The producers news., 1927-03-18

need for buying something it will be to his ad-
vantage to deposit this sum in the bank as it
will draw interest there One might ask: what
advantage is it to the banks to pay money lin
terest) for money which does not grow in amount
from merely lying in the bank"? The advantage
is that the banks put the money received from
the depositors into circulation l. e. loan it to the
big capitalists at interest and of course at great
er interest than they themselves pay to the depos-
itors. The difference comprising the net profit OF
the banks, and generally a very large profit, Is
called bank profit or interest
Sc. WHAT is CREDIT?
AS the capitalist method of production develops,
the former lending capital also develops and
changes its form. Whereas in former times peo-
pie approached the money-lender only when fore
ed by need, under the capitalist method of pro-
duction the money-lender is approached for the
extension of enterprises or for the construction
of new ones, l. e. for the greater increase of sur
plus value. The individual money-lender-the OBJ
! ject of so much hate and scorn-disappears into
the past and is replaced by the lending institu-
tion-the bank. Present-day capitalist banks have
the power Of turning into capital all the means
which are not owned by the capitalists from the
! savings of the doorkeeper or cook to the savings
of the monastery. Besides that, there also flow
! into the banks all those sums which are temper
ariy free in a given enterprise and which through
! the medium OF the banks become available to those
enterprises which on the contrary are in need of
means. These operations lead to the strongest
growth of the capital in the hands of the capitalist
and to the most powerful development of capi
talist production. Thus the banking operation
which feed the industrial and commercial enter
prises with financial means and thus promote
their most powerful development are known as
credit.
81. HOW ARE MARKETS CLASSIFIED?
Markets are classified as domestic (internal)
and foreign
3S. WHAT is THE DOMESTIC MARKET?
In the ordinary usage of the word under edo
mestic market Cor market in genera) is under
stood the summation of all places for the sale OF
commodities. Such definition does not grasp
this conception and explains nothing.
The market is phenomenon bound up with COM
modify economy, the basis of which is the social
division of labor. Gradually one after another
various methods of working up raw materials
separate out from agriculture and form independ
ent branches of industry exchanging their pro
ducts (n this case commodities already for the
products of agriculture. This non-agrculturai
2 (industrial) economy diverts more and more Of
the population from agriculture to industry. The
means of production l. e. the deprivation of his
independence, marks the transition from simple
commodity economy to capitalistic and creates
, the domestic market. Commodity economy gains
general prevalence only in the capitalist system;
that is also why the market attains exceptional
significance only under capitalism.
The process of creation of inc domestic market
during the transition from simple commodity to
I capitaiistie economy goes along two paths. On
e the one hand the means Of production which for
merly served the small producer for his existence
+ become capital in the hands of their new owner
S and serve for the production Of commodities ard
g consequently become commodities themselves. In
y this way the market for means of production is
Q created. On the other hand the small producer
r who formerly obtained the means of existence in
> his own economic unit; now, deprived of the
u means Of production, he is compelled to obtain the
means of existence from outside by realizing or
5 his wages. In this way the market for objects Of
e use is created.
n From this it is clear that the domestic marke
appears together with commodity economy anc
develops together with the latter. The domestic
market for capitalist economy is created by de
2 velopng capitalism which deepens the social di
vision of labor and divides the direct produce
into worker and capitalist. The degree of devel
: opment of capitalism in a country determines tn
81 degree of development of the domestic market
9 The rapid development of industry in capitals
: countries has created an enormous and continu
" ally increasing demand for means of production
y and objects of use l. e. has created a tremendou
n market.
e Thus, that quantity of commodities which cal
g be absorbed within a country at any given NOM
st ent, constitutes its market.
80. WHAT is THE FOREIGN MARKET?
IS The growth of capitalist production takes pac
e not so much on the score of objects of use as OF
is the score of means of production e. the growtl
u of means of production outstrips the growth o
N objects of use. But the growth of means of pro
ductiOn i. e. the great height of development o
a. productive forces without any corresponding
N broadening of consumption impels capitalism con
tinually to extend its domain, to colonize ney
countries to suck non-capitalist countries into tn
/ maelstrom of world economy.
Thus capitalism develops on the one hand i
depth e. increasing its production on the terri
tory of given state; on the other hand i
breadth /. e. extending its influence over new ten
,s ritories beyond the confines of the given state
Of These new territories for the capitalism of Civ
s4,,+o H.