19

p The continuous interaction of the development of production and the world market had already come out in the early stages of the rise of the capitalist social formation, and the determinant place in this interaction, moreover, was taken by capitalist industry. As a result of his thorough investigation of extensive historical data, Marx came to the conclusion that

p when in the 16th, and partially still in the 17th century the sudden expansion of commerce and emergence of a new world market overwhelmingly contributed to the fall of the old mode of production and the rise of capitalist production, this was accomplished conversely on the basis of the already existing capitalist mode of production. The world market itself forms the basis for this mode of production. On the other hand, the immanent necessity of this mode of production to produce on an ever-enlarged scale tends to extend the world market continually, so that it is not commerce in this case which revolutionises industry, but industry which constantly revolutionises commerce.  [19•1 

p Marxist political economy consequently looks upon the rise and development of the world capitalist market as a constituent of a broader process, i.e. the gradual conversion of capitalism into a universal socio-economic system. This methodological approach has enabled it to disclose the unequal character of the division of labour between countries that is inherent in this system, and the exploiter nature of commodity exchange and of capitalist international economic relations in general on the world market, based as they are on private property in the instruments and means of production.

p The struggle for foreign markets has always been an urgent economic need for capitalism, since a striving to extend its sphere of influence without limit is inherently characteristic of it, in contrast to previously dominant modes of production. Because of the operation of objective economic laws, 20 capitalist enterprise inevitably outgrows the boundaries of the community, region, or country, the economic exclusiveness and isolation of countries being broken down by commodity circulation itself.

p As a result, capitalist production becomes inconceivable without foreign trade and world economic relations at a certain stage of its development, which in turn reflects growth of the social division of labour on an international scale. Marx stressed that

capitalist production rests on the value or the transformation of the labour embodied in the product into social labour. But (his is only [possible] on the basis of foreign trade and of the world market. This is at, once the precondition and the result of capitalist production.  [20•1 

He expressed the same idea even more succinctly in the formula ’capitalist production does not exist at all without foreign commerce’.  [20•2 

p All that in no way signifies, of course, that any capitalist enterprise indispensably works for an external market and sends what it produces beyond the local or national economy. At the same time it constantly experiences the effect of the already existing system of international business relations and is drawn into their orbit, if not directly, then indirectly. The capitalist, even the one who is wholly oriented on the home market, is forced to compare his own costs of production with world prices as well as with the market prices in his country. An influence of the same order has to be allowed for when an all-round appraisal is being made of the position of labour power in capitalist countries, including the spheres where its value depends wholly or predominantly on domestic factors of production.  [20•3 

p Capitalism’s international economic interconnections arose later, historically, than its domestic ones, the latter being original and basic. Their level and trend depended to a decisive degree on how far each nation developed its own 21 productive forces, division of labour, and internal dealings. That, however, does not eliminate the undoubted fact that extension of both the home and foreign market under capitalism represents different aspects of a single process; the boundaries between them are very mobile and arbitrary. As the world market develops the problem of the limits of the home market of each country taken separately proves to lie very tightly bound up with that of extension of its external economic relations.  [21•1  Hence one of the essential principles of Marxian researcli into the development of capitalism in scope and depth is that, when analysing international relations of production (including the capitalist class’s colonial policy), it is not important where the boundary between the home and foreign market is drawn;

what is important is that capitalism cannot exist and develop without constantly expanding the sphere of its domination, without colonising new countries and drawing old non-capitalist countries into the whirlpool of world economy.  [21•2 

The rise of capitalism’s international exploiter relations is inextricably linked with the forming of a system of world economy appropriate to them.

p The watershed on this point between Marxian and capitalist science is clear and distinct. Although the creation of this system was completed on the whole under imperialism, it by no means follows that its present-day history can be separated from the preceding history of the development of the capitalist mode of production and that imperialist exploitation of some countries by others begins only with capitalism’s transition from free enterprise to the domination of monopolies. Many of the features of the international division of labour typical of the monopoly stage had already arisen and begun to take on a stable, long-term character during the transition of capitalist society to the machine stage of production. They were not brought about by chance, transitional factors but wore caused by deep-seated changes in both the home and external conditions of capitalist reproduction.

22

p The analysis of international economic inter-relationships made in their day by the founders of Marxist political economy indicated that it was large-scale machine industry that prepared the ground for the subsequent formation of a world economy. Machine production, as Marx and Engels pithily put it,

p produced world history for the first time, insofar as it made all civilised nations and every individual member of them dependent for the satisfaction of their wants on the whole world, thus destroying the former natural exclusiveness of separate nations.  [22•1 

p It is through the international division of labour on the world market that the tendency to bring countries together economically, constitutionally inherent in capitalism, is manifested. The kernel of this pattern, however, discovered by Marx, is that this tendency, while progressive in itself, led at the same time, because of capitalist methods and the forms of economic association of the different countries, to consolidation of the division of the world into industrially developed countries, and economically backward agrarian and primary commodity producing countries exploited by them. The antagonism between these two main groups of countries, which are opposite poles of the world capitalist economy, has become one of its main contradictions.  [22•2 

p This contradiction has become specially acute in the stage of imperialism, and a very important factor in subsequent origin and development of the crisis of the colonial structure of the capitalist economy, a crisis that is irreversible for the monopoly capitalist class. The break-up of the colonial system after World War II, and the marked deepening of the internal contradictions of world capitalism, which are undermining the historically formed foundations of its system of unequal international economic relations, have put on today’s agenda, with all urgency, the issue of eliminating the exploiter system of division of labour that completely dominated the world economy in the past.

