To give the reader an idea of Sismondi’s doctrine as a whole, we shall first state the most important conclusions which he draws from this theory, and then deal with the manner in which his chief error is rectified in Marx’s Capital.
First of all, Sismondi draws from Adam Smith’s fallacious theory the conclusion that production must correspond to consumption, that production is determined by revenue. He goes on reiterating this “truth” (which proves his complete inability to understand the nature of capitalist production) throughout the whole of his next chapter, chapter VI: “The Mutual Determination of Production by Consumption, and Expenditure by Revenue.” Sismondi directly applies the ethics of the frugal peasant to capitalist society, and sincerely believes that in this way he has corrected Adam Smith’s doctrine. At the very beginning of his work, when speaking about Adam Smith in the introductory part (Book I, History of Science ), he says that he “supplements” Smith with the proposition that “consumption is the sole aim of accumulation” (I, 51). “Consumption,” he says, “determines reproduction” (I, 119-20), “the national expenditure must regulate the national revenue” (I, 113), and the whole of the work is replete with similar assertions. Two more characteristic features of Sismondi’s doctrine are directly connected with this: firstly, disbelief in the development of capitalism, failure to understand that it causes an ever-increasing growth of the productive forces and denial that such growth is possible—in exactly the same way as the Russian romanticists “teach” that capitalism leads to a waste of labour, and so forth.
“Those who urge unlimited production are mistaken,” says Sismondi (I, 121). Excess of production over revenue causes over-production (I, 106). An increase in wealth is beneficial only “when it is gradual, when it is proportionate to itself, when none of its parts develops with excessive rapidity” (I, 409). The good Sismondi thinks that “disproportionate” development is not development (as our Narodniks also do); that this disproportion is not a law of the present system of social economy, and of its development, but a “mistake” of the legislator, etc.; that in this the European governments are artificially imitating England, a country that has taken the wrong path. Sismondi wholly denies the proposition which the classical economists advanced, and which Marx’s theory wholly accepted, namely, that capitalism develops the productive forces. In fact, he goes to the length of regarding all accumulation as being possible only “little by little,” and is quite unable to explain the process of accumulation. This is the second highly characteristic feature of his views. The way he argues about accumulation is extremely amusing:
“In the long run, the total product of a given year always exchanges only for the total product of the preceding year” (I, 121). Here accumulation is wholly denied: it follows that the growth of social wealth is impossible under capitalism. The Russian reader will not be very much surprised by this assertion, because he has heard the same thing from Mr. V. V. and from Mr. N.-on. But Sismondi, was, after all, a disciple of Adam Smith. He has a feeling that he is saying something utterly incongruous, and he wants to correct himself:
“If production grows gradually,” he continues, “then annual exchange causes only a slight loss (une petite perte) each year, while at the same time improving the conditions for the future (en même temps qu’elle bonifie la condition future). If this loss is slight and well distributed, every body will bear it without complaint. . . . If, however, the discrepancy between the new production and the preceding one is great, capital perishes (sont entamés), suffering is caused, and the nation retrogresses instead of progressing” (I, 121). It would be difficult to formulate the fundamental thesis of romanticism and of the petty-bourgeois view of capitalism more vividly and more plainly than is done in the above tirade. The more rapid the process of accumulation, i.e., the excess of production over consumption, the better, taught the classical economists, who, though they were not clear about the process of the social production of capital, and though they were unable to free themselves from Adam Smith’s mistaken view that the social product consists of two parts, nevertheless advanced the perfectly correct idea that production creates a market for itself and itself determines consumption. And we know also that Marx’s theory, which recognised that the more rapid the growth of wealth, the fuller the development of the productive forces of labour and its socialisation, and the better the position of the worker, or as much better as it can be under the present system of social economy, took over this view of accumulation from the classical economists. The romanticists assert the very opposite, and base all their hopes on the feeble development of capitalism; they call for its retardation.
