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Mi chael R. Kr ät ke
The Luxemburg Debate -
The Beginnings of Marxian Macro-Economics
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Abstract: Bef ore Rosa Luxembur g dar ed t o cr i t i ci ze t hem, Marx’
t abl eaux économi que, hi s r epr oduct i on schemes, publ i shed f or t he
f i r st t i me i n 1885 i n vol ume I I of Capi t al , edi t ed by Fr i edr i ch
Engel s, near l y escaped t he at t ent i on of t he academi c publ i c.
Tugan- Bar anowsky r ef er r ed t o t hem, act ual l y made use of t hem i n
hi s t heor y of cr i si s i n 1899, but bef or e Rosa Luxembur g t her e
was no debate what soever wi t h r espect t o t he Marxi an
r epr oduct i on schemes. Luxembur g’ s cr i t i que t r i gger ed of f a l ong
l ast i ng debat e - mai nl y among Mar xi st s and - af t er a whi l e -
qui t e a l ot of Non- Mar xi st s as wel l . The debat e st ar t ed i n 1913,
j ust af t er t he publ i cat i on of Rosa Luxembur g’ s “Accumul at i on ofCapi t al , wi t h a ser i es of def ences of Mar x’ t heor y of
r epr oduct i on and accumul at i on - i nvol vi ng some har sh cr i t i ques
of Rosa Luxembur g’ s t r eat ment of t he t opi c and her Mar x- cr i t i que
i n par t i cul ar ( by Pannekoek, Eckst ei n, Ot t o Bauer and ot her s) .
Rosa Luxembur g r eact ed wi t h a l engt hy Ant i - Cr i t i que, publ i shed
post humousl y i n 1921. The debat e di d not pet er out , i t act ual l y
cont i nued dur i ng the 1920s when di f f er ent aut hor s ( Buchar i n,
St er nber g and ot her s) t r i ed t o cl ar i f y t he poi nt s made by Rosa
Luxembur g - and t o i mprove t he Marxi an r epr oduct i on schemes
and/ or t o extend t he or i gi nal Mar xi an t heory of accumul at i on.
Due t o these var i ous ef f or t s, t he r epr oduct i on schemes wer e
enl ar ged and di f f er ent i at ed i n var i ous ways. I n t he 1930s, Rosa
Luxemburg’ s ol d adver sar y Ot t o Bauer t r i ed agai n t o devel op a
much ref i ned ver si on of t he Mar xi an repr oduct i on schemes i n
or der t o anal yse and bet t er expl ai n t he Gr eat Cr i si s of t he1930s. Despi t e the f ai l ur e of her book and t hanks t o her
unt i mel y i nt ervent i on, t he r epr oduct i on schemes had become one
of t he cornerst ones of Marxi an macroeconomi cs.
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0. The Debate on Imperialism in the German Social
Democracy
Sever al year s bef ore Wor l d War I , t he Ger man soci al
democrati c par t y, t he l eadi ng par t y of t he I I . I nt er nat i onal ,
had shi f t ed i t s at t ent i on f r om mer e col oni al pol i t i cs t owar ds
t he r at her new phenomenon of “i mper i al i sm”, r egarded as a
r evi val of t he “wor l d pol i t i cs” of t he gr eat power s. On sever al
par t y congr esses, f or i nst ance at Mai nz i n 1900, at Chemni t z at
1912, as wel l as on congr esses hel d by the Soci al i st
I nt er nat i onal , t he pol i t i cs of i mper i al i sm wer e cl ear l y
condemned. Si nce t he ear l y year s of t he 20t h
cent ur y, t he l eadi ngpart y t heor i st s i n Germany and Aust r i a were engaged i n debates
on t he expl anat i on of i mper i al i st pol i t i cs – Kaut sky and t he
r i si ng st ar s of Aust r o- Mar xi sm, Ot t o Bauer and Rudol f Hi l f er di ng
made the mai n cont r i but i ons. Rosa Luxembur g was t he f i r st
Mar xi st economi st t o devot e a whol e st udy at book- l engt h to
i mper i al i sm, j oi ni ng t he debat e r at her l at e, i n 1913. Unl i ke her
pr edecessors, and very much i n t he mood and st yl e of her ol d
adver sar y, Eduar d Ber nst ei n, she combi ned t he expl anat i on of
i mper i al i sm wi t h a har sh and t hor ough cr i t i que of Mar x. I n or der
t o devel op Mar x’ pol i t i cal economy f ur t her , one had t o cr i t i ci ze
i t s gaps and weaknesses wi t h t he same rut hl essness as he hi msel f
had cri t i ci zed t he cl assi cal pol i t i cal economi st s. So, i n 1913,
publ i shi ng t he “gr eat wor k” t hat ever ybody expect ed f r om her ,
Rosa Luxembur g became a Mar xi st r evi si oni st of sor t s.
1. Marx’ tableaux économiques
From 1857 unt i l 1881, Mar x wr ot e sever al ver si ons of
what was t o become one of hi s most f amous achi evements i n
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pol i t i cal economy: Hi s own t abl eaux économi ques, or r epr oduct i on
schemes, i n f act t he second ver si on of a macr oeconomi c anal ysi s
of t he r epr oduct i on pr ocess i n capi t al i st economi es af t er
Fr ancoi s Quesnay had f i r st desi gned and publ i shed a model
depi ct i ng t he ci r cul at i on of t he nat i onal pr oduct bet ween t he
t hr ee gr eat economi c cl asses of soci et y i n 1758. He and hi s
f ol l owers pr oduced sever al ver si ons of t he much admi r ed
t abl eaux, but unf or t unat el y, nei t her Quesnay nor t he ot her
member s of t he thr i vi ng Physi ocr at i c school ever f i ni shed t he
j ob. Af t er a shor t car eer , t he t abl eau économi que f el l i nt o
obl i vi on.
I n 1857/ 58, wr i t i ng t he l ar ge manuscr i pt s t oday known as
t he Gr undr i sse, Mar x r an f or t he f i r st t i me i nt o t he pr obl em of
t he r epr oduct i on of t ot al soci al capi t al . He want ed t o expl ai n
t he phenomenon of r eoccur r i ng cycl i cal cr i ses - or gener al gl ut s
i n t he par l ance of cl assi cal pol i t i cal economy. Accor di ng t o hi s
or i gi nal pl an, t he f amous 6 – book pl an of 1858, a book on
cr i si s and t he wor l d mar ket shoul d pr ovi de t he cl ose and t he
cul mi nat i on of hi s whol e pr oj ect cal l ed "cr i t i que of pol i t i cal
economy". The manuscr i pt of 1857/ 58 i s a r esearch manuscr i pt ,
not wr i t t en f or publ i cat i on. 1 I t i s not a phi l osophi cal t r act at
al l but a f i r st ef f or t t o br i ng t oget her Mar x’ var i ous ef f or t s
t o cri t i ci ze cl assi cal pol i t i cal economy f r om 1843/ 44 i n a
coher ent , syst emat i c way. Accor di ngl y, Mar x, t he pol i t i cal
economi st , t r i es t o sol ve t he pr obl ems t hat cl assi cal pol i t i cal
economy had l ef t unset t l ed. Among t hem, t he pr obl em of t he
1 I have explained the status of the Grundrisse and its real place in the long story of the
making of Marx’s Capital elsewhere (cf. Krätke 2008). The now prevailing view, which turns it
into an exercise of applied Hegelianism, is completely misguided. The abuse of the text (its very poor translation into English notwithstanding) as a quarry for citations serving as starting points
for all sorts of lofty “philosophical” exercises, is rather a disgrace and aloof from serious
scholarship, Marxist or not.
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r epr oduct i on and accumul at i on of capi t al on a nat i onal or wor l d
scal e – a pr obl em t hat had t r oubl ed t he cl assi cal economi st s and
i nt r i gued thei r f i r s t soci al i st c r i t i cs.
I n t hi s manuscr i pt , Mar x st ar t s wi t h a ser i es of exampl es -
subdi vi di ng t ot al soci al capi t al i n no l ess t han f i ve di f f er ent
and par t i cul ar capi t al s or i ndust r i es - and st r uggl es on wi t h a
l ot of ar i t hmet i c i l l ust r at i ons. However , he ar r i ves at a
concl usi on: The “i nner st r uctur e” of capi t al , any ( i ndust r i al )
capi t al , shoul d somehow det er mi ne t he di f f er ent i at i on of t ot al
soci al capi t al as wel l as t he pr opor t i ons i n whi ch t he di f f er ent
par t s of soci al capi t al woul d exchange wi t h each ot her ( cf . MEGAI I / 1. 2, p. 353, 354) . 2
I n t he next l ar ger manuscr i pt , t he manuscr i pt of 1861 - 63,
Marx made a deci si ve st ep f orward. I t i s her e that he came up
wi t h hi s own ver si on of a t abl eau économi que f or t he f i r st t i me.
He sket ched a gr aph - ver y much l i ke t he t abl eau of Fr ancoi s
Quesnay - based upon hi s own anal yt i cal categor i es, and di vi ded
t he pi ct ur e between t hr ee depart ment s or pol es - consumpt i on
goods, pr oduct i on goods and t he tot al soci al pr oduct i on.
Conf i ni ng hi msel f t o “si mpl e r epr oduct i on”, he spent a l ot of
t i me anal ysi ng t he i ntermedi ary movement s of money and
commodi t i es ( no l ess t han seven i nt er medi ar y f l ows of ei t her
money or commodi t i es) and dr af t i ng var i ous pl ans f or t he
t r eat i se of t hi s t opi c - t he anal ysi s of t he t ot al pr ocess of
t he r epr oduct i on of capi t al - i n hi s f ut ur e wor k (cf . MEGA I I /3. 6, pp. 2270 e. s. , 2337 e. s. )
Dur i ng t he f i r st hal f of t he year 1865, Mar x wr ot e t he
2 There is no reliable English translation of the Grundrisse text, another reason not
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f i r st f ul l ver si on of what he i nt ended t o become vol ume I I of
Capi t al . 3 I n t hi s manuscr i pt , he out l i ned a r at her ambi t i ous
pr ogr am: He woul d pr esent a f ul l anal ysi s of t he ci r cul at i on and
r epr oduct i on of t ot al soci al capi t al i n chapt er 3 of t hi s vol ume
whi ch woul d compr i se t he exami nat i on of t he pr ocess of expanded
r epr oduct i on or accumul at i on, i ncl udi ng money capi t al
accumul at i on ( or “savi ngs”) and pr ovi de t he necessary cl ues f or
t he l at er anal ysi s of cri ses or “di st ur bances of t he
r epr oduct i on pr ocess” ( cf . MEGA I I / 4. 1, pp. 321 e. s. , 381) .
