Luxemburg's 'Accumulation of Capital'

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BloodDiamond
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Sep 27 2017 20:19
Luxemburg's 'Accumulation of Capital'

What do people think of this work and its central thesis?

I've recently read it and her follow-up 'Anti-Critique' and am persuaded by some of the things she points out. Chiefly that Marx's schema doesn't work by itself and as it stands, and that the schema itself was not finished and was in need of revision (Marx and Engels themselves pretty much said this).

What I am not sure about is her "solution" to the problem whereby the schema can only work if the capitalist mode of production is able to trade with and exploit non-capitalist modes of production around the world in order to accumulate successfully. Maybe not in 1914, but in 2017 how much of the world still operates on a non-capitalist mode of production, and how can this (rapidly diminishing) mode be responsible for the successful accumulation of all of the total social capital?

Also I know Lenin was not a fan of the work and wrote a scathing conspectus of it. But I seem to remember that he planned to write a response to it and got as far as writing the headings for chapters and sections but never got any further. Does anyone know if this rough plan exists online? I can only find the conspectus.

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Alf
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Sep 27 2017 21:06

This article (which agrees with Luxemburg's basic approach) tries to situate her work in its historical context.
http://en.internationalism.org/ir/142/luxemburg. It's part of a longer series on the historical development, within the marxist movement, of the notion of the decline of capitalism. Luxemburg's theories come up in several places in the series: http://en.internationalism.org/series/779

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Craftwork
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Sep 27 2017 21:18

Side note: volume 2 of The Complete Works of Rosa Luxemburg, published by Verso, contains a new translation of this text. I will try to locate a decent PDF of this.

BloodDiamond
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Sep 27 2017 21:34

Thanks, it was from the Complete Works that I read it so no need to get the PDF (though I suppose if others want it...)

Spikymike
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Sep 28 2017 10:03

Blood Diamond - you need to search around on this site for starters as there are numerous critiques of the specific elements of Rosa Luxemburg's crisis theory from a variety of reliable sources from Paul Mattick and the ICT/CWO through to Robert Kurz via the ex-ICC comrades of Internationalist Perspective. Might dig something out when I have more time. Personally I think Rosa got it wrong on this issue.

el psy congroo
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Sep 29 2017 01:39

Briefly exiting retirement to make this post.

The theory is shit.

You're correct -- nothing today exists outside the capitalist mode of production and nothing about it is rapidly diminishing except the raw material and natural resources it blindly extracts at ever increasing levels. The ICC texts linked will only try to convince you otherwise.

Neither the ICC, nor it's internet debate chief Alf, can satisfactorily answer the question of how a decadent and decomposing system has managed to generate more wealth in the "developing" nations in the past forty years than had been generated up to that point in all of human history. For them capitalism broke around WWI and has never been able to "correct", so that equates to it's downfall being supposedly eminent.

el psy congroo
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Sep 29 2017 01:41

Theses issues have been debated countless time here and most recently on the ICC forums themselves:

http://en.internationalism.org/forum/1056/hawkeye/14331/once-more-decadence-what-does-it-mean-say-capitalism-historically-transitor#comment-24110

Dyjbas
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Sep 29 2017 09:26

Here's a few texts which critique her work on accumulation:

Nikolai Bukharin - Imperialism and the Accumulation of Capital (1924)

Henryk Grossman - Law of the Accumulation and Breakdown (1929)

Paul Mattick - Luxemburg versus Lenin (1935)

CWO/ICT - The Accumulation of Contradictions or The Economic Consequences of Rosa Luxemburg (1976)

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Sep 30 2017 05:08

I would also recommend Paul Mattick's Luxemburg in Retrospect as a good summary of his critique of Luxemburg's views on reproduction & imperialism.

Quote:
For Marx, then, the objective limits of capitalism are given by the social production relations as value relations, while for Rosa Luxemburg capitalism cannot exist at all, except through the absorption of its surplus-value by pro-capitalist economies. This implies the absurdity that these backward nations have a surplus in monetary form large enough to accommodate the surplus-value of the capitalistically advanced countries.