Further, the failure to understand that production creates a market for itself leads to the doctrine that surplus-value cannot be realised. “From reproduction comes revenue, but production in itself is not yet revenue: it acquires this name” (ce nom! Thus the difference between production, i.e., the product, and revenue lies only in the word!) “and functions as such (elle n’opère comme telle ) only after it is realised, after each article produced finds a consumer who has the need or the desire for it” (qui en avait le besoin ou le désir) (I, 121). Thus, the identification of revenue with “production” (i.e., with all that is produced) leads to the identification of realisation with personal consumption. Sismondi has already forgotten that the realisation of such products as, for example, iron, coal, machines, etc., the realisation of means of production in general, takes place in a different way, although he had been very close to this idea earlier. The identification of realisation with personal consumption naturally leads to the doctrine that it is surplus-value that the capitalists cannot realise, because, of the two parts of the social product, wages are realised through workers’ consumption. And indeed, Sismondi reached this conclusion (subsequently amplified in greater detail by Proudhon and constantly repeated by our Narodniks). In controversy with MacCulloch, Sismondi makes the allegation that the latter (in expounding Ricardo’s views) does not explain the realisation of profit. MacCulloch had said that, with the division of social labour, one branch of production provides a market for another: the producers of bread realise their commodities in the product of the producers of clothing and vice versa. “The author,” says Sismondi, “presupposes labour without profit (un travail sans bénéfice), reproduction which only replaces the workers’ consumption” (II, 384, Sismondi’s italics) . . . “he leaves nothing for the master . . . we are investigating what becomes of the excess of the workers’ production over their consumption” (ibid.). Thus, we find that this first romanticist already makes the very definite statement that the capitalists cannot realise surplus-value. From this proposition Sismondi draws the further conclusion—again the very same as that drawn by the Narodniks—that the very conditions of realisation make it necessary for capitalism to have a foreign market. “As labour itself is an important component of revenue, the demand for labour cannot be reduced without making the nation poorer. Hence, the expected gain from the invention of new methods of production nearly always relates to foreign trade” (I, 345). “The nation which is the first to make some discovery is able, for a considerable time, to expand its market in proportion to the number of hands that are released by each new invention. It employs them forthwith to produce that larger quantity of products which its invention enables it to produce more cheaply. But at last the time will come when the whole civilised world forms a single market, and it will no longer be possible to acquire new purchasers in any new nation. Demand in the world market will then be a constant (précise) quantity, for which the different industrial nations will compete against each other. If one nation supplies a larger quantity of products, it will do so to the detriment of another. The total sales cannot be increased except by an increase in general prosperity, or by the transfer of commodities, formerly the exclusive possession of the rich, to the sphere of consumption by the poor” (II, 316). The reader will see that Sismondi presents the very doctrine that our romanticists have learned so well, namely, that the foreign market provides the way out of the difficulty of realising the product in general, and surplus-value in particular.
Lastly, this same doctrine that national revenue and national production are identical led to Sismondi’s theory of crises. After what has been said above, we need scarcely quote from the numerous passages in Sismondi’s work which deal with this subject. His theory that production must conform to revenue naturally led to the view that crises are the result of the disturbance of this balance, the result of an excess of production over consumption. It is evident from the passage just quoted that it is this discrepancy between production and consumption that Sismondi regarded as the main cause of crises; and in the forefront he placed the underconsumption of the masses of the people, the workers. This explains why Sismondi’s theory of crises (which Rodbertus also adopted) is known in economic science as an example of the theories which ascribe crises to underconsumption (Unterkonsumption).
 See for example, II, 456-57, and many other passages. Later we shall quote specimens of them, and the reader will see that even in their mode of expression our romanticists, like Mr. N.-on, differ in no way from Sismondi.—Lenin —Lenin
 See supplement to Nouveaux Principes, 2nd ed., Vol. II: “Eclaircissements relatifs à la balance des consommations avec les productions” (“Explanations Relative to the Balance of Consumption and Production.”—Ed.), where Sismondi translates and disputes the essay by Ricardo’s disciple (MacCulloch) published in the Edinburgh Reviewentitled “An Inquiry into the Question as to Whether the Power to Consume Always Grows in Society Simultaneously with the Power to Produce.” —Lenin
 Lenin refers to MacCulloch’s polemical article “Mr. Owen’s Plans for Relieving the National Distress,” published anonymously in 1819 in The Edinburgh Review (Vol. XXXII), to which Sismondi replied. The The Edinburgh Review or Critical Journal was a scientific, literary and political journal that appeared from 1802 to 1929.