⧠14 The struggle between small-scale and large-scale production (between Working Ownership and Capitalistic Non-workin

The struggle between small-scale and large-scale capital in manufacturing industry. Huge factories, sometimes employing more than ten thousand workers, and having enormous machines, did not always exist. They appeared by degrees, growing up upon the remnants of artisan production and small-scale industry when these were undergoing ruin. In order to understand why this came about, we must first of all take into account the circumstance that, under private property and commodity production, a struggle for buyers, competition, is inevitable. Who is the winner in this struggle? He is the winner who knows how to attract buyers to himself and to wrest them from his competitors. Now the chief means for the attraction of buyers is to offer commodities for sale at a lower price. Who can sell at a very low price? This is the first question we have to answer. It is obvious that the large-scale producer can sell more cheaply than the small-scale producer or the independent artisan, for the large-scale producer can buy more cheaply. Large-scale production has in this respect many advantages. Above all, large-scale production has this advantage, that the entrepreneur who commands much capital can install better machinery, and can procure better tools and apparatus generally. The independent artisan or the, small master finds it very difficult to get along; he cannot usually command a power plant; he dares not think of installing better and larger machines; he has not the wherewithal to buy them. Nor is the small capitalist able to procure the, newest machines. Consequently, THE LARGER THE UNDERTAKING, THE MORE PERFECT IS THE TECHNIQUE, THE MORE ECONOMICAL IS THE LABOUR, AND THE LOWER IS THE COST OF PRODUCTION.

In the large factories of the United States and Germany there are actually scientific laboratories where new and improved methods are continually being discovered. Thus science is wedded to industry. The discoveries made in such a laboratory remain secrets of the enterprise to which it is attached, and bring profit to that enterprise alone. In small-scale production and hand production, one and the same worker conducts nearly all the stages of production. In machine production, on the other hand, where numerous workers are employed, one worker is responsible for one stage only, a second worker for a second stage, a third for a third, and so on. In this way, under the system known as the division of labour, the work goes much quicker. How great is the advantage of this system was made manifest by some American researches instituted in the year 1898. Here are the results. The manufacture of 10 ploughs. By hand labour: 2 workers, performing 11 distinct operations, worked in all 1,180 hours, and received $54. By machine labour: 52 workers, performing 97 operations (the more numerous the workers, the more varied the operations), worked in all 37 hours and 28 minutes, and received $7.90. (We see that the time was enormously less and that the cost of labour was very much lower.) The manufacture of 100 sets of clock wheels. By hand labour: 14 workers, 453 operations, 341,866 hours, $80.82. By machine labour: 10 workers, 1,088 operations, 8343 hours, $1.80. The manufacture of 500 yards of cloth. Hand labour: 3 workers, 19 operations, 7,534 hours, $135.6. Machine labour: 252 workers, 43 operations, 84 hours, $6.81. Many similar examples might be given. Furthermore, small manufacturers and hand workers are quite unable to undertake those branches of production for which a highly developed mechanical technique is essential. For instance, the manufacture of locomotive engines and ironclads ; coal mining; and so on.

Large-scale production effects economies in every direction: in buildings, machinery, raw materials, lighting and heating, cost of labour, utilization of waste products, etc. In fact, let us suppose that there are one thousand small workshops, and that there is one large factory which produces the same quantity of commodities as all the little workshops put together. It is much easier to build one large factory than a thousand small workshops; the raw materials for the workshops will be used far more wastefully; lighting and heating will be much easier in the case of the large factory; the factory will have the advantage in the matter of general supervision, cleaning up, repairs, etc. In a word, there will unquestionably be in all respects an economy, a saving, in running the large factory.

In the purchase of raw materials and of all that is necessary for production, large-scale capital is likewise at an advantage. The wholesale buyer buys more cheaply, and the goods are of better quality; furthermore, the great factory owner is better acquainted with the market, knows better where to buy cheaply. In like manner, the small enterprise is always at a disadvantage when entering the market as seller. Not only does the largescale producer know better where to buy cheaply (for this purpose, he has travellers; he conducts his business in the exchange, where news concerning various commodities is always coming in; he has commercial ties extending almost all over the world): in addition, he can afford to wait. If, for instance, the price of his product is too low, he can retain it in his warehouses, pending a rise in prices. The small producer cannot do this. He lives from hand to mouth. As soon as he has sold his product, he begins to use for immediate expenses the money he has received; he has no margin. For this reason he is forced to sell willy-nilly, for otherwise he will starve to death. It is obvious that this is a great disadvantage to him.