Thi s i s st i l l a r esear ch manuscr i pt , i n whi ch t he author i s
exper i ment i ng wi t h var i ous devi ces. He has not yet made up hi s
mi nd as t o t he r i ght di st i nct i on of depar t ment s or f r act i ons oft ot al soci al capi t al , he dr opped t he or i gi nal gr aph but had not
yet f ound a way to r epl ace i t by anot her f or m of pr esent at i on.
But t he gener al di r ect i on of t he i nvest i gat i on i s al r eady cl ear .
The deci si ve st ep f or war d was made l at er , i n 1868 - 70,
when Mar x wr ot e t he second f ul l ver si on of vol ume I I of Capi t al
( known as manuscr i pt I I ) . 4 Al t hough he was st i l l exper i ment i ng
a l ot , he had now f ound t he al gebr ai c f or m of pr esent at i on of
hi s “schemes of r epr oduct i on”. I n wr i t i ng, he f ol l owed hi s usual
pr act i ce of dr af t i ng a var i et y of numer i cal exampl es, ent angl i ng
hi msel f i n t he ar i t hmet i c. But t he basi c concept s are pr esent
and qui t e cl ear . As t he manuscr i pt shows cl ear l y enough, Marx
had not gi ven up hi s ambi t i ous pl an t o i ncl ude al l t he
i ntermedi ary movement s of money and commodi t i es i n hi s anal ysi s
to trust the philosopher’s tales about it.3 These manuscripts were published for the first time in the second MEGA, more
than a hundred years after the actual time of writing. Until today, there is no English translation
of this very first draft of Capital, volume II.4 This manuscript has been published for the first time, in MEGA II / 11. In print, it is
more than 500 pages long.
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whi ch he st i l l concei ved of as an anal ysi s of t he t ot al pr ocess
of r epr oduct i on and ci r cul at i on i n t er ms of f l ows. Ponder i ng on
hi s i nvent i on, he exper i ment ed wi t h var i ous di vi si ons and
subdi vi si ons - no l ess t han 5 di f f er ent depar t ment s - and he
t r eat ed t he pr obl ems of accumul at i on, i ncl udi ng the accumul at i on
of money capi t al , at l engt h. Nonet hel ess, t he manuscr i pt was
br oken of f and r emai ned unf i ni shed.
I n 1877, Marx wr ote a pi ece f or Engel s who was i nvol ved i n
a l engt hy pol emi c agai nst a t hen f amous cr i t i que, Eugen Dühr i ng.
Mar x suppor t ed hi m by cr i t i ci zi ng Dühr i ng’ s Hi st or y of Economi c
Thought . The cent r epi ece of Mar x’ cont r i but i on was a r at herdet ai l ed exposi t i on and expl anat i on of Francoi s Quesnay’ s
Tabl eaux économi ques. As we can see now f r om hi s draf t s,
publ i shed f or t he f i r st t i me i n t he MEGA, vol ume I / 27, he
gr asped t he opport uni t y t o engage hi msel f i n another i nt ense
st udy of Quesnay’ s work. The r esul t s of t hese renewed st udi es
ar e i ncl uded i n hi s l at er manuscri pt s f or Capi t al , vol ume I I .
I n 1878 - 1881, i n hi s l ast manuscr i pt f or Capi t al , vol ume
I I ( among Mar xol ogi st s bet t er known as manuscr i pt VI I I ) , Mar x
t r i ed agai n t o f i nd t he adequat e f or m t o pr esent hi s r esul t s. 5
But , as t he manuscr i pt cl ear l y shows, Marx was not yet done wi t h
hi s r esear ch. The bul k of t he manuscr i pt i s dedi cat ed t o t he
anal ysi s of t he r epr oduct i on and ci r cul at i on of t ot al soci al
capi t al ( t he t hi r d par t or chapt er of what was l at er t o become
vol ume I I ) and i n par t i cul ar t o t he anal ysi s of t he accumul at i onpr ocess. Al t hough hi s manner of pr esent at i on i s r at her cl umsy,
he anal yses not onl y the i mpact of accumul at i on on t he st r uct ur e
5 This manuscript has been published for the first time, in MEGA II / 11.
In print, it is a text of more than 300 pages.
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of t he sur pl us product but al so t he i nt er r el at i on bet ween money
accumul at i on and what he cal l s “r eal accumul at i on”. 6 As i n t he
ear l i er manuscr i pt s, and st i l l accor di ng t o hi s pl an of 1863, he
deal s wi t h t he pr oduct i on of gol d as a sour ce of addi t i onal
money as wel l as wi t h t he hoar di ng of money by capi t al i st s i n
bot h depar t ment s. 7 One can even f i nd an anal ysi s of t he f amous
“t hi r d per sons” and t hei r speci f i c rol e i n t he t ot al pr ocess of
r epr oduct i on and ci r cul at i on. Even i f t he manner of pr esent at i on
i s f ar f r om f i ni shed, t he el ement s f or t he sol ut i on of al l t he
sal i ent pr obl ems of t he accumul at i on pr ocess are cl ear l y pr esent
i n t hi s l ast manuscr i pt by Mar x hand. He l ef t i t unf i ni shed due
t o anot her i l l ness i n the summer of 1881.
2. Rosa Luxemburg’s critique
Vol ume I I of Capi t al , f i r st publ i shed i n 1885, had passed
r at her unnot i ced. Onl y i n t he debat e among Russi an r adi cal s on
t he f ut ur e capi t al i st devel opment of Russi a towar ds i ndust r i al
capi t al i sm some use was made of t he Marxi an schemes of
r epr oduct i on. 8 Tugan- Bar anowsky was t he f i r st t o use t hem i n
6 Capitalists’ savings and capitalists’ investments (real or direct, not financial or
portfolio) in today’s economists’ parlance. In the second section of Capital, volume II, Marx
shows in much detail, why (not always how) capitalists are bound to save money, that is to say to
“hoard”, to build up reserve funds of various kinds serving different functions, due to the very
“mechanics” of capital turnover.7 Marx sticks to the abstraction from credit in all his manuscripts for this volume. So,
the only sources of “money” are either gold production or hoards. As his analysis of the turnover
of capital shows, hoarding is a necessity for every industrial capital.8 For a history of this debate see Rosdolsky 1978. Luxemburg devoted two chapters
of the second section of her book, the section dealing with the history of economic thought on
the problem of capital accumulation, to the debates between various kinds of radical economists
in Russia, including the Marxists.
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or der t o pr ove t he possi bi l i t y of i ndust r i al gr owt h wi t hout
l i mi t s – and i ndependent of f or ei gn mar ket s ( cf . Tugan -
Bar anowsky 1901) . Dani el son, wel l known as t he f i r st t r ansl at or
of Mar x’ Capi t al , vol ume I , t o Russi an, as wel l as an
i nt er l ocut or whom bot h Mar x and Engel s hel d i n hi gh r espect ,
was t he f i r st t o ar gue at l engt h t hat t he devel opment of
capi t al i sm i n Russi a, wi t hout col oni es, wi t hout sur r oundi ng
“non- capi t al i st ” envi r onment s, was doomed t o f ai l ( cf . Dani el son
1893) 9, whi l e t he Mar xi st s, l egal or not , t r i ed t o pr ove t he
opposi t e. Ther e wer e a f ew, br i ef r eact i ons, r at her host i l e t o
Tugan’ s f i r st book ( on t he t heor y and hi st or y of cr i ses i n
Br i t ai n) ( Tugan- Bar anowsky 1901) as wel l as t o hi s l at er ( on t het heoret i cal f oundat i ons of Mar xi sm) ( Tugan- Bar anowsky 1905) i n t he
l eadi ng Ger man soci al i st j our nal s “Di e Neue Zei t ” and
“Sozi al i st i sche Monat shef t e”( cf . Schmi dt 1901, Kaut sky 1902,
Ot t o Bauer 1904, Boudi n 1907, Pannekoek 1907, Ot t o Bauer 1906) ,
but no ext ended debate on t he mat t er .
Kaut sky was t he f i r st t o mi x up t he i ssues of an
expl anat i on of t he r ecent phenomena of “i mper i al i sm” and t he
Gr eat Depr essi on, whi ch had si nce 1895 tur ned i nt o a l ong
pr osper i t y. Hi s cr i t i que of Tugan’ s wor k t r i gger ed a debat e, t he
f i r st r eal debat e on cri si s t heor y i n t he hi st or y of Mar xi sm
( cf . Kr ät ke 2014) . Loui s Boudi n, Ant on Pannekoek, Conr ad
Schmi dt , Ot t o Bauer , Hei nr i ch Cunow, even Eduard Bernst ei n
cont r i but ed t o i t , but Rosa Luxembur g st ayed out of t he f r ay. 10
The debate l i nger ed on f or several years, but ended wi t hout anyset t l ement . Some of t he prot agoni st s had become aware of t he
9 Marx had read Danielson’s articles on the development of capitalism in Russia,
“Our Post-Reform economy”, and had encouraged him to publish them as a book.10
During the debate on revisionism, when preparing her critique of Bernstein, he
had already admitted in private correspondence that she found the issues of crisis and growth
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di f f i cul t i es t hat t he unset t l ed quest i ons of t he cri t i que of
pol i t i cal economy that Marx had bequeathed t o them were mor e
ser i ous t han t hey had pr esumed. 11 So, t he gr ound was wel l
pr epar ed f or anot her “r evi si on” of Mar x.
I n 1913, af t er about f i f t een year s of pr epar at i ons, Rosa
Luxembur g publ i shed her onl y maj or t r eat i se on pol i t i cal
economy, t he “Accumul at i on of Capi t al ”. 12 The book was meant t o
pr ovi de an expl anat i on of I mper i al i sm, as she announced i n t he
subt i t l e ( A cont r i but i on t o an economi c expl anat i on of
I mper i al i sm) . I mpl i ci t l y, she l aunched an al l out at t ack agai nst
t he pr evai l i ng Mar xi st or t hodoxy i n the Ger man soci al democr at i cpar t y. The bol dness wi t h whi ch she cr i t i ci zed Mar x hi msel f and
i nt r oduced a f ar - r eachi ng r evi si on t o one of t he cor e par t s of
hi s economi c t heory, even di smi ssi ng t he usual l y unt ouchabl e
“met hod” of Mar x’ economi c anal ysi s, st unned f r i ends and f oes
al i ke. Rosa Luxembur g, t he st al war t def ender of Mar xi st
or t hodoxy agai nst “r evi si oni st ” her esi es, di d not hesi t at e t o
not e and depl or e Mar x’ s “gl ar i ng i nconsi st enci es”, t he “def ect s”
of hi s r easoni ng, hi s “wr ong appr oach” and “l ong wi nded
det our s”, and t o di smi ss hi s r at her “mi sl eadi ng f or mul at i on of
t he pr obl em” ( Luxemburg 1990a, pp. ; 2003, pp.