23

p It would be wrong to treat this task (which corresponds to the vital interests of all nations without exception) as the need to liquidate the progress already made in the internationalisation of social production. The anti-imperialist struggle for genuine national independence, just like the transition of countries to a higher socio-economic system, does not eliminate the objective need to develop the social (including the international) division of labour, and leads to a change in and perfecting of the forms in which this essentially progressive process is manifested. It is self-evident, Marx wrote to Ludvig Kugelman on 11 July 1868,

p that this necessity of the distribution of social labour in definite proportions cannot possibly be done away with by a particular jiirin of social production but can only change the mode of its appearance.  [23•1 

p The underlying principles of a Marxist-Leninist analysis of the ways and causes of capital’s internationalisation of social production have not lost their theoretical value over the years. The topicality of many of them, moreover, is growing, especially in today’s situation of the coexistence and opposition of two world social systems and of the natural extension of economic and technical co-operation on the basis of mutual advantage and equal international division of labour.

p In this situation capitalist ideologists are trying in every way to prove the ‘erroneousness’, in particular, or at least ‘obsoleteness’ of the Marxist-Leninist political economy’s analysis. Above all they endeavour to refute its conclusions about the irreversibility of tendencies toward a steady deepening of capitalism’s internal contradictions. But the whole long history of capitalist economics, and of its mistakes, its constant wavering between one conception and another, its fallacies and failures, shows that theories that consider the international market relations of capitalism to be legitimate and that are abstracted from a socio-economic analysis of the production sphere, at best contain superficial analogues of the real trends of development. In the main they bring out the consequences but not the causal connections of this development.

24

p At the same time it would clearly he an oversimplification of things to consider that the theoretical findings of capitalist political economy in the sphere of the world economy’s market relations are in general isolated from real analysis of the reproduction processes. In a numher of cases they more or less adequately reflect important features of the backlash of these relations in the production sphere. And this effect determines many of the essential features of the capitalist economy at the various stages of its development.

p In the last instance (Engols wrote to Conrad Schmidt on 27 October 1890) production is the decisive factor. But as soon as trade in products becomes independent of production proper, it has a movement of its own, which, although by and large governed by that of production, nevertheless in particulars and within this general dependence again follows laws of its own inherent in the nature of this new’ factor; this movement has phases of its own and in its turn reacts on the movement of production.  [24•1 

p All this calls for close attention to research both into the ways and determinant tendencies in the genesis of the world market and into its place in the process of extended capitalist reproduction. Not only is such research of educational value historically; it is also very necessary for an analysis of current changes in the structure of the world capitalist economy. A systems analysis of its inner and external interconnections in today’s international situation cannot be made sufficiently full without detailed allowance for tiie general patterns and long-term trends of development of these interconnections.

p Lenin more than once stressed the need to study broad socio-economic phenomena in historical retrospect, since

p the most important thing if one is to approach this question scientifically is not to forget the underlying historical connection, to examine every question from the standpoint of how the given phenomenon arose in history and what were the principal stages in its development, and, from the standpoint of its development to examine what it has become today.  [24•2 

p The next chapter of Part I is devoted to the characteristics of the main stages of the ‘self-movement’ of the capitalist world system in the light of that teivet of Lenin’s. Here we 25 must draw attention (simply by way of posing the question) to the most general features in the fundamentally important stages of the process under consideration that make it possible to distinguish the key points of the historically formed interaction of the capitalist market and production.

p There were relatively broad trade and financial relations between separate countries and peoples, of course, in the socio-economic formations that preceded capitalism, but it was capitalism that first formed a world market which played a progressive, revolutionary role in the subsequent increase of mankind’s productive forces and growth of its social production. Marx, attributing paramount importance to that, wrote that ’the specific task of bourgeois society is the establishment of a world market’.  [25•1  It was with the formation of a world market that the level of development of capitalism began to be marked by the degree of growth both of domestic and of international market relations.

p There was a qualitatively new leap in the shaping of these relations associated with the vast increase in trade and colonial expansion of the young European capitalist class. This expansion became a decisive factor in the primitive accumulation of capital. The world market thus created important material preconditions for victory of the capitalist modeof production over the feudal.  [25•2 

p At that time the merchant capital of European powers undoubtedly prevailed in international economic relations, but its dominance on the world market began to decline as the capitalist mode of production was consolidated in the countries that were the basis of its existence. The subordinating of merchant capital to industrial, natural to the new mode of production, was also manifested then in the realm of international trade. As a result the material conditions were laid for an ever increasing intensification of the action of the mechanism of the economic exploitation of all the countries of the world by a handful of ‘advanced’ countries.  [25•3 