But as already mentioned, this wrong idea was the unreflected consequence of Rosa Luxemburg’s false notion that the whole of the surplus-value, earmarked for accumulation, must yield an equivalent in money form, in order to be realized as capital. Actually, of course, capital takes on the form of money at times and at other times that of commodities of all descriptions - all being expressed in money terms without simultaneously assuming the money form. Only a small and decreasing part of the capitalist wealth has to be in money form; the larger part,, although expressed in terms of money, remains in its commodity form and as such allows for the realization of surplus-value an additional capital.

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Felix Frost
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Sep 30 2017 16:33

Luxemburg was wrong about the reproduction schemas, but I think there are much bigger problems with Grossman and Mattick, who were basically arguing that capitalism would collapse by itself because of its inner logic. For a critique of that position (and to a lesser extent, that of Luxemburg), see this short article by Pannekoek. (Or if you want to read more, I thought the series on "decadence theory" in Aufheben was pretty decent.)

Also, while there may not be anywhere today that exists outside the capitalist mode of production, there are still hundreds of millions of peasants just waiting to be made into proletarians, so capital may still have some room for expansion.

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jura
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Sep 30 2017 17:33

I don't think Mattick believed that capitalism would collapse automatically. If I remember correctly, he saw Grossman's argument as applying to "pure capitalism", not to actually existing capitalist economies.

el psy congroo
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Sep 30 2017 22:45
Felix Frost wrote:
there are still hundreds of millions of peasants just waiting to be made into proletarians, so capital may still have some room for expansion

Can you source this claim? I believe you are mistaken. I can't imagine any living soul on Earth not being "semi-proletarianzed" by this point, much less fifty years from now.

Either way, I think capital definitely has "room for expansion".

Dyjbas
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Oct 1 2017 11:10
Felix Frost wrote:
there are much bigger problems with Grossman and Mattick, who were basically arguing that capitalism would collapse by itself because of its inner logic.

Grossman responds to this accusation in a letter to Mattick:

"Obviously the idea that capitalism must break down ‘of itself’ or ‘automatically’, which Hilferding and other socialists (Braunthal) assert against my book, is far from being my position. It can only be overturned through the struggles of the working class.

But I wanted to show that the class struggle alone is not sufficient. The will to overturn capitalism is not enough. Such a will cannot even arise in the early phases of capitalism. It would also be [in]effective without a revolutionary situation. Only in the final phases of development do the objective conditions arise which bring about the preconditions for the successful, victorious intervention of the working class. Obviously, as a dialectical Marxist, I understand that both sides of the process, the objective and subjective elements influence each other reciprocally. In the class struggle these factors fuse. One cannot ‘wait’ until the ‘objective’ conditions are there and only then allow the ‘subjective’ factors to come into play. That would be an inadequate, mechanical view, which is alien to me. But, for the purposes of the analysis, I had to use the process of abstract isolation of individual elements in order to show the essential function of each element. Lenin often talks of the revolutionary situation which has to be objectively given, as the precondition for the active, victorious intervention of the proletariat. The purpose of my breakdown theory was not to exclude this active intervention, but rather to show when and under what circumstances such an objectively given revolutionary situation can and does arise."

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Oct 1 2017 13:55
jura wrote:
I don't think Mattick believed that capitalism would collapse automatically. If I remember correctly, he saw Grossman's argument as applying to "pure capitalism", not to actually existing capitalist economies.

This is from something he wrote in 1974, so it's possible he changed his view over his lifetime:

Marrick wrote:
The interpretation of the great crisis between the two world wars as a possible final crisis of capital made the wish the father to the thought. But this could only be known afterwards. In principle in developed capitalism any great crisis can become the final crisis. If it does not, it remains a presupposition of further accumulation.

