Collected Works of V. I. Lenin - Vol. 3 - From Marx to Mao

68
V. I. LENIN
from simple commodity production to capitalist production
(and constituting the necessary condition for this
transition), creates the home market. The process of this
creation of the home market proceeds in two directions: on
the one hand, the means of production from which the small
producer is “freed” are converted into capital in the hands
of their new owner, serve to produce commodities and,
consequently, are themselves converted into commodities.
Thus, even the simple reproduction of these means of production
now requires that they be purchased (previously,
these means of production were reproduced in greater part
in the natural form and partly were made at home), i.e.,
provides a market for means of production, and then the
product now produced with the aid of these means of production
is also converted into a commodity. On the other
hand, the means of subsistence of the small producer
become the material elements of the variable capital, i.e., of
the sum of money expended by the employer (whether a
landowner, contractor, lumber-dealer, factory owner, etc.,
makes no difference) on hiring workers. Thus, these means
of subsistence are now also converted into commodities,
i.e., create a home market for articles of consumption.
4) The realisation of the product in capitalist society
(and, consequently, the realisation of surplus-value) cannot
be explained without clearing up the point—1) that the
social product, like the individual product, resolves itself
in terms of value into three parts and not two (constant
capital+ variable capital+ surplus-value, and not only into
variable capital+ surplus-value, as taught by Adam Smith
and the entire school of political economy that came after
him and before Marx), and 2) that in its natural form it must
be divided into two big departments: means of production
(consumed productively) and articles of consumption (consumed
personally). By establishing these main theoretical
propositions, Marx fully explained the process of realisation
of the product in general and of surplus-value in particular
in capitalist production, and revealed that it is utterly
wrong to drag the foreign market into the problem of realisation.
5) Marx’s theory of realisation also threw light on the
problem of national consumption and income.