AppendixtoRickKuhnMarxistcrisistheoryto1932andtothepresent:Reflectionson HenrykGrossmansFiftyyearsofstruggleoverMarxismHenrykGrossman

TranslatedfromGermanbyRickKuhnandEindeOCallaghan
AMarxistsoftheearlyperiod Untiltheendoftheseventiesofthelastcentury,circumstancesfortheunderstandingof Marxsideaswerenotparticularlyfavourable,evenwithinthesocialistcamp.Aparticular difficultywasthatinitiallyCapitalwasonlyavailableasatorso,asonlyoneofseveralvolumes. Almostanotherthreedecadespassedbeforethevolumescompletingthesystemappeared (volume2in1885,volume3in1895).AndafurtherfifteenyearspassedbeforeKarlKautsky broughtoutthelastvolumeofTheoriesofsurplusvalue(1910).These,intendedbyMarxas thefourthpartofCapital,areamagnificenthistoryofpoliticaleconomyfromtheendofthe 17thcentury,onethatbourgeoishistoricalwritinghasbeenunabletoequal. DuringthefirstdecadeafterthefoundingoftheGermanEmpireitwashardlypossibleto speakofMarxisminGermany(andstilllessinothercountries).Therewasonlyaveryloose connectionbetweentheworkersmovementandthetheoriesofscientificsocialism.Many yearsafterLassallesdeaththeGermanworkersmovementwasstillundertheinfluenceof Lassallestheoriesandwork.Apartfromthat,itdrewitsideasandsentimentsfrommemories of1848,from[PierreJoseph]Proudhon,[Karl]RodbertusandEugenDhring.1Manysocialists justifiedtheirdemandsbyappealingtoethicsandhumanityororientedthemselvesonthe publicationsoftheInternationalWorkingMensAssociation[theFirstInternational].Whenthe twotendenciesintheGermanworkersmovement(thesocalledtheLassalleansandthe MarxistEisenachers)unitedattheGothaCongress(1875),Lassallesideasanddemandswere toagreatextentincorporatedinthenewlyagreedGothaProgramme(cf.Marxscriticismsin hisCritiqueoftheGothaprogramme).2Intiallyworkersinlargescaleindustrywerenot organisedineitherparty,ratherthebulkofthemovementwasworkers,suchasshoemakers, tailors,bookprinters,tobaccoworkersetc.,whostillretainedclosetieswiththepetty bourgeoisie.Lassallespamphletsanddemands,hisambiguousconceptofthestate,his completelackofclarityaboutthegoalofthepartyevidentlyexpressedmuchmorethelabour movementslackofmaturityatthattimethanthecohesiveandmagnificentedificeofMarxs theory.Eventheleadingfiguresinthelabourmovementwere,foralongtime,unabletograsp keyaspectsofMarxstheory.Characteristicofthisistherequest,in1868,byWilhelm Liebknecht,whoduringhisstayinLondonhadhadacloserelationshipwithMarx,thatEngels shouldmaketheactualdifferencesbetweenMarxandLassalleclearinanarticlefortheparty organ.3FromcorrespondencebetweenMarxandEngelsitisapparenthowdistressedMarx feltaboutthefactthatGermanpartycircleswerealmostincrediblyindifferenttoCapital.
[1 PierreJoseph,18091865,ProudhonwasanearlytheoristofanarchisminFrance.KarlRodbertus 18051875wasaGermaneconomistandtheoristofstatesocialism.EugenDhring,18331921, wasaGermaneconomistandphilosopherwhoadvocatedasocialismofcompetingproduction cooperatives.Marxwrotecritiquesoftheeconomicideasofallthree.] [2 KarlMarx,CritiqueoftheGothaProgramme,KarlMarxandFrederickEngels,Thecollectedworksof KarlMarxandFrederickEngels.Volume24(MECW),InternationalPublishers,NewYork19751995, pp.75100.] [3 WilhelmLiebknecht,lettertoFrederickEngels,20January1868,WilhelmLiebknecht:Briefwechsel mitKarlMarxundFriedrichEngels,Mouton,Hague,1963,pp.88.]

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Onlygraduallyandinconstantstruggleagainstotherviewsthatwerewidespreadinthelabour movement(thestruggleagainstProudhonismandBakuninismintheFirstInternational, EngelsspolemicagainstDhringin1878,etc.4)didMarxistideaspermeatetheworkers movement.From1883KarlKautsky(born1854)soughttospreadMarxistideas,astheeditor ofthepartystheoreticalorgan,NeueZeit.However,theperiodoftheAntiSocialistLaw (187890)wasquiteunfavourableforthetheoreticalconsolidationofMarxism.5 ThegreatpopularitythatMarxslifework[Capital]achievedisdueinitiallytothosesectionsof volume1thatdescribetheimmediateprocessofproductionwithinthefactoryandthusmake thesituationoftheworkingclass,itsexploitationbycapitalandeverydayclassstrugglestaking placebeforeeveryoneseyesintelligible.Sothisvolumebecamethebibleoftheworking classfordecades.Thefateofthosepartsoftheworkwhichpresentthehistoricaltendencies ofcapitalistaccumulationandthetendencytowardsthebreakdownofcapitalismthatfollow intheirwakewasquitedifferent.HereMarxwassofarinadvanceofhisepochintellectually thatthesepartsofhiswork,atfirst,necessarilyremainedincomprehensible.Capitalismhad notyetachievedthematuritythatwouldhavemadeitsbreakdownandtherealisationof socialismanimmediatereality.Soitisunderstandablethatinareviewofvolume2ofCapital (1886)Kautskyexplainedthat,inhisopinion,thisvolumehadlessinterestfortheworking classthanthefirst,thatforthemonlytheproductionofsurplusvalueinthefactorywasof importance.6Theadditionalquestionofhowthissurplusvalueisrealisedwasofmoreinterest tothecapitaliststhantotheworkingclass!KautskyswellknownbookTheeconomictheories ofKarlMarxalsolimitsitselfexclusivelytodescribingthecontentsofthefirstvolumeof Capital.Anextremelydeficientoutlineofthetheoriesinvolumes2and3wasonlyaddedto latereditions.7 TwogenerationshadtopassaftertheappearanceofCapitalbeforecapitalism,asaresultof capitalaccumulation,maturedtoitspresenheightandconflictsdevelopedinitswombthat translatedtheproblemoftherealisationofsocialismfromthedomainofaprogrammatic demand,onlyappropriatefortheremotefuture,tothesphereofdailypoliticalpractice.The understandingofMarxsideashasalsogrown,incorrespondencewiththechangedhistorical situation. ThesituationwasdifferentaftertheendoftheAntiSocialistLaw(1890),whenpolitical socialismstartedtodeveloprapidlyfromasmall,persecutedgroupintothelargestpartyin Germanyanditsappealencompassedbroadlayersofintellectualsandthepettybourgeoisie, farbeyondtheworkingclass.ThestrengthofMarxismapparentlyincreasedinthisperiod.In theErfurtProgram(1891)itachievedavictoriousexpression.But,preciselyatthetimewhen theappearanceofvolume3ofCapital(1895)publiclyconcludedMarxstheoreticalsystem, withtherapidblossomingofinternationalcapitalismandthestrengtheningofanopportunist labouraristocracywithintheworkingclass,achangeoccurredthatwastobeofthegreatest significanceforthefurtherdevelopmentofMarxisttheory.Soonerorlaterthesocial
[4 MikhailBakunin,18141876,wasaRussiananarchistwhoorganisedconspiraciesagainstthe leadershipoftheFirstInternational.FrederickEngels,AntiDhring:HerrEugenDhrings revolutioninscience,MECW25,pp.1309.] 5 TheAntisocialistorExceptionalLawagainstthepublicdangerofSocialDemocraticendeavours bannedsocialdemocraticorganisations,publicationsandtradeunionsinGermanybetween1878 and1890.

[6 KarlKautskyDasElendderPhilosophieundDasKapital,DieNeueZeit,4,1886p.164.] [7 KarlKautsky,KarlMarxkonomischeLehren,Dietz,Stuttgart1887;TheeconomictheoriesofKarl Marx,Black,London,1925[translatedfromthethe8thGermanedition,1903,whichincludedan accountoftheformationoftheaveragerateofprofit,fromvolume3ofCapital].]

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differentiationoftheworkingclasshadtobeexpressednotonlyinpoliticsbutalsoinits theoreticalconceptionsofthegoalsandtasksofthelabourmovement. BTheadvanceofreformism a)Revisionism Thevictoryofopportunism,initiallyinEngland,theninFranceandGermanyaswellasaseries ofsmallerEuropeancountries,isnecessarilyconnectedwiththestructuraltransformationof worldcapitalism,whichexhibitedextremelypowerfuldevelopmentandincreasinglyshowed itsimperialistfaceduringthelastdecadeofthelastcentury.Itsfundamentaleconomictraits arethereplacementoffreecompetitionbymonopolyandcolonialexpansioncombinedwith bellicoseentanglements.Throughcapitalexports,monopolisticdominationandexploitationof hugeregionsthatsupplyrawmaterialsandprovideoutletsforcapitalinvestmentinCentral andSouthAmerica,AsiaandAfrica,thebourgeoisieandthefinancialoligarchyofthecapitalist greatpowersacquirebillionsinsuperprofits.Thesemakeitpossibleforthemtowinoveran upperlayeroftheworkingclassandthepettybourgeoisfollowingofthesocialistpartieswith higherwagesandvariousotheradvantages,sothatthesetakeaninterestincolonial exploitation,arepoliticallyboundtothemandenteracommunityofinterestsagainstthe broadmassesandtheothercountries.Theseupperlayerswerethebourgeoisieschannelsof influenceintotheproletariat.Theemergenceofthelabouraristocracy,whichfound expressionpoliticallyintheformationofbourgeoisworkerspartiesonthemodelofthe LabourPartyinEngland,istypicalofalltheimperialistcountries. Theselayers,whichfoundtherevolutionarytenetsofMarxisttheoryinconvenientanda hindrancetotheirpracticaleffortstocooperatewiththebourgeoisieandstateorgans,soon wentontotheoffensiveagainstMarxisttheorywiththeargumentthatitwascontradictedby capitalismsrealtendencies.TheirmaindifferencewithMarxismwasthatthelatterdeniedthe possibilityofalastingimprovementintheconditionsoftheworkingclassunderthecurrent economicorder(apartfromtemporaryimprovementsforshorterperiods)andadvocatedthe oppositepointofview:that,withitsfulldevelopment,theimmanentpowersofcapitalism wouldnecessarilyleadtoaworseningofworkersconditions.Incontrast,therepresentatives ofreformismpointedoutthat,evenundertheexistingeconomicorder,alastingimprovement inthesituationoftheworkerswhetherbymeansofstatelegislation(pensions,accidentand unemploymentinsurance)orbymeansofselfhelp(byfoundingandexpandingtradeunions andconsumercooperatives)waspossibleandalreadyoccurring.Heretheratherslight improvement,confinedtoanarrowupperlayeronly,wasovervaluedandgeneralisedandits characterwasmisjudged,totheextentthatitwasnotconsideredtemporarybutthestartofa transformationthatwasconsistentlyexpandinginbreadthanddepth. Therisingstrengthofthetradeunionmovementwas,nodoubt,themosteffectiveleverfor theenforcementofantiradicalattitudes.Fortheleadersofthetradeunionsthetypical representativesofthelabouraristocracyreformismwastailormade.Forthesemen, conductingthesmallscalewarforentirelygradualimprovementsinthesituationofthe workersthatwereagainandagainthreatenedbysetbacks,allradicalismrepresentedathreat tothepositionstheyhadconquered,theirorganizationsandtradeunionfunds.Theytherefore soughttonipeveryintensificationofthemethodsofstruggleinthebud.UndertheAnti SocialistLaw,therewasnoroomforsucheffortsasthetradeunionsthenhardlysufferedless thanpoliticalsocialdemocracy.Withthestrengtheningofthetradeunionmovement,after therepealoftheEmergencyLaw,particularlyfromthefoundationoftheGeneralCommission

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oftheFreeTradeUnions,whichwascombinedwiththetightcentralisationofthemovement, therelationshipofthetradeunionstothepartychanged.Theinitialdependenceonthe politicalmovementwassoontransformedand,atboththeKlnTradeUnionCongressinMay 1905andtheMannheimPartyCongressinSeptember1905,thetradeunionsandtheirleaders knewhowtoimposetheirdemandsoftenondecisivequestionstooagainstthewillofthe Partyauthorities.Nowtheirinfluenceonthetheoreticalconceptionsofthesocialistworkers movementwasalsoincreasinglyapparent.GraduallycertainessentialelementsofMarxist theorywereerodedbythepracticaltradeunionnegotiators.Inthehandsofthetradeunion leaderstheconceptofclassstruggleexperiencedagradualtransformation,sothatlittleofits originalcontentremained.Underthesameinfluences,theattitudeofthetradeunionleaders tothestatealsochanged.Theypointedoutthebenefitstheysawfortheworkingclassinthe stateinstitutionsofsocialinsurance,asystemtheyhopedtobeabletoexpandfurther.Thus thesecirclesfeltcompelledtorevisetheideaspreviouslyinheritedfromMarx(revisionism). Duringtheninetiesandaftertheturnofthecentury,thequestionwasoftenraisedofwhether aspecialtradeuniontheorythatwouldjustifyreformismtheperspectiveofagradual socialisation,dropbydropwithintheexistingorderoughttobecompiledforthesocialist inclinedtradeunions.Butitnevercametosuchatradeuniontheory.Allthefriendlierwasthe tradeunionwelcomeforeffortsemergingwithinthepoliticalpartythataccommodatedtheir desires. RevisionismisinseparablylinkedwiththenameEduardBernstein(born1850).Hewasthefirst tosystematicallydemandarevisionofMarxstheory,arguingthatitdidnotcorrespondwith theactualdevelopmentofcapitalism,eventhoughtheformerradicalGeorgvonVollmarhad earlierdevelopedsimilarideas,inhisfamousEldoradospeechesinMunich(1891)andinthe pamphletStatesocialism(1892),andadvocatedreformisttactics.8EduardBernstein,who seemedtobeatruediscipleofthetheorywhileEngelswasstillalive,emergedasacriticonly afterthedeathofthemaster,inhisNeueZeitarticlesof18967,onProblemsofsocialism (publishedinbookformasThepreconditionsofsocialism).OtherwritingsbyBernsteinare relevant:Howisscientificsocialismpossible?;Guidingprinciplesforasocialdemocratic program;Onthetheoryandhistoryofsocialism.9 BernsteinneveropenlydescribedMarxisttheoryasawholeasfalse.Itisanessentialfeature ofrevisionismthatitneitherhadtheintentionofnorsucceededinconstructingacomplete theoreticaledificetoreplaceMarxs.Itshistoricalsignificanceliesprimarilyinitsinfluenceon tradeunionandpoliticalpractice.Theorywasonlyofconcerntotheextentthatitwasan obstacletothispracticalreformism.Thiswastobedisposedofthroughtherevisionistcritique thatadaptedtheorytopracticesothatinconsistencybetweeninheritedrevolutionarytheory andreformistactivitycouldbeovercome.Forthispurpose,inhiscritiqueofMarxstheoretical edifice,Bernsteinusedtheconvenientprocedureofseparatingtheenduring,generallyvalid
[8 GeorgvonVollmar,18501922,wasarevolutionaryuntilthemid1880s.ProminentintheGerman federalparliamentandstateparliaments,headvocatedaprogramofreformandallianceswith bourgeoisparties,intwospeechesinMunichsEldoradopub,UeberdienchstenAufgabender DeutschenSozialdemokratie:zweiReden,gehaltenam1.Juniund6Juli1891imEldoradozu Mnchen,Ernst,Mnchen,1891;UeberStaatssozialismus,Wrlein,Nrnberg,1892.] 9 EduardBernstein,Thepreconditionsofsocialism,CambridgeUniversityPress,Cambridge,1993 [1899];WieistwissenschaftlicherSocialismusmglich?EinVortrag,VerlagderSocialistischen Monatshefte,Berlin,1901,Berlin1901;DerRevisionismusinderSozialdemocratie:einVortrag gehalteninAmsterdamvorAkademikernundArbeitern:MiteinemAnhang:Leitstzefrein sozialdemocratischesProgramm,Cohen,Amsterdam,1909;ZurGeschichteundTheoriedes Socialismus:gesammelteAbhandlungen,Edelheim,Berlin,1901.

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elementsofthetheoryfundamentaltheoreticalpropositionssharplyfromvariable elements,thatarepropositionsarisingfromappliedscience.Underthecoverofthis distinction,however,thefundamentalpropositionsofthetheorywerealsoencompassed, albeitonthepretextthattheywerenowreinterpretedasnotfundamental.Thegoalof revisionismwasneverdeclaredtobethedefeatofMarxism;ratheritwassupposedtobea matterofrejectingcertainremnantsofutopianismthatMarxismstillallegedlycarriedinits baggage. BernsteinsactofpurificationwasanattempttoliberatesocialismfromMarxstheoryof valueandsurplusvalue.Valueisatheoreticalconstructandnota[surface]appearance. WhetherMarxstheoryofvaluewascorrectornot,Bernsteinargued,wassuperfluousforthe demonstrationofsurpluslabour,assurpluslabourisanempiricalfactwhichsufficesaloneasa rationaleforsocialism.Bernsteinneverofferedsucharationale,apositivetheoryof capitalism,builtonthefactofsurpluslabour,forsocialism.Hehasremainednegative. BernsteinconcedestheaccuracyofMarxspredictionsaboutincreasingcentralisationand concentrationofcapital,increasingconcentrationofenterprises,arisingrateofsurplusvalue (exploitation)andthefallintheprofitratebutmaintainsthatthefullpictureofcapitalismin Marxisonesidedlydistorted.Marxsupposedlyneglectsthecountertendenciesintheprinciple matter.Divisionsamongalreadyconcentratedcapitalscounteractthetendencyto concentration.Incomestatisticsshowgrowthinthenumberofshareholdersandaverage magnitudeoftheirshareholdings.Undeniablythenumberofpropertyownersisgrowingboth absolutelyandrelatively.Andtheemploymentstatistics,fortheirpart,provethatthemiddle classesisexpanding.Finallyenterprisestatisticsirreproachablydemonstratethatinawhole seriesofbranchesofindustrysmallandmediumsizedfirmsarequiteviablealongsidelarge concerns.Thisappliesnotonlytoindustrybutalsotocommerce.Totheextentthatlarge concernsareconsidered,developmentsinagriculturedemonstrateeithernochangeatallora declineinthescaleofoperations.AfterBernstein,EduardDavidattemptedtoshowthatin agricultureadevelopmentinthesizeofoperationshadbegunthatwasdiametricallyopposed toMarxsprediction.Histhesescontendedthatthatsmallscaleoperationswerenotonly viablebutwereevenasuperiorformofproduction.10 BernsteinregardstheMarxisttheoryofcrisisandbreakdownasanaprioriconstructionin accordancewithHegelsschemeofdevelopment.Invariousways,actualdevelopmentshave takenadifferencecoursethantheywouldhaveifbreakdownwasinevitableforpurely economicreasons.Bernsteinconcedesthepossibilityoflocalorparticularcrisesbutthehuge territorialexpansionoftheworldmarket,thereductionofthetimerequiredfor communicationsandthetransportofgoods,combinedwiththeelasticityofthemoderncredit systemandtheemergenceofcartelshavecreatedthepossibilitythatlocaldisturbanceswill canceleachotherout.Theoccurrenceofgeneralcrisesshould,therefore,beconsidered unlikely.Bernsteindoesnottreatbreakdownfromtheperspectiveofwhetheritwasthe necessaryresultoftheimmanentdevelopmentofcapitalism;whetherwiththeexistinglevel ofeconomicdevelopmentandthedegreeofmaturityoftheworkingclassasudden catastrophemightbetotheadvantageofsocialdemocracy.Bernsteinanswersthese questionsinthenegativebecausethereisagreaterguaranteeofenduringsuccessesinsteady forwardsmarchthaninthepossibilitiesofferedbyacatastrophe.Itispreciselyinthetheoryof breakdownthatBernsteinseesthequintessenceofutopianisminMarxism,becausethis

10 EduardDavid,18631930,SocialismusundLandwirtschaft.Berlin,VerlagderSocialistischen Monatshefte,1903.

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makesthevictoryofsocialismdependentonitsimmanenteconomicnecessity.11Bernstein combatstheironnecessityofhistory12andthematerialistconceptionofhistoryasatheory historicalnecessityandemphasisestheincreasingeffectivenessofideologicalandethical factors.AgainstMarxheappealstoKant.Thevictoryofsocialismdoesnotdependon economicnecessitybutonthemoralmaturityoftheworkingclass,i.e.itsrealisationthat socialismisdesirable. UltimatelyBernsteinconjuresawaythefinalgoalofsocialism.([T]hefinalgoalwhateverit maybe,isnothingtome,themovementeverything.)13Thefinalobjectiveissubordinate; instead,theattentionandenergyoftheworkingclassshouldbeconcentratedonimmediate goals,ondaily,detailedworkwhichwillleadtoadvanceinculturaldevelopment,higher moralityandlegalconceptions.Itisapparentthatsuchaformulationofthetasksofthe workersmovementhasnothingatalltodowithsocialismandcoincideswiththeconceptions ofbourgeoisliberalism.Thegeneralperspectivethatinallindividualgoalsthereisalwaysa pointertoafurthergoal,yettobeachievedthathastobepursuedlateronlyleadsto progressiontoinfinityandthatisdiametricallycounterposedtotheessenceofsocialism, whichataparticularstageofdevelopment,wantstoandshouldreplaceonedefinitesystem withanother(Brauer).14 HewasonlybeingconsistentwhenBernsteingaveupthefinalgoalhesimultaneously abandonedtherevolutionarytacticsnecessarytoachieveit.IncontrasttoMarxstheoryof classstruggleandhisconceptionthatforceisthemidwifeofeverysocietythatiscominginto being,Bernsteinemphasisesparliamentaryactivityasthemeansforemancipatingtheworking class.Theideaofconqueringpoliticalpowerthroughrevolutionaryactionissupposedlya foreignbodyinMarxism,aremnantofBlanquismfromwhichEngelspartedtowardstheend ofhislife. Fromhiscritique,Bernsteindrewtheconclusionthatitwasfalseanddisastroustocounton greatsocialcatastrophesandtofocusthepartystacticsonthem.Theutopiaofacoming revolutionhadtobegivenup.Developmentbluntsclassantagonismsanddemocratises society.Itisappropriatetopromotethisdevelopment.Inordertogaininfluencesocial democracyhastofindthecouragetomakeupitsmindtoappearwhatitisinrealitytoday:a democraticsocialistpartyofreform.15 Fromallthisitisapparent,asBrauercorrectlyemphasises,thatBernsteinisnosocialistinthe Marxistsense,becauseheiscaughtupinpoliticalcategories.ForMarx,theproletarian revolutionisnotjustapoliticalactthatreplacestheoldpower,basedonparliament,witha newone,butissimultaneouslyasocialrevolutioninsofarasitabolishesthewholeofthe previousformofsocietytoreplaceitwithanewone.Classstrugglejustlikeitshighestform, civilwarisnot,forMarx,theproductofthegoodorbadwillofthepeopleandcannotbe replacedatdiscretionbyparliamentaryactivity.Onthecontrary,classstruggleandrevolution areinevitableconcomitantsoftheimmanenteconomicnecessitywithwhichdevelopment drivestowardssocialism.
11 Bernstein,Thepreconditionsofsocialism,pp.199200. 12 Bernstein,Thepreconditionsofsocialism,p.20. 13 EduardBernsteinDerKampfderSozialdemokratieunddieRevolutionderGesellschaft,part2, NeueZeit,16(18),1898,p.556;BernsteinmakesaverysimilarstatementinThepreconditionsof socialism,p.190. 14 TheodorBrauer,DermodernedeutscheSozialismus,Herder,FreiburgimBreisgau,1929,p.142. 15 Bernstein,Thepreconditionsofsocialism,p.186.