It seems to me from the context that he believed that capitalism would suffer crises periodically, or even potentially find itself in a state of permanent crisis, but that the presence or absence of revolutionary action would determine whether any given crisis was a 'final crisis'. This article from 1978 continues the same theme:

Mattick wrote:
To be sure, the general trend of capitalist development implies the increasing difficulty of escaping a period of contraction by a further expansion of capital, and thus a tendency toward the system’s collapse. But it is not possible to say at what particular point of its development capital will disintegrate through the objective impossibility of continuing its accumulation process.

[...]

The particular entities involved in this process are not empirically discernible, so that it is impossible to determine whether a particular crisis of capitalist production will be of longer or shorter duration, be more or less devastating as regards social conditions, or prove to be the final crisis of the capitalist system by provoking a revolutionary resolution through the action of an aroused working class.

In principle, any prolonged and deep-going crisis may release a revolutionary situation that may intensify the class struggle to the point of the overthrow of capitalism — provided, of course, that the objective conditions bring forth a subjective readiness to change the social relations of production.

The framing of the debate in terms of a conflict between subjective and objective conditions is fascinating to me, since the conflict between 'subjective' and 'objective' epistemology was such a central topic of German Idealism from Kant to Hegel. Fichte's famous introduction to the Wissenschaftslehre makes it the central point of concern in beginning philosophical enquiry - Dogmatism or Idealism, Kant or Spinoza, Subject or Object.

Hegel frequently characterises his 'absolute' standpoint as one which resolves the apparent opposition:

Hegel, Differenzschrift wrote:
If the principle of philosophy is to be stated in formal propositions for reflection, the only thing that is present, at the outset, as the object of this task is knowledge, i.e., in general terms the synthesis of the subjective and objective, or absolute thinking.

The fact that such a rift should re-emerge in later Marxist commentary is the kind of thing that could probably produce endless philosophically reflective accounts. I'm sure some contemporary Hegelians could have a field day.

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Felix Frost
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Oct 3 2017 13:07
jura wrote:
I don't think Mattick believed that capitalism would collapse automatically. If I remember correctly, he saw Grossman's argument as applying to "pure capitalism", not to actually existing capitalist economies.

That's not quite how he put it back in the 30s when he was convinced that capitalism was already entering its "death-crisis". In a presentation of Grossman's theories from 1934 he writes:

Quote:
We have previously shown that the Marxist theory of accumulation is the law of the collapse of the capitalist system. We have further demonstrated that this law is overcome by counter-tendencies for certain periods. But these counter-tendencies are themselves overcome in the course of development or lose their effect through overaccumulation. (...) As the force of the counter-tendencies is stopped, the tendency of capitalist collapse is left in control. Then we have the permanent crisis, or the death-crisis of capitalism. The only means left for the continued existence of capitalism is then the permanent, absolute and general pauperisation of the proletariat.

Mattick does grant a role for the workers movement in overthrowing capitalism, but this is subordinated to the "objective" circumstances. In the period of the rise of capitalism, when capital can still afford to pay off workers, the workers movement is pushed into reformism:

Quote:
In previous crises it has been possible to regain sufficient capital “utilisation” without permanent cutting of real wages. Marx said: “In the measure as capital accumulates, the situation of the workers, whatever its pay, high or low, must become worse”. All statistics available show that accumulation and pauperisation of the workers are two sides of the same process. But in the period of the rise of capitalism only a relative, but not necessarily absolute, pauperisation of the workers took place. This fact formed the basis for reformism. Only when the proletariat must necessarily be absolutely pauperised are objective conditions ripe for a real revolutionary movement.

Once capitalism has reached is final stage, however, the workers movement is pushed into forms that must lead to the overthrow of the system, and its inactivity can only prolong a permanent crisis of capitalism, with ever increasing misery for the working class:

Quote:
The law of accumulation is the law of the collapse of capitalism. A collapse delayed by counteracting tendencies until these tendencies have spent themselves or become inadequate in face of the growth of capital accumulation. But capitalism does not collapse automatically; the factor of human action, though conditioned, is powerful. The death crisis of capitalism does not mean that the system commits suicide, but that the class struggle assumes forms that must lead to the overthrow of the system. There is, as Lenin said, no absolutely hopeless situation for capitalism; it depends on the workers as to how long capitalism will be able to vegetate. The “Communist Manifesto” sounds the alternative: Communism or Barbarism! A static capitalism is impossible; if the accumulation cannot continue, the crisis becomes permanent, and the condition of the workers will continually worsen. Such a crisis is barbarism!

