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of articles to the order of a consumer.[*] 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,** and are even to be found in official factory statistics.*** The Zemstvo statistical returns, in registering peasant industries, sometimes single out a special group, "artisans" (cf. Rudnev, loc. cit.), but this category (according

 
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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.[*] 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

 
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labour does not appear in the market, hardly ever leaving the sphere of peasant natural economy.[*] 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.

    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.** 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,[*] 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."[*] 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.** 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."[*] 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."[**]

    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.***

    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.*

    Let us pass to the facts that express the second of the above-mentioned processes. We shall first say that although

 
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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.[*] 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.[**] 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."[***] 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 deve]opment (as regards the number of villages involved in industry, the number of industrialists, and the total output) of the following exceptionally important

indudtries: 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,[120] 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.[*] 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."[**] A similar view is expressed by Moscow statisticians.[***] We can support this view with statistics regarding the date of origin of 523 handicraft establishments in 10 industries of Moscow Gubernia.[****]

    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."[*] 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.[**] 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.[*] 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.[**] 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.[*]

    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 tbe 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.** The handicraft house-to-house censuses that we need for such an analysis are available for Moscow Gubernia.*** 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.,

 
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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,[*] 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).

 
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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.[*] 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 overwhelm-

 
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ing 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.[*] 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.[*] 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.[*]

 
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    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[121] 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.*

 
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    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 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).[122]

    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

 
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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,"[123] 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.[*] 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

 
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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 simp]e 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

 
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the handicraft-like beginnings of manufacture. . ." (Das Kapital, I², 344-345).[125]

    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.* 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

 
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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[*]) 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.

    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, tbe existence of economic conflict and strife among them.

 
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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.* 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

 
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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.[*]

    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

 
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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" (loc. cit., 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 know how to arrange things differently. When

 
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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).* 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.** And once they have emerged, the elimination of small, scattered marketing by large-scale, wholesale marketing becomes inevitable.*** 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

 
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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* 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.** 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* ins Blaue hinein.[**]

    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 mer-

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.[*] 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.

    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.** 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.

 
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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.* "The independent masters" (metal-beaters of Vladimir Gubernia) "keep special field workers";

 
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that is why their fields are well cultivated, although they themselves "quite often can neither plough nor mow."[*] 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.[**] 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