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The First Stages of Capitalism in Industry

Vladimir Ilyich Lenin

Written: 1896-1899.
Source: Lenin’s Collected Works, 4th Edition, Moscow, 1964, Volume 3, pp. 331-383
Publisher: Progress Publishers
First Published: First printed in book form at the end of March 1899. Published according to the text of the second edition, 1908.
Original Transcription & Markup: R. Cymbala (2000)
Re-Marked up by: Kevin Goins (2008)
Public Domain: Lenin Internet Archive (2000). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.


I. Domestic Industry And Handicrafts 
II. Small Commodity-Producers In Industry. The Craft Spirit In The Small Industries 
III. The Growth of Small Industries After the Reform. Two Forces of This Process and its Significance 
IV. The Differentiation Of The Small Commodity-Producers. Data On House-To-House Censuses Of Handicraftsmen In Moscow Gubernia 
V. Capitalist Simple Co-Operation 
VI. Merchant’s Capital in the Small Industries 360
VII. “Industry And Agriculture” 369
VIII. “The Combination Of Industry With Agriculture” 378
IX. Some Remarks on the Pre-Capitalist Economy of Our Countryside 380

Let us now pass from agriculture to industry. Here, too, our task is formulated as in the case of agriculture: we have to analyse the forms of industry in post-Reform Russia, that is, to study the present system of social and economic relations in manufacturing industry and the character of the evolution of that system. Let us start with the most simple and primitive forms of industry and trace their development.

I. Domestic Industry And Handicrafts

By domestic industry we mean the processing of raw materials in the household (peasant family) that produces them. Domestic industries are a necessary adjunct of natural economy, remnants of which are nearly always retained where there is a small peasantry. It is natural, therefore, that in Russian economic literature one should meet repeated references to this type of industry (the domestic production of articles from flax, hemp, wood, etc., for consumption in the home). However, the existence of domestic industry on any extensive scale is rarely found nowadays and only in the most remote localities; until very recently, Siberia, for example, was one of them. Industry as a profession does not yet exist in this form: industry here is linked inseparably with agriculture, together they constitute a single whole.

The first form of industry to be separated from patriarchal agriculture is artisan production, i.e., the production of articles to the order of a consumer.[1] The raw materials may belong either to the customer-consumer or to the artisan, and payment for the latter’s work is made either in cash or in kind (artisan’s premises and keep, remuneration with part of the product, for example, flour, etc.). While constituting an essential part of urban life, artisan production is to be met on a considerable scale in the rural districts too, where it serves as a supplement to peasant farming. A certain percentage of the rural population consists of specialist-artisans engaged (sometimes exclusively, sometimes in conjunction with agriculture) in tanning, boot-making, tailoring, blacksmithery, dyeing of homespun fabrics, finishing of peasant-made woollens, flour-milling, etc. Owing to the extremely unsatisfactory state of our economic statistics we have no precise data on the degree to which artisan production is spread throughout Russia; but isolated references to this form of industry are scattered through nearly all descriptions of peasant farming and investigations of what is called “handicraft” industry,[2] and are even to be found in official factory statistics.[3] The Zemstvo statistical returns, in registering peasant industries, sometimes single out a special group, “artisans” (cf. Rudnev, loccit.), but this category (according to current terminology) includes all building workers. From the viewpoint of political economy this is utterly wrong, for the bulk of the building workers belong to the category, not of independent industrialists working on orders from customers, but of wage-workers employed by contractors. Of course, it is not always easy to distinguish the village-artisan from the small commodity-producer or from the wage-worker; this requires an economic analysis of the data concerning every small industrialist. A noteworthy attempt to draw a strict line of demarcation between artisan production and the other forms of small industry is the analysis of the returns of the Perm handicraft census of 1894–95.[4] The number of local village artisans was estimated at approximately one per cent of the peasant population, and (as might have been expected) the largest percentage of artisans was found in the uyezds where industry was least developed. As compared with the small commodity-producers, the artisans are more closely connected with the land: 80.6 per 100 artisans engage in agriculture (among the other “handicraftsmen” the percentage is lower). The employment of wage-labour is met with among artisans too, but is less developed among industrialists of this type than among the others. The size of establishments (taking the number of workers) is also smaller among the artisans. The average earnings of the artisan-cultivator are estimated at 43.9 rubles per year, and of the non-cultivator at 102.9 rubles.

We confine ourselves to these brief remarks, since a detailed examination of artisan production does not enter into our task. In this form of industry commodity production does not yet exist; here only commodity circulation makes its appearance, in the case where the artisan receives payment in money, or sells the share of the product he has received for work done and buys himself raw materials and instruments of production. The product of the artisan’s labour does not appear in the market, hardly ever leaving the sphere of peasant natural economy.[5] It is natural, therefore, that artisan production is characterised by the same routine, fragmentation and narrowness as small patriarchal agriculture. The only element of development native to this form of industry is the migration of artisans to other areas in search of employment. Such migration was fairly widely developed, particularly in the old days, in our rural districts; usually it led to the organisation of independent artisan establishments in the areas of attraction.


[1] Kundenproduktion. Cf. Karl Blucher, Die Entstehung der Volkswirtschaft, Tubingen, 1893. (Work done to order. Cf. Karl Blucher, The Rise of the National Economy.—Ed.)[6]Lenin

[2] It would be impossible to cite quotations in support of this; innumerable references to artisan production are scattered throughout all investigations of handicraft industry, although according to the most accepted view, artisans do not come within the category known as handicraftsmen. We shall have more than one occasion to see how hopelessly indefinite is the term “handicraft.”—Lenin

[3] The chaotic condition of these statistics is illustrated particularly vividly by the fact that no criteria have yet been decided on for distinguishing handicraft from factory establishments. In the 60s, for example, village dyeing sheds of a purely handicraft type were classified with the latter (The Ministry of Finance Yearbook, Vol. I, pp. 172-176), and in 1890, peasant fulling mills were mixed up with woollen factories (Orlov’s Directory of Factories and Works, 3rd ed., p. 21), etc. Nor is the latest List of Factories (St. Petersburg, 1897) free from this confusion. For examples, see our Studies, pp. 270-271. [See also present edition, Vol, 4, “On the Question of Our Factory Statistics.”Ed.]—Lenin

[4] We have devoted a special article to this census in our Studies, pp. 113-199. (See present edition, Vol. 2, The Handicraft Census of 1894-95 in Perm Gubernia and General Problems of “Handicraft” Industry.—Ed.) All the facts cited in the text concerning the Perm “handicraftsmen” are taken from that article.—Lenin

[5] The closeness of artisan production to the natural economy of the peasants sometimes leads to attempts on their part to organise such production for the whole village, the peasants providing the artisan with his keep, he undertaking to work for all the inhabitants of the village concerned. Nowadays this system of industry is to be met with only by way of exception, or in the most remote border regions (for example, the blacksmith’s trade is organised on these lines in some of the villages in Transcaucasia. See Reports and Investigations of Handicraft Industry in Russia, Vol. II, p. 321).—Lenin

[6] Lenin gives an appreciation of the research done by B\”ucher, and of the latter’s classification of the stages and forms of industrial development, in Chapter VII of The Development of Capitalism in Russia, in his footnote on page 550. The most important part of Blucher’s work, that devoted to the origin of the national economy, was translated into Russian by Lenin apparently when he was in exile, in the village of Shushenskoye. Lenin’s translation has not been published. [p.332]

II. Small Commodity-Producers In Industry. The Craft Spirit In The Small Industries

We have seen that the artisan appears on the market, although not with the wares he produces. Naturally, once he comes into contact with the market, he begins in time to produce for the market, i.e., becomes a commodity producer. This transition takes place gradually, at first as an experiment: goods are sold which are left on his hands by chance, or are produced in his spare time. The gradualness of the transition is heightened by the fact that the market for wares is at first extremely restricted, so that the distance between the producer and the consumer increases very slightly, and the product passes as hitherto directly from the producer to the consumer, its sale sometimes being preceded by its exchange for agricultural produce.[1] The further development of commodity production is expressed in the expansion of commerce in the appearance of specialist merchants, buyers-up; the market for wares is not the small village bazaar or the district fair,[2] but the whole region, then the whole country, and sometimes even other countries. The production of industrial wares in the shape of commodities is the first step to the separation of industry from agriculture, and to mutual exchange between them. Mr. N.-on, with his characteristically stereotyped and abstract way of understanding things, limits himself to declaring that the “separation of industry from agriculture” is a quality of “capitalism” in general, without taking the trouble to examine either the different forms of this separation or the different stages of capitalism. It is important to note, therefore, that commodity production on the smallest scale in the peasant industries already begins to separate industry from agriculture, although at that stage of development the industrialist does not, in the majority of cases, separate from the agriculturist. Later on we shall show how the more developed stages of capitalism lead to the separation of industrial from agricultural enterprises, to the separation of industrial workers from agriculturists.

In the rudimentary forms of commodity production, competition among the “handicraftsmen” is still very slight, but as the market expands and embraces wide areas, this competition grows steadily stronger and disturbs the small industrialist’s patriarchal prosperity, the basis of which is his virtually monopolist position. The small commodity-producer feels that his interests, as opposed to the interests of the rest of society, demand the preservation of this monopolist position, and he therefore fears competition. He exerts every effort, individually and with others, to check competition, “not to let” rivals into his district, and to consolidate his assured position as a small master possessing a definite circle of customers. This fear of competition so strikingly reveals the true social nature of the small commodity-producer that we think it necessary to examine the relative facts in greater detail. In the first place, let us quote an example relative to handicraft. The Kaluga sheepskin dressers go off to other gubernias to treat sheepskins; this industry has declined since the abolition of serfdom; the landlords, when they released serfs for “sheepskinning,” in return for a sizable tribute, took great care that the sheepskinners knew their “definite places” and did not permit other dressers to invade their districts. Organised on these lines the industry was so profitable that “places” were transferred for as much as 500 and 1,000 rubles, and if an artisan came to a district other than his own, it sometimes led to sanguinary clashes. The abolition of serfdom undermined this medieval prosperity: “the convenience of railway travel in this case also aids competition.”[3] One of the phenomena of the same type observed in a number of industries and bearing fully the character of a general rule, is the desire of the small industrialists to keep technical inventions and improvements secret, to conceal profitable occupations from others, in order to stave off “fatal competition.” Those who establish a new industry or introduce some improvement in an old one, do their utmost to conceal these profitable occupations from their fellow-villagers and resort to all sorts of devices for this purpose (e.g., as a make-believe they keep the old arrangements in the establishment), let no one enter their workshops, work in garrets and say nothing about their work even to their own children.[4] The slow development of the brush-making industry in Moscow Gubernia “is usually attributed to the present producers’ objection to having new competitors. It is said that they do all they can to conceal their work from strangers, and so only one producer has apprentices from outside.”[5] Concerning the village of Bezvodnoye, Nizhni-Novgorod Gubernia, famous for its metalware industry, we read the following: “It is remarkable that to this day” (the beginning of the 80s; the industry has existed since the beginning of the 50s) “the inhabitants of Bezvodnoye carefully conceal their craft from the neighbouring peasants. They have made more than one attempt to induce the volost administration to issue an instruction making it a punishable offence to carry the craft to another village; though they have failed to get this formality adopted, each of them seems to be morally bound by such an instruction, in virtue of which they refrain from giving their daughters in marriage to inhabitants of neighbouring villages, and as far as possible avoid taking girls in marriage from those villages.”[6]

The Narodnik economists have not only tried to obscure the fact that the bulk of the small peasant industrialists belong to the category of commodity-producers, but have even created quite a legend about some profound antagonism allegedly existing between the economic organisation of the small peasant industries and large-scale industry. The unsoundness of this view is also evident, by the way, from the above-quoted data. If the big industrialist stops at nothing to ensure himself a monopoly, the peasant engaging in “handicrafts” is in this respect his twin brother; the petty bourgeois endeavours with his petty resources to uphold substantially the same class interests the big manufacturer seeks to protect when he clamours for protection, bonuses, privileges, etc.[7]