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TheconsiderableinfluenceBernsteinexercisedonintellectualscanbeexplainedbythefact thattheboldnessofhisapproachwasinitiallycaptivatingbecause,incontrasttothefearthat Marxismwasbeingpetrified,itinseemedtopavethewayforthefurtherdevelopment.Atthe sametime,hewonoverthosewho,foropportunistreasons,didnotwishtocommit themselvesandfoundinBernsteinsconditionaldeterminationsandqualificationsthebolt holestheydesiredfortheirownindecision. AmongthecriticsoftheMarxisttheoryofcrisisandbreakdownwho,likeBernstein,proceed fromanethicalperspective,theRussianprofessorMikhaelTuganBaranovskiiparticularly excelled,withargumentsthatwerelaterusedextensivelybyrevisionists(Studiesonthetheory andhistoryofcommercialcrisesinEngland,TheoreticalfoundationsofMarxism,Modern socialisminitshistoricaldevelopment).16AccordingtoTuganBaranovskiicrisesandthe ultimatebreakdownofcapitalismcannotbeduetoalackofmarketssince,inthecourseofthe expansionofproductiontheindividualspheresofproductionreciprocallycreatenewmarket opportunities.TuganBaranovskiiseekstoprovethis,usingareproductionschemabasedon Marxs.Norneedthereductionofsocialconsumptionasaresultoftheprogressoftechnology andthereplacementofhumanlabourbymachinesleadtooverproduction.Withthe expansionofproduction,humanconsumptionisreplacedbyproductiveconsumption,i.e. strongerdemandformeansofproduction.AccordingtoTuganBaranovskii,theseresultsof abstracttheoreticalanalysisareconfirmedbytheempiricalfacts.Recentcapitalist developmentshowsastrongexpansionoftheindustriesproducingmeansofproduction,such sectorsascoalandsteel,mechanicalengineering,chemicalsetc,whoseproductsdonotflow intohumanconsumption,whilethosesectorsdirectlyservinghumanconsumption,suchas textiles(cotton)havealmostreachedastandstill. Theabsolutelimitfortheexpansionofproductionisconstitutedbytheproductiveforcesthat societyhasatitscommand.Capitalcanneverreachthislimittotheextentthatthisexpansion ofproductionoccursproportionatelyinallbranchesofproduction.Capitalistcrisesarethus exclusivelytheresultofdisproportionalinvestmentinindividualspheres.Withproportional investmenttheproductiveforcesofcapitalismcandevelopwithoutlimit.Thecapitalist economycannotbreakdownforeconomicreasons.17Marxstheoryofvalueissuperfluousfor thedemonstrationofsurpluslabour.Surplusproductisnottheproductofthewagelabourer employedandexploitedinproductionalonebutistheproduceofthewholeofsocietyasa unit.Capitalistsocietysdefectisthatthepropertiedclassappropriatesthissurplusproduct. Theendofthisunjustsystemcanthusonlyresultfromethicalcauses.Thereis,therefore,no occasiontosupposethatcapitalismwillsomedaydieanaturaldeath;itwillbedestroyedby theconsciouswillingeffortsofman,bythatsocialclasswhichhasbeentheforemostobjectof capitalisticexploitationtheproletariat.18ForthisreasonTuganBaranovskiipraisessocalled utopiansocialism,whichwasfarmorescientificthanMarxism,totheextentthatitdidnot attempttoprovideuntenableobjectivejustificationsforthereorganisationoftheexisting economicorder.
16 MikhailIvanovichTuganBaranovskii[(18651919)wasforaperiodalegalMarxistintheRussian empire],StudienzurTheorieundGeschichtederHandelskriseninEngland,Fischer,Jena,1901, [1894];TheoretischeGrundlagendesMarxismus,Duncker&Humblot,Leipzig,1905;Modern Socialisminitshistoricaldevelopment,Sonnenschein,London,1910[1908]. 17 TuganBaranovskii,DerZusammenbruchderkapitalistischenWirschaftsordnungimLichteder nationalkonomischenTheorie,ArchivfrSozialwissenschaftundSozialpolitik,19,1904,p.304et seq. 18 TuganBaranovskii,Modernsocialism,p.96.

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Inadditiontothosecited,ConradSchmidt,theauthorofavaluablebookonTheaveragerate ofprofitonthebasisofMarxslawofvaluewhichwaspraisedbyEngels,oughttobe mentioned.YethesoonbecameoneofthefiercestopponentsofMarxstheoryofvalueand surplusvalue.Hewasnot,however,contenttocriticiseandrejectMarxsconception,but himselfundertookasystematicanalysisofthecapitalisteconomyanditslaws(cf.hisarticles onthetheoryofvalueandcrisesinSozialistischeMonatshefteand,inparticular,Onthe methodoftheoreticalpoliticaleconomy).19HereSchmidtreachedthesameconclusionthat Marxdeducedforthecapitalisteconomy:withthepurchasingpowerintheformofwages,to whichheisentitled,theworkercanonlybuyaportionofvalueforwhoseproductiononlya fractionofthelabourthathehimselfperformedwasnecessary.Inotherwords,ifthe commoditiesheproducedaretobeprofitablefortheentrepreneur,hemustalwaysperform surpluslabour.But,accordingtoSchmidt,thisbasicresultwasachievedwithouthavingtouse Marxsuntenablelawofvalue,wherebyonecanavoidmanycontradictionsassociatedwith thislawofvalue. b)TheNeoKantians Inadditiontotherevisionistmovement,whichsoughttounderminetheeconomicand politicalfoundationsofMarxism,towardstheendofthelastcentury,inthefieldofphilosophy astrongerrevisionistcurrentalsoarosewithinsocialdemocracy.Theentryofbroad intellectuallayersintotheworkersmovementsoonledtoadiscussionaboutthemeaningand validityofthematerialistconceptionofhistory.Engelsalreadymadecertainmodifications,in letterstosocialistuniversitygraduateswhoaskedhimforinformation(see,inparticularthe letterof21September1890toJosephBloch).Intheseletters,Engelswarnedagainst exaggerationsandobservedthatsomeyoungerwritersattributemoreimportancetothe economicaspectthanisduetoit20andthattheeconomicsituationwasnottheonlybut merelythedeterminingmomentofsociohistoricaldevelopmentinthelastinstance.These intellectualsimportsecondaryidealisticcurrentsintotheworkersmovement,thatwantto abandonthematerialistconceptionofhistoryorcombineitwithidealism.Particularlyin France,whereJeanJaursinhisLatindissertationof189121developedtheidealistconception ofhistoryaccordingtowhichhistorywastheproductofthehumanspiritaconceptionthat healsoretainedlaterasasocialist.Theidealistcurrentisassistedbysomesupportersofthe materialistconceptionofhistorysuchas,forexample,PaulLafargue(18421911)whosecrude interpretationshelpeddiscreditit.22InGermanyacurrentinitiallydevelopsinphilosophyat universitiesthatseekstojustifysocialismidealisticallyandtolinkitwithKant.Itoriginates
19 ConradSchmidt,[18631932,wasaGerman,socialdemocraticeconomistandjournalist,andthe olderbrotherofthesocialistartistKtheKollwitz]DieDurchschnittsprofitrateaufGrundlagedes MarxschenWerthgesetzes,Dietz,Stuttgart,1889;NachtrglicheBemerkungenzurBernstein Diskussion,SozialistischeMonatshefte,3(10),October1899,pp.4939;ZurTheorieder HandelskrisenundderUeberproduction,SocialistischeMonatshefte,5(9),September1901,pp. 66982;PositiveKritikdesMarxschenWertgesetzes,SozialistischeMonatshefte,16(10),19May 1910,pp.60418;ZurMethodedertheoretischenNationalkonomie,SozialistischeMonatshefte, 21(10),27May1915,pp.492502. [20 FriedrichEngelslettertoJosephBloch,21September1890,MECW49,p.36.[wholeletterpp.336] [21 JeanJaurs,DeprimissocialismigermanicilineamentisapudLutherum,Kant,FichteetHegel, Chauvin,Toulouse,1891.] 22 Cf.PaulLafargue,LedterminismeconomiquedeKarlMarx:recherchessurlorigineetlvolution desidesdeJustice,duBien,delAmeetdeDieu,V.GiardetE.Brire,Paris,1909.

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withHermannCohen(18421918),thefounderofNeoKantianism,thesocalledMarburg Schoolwho,inhisIntroductiontoFriedrichAlbertLangesHistoryofmaterialism,23 attemptedtoprovethatsocialismwasbasedonthesocialismofethicsandtothisextent KantwasthetrueandgenuineinitiatorofGermansocialism.InhisbookEconomicsandlaw accordingtothematerialistconceptionofhistoryRudolfStammler(ofHalle)recognisedthisas thebestandmostconsistentmethodforcausalresearchintoeconomicdevelopment,but demandedthatitbesupplementedbygoalsetting(teleological)considerations.Onlyby meansofthelatterisitpossibletoachievethehighest,socialgoal,whichStammlerregardsas thecommunityofpeoplewhowanttobefree,inwhicheverybodymakestheobjectively justifiedpurposesoftheotherhisown.24FranzStaudinger(18491921)attemptedevenmore, inhiswritings(Ethicsandpolitics:economicfoundationsofmorality):25toreconciletheMarxist standpointwithKantsepistemologicalcritiqueandethics.EachKantianhadtocometoMarx bylogicallydevelopinghisownbasicideas.Andviceversa:AssoonasMarxismnolonger merelypursuessocialbecomingscientificallyinaccordancewiththecausalviewpointbut makesconsciousandplannedtransformationofthegivenintoitsgoal,itarrivesatKant,asa resultofconsistentpursuitofitsownprinciple.26AlongsimilarlinestoStaudinger,Karl Vorlnderinhiswritings(Kantandsocialism,FromMachiavellitoLenin)27advocateda combinationofMarxandKant,i.e.acombinationofaneconomic,historicalwithan epistemologicallycritical,ethicaljustificationforsocialism. Thiscurrent,whichinitiallyaroseoutsidethesocialistmovement,soonalsocreatedanecho withinit,particularlyintheranksoftherevisionists:EduardBernstein,ConradSchmidtand LudwigWoltmann(Historicalmaterialism),whoattemptedtoundermineMarxismthrough philosophytoo,butalsointheranksofyounger,radicalVienneseMarxistsatthetime,suchas MaxAdler(CausalityandTheologyintheDisputeabouttheEconomy,MarxasThinker,Marxist Problems)andOttoBauer(Marxismandethics,directedagainstKautsky),whoultimately deviatedintothecampofreformism.28Theyalldemandedastrongerconsiderationof ideologicalaspects,epistemologicalcritiqueandethicsinsocialisttheory.Similarattemptsby RussianrevisionisminthefieldofphilosophyevokedtheresoluteresistanceofPlekhanovand

23 HermannCohen,EinleitungmitkritischemNachtrag,inFriedrichAlbertLange,Geschichtedes MaterialismusseitKant,HermannCohenBaedeker,Leipzig,5thedition,1896. 24 RudolfStammler,WirtschaftundRechtnachdermaterialistischenGeschichtsauffassung:eine sozialphilosophischeUntersuchung,Veit,Leipzig,1896,p.5756. 25 FranzStaudinger,EthikundPolitik,Dmmler,Berlin,1899;WirtschaftlicheGrundlagenderMoral, Roether,Darmstadt,1907. 26 Staudinger,EthikundPolitik,p.159. 27 KarlVorlnder,KantundderSozialismusunterbesondererBercksichtigungderneuesten theoretischenBewegunginnerhalbdesMarxismus,Reuther&Reichard,Berlin1900;Kantund Marx:EinBeitragzurPhilosophiedesSozialismus,Mohr,Tbingen,2ndedition,1926;Von MachiavellibisLenin:NeuzeitlicheStaatsundGesellschaftstheorien,Quelle&Meyer,Leipzig,1926. 28 LudwigWoltmann,DerhistorischeMaterialismus:DarstellungundKritikdermarxistischen Weltanschauung,Michels,Dsseldorf,1900;MaxAdler,KausalittundTeleologieimStreiteumdie Wissenschaft,VerlagderWienerVolksbuchhandlungBrand,Wien,1904,pp.195433;Marxals Denker:zum25.TodesjahrevonKarlMarx,VerlagBuchhandlungVorwrts,Berlin1908,Kantand Marxism,Berlin1925;MarxistischeProbleme;BeitrgezurTheoriedermaterialistischen GeschichtsauffsungundDialektik,Dietz,Stuttgart1913;OttoBauer,MarxismusundEthik,Neue Zeit,24,2(41),1906,pp.48599;KarlKautsky,EthikundmaterialistischeGeschichtsauffassung, Dietz,Stuttgart,1906.

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Lenin(Materialismandempiriocriticism).29Onthewholerevisionismremainednegative philosophicallyandproveditselftobejustasinfertilehereasinthefieldofeconomics. However,withthevictoryofreformisminGermanSocialDemocracyduringandaftertheWar, thesecurrentssucceededincomingintotheirown.Itischaracteristicofthecompletely alteredattitudeofsocialisminthisperiodthatthearticleonthephilosophicalfoundationsof socialisminTheprogramofSocialDemocracy:suggestionforitsrenewal,whichappeared beforetheGrlitzPartyCongress,waswrittenattherequestofauthoritativepartycirclesby theabovementionedKantianKarlVorlnder.30 Asfarasrevisionismasawholeisconcerned,itisnotonlythecircumstancethatboth BernsteinandTuganBaranovskiisubscribetothetheoryofmarginalutilitythatlendsitan individualisticaspectbut,aswasshown,alsoitsattempttoreplacetheMarxistmaterialist dialecticwithKantianethicsandepistemologicalcritique.For,incontrasttosocialismthatitis afundamentalsocialism,Kantsstartingpoint,itmustbeinsisted,istheautonomous personality.Here,however,thereisafundamentalcontradictionwithsocialismingeneraland Marxistsocialisminparticular,whichonlyknowsandexplainstheindividualasconditionedby thesocialenvironment. RevisionismasawholehasnotbeenabletoreplaceMarxisttheorywithoneofitsownthatin anyrespectcapturedtheeconomicmechanismwithitssocialinterconnections.Itremained stuckincritiqueandthereforethequestionwhetherrevisionismshouldbeaddressedas socialisminprinciplehastobeansweredinthenegative.Butalsoasapurecritiquethe standpointofrevisionismhasprovedtobefalse.Oneonlyneedstocompareitscritiqueofthe Marxistaccountofthepronenessofartisanalproductionandthemiddleclassestocrisesand concentration,andfinallyitsconceptionofthesuperiorityofthesmallscaleoperationsin agriculturewiththeexperienceofthepostwarperiod(seeFritzPollockSocialismand agriculture,andJulianGumperzTheagrariancrisisintheUnitedStates),31inordertoseethat historyhasprovednotrevisionismbutMarxiscorrect.AnybodywhodelvesintoCapitaltoday, aftersevendecades,hastoconcedewithastonishmenthowcorrectly,indeedprophetically Marxunderstoodthelargescaletendenciesofcapitalistdevelopment. OverthetwodecadesbeforetheWorldWar,reformismbecameaninternational phenomenon.MuchearlierthaninGermany,itappearedinEngland.There,thefirstmass movementoftheproletariat,theChartistmovement,wasdefeatedinthethirtiesandforties. ButitsstrugglehadshowntheEnglishbourgeoisiethedangerthatthreatenedit. Subsequently,itknewhowtocalmthedissatisfactionoftheworkingclassbymeansof concessionsandthetimelygrantofrealbenefitstoitsupperlayer,whichitssupremacyonthe worldmarketallowedittodo.Inthismanneroveralongperiod,itsuccessfullypreventedthe Englishproletariatfromcombiningtocreateanindependentpoliticalparty.Thewholeenergy oftheworkingclassturnedtodevelopingtradeunions,mutualfundsandcooperatives.The greatreorganisationoflocalgovernmentgaveworkerstheopportunitytorepresenttheir interestsinthefieldofthemunicipalpromotionoftheeconomyandwelfarethrough autonomouslocalauthorities.Thetradeunionsdevelopedapurelyreformistpractice.The
29 VladimirIlychLenin,Materialismandempiriocriticism,inVladimirIlychLeninCollectedworks. Volume14,Progress,Moscow,19608(LCW),[1909],pp.17362. 30 KarlVorlnder,ZudenphilosophischenGrundlagenunseresParteiprogramms,in SozialdemokratischeParteiDeutschlands,DasProgrammderSozialdemokratie,Vorschlgefr seineErneuerung,BuchhandlungVorwrts,Berlin,1920,pp.1017. 31 FriedrichPollock,SozialismusundLandwirtschaft,inMaxAdleretal.,FestschriftfrCarlGrnberg, Hirschfeld,Leipzig1932,pp.397431;andJulianGumperz,DieAgrarkriseIndenVereinigten Staaten,Buske,Leipzig1931.

