended the interests of the petty bourgeoisie. The Narodniks first, as utopian socialists, dreamt of reaching socialism without passing through socialism. They “rejected” capitalism -- we need to recognize that there are many different ways to “reject” capitalism! -- and tried to obstruct the development that was actually under way. Citing the contradictions, instability and “danger” of capitalism, they denied the historical progressiveness of capitalism and declared it “infeasible.” They opposed capitalism, but their opposition was backward looking, and they ultimately sought human liberation through their own romanticist fantasies rather than from within the development of productive power through capitalism. But the Narodniks were like a two-headed Janus. Lenin clearly exposed the reactionary characteristics of Narodnism, but also notes that their demands for democracy in general were perfectly justified from a historic standpoint, and Marxists should not only inherit this view, but propose it in a more profound and correct fashion. In other words, the Narodniks were completely reactionary as socialists, but they had to be appreciated as revolutionary democrats.

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