Despite Mattick's "ultra-left" critique of Leninism, on economic theory he is continuing the same orthodox views that you find in the Second and Third International: The working class is a prisoner of objective economic circumstances, and can only bide its time until the right crisis appears that pushes them the onto the path of revolution.

Besides, the fact that Grossman's theories limit itself to an abstract "pure capitalism" is part of the problem: You simply can't draw the conclusions he does from that level of abstraction. Despite her errors, Luxemburg at least points in the right direction by looking at the external limits of capitalist expansion, rather than its internal logical structure.

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Oct 3 2017 13:51
Felix Frost wrote:
That's not quite how he put it back in the 30s when he was convinced that capitalism was already entering its "death-crisis". In a presentation of Grossman's theories from 1934 he writes...

I think it's exactly how he put it, because it's what he actually says in this very article (just do a search for "pure" in the text). What you originally wrote seemed as if you were saying that Mattick believed in an automatic (or automattick) collapse (which is not even a correct description of Grossman's views), and I was responding to that.

I agree that Mattick's position is problematic. So is Luxemburg's. They (and most other crisis theorists before WW2?) were all looking for inherent, definite limits to the system that could be exploited politically, and could explain what was going on around them and what it meant (in the context of an important global cycle of struggles and the following brutal repression, which killed Luxemburg, and then downturn, which isolated Mattick). I think this search for definite limits, whether they were seen as the rate of profit or the shrinking non-capitalist world, was in vain and led to some rather millenarian-sounding theories from all sides.

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Oct 3 2017 14:01

BTW, insofar as Mattick's/Grossman's analysis can be said to be looking at the "internal logical structure" of whatever, the same applies to Luxemburg, since her point of departure were reproduction schemes and the alleged impossibility of accumulation without a non-capitalist "outside".

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Oct 5 2017 22:15
jura wrote:
Felix Frost wrote:
That's not quite how he put it back in the 30s when he was convinced that capitalism was already entering its "death-crisis". In a presentation of Grossman's theories from 1934 he writes...

I think it's exactly how he put it, because it's what he actually says in this very article (just do a search for "pure" in the text). What you originally wrote seemed as if you were saying that Mattick believed in an automatic (or automattick) collapse (which is not even a correct description of Grossman's views), and I was responding to that.

Yes, Mattick writes that Grossman describes a "pure" capitalism, but I think it's clear that he thought the theory also applied to actually existing capitalist economies. He just allows for some temporary counteracting tendencies, which however can only slow down the process, but not stop it:

Quote:
Since, in reality, there is no such “pure” capitalist system, it follows that the tendency to collapse does not operate in the above described “pure” form. Instead, the pure” tendency of capitalist accumulation is slowed down in its dizzy pace by counteracting tendencies which also arise out of the capitalist development. The tendency towards collapse which is expressed through crises is nevertheless slowed down and temporarily halted by these very crises though they be the embryonic form of the final collapse; but the counter-tendencies are essentially of a temporary character. They can postpone the collapse of the system. If the crisis is only an embryonic collapse, the final collapse of the capitalist system is nothing else but a crisis fully developed and unhindered by any counter tendencies.

Also, Mattick writes that the collapse isn't automatic, but that a permanent crisis is inevitable, and that pretty much amounts to the same thing...

jura wrote:
BTW, insofar as Mattick's/Grossman's analysis can be said to be looking at the "internal logical structure" of whatever, the same applies to Luxemburg, since her point of departure were reproduction schemes and the alleged impossibility of accumulation without a non-capitalist "outside".