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revolutionarytraditionsofChartismwereforgotten.ThereformistsocialistFabianSociety, foundedin1883/84andconsistingofafewhundredintellectuals,gainedconsiderable influenceinbourgeoiscirclesandthetradeunionbureaucracy,undertheleadershipofSidney Webb(born1859)andGeorgeBernardShaw.ThereporttheywrotefortheInternational SocialistCongressinLondon(1896)providesaclearinsightintotheessenceoftheFabians.32 TheFabiansdonotwanttobeaparty,rathertheywanttopermeateallexistingorganisations andmovementswithFabianideas.Thetacticofpermeationisoneofthespecific characteristicsoftheFabians.TheFabianSocietyendeavourstorousesocialcompunctionby makingthepublicconsciousoftheevilconditionofsocietyunderthepresentsystem..33Apart fromtheFabianSocietysnumerouspamphlets(tracts),Englishreformismfounditstheological expressionaboveallintheworksofthecouple,SidneyandBeatriceWebb(HistoryofBritish Tradeunionism,withanafterwordbyEduardBernstein;ThePreventionofdestitution;A constitutionforthesocialistcommonwealthofGreatBritain;Thedecayofcapitalistcivilisation) andofJamesRamsayMacDonald(Socialismandgovernment).34TheLabourParty,whichwas finallyfoundedin1900,immediatelyadoptedthereformistprinciplesandpracticeofthe Fabiansandthetradeunions. InFranceonealreadyfindsreformisminthepamphletsthatPaulBroussepublishedinParisin 18812.BroussewasthefounderofthepartyofthesocalledPossibilists,whichexisteduntil 1899.Subsequently,reformistideasweremoststronglypromotedbytheactivityofJean Jaurs,whoalsoadvocatedparticipationinabourgeoisgovernment(ministerialism)in1899. IntheSocialistPartyofItalytoodespitetheweakindustrialdevelopmentofthecountry strongreformistcurrentsappeared,essentiallyrepresentedbypettybourgeoisintellectuals whoparticipatedinallthetheoreticalcontroversiesaboutthetheoriesofimpoverishmentand concentrationthatwerefoughtoutfromtimetotimeinthepartystheoreticalorganCritica socialeintheperiod18951905,afterthepublicationofvolume3ofCapital.Thesyndicalist ArturoLabriola,inhisStudyofMarx,wastheforemostcriticofthetheoryofimpoverishment andbreakdown.35InEconomicspeculationandThedictatorshipofthebourgeoisie,36hedealt withtheproblemofimperialism.Withthestrongerindustrialdevelopmentofthecountry after1905,therelatedintensificationofclassstrugglesandtheadvanceofreactionwithinthe bourgeoisie,numerousintellectualsabandonedsocialism.EmileVanderveldeinBelgium workedwiththesameorientationasJaursinFrance(WorkersBelgium;Collectivismand industrialevolution;Agrariansocialismandagriculturalcollectivism;Essaysontheagrarian
32 GeorgeBernardShaw,ReportonFabianpolicyandresolutionspresentedbytheFabianSocietyto theInternationalSocialistWorkersandTradeUnionCongress,London,1896,FabianSociety, London,Fabiantract,70,1896. 33 Shaw,ReportonFabianpolicy,p.7. 34 DieGeschichtedesBritischenTradeUnionismus,afterwordbyEduardBernstein,Stuttgart1895, originaleditionHistoryoftradeunionism,Longmans,GreenandCompany,1894;Industrial democracy,2volumes,Longmans,GreenandCompany,London,1897;Thepreventionof destitution,Longmans,GreenandCompany,London1911;Aconstitutionforthesocialist commonwealthofGreatBritain,Longmans,GreenandCompany,London,1920;Thedecayof capitalistcivilisation,FabianSociety,London,1923;JamesRamsayMacDonald,Sozialismusund Regierung,Diederichs,Jena,1912,withaforewordbyEduardBernstein,originaledition,Socialism andsociety,IndependentLabourParty,London,1905. 35 ArturoLabriola,Marxnelleconomiaecometeoricodelsocialismo,SocietEditriceAvanguardia, Lugano,1908;secondedition,StudiosuMarx,Morano,Napoli,1926. 36 ArturoLabriola,Laspeculazioneeconomica,SocietEditricePartenopea,Napoli1907;Ladittatura dellaborghesiaeladecadenzadellasocietcapitalistica,Morano,Napoli,1924.

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questioninBelgium;TheWorkersPartyofBelgium18851925).37Reformismtookaspecific forminRussia.ItsmostnotabletheoreticalrepresentativeswereTuganBaranovskiiandPetr BerngardovichStruvewho,however,soonswungovertoliberalism.Itachievedmasspolitical influenceintheworkersmovementinMenshevism. c)Theradicalsonthedefensive Theeffortsofrevisionismweresooncounteredbythesocalledradicalsororthodox Marxists,KarlKautsky,FranzMehring,HeinrichCunow,ParvusbutaboveallRosaLuxemburg, inNeueZeitandinspecificpolemicalwritings,whiletherevisionistsusedthenewlyfounded SozialistischeMonatshefte.38 KautskysAgrarianquestionistargetedagainsttherevisionistcritiqueoftheMarxs presentationofdevelopmentaltrendsinagriculture.39ThisisKautskysmostsignificantand independenteconomicwork,althoughevenherethehistoricaldescriptiveelementcrowds outthepurelytheoreticalaspect.InhisanticritiquedirectedagainstBernsteinscritique (BernsteinandtheSocialDemocraticprogram),40Kautskydealswiththequestionsofmethod, programandtactics,particularlythetenetsdisputedbyBernstein:thetheoryofbreakdown, developmentaltrendswithregardtoenterprisesize(largeandsmallenterprises),theincrease inthenumberofpropertyownersandthemiddleclass,thetheoryofimpoverishmentand crisis.HereKautskyseekstorefutetheBernsteinclaimsaboutthealleviationcapitalist contradictions,bymeansofphilologicalinterpretationofMarxstextsandcomprehensive company,taxandotherstatistics,andtodefendthethesisoftheintensificationofclass contradictions.Inthecourseofdoingso,herelaxesorcompletelyrelinquishesimportant principlesofMarxisttheory.EventheErfurtProgramme(1891),whichwasdrawnupby
37 EmileVandervelde,WorkersBelgium,Paris1906;Collectivismandindustrialevolution,Kerr, Chicago,1901[1900];Lesocialismeagraireoulecollectivismeetlvolutionagricole,Giard& Brire,Paris,1908;EssaissurlaquestionagraireenBelgique,ditionsduMouvementsocialiste, Paris,1902;LePartiOuvrierBelge,18851925,MaisonNationaledditionlglantine,Bruxelles, 1925. [38 KarlKautsky,BernsteinunddasSozialdemokratischeProgramm:EineAntikritik,Dietz,Stuttgart, 1899;Parvus,thenameforpoliticalpurposesofAlexanderIsraelLazarovichHelphand,18671924, wasaprominentMarxistrevolutionaryandjournalistintheRussianandGermansocialdemocratic movements,whoparticularlyadvancedthedevelopmentofthetheoryofpermanentrevolution withLeonTrotsky.WheneditorofthedailySchsigerArbeiterZeitung,hewroteaseriesofarticles, mostheadedBernsteinsUmwlzungdesSozialismusinhisnewspaper:27,28January;8,9,12, 18,22,24,26February;9,11,24,26March1898.FranzMehringsarticlesappearedinanother dailypartynewspaper,9,10February,10March,1898,LeipzigerVolkszeitung;HeinrichCunow, ZurZusammenbruchstheorie,NeueZeit,17,1(12,13,14),7,14,21December1898,pp.35664, 396403,42430;RosaLuxemburg,Socialreformorrevolution,inRosaLuxemburg,Theessential RosaLuxemburg:ReformorrevolutionandThemassstrike,Haymarket,Chicago,2008[1899, 1908],pp.41104.[Forwritingsbymajorcontributorstothedebateandanintroductoryoverview, seeHenryTudorandJosephineM.Tudor(eds)Marxismandsocialdemocracy:therevisionist debate189698CambridgeUniversityPress,Cambridge,1988.ThecontentsofNeueZeitand SozialistischeMonatsheftefortheperiodareaccessibleonlinefrom http://library.fes.de/inhalt/digital/zeitschriften.htm,accessed20June2013.] 39 KarlKautsky,Theagrarianquestion,Zwan,London,1988[1899]. 40 KarlKautsky,BernsteinunddassozialdemokratischeProgramm:EineAntikritik,Dietz,Stuttgart, 1899.

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KautskyandsignifiedthehighpointintheMarxistdevelopmentofGermanSocialDemocracy, portraysthedecisivepointofthepoliticalprogramveryvaguely.Theprocessofcapitalist developmentseemstobetheresultofblindsocialforces.Theconquestofpoweriswrapped intotaldarkness.Thedictatorshipoftheproletariatisnotevenmentioned.Asaresult,the politicalaspectofMarxismwasvirtuallydecapitated,untilitwasreconstructedagainbyLenin afteraquarterofacentury.Engelsscritiqueofthedraftprogrammeof1891wasdisregarded andineffective,justasMarxscritiqueofthedraftGothaprogrammehadbeenin1875.41In thedisputewithBernstein,KautskyintensifiedthereinterpretationofMarxsoriginaltheory evenfurther.ComparedwithBernsteinsdemandthatthePartyshouldbecomeademocratic socialistpartyofreform,emphasisedthatSocialDemocracyhadtobecomeapartyofsocial revolution.42Here,however,headdedthatitwasnotamattertheconceptofrevolutionin thesenseofanarmeduprisingbutofeverylargescalepoliticalconvulsionthatspeededup thepoliticallifeofthenationandmadeitpulsatemostenergetically.Admittedlyextralegal useofviolencecouldformanepisodeinsuchaconvulsionbutcouldneverbetherevolution itself.Inthisreinterpretationoftheconceptofpoliticalrevolution,itsrealcontentthe transferofpowerintothehandsofanewclasswasclearlylost.Atthetime,Engelsspolitical testament,hisfamousintroductiontoTheclassstrugglesinFrance,writtenin1895,playeda notunimportantroleinthedebateovertactics.Heallegedlyrevisedthetacticsoftheworkers movementandsupposedlycounterposedbarricadestrugglesviolentrevolutiontopurely legalstruggle,parliamentarism.Asitturnedout30yearslater,thankstoRyazanovs uncoveringofthefulltext,theIntroductionwaspublishedbythePartyexecutiveinan abridgedformthatsignificantlydistorteditsmeaning.43 KautskyalsoreinterpretedtheeconomicsideofMarxisminimportantpoints,byinterpreting hisownconceptionsintoMarxstext.Initially,thiswasnotsufficientlyrecognisedbythe socialistpublic,sinceheappearedintheroleofdefenderofMarxstheoryagainstBernstein andadheredtoMarxstraditionalterminology.ThiswasparticularlythecaseforMarxstheory ofbreakdownandcrisis.InsteadofmaintainingMarxstheoryofbreakdown,thetheoryofthe objectivenecessityofthedemiseofcapitalism,initsrealformagainstitsdistortionbythe revisionistcritique,thatthebreakdowncouldhappenautomaticallywithouttheactive interventionoftheproletariat,KautskydeniedthisdecisivepositionofMarxssystem altogetherandportrayedthetheoryofbreakdownasBernsteinsinvention.Atthesametime andincontradictiontothis,hemaintainedinrelationtocrisesthat,whiletheexpansionof productionwaspracticallylimitless,externalandinternalmarketshadtheirlimits. Consequently,fromaspecifichistoricmomentonwardsthecapitalistmodeofproduction wouldbecomeanimpossibility.Notonlyatemporarycrisisbutincurablechronic overproductionwouldthensetin,asthefinallimitonthemaintenanceofthecapitalist regime.Thesignificanceofthisutmostlimitoftheviabilityoftodayssocietywasthat socialism[wouldemerge]fromthesphereofnebulousideastobecomeanecessarygoalof practicalpolitics.44 ThatthisunclearandcontradictoryattitudeofKautskystoimportantelementsofMarxs theorywasunsatisfactoryisclearandallthemoresowhenKautskystheoreticalconfusion increasedinhislaterwritings.Threeyearslaterinaseriesofarticles,onCrisistheory,
41 FrederickEngels,AcritiqueofthedraftSocialDemocraticProgrammeof1891,MECW27,pp. 217233. 42 KarlKautsky,BernsteinunddassozialdemokratischeProgramm,pp.1813. [43 FrederickEngels,IntroductiontoKarlMarxTheclassstrugglesinFrance,MECW27,pp.50624, (1895).ThiseditionindicatestheabridgementsmadewhentheIntroductionwasfirstpublished.] [44 Kautsky,BernsteinunddassozialdemokratischeProgramm,pp.142,145.]

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directedagainstTuganBaranovskiiscritiquehecombatsTuganBaranovskiisviewthatcrises arisefromlackofproportionalityinproductionandarguesagainsttheassertionofthe unlimitedexpansionofcapitalism:thecapitalistmodeofproductionhasitslimitswhichit cannottranscend.Yet,afterquarterofacentury,inhisPrefacetothepopulareditionof volume2ofCapitalheembracedTuganBananovskiistheoryofdisproportionalityasthe causeofcrises,whichhehadearliercombated,withoutanyreservations.45Inhislastlarge work(Thematerialistconceptionofhistory),intheautumnofhislife,Kautskyfinally abandonedtheMarxisttheoryoftheimpassablelimitsofcapitalistdevelopmentandbased himselfonTuganBaranovskiistheoryofthepossibilityoftheunlimitedexpansionof capitalism,whichhehadcriticised25yearsearlier,andwiththatdisownedhislifework.The patternthateverymodeofproductionultimatelysurvivestobecomeafetteronproduction duringitsdeclinedoesnotapplytocapitalism.Industrialcapitalismdoesnotleadtodecline, buttoanevermorerapiddevelopmentoftheproductiveforces.Kautskyclaimsthatpostwar capitalismhasdemonstratedinpracticeinthemostimpressivefashionitsabilitytosurvive andtoadapttothemostdiverse,eventhemostdesperatesituations.Therearenoarguments ofeconomictheorythatcouldcallitsvitalityintoquestion.AlthoughheKautskyhad anticipatedachroniccrisisofcapitalismthreedecadesearlier,thisprovedtobefalse. Capitalismistoday,consideredfromthepurelyeconomicstandpoint,moresolidly establishedthanever.46 IfonebearsinmindKautskyslaterdevelopment,alreadypresentinnascentformatthetime ofhisdisputeswithBernsteininhisunclearandvacillatingpositiononimportantpointsof theoreticalprinciple,itiscomprehensiblethatthecontroversybetweenthesetwo theoreticiansdidnotandcouldnotresultintheclarificationoffundamentalquestionsof Marxisttheory.BothhadabandonedMarxisttheoryindecisivepointsandconductedthe struggleonlyoveralessimportantpoints,inpartmerelyaboutwords.Atthetimethiswas onlynoticedbyafew(RosaLuxemburg).HowevergreatKautskysservicewasinpopularising Marxism,therealrevolutionarycharacterofMarxismremainedalientohim.InKautskys strugglewithBernstein,ultimatelyBernsteinwasthevictor. TheargumentsthatParvus(IsraelLazarevichHelphand),anenthusiasticsocialpatriotduring theWar,advancedinaseriesofwritingsagainstrevisionismweremoreeffective(Commercial crisisandtradeunions,Thetradeunionstruggle,Socialismandsocialrevolution,Colonial policyandbreakdown).47 MostimpressiveandenduringwereRosaLuxemburgsessays,thehighpointofwhich,onthe theoreticalside,isherSocialreformorrevolution,publishedagainstBernsteinsPreconditions. IfBernsteinwasexpectingthetransitiontosocialism[toresult]fromtheprogressive developmentofthebourgeoislegalsystem,fromstatutorysocialreform,RosaLuxemburg explains,thenhewascommittingafundamentalerrorwithregardtotheessenceofcapitalist classrule.Thisrests,incontrasttoearlierclasssocieties,notonlegallyanchoredacquired
45 KarlKautsky,Krisentheorien,NeueZeit,202(25),1902,pp.3747,7681,1108,13343; Vorwort,inKarlMarx,DasKapital:Kritikderpolitischenkonomie.2.DerZirkulationsprozedes Kapitals,Dietz,Berlin,1926. 46 Thematerialistconceptionofhistory,(1927),pp.421,42456. 47 Parvus,DieHandelskrisisunddieGewerkschaften,Ernst,Mnchen,1901;Dergewerkschaftliche Kampf,BuchhandlungVorwrts,Berlin,1908;DerSozialismusunddiesozialeRevolution, BuchhandlungVorwrts,Berlin,1910;DieKolonialpolitikundderZusammenbruch,Leipziger buchdruckereiAktiengesellschaft,Leipzig,1907.[Later,havingbecomeasuccessfulbusinessman, heconcludedthataGermanyvictoryinWorldWar1wasdesirableandwouldleadtorevolutionin RussianandthereforecollaboratedwiththeGermanauthoritiestounderminetheRussianEmpire]

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rightsbutonrealeconomicforces.Inourjuridicalsystemthereisnotasinglelegalformula fortheclassdominationoftoday.Nolawobligestheproletariattosubmititselftotheyoke ofcapitalism.Poverty,thelackofmeansofproduction,whicharetakenfromitnotbylawbut byeconomicdevelopment,obligestheproletariattosubmititselftotheyokeofcapitalism. Theexploitationoftheworkingclassasaneconomicprocesscannot,therefore,beabolished ormoderatedbylegalprovisionswithintheframeworkofbourgeoissociety.Socialreform, factorylaws,healthandsafetyregulations,donotindicateanelementofsocialcontrolinthe interestsoftheworkingclass,theydonotconstituteathreattocapitalistexploitationbut simplytheregulationofexploitationintheinterestsofcapitalistsocietyitself.Infact developmentleadstoanaccentuationandintensificationofthecontradictionsofcapitalism. Fromthestandpointofindividualcapitalists,credit,businessassociationsandothermeans thatallegedlyservetoovercomethesecontradictionsandtoregulateproductionareonly suited,toadjusttheirinsufficientmeanstothedemandsofthemarket,toraisethefalling ratesofprofitinthecartelisedsectorofindustryattheexpenseoftheothers.Cartelscancel outtheirowneffectivenesswhentheyextendtoallthemoreimportantsectorsofproduction. Fromthestandpointoftheeconomyasawhole,credithelpsincreaseproductionbeyondthe limitsofthemarketandpromotesthemostrecklessspeculation.Farfrombeingmeansto moderatethecontradictionsofcapitalism,businessassociationsandcredit,onthecontrary, powerfullyaggravateandpromotecrisesandmustaccelerateitsdownfall.Thebreakdownof bourgeoissocietysaysRosaLuxemburgnotjustagainstBernsteinbutevidentlyagainst Kautskytooisthecornerstoneofscientificsocialism.Thehistoricalnecessityofsocialist transformationisbasedFirst,onthegrowinganarchyofcapitalisteconomy,leadinginevitably toitsruin.If,however,oneassumestheprogressivemoderationofcontradictions,ifone assumesthatcapitalistdevelopmentdoesnotmoveinthedirectionofitsownruin,then socialismceasestobeobjectivelynecessary.Thenitsjustificationisonlypossiblebymeansof purereason,thatisanidealistexplanation,whiletheobjectivenecessityofsocialism,the explanationofsocialismastheresultofthematerialdevelopmentofsociety,fallstothe ground.48 Withthesameacuity,RosaLuxemburgalsodevelopsherprincipaltacticalideasaboutthe classstruggle.RadicalMarxismtoodesireseverydaysocialreformwork,thetactical orientationoncurrentquestionsthetradeunionstruggleoverwages,thestruggleforsocial reformandthedemocratisationofpoliticalinstitutionsjustasmuchasreformism.The differenceisnotinthewhat,butinthehow.Becauseitstartsfromtheassumptionthatthe politicalseizureofpowerisimpossiblereformismwants,throughthetradeunionand parliamentaryactivitygraduallyreducecapitalistexploitationitself.Theyremovefrom capitalistsocietyitscapitalistcharacter.Theyrealiseobjectivelythedesiredsocialchange.By contrast,forMarxismtradeunionandpoliticalstruggleissignificantonlyasnecessary preparationofthesubjectivefactorinthesocialisttransformationtheworkingclassforthe decisiverevolutionarybattle,firstorganisingtheworkersasaclassandeffectingthe emergenceofunderstanding,ofunitedproletarianclassconsciousness.Thesocialisttransition willnotcomeofitsownaccordbyfatalisticallywaitingforittohappen.Itresults,rather,from understanding,wonintheeverydaystruggleoftheworkingclass,thatthesupersessionof capitalismsobjectivelyintensifyingcontradictionsthroughsocialrevolutionisindispensible. ThusforRosaLuxemburg,aslaterforLenin,reformsareonlybyproductsofclassstruggle orientedonrevolution.Revisionism,bycontrast,makeseverydayworkindependentofthe finalsocialistgoal.Itseparatesreformfromrevolutionand,byraisingthemovementtoanend initself,changesitscharacter.Itisnolongerameanstoachievethatgoalsocial
48 Luxemburg,Socialreformorrevolution,pp.457,61,902[Luxemburgsemphasis].

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transformationbutinsteadofthistransformationhasitselfbecomethegoal.This undialecticalattitudeseesonlymutuallyexclusivecontradictionseither/or,reformor revolutionbutnotthesubsumptionofthesecontradictionsinthetotalityofthesocial process.49 Aswesee,onlywiththeseexplanationsistheconceptofthefinalgoal,neglectedinthe Erfurtprogram,defined.RosaLuxemburgdoesnotunderstandthefinalgoalastheideal stateofthefuture,tobeerectedafterthesocialistrevolution,buttheconquestofpolitical power,therevolutionitself.Ifyouunderstandthefinalgoalasthefuturestate,thenyoucan considereverydemocraticoreconomicachievementasasteponthispathtothisgoal.Butif oneregardstheconquestofpoliticalpowerthroughtherevolutionasthefinalgoal,asharp boundaryisdrawnwithreformism,whichreplacesthestrategictaskofdevelopingpeoples revolutionarycapacitywithcurrent,opportunistworkorthepropagationofamoreorless vaguefinalgoaltobeawaitedfatalistically.SoRosaLuxemburgsinterpretationofMarxism assignsthedecisiveroletoworkingclasspoliticalactivism,throughtheorientationofcurrent workonthefinalrevolutionarygoal,eventhoughtheseizureofstatepowerisdependenton theobjectivecourseofmaterialsocialdevelopmentandassumesacertaindegreeofripeness ofeconomicandpoliticalrelations.Marxismisthereforesharplydistinguishedfromboth fatalismandpurevoluntarism. Forthefateofthedisputebetweenreformistsandradicals,werefertothearticle Internationals.50Reformismwasdefeatedinalltheoreticalskirmishes,condemnedby resolutionsofpartyconferencesandinternationalcongresses,refutedagainandagainanew bytheprevailingintensificationofclasscontradictionsinthecourseofactualdevelopment. Butmaturingonthebasisofanaristocracyoflabour,itneverthelessmadeatriumphal processionthroughthedailypracticeoftheworkersmovement.Thegrowingpowerof Marxismwas,however,demonstratedbythefactsthatofallthesocialisttendenciesinall Europeancountriesduringthefirsthalfofthe19thcenturyStSimonism,Proudhonism,later Blanquismetc.Butitalonedominatedthemassesintellectuallyandthatreformism,inorder tobeabletowinoverthemasses,hadtosailundertheflagofMarxism. d)ReformisminMarxistdisguise(theneoharmonists) HerewereferprimarilytoAustroMarxism,agroupofVienneseintellectualsRudolf Hilferding,OttoBauer,MaxAdlerandKarlRennergroupedaroundthenewlyestablished theoreticalreviewDerKampf(from1908).Theyattemptedtoprovidetheoreticalformulations forreformistpractice.Themostimportantbookfromthistendency,onethatstrongly influencedlatertheoreticaldevelopment,isRudolfHilferdingsFinancecapital.Twoofits componentshavetobedistinguished.Ontheonehand,Hilferdingstrivestointegratethe latestphenomenaofeconomiclifetrusts,cartels,exportofcapital,imperialist expansionisminshortmonopolycapitalism,whichhasreplacedcompetitivecapitalism,into thesystemofMarxseconomics.Ontheotherhand,followingTuganBaranovskiistheoryof crisisandrenouncingtheMarxisttheoryofbreakdown,Hilferdingendeavourstoreinterpret theMarxisttheoryofbreakdownintheharmonisticsenseofthelimitlesspossibilitiesfor
49 Luxemburg,Socialreformorrevolution,pp.669[Luxemburgsemphasis]. 50 HenrykGrossmann,Internationale:DieZweiteInternationale(International:theSecond International);andInternationale:DiedritteInternationale(International:theThird International),inLudwigElster(ed.),WrterbuchderVolkswirtschaft,ZweiterBand,fourthedition, Fischer,Jena,1932,pp.432439and439449.

