Section 2, Chapter 19 : Historical Exposition of the Problem: Vorontsov and His ‘surplus’

THE representatives of Russian ‘populism’ were convinced that capitalism had no future in Russia, and this conviction brought them to the problem of capitalist reproduction. V.V. laid down his theories on this point in a series of articles in the review Patriotic Memoirs and in other periodicals which were collected and published in 1882 under the title The Destiny of Capitalism in Russia. He further dealt with the problem in The Commodity Surplus in the Supply of the Market,⁽¹⁾Militarism and Capitalism,⁽²⁾Our Trends,⁽³⁾ and finally in Outlines of Economic Theory.⁽⁴⁾ It is not easy to determine Vorontsov’s attitude towards capitalist development in Russia. He sided neither with the purely slavophil theory which deduced the perversity and perniciousness of capitalism for Russia from the ‘peculiarities’ of the Russian economic structure and a specifically Russian ‘national character’, nor with the Marxists who saw in capitalist development an unavoidable historical stage which is needed to clear the way towards social progress for Russian society, too. Vorontsov for his part simply asserts that denunciation and acclamation of capitalism are equally futile because, having no roots in Russia, capitalism is just impossible there and can have no future. The essential conditions of capitalist development are lacking in Russia, and love’s labor’s lost if the state tries to promote it artificially – one might as well spare these efforts together with the heavy sacrifices they entail. But if we look into the matter more closely, Vorontsov’s thesis is not nearly so uncompromising. For if we pay attention to the fact that capitalism does not mean only the accumulation of capital wealth but also that the small producer is reduced to the proletarian level, that the laborer’s livelihood is not assured and that there are periodical crises, then Vorontsov would by no means deny that all these phenomena exist in Russia. On the contrary, he explicitly says in his preface to The Destiny of Capitalism in Russia: ‘Whilst I dispute the possibility of capitalism as a form of production in Russia, I do not intend to commit myself in any way as to its future as a form or degree of exploiting the national resources.’

Vorontsov consequently is of the opinion that capitalism in Russia merely cannot attain the same degree of maturity as in the West, whereas the severance of the immediate producer from the means of production might well be expected under Russian conditions. Vorontsov goes even further: he does not dispute at all that a development of the capitalist mode of production is quite possible in various branches of production, and even allows for capitalist exports from Russia to foreign markets. Indeed he says in his essay on The Commodity surplus in the Supply of the Market that ‘in several branches of industry, capitalist production develops very quickly’⁽⁵⁾ [in the Russian meaning of the term, of course – R.L.].

‘It is most probable that Russia, just like any other country, enjoys certain natural advantages which enable her to act as a supplier of certain kinds of commodities on foreign markets. It is extremely possible that capital can profit by this fact and lay hands upon the branches of production concerned – that is to say the (inter)national division of labor will make it easy for our capitalists to gain a foothold in certain branches. This, however, is not the point. We do not speak of a merely incidental participation of capital in the industrial organization of the country, but ask whether it is likely that the entire production of Russia can be put on a capitalist basis.’⁽⁶⁾

Put in this form, Vorontsov’s skepticism looks quite different from what might have been expected at first. He doubts whether the capitalist mode of production could ever gain possession of the entire production in Russia; but then, capitalism has not so far accomplished this feat in any country of the world, not even in England. Such a brand of skepticism as to the future of capitalism appears at a glance quite international in outlook. And indeed, Vorontsov’s theory here amounts to a quite general reflection on the nature and the essential conditions of capitalism; it is based upon a general theoretical approach to the productive process of social capital as a whole. Vorontsov gives the following very clear formulation of the specific relations between the capitalist mode of production and the problem of markets:

‘The (inter)national division of labor, the distribution of all branches of industry among the countries taking part in international commerce, is quite independent of capitalism.

‘The market which thus comes into being, the demand for the products of different countries resulting from such a division of labor among the nations, has intrinsically nothing in common with the market required by the capitalist mode of production ... The products of capitalist industry come on the market for another purpose; the question whether all the needs of the country are satisfied is irrelevant to them, and the entrepreneur does not necessarily receive in their stead another material product which may, be consumed. Their main purpose is to realize the surplus value they contain. What, then, is this surplus value that it should interest the capitalist for its own sake? From our point of view, it is the surplus of production over consumption inside the country. Every worker produces more than he himself can consume, and all the surplus items accumulate in a few hands; their owners themselves consume them, exchanging them for the purpose against the most variegated kinds of necessities and luxuries. Yet eat, drink and dance as much as they like – they will not be able to squander the whole of the surplus value: a considerable remnant will be left over, of which they have to dispose somehow even though they cannot exchange it for other products. They must convert it into money, since it would otherwise just go bad. Since there is no one inside the country on whom the capitalists could foist this remnant, it must be exported abroad, and that is why foreign markets are indispensable to countries embarking on the capitalist venture.’⁽⁷⁾

The above is a literal translation, showing all the peculiarities of Vorontsov’s diction, that the reader may have a taste of this brilliant Russian theorist with whom one can spend moments of sheer delight.