[1] E.g., the exchange of earthenware utensils for grain, etc. When grain was cheap the equivalent of a pot was sometimes considered to be the amount of grain the pot would hold. Cf. Reports and Investigations, I, 340.—Industries of Vladimir Gubernia, V, 140.—Transactions of the Handicraft Commission, I, 61.—Lenin

[2] An investigation of one of these country fairs showed that 31% of the total turnover (about 15,000 rubles out of 50,000 rubles) was accounted for by “handicraft” goods. See Transactions of the Handicraft Commission, I, 38. How restricted the market is at first for the small commodity-producers is seen, for example, from the fact that the Poltava boot-makers sell their wares within a radius of some 60 vorsts from their village, Reports and Investigations, I, 287.—Lenin

[3] Transactions of the Handicraft Commission, I, 35-36.—Lenin

[4] See Transactions of the Handicraft Commission, I, 81. V, 460; IX, 25-26.—Industries of Moscow Gubernia, Vol. VI, Pt. 1, 6-7; 253; Vol. VI, Pt. 2, 142; Vol. VII, Pt. 1, Sec. 2 about the founder of the “printing industry.”Industries of Vladimir Gubernia, I, 145, 149.—Reports and Investigations, 1, 89.—Grigoryev: Handicraft Lock- and Cutlery-Making in Pavlow District (Supplement to Volga publication, Moscow, 1881), p. 39.—Mr V. V. cited some of these facts in his Essay on Handicraft Industry (St. Petersburg, 1886), p. 192 and foll.; the only conclusion he draws from them is that the handicraftsmen are not afraid of innovations; it never enters his head that these facts characterise the class position and the class interests of the small commodity-producers in contemporary society.—Lenin

[5] Industries of Moscow Gubernia, VI, 2, 193.—Lenin

[6] Transactions of the Handicraft Commission, IX, 2404.—Lenin

[7] Sensing that competition will be fatal to him, the petty bourgeois strives to stave it off, just as his ideologist, the Narodnik, senses that capitalism is fatal to the “foundations” so dear to his heart, and for that reason strives to “avert,” to prevent, to stave off, etc., etc.—Lenin

III. The Growth of Small Industries After the Reform. Two Forces of This Process and its Significance

From the foregoing there also emerge the following features of small production that merit attention. The appearance of a new industry signifies, as we have already observed, a process of growing social division of labour. Hence, such a process must necessarily take place in every capitalist society, to the extent that a peasantry and semi-natural agriculture still remain to one degree or other, and to the extent that diverse ancient institutions and traditions (due to bad means of communication, etc.) prevent large-scale machine industry from directly replacing domestic industry. Every step in the development of commodity economy inevitably leads to the peasantry producing an ever-increasing number of industrialists from their ranks; this process turns up new soil, as it were, prepares new regions in the most backward parts of the country, or new spheres in the most backward branches of industry, for subsequent seizure by capitalism. The very same growth of capitalism manifests itself in other parts of the country, or in other branches of industry, in an entirely different way; not in an increase but in a decrease in the number of small workshops and of home workers absorbed by the factory. It is clear that a study of the development of capitalism in the industry of a given country requires that the strictest distinction be made between these processes; to mix them up is to lead to an utter confusion of concepts.[1]

In post-Reform Russia the growth of small industries, expressing the first steps in the development of capitalism, has manifested, and manifests, itself in two ways: firstly, in the migration of small industrialists and handicraftsmen from the central, long-settled and economically most advanced gubernias, to the outer regions; secondly, in the formation of new small industries and the spread of previously existing industries among the local population.

The first of these processes is one of the manifestations of the colonisation of the border regions to which we have referred (Chapter IV, § II). The peasant industrialist in the Nizhni-Novgorod, Vladimir, Tver, Kaluga and other gubernias, sensing the increased competition accompanying the growth of the population, and the growth of capitalist manufacture and of the factory that constitute a menace to small production, leaves for the South, where “artisans” are still few, earnings high and the living cost low. In the new locality a small establishment was set up which laid the foundations for a new peasant industry that spread later in the village concerned and in its environs. The central districts of the country, possessing an industrial culture of long standing, thus helped the development of the same culture in new parts of the country, where settlement was beginning. Capitalist relations (which, as we shall see below, are also characteristic of the small peasant industries) were thus carried to the entire country.[2]

Let us pass to the facts that express the second of the above-mentioned processes. We shall first say that although we note the growth of small peasant establishments and industries, we do not as yet deal with their economic organisation: from what follows it will be evident that these industries either lead to the formation of capitalist simple co-operation and merchant’s capital or constitute a component part of capitalist manufacture.

The fur industry in Arzamas Uyezd, Nizhni-Novgorod Gubernia, began in the town of Arzamas and then gradually spread to the surrounding villages, embracing an ever larger area. At first there were few furriers in the villages and they employed numerous workers; labour was cheap, since people hired themselves out in order to learn the trade. After learning it they left and opened small establishments of their own, thus preparing a wider field for the domination of capital, which now controls a large section of the industrialists.[3] Let us note in general that this abundance of wage-workers in the first establishments of a rising industry and the subsequent transformation of these wage-workers into small masters is a very widespread phenomenon, bearing the character of a general rule.[4] Obviously, It would be a profound error to deduce from this that “in spite of various historical considerations . . . it is not big establishments that absorb small ones, but small ones that grow out of big ones.”[5] The large size of the first establishments expresses no concentration of the industry; it is explained by the solitary character of these establishments and by the eagerness of local peasants to learn a profitable trade in them. As to the process of the spread of peasant industries from their old centres to the surrounding villages, it is observed in many cases. For example, the post-Reform period saw the development (as regards the number of villages involved in industry, the number of industrialists, and the total output) of the following exceptionally important industries: the lock and cutlery industry of Pavlovo, tanning and boot-making in the village of Kimry, the knitting of woollen slippers in the town of Arzamas and in its environs,[15] the metalware industry of the village of Burmakino, the cap-making industry of the village and of the district of Molvitino, the glass, hat and lace industries of Moscow Gubernia, the jewellery industry of Krasnoselskoye District, etc.[6] The author of an article on handicraft industries in seven volosts of Tula Uyezd notes as a general phenomenon “an increase in the number of artisans since the peasant Reform,” “the appearance of artisans and handicraftsmen in places where there were none in pre-Reform times.”[7] A similar view is expressed by Moscow statisticians.[8] We can support this view with statistics regarding the date of origin of 523 handicraft establishments in 10 industries of Moscow Gubernia.[9]Number of establishments founded.

Similarly, the Perm handicraft census revealed (according to data showing the time of origin of 8,884 small artisan and handicraft establishments) that the post-Reform period is characterised by a particularly rapid growth of small industries. It will be interesting to take a closer glance at this process of the rise of new industries. The production of woollen and semi-silk fabrics in Vladimir Gubernia began recently, in 1861. At first this was a peasant outside occupation, but later “subcontractors” made their appearance in the villages, who distributed yarn. One of the first “factory owners” at one time traded in groats, buying them up in the Tambov and Saratov “steppes.” With the building of railways, grain prices were levelled out, the grain trade became concentrated in the hands of millionaires, and so our merchant decided to invest his capital in an industrial weaving enterprise; he went to work in a factory, learnt the business and became a “subcontractor.”[10] Thus, the formation of a new “industry” in this locality was due to the fact that the general economic development of the country was forcing capital out of trade and directing it towards industry.[11] The investigator of the industry we have taken as an example points out that the case he has described is by no means an isolated one: the peasants who earned their living by outside employments “were pioneers in all sorts of industries, carried their technical knowledge to their native villages, got new labour forces to follow their example and migrate, and fired the imagination of the rich muzhiks with stories of the fabulous profits which the industry brought the workroom owner and the subcontractor. The rich muzhik, who used to store his money away in a chest, or traded in grain, paid heed to these stories and put his money into industrial undertakings” (ibid.). The boot and felt industries in Alexandrov Uyezd, Vladimir Gubernia, arose in some places in the following way: the owners of calico workrooms or of small yarn-distributing shops, seeing that handweaving was declining, opened workshops of another kind, sometimes hiring craftsmen so as to get to know the trade and to teach their children.[12] To the extent that large-scale industry forces small capital out of the branch of production, this capital flows into others and stimulates their development in the same direction.

The general conditions of the post-Reform period which called forth the development of small industries in the rural districts are very vividly described by investigators of Moscow industries. “On the one hand, the conditions of peasant life have greatly deteriorated during this period,” we read in a description of the lace industry, “but on the other, the requirements of the population, of that part which lives under more favourable conditions, have considerably increased.[13] And the author, using the data of the region he has taken, notes an increase in the number of those owning no horses and raising no crops, side by side with an increase in the number of peasants owning many horses and in the total number of cattle belonging to peasants. Thus, on the one hand, there was an increase in the number of persons in need of “outside earnings” and in search of industrial work, while on the other, a minority of prosperous families grew rich, accumulated “savings,” and were “able to hire a worker or two, or give out work to poor peasants to be done at home.” “Of course,” the author explains, “we are not dealing here with cases where individuals who are known as kulaks, or blood-suckers, develop from among such families; we are merely examining most ordinary phenomena among the peasant population.”

So then, local investigators point to a connection between the differentiation of the peasantry and the growth of small peasant industries. And that is quite natural. From the data given in Chapter II it follows that the differentiation of the agricultural peasantry had necessarily to be supplemented by a growth of small peasant industries. As natural economy declined, one form of raw-material processing after another turned into separate branches of industry; the formation of a peasant bourgeoisie and of a rural proletariat increased the demand for the products of the small peasant industries, while at the same time supplying free hands for these industries and free money.[14]


[1] Here is an interesting example of how these two different processes occur in one and the same gubernia, at one and the same time and in one and the same industry. The spinning-wheel industry (in Vyatka Gubernia) is ancillary to the domestic production of fabrics. The development of this industry marks the rise of commodity production, which embraces the making of one of the instruments for the production of fabrics. Well, we see that in the remote parts of the gubernia, in the north, the spinning wheel is almost unknown (Material for a Description of the Industries of Vyatka Gubernia, II, 27) and there “the industry might newly emerge,” i.e., might make the first breach in the patriarchal natural economy of the peasants. Meanwhile, in other parts of the gubernia this industry is already declining, and the investigators believe that the probable cause of the decline is “the increasingly widespread use among the peasantry of factory-made cotton fabrics” (p 26). Here, consequently, the growth of commodity production and of capitalism is manifested in the elimination of petty industry by the factory.—Lenin

[2] See, for example, S. A. Korolenko, loccit., on the movement of industrial workers to the outer regions, where part of them settle. Transactions of the Handicraft Commission, Vol. I (on the preponderance in Stavropol Gubernia of industrialists from the central gubernias), Vol. III, pp. 33-34 (the migration of boot-makers from Viyezdnaya, Nizhni-Novgorod Gubernia, to the Lower-Volga towns); Vol. IX (tanners from the village of Bogorodskoye in the same gubernia established tanneries all over Russia). Industries of Vladimir Gubernia, IV, 136 (Vladimir potters carried their trade into Astrakhan Gubernia). Cf. Reports and Investigations, Vol. I, pp. 125, 210; Vol. II, pp. 160-165, 168, 222 for general remarks on the preponderance “all over the South” of industrialists from the Great-Russian gubernias.—Lenin

[3] Transactions of the Handicraft Commission, III.—Lenin

[4] For example, the same thing has been noted in the dyeing industry of Moscow Gubernia (Industries of Moscow Gubernia, VI, I, 73-99), in the hat (ibid., VI, Pt. I), in the fur (ibid., VII, Pt. I, Sec. 2), in the Pavlovo lock and cutlery industries (Grigoryev, loccit., 37-38), and others.—Lenin

[5] Mr. V. V. hastened to draw this conclusion from a fact of this kind in his Destiny of Capitalism, 78-79.—Lenin