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capitalistexpansion.RevivingJeanBaptisteSaysoldtheory,whichMarxalwayscombated, thatprimarilygeneraloverproductionisimpossiblebecauseindividualspheresofproduction createmarketsforeachother,Hilferdingreachestheconclusionthatcrisesarenotnecessarily associatedwiththeessenceofcapitalism.Theyarisesimplyfromdisproportioninthegrowth intheindividualspheres,i.e.onlyfromunregulatedproduction.Ifthedistributionofcapital amongindividualbranchesofindustryisproportional,thenthereisnolimitonproduction, productioncanbeexpandedindefinitelywithoutleadingtotheoverproductionof commodities.Inshort,ifproduction,evenonacapitalistbasis,canberegulated,crisescanbe avoided.51 ThefoundationoftheworkisHilferdingstheoryofmoneyandcredit,whichdepartsfrom MarxstheoryofmoneyanddistortsitinthesenseofKnappschartalism.52Certainly,forthis purpose,HilferdinghastobreachthegeneralvalidityofMarxslawofvalueforthemoney commodity,whichKarlKautskycorrectlyassertedmeantthesuicideofMarxism.53Thetheory offinancecapitalisbuiltonthefoundationofthistheoryofmoney.Thecharacteristicfeature oflatestdevelopmentsisthedominantroleofbankcapitalcomparedwithindustry.With capitalistdevelopment,thetotalsumofmoneymadeavailabletothebanksbythenon productiveclassesandthroughthebankstotheindustrialists,i.e.theroleofbankcapitalin theformofmoneythatistransformedintoindustrialcapital,constantlygrows.Aparticular rolefallsheretothetypeofenterpriseknownasajointstockcompany.Withshareswhatis calledfictitiouscapital,detachedfromproductivecapitalfunctioninginfactories,arises.It enablesbankstorapidlyconcentrateownership,independentlyoftheconcentrationof factoriesandisacceleratedbyspeculationonthestockexchangeandtheaccumulationof promotersprofitbythebanks.Bymeansofthismobilisationofcapital;anevergrowing portionofcapitalinindustrybecomesfinancecapital,i.e.itnolongerbelongstothe industrialistsworkingwithit.Thedirectionofcapitalinvestedinindustryfallsmoreandmore tobanks.[T]heybecomefoundersandeventuallyrulersofindustry.Thetendencytowards concentrationinbanking,towardsprogressiveeliminationofcompetitionamongbanks, wouldfinallyresultinasinglebankoragroupofbanksestablishingcontrolovertheentire moneycapital.Suchacentralbankwouldthenexercisecontroloversocialproductionasa whole.54 Aparalleltendencytowardscombinationisalsoatworkinproduction.InasectiononThe historicaltendencyoffinancecapital,probablyintendedtobeacounterparttoMarxsfamous chapteronThehistoricaltendenciesofcapitalistaccumulation,Hilferdingpresentsthecourse ofhistoricaldevelopmentquitedifferentlyfromMarx.55Thelatterdepictedthelimitsof capitalistaccumulationthat,inadialecticalshiftatadefinitestageofdevelopment,ultimately leadstotheexpropriationoftheexpropriators.56Hilferdingwantstodemonstratethe peacefulandgradualgrowthofcapitalismintoaregulatedeconomy.Thecartelisationof industry,inordertoraisepricesandprofits,lowerstherateofprofitinthenoncartelised
51 RudolfHilferding,Financecapital:astudyofthelatestphaseofcapitalistdevelopment,Routledge &KeganPaul,London,1981[1910],p.241. [52 Chartalismisatheoryoffiatmoney,issuedandbackedbylawratherthanpreciousmetals, elaboratedbyGeorgFriedrichKnapp,Thestatetheoryofmoney,Macmillan,London,1924[1895].] 53 KarlKautsky,Financecapitalandcrises,MarxistInternetArchive, www.marxists.org/archive/kautsky/1911/xx/finance.htm,accessed4February2012(1911). 54 Hilferding,Financecapital,pp.105etseq.,226,180. 55 Hilferding,Financecapital,pp.22735;Marx,Capital1,pp.927930. 56 KarlMarx,ThecivilwarinFrance,MECW22,[1871],p.335.

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industries,intensifiescompetitioninthemandthusthetendencytowardsconcentration.This leadstofurthercartelisation,intheseindustriestoo.Soatendencytowardsthecontinuous extensionofcartelisationemerges.Theresultofthisconcentrationmovement,itsideal, theoreticalendpoint,willbethecompletecartelisationofallbranchesofindustrynotonlyin thenationalbutalsotheworldeconomy,auniversalorgeneralcartelwhichconsciously regulatestheentiretyofcapitalistproductioninallitsspheres,setspricesandalsoundertakes thedistributionofproducts.Withtheadvanceoftheconcentrationmovementinindustry, productionisincreasinglyplanned(organisedcapitalism)andfinallyreachesitshighest expressioninthegeneralcartel.Theanarchyofproductiondisappears,crisesareeliminated andreplacedbyproductionregulatedbythegeneralcartel,evenifstillonthebasisofwage labour.Thetendenciestowardstheestablishmentofageneralcartelandtowardsthe formationofacentralbankareconverging,57henceapeacefulandpainlesstransitionfrom capitalismtosocialismbecomespossible.Thesocializingfunctionoffinancecapitalfacilitates enormouslythetaskofovercomingcapitalism.Oncefinancecapitalhasbroughtthemost importancebranchesofproductionunderitscontrol,itisenoughforsociety,throughits consciousexecutiveorganthestateconqueredbytheworkingclasstoseizefinancecapital inordertogainimmediatecontrolofthesebranchesofproduction.Eventoday,taking possessionofsixlargeBerlinbankswouldmeantakingpossessionofthemostimportant spheresoflargescaleindustry.58 Afterthewar(1927),Hilferdingdeclaredthathehadalwaysrepudiatedeverytheoryof economicbreakdown,whichMarxhadalsoconsideredfalse.Theoverthrowofthecapitalist systemwouldnothappenbecauseofinternallawsofthissystembuthadinsteadtobethe consciousactofthewilloftheworkingclass.59 Duringthepostwarperiod,otherneoharmonists,suchasOttoBauer,KarlKautsky,also derivecrisessimplyfromthedisproportionalityofthedistributionofcapitalamongthe individualbranchesofindustry.Theyconsidercrisestobeavoidable,ifthedistributionof capitalisregulated,evenundercapitalism,andthelimitlessdevelopmentofcapitalismtobe possible.Bauersassertionthatthemechanismofcapitalismautomaticallyenforcesthis proportionaldistributionofcapitalevenifthisismediatedbyperiodiccrisesgiveshis harmonisticinterpretationofMarxstheoryofcrisisaspecificcolouration.[T]hemechanism ofcapitalistproductionautomatically[cancelsout]overaccumulationandunderaccumulation. WhereasMarxhadmaintainedthenecessityoftheprogressivegrowthoftheindustrial reservearmyoflabour,Bauertriestoprovetheopposite:Thereexistsinthecapitalistmode ofproductionatendencyfortheadjustmentofcapitalaccumulationtothegrowthof population.60

57 Hilferding,Financecapital,p.234. 58 Hilferding,Financecapital,pp.367,368. 59 RudolfHilferding,DieAufgabenderSozialdemokratieinderRepublik,Vorstandder SozialdemokratischenParteiDeutschlands,Berlin,1927,p.2,http://library.fes.de/prodok/fa 59843.pdf,accessed4February2012. 60 OttoBauer,Theaccumulationofcapital,Historyofpoliticaleconomy,18(1),Spring1986,pp.106, 107,(1913).[Thistranslationhasbeenmodified,asindicatedbythesquarebrackets.Initsoriginal formthetranslationseriouslydistortedthemeaningofBauersGermantextbyrenderingaufhebt asgenerates,seeOttoBauer,DieAkkumulationdesKapitals,NeueZeit,311(24),p.872.]

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CTheresurgenceofrevolutionaryMarxism a)Thedecayofrevisionisttheory Asalreadyshown,reformismwastheresultoftherelativelypeacefulperiodofcapitalist developmentbetween1872and1894.RevolutionaryMarxisttheory,itselftheproductofthe revolutionaryperiodof1848,nolongerseemedtosuitthispeacefulperiod.Thereformist attempttodivestMarxismofitsrevolutionarycharacter,inordertoadaptittothereformist practiceofthepeacefulworkofconstruction,wasultimatelydoomedtotheoreticalfailure. Economicdevelopmentattheendofthepreviouscenturyexperiencedadecisiveshift,once moredemonstratingthatthepracticeofthepeacefulworkofconstructionwasentirely questionable. Thepolicyofimperialistexpansion,whichinthemostadvancedcountrieswastemporarily abletosecureadvantagesfortheupperlayeroftheworkingclass,attheturnofthecentury, ledtoasharpeningofallantagonismsinbothdomesticandforeignpolicy.Theimperialistera ofheightenedcolonialpolicy,offeverishmilitaryandnavalarmsbuildups,andfinallyof bellicosecollisionsthatledtotheoutbreakoftheworldwarbegan. Asharpeningofdomesticclassantagonismsinallcapitalistcountrieswentinparallelwiththe growingtensionsinforeignpolicy.Thegreatadvancesofthesocialistworkersmovement acceleratedtheprocessofcombinationofemployersintopowerfulassociationsforstruggle, whichforcedworkersontothedefensiveinalleconomicstruggles.Kautskydemonstratedin 1908thatthefactorswhichhadresultedinincreasedrealwagesoverpreviousdecadeswere allalreadygoingintoreverse.Theperiodofrisingrealwageswasreplacedbyfallingwages andcertainlynotsimplyduringperiodsoftransientdepressionbuteveninperiodsof prosperity.61Thefactofdeterioratingconditionsoflifeforworkingclassoverthisperiodhas beendemonstratedbyprivateandpublicinvestigationsinaseriesofadvancedcapitalist countries.Stateprotectionsforworkersalsocametoahaltunderthepressureofemployer associations.Moreandmore,inthiscontext,thetradeunionsoldmethodsofstruggleproved tobeinsufficient.Theperiodofisolatedstrikesinindividualenterpriseswaspast. Developmentdroveontolargemasseconomicstrugglesinwholebranchesofacountrys industry.Ontheotherhandthebourgeoisiebecameprotectionistandreactionary.Political liberalismbegantodieout.Therecouldnolongerbetalkofextendingdemocracyfurther, whichhadbeenpromotedearlierbyacertain[degreeof]cooperationbetweentheliberal bourgeoisieandtheworkingclass.Thisentiredevelopmentwasstrengthenedandaccelerated evenmorebytheimpactoftheRussianRevolutionof1905.Thedevelopment,predictedby thereformists,ofprogressiveimprovementintheconditionoftheworkingclassandthe weakeningoftheofclassstrugglesdidnotoccur.Therewas,rather,asharpeningofclass struggles.Asitwasapparentthattheoldtradeunionandparliamentarymethodswereno longercapableofachievingfurthergains,theworkingclasswasforcedtoconsidernew methodsofstruggle,thattookintoaccounttherisingeconomicandpoliticalpressurefromthe bourgeoisie.Thiswasthesignificanceofthediscussionaboutthepoliticalmassstrike.62
[61 KarlKautsky,VerelendungundZusammenbruch:DieneustePhasedesRevisionismusNeueZeit 26,2,42,pp.546,549.][wholearticle:NeueZeit26,2,42and43,17and24July1908,pp.54051 and60712] [62 SeeRosaLuxemburg,Themassstrike,inRosaLuxemburg,TheessentialRosaLuxemburg:Reform orrevolutionandThemassstrike,Haymarket,Chicago2008[1907],pp.11181.]

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Insuchcircumstances,duringtheeraofbellicoseimperialismandcolonialexpansionaswellas reactionarydomesticpolicies,reformismoftheoldkindwasatypicalproductofepigones: repetitionofdatedchainsofthought,diametricallycounterposedtoreality.Anexampleofthis oversimplifiedpopularisationofsocialismthatspreadouteverywhereintheworkers movementatthebeginningofthe20thCenturyand,despiteitsMarxistphraseology,retaining nothingofthegenuinecontentofMarxssocialism,mentionshouldbemadeofabookby MorrisHillquit,thecurrentleaderoftheAmericanSocialistParty,Socialismintheoryand practice,63shouldbementioned.InthechapteronSocialismandthestateHillquitsettles accountswithtwodozendefinitionsofthestate,startingwithAristotleandCicero,through TurgotandBenthamtoLeroyBeaulieuandAntonMenger,accordingtowhomthestateisthe organisedhumanityofagiventerritory.Tothisdefinition,designatedasfaulty,Hillquit counterposestheentirelycorrectsocialistdefinitionofthestate,accordingtoMarxand Engels,andshowsthatthestate,asaproductofclass[divisions]aroseatthesametimeas theinstitutionofprivatepropertyandhasatalltimesbeentheinstrumentofthepropertied classesand,asanorganisationoftherulingclasses,necessarilykeepstheexploitedclasses inaconditionofdependency.Fromthisentirelycorrectdefinition,however,Hillquitdraws noconclusionsforworkingclasspolicy.Inrelationtothepresentday,modernstate,Hillquit neverthelessallowsthevalidityofthebourgeoisdefinitionandassertsthatithasexperienced deepinroadsmadeinitssubstanceandfunctionsbytherisingclassofwageworkers.Under thepressureofthe[socialistand]labourmovement,thestatehasacquirednewsignificanceas aninstrumentofsocialandeconomicreforms.Thestatewhichcameintobeingsolelyasan instrumentofclassrepression,hasgradually,andespeciallywithinthelastcenturiesassumed otherimportantsocialfunctions,functionsinwhichitlargelyrepresentssocietyasawhole, andnotanyparticularclassinit.Itsexploitativefunctionintheinterestsoftherulingclasses arecurbedmoreandmore,whileitsgenerallyusefulfunctionsclaimitsattentionmoreand more,asitprotectsworkersfromexcessiveexploitation,soitisgraduallycomingtobe recognisedbythe[workers]asamostpotentinstrumentforthemodificationandultimate abolitionofthecapitalistclassrule.Therulingcapitalistclasswill,indeed,nevervoluntarily giveupitspropertyandthesupremacythatresults.Hillquitdrawstheconclusionnotthatit hastobeexpropriatedeconomicallyandpoliticallybutratherthattheprocessof transformationwillcometopassgraduallythroughaseriesofeconomicandsocialreforms andlegislativemeasurestendingtodivesttherulingclassesoftheirmonopolies,privilegesand advantages,stepbystep.Violencedoesnot,consequently,havetobeemployed.Thatwould bebutanaccidentofthesocialrevolution[violence]hasnoplaceinthesocialistprogram. Throughthesereforms,aperiodoftransitionwillbeentered,inwhichthestate,althoughnot yetsocialist,isnolongeranorganofthecapitalistclassbutratheratransitionalstate. Definitelinesofdemarcation,whereitbeginsandwhereitendscannotbespecifiedbut today[a]numberofmunicipalitiesandstatesarealreadywhollyorpartlyundersocialist control.Manyofthepoliticalorsocialtransitionalreformsofsocialismhave,toacertain degree,beenrealisedincountriesinEurope,AmericaandAustraliaandtheconceded tendencyofallmodernlawmakingisitdirectedtowardstheextensionofsuchreforms.In thissense,itmaywellbesaidthatweareinthemidstorinanycaseatthestartofthe transitionalstate.Hillquitrecommends,inturn,tacticsthatareconfinedtoelectoraltactics andpositiveworkofparliament,withoutviolatingtheprincipleoftheclassstruggle.64
63 MorrisHillquit,Socialismintheoryandpractice,Macmillan,NewYork1909. [64 Hillquit,Socialismintheoryandpractice,pp.97105,174,181,189.Grossmanwroteclass struggleswheretheoriginalhadclassdivisions;andleftoutsocialistandfromthequotation startingUnderthepressure;Hillquittookthequotationwithoutviolatingtheprincipleofthe

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IfsuchtheorieswerestronglyutopianduringtheperiodbeforetheWartheycompletelylost anyconnectionwithrealityaftertheoutbreakoftheWorldWar.Inordertoavoidshipwreck onthiscontrastwithreality,reformisttheorywasforcedtoadapttoit.Inpurelogic,this correctionwaspossibleoncourses.Fromtheproletarianstandpoint:throughareturnto revolutionaryMarxism.Inafurther,consistentdevelopmentofitsnature,reformismchose theothercourseandplaceditselfentirelyonthegroundofbourgeoissocietyandthecapitalist state.KarlRenneralreadydrewthisconclusion,containedinembryoinHilferdingsbook,with greatclarityinarticlespublishedintheVienneseKampfandArbeiterzeitung(whichappeared inbookformasMarxism,warandtheinternational).65ExtendingtheresultsofHilferdings book,heseekstoportraythetransformationsinceMarxsdeaththathastakenplaceinthe fabricoftheeconomy,stateandsociety,inthemutualrelationsofclassesinthencharacterof ownershipandinthetasksoftodaysproletariat.Althoughhepositsdifferentdevelopmental tendenciestoMarxinalltheseareas,althoughheabandonsallthefundamentalcomponents ofMarxstheoreticalstructureandfinallyidentifiesdifferentgoalsandtasksfortheworkers movementtoMarx,hedidnotforegoMarxistdisguiseforhistheory.Heclaimedtobea proponentofgenuineMarxismwhostruggledagainstthereactionarymisconstrualofMarxs thoughtagainstthevulgartendencyofMarxism,againsttheossificationand oversimplificationofthe(Marxist)theoryofclassstruggle.Nothebutratherthesupposed Marxistshaddistortedthetheoryofthemaster.IntheshortperiodsinceMarxwasactive, classrelationshaveoften,almosteverydecadeandahalf,beentransformed.Insteadof luggingalongtheoldcatechisticpropositionsofMarxssystemasoldgoods,itisnecessary torevisethetheoreticalbaggageinallareas.SohisbookwasaMarxistexaminationofthe newmaterialofsocialdevelopment,adraftofastudyprogramforMarxists.66 Marxsentireperiodofactivitywas,accordingtoRenner,duringtheliberalsocialera,withits individualisticanarchisticeconomicmode,forwhichthepowerofthestatewasabogyman. MarxresearchedthisepochanddescribeditinCapital.Inordertoexposeitslawsintheir pure,logicalform,everystateinterventionhadtobedisregarded.Thiscapitalistsociety, whichMarxexperiencedanddescribed,doesnotexistanymore,somethingthatMarxists havesofaroverlooked.Theessentialfeatureofthefundamentalchangesinthestructureof society,whichwerecompletedfrom1878to1914consistsofthestatificationofthe previouslystatelesseconomy,thatis,preciselywhatKarlMarxssystemlogicallyand practicallyexcluded,whatMarxdidnotexperienceordescribe.Thereareimportant consequencesofthisstatificationbecausetheeconomymoreandmoreexclusivelyserves thecapitalistclass,thestatemoreandmorepredominantlytheproletariat.Consequently, thestateisthetool,withthehelpofwhichthehistoricaloverthrowfromcapitalismto socialismwillbecarriedout.Butitisacrazyconceptiontothinkthattheconquestof politicalpowerbytheproletariatcanbecarriedoutthroughasuddenoverthrowofthe system,throughapoliticalsurpriseattack.Thoseareconceptionsthathavebeensmuggled fromthepoliticalhistoryofthebourgeoisieintotheworldofsocialistideas.Thestatewill, rather,beconqueredstepbystepindailystruggles.Itstransformationiscarriedoutthrough thegradualsocialisationofalleconomicfunctions.Marxwasfarfrombeingcondemningand
classstrugglefromKarlKautsky,DersozialistischenKongresseunddersozialistischeMinister, NeueZeit,19(1),p.37[wholearticlepp.3644],whointurnquotedhisownletterinPetite Republique,28September1899.] 65 KarlRenner,Marxismus,KriegundInternationale,Dietz,Stuttgart,1918[1917].[Renner(1870 1950)wasaleadingsocialdemocraticparliamentarianandtheoreticianinAustriabeforeand duringWorldWar1.HewasthefirstchancelloroftheAustrianrepublicfrom1918until1920.] [66 Renner,Marxismus,pp.612,70,90,97.]

