CONTENTS
   vii    PUBLISHER’NOTE
   ix     FOREWORD TO RUSSIAN EDITION
    1    INTRODUCTION
 
Part I: Labour as the Regulator of the Commodity System
    7    I. LABOUR AS THE BASIS OF VALUE
  41    II. THE FORM OF VALUE AND MONEY
 
Part II: Production of Surplus Value
  65    I. SURPLUS VALUE IN CAPITALIST ECONOMY
  92     II. SURPLUS VALUE IN THE U.S.S.R.
 
Part III: Wages
105    WAGES UNDER CAPITALISM
120    WAGES IN THE U.S.S.R
 
Part IV: The Theory of Profit and the Price of Production
137    I. PROFIT AND THE PRICE OF PRODUCTION UNDER CAPITALISM
168    II. THE REGULATOR OF SOVIET ECONOMY
 
Part V: Merchant Capital and Merchant Profit
187    I. MERCHANT CAPITAL AND MERCHANT PROFIT IN CAPITALIST ECONOMY
205    II. THE QUESTION OF MERCHANT CAPITAL AND MERCHANT’S PROFIT IN THE U.S.S.R.
 
Part VI: Loan Capital and Credit: Credit Money and Paper Money
217    I. LOAN CAPITAL AND INTEREST
227    II. CREDIT AND BANKS
240    III. CREDIT NOTES AND PAPER MONEY
260    IV. INTEREST, CREDIT, AND PAPER MONEY IN THE U.S.S.R.
 
Part VII: Ground Rent
269    I. GROUND RENT IN CAPITALIST SOCIETY
295    II. PRE-CAPITALIST FORMS OF RENT AND THE QUESTION OF RENT IN SMALL PEASANT AGRICULTURE
306    III. GROUND RENT IN SOVIET ECONOMY
 
Part VIII
319    I. ACCUMULATION OF CAPITAL AND THE REPRODUCTION OF CAPITALIST RELATIONS
 
Part IX
381    I. IMPERIALISM AND THE DOWNFALL OF CAPITALISM

Part X
459    I. TRANSITION FROM CAPITALISM TO SOCIALISM

FOREWORD TO THE RUSSIAN EDITION

Students taking courses of political economy in the Soviet Party schools, Workers’ Faculties (Preparatory Schools) and higher educational institutions have hitherto been greatly hampered in their work by the absence of any manual adapted to the programmes of these educational bodies.

It has been necessary for them to turn first to one and then to another textbook for reference, according to the various sections of the course, and even the individual questions under consideration; and in the case of a number of problems, especially those touching on Soviet economy, it is sometimes quite impossible to indicate any textbook whatever.

The aim of this book is to satisfy this need for a manual for these schools.

In addition to the basic material of the manual, the book also contains special materials for practical scientific investigation, arranged so as to assist the student to display a certain activity and independence in acquiring knowledge. These materials are not finished lessons. They only provide examples of research work, and so in no way eliminate the necessity for the teacher himself to work out tasks for his pupils.

The selections from classic works recommended in the sections on research work are, of course, intended for more advanced students. They give the student opportunities to develop further the fundamentals acquired during our course, and should also accustom him to the reading of classic works on political economy, and first and foremost to the reading of Capital.

As our book is adapted for a course dealing with various problems we have divided it into a corresponding number of sections, and have endeavoured to make each section more or less complete in itself. As a result, owing to the natural connection which exists between various themes, a certain repetition has been inevitable; it seems to us that this, from the methodological aspect, will not only not be a misfortune in itself, but on the contrary will help towards a surer grasp of the problems of political economy.

In conclusion, a few words concerning the actual construction of the course. Its distinguishing feature is the principle, rigidly observed, of considering the problems of political economy alongside the corresponding problems of Soviet economy. This arrangement of the course seems to us to have a number of advantages as a method of work. In the first place the juxtaposition of problems of political economy with problems of Soviet economy will evoke great interest in the student, and will make the teaching of political economy very interesting. In addition, this juxtaposition will clarify the essence of productive relationships in capitalist society and also the fetishist character and the historical setting of certain brands of political economy.

But while there are advantages in a parallel study of political economy and Soviet economy, the difficulties which are bound to be met with in such a plan have also to be mentioned. The first difficulty is that the problems of Soviet economy have a close inter-connection one with another, and demand a definite method of exposition—one which does not always coincide with the method of exposition of political economy. Thus, for example, in order to resolve the problem of surplus value in the U.S.S.R., it is not only necessary to know how the problem of surplus value is presented in the first volume of Capital, but also to have some conception of the manner of the realisation of surplus value, and consequently of markets, of production, accumulation, and so on. All this could be avoided if a course of Soviet economy were taken separately after working through a course of political economy.

But these difficulties are not so fundamental and insuperable as to nullify the methodological advantages which the principle of connecting political economy with Soviet economy provides.

The second difficulty consists in the fact that the theoretical problems of Soviet economy have as yet not been worked out. In a number of cases the authors found themselves forced to provide their own elucidation of these problems.

This is not likely to guarantee our book against including a certain number of errors. None the less, the possibility of such errors is in our opinion an inadequate justification for passing those problems over in silence. Thousands of workers and peasants passing through the Soviet Party schools, the Workers’ Faculties and higher educational institutions, are insistently demanding an answer to them, and not one teacher of political economy can afford to ignore these problems.

Our own answers to them will, it seems to us, have their own value, if only for the reason that they provide materials for criticism, and thus assist in more intensive study. The course of political economy we have provided can be adopted in its entirety by the higher educational institutions, the Soviet Party schools and the Workers’ Faculties with a social-economic bias. For use in Workers’ Faculties with a technical bias, and also in evening Workers’ Faculties, it should be abridged, in accordance with the existing variants provided by the programmes of the State Educational Council.