[6] A. Smirnov: Pavlovo and Vorsma, Moscow, 1864.—N. Labzin: An Investigation of the Cutlery Industryetc., St. Petersburg, 1870.—Grigoryev, loccit.—N. Annensky, Reportetc., in No. 1 of Nizhegorodsky Vestnik Parokhodstva i Promyshlennosti [The Nizhni-Novgorod Steam-Shipping and Industrial Journal ] for 1891.—Material of Zemstvo statistics for Gorbatov Uyezd, Nizhni-Novgorod, 1892.—A. N. Potresov, Report in the St. Petersburg Branch of the Loan and Savings Society Committee in 1895.—Statistical Chronicle of the Russian Empire, II, Vol. 3, St. Petersburg, 1872.—Transactions of the Handicraft Commission, VIII.—Reports and Investigations, I, III.—Transactions of the Handicraft Commission, VI, XIII.—Industries of Moscow Gubernia, VI, Pt. I, p. 111, ibid., 177; VII, Pt II, p. 8.—Historico-Statistical Survey of Russian Industry, II, Col. VI, Industry 1.—Vestnik Finansov, 1898, No. 42. Cf. also Industries of Vladimir Gubernia, III 18-19 and others.—Lenin

[7] Transactions of the Handicraft Commission, IX, 2303-2304.—Lenin

[8] Industries of Moscow Gubernia, VII, Pt. I, Sec. 2, 196.—Lenin

[9] The data on the brush, pin, hook, hat, starch, boot, spectacle frame, harness, fringe and furniture industries have been selected from the handicraft house-to-house census material quoted in Industries of Moscow Gubernia and in Mr. Isayev’s book of the same title.—Lenin

[10] Industries of Vladimir Gubernia, III, 242-243.—Lenin

[11] In his researches into the historical destiny of the Russian factory, M. I. T.-Baranovsky showed that merchant’s capital was a necessary historical condition for the formation of large-scale industry. See his The Factoryetc., St. Petersburg, 1898.—Lenin

[12] Industries of Vladimir Gubernia, II, 25, 270.—Lenin

[13] Industries of Moscow Gubernia, Vol. II, Pt. II, p. 8 and foll.—Lenin

[14] The fundamental theoretical error made by Mr. N.-on in his arguments about the “capitalisation of industries” is that he ignores the initial steps of commodity production and capitalism in its consecutive stages. Mr. N.-on leaps right over from “people’s production” to “capitalism,” and then is surprised, with amusing naïvety, to find that he has got a capitalism that is without basis that is artificial, etc.—Lenin

[15] In the middle of the 19th century, the knitting of slippers with designs in coloured wools was widespread in Arzamas and its outskirts. In the 1860s ten thousand and more pairs of knitted footwear were made annually in the town, the Nikolsky Convent and the village of Viyezdnaya Sloboda. The wares were sold at the Nizhni-Novgorod fair, and from there were dispatched to Siberia, the Caucasus and other parts of Russia. [p. 341]

IV. The Differentiation Of The Small Commodity-Producers. Data On House-To-House Censuses Of Handicraftsmen In Moscow Gubernia

Let us now examine the social and economic relations that develop among the small commodity-producers in industry. The task of defining the character of these relations is similar to the one outlined above, in Chapter II, in relation to the small farmers. Instead of the scale of farming, we must now take as our basis the size of the industrial establishments; we must classify the small industrialists according to the size of their output, ascertain the part wage-labour plays in each group, the conditions of technique, etc.[1] The handicraft house-to-house censuses that we need for such an analysis are available for Moscow Gubernia.[2] For a number of industries the investigators quote precise statistics on output, and sometimes also on the farms of each separate craftsman (date of origin of establishment, number of workers, family and hired, total annual output, number of horses owned by craftsmen, method of cultivating the soil, etc.). The investigators provide no classified tables, however, and we have therefore been obliged to compile them ourselves, dividing the craftsmen in each industry into grades (I, bottom; II, middle and III, top) according to the number of workers (family and hired) per establishment, and sometimes according to the volume of output, technical organisation, etc. In general, the criteria according to which the craftsmen have been divided into grades are based on all the data given in the description of the industry; but in different industries we have found it necessary to take different criteria for dividing the craftsmen into grades. For example, in very small industries we have placed in the bottom grade establishments with 1 worker, in the middle grade those with 2, and in the top grade those with 3 and more; whereas in the bigger industries we have placed in the bottom grade establishments with 1 to 5 workers, in the middle grade those with 6 to 10, etc. Had we not employed different methods of classification we could not have presented for each industry data concerning establishments of different size. The table drawn up on these lines is given in the Appendix (see Appendix I); it shows the criteria according to which the craftsmen in each industry are divided up into grades, gives for each grade in each industry absolute figures of the number of establishments, workers (family and hired combined), aggregate output, establishments employing wage-workers, number of wage-workers. To describe the farms of the handicraftsmen we have calculated the average number of horses per peasant household in each grade and the percentage of craftsmen who cultivate their land with the aid of “a labourer” (i.e., resort to the hire of rural workers). The table covers a total of 37 industries, with 2,278 establishments and 11,833 employed and an aggregate output valued at over 5 million rubles; but if we subtract the 4 industries not included in the general list because of incompleteness of data, or because of their exceptional character,[3] there is a total of 33 industries, 2,085 establishments, 9,427 workers and an aggregate output of 3,466,000 rubles, or, with corrections (in the case of 2 industries), about 3 3/4 million rubles.

Since there is no need to examine the data for all the 33 industries, and as it would be too arduous a task, we have divided these industries into four categories: 1) 9 industries with an average of 1.6 to 2.5 workers (family and hired combined) per establishment; 2) 9 industries with an average of 2.7 to 4.4 workers; 3) 10 industries with an average of 5.1 to 8.4 workers; and 4) 5 industries with an average of 11.5 to 17.8 workers. Thus, in each category we have combined industries that are fairly similar as regards the number of workers per establishment, and in our further exposition we shall limit ourselves to the data for these four categories of industries. We give these data in extenso. (See Table on p. 347.)

This table combines those principal data on the relations between the top and bottom grades of handicrafts men that will serve us for our subsequent conclusions. We can illustrate the summarised data for all four categories with a chart drawn up in exactly the same way as the one with which, in Chapter II, we illustrated the differentiation of the agricultural peasantry. We ascertain what percentage each grade constitutes of the total number of establishments, of the total number of family workers, of the total number of establishments with wage-workers, of the total number of workers (family and wage combined), of the aggregate output and of the total number of wage-workers, and we indicate these percentages (in the manner described in Chapter II) on the chart (see chart on p. 349).Categories of industries.

Let us now examine the conclusions to be drawn from these data.

We begin with the role of wage-labour. In the 33 industries wage-labour predominates over family labour: 51% of the workers are hired; for the “handicraftsmen” of Moscow Gubernia this percentage is even lower than the actual one. We have computed the data for 54 industries of Moscow Gubernia for which exact figures as to wage-workers employed are available, and got the figure of 17,566 wage-workers out of a total of 29,446 workers, i.e., 59.65%. For Perm Gubernia the percentage of wage-workers among all handicraftsmen and artisans combined was established as 24.5%, and among commodity-producers alone, as from 29.4 to 31.2%. But these gross figures, as we shall see below, embrace not only small commodity-producers, but also capitalist manufacture. Far more interesting, therefore, is the conclusion that the role of wage-labour rises parallel to the increase in the size of establishments: this is observed both in comparing one category with another and in comparing the different grades in the same category. The larger the establishments, the higher the percentage of those employing wage-workers and the higher the percentage of wage-workers. The Narodnik economists usually limit themselves to declaring that among the “handicraftsmen” small establishments with exclusively family workers prevail, and in support of this often cite “average” figures. As is evident from the data given, these “averages” are unsuitable for characterising the phenomenon in this regard, and the numerical preponderance of small establishments with family workers does not in the least eliminate the basic fact that the tendency of small commodity production is towards the ever-growing employment of wage-labourtowards the formation of capitalist workshops. Moreover, the data cited also refute another, no less widespread, Narodnik assertion, namely, that wage-labour in “handicraft” production really serves to “supplement” family labour, that it is resorted to not for the purpose of profit-making, etc.[4] Actually, however, it turns out that among the smallChart summarizing data given in preceding table.

industrialists—just as among the small agriculturists—the growing employment of wage-labour runs parallel to the increase in the number of family workers. In the majority of industries we see that the employment of wage-labour increases as we pass from the bottom grade to the top, notwithstanding the fact that the number of family workers per establishment also increases. The employment of wage-labour does not smooth out differences in the size of the “handicraftsmen’s” families, but accentuates them. The chart very clearly shows this common feature of the small industries: the top grade employs the bulk of the wage-workers, despite the fact that it is best provided with family workers. “Family co-operation ” is thus the basis of capitalist co-operation.[5] It goes without saying, of course, that this “law” applies only to the smallest commodity-producers, only to the rudiments of capitalism; this law proves that the tendency of the peasantry is to turn into petty bourgeois. As soon as workshops with a fairly large number of wage-workers arise, the significance of “family co-operation” must inevitably decline. And we see, indeed, from our data that this law does not apply to the biggest grades of the top categories. When the “handicraftsman” turns into a real capitalist employing from 15 to 30 wage-workers, the part played by family labour in his workshops declines and becomes quite insignificant (for example, in the top grade of the top category, family workers constitute only 7% of the total number of workers). In other words, to the extent that the “handicraft” industries are so small that “family co-operation” predominates in them, this family co-operation is the surest guarantee of the development of capitalist co-operation. Here, consequently, stand out in full relief the dialectics of commodity production, which transform “working with our own hands” into working with others’ hands, into exploitation.

Let us pass to the data on productivity of labour. The data on total output per worker in each grade show that with the increase in the size of the establishment labour productivity improves. This is to be observed in the overwhelming majority of the industries, and in all categories of industries without exception; the chart graphically illustrates this law, showing that the share of the top grade in total output is greater than is its share in the total number of workers; in the bottom grade the reverse is the case. The total output per worker in the establishments of the top grades is from 20 to 40 per cent higher than that in the bottom grade establishments. It is true that the big establishments usually have a longer working period and sometimes handle more valuable material than do the small ones, but these two circumstances cannot eliminate the fact that labour productivity is considerably higher in the big workshops than in the small ones.[6] Nor can it be otherwise. The big establishments have from 3 to 5 times as many workers (family and hired combined) as the small ones, and co-operation on a larger scale cannot but increase the productivity of labour. The big workshops are always better equipped technically, they have better implements, tools, accessories, machines, etc. For example, in the brush industry, a “properly organised workshop” must have as many as 15 workers, and in hook-making 9 to 10 workers. In the toy industry the majority of handicraftsmen make shift with ordinary stoves for drying their goods; the bigger toy-makers have special drying ovens, and the biggest makers have special drying premises. In metal toy-making, 8 makers out of 16 have special workshops, divided as follows: I) 6 have none; II) 5 have 3; and III) 5 have 5. A total of 142 mirror and picture-frame makers have 18 special workshops, the figures by grades being: I) 99 have 3; II) 27 have 4; and III) 16 have 11. In the screen-plaiting industry screens are plaited by hand (in grade I), and woven mechanically (in grades II and III). In the tailoring industry the number of sewing-machines per owner according to grade is as follows: I) 1.3; II) 2.1; and III) 3.4, etc., etc. In investigating the furniture industry, Mr. Isayev notes that the one-man business suffers the following disadvantages: 1) lack of a complete set of tools; 2) limited assortment of articles made, because there is no room in the craftsman’s hut for bulky articles; 3) much higher cost of materials when bought retail (30 to 35% higher); 4) necessity of selling wares cheaper, partly due to lack of confidence in the small “handicraftsman” and partly to his need of money.[7] It is well known that exactly the same sort of thing is to be observed not only in the furniture industry, but also in the vast majority of small peasant industries. Lastly, it must be added that the value of the goods produced per worker not only increases from the bottom to the top grade in the majority of industries, but also from the small to the big industries. In the first category of industries the average output per worker is 202 rubles, in the second and third about 400 rubles, and in the fourth over 500 rubles (the figure 381 should, for the reason stated above, be increased by about fifty per cent). This circumstance points to the connection between the rise in the price of raw materials and the ousting of the small establishments by the big ones. Every step in the development of capitalist society is inevitably accompanied by a rise in the price of such materials as timber, etc., and thus hastens the doom of the small establishments.