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negatingthestate,fromstatenihilism,withwhichcontemporaryMarxismcoquettes. Throughthestatealleconomiccategoriesarefundamentallytransformed.Thecompetitive priceoftheprivateeconomychangeintocartelprice,finallytariffpricedevelopsintonational price,whoseformandextentdiffersfromstatetostate,duringtheperiodofhighprotection andundertheinfluenceofthestate.Itisonlyonestepfurthertostatelegislationdirectly prescribingtheprice:taxpriceorpoliticalprice.Theeconomyisnotsufficienttoexplain suchpricing,overalldeviationfromthenaturallawsoftheeconomyisdeterminedbythe processofstatification.Anextraeconomiclawimposeditselfoverthebasiceconomiclaw. AndthatisnowthenewproblemofMarxism,asthedeliberateallocationofgoods,thatis theexclusivemodeofcirculationofasocialistsociety,istodayalreadymergedintothe systemofautomaticcommoditycirculation.67 Whatcanbesaidofcommoditypricescanalsobesaidofthecategoryofwages.Thewages systemisbeingfundamentallyreorganisedbythestate.Todaytheworkerswageisalready comprisedofanindividualandacollectivewage.Thestatesocialisesvariablecapital,i.e. capitalspentonwages,throughcompulsorycontributionsbyworkersandemployersfor health,accidentandoldageinsurance,afterindividualsarepaid.Basically,thestatehas alreadylongdonethisthroughcertainpublicoutlays,e.g.publicschools,thatcontributeto themaintenanceandrenewaloftheworkingclass.Theworkingclass,consequently,already receivesapartofitswagescollectively.Thedevelopmentistowardsthecollectivisationofan everlargerpartofwages.Toanincreasingextent,theworkerbecomesthesubjectandobject ofpublicinstitutions.Theprocessofsocialisationintegrateshimasanelementintothe state.68 ThisprocessofsocialisingtheworkerswagehasnotyetbeenanalysedbyMarxists.Butlarge transformationsoftheindividualcomponentsofthewagealsotakeplace.Theindividualwage isreplacedbythetradeunionwageandfinallybytheregulatedwage[Tariflohn]CHANGE ABOVE.Theseinstitutions...transformtheworkerfromaserfintoaneconomiccitizen.The leapfromthefreewagecontracttotheregulatedsystemisofthesamesignificanceasthat frommanorialsubjectionandpatrimonialjusticetothebourgeoiscourt.Buttheregulated wageisstillnotthehighestpointofdevelopment.Giantcapitalistenterprisesconstruct serviceprogramsfortheirwhitecollaremployeesand,toanextent,theirworkers,witha wagescalethatiscalculatedovertheirwholelives,includingtheirdeaths,inshort,formsof wagepaymentthatRennercallsthepragmaticwage.Fromthisitisonlyasteptothedirect settingofwagesbythestate,toataxwage[Lohntaxe].Throughstatification,todaythe workingclassesfindthemselvesinadifferentsocialsituationfromMarxsperiod.Ownership becomesapublicinstitution,workapublicjob.Aregroupingofclassestakesplace. Industrialismisnolongerthepredominantformofenrichmentincontemporarysociety.The factoryowneroftheoldkindisnolongercounterposedtotheproletariat.Ratherthe dominantpowerswithinthecapitalistclasshavebecomeagrarianismandfinancecapital.A transformationoftheeconomicfunctionoflandownershipoccurs.Whiletheprocessof statificationandsocialisationisveryextensiveinagriculture,landownership,encompassed economicallyasgroundrent,hasbecomemoreandmoreparasitic.Thequestionofground rentwillbecometheprincipalsocialquestionoverthenextfiveyearsanddecades.69 Loancapitalhasalsoexperiencemassivetransformations.Loancapitaloftheoldkindwas
[67 Renner,Marxismus,pp.712.28,413.AccordingtoRenner,thetariffpricewasaconsequenceof theinteractionofcartelsandprotectivetariffs.] [68 Renner,Marxismus,pp.467.] [69 Renner,Marxismus,pp.4755,61,645,67.]

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usury,amereparasiticeconomicfunction.Theusurerswere,however,displaced.Credit capitalofthenewkindisnotparasiticandisgenerallyfelttobeablessing.70 ThepurposeofRennersarbitraryconstruction,whichcannotbefullitemisedhere,isthe justificationsproducedbytheconclusionstowhichhecomes:theworkingclasshastoaffirm thecontemporarystateand,thoughthepolicyofchangingallianceswithindividualbourgeois classes,painstakingly,stepbystepworkitswayupandtakepoweroverbourgeoissociety intellectually[geistig],positionitselfeverywhereonthebasisofthestateandbourgeois society.Suchanalliancepolicyisnotawateringdownofclassprinciplebutitsfulfilment.As theproletariataffirmsthestateitmustalsoaffirmstatepolicy.Thereisnoamorphous internationalitybutinternationalityisfirsttheresultoftheeffectofgroupsofnationstates whichisspecificallynewinourperiod.Capitalisnotinternationalbutnational.National capitalorganisedbythestatehasbecometheeffectiveagentonthetribuneoftheworld. Marxscategoriesareuniversal,Marxistsstartwiththecategoryofthestatelessworld economybutforthetimebeingthisisstillnotasinglestate,forthetiebeingdevelopmenthas achievedthelevelofnationalpolitical,territorialstates.Hencethereisalsonoworld proletariat,whichisonlyamysticalunit;inrealityonlynationalproletariatswithinstate territoriesexist.Theworldeconomyisonlycomingintobeing,promotedbythetendencyof individualstatestoextendtheireconomicterritories.Intermsofspecificstates,the expansionisttendenciesappearascolonialpolicyandcolonialexploitation,dominationand servitude.ButthismoralisticstandpointliesdeepbelowMarxsmodeofthought,asbehind thesemundanecomplaintsaboutcolonialpolicyoneshouldnotoverlookthesecular greatnessoftheeconomisationoftheworld.71 Inthiswaytobeanopponentofthecolonialsystemmeansbeinganopponentofworld history.Solongascapitalismpersistsintheeconomyandtheanarchisticantagonismofstates inpolitics,warsareunavoidable,becausecompetitivestrugglesamongeconomicterritories takeplaceintwoways:peacefullythroughstatestradeagreementsandaggressivelythrough conquest.Theimperialistwarshouldnotbejudgedethicallybutshouldbeassessedasafact, justliketradepolicy.Itisnothingotherthantheturningofpricecompetitionintoarms competition.Atmost,thereshouldbeeffortstocivilisewarandtheextensionofthe organisationoftheworldintoapeacefulassociationofnations,throughinternationallaw.So long,however,assuchafuture,supranationalorganisationoftheworldhasnotbeen achieved,warremainspossibleand,incertaincircumstances,necessary,becauseitconcerns theexistenceofastateanditseconomy.Astradeunionworksmethodsofstrugglereston thebasisofthiscapitalistorder,itmustactpositivelyinthestruggle.Notradeuniondesires thedestructionofindustry.Theexistence,continuationandfutureofthiscapitalalsoaffect theworkingclasspositively.Inbellicoseperiodstheworkingclassstruggleswithandalsoover thatcontinuation.Oncethereiswar,theproletariatalsohastotakethepathofwar:thispath isalsoapathofhistoryand,astheproletariatcannotabsenteeitselffromhistory,ithasto travelthispath.Fromthemomentoftheoutbreakofwar,ithasnootherpossibleattitude thanaffiliationwithitsownstate.Thestandoftheproletarianpartieson4August1914was justified.72 ObviouslyRennerstheoremscannotbereconciledwithproletariansocialism.Theyshouldbe regardedasanattempttodiverttheproletariatfromitstasksasaclassandtobringitinto allegiancewiththeimperialistbourgeoisie.Withhisproducts,reformismsankfromthelevelof
[70 Renner,Marxismus,pp.823.] [71 Renner,Marxismus,pp.63,6566,101,106,1123,123.] [72 Renner,Marxismus,pp.28122,331,3601,3289,353.]

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socialcriticismtoapologeticsforbourgeoissociety.Itwasthereforeunavoidablethat reformism,havingcometopowerafterthewarandtheoutbreakofrevolutioninthedefeated states,wasincapableoffulfillingevenoneofthetasksposedbyproletariansocialism. EclecticismandthetendencytoturnawayfromMarxismwascharacteristicofreformist theoryduringthepostwarperiod.EmilLedererrestrictstheapplicabilityofMarxslabour theoryofvalueintwoways.InhisOutlinesofeconomictheory,73herestrictsittotheterrainof competitivecapitalism.Heregardsitasinsufficienttoexplainmonopolyprices,andhence triestoconstructafusionofthelabourtheoryofvaluewithmarginalutilitytheory.Heregards Marxslabourtheoryofvalue,secondly,assuitedtotheexplanationonlyofstaticeconomic processesbutnotdynamicconjunctualcycles.74Lederersexplanationofcrisesisinessencean underconsumptionisttheoryonadetourthroughmonetarytheoriesofcrisis(extensionof thelabourprocessonlythroughadditionalcredit75withallitsattendantdeficiencies. AlfredBraunthalsThecontemporaryeconomyanditslawsisintendedtobeasocialist economicstextbook,faithfultotheideaofMarxism.Actually,BraunthalcombatsMarxs theorywithargumentsborrowedfrombourgeoiscriticismofMarx:itprovidesnoinformation aboutthelawsaccordingtowhichthesocialproduct,infact,isdividedintowagesandthe earningsofcapital.The(bourgeois)theoryofproductivityis,inthisrespect,withoutdoubt superiortoMarxisttheory.Herefersfurthertothesecureresultsofmarginalutilitytheory. Hisaccountofthecontemporaryeconomyisisessentiallyasimplifiedcompilationof HilferdingsthoughtsabouttheprogressiveorganisationoftheeconomyandRennersideas aboutstatificationandtheeverstrongerinfluenceofthestatewhichisbeingproletarianised. Throughitsgrowingregulationoftheorganisationofthewholeeconomy,finallythroughcold socialisationi.e.throughtheencroachmentofthepubliceconomy,thefreeeconomywithits marketmechanismismoreandmoresuperseded.Forthisreason,Braunthalthinks,weare standingatthestartofasocialrevolution,asocietywhichischangingfromcapitalisminto socialism.76 WiththetransitionintheleadershipoftheworldeconomyfromEuropetotheUnitedStates ofAmericaandimpressedbyAmericanprosperityaftertheWorldWar,aflushofuncritical admirationofAmericanmethodsoforganisationandwork(rationalisation)arosein bourgeoisEurope.TheemulationofthesemethodsbyGermancapitalistsfoundthefullest approvalamongtheproponentsoftradeuniontheoryandpractice.Atypicalproductofthis currentistheworkofthechairpersonoftheGermanWoodworkersAssociation,Fritz Tarnow,Whybepoor?Theoldeconomictheoriesaboutthesocialquestion,Tarnowthinks originatedprimarilyinEngland...ThenewtheorieswillbeformedinAmerica.Americahas showthatpovertyisnoeconomicnecessitybutasocialillness,whosecureability,even withintheframeworkofthecapitalisteconomy,isundoubted.Wages,asacostfactor,have declinedinsignificancebutasafactorinpurchasingpowertheyhavegainedimportance. Increasingconsumptionand,aboveall,massconsumptionisthekeytothedevelopmentof production.Inviewoftheenormousdevelopmentoftheproductiveforces,fromnowon wasteisablessingandrestraintacurse.Notonlyislabourdependentoncapitalbutcapitalis
73 EmilLederer,GrundzgenderkonomischenTheorie,J.C.B.Mohr(P.Siebeck),Tbingen,1922. Lederer(18821938)wasasocialdemocraticprofessorofsociologyandeconomics. 74 EmilLederer,KonjunkturundKrisen,GrundriderSozialkonomie,IV,i,1925,J.C.B.Mohr(P. Siebeck),Tbingen,pp.pp.355413. 75 Lederer,KonjunkturundKrisen,p.387. 76 AlfredBraunthalWirtschaftderGegenwartundihreGesetze:EinsozialistischesLehrbuchder Nationalkonomie,LaubscheVerlagsbuchhandlung,Berlin,1930,pp.623,241,???,???, ???.[HarvardDepositoryEcon1435.2.5,Regularloan(depository)]

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alsodependentonthepurchasingpowerofworkerconsumers.Highwagesareinthewell understoodinterestsoftheemployersthemselves.Countrieswithhighwageshave accumulatedmoststronglyandcancompetemostsuccessfully.Americanemployersare advancingalongthetrackofthisknowledgewhichisthebasisofthesecretofthecontinuing boomintheUnitedStatesofAmerica.HenryFordsbook,Mylifeandworkiscertainlythe mostrevolutionarytextofalleconomicliteraturetothepresent.77 Inaddition,thevarioussubspeciesandcurrentsofreformismastheyappearinindividual countriesorinternationallyshouldalsobementionedbriefly.Firstmunicipalsocialism, whichisconcernedwithreformistactivityintheareaoflocalpoliticsamongstotherthings, alsotheefforttothemunicipalisewater,gasandelectricityservicesfortheurbanpopulation inthegeneraleconomicinterest,withoutreferencetotheirprivatesectorprofitability(see HugoC,i.e.HugoLindemann,CityadministrationandmunicipalsocialisminEnglandand Germanycityadministration.78 AcurrentintheEnglishworkersmovementisknownasguildsocialism.Itaspirestothe controlofproductionandthesupersessionofthewagessystemthroughtheorganisational unificationofallmanualandintellectualworkers,notaccordingtoprofessionortradeunion groups,butinassociations(guilds)ofwholeindustries.Itseekstoachievethisgoal,possibly throughageneralstrike.Guildsocialismdiffersfromsyndicalisminthatitdoesnotoppose thestatebutratherallocatesitcertainfunctionsoutsidethesphereofproduction(see GeorgeRobertStirlingTaylor,Guildpolitics:apracticalprogrammefortheLabourparty; GeorgeDouglasHowardCole,Selfgovernmentinindustry;GeorgeDouglasHowardColeGuild socialism;GeorgeDouglasHowardColeandWilliamMellor,Themeaningofindustrial freedom).79Socalledliberalsocialismstandsoutsidetheworkersmovementandhaslessto dowithsocialismthanliberalismi.e.capitalism.RepresentedbytheisolatedeffortsofFranz Oppenheimer(Neithercapitalismnorcommunism),drawingonthetheoriesofEugen Dhring,itseekstomaintainthemediumofexchange.80 b)Thedevelopmentofthematerialistconceptionofhistory Thematerialistconceptionofhistory,draftedbyMarxwithEngelsscollaborationinaseriesof youthfulwritings(184259)ininspiredoutlines,wasneversystematicallydevelopedbythem. ItwasprimarilythefirststudentsofMarxwhoundertooktoextenditphilosophicallyand
77 FritzTarnow,Warumarmsein?,AllgemeinerDeutscherGewerkschaftsbund,Berlin1928,pp.10, 19,70,71;HenryFord,Mylifeandwork,Doubleday,GardenCity,NewYork,1922. 78 HugoLindemann,StdteverwaltungundMunizipalSozialismusinEngland,Dietz,Stuttgart,1906 [1897];andDeutscheStdteverwaltung:ihreAufgabenaufdenGebietenderVolkshygiene,des StdtebausunddesWohnungswesens,Dietz,Stuttgart,1906[1901]. 79 GeorgeRobertStirlingTaylor,Guildpolitics:apracticalprogrammefortheLabourparty&theco operators,Palmer,London,1921;GeorgeDouglasHowardCole,Selfgovernmentinindustry,Bell andSons,London,1920[1917],[theGermanedition,referredtobyGrossman,Selbstverwaltungin derIndustrie,Engelmann,Berlin,1921,wasintroducedbyRudolphHilferding];GeorgeDouglas HowardCole,Guildsocialism,FabianSociety,London1920;GeorgeDouglasHowardColeand WilliamMellor,Themeaningofindustrialfreedom,AllenandUnwin,London,1918,[waspublished togetherwithColesGuildsocialisminG.D.H.ColeandWilliamMellor,Gildensozialismus, Rheinland,Kln,1921]. 80 FranzOppenheimer,WederKapitalismusnochKommunismus,Fischer,Jena,1932.Oppenheimer (18641943)wasprofessorofsociologyandeconomicsattheUniversityofFrankfurtamMainfrom 1919until1929.HewasaZionistandproponentofmarketsocialism.

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epistemologically,deepeningit,aboveall,throughfruitful,specialisedresearch,invarious areasofsocial,economicandculturalhistory.KarlKautskydealtwithitphilosophically,above allinEthicsandthematerialistconceptionofhistory,Classantagonismsintheeraofthe FrenchRevolution,ThomasMoeandhisUtopia,ThefoundationsofChristianity.81Inhislast largework,ThematerialistconceptionofhistoryKautskyrevisedhisearlierconceptionofthe drivingforceofhistoricaldevelopmentjustashehadinrelationtohiseconomicandpolitical conceptions(compareKarlKorschThematerialistconceptionofhistory:anargumentwithKarl Kautsky.82FranzMehring(18461919)inhisTheLessinglegendchosetheliteratureandthe historyofLessingandFriedrichIIashisfieldofapplication.InbrilliantessaysinNeueZeit,he dealtwithmostdiverseareasofhistoryandliteraryhistory.Inhisconsummate,broadly conceivedHistoryofGermansocialdemocracy,thatadmittedlyonlyextendeduntilthestartof revisionism,heilluminatedtheeconomicandsocialcontextofthegrowthofthesocialist workersmovementandcombinedthiswithapresentationofitstheoreticaldevelopments.83 GeorgiiPlekhanov,thecreatorofthematerialistsociologyofcultureandart,enteredthe struggleagainstrevisionismasoneofthemostbrilliantproponentsofdialecticalmaterialism (aboveallFundamentalproblemsofMarxism,HenrikIbsen,Essaysonthehistoryof materialism).84Fromthepostwarperiod:thefineandvaluablebook,Historyandclass consciousness:studiesinMarxistdialectics,byGeorgyLukcs85should,aboveall,be mentioned,andalsoKarlKorsch,CentralpointsofhistoricalmaterialismandMarxismand philosophy.86Finally,inadditiontotheworksbyMaxAdler,alreadymentioned,alsoHeinrich CunowMarxstheoryofhistory,societyandthestate.87 Significantwritingsonhistoricalmaterialisminparticularcountries France GeorgesSorel,Laruinedumondeantique:conceptionmaterialistedelhistoire(Thecollapseof theancientworld:thematerialistconceptionofhistory),M.Rivire,Paris1925[1901].
81 KarlKautsky,Ethicsandthematerialistconceptionofhistory,Kerr,Chicago,1906;Die KlassengegenstzeimZeitalterderfranzsischenRevolution,Dietz,Stuttgart,1908[1889];Thomas MoreandhisUtopia,A.andC.Black,London,1927[1888];FoundationsofChristianity:astudyin Christianorigins,InternationalPublishers,NewYork,1925[1889]. 82 KarlKautsky,Thematerialistconceptionofhistory,abridged,YaleUniversityPress,NewHaven, 1988[1927];KarlKorsch,DiematerialistischeGeschichtsauffassung.AuseinandersetzungmitKarl Kautsky,Hirschfeld,Leipzig1929. 83 FranzMehring,TheLessinglegend,CriticsGroupPress,NewYork,1938[1893];Mehringpublished manyhundredsofarticlesinNeueZeit;GeschichtederdeutschenSozialdemokratie,twovolumes, Dietz,Berlin,1976[18978]. 84 GeorgiiPlekhanov,FundamentalproblemsofMarxisminGeorgiiPlekhanov,Selectedphilosophical works.Volume3,ProgressPublishers,Moscow,1976[1908],pp.11783;HenrikIbsen,NeueZeit, Stuffgart1908[1906];Essaysonthehistoryofmaterialism,Selectedphilosophicalworks.Volume2, ProgressPublishers,Moscow,1976[1896],pp.31182. 85 GeorgLukcs,Historyandclassconsciousness:studiesinMarxistdialectics,Merlin,London,1971 [1923]. 86 KarlKorsch,KernpunktedermaterialistischenGeschichtsauffassungEinequellenmige Darstellung,VIVAVereinigunginternationalerVerlagsAnstalten,Berlin,1922;Marxismand philosophy,NLB,London,1970[1923]. 87 HeinrichCunow,DieMarxscheGeschichts,GesellschaftsundStaatstheorie:Grundzgeder MarxschenSoziologie,BuchhandlungVorwrts,Berlin,1923[1920].