It need hardly be said that large-scale production enjoys an additional advantage, in the matter of credit. If a great entrepreneur has urgent need of money, he can get it. Banks will always lend money to a solid' firm at a comparatively low rate of interest. But hardly anyone will give credit to the small producer. If he can borrow at all, exorbitant interest will be demanded. Thus the small producer easily falls into the hands of the usurer.

All these advantages attaching to large-scale enterprise explain why smallscale production must invariably succumb in capitalist society. Largescale capital crushes the small producer, takes away his customers, and ruins him, so that he drops into the ranks of the proletariat or becomes a tramp. In many cases, of course, the small master continues to cling to life. He fights desperately, puts his own hand to the work, forces his workers and his family to labour with all their strength; but in the end he is compelled to give up his place to the great capitalist. In many instances, one who seems to be an independent master is in truth entirely dependent on large-scale capital, works for it, and cannot take a single step without its permission. The small producer is frequently in the toils of the moneylender. Ostensibly independent, he really works for this spider. Or he is a dependent of the purchaser of his commodities. In other cases he is a dependent of the shop for which he works. In the last instance, though apparently independent, he has really become a wage worker in the service of the capitalist who owns the large shop. It may happen that the capitalist provides him with raw materials, and sometimes with tools as well; in Russia many of those engaged in home industry are in this position. In such cases it is perfectly clear that the home worker has become a satellite of capital. Another form of subordination to capital is that in which small repairing workshops are grouped around a large undertaking, so that they are, as it were, mere screws in the wall of the big building. Their independence is only apparent. We sometimes see that small masters, independent artisans, home workers, traders, or petty capitalists, when they have been driven out of one branch of manufacture or commerce, enter some other branch in which large-scale capital is less powerful. In many cases, persons who have been ruined in this way become small traders, pedlars, and the like. Thus largescale capital tends, step by step, to replace small production everywhere. Huge enterprises come into existence, each employing thousands or tens of thousands of workers. Large-scale capital is becoming the ruler of the world. The working owner is disappearing. His place is being taken by large-scale capital.

As examples of the decline of small-scale production in Russia, let us consider the home workers. Some of these, such as furriers and basketweavers, worked with their own raw materials and sold to anyone who would buy. In course of time the home worker began to work for one particular capitalist; this is what happened in the case of the Moscow hatmakers, toymakers, brushmakers, etc. In the next stage, home workers procure the raw materials from their own employer, and thus pass into bondage to him (e.g. the locksmiths of Pavlovsk and of Burmakino). Finally, the home worker is paid by his employer at piecework rates (the nailmakers of Tver, the bootmakers of Kimry, the matmakers of Makarieff, the knifeforgers of Pavlovo). The hand-loom weavers have been similarly enslaved. In England, the expiring system of small-scale production was nick-named the sweating system', owing to the abominable conditions that prevailed. In Germany, during the period 1882 to 1895, the number of small enterprises diminished by 8.6 per cent; the number of middle-sized enterprises (those employing from 6 to 50 workers) increased by 64.1 per cent; and the number of great enterprises increased by 90 per cent. Since 1895 a notable number of middle-sized enterprises have also been crushed out. In Russia, the victory of the factory system over home industry has been fairly rapid. The textile industry (weaving) is one of the most important branches of manufacture in Russia. If we consider the changes that have taken place in the cotton industry, if we compare the number of factory workers with the number of home workers, we are able to judge how rapidly the factory system is displacing home industry. Here are the figures:

In the year 1866, for every hundred workers engaged as weavers in cotton factories, there were 70 weavers working at home; in the years 1894-5, for every hundred factory workers there were only 8 home workers. In Russia the growth of large-scale production was extraordinarily rapid because foreign capital undertook its direct organization. By the year 1902, large enterprises were already employing nearly half (40 per cent) of all the Russian industrial workers.

In 1903, in European Russia, the factories employing more than 100 workers numbered 17 per cent of all factories and workshops; and of the total number of workers engaged in factories and workshops 76.7 per cent worked in these large factories.

The victory of large-scale production all over the world entails much suffering for small producers. Sometimes whole occupations perish and entire districts are depopulated (e.g. the Silesian weavers in Germany, the Indian weavers, etc.).

(B) The struggle between small-scale and large-scale capital in agriculture. The same struggle between small-scale and largescale production which is carried on in industry, occurs also under capitalism in agriculture. The landlord, who administers his estate just as the capitalist administers his factory; the rich peasant, grasping and usurious; the middle peasant; the poor peasant, who often accepts a job from the landlord or the rich peasant; and the agricultural labourer - we may compare this agricultural series with the industrial series of great capitalist, small capitalist, independent artisan, home worker, wage worker. In the country, as in the town, extensive possessions give an advantage when compared with small.