) . As she emphasi zed t i me and agai n, Capi t al , vol ume I I had
r emai ned unf i ni shed, cr uci al par t s of Mar x’ s anal yses wer e l ef t
“most i ncompl et e” and si mpl y br oken of f .
Si nce 1907, she had wor ked as a l ect ur er i n pol i t i cal
rather daunting.11
Richard Day and Daniel Gaido have recently published two volumes which make
the main contributions to these debates available to an English speaking audience for the firsttime (see Richard D. Day / Daniel Gaido 2011, 2012).
12 It was followed by a response to her critics, at book length, the “Anti-critique”,
written in 1915, and published only after her death, in 1921 (cf. Rosa Luxemburg 1990c).
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economy and economi c hi st ory at t he par t y school of t he German
soci al democrat i c par t y, based i n Ber l i n. Her l ect ur es, cover i ng
a vast ar r ay of t opi cs f r om t he ear l y ages of manki nd unt i l t he
t endenci es of moder n, i ndust r i al capi t al i sm, wer e qui t e a
success. So she st ar t ed worki ng on t hem and t r ansf ormi ng t hem
i nt o a f ul l - scal e i nt r oductor y t ext book of Pol i t i cal Economy.
The t ext was never f i ni shed, cr uci al chapter s wer e never wr i t t en
or never l ar ge par t s of t he manuscr i pt s have been l ost , some of
t he r emai ni ng par t s wer e onl y publ i shed i n 1925, si x year s af t er
Rosa Luxembur g’ s deat h. 13 However , t he f r agment s provi de some
hi nt s as t o her gener al concept i on of pol i t i cal economy and i t s
cr i t i que. I n t he st udy of pol i t i cal economy, we l ook f orexpl anat i ons f or t he possi bi l i t y of moder n capi t al i sm: How i s an
anarchi c market economy on a wor l d scal e poss i bl e? How i s
cont i nuous growt h of such an economy sust ai nabl e i n t he l ong
r un? Event ual l y, as t he devel opment of capi t al i sm has i t s
di st i nct l i mi t s, t he t ask i s changed: Fr om t he i nvest i gat i on of
t he pr econdi t i ons of capi t al i sm – how i s capi t al i sm possi bl e,
how i s capi t al i st devel opment possi bl e? – t o t he i nvest i gat i on
of t he condi t i ons t hat r ender capi t al i sm i mpossi bl e and wi l l
br i ng capi t al i st devel opment t o i t s end. As Rosa Luxembur g saw
i t , t he f i ne poi nt of Mar x’ cr i t i que was j ust t he det er mi nat i on
of capi t al i sm’ s hi st or i cal l i mi t s – i n hi st or i cal space and
t i me. An i nvest i gat i on t hat went cl ear l y f ur t her t han t he
i dent i f i cat i on of “i nner ” cont r adi cti ons or t he condi t i ons of
di sequi l i br i um and cr i si s i nher ent t o capi t al i sm as such ( cf .
Luxemburg 1990c, pp. 443, 445; vgl . 1990a, p. 411) .
When she wr ote her cr i t i que of Marx’ r epr oduct i on schemes,
13 Several lecture notes and further manuscripts by Rosa Luxemburg have been
published recently or are about to be published soon. Until very recently, most of the text of
Luxemburg’s introduction to political economy was not available in English.
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she had no i dea of t he var i et y of Mar x’ manuscr i pt s dedi cat ed t o
t he mat t er at hand. I n f act , i n May 1900 she had r ef used t o
par t i ci pat e i n t he edi t i ng work on Mar x’ many unpubl i shed paper s
and manuscr i pt s when Kaut sky i nvi t ed her t o hel p hi m wi t h what
he was l at er t o publ i sh as “Theor i es of Sur pl us Val ue” i n 1905 –
1910 ( cf . Kr ät ke 2010) , 14 So she mi ssed the oppor t uni t y t o st udy
Mar x’ unpubl i shed manuscr i pt s f or Capi t al , vol ume I I and t o
become f ami l i ar wi t h Marx’ workshop.
I n 1911, whi l e she was wor ki ng on her book, she gave some
comment s on t he t opi c - i n pr i vat e l et t er s wher e she di d not
r est r i ct her l anguage: To her cl ose f r i end Kost j a Zet ki n shewr ote i n November of t hat year , t hat t he Mar xi an r epr oduct i on
schemes had al r eady gi ven her t he creeps f or a l ong t i me; now,
at cl oser exami nat i on, she f ound t hem f ul l of unr el i abi l i t i es
( “Wi ndbeut el ei en” i n Ger man, whi ch i s much har sher ) ( cf .
Laschi t za 2000, p. 411) . I n ot her wor ds, Mar x di d not onl y not
f i ni sh t he j ob of anal ysi ng t he pr ocess of ( expanded)
r epr oduct i on of t ot al soci al capi t al , he di d a l ousy j ob
al t oget her .
Her book st ar t s wi t h an exami nat i on of Mar x’ t heory of t he
r epr oduct i on pr ocess of capi t al - as expounded i n sect i on I I I of
Capi t al , vol ume I I . I n sever al chapt er s - chapt er 4 t o 9 of t he
f i r st sect i on - she exami nes f i r st Mar x’ schemes of si mpl e
r epr oducti on of t ot al soci al capi t al - r ai si ng j ust a f ew
obj ect i ons of mi nor i mpor t ance, l i ke t he way i n whi ch t her epr oduct i on of f i xed capi t al - a di f f i cul t y t hat Mar x avoi ded -
or t he way i n whi ch he deal s wi t h t he pr oduct i on of gol d - wher e
Rosa Luxembur g pr oposes t o put gol d pr oduct i on i nt o a separate,
14 In a private letter, Rosa Luxemburg commented upon Kautsky’s proposal – which
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t hi r d depar t ment of soci al pr oduct i on ( cf . Luxembur g 1990a, pp.
; Luxembur g 2003, p. ) . Next she pr esent s and
di scusses Marx’ schemes of expanded r epr oduct i on. What bother s
her i s t he apparent smoot hness of t he accumul at i on pr ocess whi ch
- i n accor dance wi t h t he rul es of pr opor t i onal i t y bet ween t he
t wo depar t ment s as expounded by Marx - coul d go on f or ever
wi t hout any l i mi t s. That l ooks l i ke an easy, “f ool - pr oof
mathemat i cal exerci se” t o her and she want s t o know whet her
Mar x’ scheme does f i t i n t he r eal wor l d of capi t al i sm ( cf .
Luxemburg 1990a, p. ; Luxemburg 2003, p. 91) . Obvi ousl y, she
t hi nks not . I n her vi ew, Mar x’ schemes ar e val i d f or a soci al i st
pl an economy, but not f or a capi t al i st economy. What Marx doesnot expl ai n i n t he l ast chapt er of vol ume I I ( l ar gel y dr awn f r om
hi s unf i ni shed l ast manuscr i pt , manuscr i pt VI I I of 1880/ 81)
where t he i ncr easi ng addi t i onal demand comes f r om t hat woul d
i nduce capi t al i st s i n depar t ment I and I I t o i nvest and expand
t hei r pr oduct i on? Who wi l l buy the addi t i onal goods emanat i ng
f r om t he expanded pr oduct i on appar at us of a cont i nuousl y
accumul at i ng i ndust r i al capi t al ? ( cf . Luxembur g 1990a, pp. 102,
108; Luxembur g 2003, pp. 104, 110) . Upon cl oser exami nat i on of
Mar x’ argument , she concl udes t hat t he abst r act i on f r om money,
money ci r cul at i on and hoar di ng i s at t he cor e of t he mat t er . As
Mar x does l i f t t hi s abst r act i on i n t he ver y same manuscr i pt , she
scrut i ni zes hi s “at t empt t o r esol ve t he di f f i cul t y” ( i n chapt er s
8 and 9) and r ej ect s i t . I n her vi ew, Mar x’ sol ut i on - t he
addi t i onal amount of ef f ect i ve demand comi ng f r om t he cont i nuous
hoar di ng of many capi t al i st s i n bot h depar t ment s, a sol ut i onwhi ch i s cl ear l y i n l i ne wi t h al l of Mar x’ s anal yses of t he
t ur nover pr ocess of capi t al i n t he pr evi ous sect i on I I of vol ume
I I - can onl y be val i d f or one, hi ghl y speci f i c and except i onal
was actually quite an honour to her -
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case: For t he t r ansi t i on f r om si mpl e t o expanded r epr oduct i on
( cf . Luxemburg 1990a, pp. 114, 115; Luxembur g 2003, pp. 117,
118) . But i t cannot serve as an expl anat i on f or t he cont i nued
pr ocess of accumul at i on i n t he l onger r un and under “nor mal ”
ci r cumst ances.
Af t er a l ong det our t hr ough t he hi st or y of pol i t i cal
economy and the many debates on the r ol e of “t hi r d persons” i n
t he repr oduct i on pr ocess, she comes back t o t he exami nat i on of
Mar x’ schemes ( i n chapt er 25) , now t aki ng i ssue wi t h t he core of
Marx’ argument : What Marx r egards as an adequat e sol ut i on t o her
pr obl em, i s i nsuf f i ci ent , because t he amount s of hoar ded moneycapi t al wi l l be t oo smal l t o pr ovi de a suf f i ci ent amount of
ef f i ci ent demand f or t he gr owi ng pr oduct i on i n t he cont ext of
expanded capi t al i st r epr oduct i on ( cf . Luxembur g 2003, p. 321) .