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CharlesRappoport,Laphilosophiedelhistoirecommesciencedel'volution(Thephilosophyof historyasanevolutionaryscience),M.Rivire,Paris1925[1901]. Italy BenedettoCroce,HistoricalmaterialismandtheeconomicsofKarlMarx,GeorgeAllen& Unwin,London,1915[1901]. _Philosophyofthepractical:economicandethic,Macmillan,London,1913[1909]. RodolfoMondolfo,IlmaterialismostoricoinFedericoEngels(Thehistoricalmaterialismof FriedrichEngels),Formiggini,Genova,1912. _IIconcettomarxisticodellaumwlzendePraxisesuoigermiinBrunoeSpinoza,1932. AntonioLabriola,Essaysonthematerialistconceptionofhistory,Kerr,Chicago,1908[1896]. _Socialismandphilosophy,Kerr,Chicago,1912[1899]. Poland StanisawBrzozowski,Idee:wstpdofilozofiidojrzaocidziejowej,WydawnictwoLiterackie, Krakw,1990[1910]. Russia NikolaiBukharin,Historicalmaterialism,InternationalPublishers,NewYork1925[1921]. AbramDeborin,Vvedenievfilosofiiudialekticheskogomaterializma(Anintroductiontothe philosophyofdialecticalmaterialism),Librokom,Moskva,2012[1916],GeorgiiPlekhanovs prefaceisinGeorgiiPlekhanov,Selectedphilosophicalworks.Volume3,ProgressPublishers, Moscow,1976,pp.57799. Holland HermannGorter,DerhistorischeMaterialismus,withaforewordbyK.Kautsky,Stuttgart1919. Writingsaboutparticularareasofapplicationofhistoricalmaterialism Law EvgeniiPaschukanis,LawandMarxism:ageneraltheory,Transaction,NewBrunswick2002 [1924]. PeterisStutschka,DasProblemdesKlassenrechtsundderKlassenjustiz(Theproblemofclass lawandclassjustice),inEugenPaschukanisAllgemeineRechtslehreundMarxismus,editedby HermannKlenneandLeonidMamut,RudolfHaufeVerlag,Freiburg,1991[1922],pp.23368 (compareHansKelsen,AllgemeineRechtslehreimLichtematerialistischer Geschichtsauffassung(Thegeneraltheoryoflawinthelightofthematerialistconceptionof history),ArchivfrSozialwissenschaftundSozialpolitik,66(3),1931,pp.449521). PaulSzende,NationalesRechtundKlassenrecht,BeitrgeausderungarischenRechtsund Wirtschaftsgeschichte(Nationallawandclasslaw:contributionsfromHungarianlegaland economichistory),FestschriftfrCarlGrnbergZum70.Geburtstag,Hirschfeld,Leipzig, 1932,pp.44578. Economichistory HeinrichCunow,AllgemeineWirtschaftsgeschichte.VonderprimitivenSammelwirtschaftbis zumHochkapitalismus(Generaleconomichistory:fromtheprimitivegatherereconomyto advancedcapitalism),4volumes,Dietz,Berlin,19261931. Theprocessoftransitionfromthefeudalstateofthe18thCenturytothemoderncapitalist stateisdealtwith,usingtheexampleofAustriaandPolandinHenrykGrossmann,sterreichs HandelspolitikmitBezugaufGalizieninderReformperiode17721790(Austriastradepolicy withregardtoGaliciainthereformperiod17721790),Konegen,Wien1914. _DieAnfngeunddiegeschichtlicheEntwicklungderamtlichenStatistikinOesterreich(The

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beginningsandhistoricaldevelopmentofofficialstatisticsinAustria),Statistische Monatsschrift,newseries21,1916,pp.331423. _StrukturaspoecznaigospodarczaKsistwaWarszawskiegonapodstawiespisowludnosci 18081810roku(ThesocialandeconomicstructureoftheDuchyofWarsawonthebasisof theresultsofthecensesof1808and1810),KwartalnikStatystyczny2,1925,pp.1108. LudoMoritzHartmann,RmischeGeschichte(Romanhistory),Perthes,Gotha,1919. _DerUntergangderantikenWelt(Thefalloftheancientworld),Heller,Wien1910[1903]. KarlAugustWittfogel,WirtschaftundGesellschaftChinas(Chinaseconomyandsociety), Hirschfeld,Leipzig1931. Sociologyofknowledge MaxHorkheimer,Anewconceptofideology?inMaxHorkheimer,Betweenphilosophyand socialscience,MITPress,Cambridge,Massachusetts,1993[1930],pp.129150. PaulSzende,VerhllungundEnthllung:DerKampfderIdeologieninderGeschichte,Archiv frdieGeschichtedesSozialismusundderArbeiterbewegung,10(23),1922,pp.185270. c)Theproblemsofimperialismandwar Wepointedoutearlierthat,towardstheendofthepreviouscentury,thedevelopmentof capitaliststatestookonmoreanmoreimperialistfeaturesandwasdistinguishedbyarms buildupsandcolonialexpansion.SocialistsschooledintheMarxistapproachtohistoryquickly recognisedthesignificanceoftheseprocesses.Fromthestartofthenewcentury,inaseriesof writings(Thesocialrevolution,Theroadtopower,Tradepolicyandsocialdemocracy),Karl Kautskypredictstheapproachofanewepochofrevolutionasaresultofcolonialpolicyand imperialism.Particularlyintheeast:anageofconspiracies,coupsandconstantsocial upheaval,heexplained,wasbeginningineastAsiaandtheentireMuslimworld.Eventuallythe westwouldbecaughtupinthese.Aworldwarisbroughtwithinthreateningproximity.Inall thesewritings,Kautskydescribesthefeaturesthathadchangedduringitsimperialistperiod, itsinclinationtoarmforwar,actsofviolenceandconquestinthestruggleovertheworld market.Atthetime,thesedevelopmentsdidnotappeartohimasconsequencesofthefancies ofindividualpowerholdersbutasboundupwiththeinnernatureofcapitalism.[T]heiron necessityofeconomicrequirementsdrivesmodernindustrialnationstowardsruin.88 Thisconceptionofcapitalismsdevelopmentaltendencies,untilthengenerallyacceptedin theworkersmovement,couldnotbereconciledwithTuganBarnaovskiisandHilferdings theoriesoftheunlimitedpossibilitiesforthedevelopmentofcapitalism,alreadymentioned. Theharmonistconceptionofcapitalistdevelopmentwasobviouslycontradictedreality,with itssteadilygrowingcompetitionandtheescalationofstrugglesamongtheadvancedcapitalist countriesovermarketsandspheresofinvestment,alsoincontradictionwiththefundamental notionofhistoricalmaterialismthatexplainspoliticsonthebasisoftheeconomy.Inherbook Theaccumulationofcapital:acontributiontotheeconomicexplanationofimperialism,89Rosa
88 KarlKautsky,Thesocialrevolution,TwentiethCenturyPress,ClerkenwellGreen,1903[1902];The roadtopower,Bloch,Chicago,1909,p.117;HandelspolitikundSozialdemokratie,Buchhandlung Vorwrts,Berlin,1911[1901],p.94. [89 RosaLuxemburg,Theaccumulationofcapital,RoutledgeandKeganPaul,London,1951[1913].This translation,byAngesSchwarzschild,ofRosaLuxemburg,DieAkkumulationdesKapitals:EinBeitrag zurkonomischenErklrungdesImperialismus,BuchhandlungVorwrtsPaulSinger,Berlin,1913,is unsatisfactoryinplaces.Wherethatisthecase,new,moreaccuratetranslationsfromtheGerman originalareprovidedandwhereSchwarzschildstranslationhasbeenusedandherterminology

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Luxemburgsetherselfthetaskofresolvingthiscontradiction.Iftheneoharmonists conceptionofcapitalismsunlimitedpossibilitiesforthedevelopmentwasright,thenthe imperialistfeatureswhichwereappearingwithsuchintensitycouldnotbeexplainedinterms ofthenatureofcapitalism.Theywererathertobeevaluatedasmereaccidentalphenomena. Ontheotherhand,asRosaLuxemburgcorrectlyemphasised,thetheoryofcapitalistcollapse isthecornerstoneofscientificsocialism.90Andthisisthegreathistoricalsignificanceof RosaLuxemburgsbook:that,inconsciousoppositiontotheattempteddistortionsofthe neoharmonists,sheadheredtothefundamentalideainCapitalofanabsoluteeconomic limittothedevelopmentofthecapitalistmodeofproduction,eventhoughtheconcrete justificationthatsheprovidedforthetheoryofbreakdown,today,hastoberegardedas mistaken.InhercritiqueofMarxsanalysisoftheaccumulationprocess,whichassumesa societythatconsistssolelyofcapitalistsandworkersanddoesnotengageinforeigntrade, shecametotheconclusionthatMarxsschemaofaccumulationdoesnotsolvethequestion ofwhoistobenefitintheendbyenlargedreproduction.Purelyabstractly,assumingthe relationsofdependenceandproportionsofMarxsschema,Marxsanalysisgivesthe appearancethatcapitalistproductioncanbyitselfrealiseallsurplusvalueandemploys capitalisedsurplusvaluetosatisfyitsownrequirements.Thatis,capitalistproductionbuys upitsentiresurplusproduct.Forexample,coalminingisextendedinordertomakethe expansionoftheironmakingandmachinebuildingindustriespossible;thelatterare expandedtomaketheextensionoftheproductionofmeansofconsumptionpossible.This extensionofindustryproducingmeansofconsumption,however,createsmarketsforthe extendedproductionofthecoalmining,ironmakingandmachinebuildingindustries. Individualindustrialbranchesthusestablishmarketsforeachother.SettingoutMarxs analysisinthisway,whichRosaLuxemburgregardsasmistaken,productioncanbeextended adinfinitum...incircles,withoutitbeingapparentwhoistobenefitwhoarethenew consumersforwhosesakeproductionisevermoreenlarged.91Suchaccumulationdoesnot serveconsumptionbutisproductionforproductionssake.92Actuallyworkerscanreallyonly consumeapartofthelargerproduct,thepartwhichexpressesthevalueoftheirwages.Part oftheproductservestoreplacemeansofconsumptionthathavebeenusedup;the remainderthatisleftover,surplusvalue,consistentlygrowsinthecourseofaccumulation. Whorealisesthesurplusvaluethatconsistentlygrows?Thecapitaliststhemselvesonly consumeapartofit,whiletheyemployanevergrowingpartofitforfurtheraccumulation. Butwhatdotheydo,then,withtheevenlargerannualproduct,withtheirsurplusvalue? RosaLuxemburgcomestotheconclusionthattherealisationofthesurplusvalueforthe purposesofaccumulationisanimpossibletaskforasocietywhichconsistssolelyofworkers andcapitaliststhatis,suchacapitalismcannotexist.Thecapitalistmodeofproduction requiresforitsexistenceasitsprimecondition...thatthereshouldbestrataofbuyers outsidecapitalistsociety,thatis,sociallayers,whoseownmodeofproductionisnot capitalisticandrealisethecapitalistsurplusvalue.Butcapitalismrequiresnoncapitalist milieusnotonlytorealisesurplusvalue,evenmoreinordertoobtainalargepartofthe meansofproduction,inparticularrawmaterials(constantcapital);andfinally[o]nlythe existenceofnoncapitalistgroupsandcountriescanguaranteesuchasupplyofadditional
divergesfromthetranslationsinthePenguineditionsofCapital,hertextshavebeenmodified.The termdiagram,forexample,hasbeenreplacedwithschema.] 90 Luxemburg,Reformorrevolution,p.96. [91 Luxemburg,Theaccumulationofcapital,pp.329,330.] [92 KarlMarx,Capital.Volume1,Penguin,Harmondsworth,1976,p.742.]

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labourpowerforcapitalistproduction.93ItisthereforeapparentthatTheprocessofcapital accumulationisconnectedwithnoncapitalistformsofproductioninallitsvalueandmaterial relations:constantcapital,variablecapitalandsurplusvalue.94Capitalistaccumulationasan historicalprocessis,inpractice,dependentonthegivenhistoricalsettingofnoncapitalist countriesandlayers:artisans,peasants.Withoutthismilieuitisinanycaseunthinkable.The resultiscapitalsaggressivedrivetobringnoncapitalistterritoriesunderitssway.Inthisway, RosaLuxemburgbelievesthatshehasexplainednotonlyaccumulationandtheconditions underwhichittakesplacebutalsothedrivingforcebehindimperialismandthetendencyto colonialexpansion.Militaryoccupationofcolonies,theviolenttheftoftheirmeansof productionandlabourpower,planningforthesystematicdestructionandannihilationofall thenoncapitalistsocialunits,thestruggleofcapitalismagainstthenaturaleconomyandthe ruinofindependenteconomiesofartisansandpeasants.Incontrasttothecrudeoptimism ofRicardo,Say,TuganBaranovskiiforwhomcapitalismcandevelopwithoutlimit,withthe logicalcorollaryofcapitalisminperpetuity,95herownsolution,itseemsher,isinthespiritof Marxstheoryofthefinalbreakdownofthecapitalistsystemofproduction,whichisfounded onthedialecticalcontradictionthatthemovementofcapitalaccumulationrequiresnon capitalistformationsasitscontextandcanonlyexistaslongasthismilieuispresent.96As thenaturaleconomiesarebeingsubordinatedtocapitalism,then,thesituationwhichMarx predictedinhisanalysisdrawsnearer.Thatis,capitalistproductionastheexclusiveand universaldominationofcapitalistproductioninallcountriesandforallbranchesofindustry. Yetthisargumentdoesnotleadanywhere.Assoonasthisfinalresultisachieved accumulationmustcometoastop.97Thehistoricallimitsofaccumulation,theimpossibility fortheproductiveforcestodevelopmentfurther,isapparenthere.Theconsequenceisthe endofcapitalism.Itsimperialistphaseisthusthefinalperiodinitshistoricalcareer.The economicanalysisofnoncapitalistmarketsthushastheclosestinnerconnectionwiththe emergenceofsocialism.Socialismisnotmerelydependentonsubjectivevoluntaristfactors butresultsfromtheeconomysdevelopmentalpath,inthecontextoftheforceswithin capitalismthatobjectivelyworktowardsitsnecessarybreakdown.Thistheory,thatfocuses ontheproblemofmarkets,onthequestionoftherealisationofsurplusvalueisnotcapable ofsatisfactorilyexplainingthecharacteristicfeatureofcapitalismsimperialistperiod,the exportofcapital(seeLeninstheoryofimperialism,below).Furthermoretheseideaswerenot new;theyhaveahistoryofmorethanahundredyears.Inessence,theywerealready developedbySimondedeSismondiinhisNewprinciplesofpoliticaleconomyof1819and RobertMalthusinthechapteronaccumulationinhisPrinciplesofpoliticaleconomyof1820.98 TheseideaswerelaterextendedbysocialisttheoriststoexplainimperialismbyHeinrich Cunow(Oncrisistheory),LouisB.Boudin(ThetheoreticalsystemofKarlMarx,witha forewordbyKarlKautsky)andKautskyhimself(seeabove).99Luxemburgsachievementwas
[93 Luxemburg,Theaccumulationofcapital,pp.3502,361.] [94 Luxemburg,DieAkkumulationdesKapitals,p.314.] [95 Luxemburg,Theaccumulationofcapital,pp.3656,370.] [96 Luxemburg,DieAkkumulationdesKapitals,p.315.] [97 Luxemburg,Theaccumulationofcapital,p.417.] [98 JeanCharlesLonardSimondedeSismondi,Newprinciplesofpoliticaleconomy,Transaction,New Brunswick,1991;RobertMalthus,Principlesofpoliticaleconomy,consideredwithaviewtotheir practicalapplication,Pickering,London,1836[1820],pp.308438.] 99 Cunow,ZurZusammenbruchstheorie;LouisB.Boudin,ThetheoreticalsystemofKarlMarxinthe lightofrecentcriticism,Kerr,Chicago,1907;KautskysprefacewasonlypublishedintheGerman edition,DastheoretischeSystemvonKarlMarx,Dietz,Stuttgart,1909;Kautsky,Krisentheorien.

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newinthatsheusedMarxsreproductionschemestodemonstratethenecessityofnon capitalistareas. Thisisnottheplacetoofferanextensivemethodologicalandmaterialcritiqueofthetheory. Inthisregard,refertotheworksofHenrykGrossman,discussedfurtherbelow.Indirect contrastwithRosaLuxemburgsisthepositionofVladimirIlyichLeninwhoalready,inhisA characterisationofeconomicromanticism(SismondiandournativeSismondists)argued againsttheRusssianNarodniksiscounterposedtoLuxemburgs.TheNarodniksadopted Sismondistheoryofexternalmarketastheconditionfortheexistenceofcapitalisminfull. Leninrepeatedcriticisedthetheorythatitwasimpossibletorealisesurplusvalueinpure capitalism,inhisprincipalworkagainsttheNarodniks,Thedevelopmentofcapitalismin Russia.100Thecontractionbetweenthelimitsofconsumptionandlimitlessexpansionof productionforthesakeofproduction101reallydoesexist.Butthisisnotthecontradictionina theorybutarealcontradictioninthecapitalistsystem.Nothingwouldbemorevulgar, however,thantoconcludefromthecontradictionsofcapitalism,i.e.fromitsirrationality,that itisimpossible.Thiscontradictionisnotcapitalismsonlyone.Itcanneitherexistnordevelop withoutcontradictions.NothingcouldbemoresenselessthantoconcludethatMarxdidnot admitthepossibilityofsurplusvaluebeingrealisedincapitalistsociety,thatheattributed crisestounderconsumption,andsoforth.102Infactdifferentbranchesofindustryconstitute marketsforeachother.As,however,theydevelopunevenlyandovertakeeachother,because thereisnoregulationtoenforceabalanceamongtheindividualbranches,ensuringthatthe moredevelopedindustrynecessarilyseeksaforeignmarket.103Thisunevendevelopmentof individualbranchesofindustryis,therefore,thefinalcauseofcrisesandcapitalisms expansionisttendencies.AftertheoutbreakoftheWorldWar,astheproblemofimperialism naturallyattractedgreaterattention,Leninundertooktolaythenatureofimperialism,its economicandsocialroots,bareinhisbookImperialism:thehigheststageofcapitalism.104He identifiedtheseinthestructuraltransformationofworldcapitalism,inthedisplacementof competitionbymonopoly,whichopenedthephaseofcapitalismsdecline.Itscharacteristic featureisnolongertheexportofcommoditiesbutofcapital.Themonopolisticcharacterof capitalismexplainscontinuouscolonialexpansionandthedivisionoftheworldamong monopolistassociationsofcapitalists,dominatedbythefinancialoligarchy.Capitalexport, throughthedominationofenormousterritoriesinAsiaandAfricathatsupplyrawmaterials, securescolossalsuperprofitsforthebourgeoisiesoftherulingcapitalistcountries.Theessence ofimperialistexpansiondoesnotlieinthesphereofcirculation(therealisationofsurplus value)butinthesphereofproduction(raisingprofits). Theemergenceofimperialismopenedaperiodofconstantwarandthreatofwar.Warsarea productofimperialism,anunavoidableresultoftheantagonismsoftheepochofdecline.In thisrespect,thecharacterofwarshaschanged;theformaldistinctionbetweenwarsof defenceandoffencehaslostanymeaning.For,incontrastwiththewarsofnationalliberation duringtherisingphaseofcapitalism,warsintheperiodofdeclinearepredatorywars amongstimperialistcountriesandagainsteconomicallylessdevelopednationsandstates.As aconsequence,theworkingclasshasspecialresponsibilitiesintakingpositionsonwar,civil
100 VladimirIlychLenin,ThedevelopmentofcapitalisminRussia,LCW3,[1899],pp.21607. [101Marx,Capital1,p.742;VladimirIlychLenin,Acharacterisationofeconomicromanticism(Sismondi andournativeSismondists)LCW2,[1897],pp.161,182.][Wholepamphletpp.129265] [102Lenin,Thedevelopmentofcapitalism,p.58.] [103Lenin,Thedevelopmentofcapitalism,p.66.] 104 VladimirIlychLenin,Imperialism,thehigheststageofcapitalism:apopularoutline,LCW22,[1916], pp.183304.