On a large farm, it is comparatively easy to introduce up-to-date methods. Agricultural machinery (electric or steam ploughs, harvesters, cutters and binders, drillers, threshers, steam threshers, etc.) is almost beyond the reach of the small farmer. The independent artisan cannot think of installing expensive machinery in his little workshop; he has no money to pay for it, nor could he turn such machinery to good account even if he could buy it. In like manner, the peasant cannot buy a steam plough, for, if he had the money, a steam plough would be of no use to him. A great machine like this, for its profitable utilization, needs a large area of land; it is valueless on a patch where there is hardly room for a fowl-run.

The efficient utilization of machinery and tools depends on the area of land under cultivation. For the full utilization of a horse plough we need 30 hectares of land; for that of a set comprising driller, harvester, and thresher, about 70 hectares; for a steam thresher, about 250 hectares; for a steam plough, about 1,000 hectares. Recently, machines driven by electric power have been used in agriculture; for these, also, large-scale farming; is indispensable.

As a rule, only for farming on the large scale is it practicable to undertake irrigation, to drain swamps, to provide field drainage (the laying of earthenware pipes in the fields to carry off superfluous water), to build light railways, and so on. In agriculture, just as in manufacturing industry, where work is done on a large scale we save upon tools and machinery, materials, labour power, fuel, lighting, etc.

In large-scale farming, there will be per desyatina less waste space between the fields, fewer hedges, ditches, and fences; less seed will be lost in these waste areas.

Furthermore, the owner of a large farm finds it worth while to engage expert agriculturists, and he can work his land by thoroughly scientific methods.

In matters of trade and credit, what applies to industry, applies also to agriculture. The large-scale farmer is better acquainted with the market, he can await favourable opportunities, he can buy all he needs more cheaply, can sell at a better price. Only one thing remains for the small competitor; he struggles with all his might. Small-scale agriculture is able to continue in existence only through strenuous labour, in conjunction with the restriction of needs, with semi-starvation. Thus alone can it maintain itself under the capitalist régime. It suffers still more severely owing to heavy taxation. The capitalist State lays crushing burdens upon the smallholder. It suffices to remember what tsarist taxation signified to the peasant Sell all you have, so long as you pay your taxes.'

In general it may be said that small-scale production is far more tenacious of life in agriculture than in manufacturing industry. In the towns, the independent artisans and other small-scale producers are for the most part rapidly undergoing ruin, but in the rural districts of all countries peasant farming still leads a tolerably sturdy existence. Nevertheless, in the country, too, the impoverishment of the majority proceeds apace, only here the results are less obvious than in the towns: Sometimes it seems, as far as the amount of land is concerned, that an agricultural enterprise is very small, when in reality it is quite an extensive affair, because much capital has been put into it, and because it employs a considerable number of workers; this applies, for instance, to market gardens in the neighbourhood of large towns. Sometimes, on the other hand, those who seem to be independent smallholders are really for the most part wage workers; sometimes they are employed on neighbouring farms, sometimes they engage in seasonal occupations elsewhere, and sometimes they work in the towns. What is happening to the independent artisans and to the home workers, is in like manner happening to the peasants of all lands. A few of them become 'kulaks' (liquor sellers, usurers, rich peasants who by degrees round off their possessions). Some of them manage to struggle on as they are. The remainder are ultimately ruined, they sell their cow and their nag, becoming 'horseless men'; finally, the plot of land goes the way of the rest, the man will either settle in the town or make his living as an agricultural labourer. The 'horseless man' becomes a wage worker, whereas the kulak, the rich peasant who hires workers, becomes a landlord or a capitalist.

Thus in agriculture a vast quantity of land, tools, machines, cattle, horses, etc., passes into the hands of a small group of capitalist landlords, for whom millions of workers labour, and upon whom millions of peasants are dependent.

In the United States, where the capitalist system has developed more fully than elsewhere, there are great estates which are worked like factories. And just as, in factories, only one product is turned out, so it happens on these farms. There may be huge fields where nothing but strawberries are grown, or gigantic orchards; enormous poultry farms; colossal wheat fields, worked by machinery. Many branches of agricultural production are concentrated in a few hands. In this way, for example, there comes to exist a chicken king' (a capitalist into whose hands is concentrated, more or less completely, the rearing of chickens), an egg king', and so on.