From the foregoing it follows that the relatively big capitalist establishments also play a tremendous part in the small peasant industries. While constituting a small minority of the total number of establishments, they concentrate, however, quite a big share of the total number of workers, and a still bigger share of the total output. Thus, in 33 industries of Moscow Gubernia, the top-grade establishments, constituting 15% of the total, account for 45% of the aggregate output; while the bottom-grade establishments, constituting 53% of the total, account for only 21% of the aggregate output. It goes without saying that the distribution of the net income from the industries must be far more uneven. The data of the Perm handicraft census of 1894-95 clearly illustrate this. Selecting the largest establishments in 7 industries we get the following picture of the relations between the small and big establishments.[8]Relations between small and big establishments.

An insignificant number of big establishments (less than 1/10 of the total number), which employ about 1/5 of the total number of workers, account for almost half the total output and nearly 2/5 of the total income (combining the workers’ wages and the employers’ incomes). The small proprietors obtain a net income considerably below the wages of the hired workers employed in the big establishments; elsewhere we have shown in detail that this phenomenon is no exception but is a general rule for small peasant industries.[9]

Summing up the conclusions that follow from the data we have analysed, we must say that the economic system of the small peasant industries is typically petty bourgeois, the same as that which we have seen among the small farmers. The expansion, development and improvement of the small peasant industries cannot take place in the present social and economic atmosphere except by generating a minority of small capitalists on the one hand, and a majority of wage-workers, or of “independent craftsmen” who lead a harder and worse life than the wage-workers, on the other. We observe, consequently, in the smallest peasant industries the most pronounced rudiments of capitalism—of that very capitalism which various economists of the Manilov[11] type depict as something divorced from “people’s production.” From the viewpoint of the home market theory the facts we have examined are also of no little importance. The development of small peasant industries leads to an expansion of the demand by the more prosperous industrialists for means of production and for labour-power, which is drawn from the ranks of the rural proletariat. The number of wage-workers employed by village artisans and small industrialists all over Russia should be quite impressive, if in the Perm Gubernia alone, for example, there are about 6,500.[10]


[1] Describing “handicraft” industry in Chernigov Gubernia, Mr. Varzer notes “the variety of economic units” (on the one hand families with incomes from 500 to 800 rubles, and on the other, “almost paupers”) and makes the following observation: “Under such circumstances, the only way to present a full picture of the economic life of the craftsmen is to make a house-to-house inventory and to classify their establishments in a number of average types with all their accessories. Anything else will be either a fantasy of casual impressions or arm-chair exercises in arithmetical calculations based on a diversity of average norms. . . “ (Transactions of the Handicraft Commission, Vol. V, p. 354).—Lenin

[2] Statistical Returns for Moscow Gubernia, Vols. VI and VII. Industries of Moscow Gubernia, and A. Isayev’s Industries of Moscow Gubernia, Moscow, 1876-1877, 2 vols. For a small number of industries similar information is given in Industries of Vladimir Gubernia. It goes without saying that in the present chapter we confine ourselves to an examination of only those industries in which the small commodity-producers work for the market and not for buyers-up,—at all events, in the overwhelming majority of cases. Work for buyers-up is a more complicated phenomenon, one that we shall examine separately later on. The house-to-house censuses of handicraftsmen who work for buyers-up are unsuitable for judging the relations existing among small commodity-producers.—Lenin

[3] On these grounds the pottery “industry,” in which 20 establishments employ 1,817 wage-workers, has been excluded. It is characteristic of the confusion of terms prevailing among us that the Moscow statisticians included this industry, too, among the “handicraft” industries (see combined tables in Part III of Vol. VII, loccit.).—Lenin

[4] See, for example, Statistical Returns for Moscow Gubernia, Vol. VI, Pt. 1, p. 21.—Lenin

[5] The same conclusion follows from the data regarding the Perm “handicraftsmen”, see our Studies, pp. 126-128. (See present edition, Vol. 2, The Handicraft Census of 1894-95 in Perm Gubernia.—Ed.)—Lenin

[6] For the starch-making industry, which is included in our tables, data are available on the duration of the working period in establishments of various sizes. It appears (as we have seen above) that even in an equal period the output per worker in a big establishment is higher than that in a small one.—Lenin

[7] The small producer tries to make up for these unfavourable conditions by working longer hours and with greater intensity (loc cit., p 38). Under commodity production, the small producer both in agriculture and in industry carries on only by cutting down his requirements.—Lenin

[8] See our Studies, p. l53 and foll. (see present edition, Vol. 2, The Handicraft Census of 1894-95 in Perm Gubernia.—Ed.) where data are given for each industry separately. Let us note that all these data refer to handicraftsmen cultivators who work for the market.—Lenin

[9] From the data given in the text it can be seen that in the small peasant industries a tremendous, and even predominant, part is played by establishments with an output exceeding 1,000 rubles. Let us recall that in our official statistics establishments of this kind have always been, and still are, classed among “factories and works” [cf. Studies, pp. 267 and 270 (see present edition, Vol, 4, “On the Question of Our Factory Statistics.”Ed.) and Chapter VII, § II]. Thus, if we thought it permissible for an economist to use the current, traditional terminology beyond which our Narodniks have never gone, we would be entitled to establish the following “law”: among peasant “handicraft” establishments a predominant part is played by “factories and works,” not included in official statistics because of their unsatisfactory nature.—Lenin

[10] Let us add that in other gubernias, besides Moscow and Perm, the sources note quite analogous relations among the small commodity producers. See, for instance, Industries of Vladimir Gubernia, Vol. II, house-to-house censuses of shoemakers and fullers; Transactions of the Handicraft Commission, Vol II—on the wheelwrights of Medyn Uyezd; Vol. II—on the sheepskin dressers of the same uyezd; Vol. III—on the furriers of Arzamas Uyezd, Vol. IV—on the fullers of Semyonov Uyezd and on the tanners of Vasil Uyezd, etc. Cf. Nizhni-Novgorod Handbook, Vol. IV, p. 137,—A. S. Gatsisky’s general remarks about the small industries speak of the rise of big workshops. Cf, Annensky’s report on the Pavlovo handicraftsmen (mentioned above), on the classification of families according to weekly earnings, etc. etc. All these sources differ from the house-to-house census data we have examined only in their incompleteness and poverty. The essence of the matter, however, is identical everywhere.—Lenin

[11] Manilov—a character in Gogol’s Dead Souls, typifying the weak willed, hollow dreamer and inert windbag. [p. 355]

V. Capitalist Simple Co-Operation

The establishment by small commodity-producers of relatively large workshops marks the transition to a higher form of industry. Out of scattered small production rises capitalist simple co-operation. “Capitalist production only then really begins . . . when each individual capital employs simultaneously a comparatively large number of labourers; when consequently the labour-process is carried on an extensive scale and yields, relatively, large quantities of products. A greater number of labourers working together, at the same time, in one place (or, if you will, in the same field of labour), in order to produce the same sort of commodity under the mastership of one capitalist, constitutes, both historically and logically, the starting-point of capitalist production. With regard to the mode of production itself, manufacture, in its strict meaning, is hardly to be distinguished, in its earliest stages, from the artisan trades of the guilds, otherwise than by the greater number of workmen simultaneously employed by one and the same individual capital. The workshop of the medieval master handicraftsman is simply enlarged” (Das Kapital, I2, S. 329).[4]

It is this starting-point of capitalism that is to be seen, consequently, in our small peasant (“handicraft”) industries. The different historical situation (absence or slight development of guild handicrafts) merely changes the way in which identical capitalist relations are made manifest. The difference between the capitalist workshop and the workshop of the small industrialist lies at first only in the number of workers simultaneously employed. That is why the first capitalist establishments, being numerically in the minority, are submerged, as it were, in the general mass of small establishments. However, the employment of a larger number of workers inevitably leads to consecutive changes in production itself, to the gradual transformation of production. Under primitive hand technique differences between the individual workers (in strength, dexterity, skill, etc.) are always very considerable; if only for this reason the position of the small industrialist is extremely precarious; his dependence upon market fluctuations assumes the most burdensome forms. Where, however, several workers are employed in an establishment, the individual differences between them are smoothed out in the workshop itself: “the collective working day of a large number of workmen simultaneously employed . . . gives one day of average social labour,”[5] and as a consequence, the manufacture and sale of the products of the capitalist workshop acquire incomparably greater regularity and stability. It becomes possible to make fuller use of premises, warehouses, implements, instruments of labour, etc.; and this leads to a cheapening of production costs in the larger workshops.[1] The organisation of production on a larger scale and the simultaneous employment of many workers require the accumulation of a fairly large capital, which is often formed, not in the sphere of production, but in the sphere of trade, etc. The size of this capital determines the form in which the proprietor himself takes part in the enterprise—whether he himself is a worker, if his capital is still very small, or whether he gives up working himself and specialises in commercial and entrepreneur functions. “One can establish a connection between the position of the workshop owner and the number of his workers”we read, for example, in a description of the furniture industry. “The employment of 2 or 3 workers provides the proprietor with such a small surplus that he has to work alongside of them. . . . The employment of 5 workers already gives the proprietor enough to enable him to give up manual labour in some measure, to take it easy somewhat, and to engage mainly in the last two business functions” (i.e., purchase of materials and sale of goods). “As soon as the number of wage-workers reaches 10 or exceeds this figure, the proprietor not only gives up manual labour but practically ceases to supervise his workers: he appoints a foreman for the purpose. . . . He now becomes a small capitalist, a ’born master’” (Isayev, Industries of Moscow Gubernia, I, 52-53). The statistics we have cited graphically confirm this description, showing a decline in the number of family workers with the appearance of a considerable number of wage-workers.

The general significance of capitalist simple co-operation in the development of capitalist forms of industry is described by the author of Capital as follows:

“Historically, however, this form is developed in opposition to peasant agriculture and to the carrying on of independent handicrafts whether in guilds or not. . . . Just as the social productive power of labour that is developed by co-operation, appears to be the productive power of capital, so co-operation itself, contrasted with the process of production carried on by isolated independent labourers, or even by small employers, appears to be a specific form of the capitalist process of production. It is the first change experienced by the actual labour-process, when subjected to capital. . . . The simultaneous employment of a large number of wage-labourers, in one and the same process, which is a necessary condition of this change, also forms the starting-point of capitalist production. . . . If then, on the one hand, the capitalist mode of production presents itself to us historically, as a necessary condition to the transformation of the labour-process into a social process, so, on the other hand, this social form of the labour-process presents itself, as a method employed by capital for the more profitable exploitation of labour, by increasing that labour’s productiveness.

“In the elementary form, under which we have hitherto viewed it, co-operation is a necessary concomitant of all production on a large scale, but it does not, in itself, represent a fixed form characteristic of a particular epoch in the development of the capitalist mode of production. At the most it appears to do so, and that only approximately, in the handicraft-like beginnings of manufacture. . .” (Das Kapital, I2, 344–345).[6]

We shall see later how closely small “handicraft” establishments in Russia which employ wage-workers are connected with incomparably more highly developed and more widespread forms of capitalism. As for the role of these establishments in the small peasant industries, the statistics already given show that these establishments create fairly wide capitalist co-operation in place of the previous scattered production and considerably raise the productivity of labour.

