Development of Capitalism in Russia, The

(subtitled “The Process of the Formation of a Home Market for Large-scale Industry”), a work by V. I. Lenin on the economic and social-class structure of Russia in the last third of the 19th century. Published at the end of March 1899 under the pseudonym Vladimir Il’in, The Development of Capitalism in Russia is included in the fifth Russian edition of Lenin’s works (Poln. sobr. soch., vol. 3).

Lenin began writing the book in prison in 1896. (He had been arrested because of his involvement with the St. Petersburg League of Struggle for the Emancipation of the Working Class.) He finished the book at the end of January 1899 in the village of Shushenskoe, where he was living in exile. The Development of Capitalism in Russia summarizes the cycle of works written by Lenin during the 1890’s. Lenin drew a number of very important theoretical and practical conclusions from extensive sources and information on the Russian economy. Approximately 600 works are cited. The Development of Capitalism in Russia may be considered the continuation of research on the Russian economy begun by K. Marx in the 1870’s and early 1880’s but left incomplete at his death. Marx’ aim was to apply the economic theory elaborated in Das Kapital specifically to countries that differed fundamentally from Great Britain, the classic example of a capitalist country.

The Development of Capitalism in Russia was a major contribution to Marxist economic theory. On the one hand, it was directed against legal Marxism. On the other hand, it completed the ideological defeat of Narodnichestvo (Populism), which had been the chief obstacle in the 1880’s and 1890’s to the spread of revolutionary Marxism in Russia and to the founding of a Marxist party. The focal point of the struggle against the Narodniks (Populists) was the question of the destiny of capitalism in Russia. Responses to that question shaped attitudes toward the prospects for a proletarian revolution in Russia—that is, attitudes toward the possibility that the industrial workers would sweep the peasantry into a socialist revolution. (According to the 1897 census, the peasantry constituted 78 percent of the population of Russia.)

Chapter 1 of The Development of Capitalism in Russia criticizes the theoretical errors of liberal Narodniks such as V. P. Vorontsov (V. V.) and N. F. Daniel’son (Nikolai-on), who assumed that without foreign markets, the surplus value embodied in commodities cannot be realized (that is, the commodities cannot be sold). Consequently, the liberal Narodniks concluded that capitalism could not develop in Russia, which had no foreign markets.

Drawing on Marx’ economic doctrines, Lenin showed that the separation of industry from agriculture and the separation of manufacturing from extractive industry leads to the development of exchange and to an increase in the capacity of the home market, since each branch of production acts as a market for the others. Lenin demonstrated that the ruin of the small-scale commodity producers leads not to the contraction of the home market but to its expansion. Forced to make a living by selling their labor power, the rural proletarians have to purchase the basic means of subsistence. The rural bourgeoisie provides capitalism with a home market for the means of production and for consumer goods.

Chapter 2 describes the capitalist evolution of agriculture in postreform Russia. Lenin used the extensive data provided by zemstvo statistics compiled in the 1880’s and 1890’s on peasant budgets and on the distribution of land, cattle, and the instruments of production among the various strata of the peasantry. Based on this data, he drew important theoretical conclusions concerning the disintegration of the peasantry as a class and its differentiation into various class groups. Using the aggregate data for the entire Russian peasantry, Lenin showed that the peasantry was being forced off the land “by absolutely new types of rural inhabitants…. These types are the rural bourgeoisie (chiefly petite bourgeoisie) and the rural proletariat—a class of commodity producers in agriculture and a class of agricultural wage workers” (Poln. sobr. soch., 5th ed., vol. 3, p. 166). At the same time, Lenin provided a model of the Marxist method of elaborating and analyzing statistical material, and he criticized the Narodnik method of deducing “average” indexes of holdings in land, cattle and the implements of labor. Lenin showed that by using “average” statistics, the Narodniks distorted the real situation in the countryside, failed to comment on the contradictions of Russian capitalism, and obfuscated the process of the disintegration of the peasantry, which promotes the growth of the home market.

In his conclusion to Chapter 2, Lenin gives a scientific explanation of the reasons for the disintegration of the peasantry: the contradictions of commodity production based on private property, competition between commodity producers, and the struggle for economic independence. Under these conditions, the economic law of value—the law of the development of all commodity production—operates spontaneously. Under certain historical conditions commodity production is transformed into capitalist commodity production, and labor power becomes a commodity. Lenin singled out two stages in the historical development of capitalism and consequently in the development of the home market: the transformation of a subsistence economy into a commodity economy and the transformation of a commodity economy into a captialist economy. The transition from a subsistence to a capitalist economy takes place throughout both stages. There is no gulf between the two types of economies. Under specific conditions the subsistence economy makes a regular transition to a capitalist economy.

Chapter 3 of The Development of Capitalism in Russia reveals the process of the gradual transition from a landlords’ economy to a capitalist economy. It points out a peculiarity of the development of capitalism in Russian agriculture—the strength of the vestiges of serfdom, which survived in the system of labor service (corvée), in the redemption payments, and in the onerous terms for renting land. The vestiges of serfdom retarded the development of capitalism in Russia. Lenin also showed that the ruin of the peasantry, especially the poor peasantry, was the source of its revolutionary spirit and deeply rooted interest in the elimination of the large landed estates.