Thi s asser t i on - i t i s not mor e t han t hat - i s suf f i ci ent f or
her t o r ej ect Mar x’ schemes out r i ght . What ever t hei r mer i t s,
t hey cannot “expl ai n t he act ual and hi st or i cal pr ocess of
accumul at i on” ( cf . Luxembur g 2003, p. 328) . J umpi ng f r om a
t heor et i cal ar gument i nt o hi st or i cal expl anat i on, she spends t he
bul k of sect i on I I I of her book ( chapt er s 26 - 32) on an out l i ne
of a cor r ect hi st or i cal expl anat i on of t he accumul at i on pr ocess
i n t he Eur opean count r i es. To over come t he unset t l ed pr obl em she
had i dent i f i ed i n Mar x’ t heor y of accumul at i on, she pr oposes a
sol ut i on whi ch shoul d t ake i nt o account anot her set of “t hi r d
per sons”, t hi s t i me t he l ar ge non- or pr e- capi t al i st wor l d as
par t of t he r eal cont ext of capi t al i st expansi on and par t of t hecapi t al i st wor l d economy. From t he l ogi c and cont ext of her
ar gument i t i s not sel f - evi dent t hat t hese “non- capi t al i st ”
envi r onment s have t o be f ound “out si de” of t he capi t al i st wor l d
i n spat i al t er ms. But t hat i s t he t ur n t hat she t akes wi t hout
f ur t her ado. I n t hese l ast chapt er s of her book, she pr esent s
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her f amous expl anat i on of t he hi st or i cal phenomenon of
i mper i al i sm and i nt er - i mper i al i st r i val r y bet ween the advanced
capi t al i st count r i es i n par t i cul ar . She makes no ef f or t
what soever t o meet Marx on hi s own ground and, cont i nui ng and
expandi ng t he anal ysi s on hi s t er ms, t o pr ovi de an i mpr oved
ver si on of a scheme of expanded r epr oduct i on and accumul at i on.
3. The Luxemburg – debate: Round One
Luxembur g’ s Marx- cr i t i que was as har sh, even harsher t han
most of t he cr i t i ci sm t hat t he pr ot agoni st s of “r evi si oni sm” hadever expounded. But i n st r i ki ng cont r ast wi t h Ber nst ei n, f or
i nst ance, she went st r ai ght i nt o t he opposi t e di r ect i on -
ar gui ng i n f avour of t he hypot hesi s of an i nevi t abl e “br eakdown”
of t he capi t al i st wor l d economy. I n t he l onger r un, capi t al i st
accumul at i on on a wor l d scal e woul d no l onger be possi bl e and
come t o a gr i ndi ng hal t or end up i n a wor l dwi de st agnat i on and
per manent cr i si s.
She had t he gr eat mer i t t o t r i gger of f an i nt er nat i onal
debate whi ch l ast ed unt i l t he 1930s and was never f ormal l y
concl uded. Because the l eadi ng Mar xi st t heor i st s of her day wer e
pr ovoked by her at t ack t o def end Mar x’ t heor y, t hey st ar t ed
r eworki ng and r ef ormul at i ng i t . No one deni ed, as Engel s had
al r eady st at ed f r ankl y enough t hat Mar x had l ef t t he j ob
unf i ni shed and that somethi ng coul d and shoul d be done about t hei ncompl et e t heory of accumul at i on whi ch cl ear l y bel onged t o a
f ul l y- f l edged anal ysi s of t he dynami cs of moder n capi t al i sm. 15
15 Account of this debate by professed Marxists of some kind or the other have been
distorted by the fatal habit of reading everybody’s contributions as open or clandestine
statements of political views – right, centrist, harmonist, reformist, revolutionary. That is, of
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I n t he end, t he out come of t he debate was somethi ng Rosa
Luxembur g never want ed: A much mor e sophi st i cat ed and f or mal i zed
ver si on of Mar xi an macr oeconomi c anal ysi s, t he begi nni ngs of t he
syst emat i c st udy of capi t al i st macr odynami cs whi ch had i t s
ef f ect s - most l y t hr ough t he wor k of Mi chal Kal ecki - upon t he
Keynesi an macr o t heor y and modern growt h t heor y.
Onl y a f ew r evi ews of Luxembur g’ s book i n the soci al i st
pr ess wer e f r i endl y - so t he r evi ews by Fr anz Mehr i ng and J ul i an
Mar chl ewski i n t he “Lei pzi ger Vol kszei t ung”: Bot h hai l ed her
book as a t r ue enl argement of Marxi an economi c t heor y ( cf .Marchl ewski 1913, Mehr i ng 1913) . Both revi ewers, however , had no
exper t i se and cer t ai nl y no r eput at i on as pol i t i cal economi st s.
Some r evi ews wer e qui t e host i l e, l i ke t he one wr i t t en by Max
Schi ppel f or t he “Sozi al i st i sche Monat shef t e”. Schi ppel t r eat ed
her ver y unf ai r l y i ndeed, mocki ng her as a quack doct or who was
i nvent i ng an “i magi nar y di sease” cf . Schi ppel 1913, p. 148) .
Most of t he revi ewer s of her book i n t he soci al i st pr ess wer e
not convi nced at al l by her ef f or t t o demonst r at e t he
i mpossi bi l i t y of equi l i br i um gr owt h and t he necessi t y of a
br eakdown of capi t al i sm. Gust av Eckst ei n, i n hi s ver y det ai l ed
and pol i t e r evi ew i n “Vor wär t s”, accused her of si mpl y
mi sunderst andi ng the repr oduct i on schemes and thei r pur pose, of
mi ssi ng t he l ogi c of Mar x’ ar gument . 16 As he poi nt ed out , Rosa
Luxembur g had cr eat ed an i nsuper abl e di f f i cul t y by t aci t l yi nt r oduci ng addi t i onal condi t i ons i nt o t he r epr oduct i on schemes,
assumi ng – i nst ead of pr ovi ng – a ki nd of “l aw” of equal
course, nonsense.16
A logic that was not unfamiliar to Rosa Luxemburg, as her lectures on Capital,
volume II clearly show.
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accumul at i on i n both depart ment s or an equal r at e of
accumul at i on ( cf . Eckst ei n 1913, p. 702f f , 707f ) . He was of
cour se r i ght . And he was al so r i ght i n r ef ut i ng her ar gument
t hat Eur opean or Amer i can sur pl us pr oduct i on was bei ng sol d t o
t he peasant popul at i ons of non- capi t al i st count r i es on a l ar ge
scal e. Rosa Luxembur g’ s own i nsi ght s i nt o t he ways i n whi ch
t hese count r i es and t hei r popul at i ons wer e act ual l y expl oi t ed by
t he i mper i al i st power s were i ncompat i bl e wi t h t hat assumpt i on
( Eckst ei n 1913, p. 711 - 112) . Accor di ngl y, Eckst ei n r ej ect ed her
expl anat i on of t he l i mi t s of capi t al i sm.
Anot her pr ot agoni st of t he soci al democr at i c l ef t i n Eur ope, t heDutch ast r onomer Anton Pannekoek, a man qui t e cl ose t o Rosa
Luxembur g as f ar as t he act ual pol i ci es of t he soci al democr at i v
par t y wer e concer ned, cr i t i ci zed and r ef ut ed t he cent r al t hesi s
of her book i n hi s r evi ew, publ i shed i n t he “Br emer Bür ger -
zei t ung” t he ver y same year . He r ej ect ed her cr i t i ci sm of Mar x’
r epr oduct i on schemes out r i ght , showi ng t hat t he condi t i ons of
gr owt h and i ncr easi ng pr oduct i vi t y of l abour , hence r i si ng
or gani c composi t i on of capi t al , coul d be met wi t hi n t he conf i nes
of Marx’ schemes. Marx’ model s coul d be enl arged and
di f f er ent i at ed, compl et el y i n accor dance wi t h hi s own met hod
( cf . Pannekoek 1913, p. 685f f ) . What was more, Pannekoek di d not
even accept her expl anat i on of i mper i al i sm, al t hough he saw some
val ue i n her det ai l ed descri pt i on of t he pr axi s of capi t al i st
expansi on i n t he l ast chapt ers of her book. But Luxembur g had
f ai l ed t o gr asp t he pecul i ar i t i es of cont empor ar y i mper i al i stpol i ci es, f or “i mper i al i sm i s a moder n phenomenon” and not
i dent i cal wi t h t he col oni al i sm of t he 17t h and 18t h cent ur y or
wi t h t he capi t al i st wor l d pol i cy of t he f i r st hal f of t he 19t h
cent ur y. I n par t i cul ar , Rosa Luxembur g had mi sunder st ood t he
economi c r easons f or t he new wor l d pol i t i cs of t he gr eat
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capi t al i st power s – whi ch l ay not i n t he sear ch f or new mar ket s
f or sel l i ng sur pl us commodi t i es but i n t he necessi t y of capi t al
expor t s. Hi l f er di ng had done an excel l ent j ob, and Rosa
Luxemburg had mi ssed t he poi nt s – both i n her cr i t i que of Marx
and i n her economi c expl anat i on of i mper i al i sm ( cf . Pannekoek
1913, p. 691 – 3) . 17 Rosa Luxembur g was appar ent l y st unned by t he
l ack of under st andi ng f or t he pr obl em and t he sol ut i on t hat she
had put f or war d i n her book, as she admi t t ed i n a pr i vat e l et t er
t o Franz Mehr i ng ( cf . Laschi t za 2000, p. 420) . Leni n, f or hi s
part , was qui t e pl eased wi t h Pannekoek’ s r evi ew. When he had
r ead Luxembur g’ s book, he dr af t ed an ar t i cl e agai nst i t , i n
whi ch he agai n r ej ect ed her i nt er pr et at i on of Mar x as compl et el ywr ong and her addi t i on t o hi s t heor y as an out r i ght f ai l ur e ( cf .
Leni n 1933, pp. 337 e. s. ) .
3.1 Round Two - Otto Bauer’s critique
Rat her qui ckl y, t he l eadi ng Mar xi st t heor i st s of t he
t i me i n t he German speaki ng wor l d responded to Luxembur g’ s Marx-
cr i t i que. 18 The most subst ant i al cr i t i que came f r om Ot t o Bauer ,
i n an ar t i cl e t i t l ed “The Accumul at i on of Capi t al ”, publ i shed i n
t he l eadi ng t heor et i cal j our nal of i nt er nat i onal soci al i sm, t he
“Neue Zei t ” i n 1913. 19 Pol i t el y but wi t hout any reser vat i on, he
at t acked what he saw as j ust another ver si on of t he vener abl e
“t hi r d- per sons” t heorem, now i n a Mar xi st gui se. He t ook up t he
17 Anton Pannekoek was then a journalist working for German socialist newspapers.
He had come to Germany to teach at the SPD’s party school in Berlin. By training, he was an
astronomer (he later wrote a very remarkable history of astronomy after he had become chair of
astronomy at the university of Amsterdam) and a very well versed mathematician.18
With the remarkable exception of Rudolf Hilferding.