Our conclusion as to the tremendous role of capitalist co-operation in the small peasant industries and as to its progressive significance is in sharp contrast to the widespread Narodnik doctrine of the predominance of all sorts of manifestations of the “artel principle” in the small peasant industries. As a matter of fact, the reverse is the case; the distinguishing feature of small industry (and handicrafts) is the extremely scattered nature of the individual producers. In support of the contrary view Narodnik literature could advance nothing more than a collection of individual examples, the overwhelming majority of which do not apply to co-operation at all, but to temporary, miniature associations of masters, big and small, for the common purchase of raw materials, for the building of a common workshop, etc. Such artels do not in the least affect the predominant significance of capitalist co-operation.[2] To obtain an exact idea of how widely the “artel principle” is actually applied it is not enough to cite examples taken at random here and there; it is necessary to take the data for some area which has been thoroughly investigated, and to examine the relative incidence and significance of the various forms of co-operation. Such, for example, are the data of the Perm “handicrafts” census of 1894-95; and we have shown elsewhere (Studies, pp. 182-187[3]) what an amazing dispersion of small industrialists was revealed by the census, and what importance attaches to the very few big establishments. The conclusion we have drawn as to the role of capitalist co-operation is based not on isolated examples, but on the precise data of the house-to-house censuses, which embrace scores of the most diverse industries in different localities.


[1] For example, concerning the metal-beaters[7] of Vladimir Gubernia, we read: “With the employment of a larger number of workers a considerable reduction in expenditure may be effected; this concerns expenditure on light, blocks, anvil-stone and casing” (Industries of Vladimir Gubernia, III, 188). In the copper-beating industry of Perm Gubernia a one-man establishment needs a complete set of tools (16 items); for two workers “a very small addition” is required. “For workshops employing 6 or 8 persons three or four sets of tools are required. . . . Only one lathe is kept even in a workshop employing 8 men” (Transactions of the Handicraft Commission, X, 2939). The fixed capital of a big workshop is estimated at 466 rubles, of a medium workshop at 294 rubles, and of a small one at 80 rubles; and the total output at 6,200 rubles, 3,655 rubles, and 871 rubles respectively. That is to say, in the small workshops the output is 11 times the amount of the fixed capital, in the medium ones 12 times, and in the big ones 14 times.—Lenin

[2] We do not think it worth our while to support the statement made in the text with examples, a host of which may be found in Mr V. V.’s The Artel in Handicraft Industry (St. Petersburg, 1895). Mr. Volgin has dealt with the true significance of the examples cited by Mr. V. V. (opcit., p. 182 and foll.) and has shown the very negligible part played by the “artel principle” in our “handicraft” industry. Let us merely note the following assertion by Mr. V. V.: “. . . the amalgamation of several independent handicraftsmen into one production unit . . . is not imperatively dictated by competition, as is proved by the absence in the majority of industries of workshops of any size employing wage-workers” (93). To advance such a bald and sweeping thesis is, of course, much easier than to analyse the house-to-house census data available on this question.—Lenin

[3] See present edition, Vol. 2, The Handicraft Census of 1894-95 in Perm Gubernia.—Ed.

[4] Karl Marx, Capital, Vol. I, Moscow, 1958, p. 322. [p.356]

[5] Karl Marx, Capital, Vol. I, Moscow, 1958, p. 323. [p. 357]

[7] Metal-beaters—workers who beat gold, silver, tin, copper and other metals into the foil or leaf formerly used for decorative purposes; icons and other church property were among the articles so decorated. [p.357]

[6] Karl Marx, Capital, Vol. I, Moscow, 1958, pp. 334-335. [p. 359]

VI. Merchant’s Capital in the Small Industries

As we know, the small peasant industries in many cases give rise to special buyers-up, who are particularly engaged in the commercial operations of marketing products and purchasing raw materials, and who usually in one way or another subject the small tradesmen to themselves. Let us see what connection this phenomenon has with the general system of small peasant industries and what its significance is.

The principal economic operation of the buyer-up is to buy goods (finished products or raw materials) in order to resell them. In other words, the buyer-up is a representative of merchant’s capital. The starting-point of all capital—both industrial and merchant’s—is the accumulation of free money in the hands of individuals (by free money we mean that money which is not needed for personal consumption, etc.). How this property differentiation takes place in our rural districts has been shown in detail above by the data on the differentiation of the agricultural and the industrial peasantry. These data revealed one of the conditions giving rise to the appearance of the buyer-up, namely: the scattered nature, the isolation of the small producers, the existence of economic conflict and strife among them. Another condition relates to the character of the functions performed by merchant’s capital, i.e., to the marketing of wares and to the purchase of raw materials. Where the development of commodity production is slight, the small producer limits himself to disposing of his wares in the small local market, sometimes even to disposing of them directly to the consumer. This is the lowest stage of the development of commodity production, hardly to be distinguished from artisan production. As the market expands, this petty, scattered marketing (which fully conforms to petty, scattered production) becomes impossible. In the big market, selling must he on a big, on a mass scale. And so the petty character of production proves to be in irreconcilable contradiction with the need for big, wholesale marketing. Under the existing social and economic conditions, with the isolation of the small producers and their differentiation, this contradiction could only be resolved by the well-to-do minority taking charge of marketing, concentrating it in their hands. By buying-up goods (or raw materials) on a large scale, the buyers-up thus cheapened marketing costs and transformed marketing from a petty, casual and irregular operation into a large and regular one; and this purely economic advantage of large-scale marketing inevitably led to the small producer finding himself cut off from the market and defenceless in face of the power of merchant’s capital. Thus, under commodity economy, the small producer inevitably falls into dependence upon merchant’s capital by virtue of the purely economic superiority of large, mass-scale marketing over scattered, petty marketing.[1] It goes without saying that actually the profits of the buyers-up are often far from limited to the difference between the returns of mass sales and those of petty sales, just as the profits of the industrial capitalists often consist of deductions from normal wages. Nevertheless, to explain the profits of the industrial capitalists we must assume that labour-power is sold at its real value. Similarly, to explain the role of the buyer-up we must assume that he buys and sells goods in accordance with the general laws of commodity exchange. Only these economic causes of the domination of merchant’s capital can provide the key to an understanding of the variety of forms which it assumes in real life, and among which we constantly meet (there can be no doubt of that) the plainest fraud. To proceed otherwise, as the Narodniks usually do, that is, to confine oneself to enumerating the various tricks of the “kulaks,” and on these grounds completely to brush aside the economic nature of the phenomenon would be to adopt the viewpoint of vulgar economics.[2]

To substantiate our thesis concerning a necessary causal relation between small production for the market and the domination of merchant’s capital, lot us deal in greater detail with one of the best descriptions of how the buyer-up appears and of the part he plays. We have in mind the investigation of the lace industry in Moscow Gubernia (Industries of Moscow Gubernia, Vol. VI, Pt. II). The “tradeswomen” came into being in the following way. In the 1820s, when this industry first developed, and later, when the number of lace-makers was still small, the principal buyers were the landlords, the “gentry”. The consumer was in the neighbourhood of the producer. As the industry spread, the peasants began to send their lace to Moscow “as chance offered,” for example, through comb-makers. The inconvenience of this primitive form of marketing very soon made itself felt: “how can a muzhik not engaged in this business go from house to house?” The sale of the lace was entrusted to one of the lace-makers, who was compensated for the time she lost. “She also brought back thread for the lace.” Thus the inconveniences of isolated marketing led to turning trade into a special function performed by one person who gathered the wares from many lace-makers. The patriarchal proximity of these women workers one to the other (relatives, neighbours, fellow-villagers, etc.) at first gave rise to attempts at the co-operative organisation of sales, to attempts at entrusting this function to one of the women workers. But money economy at once causes a breach in the age-old patriarchal relations, at once gives rise to the phenomena we noted above when examining the mass-scale data on the differentiation of the peasantry. Production for sale teaches that time is money. It becomes necessary to compensate the intermediary for her lost time and labour; she becomes accustomed to this occupation and begins to make it her profession. “Journeys of this kind, repeated several times, gave rise to the tradeswoman type” (loccit., 30). The woman who has been to Moscow several times establishes the permanent connections which are so necessary for proper marketing. “Thus the need and habit of living on earnings from commission operations develops.” In addition to commission earnings, the tradeswoman “does what she can to advance the price of materials, paper, thread”; she sells the lace above the set price and pockets the difference; the tradeswomen declare that the price received was less than the one agreed on: “take it or leave it,” they say. “The tradeswomen begin . . . to bring goods from the towns and make a considerable profit.” The commission agent thus becomes an independent trader who now begins to monopolise sales and to take advantage of her monopoly to subjugate the lace-makers completely. Usurious operations appear alongside commercial operations—the lending of money to the lace-makers, the taking of goods from them at reduced prices, etc. “The girls . . . pay 10 kopeks per ruble as a commission for sales. . . . They know very well that the tradeswoman makes even more out of them by selling the lace at a higher price. But they simply do not knowhow to arrange things differently. When I suggested that they should take turns in going to Moscow, they replied that this would be worse, because they did not know where to sell the lace, whereas the tradeswoman already knew all the places. She sells the finished lace for them and brings back orders, materials, patterns, etc.; she always gives them money in advance, or on loan, and one can even sell her a piece of lace outright, should the need arise. Thus, on the one hand, the tradeswoman becomes a most needed, indispensable person; on the other, she gradually develops into a person who cruelly exploits the labour of others—a woman kulak” (32). To this it should be added that such types develop from among the small producers themselves: “However many enquiries we made, we found that all the tradeswomen had formerly been lace-makers themselves, and consequently, were familiar with the trade; they came from the ranks of these same lace-makers; they had had no capital to start with, and had only gradually begun to trade in calico and other goods, as they made money out of their commissions” (31).[3] There can, therefore, be no doubt that under commodity economy, not only prosperous industrialists in general, but also, and particularly, representatives of merchant’s capital emerge from among the small producers.[4] And once they have emerged, the elimination of small, scattered marketing by large-scale, wholesale marketing becomes inevitable.[5] Here are a few examples of how marketing is organised by the bigger “handicraft” proprietors who are at the same time buyers-up. The marketing of abacuses by craftsmen of Moscow Gubernia (see the statistics relating to them in our table; Appendix I) is done mainly at fairs all over Russia. To do business oneself at a fair one must have, firstly, a considerable amount of capital, as only wholesale trade is conducted at the fairs; and, secondly, one must have an agent to buy up wares where they are made, and to send them on to the merchant. These requirements are met “by the one merchant-peasant,” who is also a “craftsman,” possesses a considerable amount of capital and engages in finishing the abacuses (i.e., fitting the frames and beads) and marketing them; his six sons are “engaged exclusively in commerce,” so that two persons have to be hired to cultivate the allotment. “It is not surprising,” observes the investigator, “that he is able to sell his wares . . . at all the fairs, whereas the smaller traders usually sell theirs at nearby markets” (Industries of Moscow Gubernia, VII, Pt. I, Sec. 2, p. 141). In this case the representative of merchant’s capital was still so little differentiated from the general mass of “muzhik cultivators” that he even continued to retain his allotment farm and his large patriarchal family. The spectacle-frame makers of Moscow Gubernia are entirely dependent upon the industrialists to whom they sell their wares. These buyers-up are at the same time “craftsmen” possessing their own workshops; they lend raw materials to the poor on condition that the finished articles are delivered to them, the “masters,” etc. The small industrialists made an attempt to sell their wares in Moscow themselves, but failed; it did not pay to sell goods in small quantities amounting to a matter of 10 or 15 rubles (ibid., 263). In the lace industry of Ryazan Gubernia the tradeswomen make profits amounting to 12 to 50% of the lace-makers’ earnings. The “substantial” tradeswomen have established regular-connections with marketing centres and send goods by mail, which saves travelling expenses. How necessary wholesale marketing is can be seen from the fact that the traders consider that even sales amounting to 150 and 200 rubles do not cover marketing expenses (Transactions of the Handicraft Commission, VII, 1184). The marketing of Belyov lace is organised as follows. In the town of Belyov there are three grades of tradeswomen: 1) The distributor, who hands out small orders, makes the round of the lace-makers herself and delivers the finished article to the bigger tradeswomen. 2) The subcontractor, who places orders herself, or buys up goods from the distributors and delivers them to the big cities, etc. 3) The big tradeswomen (2 or 3 “firms”), who do business with commission agents, to whom they send lace and from whom they receive big orders. It is “practically impossible” for the provincial trades women to sell their goods to the big shops: “the shops prefer to do business with the wholesale buyers-up who deliver the wares in big quantities . . . of the most diverse patterns”; the tradeswomen are obliged to sell to these “suppliers”; “it is from them that they learn all the requirements of the market; it is they who fix prices; in short, but for them, there is no way out” (Transactions of the Handicraft Commission, X, pp. 2823-2824). Numerous such examples could be given. But those given are quite sufficient to show how utterly impossible is small, scattered marketing where production is for big markets. In view of the scattered state of the small producers and of their complete differentiation[6] large-scale marketing can only be organised by large capital, which, by virtue of this, reduces the handicraftsmen to a position of utter helplessness and dependence. One can therefore judge how absurd are the current Narodnik theories which recommend helping the “handicraftsmen” by “organising marketing.” From the purely theoretical aspect such theories belong to the category of petty-bourgeois utopias, based on a failure to understand the indissoluble connection between commodity production and capitalist marketing.[7] As for the facts of Russian reality, the authors of such theories simply ignore them: they ignore the scattered state of the small commodity-producers and their utter differentiation; they ignore the fact that it is from their very midst that “buyers-up” have emerged and continue to emerge; that in capitalist society marketing can only be organised by big capital. It is natural that if one leaves out of account all these features of the unpleasant but undoubted reality, it is not difficult to conjure up phantasies[8] ins Blaue hinein.[9]