Later, in 1895, Vorontsov summarized the same views in his book Outlines of Economic Theory now claiming our attention. Here he takes a stand against the views of Say and Ricardo, and in particular also against John Stuart Mill who denied the possibility of general over-production. In the course of his argument he discovers something no one had known before: he has laid bare the source of all errors the classical school made about the problem of crises. This mistake lies in a fallacious theory of the costs of production to which bourgeois economists are addicted. No doubt, from the aspect of the costs of production (which according to Vorontsov's equally unheard-of assumption do not comprise profits), both profit and crises are unthinkable and inexplicable. But we can only appreciate this original thought to the full in the author’s own words:

‘According to the doctrine of bourgeois economists, the value of a product is determined by the labor employed in its manufacture. Yet bourgeois economists, once they have given this determination of value, immediately forget it and base their subsequent explanation of the exchange phenomena upon a different theory which substitutes “costs of production” for labor. Thus two products are mutually exchanged in such quantities that the costs of production are equal on both sides. Such a view of the process of exchange indeed leaves no room for a commodity surplus inside the country. Any product of a worker’s annual labor must, from this point of view, represent a certain quantity of material of which it is made of tools which have been used in its manufacture, and of the products which served to maintain the workers during the period of production. It [presumably the product – R.L.] appears on the market in order to change its use-form, to reconvert itself into objects, into products for the workers and the value necessary for renewing the tools. As soon as it is split up into its component parts, the process of reassembling, the productive process, will begin, in the course of which all the values listed above will be consumed. In their stead, a new product will come into being which is the connecting link between past and future consumption.’

From this perfectly unique attempt to demonstrate social reproduction as a continuous process in the light of the costs of production, the following conclusion is promptly drawn: ‘Considering thus the aggregate bulk of a country’s products, we shall find no commodity surplus at all over and above the demand of society; an unmarketable surplus is therefore impossible from the point of view of a bourgeois economic theory of value.’

Yet, after having eliminated capitalist profit from the costs of production by an extremely autocratic manhandling of the bourgeois theory of value, Vorontsov immediately presents this deficiency as a great discovery: ‘The above analysis, however, reveals yet another feature in the theory of value prevalent of late: it becomes evident that this theory leaves no room for capitalist profits.’

The argument that follows is striking in its brevity and simplicity: ‘Indeed, if I exchange my own product, representing a cost of production of 5 rubles, for another product of equal value, I receive only so much as will be sufficient to cover my expense, but for my abstinence [literally so – R.L.] I shall get nothing.’

And now Vorontsov really comes to grips with the root of the problem:

‘Thus it is proved on a strictly logical development of the ideas held by bourgeois economists that the destiny of the commodity surplus on the market and that of capitalist profit is identical. This circumstance justifies the conclusion that both phenomena are interdependent, that the existence of one is a condition of the other, and indeed, so long as there is no profit, there is no commodity surplus ... It is different if the profit comes into being inside the country. Such profit is not originally related to production; it is a phenomenon which is connected with the latter not by technical and natural conditions but by an extraneous social form. Production requires for its continuation ... only material, tools, and means of subsistence for the workers, therefore as such it consumes only the corresponding must be found for the surplus which makes up the profit, and for which there is no room in the permanent structure of industrial life, in production – consumers, namely, who are not organically connected with production, who are fortuitous to a certain extent. The necessary number of such consumers may or may not be forthcoming, and in the latter case there will be a commodity surplus on the market.’⁽⁸⁾

Well content with the ‘simple’ enlightenment, by which he has turned the surplus product into an invention of capital and the capitalist into a ‘fortuitous’ consumer who is ‘not organically connected with capitalist production’, Vorontsov now turns to the crises. On the basis of Marx’s ‘logical’ theory of the value of labor which he claims to ‘employ’ in his later works, he expounds them as an immediate result of the surplus value, as follows:

‘If the working part of the population consumes what enters into the costs of production in form of the wages for labor, the capitalists themselves must destroy [literally so – R.L.] the surplus value, excepting that part of it which the market requires for expansion. If the capitalists are in a position to do so and act accordingly, there can be no commodity surplus; if not, over-production, industrial crises, displacement of the workers from the factories and other evils will result.’