The authors will be very grateful to any teachers and students who communicate their observations in regard to the book to the following address: The Plekhanov Institute of National Economy, Moscow.

I. Lapidus.

K. Ostrovityanov.

An Outline of Political Economy

INTRODUCTION

We propose to work through a course of political economy. What exactly is this science, and what phenomena does it study?

To many, even of those who have no acquaintance with the science whatever, it is probably known that it is a social science. This means that political economy studies not the phenomena of inanimate nature, or of the animal and vegetable worlds, or even the life of an individual human organism, but the relations between human beings, arising out of their life together in society.

How great is the importance of the links between human beings arising out of their social relations is known to everyone. It is impossible to imagine a man living completely outside society, even during the primitive stages of human development. It has well been said that “man is a social animal."

But if we consider man’s social relationships we see that they are of various kinds: family relationships, political relationships arising out of the struggle between various classes and their parties, relationships arising out of man’s cultural intercourse, and others. Not all these relationships are studied by political economy. The sphere of its study is much narrower: it has as its object the study of only one form of social relationships, namely, those which arise between men out of the production and the distribution of the produce of social labour, and which usually bear the name of productive relationships.

Just as it is impossible to imagine a man living outside society, so is it impossible to imagine a man who, whilst living in society, does not enter into certain productive relationships with other men. Even though this or that man takes no direct part in the process pf production, this does not at all mean that he enters into no productive relationships whatever with other men (taking the term "productive relationships” in its broad sense, of course). Inasmuch as he eats, drinks, clothes himself, satisfies his needs somehow or other, he is to that extent involved in productive relationships with those who by their labour give him the chance to satisfy those needs without any labour on his part. This possibility of living without working may arise in connection with his ownership of the means of production (factories and workshops) or because he has money in the bank; but in any case, he cannot exist without the labour of other men, without connections with other men on the basis of the production and distribution of goods.

But does political economy study all productive relationships between people? Again, not all.

Take for example some form of natural economy, even a patriarchal agricultural economy, which satisfies all its needs from within itself and enters into no exchange relations whatever with other economies. Here we have a pecular type of productive relations. They consist, let us assume, in a joint organisation of labour (on the basis of a certain distribution of that labour between men and women, adults and children), in a certain subordination of all to the head of the family, and so on. But these relationships are, in the first place, regulated by the conscious will of the eldest of the family. In his work he starts from an estimate of the needs which exist in his family. In correspondence with this he arranges his “productive plan,” he decides what part of the land at his disposition to sow with rye, what with millet, oats, wheat, and so on. In the second place, those relationships are so clear, and there is so little complexity in them, that they do not call for a special science or study.

Take also Communist society, the basis of which is now being laid in the Soviet Union. In such a society all the members will occupy themselves with joint labour for the satisfaction of their needs, and will so occupy themselves according to a certain plan under the direction of the body which expresses the will of this economic combination. That body will previously estimate the needs of the members of the Communist society, and on the basis of that estimate will distribute the labour throughout the various spheres of economy and the various enterprises. The implements of labour and the raw materials will be distributed according to plan throughout the enterprises, without any form of exchange, without any sale or purchase. And in the same way the semi-manufactures (that is, the products not yet completely finished) will be transferred to the enterprises which give them their final aspect, after which they will pass into the public warehouses, whence they will be distributed among the members of society according to their needs. Thus the correspondence between production and men’s needs will, in Communist society, be achieved by the planned organisation of that society and its conscious direction.

Despite the fact that there is an enormous difference between peasant natural economy and Communist economy, they have one common feature. That feature consists in the fact that both are organised and are directed by conscious human will.

Now consider modem capitalist economy. It represents the sum of all the individual private enterprises, directed by individual entrepreneurs; and in modern capitalist countries side by side with the great capitalist enterprises, which employ thousands of workers, one may meet with innumerable small enterprises of an artisan nature, millions of peasant households, and so on. These innumerable large and small enterprises are not regulated by a single conscious will, and do not possess a single directing centre which previously estimates men’s needs and distributes labour throughout the various spheres of production in accordance with those needs. Each individual entrepreneur engaged in production acts blindly. He does not know exactly what demand there will be for the commodities he is producing, or how many others besides himself are occupied in the production of the same commodity. He follows exclusively his own private interests, without regard for society as a whole. Hence arises the arbitrary character, the lack of organisation, the anarchy of capitalist society.

How can such an anarchic society exist; how is an equilibrium reached between human needs and production in such a society? Obviously certain laws regulating these un-organised relationships of capitalist society must exist. But these laws act blindly, independently of the will and the conscious endeavour of the participants in the economic process, and consequently are in sharp distinction from the laws of organised society, whether it be a peasant patriarchal family or the Communist society of the future. And it is these elemental laws regulating the productive relationships of commodity-capitalist society that are studied in political economy.

 In so far as self-supporting and Communist economy are organised, and directed by conscious human will, we cannot find in them materials for the study of political economy. Possibly the productive relationships of Communist society, which undoubtedly will be much more complex than the productive relations of primitive natural economy, will have need of some special science; but that science will not be political economy.

Together with the laws governing the productive relations of capitalist economy we shall also study the laws of Soviet economy. The peculiar feature of Soviet economy lies in the fact that it is in transition from capitalism to socialism. In it are combined planned and anarchic features, socialist elements and the most varied of economic forms, from primitive ..........................

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