26

p And the wider the gap in levels of labour productivity becomes between this handful of advanced countries and the economically backward ones, the greater is the exploitation suffered by the latter on the world market. This pattern was expressed with maximum clarity in the following formula of Marx:

The favoured country recovers more labour in exchange for less labour, although this difference, this excess is pocketed, as in any exchange between labour and capital, by a certain class.  [26•1 

In that way, in particular, the main antagonistic contradiction of the capitalist mode of production, i.e. that between its constantly increasing social character and the private capitalist forms of appropriating the results of social labour, thus found expression within the world market.

p The putting of capitalism onto the rails of large-scale machine industry during the industrial revolution, which was completed in the second half of the nineteenth century, meant the beginning of a new, higher stage in the development of world economic relations. Large-scale industry in fact shaped the world market of the epoch of mature capitalism. And its dependence on external economic links and the international division of labour in turn also grew immensely. As Karl Marx said in his day:

p large-scale industry, detached from the national soil, depends entirely on the world market, on international exchange, on an international division of labour.  [26•2 

p In this situation the antagonistic contradictions of the world market stemming from the basic economic contradiction of capitalist society, have become an ever more serious obstacle to a further rise of social production. One of the most convincing bits of evidence of that were the world economic crises that were converted into a constitutionally inalienable feature of the whole economic system of capitalism. Years of comparatively rapid industrial boom began to alternate with regular consistency with periods of stagnation and direct destruction of already created productive forces. This cyclicity, determined by the objective laws of capitalist production, was intensified in turn by industry’s 27 mounting dependence on the foreign market.  [27•1  It was their comprehensive study both of the internal, home factors of the cyclic development of capitalist business and of the international ones that enabled the authors of classical Marxist political economy to draw the conclusion, confirmed by the whole subsequent course of social development, that economic crises would remain, while capitalism existed, one of the incurable ills determining its historically transient character.

p For more than a century and a half now, since 1825, capitalism has periodically suffered from cyclic crises. All the attempts of capitalist economists to work up prescriptions to cure this illness without eliminating its basis, namely its exploiter relations of production, have unfailingly proved unsound and bankrupt. The capitalists as a class have demonstrated more and more clearly with the course of time their incapacity to control the productive forces of society rationally not only within the context of the separate national economies but also and especially on the scale of the world economy.

p The world cyclic crisis of 1974-75, the greatest since the war, which developed under an unprecedented sharpening of several of modern capitalism’s most important world problems, viz. the monetary, energy, raw material, and food crises, was convincing evidence of that indisputable fact in our day. It swept almost all the main centres of capitalism simultaneously and in turn interrupted their economic development.  [27•2  During the crisis the monopoly 28 capitalists as usual exerted immense efforts to shift its most serious consequences onto the working masses of their own countries and the peoples of the agrarian and primary producer periphery.

p As capital internationalises society’s productive powers the connection between the reproductive processes of the individual countries (including those that are the epicentres of world crises under the impact of the economy’s cyclic movement) is becoming closer and closer. Therefore, when we are determining the objective patterns of capitalism’s development, the question of the interaction of the national cycles within the context of a single world cycle (study of which was begun by Karl Marx) is posed in all its acuteness.  [28•1  We shall dwell in detail on the features of the cyclic development of today’s world capitalist economy later,  [28•2  here it is necessary to stress the following from the standpoint of the matter we are examining.

p Despite the fact that the cyclic synchronousness of the movement of capitalist production and of the world market already lias a history of 150 years, a line of refusing to recognise the general patterns of this movement still clearly dominates capitalist economics. When, however, the course of the world cycle is studied, its development is mainly considered as a kind of arithmetical sum total of the results of cyclic fluctuations within the national economies taken separately. As a result it comes about that the specilic features of national development are, as it were, the sole decisive factor in the shaping of each world cycle. In that case 29 the role of the system of international socio-economic connections and of the internationalisation of social production, which in essence convert these countries into links in a single economic chain, is patently underestimated.  [29•1 

p Since the beginning of the 70s, it is true, because of the steady exacerbation of modern capitalism’s international economic problems, an increasingly negative attitude toward sucli a ’narrowly nationalist’ approach to analysis of the main world crisis processes (including its cyclic development) has been traceable in capitalist economic literature.  [29•2  Sometimes, while justly noting the close connection between these processes, and in particular between national overproduction crises, within the context of the capitalist economy, most capitalist economists as usual, however, prefer to identify their prime causes with the processes taking place at any definite moment in the sphere of the international market and political relations. They thus willy-nilly leave aside objective study of the system of international exploiter relations of production that underlies the deep internal contradictions of the world capitalist economy, which are inexorably undermining its main foundations.

The political dependence of most of the countries of the world on the main centres of capitalism has played an extremely important z’ole in the long history of the building up of this system. The structure of its unequal, exploiter relations was also moulded by that dependence in the imperialist stage, the crisis of which developed with particular force in the second half of this century as a consequence of most colonial countries’ winning of national independence.