According to Vorontsov, however, it is ‘the inadequate elasticity of the human organism which cannot enlarge its capacity to consume as rapidly as the surplus value is increasing’, which is in the end responsible for these evils. He repeatedly expresses this ingenious thought as follows: ‘The Achilles heel of capitalist industrial organization thus lies in the incapacity of the entrepreneurs to consume the whole of their income.’

Having thus ‘employed’ Marx’s ‘logical’ version of Ricardo’s theory of value, Vorontsov arrives at Sismondi’s theory of crises which he adopts in as crude and simplified a form as possible. He believes, of course, that he is adopting the views of Rodbertus in reproducing those of Sismondi. ‘The inductive method of research’, he declares triumphantly, ‘has resulted in the very same theory of crises and of pauperism which had been objectively stated by Rodbertus.’⁽⁹⁾

It is not quite clear what Vorontsov means by an ‘inductive method of research’ which he contrasts with the objective method – since all things are possible to Vorontsov, he may conceivably mean Marx’s theory. Yet Rodbertus, too, was not to emerge unimproved from the hands of the original Russian thinker. Vorontsov corrects Rodbertus’ theory merely in so far as he eliminates the stabilization of the wage rate in accordance with the value of the aggregate product which, to Rodbertus, had been the pivot of his whole system. According to Vorontsov, this measure against crises is a ‘mere palliative, since the immediate cause of the above phenomena (over-production, unemployment, etc.) is not that the working classes receive too small a share of the national income, but that the capitalist class cannot possibly consume all the products which every year fall to their share.’⁽¹⁰⁾

Yet, as soon as he has refitted Rodbertus’ reform of the distribution of incomes, Vorontsov, with that ‘strictly logical’ consistency so peculiar to him, ultimately arrives at the following forecast for the future destiny of capitalism:

‘If industrial organization which prevails in W. Europe is to prosper and flourish further still, it can only do so provided that some means will be found to destroy [verbatim – R.L.] that portion of the national income which falls to the capitalists’ share over and above their capacity to consume. The simplest solution of this problem will be an appropriate change in the distribution of the aggregate income among those who take part in production. If the entrepreneurs would retain for themselves only so much of all increase of the national income as they sited to satisfy all their whims and fancies, leaving the remainder to the working class, the mass of the people, then the régime of capitalism would be assured for a long time to come.’⁽¹¹⁾

The hash of Ricardo, Marx, Sismondi and Rodbertus thus is topped with the discovery that capitalist production could be radically cured of over-production, that it could ‘prosper and flourish’, in all eternity, if the capitalists would refrain from capitalizing their surplus value and would make a free gift to the working class of the corresponding part of the surplus value. Meanwhile the capitalists, until they have become sensible enough to accept Vorontsov’s good advice, employ other means for the annual destruction of a part of their surplus: Value. Modern militarism, among others, is one of these appropriate measures – and this precisely to the exit to which the bills of militarism, are footed by the capitalists’ income – for Vorontsov can be counted – upon to turn things upside down – and not by the working masses. A primary remedy for capitalism, however, is foreign trade which again is a sore spot in Russian capitalism. As the last to arrive at the table of the world market, Russian capitalism fares worst in the competition with older capitalist countries and thus lacks both prospects as to foreign markets and the most vital conditions of existence. Russia remains the ‘country of peasants’, a country of ‘populist’ production.

‘If all this is correct,’ Vorontsov concludes his essay on The Commodity Surplus in the Supply of the Market, ‘then capitalism can play only a limited part in Russia. It must resign from the direction of agriculture, and its development in the industrial sphere must not inflict too many injuries upon the domestic industries which under our economic conditions are indispensable to the welfare of the majority of the population. If the reader would comment that capitalism might not accept such a compromise, our answer will be: so much the worse for capitalism.’

Thus Vorontsov ultimately washes his hands of the whole thing, declining for his part all responsibility for the further fortunes of economic development in Russia.

Footnotes

⁽¹⁾ An essay in Patriotic Memoirs, May 1883.

⁽²⁾ An essay in the review Russian Thought, September 1889.

⁽³⁾ A book published in 1893.

⁽⁴⁾ A book published in 1895.

⁽⁵⁾Patriotic Memoirs, vol.v: A Contemporary Survey, p.4.

⁽⁶⁾Ibid., p.10.

⁽⁷⁾Ibid., p.14.

⁽⁸⁾Outlines of Economic Theory (St. Petersburg 1895), pp.157ff.

⁽⁹⁾Militarism and Capitalism in Russian Thought (1889), vol.ix, p.78.

⁽¹⁰⁾Ibid., p.80.

⁽¹¹⁾Ibid., p.83. Cf. Outlines, p.196.