19 Otto Bauer’s article is one of the few contributions to the debate which has been
translated to English by John E. King in 1985 (cf. ).
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chal l enge and set out t o def end what he r egarded as an essent i al
par t of Mar x’ economi c t heor y: The anal ysi s of t he condi t i ons
under whi ch an equi l i br i um gr owt h of a pur el y capi t al i st economy
was possi bl e. Not beyond l i mi t s, but possi bl e.
Bauer ’ s cr i t i que of Luxembur g i s di f f er ent , as he di smi sses
her al most i mmedi at el y and does not spend much space engagi ng
wi t h her ar gument and cr i t i ci zi ng her mi st akes. I nst ead, he
devel ops a mor e sophi st i cat ed and mor e compl ex model of
accumul at i on and capi t al i st gr owt h, i ncl udi ng popul at i on gr owt h
- al t hough at a st eady rate - and t echni cal pr ogr ess, t hat i s t o
say a r i si ng or gani c composi t i on of capi t al i n bot h depar t ment s.I ni t i al l y, he keeps t he r at e of expl oi t at i on / sur pl us val ue
const ant , but does not r el ax thi s assumpt i on l at er on.
Nonet hel ess, he demonst r at es t he possi bi l i t y of equi l i br i um
accumul at i on and gr owt h i n a pur el y capi t al i st economy i n t er ms
of a t i me sequence - over f our per i ods / year s. I n Bauer ’ s
model , t he capi t al i st s’ r at e of savi ngs i ncreases st eadi l y f r om
one per i od t o t he next . Unf or t unat el y, he does not f ol l ow Mar x’
exampl e and negl ect s t he di st i nct i on between money accumul at i on
and r eal accumul at i on ( or di r ect i nvest ment ) whi ch Mar x act ual l y
makes. 20 Expl i ci t l y, Bauer al l ows f or t he possi bi l i t y of capi t al
t r ansf er bet ween t he t wo depar t ment s. I n hi s model , capi t al i st s
can and do i nvest t hei r savi ngs, t he saved and not consumed
par t s of sur pl us val ue that t hey have appr opr i at ed, out si de
t hei r own or home depar t ment , shi f t i ng i nvest ment s f r om one
depart ment t o t he ot her so t hat accumul at i on and gr owt h remai nspossi bl e and on a pat h of equi l i br i um. Bauer r ej ect s Luxembur g’ s
20 He did so in his later writings on the theory of crisis (cf. Bauer 2007). Actually, the
preceding section II of Capital, volume II, dealing with the turnover of capital, had already
shown the sources of an ever increasing “accumulation funds” for capital – while still
maintaining the abstraction from credit.
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sol ut i on t o her pr obl em - whi ch he deni es, as t he accumul at ed
par t of sur pl us val ue can be r eal i zed - as out r i ght f al se:
Sel l i ng sur pl us pr oduct s i n t he gui se of means of pr oduct i on
abr oad, expor t i ng t hem t o t he non- capi t al i st wor l d woul d not
sol ve t he pr obl em. On the cont r ar y, i t woul d i mpai r accumul at i on
and make i t i mpossi bl e i n t he l ong run. Moreover , Luxembur g does
not expl ai n, nor coul d she, how t he peopl e i n non- capi t al i st
ar ea’ s of t he wor l d woul d be abl e to pr ovi de f or a r i si ng amount
of addi t i onal ef f ect i ve demand, pr ovi di ng an ever expandi ng
mar ket f or t he capi t al i st i ndust r i es i n t he cor e count r i es of
capi t al i sm That i s - wi t hout a const ant f l ow of capi t al expor t
f r om t he capi t al i st count r i es t o t he non- capi t al i st par t s of t hewor l d, upon whi ch t he hi st or i cal i mper i al i sm hi ghl y depended.
Ot t o Bauer under st ood Mar x’ i nt ent i on to pr ovi de f or an
addi t i onal i ngr edi ent f or hi s theor y of cri si s per f ectl y wel l .
So he di d what Rosa Luxembur g had compl et el y f or got t en and
avoi ded - he engaged i n a di scussi on of t he cycl i cal movement of
t he capi t al i st accumul at i on pr ocess. A pr ocess, t hat was
char act er i zed by a per i odi cal change between overaccumul at i on
and under accumul at i on and di d al l ow f or a l ong t er m gr owt h of
capi t al i st economi es, al l t he cr i ses not wi t hst andi ng. He di d not
ar gue agai nst t he concept of “l i mi t s t o t he accumul at i on of
capi t al ”, on t he cont r ar y. But i n hi s vi ew Luxembur g had f ai l ed
t o det er mi ne t hose l i mi t s. However , her t heor y of i mper i al i sm
car r i ed a ker nel of t r ut h i n Bauer ’ s vi ew, as i mper i al i sm ser ved
t o ext end t he l i mi t s of accumul at i on and t o al l evi at e t he cr i sest hat per i odi c over accumul at i on ent ai l ed.
Bauer ’ s growt h model was “t he most sophi st i cated pi ece of
macr odynami c anal ysi s at t empt ed by any Marxi an economi st bef ore
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1914" ( Howard / Ki ng 1989, p. 120) . 21 I t has cl ose af f i ni t i es
wi t h t he modern Harr od- Domar gr owt h model . Of cour se, i t has i t s
weaknesses as wel l . The l ar gest bei ng i t s r el i ance upon t he
gr owt h of popul at i on as t he one and onl y i ndependent var i abl e
whi ch rul es t he movement s of capi t al accumul at i on. I n the Bauer
model , f ul l empl oyment of t he worki ng cl ass appear s l i ke an
“i r on l aw” of capi t al i st devel opment .
3.2 Round Three - Rosa Luxemburg’s Anti-critique
When Luxembur g f ound her sel f i n j ai l agai n, dur i ngWor l d War I , she had t i me to respond t o hei r cr i t i ques. She di d
so, wr i t i ng a l ar ge Ant i - cr i t i que, most l y dur i ng t he year 1915.
Af t er t he end of t he war and her unt i mel y deat h i n J anuar y 1919,
her paper s wer e par t l y l ost , but t he manuscr i pt of her Ant i -
cr i t i que was saved. I n 1921 her book was publ i shed. I t was no
gr eat success, ei t her . I t i s a hi ghl y pol emi cal t ext . Rosa
Luxembur g at t acks her cr i t i ques on pol i t i cal gr ounds: They ar e
al l r ef or mi st s, adher i ng t o a f l awed, “har moni st ” vi ew of t he
capi t al i st wor l d syst em, denyi ng t he possi bi l i t y of a
“br eakdown” of capi t al i sm ( cf . Luxembur g 1990b) .
I n her Ant i - Cr i t i que, she f ocussed upon Ot t o Bauer : Most of
t he space i n t he book was devot ed t o r i di cul e and r ef ut e hi s
el aborated ver si on of a Mar xi st model of accumul at i on and gr owt h
– but avoi di ng any engagement wi t h t he f i ner poi nt s of model
21 Perhaps with the exception of Charasoffs study of 1910 which Otto Bauer had
reviewed in the theoretical journal of the Austrian social democratic party, the “Kampf” (cf.
Bauer 1911). Bauer’s first contribution to the debate, his article on “Marx’s theory of economic
crises” (Marx’ Theorie der Wirtschaftskrisen) of 1904, already
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bui l di ng. Gust av Eckst ei n was at t acked vi ci ousl y and ver y
unf ai r l y; obvi ousl y, Rosa Luxembur g was not awar e of hi s f i ne
wor k as a Mar xi st hi st or i an and pol i t i cal anal yst . 22 Of cour se,
Ant on Pannekoek, her pol i t i cal al l y, coul d not be di smi ssed i n
t hi s way; so she pr ef er r ed t o j ust i gnor e hi m. As she was i n
j ai l , she had no knowl edge of t wo f ur t her cr i t i ques of her book,
publ i shed i n t he same year of 1915: One by Conr ad Schmi dt , i n
t he Ger man j our nal “Sozi al i st i sche Monat shef t e”, t he ot her by
Sam de Wol f f , i n t he Dut ch soci al i st j our nal “De ni euwe t i j d”.
Agai n, t wo of t he most abl e Mar xi st economi st s of t he t i me
di smi ssed her ar gument out r i ght .
She r ef uses t o ent er t he t er r ai n of t heor et i cal debat e and
does not engage i n any f urt her mathemat i cal exerci ses. Any
ef f or t t o i mpr ove or enl ar ge t he Mar xi an schemes i s f ut i l e. I n
her vi ew, t he Marxi an r epr oduct i on schemes were f undament al l y
f l awed and no ref ormul at i on coul d save t hem. There ar e onl y t wo
subst ant i al poi nt s she makes i n her pol emi c agai nst Ot t o Bauer :
The assumpt i on of a const ant r at e of expl oi t at i on i s not
compat i bl e wi t h a r i si ng or gani c composi t i on of capi t al , i t
shoul d be dr opped i n order t o get a compl ete vi ew of t he
capi t al i st accumul at i on pr ocess. The i dea t hat capi t al
accumul at i on woul d f ol l ow t he gr owt h of ( wor ki ng cl ass)
popul at i on i s r at her st r ange. However , her asser t i ons agai nst
Ot t o Bauer ’ s demonst r at i on of a possi bl e pr oport i onat e exchange
between t he t wo depart ment s and hence t he possi bi l i t y of
equi l i br i um accumul at i on and gr owt h ar e si mpl y wr ong. Of cour se,she i s r i ght when she st r esses t he doubl e nat ur e of accumul at i on
as bot h a pol i t i cal and an economi c pr ocess i n hi st or i cal t i me
( cf . Luxembur g 1990b, p. 519) . But her bel i ef t hat she had
22 Her extremely unfair attacks on the Austro-Marxists, the group of young scholars
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pr ovi ded a sci ent i f i c pr oof f or t he i nevi t abi l i t y of an over al l
br eakdown of t he capi t al i st wor l d economy i s s i mpl y wr ong and
compl et el y mi sgui ded.
Unf ort unat el y, her def ence onl y i mpr essed her f ol l ower s who
f el t encour aged t o ref use any ser i ous debat e of anythi ng t hat a
“r ef or mi st ” or “cent r i st ” l i ke Ot t o Bauer mi ght have t o say.
