The establishment by small commodity-producers of relatively large workshops marks the transition to a higher form of industry. Out of scattered small production rises capitalist simple co-operation. “Capitalist production only then really begins . . . when each individual capital employs simultaneously a comparatively large number of labourers; when consequently the labour-process is carried on an extensive scale and yields, relatively, large quantities of products. A greater number of labourers working together, at the same time, in one place (or, if you will, in the same field of labour), in order to produce the same sort of commodity under the mastership of one capitalist, constitutes, both historically and logically, the starting-point of capitalist production. With regard to the mode of production itself, manufacture, in its strict meaning, is hardly to be distinguished, in its earliest stages, from the artisan trades of the guilds, otherwise than by the greater number of workmen simultaneously employed by one and the same individual capital. The workshop of the medieval master handicraftsman is simply enlarged” (Das Kapital, I2, S. 329).
It is this starting-point of capitalism that is to be seen, consequently, in our small peasant (“handicraft”) industries. The different historical situation (absence or slight development of guild handicrafts) merely changes the way in which identical capitalist relations are made manifest. The difference between the capitalist workshop and the workshop of the small industrialist lies at first only in the number of workers simultaneously employed. That is why the first capitalist establishments, being numerically in the minority, are submerged, as it were, in the general mass of small establishments. However, the employment of a larger number of workers inevitably leads to consecutive changes in production itself, to the gradual transformation of production. Under primitive hand technique differences between the individual workers (in strength, dexterity, skill, etc.) are always very considerable; if only for this reason the position of the small industrialist is extremely precarious; his dependence upon market fluctuations assumes the most burdensome forms. Where, however, several workers are employed in an establishment, the individual differences between them are smoothed out in the workshop itself: “the collective working day of a large number of workmen simultaneously employed . . . gives one day of average social labour,” and as a consequence, the manufacture and sale of the products of the capitalist workshop acquire incomparably greater regularity and stability. It becomes possible to make fuller use of premises, warehouses, implements, instruments of labour, etc.; and this leads to a cheapening of production costs in the larger workshops. The organisation of production on a larger scale and the simultaneous employment of many workers require the accumulation of a fairly large capital, which is often formed, not in the sphere of production, but in the sphere of trade, etc. The size of this capital determines the form in which the proprietor himself takes part in the enterprise—whether he himself is a worker, if his capital is still very small, or whether he gives up working himself and specialises in commercial and entrepreneur functions. “One can establish a connection between the position of the workshop owner and the number of his workers”we read, for example, in a description of the furniture industry. “The employment of 2 or 3 workers provides the proprietor with such a small surplus that he has to work alongside of them. . . . The employment of 5 workers already gives the proprietor enough to enable him to give up manual labour in some measure, to take it easy somewhat, and to engage mainly in the last two business functions” (i.e., purchase of materials and sale of goods). “As soon as the number of wage-workers reaches 10 or exceeds this figure, the proprietor not only gives up manual labour but practically ceases to supervise his workers: he appoints a foreman for the purpose. . . . He now becomes a small capitalist, a ’born master’” (Isayev, Industries of Moscow Gubernia, I, 52-53). The statistics we have cited graphically confirm this description, showing a decline in the number of family workers with the appearance of a considerable number of wage-workers.
The general significance of capitalist simple co-operation in the development of capitalist forms of industry is described by the author of Capital as follows:
“Historically, however, this form is developed in opposition to peasant agriculture and to the carrying on of independent handicrafts whether in guilds or not. . . . Just as the social productive power of labour that is developed by co-operation, appears to be the productive power of capital, so co-operation itself, contrasted with the process of production carried on by isolated independent labourers, or even by small employers, appears to be a specific form of the capitalist process of production. It is the first change experienced by the actual labour-process, when subjected to capital. . . . The simultaneous employment of a large number of wage-labourers, in one and the same process, which is a necessary condition of this change, also forms the starting-point of capitalist production. . . . If then, on the one hand, the capitalist mode of production presents itself to us historically, as a necessary condition to the transformation of the labour-process into a social process, so, on the other hand, this social form of the labour-process presents itself, as a method employed by capital for the more profitable exploitation of labour, by increasing that labour’s productiveness.