We are unable here to go into descriptive details showing exactly how merchant’s capital manifests itself in our “handicraft” industries, and how helpless and wretched is the position in which it places the small industrialist. Moreover, in the next chapter we shall have to describe the dominance of merchant’s capital at a higher stage of development, where (as an adjunct of manufacture) it organises capitalist domestic industry on a mass scale. Here let us confine ourselves to indicating the main forms assumed by merchant’s capital in the small industries. The first and simplest form is the purchase of wares by the merchant (or owner of a big workshop) from the small commodity producers. Where buying-up is poorly developed, or where there are numerous competing buyers-up, the sale of goods to the merchant may not differ from any other sale; but in the vast majority of cases the local buyer-up is the only person to whom the peasant can regularly dispose of his wares, and then the buyer-up takes advantage of his monopoly position to force the price he pays to the producer down to rock bottom. The second form of merchant’s capital consists in its combination with usury: the peasant, who is constantly in need of money, borrows it from the buyer-up and repays the debt with his goods. The sale of his goods in this case (which is very widespread) always takes place at artificially reduced prices, which often do not leave the handicraftsman as much as a wage-worker could get. Moreover, the relations of the creditor to the debtor inevitably lead to the personal dependence of the latter, to bondage, to the creditor taking advantage of specific occasions of the debtor’s need, etc. The third form of merchant’s capital is payment for wares with goods, a common practice among village buyers-up. The specific feature of this form is that it is typical not only of the small industries but of absolutely all undeveloped stages of commodity production and capitalism. Only large-scale machine industry, which has socialised labour and broken radically with all patriarchal usages, has eliminated this form of bondage by causing it to be legally prohibited in large industrial establishments. The fourth form of merchant’s capital is payment by the merchant with the particular kinds of goods that are needed by the “handicraftsman” for production (raw or auxiliary materials, etc.). The sale of materials of production to the small industrialist may also be an independent operation of merchant’s capital, quite analogous to the operation of buying-up finished goods. When, however, the buyer-up of finished goods begins to pay for them with the raw materials needed by the “handicraftsman,” this marks a very big step in the development of capitalist relations. Having cut off the small industrialist from the finished-goods market, the buyer-up now cuts him off from the raw-materials market, and thereby brings him completely under his sway. It is only one step from this form to that higher form of merchant’s capital under which the buyer-up directly hands out materials to the “handicraftsmen” to be worked up for a definite payment. The handicraftsman becomes de facto a wage-worker, working at home for the capitalist; the merchant’s capital of the buyer-up is here transformed into industrial capital.[10] Capitalist domestic industry arises. In the small industries it is met with more or less sporadically; its introduction on a mass scale, however, relates to the next and higher stage of capitalist development.


[1] Regarding the significance of trading, merchant’s capital in the development of capitalism in general we would refer the reader to Capital, Vol. III. See especially III, I, S. 253-254 (Russ. trans., 212), on the essence of commodity-trading capital; S. 259 (Russ. trans., 217), on the cheapening of marketing by merchant’s capital, S. 278 279 (Russ. trans., 233-234), on the economic necessity of the phenomenon that “concentration appears earlier historically in the merchant’s business than in the industrial workshop”; S. 308 (Russ. trans., 259) and S. 310-311 (Russ. trans., 260-261), on the historical role of merchant’s capital as necessary “premises for the development of capitalist production.”[11]Lenin

[2] The preconceived viewpoint of the Narodniks, who have idealised the “handicraft” industries and pictured merchant’s capital as a sort of deplorable deviation and not as a necessary accessory to small production for the market is unfortunately reflected in statistical investigations. Thus, we have a number of house-to-house censuses of handicraftsmen (for Moscow, Vladimir and Perm Gubernias) which carefully investigated the business of each small industrialist, but ignored the business of the buyers-up, did not investigate how his capital is built up and what determines its magnitude, what are the sales’ receipts and purchase costs of the buyer-up etc. Cf. our Studies, p. 169 (See present edition, Vol. 2, The Handicraft Census of 1894-95 in Perm Gubernia.—Ed.).—Lenin

[3] The emergence of buyers-up from among the small producers themselves is a common thing noted by investigators almost everywhere as soon as they touch upon this question. See, for example, the same remark about “distributors” in the kid-glove industry (Industries of Moscow Gubernia, Vol. VII, Pt. II, pp. 175-176), about the buyers-up in the Pavlovo industry (Grigoryev, loccit., 92), and many others.—Lenin

[4] Korsak (Forms of Industry ) in his day quite rightly noted the connection between the unprofitableness of small-scale marketing (and of small-scale buying of raw materials) and the “general character of small scattered production” (pp. 23 and 239).—Lenin

[5] Very often the big handicraft proprietors whom we discussed in detail above are also in some measure buyers-up. For instance, the purchase of the wares of small industrialists by big ones is a very widespread practice.—Lenin

[6] Mr. V. V. asserts that the handicraftsman who is under the sway of merchant’s capital “suffers losses that are fundamentally quite superfluous” (Essays on Handicraft Industry, 150). Maybe Mr. V. V. imagines that the differentiation of the small producers is “fundamentally” a “quite superfluous” phenomenon, i.e., fundamentally as regards the commodity economy under which the small producer lives?—Lenin

[7] “It is not a matter of the kulak, but of the shortage of capital among the handicraftsmen,” say the Perm Narodniks (A Sketch of the Condition of Handicraft Industry in Perm Gubernia, p. 8). But what is a kulak if not a handicraftsman with capital? The trouble is just that the Narodniks refuse to investigate the process of differentiation of the small producers which yields entrepreneurs and “kulaks” from their ranks.—Lenin

[8] Among the quasi-economic arguments advanced in support of the Narodnik theories is the one about the small amount of “fixed” and “circulating” capital needed by the “independent handicraftsman.” The line of this extremely widespread argument is as follows: handicraft industries greatly benefit the peasant and therefore should be implanted. (We do not dwell on the amusing notion that the mass of the peasantry which is being steadily ruined can be helped by turning some of their number into small commodity-producers.) And in order to implant these industries one must know how much “capital” the handicraftsman needs to carry on his business. Here is one of numerous calculations of this sort. The Pavlovo handicraftsman, says Mr. Grigoryev for our edification, needs a fixed “capital” of 3 to 5 rubles, 10-13-15 rubles, etc., counting cost of implements, and a circulating “capital” of 6 to 8 rubles, counting weekly expenditure on food and raw materials. “Thus, the amount of the fixed and circulating capital (sic !) in Pavlovo District is so small that it is very easy to acquire the tools and materials needed for independent (sic !!) production” (loccit., 75). And indeed, what could be “easier” than such an argument? With a stroke of the pen the Pavlovo proletarian is turned into a “capitalist”; all that was needed was to call his weekly keep and miserably cheap tools “capital.” But the real capital of the big buyers-up who have monopolised sales, who alone are able to be “independent” de facto, and who handle capital running into the thousands this real capital the author simply passes over! Queer people, indeed, these well-to-do Pavlovians: for generations they have used, and continue to use, every foul means to pile up thousands of rubles of capital, whereas according to the latest discoveries it seems that a “capital” of a few dozen rubles is sufficient to make one “independent”!—Lenin

[9] at random.—Ed.

[10] The pure form of merchant’s capital is the purchase of a commodity in order to sell this same commodity at a profit. The pure form of industrial capital is the purchase of a commodity in order to sell it in worked-up form, hence the purchase of raw materials, etc., and the purchase of labour-power, which processes the material.—Lenin

[11] Karl Marx, Capital, Vol. III, Moscow, 1959, pp. 263-264, 270-271, 290, 319-320, 321-320, 321-322. [p. 361]

VII. “Industry And Agriculture”

Such is the usual heading of special sections in descriptions of peasant industries. In view of the fact that at the initial stage of capitalism which we are examining the industrialist has hardly yet become differentiated from the peasant, his connection with the land is something indeed highly characteristic and requires special examination.

Let us begin with the data given in our table (see Appendix I). To characterise the farms of the “handicraftsmen” there are given here, firstly, data on the average number of horses owned by the industrialists of each grade. By combining the 19 industries for which such data are available we get an all-round average per industrialist (master or petty master) of 1.4 horses, and for the grades: I) 1.1; II) 1.5 and III) 2.0. Thus the higher the proprietor’s position in respect to the size of his industrial establishment, the higher his position as an agriculturist. The biggest industrialists have almost twice as many draught animals as the small ones. But with regard to their farms even the smallest industrialists (grade I) are above the middle peasantry, for the general average for Moscow Gubernia in 1877 was 0.87 horses per peasant household.[1] Thus it is only the relatively prosperous peasants who become master and petty-master industrialists. The poor peasants, on the other hand, do not, in the main, provide master industrialists but worker industrialists (wage-workers employed by “handicraftsmen,” migratory workers, etc.). Unfortunately, for the overwhelming majority of Moscow industries no data are available on the farms of the wage-workers engaged in small industries. An exception is the hat industry (see general data on it in our table, Appendix I). Here are exceedingly instructive data on the farms of master hat-makers and worker hat-makers.Master hat-makers and worker hat-makers.

Thus, the master industrialists belong to the category of very “sound” farmers, i.e., are members of the peasant bourgeoisie, whereas the wage-workers are recruited from the mass of ruined peasants.[2] Still more important for characterising the relations described are the data on the methods by which the master industrialists cultivate their land. The Moscow investigators distinguished three methods of cultivating the soil: 1) by means of the personal labour of the householder; 2) by “hiring,” i.e., by hiring some neighbour who tills the land of the “distressed” householder with his own implements. This method of cultivation is characteristic of the poor peasant who is being steadily ruined. Of opposite significance is the third method, namely, cultivation with the aid of a “labourer,” i.e., the hire of agricultural (“land”) labourers by the farmer. These workers are usually hired for the whole summer; and, particularly in the busy season, the master usually reinforces them with employees from his workshop. “Thus, the method of cultivating the soil with the aid of the ’land’ labourer is quite a profitable one” (Industries of Moscow Gubernia, VI, I, 48). In our table we have assembled the data on this method of cultivation for 16 industries, in 7 of which there are no masters who hire “land labourers.” In all these 16 industries the master industrialists who hire rural labourers constitute 12% of the total, and by grades: I) 4.5%; II) 16.7% and III) 27.3%. The better off the industrialists are, the more often we find rural entrepreneurs among them. The analysis of the data on the industrial peasantry consequently reveals the same picture of parallel differentiation in both industry and agriculture that we observed in Chapter II on the basis of the data on the agricultural peasantry.