Perhaps wi t h t he except i on of Henr yk Gr ossmann who was t he onl y
Mar xi st economi st who pr ovi ded a subst ant i al cr i t i ci sm of Ot t o
Bauer ’ s model dur i ng t he next r ound. Even Roman Rosdol sky,
t r yi ng t o r eassess t he whol e debate i n t he 1950s, was i mpr essed
by t he pol i t i cal at t ack agai nst t he so cal l ed “neo- har moni st s”.As Luxembur g di d, he si mpl y i gnored t he ef f or t made by Ot t o
Bauer t o ext end and devel op t he Marxi an r epr oduct i on schemes
i nt o a f ul l y- f l edged t heor y of ( cycl i cal ) cr i s i s ( cf . Rosdol sky
1978, ) .
3.3 Round Four
Dur i ng t he 1920s, t he debate went on, al t hough i n t he
shadow of a pol i t i cal st r uggl e wi t hi n t he communi st movement
agai nst a st r and cal l ed “Luxembur gi sm”. Onl y f ew Mar xi st s dar ed
t o t ake Luxembur g’ s t heor y of i mper i al i sm as a f r ame of
r ef er ence f or t hei r own wor k - onl y peopl e out si de of t he wor l d
of t he Communi st par t i es and t he Soci al democrat i c par t i es as
wel l coul d dar e t o do so. Fr i t z St er nber g pr ovi des t he mostpromi nent exampl e.
I nsi de t he hear t l and of t he communi st movement , Ni kol ai
and intellectuals to which also Gustav Eckstein belonged, is a rather weird phenomenon indeed.
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Buchar i n wr ote another cr i t i que of Luxembur g i n t he ear l y 1920s,
a cr i t i que t hat was i nspi r ed by hi s wi sh t o come t o gr i ps wi t h
t he phenomenon of i mper i al i sm af t er Wor l d War I . Event ual l y, he
enl ar ged hi s or i gi nal ar t i cl e and t r ansf or med i t i nt o a smal l
book, publ i shed i n 1925 ( cf . Buchar i n 1925) . Her e, Buchar i n gave
another hi ghl y sophi st i cated exampl e of a Mar xi an model of
accumul at i on and gr owt h, t aki ng i nt o account most var i abl es t hat
had been di scussed unt i l t hen and r edr essi ng t he pr oport i ona-
l i t i es bet ween t he depar t ment s i n or der t o come t o a f ul l y
dynami zed gr owt h model . I n Buchar i n’ s ver si on, we f i nd r i si ng
r at es of expl oi t at i on as wel l as r i si ng or gani c composi t i ons of
capi t al i n bot h depar t ment s, we deal wi t h var i abl e r at es ofaccumul at i on ( savi ngs and i nvest ment ) and ( out put ) gr owt h.
Buchar i n def ends Marx’ model s on methodol ogi cal gr ounds: To
demonst r at e t he sheer possi bi l i t y of l i mi t l ess equi l i br i um
gr owt h i s j ust a devi ce desi gned i n or der t o pi npoi nt t he many
possi bi l i t i es of di sequi l i br i um and unbal anced gr owt h i n
capi t al i st devel opment ; t he model l i ng of such a gr owt h i s not t o
be conf used wi t h asser t i ons as t o t he l i kel i hood t hat i t wi l l
occur . What i s more, he t ook Luxembur g’ s expl anat i on of
i mper i al i sm ser i ousl y and f ound i t deepl y f l awed. Luxembur g
f ai l s t o under st and t he i mpl i cat i ons of commodi t y expor t s t o
pr e- capi t al i st mar ket s. An expor t sur pl us can i ndeed pr ovi de a
net i ncr ease i n ef f ect i ve demand - but i t wi l l i nevi t abl y
i nvol ve t he expor t of capi t al t o t he pr e- capi t al i st r egi ons of
t he wor l d. An el ement t hat Luxembur g f ai l s t o gr asp and expl ai n
and whi ch i s f i r ml y r oot ed i n t he hi st or i cal exper i ence andpr act i ce of Eur opean col oni al i sm / i mper i al i sm.
One of t he f ew def ences of Luxembur g came f r om Fr i t z
St ernberg who set out i n t he 1920s t o gi ve a new and
compr ehensi ve expl anat i on of t he phenomenon of i mper i al i sm ( cf .
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St ernberg 1926) . St ernberg f ol l owed Rosa Luxembur g’ s l ead wi t h
r espect t o her Mar x- cr i t i que ( some reser vat i ons
not wi t hst andi ng) . Her cr i t i ci sm was cor r ect and compl et el y
j ust i f i ed, al t hough she had mi ssed some i mport ant poi nt s. I n
order t o come t o gr i ps wi t h i mper i al i sm, Mar xi st economi st s had
t o i nt egr at e t he r i se of t he or gani c composi t i on of capi t al i n
bot h depar t ment s as wel l as t he di f f er ence of t he or gani c
composi t i on of capi t al between t hem. Moreover , he t r i ed t o
hi st or i ci ze most of t he Marxi an “l aws of movement ” of modern
capi t al i n a r adi cal manner . I n hi s vi ew, t hey wer e onl y val i d
f or cer t ai n per i ods i n t he hi st or y of moder n capi t al i sm and had
t o be speci f i ed accordi ngl y. Fol l owi ng Luxembur g, he was t hef i r st t o t r y t o i ngr at e t he non- or pr e- capi t al i st ar eas i nt o a
l ong t er m per i odi zat i on of capi t al i st devel opment ; he
di st i ngui shes di f f er ent er a’ s and di f f er ent st ages of
i mper i al i sm ( ear l y and l at e i mper i al i sm) : Dependi ng upon the
pr i nci pal sour ce of sur pl us l abour / sur pl us popul at i on, one
coul d di st i ngui sh di f f er ent and subsequent per i ods of capi t al i st
devel opment - some of whi ch, l i ke hi s f amous “honeymoon per i od”,
were much more f avour abl e t o t he worki ng cl ass t han others.
Recent l y, t hi s “honeymoon per i od” had come t o an end, and t he
pr ospect s of f ur t her capi t al i st devel opment as wel l as t he ver y
nat ur e of “i mper i al i sm” wer e changi ng accordi ngl y. So
St ernberg’ s work coul d be read as a def ence as wel l as an
ext ensi on of Luxembur g’ s or i gi nal t heor y.
Cur i ousl y enough, St ernberg was most gr i ml y at t acked byHenr yk Gr ossmann who, f or hi s par t , t r i ed t o r ef ormul at e and
def end Rosa Luxembur g’ s or i gi nal t heory about t he i nevi t abl e
br eakdown of capi t al i sm i n a more r i gorous and r adi cal manner
( cf . Gr ossmann 1929) . Gr ossmann, i n hi s scat hi ng r evi ew,
r i di cul ed t he l ack of Mar xi st schol ar shi p i n St er nber g’ s
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approach. 23 I n St ernberg’ s book t here i s no scheme of expanded
r epr oduct i on, j ust a numer i cal exampl e whi ch he does not
anal yse. So Gr ossmann and Hel ene Bauer , Ot t o Bauer ’ s wi f e, had
no di f f i cul t y t o demonst r at e t he i nher ent weakness of hi s t heor y
of cr i si s whi ch r est ed upon asser t i ons and some hi st or i cal
i l l ust r at i ons r at her t han upon an extensi on of macr oeconomi c
anal ysi s. Hel ene Bauer i n her r evi ew j ust r epeat ed t he mai n
argument s f r om her husbands ar t i cl e agai nst Luxembur g - and she
was r i ght ( cf . Bauer 1927) .
The l ast bi g ef f or t t o but t r ess Rosa Luxembur g’ s or i gi nal
ar gument i n f avour of an i nevi t abl e l i mi t t o accumul at i on andeventual breakdown of capi t al i sm was made by Henr yk Gr ossmann
j ust t hr ee years l at er ( cf . Gr ossmann 1929) . Hi s st ar t i ng poi nt
was not Luxembur g’ s but Ot t o Bauer ’ s scheme of expanded
r epr oduct i on, t he ver y model t hat had been const r uct ed i n order
t o r ef ute Rosa Luxemburg. Now Gr ossmann used i t wi t hout changes;
he j ust ext ended i t - f r om t he or i gi nal f our per i od sequence t o
a sequence of t hi r t y- si x per i ods. Even under t he or i gi nal
assumpt i ons made by Ot t o Bauer , t he model - or bet t er numer i cal
exampl e - ended up i n a sever e cr i si s because t he path of
accumul at i on coul d not be sust ai ned i n the l onger r un: Bot h
capi t al i st consumpt i on and accumul at i on woul d sl ow down and
pet er out because of an i ncr easi ng l ack of sur pl us val ue. A
cont i nuous r i se of t he r at e of accumul at i on i s onl y possi bl e
wi t hi n cer t ai n t i me l i mi t s. I n vi ew of t hi s cent r al ar gument of
t he book, i t i s r at her sur pr i si ng t hat i t s aut hor har dl yment i ons and never i ncor por at es any r i se of t he rat e of
expl oi t at i on i n hi s model , f ol l owi ng t he or i gi nal assumpt i on by
23 Actually, the polemic between Sternberg and Grossmann raged on. When
Grossmann’s book on the “Law of Accumulation” was published in 1929, Sternberg replied with
a critique in book-length (cf. Sternberg 1930).
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Ot t o Bauer , i nstead of l i f t i ng i t .
Gr ossmann’ s book was i mmedi atel y under heavy at t ack.
St ernberg t ook hi s r evenge on Gr ossmann ( cf . St ernberg 1929) .
Hel ene Bauer j oi ned t he f r ay agai n and accused Gr ossmann of j ust
pl ayi ng wi t h numbers ( and words) ( cf . Bauer 1929) . The most
subst ant i al cr i t i ci sm at t he t i me came f r om Ot t o Benedi kt who
publ i shed a l ong ar t i cl e i n t he l eadi ng t heor et i cal j our nal of
t he Communi st I nt ernat i onal “Unt er dem Banner des Marxi smus” .