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peace,defenceofthefatherlandandapprovingwarcredits.Duringthephasecapitalisms decline,itisthetaskoftheproletariattotransformwarbetweenpeoplesintocivilwar,witha viewtotheconquestofpowerand,forthisreason,thestrategicandorganisational preparationforrevolution.GrigoriiZionoviev(Thewarandthecrisisofsocialism),Vladimir IlyichLeninundGrigoriiZinoviev(Againstthecurrent:articlesfromtheyears191416),Leon Trotsky(TheWarandtheInternational),NikolaiBukharin(Imperialismandworldeconomy withanintroductionbyV.I.Lenin)andHermannGorter(Imperialism,theWorldWarand socialdemocracy)takesimilarstancesontheproblemofimperialismandwar.105 d)Theproblemoftheproletarianseizureofpower.MarxisttheoryandtheSovietUnion TheestablishmentoftheSovietUnionis,inprinciple,notsimplyaturningpointofgreat importanceinthepoliticalandeconomichistoryofcapitalismbutalsointhefieldofMarxist theory.TheoutbreakoftheRussianrevolutionconfirmedthecorrectnessofprognosisof Marxists,whohadpredicteditsadventandthusbasedtheirstrategyandtacticsonitfor decades.Further,itprovedthecorrectnessofthosewho,likeLeninin1905,hadalready predictedonthebasisofMarxisttheorythatthecomingrevolutionwouldbeanupheavalofa newkindproletarianrevolutionwhich,initsgoal,organsandtacticswouldmovebeyondthe bourgeoisworld.ThesignificanceoftheOctoberRevolutionanditshistoricalmeaningfor Marxisttheoryis,moreover,thatthesoleruleofthecapitalistsystemhasreacheditsend. WiththeOctoberRevolution,thebourgeoismodeofproduction,beforethisturningpointthe rulingandthemostprogressivemodeofproduction,lostitsauraofpermanenceand indestructibility,provingtobeanhistorical,i.e.atransitory,category.Theremnantsofsocial formationsthathavegoneunderandareincomparisonmorebackward(artisans,peasant,the primitiveeconomiesofcolonialpeopleinAfricaandAsia)havesurvivedintothepresent.In contrasttocapitalism,socialismhassofaronlybeenademandforthefuturearrangementof society.Now,aftertheworldeconomiccrisisconvulsedcapitalism,bycontrastasexperience seemstoconfirmthereisasuperioreconomicsystemintheSovietUnion.Thisisonthebest pathtorealising,forthefirsttimeinhistory,thesocialistideaofasocialist,plannedeconomy, afterthefirstFiveYearPlanhasovercomeinitial,transitionaldifficulties.TheSovietUnionis constructingasocialisteconomyonthebasisofthemostadvancedtechnologyatamassive tempo,forwhichthereisnohistoricalanalogy,ineconomicsandcultureinasixthoftheworld and,leapingoverwholehistoricalstagesofdevelopment,particularlyinthepreviouslymost backwardareasofAsiaticRussia.Thegreatpopularityofthearrangementsundertheplanned economy,inalmostallthehighlydevelopedcountriesofEuropeandintheUnitedStatesof
105 GrigoriiSinowjewDerKriegunddieKrisedesSozialismus,VerlagfrLiteraturundPolitik,Wien 1924[1917],[asectionofthebookisinEnglishtranslationTwoerasofwar,Newinternational,18 (5,6)and19(1),SeptemberOctober1952,NovemberDecember1952andJanuaryFebruary 1953,pp.23344,3237,4251,http://www.marxists.org/archive/zinoviev/works/1916/war/2eras index.htm,accessed17June2013];N.LeninandG.Sinowjew,GegendenStrom.Aufstzeausden Jahren191416,VerlagderKommunistischenInternationale,Hamburg1921[1918],[acollectionof 74articles,thelongestarticlesavailableinEnglishareVladimirIlyichLeninThecollapseofthe SecondInternationalLCW21,1964[1915],pp.205259andVladimirIlyichLenin,Thediscussion onselfdeterminationsummedupLCW22,1964[1916].pp.32060];LeonTrotsky,TheWarand theInternational,1915,withtheZimmerwaldManifesto,anopenlettertoGuesde,AYoung SocialistPublication,1971[1914];NikolaiBukharin,Imperialismandtheaccumulationofcapital, MonthlyReviewPress,NewYork,1972[1926];HermanGorter,DerImperialismus,derWeltkrieg unddieSozialdemokratie,SozialdemokratischeParteiHollands,Amsterdam,1915.

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America,istheexpressionoftheshakenbeliefinthejustificationforandadequacyofthe capitalistmarketeconomy.Thecapitalismsdifficultiesseemtohavebecomemoreacute becauseofthefactoftheexistenceoftheSovietUnionalone,asaconsequenceofits successfulsocialistconstruction.Socialcontradictionsandclassantagonismsarenolonger contractionsbetweenrealityandahopedforsocialistfuture,butrathertheevermore pronouncedcontradictionsbetweentwosocialandstatesystemsthatexistsidebyside.The foundationoftheMarxEngelsInstituteinMoscow,undertheleadershipofthewellknown MarxresearcherDavidRiazanov,isofthegreatestsignificanceforthescientificdeepeningand developmentofMarxisttheory.Ittookonthemonumentaltaskof[producing]theMarx Engelscollectedworks(inmorethan40volumes)whichwillpublishfundamentallyimportant partsofMarxsandEngelssworldofideasthatwerepreviouslyunknown.106MarxEngels Archiv,whichalsoappearsinGerman,istheorganoftheInstitute. Theresearchofparticularconditionsoftheexistenceanddevelopmentofthepeasant economyplaysaspecificroleinthesocialistliteratureoftheSovietUnion.Fromtheextensive literatureonthefollowingarementioned:AlexanderVasilyevichChayanov,Theoptimalsizeof agriculturalenterprises,Thetheoryofthepeasanteconomy,Thetheoryofpeasantco operatives;NikolaiPavlovichMakarovThepeasanteconomyanditsevolution.Further,the InternationalAgrarianInstituteinMoscowanditsjournaldealwiththeseproblems.107 Russiansocialistliteratureisespeciallyengagedwiththetheoryofsocialistupheavalandthe periodoftransitiontosocialism.InhisspeechontheprogramoftheThirdInternational,in 1922,Bukharincriticisedthosewhowanttodelaythesocialistrevolutionuntilsocialismhas ripenedwithincapitalism.IncontrasttotheclassicalstatementinMarxsCapitalthat capitalismmaturedfullyunderfeudalruleuntiltheneworderisabletofullydevelopafter theconquestofpoliticalpower,theRussianCommunists,especiallyBukharin,insistthatthis theorydoesnotapplytosocialism.Withinfeudalism,thebourgeoisiecouldalreadypossessa monopolyoverindustrialmeansofproduction,achieveleadingrolesinindustrialproduction and,drawingonitseconomicpower,alsoovertakethefeudalclassculturally.Incontrast,the workingclasscannotbecometheownerofthemeansofproductionandcontrolproduction undercapitalism.Norcanitrisetoahigherculturallevelthanthebourgeoisiewithinthe frameworkofcapitalism.Socialismcanneverripeninthismanner,evenunderthemost favourableconditionsItisimpossiblefortheworkingclasstotakeproductioninhandwithin thewombofcapitalistsociety[T]heproletariatcanlearnallthatonlywhenithasalready achievedthedictatorshipoftheproletariat.108
[106ThisprojectwasterminatedunderStalin.RiazanovwasdismissedastheheadoftheInstitutein February1931andexecutedin1938.] [107AlexanderVasilyevichChayanov,DieoptimalenBetriebsgrsseninderLandwirtschaft,Parey,Berlin 1930[1921];Thetheoryofthepeasanteconomy,R.D.Irwin,Homewood,1966[theRussianbook publishedin1925wasbasedonaGermanbookpublishedin1923,towhichGrossmanrefers];The theoryofpeasantcooperatives,OhioStateUniversityPress,Columbus,1991[1919].Chayanovwas arrestedin1930,onthepretextofoneofhisworksofsciencefiction,executed1937.Nikolai PavlovichMakarovKrestianskoekhozyaistvoiegoevolyutsiya,Tip.N.Zheludkovoi,Moscow,1920. TheInstitute,MezhdunarodniiAgrarniiInstitut,publisheditsjournalAgrarproblemeinGerman, from1928until1934.] 108 NikolaiBukharin,TheprogrammeoftheInternationalandtheCommunistParties,inTowardthe unitedfront:proceedingsoftheFourthCongressoftheCommunistInternational,1922,Brill,Leiden, 2012[1922],p.491[wholetextpp.479501],[emphasisinBukharinsoriginal.Thefirstquotationis fromBukharinratherthanMarxbutseeMarx,Capital1,p.875.]

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Socialismdoesnotarise,itmustbeconsciouslyconstructed.Accordingly,fortheRussian Communists,thepossibilityofaproletarianrevolutionisnottiedtoanydefinite developmentalmaturityofcapitalistsociety.Onlyasufficientconcentrationofproductionis requiredtomaketheplannedorganisationoftheeconomypossibleandacorrespondingly advancedunionofproletarianatomsintoarevolutionaryclass,toguaranteetheoverthrowof thebourgeoisieintherevolutionandtheconstructionoftheapparatusoftheproletarian dictatorship.Inadditiontothesetwoobjectiveaspects,twosubjectiveaspectsarerequired: therevolutionaryenthusiasmoftheproletariatanditsdesiretoendthecapitalistorder,and theincapacityofthebourgeoisietoeffectivelyresisttheproletariat.Alltheseaspects, however,arecompatiblewiththemostdiverseeconomiccircumstance.Thebreakdownof capitalism,accordingtothisconception,canjustaseasilytakeplaceatahighorarelativelow levelofcapitalismsinnermaturity.Acountrydoesnotnecessarilyhavetobeamongstthe leadingcapitalistcountriesintermsofitsgenerallevelofeconomicdevelopment.Onthe contrary,sincethecapacityofthebourgeoisieis,ceterisparibus,directlyproportionaltothe economicmaturityofcapitalism,itislikelythatthecollapseoftheentiresystemensues, beginningwiththeorganisationallyweakestlinksofthatsystem(BukharinTheeconomicsof thetransitionperiod).109Laterwewillseethatthistheoryofbreakdown,whichconstitutes nothingotherthanaformulationofthespecificRussiansituationduringtheWar,neither correspondswithLeninsconceptionoftheoverthrowofcapitalismnordoesitapplyatallto theadvancedcapitalistcountriesofwesternEurope. Theproblemsofsocialisteconomicconstructioninindustryandagricultureisofimmediate, currentsignificanceandatthesametimepresentthegreatesttheoreticaldifficultiesNodoubt theexpropriationofthemeansofproductionhaslongbeenafixedcomponentofallsocialist programs.Butthequestionoftheextentoftheexpropriationofindustrialandcommercial capital,thenatureandextentoftheconnectionbetweenthesocialistelementsofthe economywithoutmarketsandtheremainderofthecapitalisteconomy,i.e.theextentto whichthemarketeconomyistoberetainedandtheeconomywithoutmarketsandmoneyis tobeintroduced,nowhadtobeanswered.Theproblemofthesocialistrestructuringofthe villagehadtobesolved:whetherastatemonopolyoveragriculturalproductsshouldbe introducedorprivatepeasantproductionandprivatesales,onlyburdenedwithataxinkind, shouldremain.Likewisethequestionofwhethercollectiveagriculturalproductionshouldbe introducedand,finally,towhatdegree.Everywhere,thefirsttentativeattemptsatproletarian economicpolicyhadtobemade.Theyachievedapreliminaryresolutionwiththeformulation oftheFirstFiveYearPlan,whichalsolaidthefoundationsforanewscience. Theproblemsoftheproletarianseizureofpowerwerealmostonlydiscussedwithinthe RussianworkersmovementuntiltheOctoberRevolution.Withthisevent,moststrongly encouragedbyLeninsStateandrevolution,itmovedtothecentreofdiscussionswithinthe workersmovementoftheentireworld,particularlyWesternEurope.Thequestionswere whethertheconquestofpowerbytheproletariatwouldtakeplacebyparliamentaryor extraparliamentarymeans,iethroughtherevolutionaryactionoftheworkingclass;whether dictatorshipoftheproletariatcouncilsystemistherealisationofproletariandemocracyor parliamentarydemocracyistheformofappearanceofthedictatorshipofthebourgeoisie;
[109NikolaiBukharin,Thepoliticsandeconomicsofthetransitionperiod,Routledge&KeganPaul, London,1979,p.65.ThefirstquotationdoesnotappearintheGermaneditiontowhichGrossman referred;itssenseisclearinBukharinstextp.99oftheEnglishedition:Thebourgeoisie didnotbuildcapitalism,butitwasbuilt.Theproletariat,asanorganisedcollectivesubject,is buildingsocialismasanorganisedsystem.Ifthecreationofcapitalismwasspontaneous, thebuildingofcommunismistoamarkeddegreeaconscious,i.e.organised,process.]

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spontaneousproletarianrevolutionorconsciousorganisationthroughapartyandthusthe fundamentalrelationshipbetweenpartyandclass;theorganisationofanewproletarian internationalorganisedaccordingtotheprinciplesofdemocraticcentralismasaunitaryworld partywiththetaskofpracticallypreparingfortheworldrevolution;thetaskofconqueringthe middlestratainthetownsandcountrysideasalliesoftheproletariat;colonialpeoples struggleforfreedomandtherightofselfdeterminationofnations,thatistheproblemof mobilisingtheoppressedmassesoftheentireworldagainstimperialism. Theassessmentofthetendenciesofeconomicdevelopmentofworldcapitalismis,naturally, ofdecisiveimportanceinansweringthequestion.Atpresent,thoselikeKautskyandthe speakersattheBrusselsCongressoftheSecondInternationalin1928areoftheviewthat capitalismstandsattheoutsetofafurthereraofupturnwhileothers,onthecontrary, assumethatitisinaperiodofdecline,whichisindeedpunctuatedbyshortperiodsof temporarystabilisation.Onthewhole,however,acontinualsharpeningofclassantagonisms isapparent,whichmustfinallyleadtothedecisivestruggleforpower. TheexperiencesandlessonsoftheRussianrevolutionareacurrentproblemforwestern EuropeancapitalismifitisindeclineandthequestionoftheWesternEuropeanrevolutionis ontheagendaforthenextperiodthen.Thisisthesignificanceofdebatesovertheconquestof statepowerinsidetheleftwingoftheSecond(Socialist)International,e.g.thedebatesatthe LinzCongressofAustrianSocialDemocracy(30October3November1926),atwhichthe newPartyprogramwasadopted.Thecoreproblemwasthequestionofwhethercivilwarand theuseofforceshouldbeavoidedbytheworkingclassinitsstruggleforstatepowerand socialism.Theresultofthediscussioncanbesummarisedthus:theworkingclassshouldin principlemakeuseofthelegalmeansofdemocracyinitsstruggle.Itshouldnot,however, ignorethefactthatitisprobablethatthebourgeoisiewillhaverecoursetoforceagainstthe workingclassanditsstateatthemomentwhentheproletariatconquerspoliticalpowerby meansofdemocracy,whenthereforedemocracyisdeployeddecisivelyagainstthe bourgeoisieitself,asnorulingclassgivesupitspowerwithoutastruggle.Undersuch circumstances,theworkingclassforitspartcannotabstainfromtheuseofforce. e)Theendofcapitalism WhilethesoleruleofthecapitalistsystemwasconvulsedbythevictoryoftheOctober RevolutioninRussia,itdidnotresolvethequestionoftheendofcapitalisminsocialisttheory, giventheconcretecircumstancesinwhichthisvictorywaspossible.WiththeOctober Revolution,thebreakthroughfromthecapitalistsystemtookplaceatitsweakestpoint, namelywheretherevolutionisingeffectsofcapitalismhadhardlybegunatthemomentofthe socialexplosion.ForthetechnologicalbackwardnessofoldRussiawasstillmorecharacteristic offeudalismthanofcapitalism.TheRussianexampleisnot,therefore,toberegardedas typicalofthebreakdownofcapitalismintheindustriallymostdevelopedcountries.Their capacitytoresist,asBukharinsays,isindirectproportiontotheireconomicmaturity,thus significantlygreaterthanwasthecaseinRussia,whosecapitalistdevelopmentwasjust beginning.IftheOctoberRevolutionwasasymptomandalsothebeginningofthebreakdown ofthecapitalistworldsystem,theimmediateconcretecausesofthiseventarestilltobefound infactorsotherthanthelikelycausesofthebreakdownofcapitalisminfullycapitalist countries,likeEngland,GermanandtheUnitedStatesofAmerica.Asaresult,thebreakdown ofcapitalismstillremainsaproblem,fromthestandpointofMarxisttheoryandthelabour movement.

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Duringthepostwarperiod,HenrykGrossmanundertooktoreassertthevalidityofthishighly disputedbutbasicconceptofMarxssystem.Previously,thereweretwovariantsofthetheory ofbreakdown.One(forexample,BukharinImperialismandtheaccumulationofcapital)only speaksgenerallyaboutthelimitgiventoacertaindegreebythetensionofcapitalist contradictionswhichwillunavoidablyleadtothecollapseofcapitalistrule,110without provingthisunavoidability,i.e.withoutprovidingthetheoreticalexplanationofwhythese contradictionsmustculminateinthefinalimpossibilityofequilibrium.Justaslittledoesthis interpretationprovideconcreteindicatorsbywhichonecanidentifyinadvancethedegreeof criticaltensionincontradictionsthatmakebreakdownunavoidable.Thiscanonlybe determinedexpost,aftertheadventofthebreakdown.Then,however,thetheoryof breakdownissuperfluousasaninstrumentofscientificknowledge.Suchageneral explanationofbreakdownmustbeconsideredtobeunsatisfactorybecauseofitsscientific indeterminacy,asitreallydoesnotfulfiltheMarxistrequirementofconcreteness(Lenin).111 Theothervariantofbreakdowntheory,representedbyCunow,Kautsky(inthewritingsfrom theperiod190111,citedabove),BoudinandRosaLuxemburg,soughttoderivethenecessity ofthedownfallofthecapitalistsystemfromthelimitationsofthemarket,thusfromprocesses inthesphereofcirculation(therealisationproblem). Inhis1898article,alreadymentioned,Cunowinvestigatesthecoreproblemofwhetherour economicdevelopmentdrivestowardsageneralcatastrophe.Previously,thesteady expansionofcolonialpossessionsfunctionedtoweakenthetendencytobreakdown,resulting frominsufficientmarkets.However,assuchanextensionofmarketshasitslimit,the unavoidabilityofbreakdownresults.Withoutgainingexternalmarkets,Englandwouldlong agohavefacedaconflictbetweenthecapacityofitsdomesticandforeignmarketstoconsume andthegiganticescalationofitscapitalistaccumulation.ForCunow,breakdownisnotin doubt;rather[itis]simply[amatterof]howlongthecapitalistmodeofproductioncan survive...andunderwhatcircumstancesbreakdownwilltakeplace.112 AfterKautskysendorsementinthepreface,Boudinsbookdealswiththedecisivepointsof Marxssystem.Boudinalsoregardsthesaleofsurplusvalueasthegreatproblemonwhich theexistenceoftheeconomicconstitutionofcapitalismdepends.Itistheinabilitytodispose ofthatproductthatisthechiefcauseofthetemporarydisturbanceswithinitsbowels.Indeed ifcriseshavepreviouslyendedandfurtheraccumulationhasbeenmadepossibleagain,itis onlybecausecapitalisticcountrieshadanoutsideworldintowhichtheycoulddumpthe productswhichtheycouldnotthemselvesabsorb.Butthissolutionwasonlytemporary.The penetrationofcapitalismintotheterritoriesofagrarianmarketssignifiesthethebeginningof theendofcapitalismandwillleadtotheinevitablebreakdownofthecapitalisticmodeof production.113 Incontrasttoallpreviousbreakdowntheorists,HenrykGrossmantreadsanewpathinhis principalworkThelawofaccumulationandbreakdownofthecapitalistsystemandnumerous methodologicalandcriticalessays(Anewtheoryofimperialismandsocialrevolution,The changeintheoriginalplanforMarxsCapital,Goldproductioninthereproductionschemaof MarxandRosaLuxemburg,ThevaluepricetransformationinMarxandtheproblemof

110 Bukharin,Imperialism,p.265[;Bukharinsemphasis]. [111VladimirIlychLenin,TheJuniuspamphlet,LCW22,[1916],pp.3089,similarlyp.316.] 112 Cunow,ZurZusammenbruchstheorie,pp.425,427,430. 113 Boudin,Thetheoreticalsystem,pp.150,235,244[;Boudinsemphasis].

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crisis).114Heexplainsthedecisivecauseoftheinevitabledemiseofthecapitalistsystemin termsoftheoveraccumulationofcapitalinhighlydevelopedcountriesandtheresulting insufficientvalorisationofcapital,thusintermsoftheintheprocessofproductionitself(the valorisationproblem).Withnewproofstakenfrommoderneconomicrelations,Grossman seekstosupportthedoctrinedevelopedbyMarx,todayalmostforgottenbutalreadypresent inJohnStuartMillandAdamSmithinanembryonicform.115Itholdsthatonceanations capitalexceedsadefinitescaleofaccumulation,itfindsnofurtherprofitableopportunitiesfor investmentandconsequentlyeitherliesidleorhastobeexported.SinceTuganBaranovskiis bookoncrisis,theproblemofcrisisandbreakdownintheMarxistliteratureofthelastthirty yearshassimplybeendealtwithfromthepointofviewofdisproportionalitybetween individualspheresofproduction.Grossmandemonstratesthat,forMarx,thedecisiveproblem wasnotprimarilypartialcrisesarisingfromdisproportionalitybutrathertheprimarilygeneral crisis,generalglut,whichiscausedbyparallelproductionwhichtakesplace simultaneouslyoverthewholefield.116Preciselythepossibilityofsuchprimarilygeneral crises,andnotprimarilypartialcrisesarisingfromdisproportionality,istheobjectofMarxs disputewiththeSayRicardoconception.117 Thatanevergrowingmassofmeansofproduction(Pm=machines,buildings,rawmaterials, instrumentsofproduction)canbesetinmotionwithaprogressivedeclineintheexpenditure oflabour(L)isanempiricallawcharacteristicofthecapitalistmodeofproduction,withits everexpandingreproduction.Onthebasisofcapitalism,thatisexpressedintheconstant growthintheamountofconstantcapitalperworkerinrelationtovariable(wage)capital(c:v, astheMarxistssay,theorganiccompositionofcapital).Americancensusfiguresalsoconfirm this.Asaresultoftheprogressivelyhigherorganiccompositionofcapital,becauseofthe associatedrisingproductivityoflabour,wagesmakeupaneversmallerportionoftotal production.Totheextentthatthesurplusvaluegeneratedbyagivenworkingpopulation growsabsolutely(therateofsurplusvalueincreases),however,itfallsinrelationtothe continuouslyexpandingtotalcapital(c+v).Thisisthefactthatunderliesthelawofthe tendentialfallintherateofprofit.Theclassicaleconomists(Ricardo)alreadycorrectly identifiedthetendencyfortherateofprofittofallasaphenomenonbutmistakenly attemptedtoexplainitasalawofnature,resultingfromthedeclineintheproductivityofthe soil.Ricardodrewpessimisticconclusionsforthefutureofcapitalismfromthisphenomenon, aswithoutprofittherecouldbenoaccumulation.Heconsoledhimselfthathappily,from

114 HenrykGrossmann,DasAkkumulationsundZusammenbruchsgetzdeskapitalistischenSystems (zugleicheineKrisentheorie),Hirschfeld,Leipzig,1929;EineneueTheorieberImperialismusund diesozialeRevolution,ArchivfrdieGeschichtedesSozialismusundderArbeiterbewegung,13, 1928,pp.141192;DienderungdesursprunglichenAufbauplansdesMarxschenKapitalund ihreUrsachen,ArchivfrdieGeschichtedesSozialismusundderArbeiterbewegung,14,1929,pp. 305338;DieGoldproduktionimReproduktionsschemavonMarxundRosaLuxemburg,inMax Adleretal.,FestschriftfrCarlGrnbergzum70.Geburtstag,Leipzig,Hirschfeld,1932,pp.152 184;DieWertPreisTransformationbeiMarxunddasKrisenproblem,Zeitschriftfr Sozialforschung,1,1932,pp.5584. 115 JohnStuartMill,PrinciplesofPoliticalEconomy,Routledge,London,1900,book4,chapter4,pp. 48191;AdamSmith,WealthofNations.Volume1,Dent,London,1910,book1,chapter9,pp.77 89. [116KarlMarxEconomicmanuscriptof186163,MECW32,[1905],pp.115,136.Generalglutin EnglishinMarxsandGrossmansoriginals.] 117 Grossmann,DasAkkumulationsundZusammenbruchsgetz,p.211.