The hiring of “land labourers” by “handicraft” masters is very widespread in all the industrial gubernias. We meet, for example, with references to the hiring of agricultural labourers by the rich bast-matting makers of Nizhni-Novgorod Gubernia. The furriers of the same gubernia hire agricultural labourers, who usually come from the purely agricultural surrounding villages. The “village-community peasants of Kimry Volost engaged in the boot industry find it profitable to hire for the cultivation of their fields men and women labourers who come to Kimry in large numbers from Tver Uyezd and neighbouring . . . localities.” The pottery decorators of Kostroma Gubernia send their wage-workers, when not occupied at their regular jobs, to work in the fields.[3] “The independent masters” (metal-beaters of Vladimir Gubernia) “keep special field workers”; that is why their fields are well cultivated, although they themselves “quite often can neither plough nor mow.”[4] In Moscow Gubernia, the hiring of “land labourers” is resorted to by many industrialists apart from those about whom data are given in our table; for example, pin-makers, felt-makers and toy-makers send their workers to jobs in the fields too; the glass-bead-makers, metal-beaters, button makers, cap-makers and harness-makers employ agricultural labourers, etc.[5] The significance of this fact—the hiring of agricultural workers by peasant industrialists—is very great. It shows that even in the small peasant industries the phenomenon characteristic of all capitalist countries is beginning to be manifested, and that goes to confirm the progressive historical role of capitalism, namely, a rise in the standard of living of the population, an increase in its requirements. The industrialist is beginning to look down upon the “raw” agriculturist with his coarse patriarchal manners and is trying to rid himself of the hardest and worst-paid agricultural jobs. In the small industries, in which capitalism is least developed, this is to be observed very slightly as yet; the industrial worker is only just beginning to be differentiated from the agricultural worker. In the succeeding stages of development of capitalist industry this phenomenon, as we shall see, is to be observed on a mass scale.

The importance of the “tie between agriculture and industry” compels us to review in greater detail the data relating to other gubernias besides Moscow.

Nizhni-Novgorod Gubernia. Among the mass of bast-matting makers agriculture is on the decline, and they are neglecting the land; about 1/3 of the winter-crop area and 1/2 of the spring-crop area are “wasteland.” For the “well to-do muzhiks,” however, “the land is no longer a wicked stepmother, but a mother bountiful”: they have enough animals, they have manure, they rent land, they try to keep their strips out of the periodical redistribution and tend them better. “Now the wealthy muzhik has become a landlord while the other muzhik, the poor one, is in serf dependence name=fnp> upon him” (Transactions of the Handicraft Commission, III, 65). The furriers “are bad farmers,” but here too we must single out the bigger proprietors who “rent land from their poor fellow-villagers,” etc. The following is a summary of typical budgets of furriers of different groups:Typical budgets of furriers of different groups.



The parallel process of differentiation of the agriculturists and industrialists stands out here in bold relief. Concerning the blacksmiths, the investigator says that “industry is more important than agriculture” for the rich masters, on the one hand, and for the “landless” labourers, on the other (ibid., IV, 168).

In Industries of Vladimir Gubernia the question of the relation between industry and agriculture is dealt with much more thoroughly than in any other work of investigation. For a whole number of industries precise data are given on the farms, not only of “handicraftsmen” in general (such “average” figures, as is clear from all the aforesaid, are quite fictitious), but of the various grades and groups of “handicraftsmen,” such as: big masters, small masters, wage-workers; workroom owners and weavers; master industrialists and the rest of the peasantry; households engaged in local and in outside industries, etc. The general conclusion drawn by Mr. Kharizomenov from these data is that if the “handicraftsmen” are divided into three categories, viz.—1) big industrialists; 2) small and medium industrialists; 3) wage-workers, there is to be observed a deterioration of agriculture as from the first category to the third, a diminution in the amount of land and animals, an increase in the proportion of “distressed” farms, etc.[8] Unfortunately, Mr. Kharizomenov examined these data too restrictedly and one-sidedly, and paid no attention to the parallel and independent process of the differentiation of the peasant agriculturists. That is why he failed to draw from these data the conclusion that inevitably follows from them, namely, that the peasantry both in agriculture and in industry are splitting up into a petty bourgeoisie and a rural proletariat.[9] That is why, in describing the different industries, he quite often sinks to the traditional Narodnik arguments about the influence of “industry” in general over “agriculture” in general (see, for example, Industries of Vladimir Gubernia, II, 288; III, 91), i.e., to the ignoring of the profound contradictions in the very system of both industry and agriculture, the existence of which he himself was obliged to admit. Another investigator of the industries of Vladimir Gubernia, Mr. V. Prugavin, is a typical spokesman of the Narodnik views on this subject. Here is a sample of his reasoning. The cotton-weaving industry in Pokrov Uyezd “cannot be regarded at all as a harmful factor (sic !!) in the agricultural life of the weavers” (IV, 53). The data testify to the poor farms of the mass of weavers, and to the fact that among the workroom owners, farming is conducted at a level far above the general (ibid.); from the tables it is evident that some workroom owners hire agricultural labourers too. Conclusion: “industry and agriculture march hand in hand, conditioning each other’s development and prosperity” (60). A fine specimen of the phrases used to obscure the fact that the development and prosperity of the peasant bourgeoisie go hand in hand both in industry and in agriculture.[10]

The data of the Perm handicraft census of 1894-95 revealed the same thing: it is among the small commodity-producers (masters and petty masters) that the level of agriculture is highest and rural labourers are met with; among the artisans agriculture is on a lower level, while among the craftsmen who work for buyers-up the condition of agriculture is worst (as to the agriculture of the wage-workers and of various groups of masters, no data, unfortunate]y, have been gathered). The census also revealed that the “handicraftsmen” who do not engage in agriculture differ from those who do in that 1) their labour productivity is higher, 2) their net incomes from industry are incomparably higher, and 3) their level of culture and literacy is higher. All these are evidences which confirm the conclusion drawn above, namely, that even the initial stage of capitalism manifests the tendency of industry to raise the population’s standard of living (see Studies, p. 138 and foll.).[11]

Lastly, the following point is connected with the question of the relation of industry to agriculture. The larger establishments usually have a longer working period. For example, in the furniture industry of Moscow Gubernia, the working period of those working in plain wood equals 8 months (the average workshop staff here is 1.9 workers); for the bent-wood establishments it is 10 months (2.9 workers per establishment), and in the heavy-furniture trade it is 11 months (4.2 workers per establishment). In the shoe industry of Vladimir Gubernia the working period in 14 small workshops equals 40 weeks, and that in 8 large ones (9.5 workers per establishment, as against 2.4 in the small workshops) 48 weeks, etc.[12] Naturally, this fact is connected with the large number of workers (family, hired industrial and hired agricultural) in the big establishments and explains the great stability of these establishments and their tendency to specialise in industrial activities.

Let us now sum up the data given above on “industry and agriculture.” It is usual at the lower stage of capitalism which we are reviewing for the industrialist still to be scarcely differentiated from the peasant. The combination of industry with agriculture plays an extremely important part in aggravating and accentuating the differentiation of the peasantry: the prosperous and the well-off peasants open workshops, hire workers from among the rural proletariat, and accumulate money for commercial and usurious transactions. The peasant poor, on the other hand, provide the wage-workers, the handicraftsmen who work for buyers-up, and the bottom groups of petty-master handicraftsmen, those most crushed by the power of merchant’s capital. Thus, the combination of industry with agriculture consolidates and develops capitalist relations, spreading them from industry to agriculture and vice versa.[13] That characteristic feature of capitalist society, the separation of industry from agriculture, manifests itself at this stage in the most rudimentary form, but it does manifest itself and—what is particularly important—in a way totally different from what the Narodniks imagine. When the Narodnik says that industry does no “damage” to agriculture, he discerns damage in the abandonment of agriculture for profitable industry. But such a notion is an invention (and not a deduction from the facts), and a bad invention at that, for it ignores the contradictions which permeate the entire economic system of the peasantry. The separation of industry from agriculture takes place in connection with the differentiation of the peasantry, and does so by different paths at the two poles of the countryside: the well-to-do minority open industrial establishments, enlarge them, improve their farming methods, hire farm labourers to till the land, devote an increasing part of the year to industry, and—at a certain stage of the development of the industry—find it more convenient to separate their industrial from their agricultural undertakings, i.e., to hand over the farm to other members of the family, or to sell farm buildings, animals, etc., and adopt the status of burghers, of merchants.[14] The separation of industry from agriculture is preceded in this case by the formation of entrepreneur relations in agriculture. At the other pole of the countryside the separation of industry from agriculture consists in the fact that the poor peasants are being ruined and turned into wage-workers (industrial and agricultural). At this pole of the countryside it is not the profitableness of industry, but need and ruin, that compels the peasant to abandon the land, and not only the land but also independent industrial labour; here the process of the separation of industry from agriculture is one of the expropriation of the small producer.


[1] See Combined Statistical Material on the Economic Position of the Rural Population, published by the Committee of Ministers, Appendix I: Data of Zemstvo house-to-house investigations, pp. 372-373.—Lenin

[2] It is characteristic that the author of the description of the hat industry “did not observe” even here the differentiation of the peasantry both in agriculture and in industry. Like all Narodniks, he limited himself in his conclusions to the absolutely vapid banality that “industry does not prevent one from engaging in agriculture” (Industries of Moscow Gubernia, VI, I, p. 231) The social and economic contradictions both in the system of industry and in the system of agriculture were thus safely passed over.—Lenin

[3] Transactions of the Handicraft Commission, III, 57, 112; VIII, 1354; IX, 1931, 2093, 2185.—Lenin

[4] Industries of Vladimir Gubernia, III, 187, 190.—Lenin

[5] Industries of Moscow Gubernialoccit.—Lenin

[6] Transactions of the Handicraft Commission, III, 38, and foll. The figures are approximate and have been arrived at on the author’s estimate as to how long the family’s own grain suffices.—Lenin

[7] “*” DUPLICATE (see above footnote).

[8] See Yuridichesky Vestnik [The Legal Messenger ], 1883, Vol. XIV, Nos. 11 and 12.—Lenin

[9] How near Mr. Kharizomonov was to drawing such a conclusion may be seen from the following description of post-Reform economic development which he gives in speaking of the silk trade: “Serfdom evened out the economic level of the peasantry: it tied the hands of the rich peasant, sustained the poor peasant and prevented the family division of property. Natural economy narrowed too much the arena for commercial and industrial activity. The local market did not provide sufficiently wide scope for enterprise. The peasant merchant or industrialist accumulated money—without risk, it is true, but very slowly—accumulated it and put it away in his chest. Beginning with the 60s conditions change. Serfdom comes to an and, credit and the railways, by creating an extensive and distant market, provide scope for the enterprising peasant merchant and industrialist. All those who have been above the average economic level quickly get on their feet, develop trade and industry and extend their exploiting activities quantitatively and qualitatively. All those who have been below that level fall, sink, drop into the ranks of the landless, the non-farming, the horseless. The peasantry split up into the groups of kulaks, semi-prosperous peasants and farmless proletariat. The kulak element of the peasantry rapidly copy all the habits of a cultured milieu;name=p374> they live in grand style, and from them a huge class is formed of the semi-cultured sections of Russian society” (III, 20, 21).[15]Lenin

[10] Mr. V. V. confines himself to the same sort of phrases in dealing with this subject in Chapter VIII of his Essays on Handicraft Industry. “Farming . . . is sustained by industry” (205). “Handicraft industries are one of the most reliable mainstays of agriculture in the industrial gubernias” (219). Proof? Any amount: take, for example, the master tanners, starch-makers, oil-millers (ibid., 224), etc, and you will find that their farming is on a higher level than that of the masses!—Lenin

[11] See present edition, Vol. 2, The Handicraft Census of 1894-95 in Perm Gubernia.—Ed.