I n hi s vi ew, Gr ossmann had f al l en f ar back behi nd Ot t o Bauer , as
he had dr opped t he di st i nct i on between two depar t ment s and
i gnor ed t he ef f ect s of t echni cal pr ogr ess whi ch woul d not onl yaf f ect t he or gani c composi t i on of capi t al but al so l abour
pr oduct i vi t y, r eal wages and t he r at e of expl oi t at i on. I n or der
t o pr ove a “l aw” of a t endency t owards breakdown, Benedi kt
ar gues, one has t o devel op a r i gor ous model of capi t al i st
accumul at i on i n al gebr ai c t er ms, a model wher e al l t he st r at egi c
var i abl es det er mi ni ng t he st r uct ur e of t he t ot al soci al pr oduct
and t he tot al soci al capi t al , ar e consequent l y t r eat ed as
i nt er dependent var i abl es. That i s exact l y, what he t r i es t o do
i n hi s ar t i cl e, pr esent i ng al l t he r el evant magni t udes, const ant
capi t al , var i abl e capi t al , sur pl us val ue, r at e of expl oi t at i on,
or gani c composi t i on of capi t al , r at e of savi ng and r at e of
accumul at i on var yi ng over t i me i n both depar t ment s ( cf . Benedi kt
1929) . Despi t e of t he cl umsy not at i on, t hi s i s a bi g st ep beyond
t he model as sket ched by Ot t o Bauer i n 1913. 24
4. Round Five: Otto Bauer’s Reformulation of Marxist Macro-
24
Another scathing critique of Grossmann’s book came from Anton Pannekoek,
who started with a brief review of the Luxemburg debate so far, defending both Luxemburg and
Bauer against Grossmann (cf. Pannekoek 1934).
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Economics in the 1930s
Ot t o Bauer never r esponded t o Luxembur g’ s Ant i - cr i t i que.
However , he cont i nued hi s work on t he t heoret i cal core of t he
debate - t he model of accumul at i on and gr owt h whi ch shoul d,
accor di ng t o Mar x’ s i nt ent i ons gi ve a syst emat i c cl ue f or t he
expl anat i on of al l maj or and r egul ar cr i ses i n capi t al i sm. From
hi s var i ous manuscr i pt s, onl y t wo pi eces have survi ved. One
shor t t ext , onl y compr i si ng a f ew pages, has been publ i shed i n
exi l e, as an annex t o Bauer ’ s book on t he pr esent and f ut ur e of
wor l d soci al i sm, publ i shed under t he t i t l e “Zwi schen zwei
Wel t kr i egen” ( Between two Wor l d Wars) i n 1936. The much l argermanuscr i pt pr esent i ng a f ul l - scal e anal ysi s of t he Gr eat Cr i si s
of t he 1930s and a di l i gent pr esent at i on of al l t he sal i ent
el ement s of Mar x’ t heor y of cr i si s, i ncl udi ng some i nnovat i ons
made by Bauer hi msel f , has r emai ned unpubl i shed unt i l t hi s ver y
day ( cf . Bauer 2006) . 25
The f i r st shor t t ext i s a f r agment . I t shows t hat Bauer had
st art ed devel opi ng a dynami c gr owt h model - perhaps f ol l owi ng
t he exampl e gi ven by Ot t o Benedi kt a f ew years ago. Bauer ’ s
i nt ent i on i s t o speci f y i n al gebr ai c f or m t he ver y condi t i ons
not of a br eakdown but of a st at e of over pr oduct i on and
over accumul at i on f ol l owi ng f r om capi t al i st expansi on pl us
t echnol ogi cal i nnovat i on – hence t o det er mi ne t he condi t i ons of
a st at e of cr i si s t hat must r egul ar l y occur and r eoccur i n t he
cour se of capi t al i st devel opment . I n t hi s model , Bauer wor kswi t h many var i abl es, t he gr owt h r at es of whi ch var y i n t i me -
mor e of t en t han not at an accel er at ed pace. I t i s t hi s si mpl e,
abr i dged ver si on, pr esent ed wi t hout t he f ur t her di f f er ent i at i on
25 It will be published this year in the original German version (cf. Bauer 2014).
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between depart ment s of soci al pr oduct i on and wi t hout any
anal ysi s of monetary ci r cul at i on, changi ng amount s of money and
cr edi t ( whi ch can be f ound i n t he l ar ger , unpubl i shed
manuscr i pt ) .
I n t he ear l y 1940s, Paul Sweezy has used t he Bauer - scheme
of 1936, t he onl y one known t o hi m, as a st ar t i ng poi nt f or hi s
anal ysi s of gr owt h and cr i si s. Sweezy bui l t hi s model r ef er r i ng
t o most of hi s f or er unner s, i ncl udi ng Buchar i n and Bauer . I n
part i cul ar , Sweezy cl ai med t o have i mpr oved Bauer ’ s model of
1936 and hoped t o have st r engt hened t he case of t he Marxi st
t heor y of accumul at i on l eadi ng t o cr i si s by t hi s amendedver si on. Bauer ’ s model had passed unnot i ced - as hi s book was
not r ead by academi c economi st s and Marxi st s were no l onger
i nt er est ed i n such mat t er s i n t he second hal f of t he 1930s.
Sweezy’ s sl i ght l y amended ver si on, however , was ser i ousl y
di scussed by economi st s, as f or i nst ance by Evsey Domar i n 1948
( cf . Domar 1948) . Dur i ng t hi s br i ef exchange, mai n st r eam
( neocl assi cal ) economi st s di scover ed, much t o t hei r sur pr i se,
t he i mport ance of Mar x ( and t he Mar xi an school ) as pi oneer s of a
t heor y of accumul at i on and gr owt h. Respondi ng t o hi s cr i t i cs i n
1949, Sweezy admi t t ed t hat hi s aggregat e dynami c model was a
f ai l ur e, because he - f ol l owi ng Ot t o Bauer ’ s sket ch f r om 1936 -
had gi ven up Mar x’ or i gi nal t wo sect or al scheme. That i s,
however , not what Ot t o Bauer di d i n hi s manuscr i pt of 1935,
unpubl i shed and hence unknown t o Paul Sweezy. 26
Hi s f i nest cr i t i que, Georgescu- Roegen made t wo concl udi ng
26 There is a whole array of unpublished theoretical and empirical works on the
crisis by Marxist economists that were stimulated by the Great Crisis of the 1930s, among them
the doctoral dissertation by Richard Löwenthal of 1935, still unpublished, and a large study on
the crisis by Louis B. Boudin, written 1937, and still unpublished as well. For details see my
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r emar ks i n a paper publ i shed i n 1960: Fi r st , i n hi s vi ew, t he
or i gi nal Mar xi st scheme of expanded r epr oduct i on coul d not be
cast i nt o “a mat hemat i cal cor r ect model ”. I f one t ook al l t he
el ement s of capi t al i st dynami cs as consi dered by Mar x ( and Bauer
and Sweezy) i nt o account , one ended up wi t h no l ess t han t en
unknown f unct i ons ( i ncl udi ng t hei r f i r st der i vat i ves wi t h
r espect t o t , as al r eady speci f i ed by Bauer and Sweezy) . The
second di f f i cul t y i s r el at ed t o t he conf usi on bet ween st ocks and
f l ows, var i abl es and t hei r i ncr ement s i n t i me per t i nent t o t hese
ear l y ef f or t s t o const r uct a dynami c model i n t he Mar xi st
t r adi t i on. What i s mor e, t he pr oof f or t he i nevi t abi l i t y of
cr i si s ( and even more so wi t h respect t o an al l eged br eakdown)i s not convi nci ng as a capi t al i st economy can gr ow at a
decr easi ng r at e f or a ver y l ong t i me, even unl i mi t ed. The
st r ongest cr i t i cal count erar gument by Georgescu- Roegen, however ,
i s gear ed at t he pr i nci pal ai m of al l such ef f or t s - t o pr edi ct
t he f ut ur e of capi t al i sm. I n hi s vi ew, t hi s i s j ust t oo
compl i cat ed f or mathemat i cs. When we come t o t he pr obl em of
capi t al i sm’ s change, i t s evol ut i on or mut at i on i nt o anot her f or m
i n hi st or i cal t i me, “mat hemat i cs pr oves t o be t oo ri gi d and
hence t oo si mpl e a t ool f or handl i ng i t ” ( Georgescu- Roegen 1960,
p. 415) . Rosa Luxembur g t r i ed t o expl ai n a hi st or i cal
phenomenon, i mper i al i sm i n i t s heydays, and she f ai l ed t o br i dge
t he gap bet ween Mar x’ gener al anal ysi s of capi t al i sm and
hi st or i cal changes i n t he r eal wor l ds of mar ket s, st at es and
capi t al i sms. Her cri t i cs as wel l as her f ol l ower s di d not f ar e
much bet t er . The bi ggest pr obl em f or t hem was t o di sent angl e t hemaze of t heoret i cal pr obl ems t hat had become mi xed up si nce t he
t i mes of Tugan- Baranowsky and Kaut sky, t he pr obl ems of an
anal ysi s of capi t al accumul at i on, t he pr obl ems of an expl anat i on
introduction to Bauer 2014.
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of t he gener al condi t i ons of cycl i cal cr i ses and t he pr obl ems of
an anal ysi s of t he l ong- t er m, secul ar devel opment of capi t al i sm
as a wor l d syst em – t owar ds a st at e of endur i ng st agnat i on.
Mar x’ gr eat pr oj ect st i l l r emai ns unf i ni shed t oday, al t hough
t hanks t o t he debat e t r i gger ed by Rosa Luxembur g’ s i l l - f at ed
r evi si on of Mar x we under st and some of t he pecul i ar f eat ur es of
capi t al i st dynami cs bet t er .
5. An unexpected impact: Rosa Luxemburg and the
(Post)Keynesians
The f i r st Engl i sh t r ansl at i on of Rosa Luxembur g’ s
Accumul at i on of Capi t al was publ i shed af t er WWI I , i n 1951, wi t h
an i nt r oduct i on of J oan Robi nson, al r eady t hen a wel l - know
vot ar y of “Lef t ” Keynesi ani sm ( cf . Robi nson 1951) . J oan Robi nson
was bound t o publ i sh her own magnus opum under t he same t i t l e as
Rosa Luxembur g’ s, t he “Accumul at i on of Capi t al ”, a f ew year s
l at er ( cf . Robi nson 1958) . I n t hi s l at er book, Robi nson t r i ed t o
do f or t he Keynesi ans what Rosa Luxembur g had t r i ed t o do f or
t he Mar xi st s i n 1913: To combi ne t he anal ysi s of ef f ect i ve
demand wi t h the anal ysi s of t he over al l devel opment of
capi t al i sm as a whol e i n t he l ong r un. Robi nson saw Luxembur g’ s
ef f or t t o est abl i sh a bet t er ver si on of Mar x’ s unf i ni shed
model l i ng of t he accumul at i on pr ocess as a pi oneer ’ s wor k. Al l
her pr ai se notwi t hst andi ng, she r ai sed ver y much t he same
obj ect i ons t hat had al r eady been r ai sed by Rosa Luxembur g’ svar i ous Mar xi st cri t i ques, i n par t i cul ar by Ot t o Bauer .