Well, I would agree with that as far as her point of departure with the reproduction schemes is concerned, and indeed she also reaches the same conclusion that the collapse (or permanent crisis?) of capitalism is inevitable once it runs out of non-capitalist areas to extract surplus value from. I still find some of her discussion useful. While she is wrong on a theoretical level that accumulation is impossible in an exclusively capitalist environment, on a practical level, expansion to less developed areas has been one of the main ways that capitalism has historically solved its accumulation problem.

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Oct 8 2017 14:43

In terms of the initial list of critics I briefly mentioned in my post no 5 I should also point out that Robert Kurz is critical at a pretty fundamental level of the crisis or breakdown theories of Grossman, Mattick, and Bukharin as well as Rosa Luxemburg in Part 2 of his 'The Substance of Capital' which I've just managed to struggle through. Haven't read Heinrich's works which seems to form much of the focus of Kurz critique there so I'm not able to make a clear judgement on it all, but I did eventually get to grips with the main repeated argument of Kurz opposition to all those common theories which reduce the concept of 'abstract labour' to the sphere of circulation and the market mechanism. I have found some of the shorter Kurz texts on libcom useful even if I don't draw all the same conclusions as he (or the former Krisis and EXIT) groups that he was previously associated with).

zugzwang
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Oct 9 2017 06:33

I just got done reading Heinrich's introduction to Captial; he has a chapter on theories of collapse and briefly mentions Luxemburg.

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In the history of the workers' movement, the notion that economic crises would ultimately lead to the collapse of capitalism, that capitalism was marching toward its "final crisis," was widespread. Capital was interpreted as providing a "Marxian theory of collapse." We can find this idea in the old German Social Democratic Party before 1914, in the work of Rosa Luxemburg, and in an elaborated form in the work of Henryk Grossmann. In Germany in the 1990s, this old idea was revived by Robert Kurz and the group "Krisis."
Quote:
[...] Even disregarding all the detailed objections, theories of collapse are confronted with the fundamental problem that they claim an inevitable developmental tendency that capitalism is so unable to deal with that its further existence necessarily becomes impossible - regardless of whatever happens in the actual course of history.
Noa Rodman
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Oct 8 2017 20:43

Yakov Piletsky (Яков Ананьевич Пилецкий) in 1924 wrote a book whose second half is sympathetic to Luxemburg's theory (its first half was very critical of Hilferding's): Две теории империализма (Марксистская легенда и возврат к Марксу) – "Two Theories of Imperialism (a Marxist Fable and a Return to Marx)". Downloadable at: http://search.rsl.ru/ru/record/01007516978

Also, I translated the soviet introduction to her works, written by a former-Luxemburgist turned critic: https://libcom.org/library/critical-introduction-rosa-luxemburgs-economic-works-wolf-motylev

BloodDiamond
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Oct 8 2017 22:42
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Well, I would agree with that as far as her point of departure with the reproduction schemes is concerned, and indeed she also reaches the same conclusion that the collapse (or permanent crisis?) of capitalism is inevitable once it runs out of non-capitalist areas to extract surplus value from. I still find some of her discussion useful. While she is wrong on a theoretical level that accumulation is impossible in an exclusively capitalist environment, on a practical level, expansion to less developed areas has been one of the main ways that capitalism has historically solved its accumulation problem.

I think this is all true and we should especially pay attention to the fact that Marx himself acknowledged that his schemas were far from complete and would need a revision (something he never got round to doing). So when people take them as gospel it is very shortsighted of them. It has also got me thinking on the source of capitalist profits and the markets they ultimately come from. As you say, capital has a tendency to want to expand into new markets in developing countries. In our lifetimes we have seen how much post-Mao China has been an example of this and how important it has become in the world economy.

I think it is also important to recognise how the boom in living standards in the West which occurred after WW2 has largely ground to a halt now and the Western middle class has seemingly reached its limits. We now seem to be sliding backwards whereby the young generations today struggle to achieve the markers of prosperity that their parents' generations had access to. One could argue that the global limits of what capitalist prosperity can provide for the middle class has been reached, and since it is the middle class which essentially preserves capitalism, the future of capitalism does not look too good from this perspective.