“In the elementary form, under which we have hitherto viewed it, co-operation is a necessary concomitant of all production on a large scale, but it does not, in itself, represent a fixed form characteristic of a particular epoch in the development of the capitalist mode of production. At the most it appears to do so, and that only approximately, in the handicraft-like beginnings of manufacture. . .” (Das Kapital, I2, 344–345).
We shall see later how closely small “handicraft” establishments in Russia which employ wage-workers are connected with incomparably more highly developed and more widespread forms of capitalism. As for the role of these establishments in the small peasant industries, the statistics already given show that these establishments create fairly wide capitalist co-operation in place of the previous scattered production and considerably raise the productivity of labour.
Our conclusion as to the tremendous role of capitalist co-operation in the small peasant industries and as to its progressive significance is in sharp contrast to the widespread Narodnik doctrine of the predominance of all sorts of manifestations of the “artel principle” in the small peasant industries. As a matter of fact, the reverse is the case; the distinguishing feature of small industry (and handicrafts) is the extremely scattered nature of the individual producers. In support of the contrary view Narodnik literature could advance nothing more than a collection of individual examples, the overwhelming majority of which do not apply to co-operation at all, but to temporary, miniature associations of masters, big and small, for the common purchase of raw materials, for the building of a common workshop, etc. Such artels do not in the least affect the predominant significance of capitalist co-operation. To obtain an exact idea of how widely the “artel principle” is actually applied it is not enough to cite examples taken at random here and there; it is necessary to take the data for some area which has been thoroughly investigated, and to examine the relative incidence and significance of the various forms of co-operation. Such, for example, are the data of the Perm “handicrafts” census of 1894-95; and we have shown elsewhere (Studies, pp. 182-187) what an amazing dispersion of small industrialists was revealed by the census, and what importance attaches to the very few big establishments. The conclusion we have drawn as to the role of capitalist co-operation is based not on isolated examples, but on the precise data of the house-to-house censuses, which embrace scores of the most diverse industries in different localities.
 For example, concerning the metal-beaters of Vladimir Gubernia, we read: “With the employment of a larger number of workers a considerable reduction in expenditure may be effected; this concerns expenditure on light, blocks, anvil-stone and casing” (Industries of Vladimir Gubernia, III, 188). In the copper-beating industry of Perm Gubernia a one-man establishment needs a complete set of tools (16 items); for two workers “a very small addition” is required. “For workshops employing 6 or 8 persons three or four sets of tools are required. . . . Only one lathe is kept even in a workshop employing 8 men” (Transactions of the Handicraft Commission, X, 2939). The fixed capital of a big workshop is estimated at 466 rubles, of a medium workshop at 294 rubles, and of a small one at 80 rubles; and the total output at 6,200 rubles, 3,655 rubles, and 871 rubles respectively. That is to say, in the small workshops the output is 11 times the amount of the fixed capital, in the medium ones 12 times, and in the big ones 14 times.—Lenin
 We do not think it worth our while to support the statement made in the text with examples, a host of which may be found in Mr V. V.’s The Artel in Handicraft Industry (St. Petersburg, 1895). Mr. Volgin has dealt with the true significance of the examples cited by Mr. V. V. (op. cit., p. 182 and foll.) and has shown the very negligible part played by the “artel principle” in our “handicraft” industry. Let us merely note the following assertion by Mr. V. V.: “. . . the amalgamation of several independent handicraftsmen into one production unit . . . is not imperatively dictated by competition, as is proved by the absence in the majority of industries of workshops of any size employing wage-workers” (93). To advance such a bald and sweeping thesis is, of course, much easier than to analyse the house-to-house census data available on this question.—Lenin
 See present edition, Vol. 2, The Handicraft Census of 1894-95 in Perm Gubernia.—Ed.
 Karl Marx, Capital, Vol. I, Moscow, 1958, p. 322. [p.356]
 Karl Marx, Capital, Vol. I, Moscow, 1958, p. 323. [p. 357]
 Metal-beaters—workers who beat gold, silver, tin, copper and other metals into the foil or leaf formerly used for decorative purposes; icons and other church property were among the articles so decorated. [p.357]
 Karl Marx, Capital, Vol. I, Moscow, 1958, pp. 334-335. [p. 359]