Chapter 4 provides a general picture of the growth of capitalism in agriculture (for example, commercial land cultivation, livestock raising, and the cultivation and processing of industrial crops). Consequently, this chapter also describes the expansion of the home market for capitalism.

Chapters 5-7 deal with the stages of the development of capitalism in industry: simple capitalist cooperation, manufacture, and large-scale machine industry. Lenin viewed small-scale commodity production, which existed in Russia in the form of various handicrafts, as the initial stage of the development of capitalism in industry. He used extensive statistical materials to show the development of capitalist relations, which leads to class differentiation—that is, to the emergence of small-scale capitalists in industry, on the one hand, and proletarians and semiproletarians, on the other. He noted the rise of large-scale industry in the most important regions of the country and in all sectors of the economy, and he pointed out the growth of cities, industrial centers, and the proletariat. Lenin came to the general conclusion that capitalism had already become “the main background of the economic life of Russia” (ibid., vol. 1, p. 105). A specific feature of the Russian economy was the coexistence of all three stages of the development of capitalism in industry. Drawing on his research, Lenin again confirmed that Russia was going through the process of capitalist development, the general tendencies of which coincided with those described by Marx. This assertion was decisive in refuting the Narodnik doctrine.

In the concluding (eighth) chapter, Lenin summarized all his data on the intensive and extensive growth of capitalism in Russia, revealing all aspects of the progressive role of capitalism, as opposed to feudalism—a role denied by the Narodniks. At the same time, Lenin also described the deep, antagonistic contradictions in capitalist progress—phenomena denied by the legal Marxists. He showed how the contradictions in capitalism were manifested in the rising class struggle of the proletariat against the bourgeoisie and in the increasing organization and consolidation of the proletariat as the gravedigger of capitalism.

In the second edition of The Development of Capitalism in Russia, which was published in 1908, Lenin provided a more detailed description of the class composition of the Russian population, drawing on the results of the first population census in 1897. Of a total population of 125.6 million, approximately 3 million were landlords or members of the big bourgeoisie; 23.1 million were well-to-do, small-scale landowners; 35.8 million were very poor small-scale landowners; and 22 million were members of the proletariat. The proletarians and semiproletarians accounted for 63.7 million of Russia’s inhabitants. These figures, which summarized the results of Lenin’s extensive study of economic realities in Russia, had decisive significance in clarifying the direction of the revolutionary movement. Contrary to the Narodniks’ calculations, which indicated that the proletariat constituted slightly more than 1 percent of the population, the proletariat was not a weak, numerically small mass, lost in a vast sea of peasants. The proletariat was an impressive social force, constituting, together with the semiproletarians, more than 50 percent of the population. Contrary to the assertions of the Narodniks, Russia had, in addition to a working class (advanced industrial workers), not a homogeneous peasantry but rather a mass of millions of rural proletarians and semiproletarians, who were subjected to particularly harsh exploitation owing to the continued existence of precapitalist production relations.

These facts provided the foundation for a conclusion concerning the revolutionary potential of the Russian peasantry—a conclusion that was very important in determining the direction of the proletarian revolution under specific conditions in Russia. The working class was the leading force not only in the socialist revolution but also in the bourgeois democratic revolution. This conclusion was fully confirmed during the Revolution of 1905-07 in Russia. In 1907, Lenin wrote in the Preface to the second edition of The Development of Capitalism in Russia: “The leading role of the proletariat has been fully revealed. It has also been revealed that the strength of the proletariat in the process of history is immeasurably greater than its share of the total population” (ibid., vol. 3, p. 13).

In The Development of Capitalism in Russia, Lenin provided an economic explanation of the necessity for an alliance of the working class and the peasantry under the leadership of the working class in the bourgeois democratic revolution and for an alliance of the working class with the poorest peasants in the proletarian revolution. He had proposed these ideas for the first time in What the “Friends of the People” Are and How They Fight the Social Democrats. Lenin’s The Development of Capitalism in Russia demonstrated the inevitability of revolution in Russia and revealed the driving forces behind the revolution. The book is historically significant because it armed the Marxist party with a knowledge of the specific features of the laws of economic development in Russia and with a scientific understanding of the role of the proletariat and peasantry in the struggle against the autocracy and capitalism.

In the article “Uncritical Criticism” (1900), Lenin replied to criticisms of his book by Russian and Western European revisionists, followers of E. Bernstein.

Under contemporary conditions, the basic propositions and conclusions in Lenin’s The Development of Capitalism in Russia are of significance not only for the developed capitalist countries, where the processes of the class differentiation of the peasantry have become more intense, but also for the majority of developing countries, where the peasantry and semiproletarians have assumed an increasingly active role in the national liberation struggle. From the standpoint of methodology, the book is very important for the analysis of economic and social phenomena.

Between 1917 and 1973, Lenin’s The Development of Capitalism in Russia was printed 75 times (a total of 3.4 million copies) in 20 of the languages of the peoples of the USSR and in ten foreign languages.