[12] Sources are indicated above. The same thing is revealed by the household censuses of the basket-makers, guitar-makers and starch-makers in Moscow Gubernia. The Perm handicraft census also mentions the longer working period of the large workshops (see Sketch of Handicraft Industry in Perm Gubernia, p. 78. No precise data, unfortunately, are given).—Lenin

[13] For instance, in the woollen trade of Vladimir Gubernia the big “factory owners” and subcontractors are distinguished by the fact of their farming being on the highest level. “During periods of stagnation in production the subcontractors try to buy estates, to engage in farming, and to give up industry altogether” (Industries of Vladimir Gubernia, II, 131). This instance is worth noting, since facts of this kind sometimes lead the Narodniks to conclude that “the peasants are going back to agriculture,” that the “exiles from the soil must be restored to the land” (Mr. V. V. in Vestnik Yevropy, No. 7, 1884).—Lenin

[14] “The peasants explained that latterly some of the prosperous master industrialists had moved to Moscow to carry on their business.” The Brush Industry According to the Investigation of 1895, p. 5.—Lenin

[15] Industries of Vladimir Gubernia, Vol. III, an investigation by S. Kharizomenov, Moscow, 1882, pp. 20-21. [p. 374]

VIII. “The Combination Of Industry With Agriculture”

Such is the favourite Narodnik formula with the aid of which Messrs. V. V., N.-on and Co. hope to solve the problem of capitalism in Russia. “Capitalism” separates industry from agriculture; “people’s production” combines them in the typical and normal peasant farm—in this ingenuous contra-position lies a good part of their theory. We are now in a position to sum up as regards the question of how in reality our peasantry “combine industry with agriculture,” since a detailed examination has been made above of the typical relations existing among the agricultural and among the industrial peasantry. Let us enumerate the diverse forms of the “combination of industry with agriculture” to be observed in the economics of Russian peasant farming.

1) Patriarchal (natural) agriculture is combined with domestic industries (i.e., with the working up of raw materials for home consumption) and with corvée service for the landowner.

This form of combining peasant “industries” with agriculture is most typical of the medieval economic regime, of which it is an essential component.[1] In post-Reform Russia all that is left of such patriarchal economy—in which there is as yet absolutely no capitalism, commodity production, or commodity circulation—is vestiges in the shape of the domestic industries of the peasants and labour-service.

2) Patriarchal agriculture is combined with industry in the form of artisan production.

This form of combination is still very close to the preceding one, differing from it only in that here commodity circulation manifests itself—when the artisan is paid in money and appears on the market to purchase tools, raw materials, etc.

3) Patriarchal agriculture is combined with the small-scale production of industrial products for the market, i.e., with commodity production in industry. The patriarchal peasant is transformed into a small commodity-producer, who, as we have shown, tends to the employment of wage-labour, i.e., to capitalist production. A condition for this transformation is now a certain degree of differentiation among the peasantry: we have seen that the small masters and petty masters in industry belong, in the majority of cases, to the prosperous or to the well-off group of peasants. In its turn, the development of small commodity production in industry gives a further impetus to the differentiation of the peasant agriculturists.

4) Patriarchal agriculture is combined with work for hire in industry (and also in agriculture).[2]

This form is a necessary addition to the preceding one: there it is the product that becomes a commodity, here it is labour-power. Small-scale commodity production in industry is necessarily accompanied, as we have seen, by the appearance of wage-workers and of handicraftsmen who work for buyers-up. This form of the “combination of agriculture with industry” is characteristic of all capitalist countries, and one of the most striking features of the post-Reform history of Russia is the extremely rapid and extremely wide incidence of this form.

5) Petty-bourgeois (commercial) agriculture is combined with petty-bourgeois industries (small commodity production in industry, petty trade, etc.).

The difference between this form and the third is that here petty-bourgeois relations embrace not only industry but also agriculture. Being the most typical form of the combination of industry with agriculture in the economy of the small rural bourgeoisie, this form is therefore characteristic of all capitalist countries. The honour of discovering a capitalism without a petty bourgeoisie fell to the Russian Narodnik economists alone.

6) Wage-labour in agriculture is combined with wage-labour in industry. We have already discussed how such a combination of industry and agriculture manifests itself and what it signifies.

Thus, the forms of the “combination of agriculture with industry” among our peasantry are extremely varied: there are those which express the most primitive economic system with the dominance of natural economy; there are those which express a high development of capitalism; there are a whole number of transitional stages between the former and the latter. By confining oneself to general formulas such as: the “combination of industry with agriculture,” or the “separation of industry from agriculture”), one can not advance a single step in explaining the actual process of development of capitalism.


[1] Korsak, in Chapter IV of the book mentioned above, cites historical evidence of the following nature, for example: “the abbot gave out (in the village) flax for spinning”; the peasants were bound to yield to the landowner “work or wares,”—Lenin

[2] As has been shown above, such confusion of terminology prevails in our economic literature and economic statistics that the category peasants’ “industries” is used to cover domestic industry, labour-service, handicrafts, small commodity production, trading, work for hire in industry, work for hire in agriculture, etc. Here is an example of how the Narodniks take advantage of this confusion. Mr. V. V., singing the praises of the “combination of industry with agriculture,” points, in illustration, to the “timber industry” and “unskilled labour”: “He (the peasant) is strong and accustomed to hard work; that is why he can do all kinds of unskilled labour” (Essays on Handicraft Industry, 26). And this sort of fact figures among a heap of others to back the conclusion that: “We observe a protest against the splitting-up of occupations,” “the durability of the organisation of production that arose when natural economy still predominated” (41). Thus, even the conversion of the peasant into a lumberworker and unskilled labourer was passed off, among other things, as evidence of the durability of natural economy!—Lenin

IX. Some Remarks on the Pre-Capitalist Economy of Our Countryside

The essence of the problem of “the destiny of capitalism in Russia” is often presented as though prime importance attaches to the question: how fast ? (i.e., how fast is capitalism developing?). Actually, however, far greater importance attaches to the question: how exactly ? and to the question: where from ? (i.e., what was the nature of the pre-capitalist economic system in Russia?). The principal errors of Narodnik economics are the false replies given to precisely these two questions, i.e., in a wrong presentation of exactly how capitalism is developing in Russia, in a false idealisation of the pre-capitalist order. In Chapter II (and partly in Chapter III) and in the present one we have examined the most primitive stages of capitalism in small-scale agriculture and in the small peasant industries; in doing so we could not avoid many references to the features of the pre-capitalist order. If we now try to summarise these features we shall arrive at the conclusion that the pre-capitalist countryside constituted (from the economic point of view) a network of small local markets which linked up tiny groups of small producerssevered from each other by their separate farmsby the innumerable medieval barriers between them, and by the remnants of medieval dependence.

As to the scattered nature of the small producers, it stands out in boldest relief in their differentiation both in agriculture and in industry, which we established above. But their fragmentation is far from being confined to this. Although united by the village community into tiny administrative, fiscal and land-holding associations, the peasants are split up by a mass of diverse divisions into grades, into categories according to size of allotment, amount of payments, etc. Let us take, for example, the Zemstvo statistical returns for Saratov Gubernia; there the peasants are divided into the following grades: gift-land, owner, full owner and state peasants, state peasants with community holdings, state peasants with quarter holdings,[1] state peasants that formerly belonged to landlords, appanage, state-land tenant, and landless peasants, owners who were formerly landlords’ peasants, peasants whose farmsteads have been redeemed, owners who are former appanage peasants, colonist freeholder, settler, gift-land peasants who formerly belonged to landlords, owners who were former state peasants, manumitted, those who did not pay quitrent, free tiller,[2] temporarily bound, former factory-bound, etc.; further, there are registered peasants, migrant, etc. All these grades differ in the history of their agrarian relations, in size of allotments, amount of payments, etc., etc. And within the grades there are innumerable differences of a similar kind: sometimes even the peasants of one and the same village are divided into two quite distinct categories: “Mr. X’s former peasants” and “Mrs. Y’s former peasants.” All this diversity was natural and necessary in the Middle Ages, in the remote past; at the present time, however, the preservation of the social-estate exclusiveness of the peasant communities is a crying anachronism and greatly worsens the conditions of the toiling masses, while at the same time not in the least safeguarding them against the burdens of the new, capitalist era. The Narodniks usually shut their eyes to this fragmentation, and when the Marxists express the view that the splitting up of the peasantry is progressive, the Narodniks confine themselves to hackneyed outcries against “supporters of land dispossession,” thereby covering up the utter fallacy of their views about the pre-capitalist countryside. One has only to picture to oneself the amazing fragmentation of the small producers, an inevitable consequence of patriarchal agriculture, to become convinced of the progressiveness of capitalism, which is shattering to the very foundations the ancient forms of economy and life, with their age-old immobility and routine, destroying the settled life of the peasants who vegetated behind their medieval partitions, and creating new social classes striving of necessity towards contact, unification, and active participation in the whole of the economic (and not only economic) life of the country, and of the whole world.

If we take the peasants who are handicraftsmen or small industrialists we shall find the same thing. Their interests do not transcend the bounds of the small area of surrounding villages. Owing to the insignificant area covered by the local market they do not come into contact with the industrialists of other districts; they are in mortal terror of “competition,” which ruthlessly destroys the patriarchal paradise of the small handicraftsmen and industrialists, who live lives of stagnant routine undisturbed by anybody or anything. With respect to these small industrialists, competition and capitalism perform a useful historical function by dragging them out of their backwoods and confronting them with all the issues that already face the more developed strata of the population.

A necessary attribute of the small local markets is, apart from primitive forms of artisan production, primitive forms of merchant’s and usury capital. The more remote a village is, the further away it is from the influence of the new capitalist order, from railways, big factories and large-scale capitalist agriculture, the greater the monopoly of the local merchants and usurers, the more they subjugate the surrounding peasantry, and the cruder the forms of this subjugation. The number of these small leeches is enormous (when compared with the meagre produce of the peasants), and there is a rich variety of local names to designate them. Recall all these “prasols,” “shibais,” “shchetinniks,” “mayaks,” “ivashes,” “bulinyas,” etc., etc. The predominance of natural economy, which accounts for the scarcity and dearness of money in the countryside, results in the assumption of an importance by all these “kulaks” out of all proportion to the size of their capital. The dependence of the peasants on the money owners inevitably acquires the form of bondage. Just as one cannot conceive of developed capitalism without large-scale merchant’s capital in the form of commodities or money so the pre-capitalist village is inconceivable without small traders and buyers-up, who are the “masters” of the small local markets. Capitalism draws these markets together, combines them into a big national market, and then into a world market, destroys the primitive forms of bondage and personal dependence, develops in depth and in breadth the contradictions which in a rudimentary form are also to be observed among the community peasantry—and thus paves the way for their resolution.


[1] State peasants with quarter holdings – the name given in tsarist Russia to the category of former state peasants, descendants of lower-rank servicemen who in the 16th to 17th centuries were settled in the border lands of the state of Muscovy. For their services in guarding the state frontiers the settlers (Cossacks musketeers, soldiers) were given the use of small plots of land either temporarily or in perpetuity. The area of such a plot amounted to a so-called quarter [1.35 acres]. From the year 1719 such settlers were called odnodvortsi [i.e., those possessing only their own farmsteads and no community land]. Formerly they enjoyed various kinds of privileges and had the right to own peasants, but during the 19th century were gradually deprived of these rights and reduced to the status of ordinary peasants. By a regulation of 1866 the quarter lots were recognised as the private property of the former quarter-lot peasants and their descendants. [p.381]

[2] Free tillers – the category of peasants freed from serf dependence by the law of February 20, 1803. This law permitted landlords themselves to decide the terms on which they freed the peasants from the land. [p.381]