Unf or t unatel y, she was unaware of t he Luxemburg debate as i t had
unf ol ded f r om 1913 onwar ds. I f she had known thi s body of
Mar xi st schol ar shi p, she woul d have been awar e of t he reasonabl y
wel l advanced l evel of dynami c anal ysi s t hat had al r eady been
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at t ai ned by Marxi st economi st s – more or l ess at t he same t i me
as Keynes was st r uggl i ng wi t h t he same pr obl ems. 27
J oan Robi nson’ s per cept i on, per haps even her awar eness of
Luxemburg’ s book was due t o t he i nf l uence of Mi chal Kal ecki whom
she f i r st met i n 1936. 28 Kal ecki , al t hough l acki ng f or mal
t r ai ni ng as an economi st , had been f asci nat ed by t he pr obl em of
t he busi ness cycl es – or t he t heor y of cr i si s, as Mar xi st s woul d
have i t – f or a l ong t i me. As a young soci al i st , he had become
acquai nt ed wi t h the Mar xi st debat es on i mper i al i sm and wor l d
cr i si s, and was f ami l i ar wi t h Luxembur g’ s wor k. Tr yi ng t o
under st and t he causes of t he gr eat wor l d economi c and f i nanci alcr i si s as i t unf ol ded si nce 1929, Kal ecki st ar t ed t o wor k on a
gener al t heor y of t he capi t al i st busi ness cycl e si nce t he ear l y
1930s. Sear chi ng f or t he key det er mi nant s of t hi s cycl i cal
movement he r an i nt o ear l i er ef f or t s t o deal wi t h t he “l aws of
mot i on” of t he capi t al accumul at i on pr ocess, l i ke Tugan-
Baranowsky’ s and Rosa Luxembur g’ s . Whi l e accept i ng her basi c
i dea about t he i mpor t ance of aggr egate demand and i t s i ncr ease
f or a sust ai nabl e r at e of capi t al accumul at i on, he r ej ect ed her
sol ut i on t o the pr obl em: That capi t al i st economi es coul d onl y
over come i nsuf f i ci ent aggr egat e demand by f orci ng t he cr eat i on
of new markets and new consumer demand i n noncapi t al i st r egi ons
of t he wor l d. Accor di ngl y, he di d not shar e her per spect i ve that
t he exhaust i on of such newl y creat ed mar ket s i n noncapi t al i st
t er r i t or i es woul d usher i n t he f i nal cri t i cal phase of
capi t al i st devel opment on a wor l d scal e. Gover nment s i ncapi t al i st count r i es had mor e choi ces t han t hat , and some of
t hem wer e cl ear l y l i nked t o i mper i al i st pol i ci es – as, f or
27 Otto Bauer was, of course, well aware of Keynes’ work and made several
references to it in his book on the great crisis.28
For the relationship between Robinson and Kalecki see Asimakopoulos 1989.
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i nst ance, t he gr owt h of t he ar ms sect or and i ncr eased publ i c
spendi ng t o buy arms and bui l d armi es and navi es. Rosa Luxembur g
her sel f had devot ed a whol e chapt er of her book on t he economi c
ef f ect s of “mi l i t ar i sm”, t hat i s i ncr eased gover nment spendi ng
on t he mi l i t ar y, al t hough she di d not even t r y t o spel l out t he
consequences of t hi s new el ement f or t he pr ocess of capi t al
accumul at i on at l ar ge. I n t he cont ext of her anal ysi s, t hi s
f ai l ur e t o anal yse publ i c sect or demand and i ncr eased mi l i t ar y
expendi t ur e by t he gover nment i n par t i cul ar i s expl i cabl e.
Unl i ke at l east some of her cr i t i cs, Luxembur g di d not even
envi sage t he possi bi l i t i es of credi t and debt f i nance. Kal ecki ,
wel l ver sed i n monet ar y anal ysi s, coul d easi l y i magi ne ext er nalexpor t markets and debt - f i nanced domest i c gover nment spendi ng as
al t er nat i ves and f unct i onal equi val ent s ( cf . Kal ecki 1971) .
The l i nk bet ween Rosa Luxembur g and Mi chal Kal ecki has been
r ar el y di scussed and r at her avoi ded by Mar xi st s. The except i on
t hat conf i r ms t he rul e was provi ded by t he wor k of t he l at e
Tadeusz Kowal i k who devot ed a whol e book t o t he t opi c: I t i s a
gr eat book, expl ai ni ng i n much detai l how Rosa Luxembur g, i f she
had al l owed her sel f t o be enl i ght ened by her cr i t i cs, and how
some l ater Mar xi st s, al l owi ng t hemsel ves t o be enl i ght ened by
t he Luxemburg debate, mi ght have rethought and ref ormul ated t he
basi c i deas of t he “Accumul at i on of Capi t al ” and saved i t f r om
obl i vi on( cf . Kowal i k 1971) . 29
6. The Legacy of Rosa Luxemburg
Except f or t he pol emi cs i t had st i r r ed up, Rosa
29 Kowalik’s work on Luxemburg has been translated to Italian and Spanish, but not
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Luxemburg’ s great book was soon f orgot t en. When conf r ont ed wi t h
ser i ous cri t i ci sm, she, as wel l as her f ew f ol l ower s, had
r ef used t o engage i n a st r i ct l y theor et i cal debat e gear ed at
sol vi ng t he anal yt i cal pr obl ems t hat Mar x had l ef t unsol ved.
Nonet hel ess, and despi t e of a l ot of r epet i t i on of ol der
argument s, some pr ogr ess had been made, al t hough i t was l argel y
unr ecogni zed by t he maj or i t y of Mar xi st s at t he t i me. So one
coul d gi ve her a l ot of cr edi t f or openi ng up new vi st as on
Mar x’ t heor y of accumul at i on and cr i si s – j ust by bol dl y
at t acki ng i t and exposi ng some of i t s def ect s. The f r ui t s,
however , were onl y reaped af t er a l ong and wi nded detour , i n a
ser i es of debat es whi ch wer e, mor e of t en t han not , cl ear l ydet er mi ned by mer el y pol i t i cal pr eoccupat i ons. The Luxembur g
debate suf f ered as so many debates on t he unset t l ed quest i ons of
Mar x’ s cri t i que of pol i t i cal economy f r om t he anci ent vi ce of
overpol i t i ci sat i on.
Her t heor y of i mper i al i sm, i l l f ounded i n economi c
anal ysi s and st r i cken by i nconsi st enci es as i t was, had t he
st r ongest i mpact . Some of t hi s i mpact was due t o the popul ar i t y
of any t heor y t hat woul d al l ow t o rest or e and mai nt ai n t he ol d
“Mar xi st ” i dea of a causal l i nk or “t r i gger - ef f ect ” bet ween
gr eat economi c cr i ses and pol i t i cal r evol ut i ons. When t he I I I .
I nt er nat i onal est abl i shed t he concept of a “gener al cr i si s” of
capi t al i sm i n t he l at e 1920s as i t s of f i ci al doct r i ne,
“Luxembur gi sm” was cr eat ed as a new devi at i on, associ ated wi t h
al l sor t s of danger ous t hought s. Even t he l eadi ng economi st oft he Comi ntern, Eugen Varga, was agai n and agai n accused of
“Luxembur gi st ” t hi nki ng by hi s adver sar i es. I n t he gui se of
“Luxembur gi sm”, Rosa Luxembur g’ s economi c and pol i t i cal t hought
to English.
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became compl et el y di st or t ed, and t he of f i ci al r eadi ng of her
work was domi nat ed by enumerat i ons of her al l eged “mi st akes”.
Good Leni ni st s, however , bel i evi ng i n t he val ue of Leni n’ s
pamphl et on “i mper i al i sm” as par t of t he of f i ci al gospel , coul d
not di smi ss her compl et el y. Af t er al l , Rosa Luxembur g had t r i ed
t o show t hat i mper i al i sm was i nher ent i n t he ver y basi c f abr i cs
of capi t al i sm and coul d not be r egar ded as a var i et y of pol i ci es
t he gr eat power s mi ght or mi ght not pur sue. I mper i al i sm,
i nvadi ng and per vadi ng non- capi t al i st t er r i t or i es, was
f undament al , a “l aw” l i ke f eat ur e of capi t al i st devel opment .
Even i f Mar xi st s di sagr eed about t he det ai l s, Luxembur g’ s
appr oach had an undi sput abl e mer i t . Mai nl y i n pol i t i cal t er ms,as i t t ur ned t he at t ent i on t owar ds t he col oni al wor l d out si de of
t he hear t l ands of a f ew advanced capi t al i st count r i es. I f t hese
r egi ons of t he wor l d wer e vi t al f or t he vi abi l i t y of capi t al i sm
as a wor l d syst em, as Luxemburg had mai ntai ned, i t was wor t h the
whi l e of t he soci al i st / communi st movement s i n t hose hear t l ands
t o engage i n and suppor t st r uggl es t her e - even i f i t was f or
t he wr ong t heor et i cal r easons.
On t he ot her hand, however , Luxembur g’ s anal ysi s di d not
cont r i but e much t o t he under st andi ng of t he t r ansf or mat i ons of
t he capi t al i st wor l d economy t r i gger ed and / or accel er at ed by
WWI and t he Gr eat Cr i si s of t he 1930s. Most Mar xi st s, i ncl udi ng
her most abl e cr i t i cs, wer e caught i n t he spat i al met aphor of
t he “non- capi t al i st ” ar eas or r egi ons. They di d not t ake i nt o
account t he possi bi l i t i es of f ur t her capi t al i st expansi on t hatl ay i n t he t r ansf or mat i on of t hose ar eas of ever yday l i f e and,
act ual l y, t he economy at l ar ge i n t he capi t al i st count r i es t hat
wer e not yet f ul l y subdued t o and i nt egr at ed i nt o the l ogi c of
capi t al i st pr oduct i on, exchange, consumpt i on and accumul at i on.
Eduard Bernst ei n had t ol d t hem so al r eady i n 1899. But who woul d
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l i st en t o Eduar d Ber nst ei n, anyway?
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