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timetotime,industrialandagriculturalinventions(mechanicalengineeringandagronomy)can breakthispernicioustendency,sothatitwillonlyhaveanimpactinthedistantfuture.118 Manyearliertheorists,likeBoudinbutaboveallGeorgCharassoff,119feltthatMarxalso connectedthebreakdownofcapitalismwiththefallintherateofprofit.Theycouldnot, however,demonstratethecontentofthisconnectionandthegreatimportancethatthislaw hasforcapitalistproduction.120Thatiseasytoexplain,astheyonlyeverpointedoutthefallin therateofprofitalone.Therateofprofit,however,onlyexpressesaproportionalrelationship, nothingotherthananumericalconcept.Itisapparent,thatthiscannotleadtothebreakdown ofarealsystem.Forthattohappenrealcausesarerequired. Moreover,thetendencyfortherateofprofittodeclinehasbeenaconstant,concomitant phenomenonofcapitalismfromitsbeginningsuntiltoday,thatis,duringthewholeprocessof itsdevelopment.Where,then,doesthesuddenshifttobreakdowncomefrom?Whycant capitalismsurvivewitharateofprofitof4percentjustaswellaswithoneof1315percent, asthedecliningrateisoffsetbyarisingmassofprofit?Indeed,thegrowingmassofprofit,asa consequenceoftheevenfastergrowthintotalcapital,wouldindeedbeexpressedinever smallerpercentages.Therateofprofitapproacheszero,thatistheboundarypointinthe mathematicalsense,withoutreachingitandyetthecapitalistclasscanfeelcomfortableasa consequenceofthegrowthinthemassofprofit. Grossmanwasthefirsttopointoutthatbreakdowncannotbederivedfromorexplainedby therateofprofit,thatisbytheindexnumberofprofitsbutmustbeunderstoodintermsof whatisconcealedbehindit:therealmassofprofitinrelationtothesocialmassofcapital.For, accordingtoMarx,accumulationdependsnotonlyontherateofprofitbutontheamountof profit.121Ifaccumulation,proceedsasacontinuousprocess,thesurplusvalueofthecapitalists mustbeusedforthreepurposes,dividedintothreeparts.First,partmustbeusedas additionalconstantcapital(ac);secondpartasadditionalvariablecapital(av)forthe applicationofadditionallabourpower;theremaining,thirdpartcanbeusedasfund,[f],for thecapitalistsconsumption.Now,themassofsurplusvaluegrowsabsolutelywiththe developmentofthecapitalistmodeofproduction.If,however,theorganiccompositionof capitalgrowsasisnecessaryforcapitalistproductionandisalsoassumedinthetheoretical analysisthenarelativelyeverlargerpartofthesurplusvaluemustbedeductedforthe purposesofadditionalaccumulation(ac).Aslongastheabsolutemassoftotalsocialcapital withaloworganiccompositionissmall,surplusvalueisrelativelargeandthisleadstoa rapidincreaseinaccumulation.Forexample,withacompositionof200c+100v+100s, constantcapitalccanbeincreasedby33percentofitsinitialsize(assumingthe employmentofallthesurplusvalueforthepurposesofaccumulation).Atahigherlevelof capitalaccumulation,withasignificantlyhigherorganiccompositionofcapital,e.g.of 14,900c+100v+150s,theexpandedmassofsurplusvalueisonly1percent,whenitis employedasadditionalcapitalac.Itiseasytocalculatethatwithcontinuingaccumulationon thebasisofaneverhigherorganiccomposition,apointmustcomewhenallaccumulation ceases.Thisisallthemoresobecausenotanyarbitraryfractionalamountofcapitalcannotbe employedbutratheradefiniteminimalamountisrequired,whosescaleconsistentlygrows withincreasingaccumulationofcapital.Withtheprogressofcapitalaccumulation,therefore,
[118DavidRicardo,Theprinciplesofpoliticaleconomyandtaxation,Dent,London,1912[1817],pp.71, 73.] 119 GeorgCharasoff,DasSystemdesMarxismus:DarstellungundKritik,Bondy,Berlin,1910. [120KarlMarx,Capital.Volume3,Penguin,Harmondsworth,1981,p.319.] [121MarxEconomicmanuscriptof186163,MECW32,p.165.]

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aneverlargerpart,notonlyabsolutelybutalsorelatively,mustbedeductedfromsurplus valueforthepurposesofaccumulation.Soathighlevelsofaccumulation,whenextentofthe totalsocialcapitalisgreat,thepartofsurplusvaluerequiredforadditionalaccumulation,ac, willbesolargethatitfinallyabsorbsalmostallofthesurplusvalue.Apointmustbereached atwhichthepartofsurplusvaluedestinedfortheconsumptionoftheworkersandthe capitalists(av+f)declinesabsolutely.Thatis,theturningpointatwhichthepreviouslylatent tendencytobreakdownbeginstotakeeffect.Nowitisapparentthattheconditionsrequired forthecontinuationofaccumulationcannolongerbeentirelyfulfilled,thatthemassof surplusvalue,althoughithasgrownabsolutely,isnotsufficientforthethreefunctions.If,as haspreviouslybeenassumed,theadditionalconstantcapital(ac)isdeductedfromsurplus valuetotherequiredextent,thentherevenuepartisnotsufficienttocovertheconsumption oftheworkersandtheentrepreneurstothepreviousextent.Anintensestrugglebetweenthe workingclassandtheentrepreneursoverthedivisionofrevenue,risingpressurefrom entrepreneursonthelevelofwagesbecomesunavoidable.If,ontheotherhand,the capitalistsareforced,underpressurefromtheworkingclass,tomaintainthepreviouslevelof wagesandconsequentlythepartdestinedforadditionalaccumulationacisreduced,the tempoofaccumulationslowed.Thiswouldsignifythattheproductiveapparatuscannotbe renewedandexpandedtotheextentrequiredbytechnologicalprogress.Arelative technologicalbackwardnessintheproductiveapparatuswouldsetin.Anyfurther accumulationmust,insuchcircumstances,increasethedifficultiesbecausethemassof surplusvaluecanonlybeincreasedtoaninsignificantextent,withagivenpopulation.Surplus valueflowingfrompreviouscapitaloutlaysmustthereforeremainidle;anexcessofinactive capitalsearchinginvainforinvestmentopportunitiesresults.Inthisway,Grossmanexplains thetechnologicalbackwardnessoftheoldercapitalistcountrieswithahigherlevelofcapital accumulation,likeEngland,andthetendencyapparentthereforthelevelofwagestostagnate ordecline. Inpure,i.e.isolated,capitalism,thesetendenciesmustsoonprevail,i.e.leadtothe breakdownofthesystem,underthepressureofintensifyingclassantagonisms.Incapitalism whichisinterdependentwiththeworldeconomynumerouscountertendenciesoperateto weakenthetendencytobreakdown,whichisthenonlyexpressedintemporarycrises. Theperiodicdevaluationofavailablecapitalrepeatedlyimprovesvalorisation(therateof profit)andincreasesthemassofprofitbythereducingthecostofproducingconstantcapital andvariablecapital(thelevelofwages),shorteningturnovertime,improvingtheorganisation oftransport,reducingstocksandcommercialexpenses.Theadvantagesderivedfromthe dominationoftheworldmarketoperateinthesameway.Unequalexchangetakesplacein foreigntradethetechnologicallyadvancedcountriesreceiveahighervalueinexchangefor thevalueoftheircommoditieswhichalsoincreasesprofits.Thisalsoresultsfromtheexport ofcapital.Capitalexportoccursbecauseanoveraccumulationofcapitalpredominatesinthe highlydevelopedcapitalistcountriesandconsequentlythereisalackofopportunitiesfor investment.Asaconsequence,thecapitalexportingcountryreceiveanadditionalinjectionof surplusvalue,thatimprovestheinsufficientvalorisationofcapitalandweakensortemporarily suspendsthetendencytobreakdown.Thisexplainstheintensityofimperialistexpansion duringthelatephaseofcapitalaccumulation.Imperialismisanattempttoimprovecurrently insufficientvalorisationandhencetoextendthelifespanofthecapitalistsystem,by weakeningtendenciestobreakdown,throughthetransferofsurplusprofitsfromcolonial territoriestohighlydevelopedcapitalistcountries.Inthisway,Grossmancombinesthetheory ofbreakdownwiththetheoryofcrisis.Crisisisanexpressionofbreakdownthathasnotfully developed,becauseithasbeenmitigatedbycountertendencies.Butsoonitisapparentthat, becauseofthenatureoftheabovecountertendencies,theyareonlytemporaryandonlyable

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tocounteractthetendencytobreakdowntoacertainextent.Stockscanonlybereducedtoa definitelowerlimit,breachingwhichwoulddisruptthecontinuityoftheproductionprocess. Wagescanonlybedepressedtoadefinitelimit,breachingwhichwouldmeanthatthelabour poweroftheworkingclasswasnotfullyreproduced,insteadadeclineintheintensityand qualityoflabourwoulddecline.Thereductionofcommercialprofitscanonlyimprovethe profitabilityofindustrytoalimitedextent.Themorecommerceisreduced,thesmallerthe mitigatingeffectsoffurtherreductionwillbe.Thecountereffectsofcapitalexportcanalso onlybetemporary.Totheextentthatthenumberofcountrieswithexcesscapitaland consequentlyseekingtoexportincreasesinthecourseofaccumulation,competitiononthe worldmarketincreases,thestruggleoverprofitablespheresforinvestment.Forthisreason too,thetendencytobreakdownmustbecomemoreintense,atdefinitepoint.Theincreasein fixedcapitaldoesnothaveadifferenteffect.Athigherlevelsofcapitalaccumulation,atwhich fixedcapitalisalargercomponentofconstantcapital,thereductionofproductionduringthe crisishaseversmallersignificance:theburdenofamortisationandinterestpaymentsforfixed capitalonthefirmdoesnotdeclinewhenproductionisreduced. Soitisapparentthattheimmanentlawsofcapitalaccumulationthemselvesprogressively weakenthecountertendencies.Overcomingcrisesbecomesevermoredifficult,thetendency tobreakdownmoreandmoreholdssway.Theperiodsofupturnbecomeevershorter,the durationandintensityofcrisisperiodsrises.InhisformulaforcrisesGrossmanattemptsto determinethephaselengthoftheeconomiccycletheoretically,bymeansofmathematics,and toidentifythefactorsonwhichtheextensionorcontractionoftheeconomiccycledepend,.If crisisis,forhim,thetendencytobreakdownwhichhasnotfullydeveloped,thebreakdownof capitalismisnothingotherthanacrisisthatisnotcheckedbycountertendencies. Socapitalismapproachesitsendasaresultofitsinnereconomiclaws. FromthestandpointofaMarxisttheoryofcrisisandbreakdown,itisobvioustoGrossman fromthestartthatthequestionofperhapsfatalisticallyawaitingtheautomaticbreakdown withoutactivelyintervening,doesnotarisefortheworkingclass.Oldregimesneverfallof theirownaccord,evenduringaperiodofcrisis,iftheyarenottoppledover(Lenin).122 AccordingtoGrossman,thepointofaMarxisttheoryofbreakdownisonlytodemarcate voluntarismandputschism,whichregardrevolutionaspossibleatanytimewithout considering[whetherthereis]anobjectivelyrevolutionarysituationandasdependentonlyon thesubjectivewilloftherevolutionaries.Thepointofbreakdowntheoryisthatthe revolutionaryactionoftheproletariatonlyreceivesitsmostpowerfulimpulsefromthe objectiveconvulsionoftheestablishedsystemand,atthesametime,onlythiscreatesthe circumstancesnecessarysuccessfullycrushrulingclassresistance. Grossmancouldachievetheseresults,whichheregardsasareconstructionofMarxstheory ofcrisisandbreakdown,becausehehadpreviouslyresearchedandrecoveredMarxsmethod andtheplanwhichunderliesCapital. RosaLuxemburgassumedthattherewasagapinCapital,thatMarxhadnotconsidered foreigntrade,anassumptionthatcanonlybeexplainedbythelackofrecognition,atthat time,ofthemethodwhichunderliesthestructureofCapitalasaspecifictheoreticalproblem. Forthisreason,however,itwasnotpossibleforLuxemburgtofullyunderstandingofMarxs solution. Iftheprocessofisolationservedtheclassicaleconomists,MarxaccordingtoGrossman employsthesocalledprocedureofsuccessiveapproximation.Inordertoresearchcausesin thecomplicatedworldofappearances,Marx,liketheclassicaleconomists,makesnumerous
[122VladimirIlychLenin,ThecollapseoftheSecondInternational,LCW21,[1915],p.214.]

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simplifyingassumptionsbymeansofwhichhedepartsfromtheconcretetotalityof appearances,althoughthisispreciselyinordertoexplainit.Theunderstandingachieved[in thisway]canonlyhaveapreliminarycharacterandconstituteonlythefirststageof knowledgeintheprocedureofsuccessiveapproximation,whichmustbefollowedbyafurther, definitivestage.Toeachsimplifyingassumptiontherecorrespondsasubsequentcorrection, whichinthefinalresulttakesintoaccounttheelementsofactualrealitythatwereinitially neglected.Allphenomenaandproblemsaredealtwithtwiceinthisprocedure:firstunder simplifyingassumptions,thenintheirfinalform.ThismethodunderliesMarxsanalysisinall threevolumesofCapital.Thosefromwhomthisremainshiddenmustencountercontinual contradictionsbetweentheindividualcomponentsofMarxstheory. Literature Olderliteratureisidentifiedinthepreviouseditionofthisdictionary(volume2,pp.8769);itis expresslyreferredtohere.Ofthemorerecentliteraturesee Ashcroft,Thomas,Anoutlineofmodernimperialism,PlebsLeague,London,1922. Bauer,Otto,KapitalismusundSozialismusnachdemWeltkriege(Capitalismandsocialismafter theworldwar),WienerVolksbuchhandlung,Wien1931. Beer,Max,Thegeneralhistoryofsocialismandsocialstruggles,Russell&Russell,NewYork, [1922,1929]. Bober,MandellMorton,KarlMarxsinterpretationofhistory,HarvardUniversityPress, CambridgeMassachusetts,1927. Brauer,Theodor,DermodernedeutscheSozialismus(ModernGermansocialism),Salzwasser, Paderborn,2012[1929]. Graziadei,Antonio,Capitaleecolonie(Capitalandcolonies),Casaeditricesociale,Milano, 1927. Heider,Werner,DieGeschichtslehrevonKarlMarx(KarlMarxstheoryofhistory),Cotta, Stuttgart,1931. Heimann,Eduard,MehrwertundGemeinwirtschaft:kritischeundpositiveBeitrgezurTheorie desSozialismus(Surplusvalueandsocialeconomy:criticalandpositivecontributionson thetheoryofsocialism),Engelmann,Berlin,1922. ____ KapitalismusundSozialismus:RedenundAufstzezurWirtschaftsundGeisteslage (Capitalismandsocialism:speechesandessaysontheeconomicandintellectual situation),Protte,Potsdam,1931. Heimburger,K.,DieTheorievonderindustriellenReservearmee(Thetheoryoftheindustrial reservearmy),Meyer,Halberstadt,1928. Jenssen,Otto,DerKampfumdieStaatsmacht:WaslehrtunsLinz?VerhandlungendesLinzer ParteitagesderdeutschsterreichischenSozialdemokratie(Thestruggleoverstate power:whatdoesLinzteachus?ProceedingsoftheLinzCongressofGermanAustrian socialdemocracy),Laub,Berlin,1927. Jostock,Paul,DerAusgangdesKapitalismus:Ideengeschichteseinerberwindung (Capitalismsexit:thehistoryofideasofovercomingit),Duncker&Humblot,Mnchen 1928. Laidler,HarryWellington,Ahistoryofsocialistthought,Crowell,NewYork,1927. Laurat,Lucien,Unsystmequisombre(Asystemthatissinking),lglantine,Paris,1932. Lenin,VladimirIlyich,Collectedworks,Progress,Moscow,19608[from1920]. Leubuscher,Charlotte,SozialismusundSozialisierunginEngland:einberblickberdieneuere EntwicklungdersozialistischenTheorienundberdieProblemederIndustrieverfassung

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inEngland(SocialismandsocialisationinEngland:anoverviewofrecentdevelopments insocialisttheoryandtheproblemoftheindustrialconstitution),Fischer,Jena,1921. Lewin,David,DerArbeitslohnunddiesozialeEntwicklung(Thewageandsocialdevelopment), Springer,Berlin,1913. Liebert,Arthur,MaterialistischeGeschichtsphilosophieThematerialistphilosophyofhistory, inAlfredVierkandt(ed.),HandworterbuchderSoziologie(Dictionaryofsociology),Enke, Stuttgart,1931,pp.36070. Louis,Paul,Lesidesessentiellesdusocialisme(Theessentialideasofsocialism),Rivire,Paris, 1931. Luxemburg,Rosa,Theaccumulationofcapitalananticritiqueorwhattheepigoneshave madeofMarxstheory(Anticritique),inRosaLuxemburgandNikolaiBukharin, Imperialismandtheaccumulationofcapital,AllenLane,London,1972[1921],pp.44 153. ____ Thecrisisofsocialdemocracy,SocialistPublicationSociety,NewYork,1919[1916]. Mallock,WilliamHurrell,Thelimitsofpuredemocracy,ChapmanandHall,London,1918 [1917]. Spectator(Nakhimson),MyronIsaevichMirovoehozjajstvodoiposlevojny.Tom3(Theworld economybeforeandafterthewar.Volume3),IzdatelstvoKomakademii,Moskva,1929. Pollock,Friedrich,SombartsWiderlegungdesMarxismus(SombartsrefutationofMarxism), Hirschfeld,Leipzig,1926. ProtokolldessozialdemokratischenParteitagsinLinz(Minutesofthesocialdemocraticparty congressinLinz),30.IX.3.XI.1926,Wien1926 Ralea,Mihai,Rvolutionetsocialisme:essaidebibliographie(Revolutionandsocialism: bibliographicessay),PressesuniversitairesdeFrance,Paris,1923. Rosenberg,Arthur,AhistoryofBolshevism:fromMarxtothefirstfiveyearsplan,Oxford UniversityPress,Oxford,1934[1932]. S,Henri,Matrialismehistoriqueetlinterprtationconomiquedelhistoire(Historical materialismandtheeconomicinterpretationofhistory),Slatkine,Genve,1982[1927]. Seligman,EdwinRobertAnderson,Theeconomicinterpretationofhistory,ColumbiaUniversity Press,1967[1902].[GrossmanreferstotheFrencheditionanditsprefacebyGeorges Sorel,Theeconomicinterpretationofhistory,FromGeorgesSorel:hermeneuticsand thesciences,Transaction,NewBrunswick,1990[1911],pp.191208. Seydewitz,Maxetal.,DieKrisedesKapitalismusunddieAufgabederArbeiterklasse(Thecrisis ofcapitalismandthetasksoftheworkingclass),VerlagderMarxistischen Bchergemeinde,Berlin,1931. Stalin,Joseph,ProblemsofLeninism,InternationalPublishers,NewYork,1934[19246]. Trotsky,Leon,Betweenredandwhite:astudyofsomefundamentalquestionsofrevolution, withparticularreferencetoGeorgia,HyperionPress,Westport,Connecticut,1975 [1922]. ____ TheThirdInternationalafterLenin:thedraftprogramoftheCommunistInternational:a criticismoffundamentals,PathfinderPress,NewYork,1970,[1928]. _HistoryoftheRussianRevolution,PlutoPress,London,1977[1930]. Turgeon,Charles,Critiquedelaconceptionmatrialistedelhistoire(Critiqueofthematerialist conceptionofhistory),RecueilSirey,Paris1932 Wilbrandt,Robert,Sozialismus(Socialism),Diederichs,Jena,1919. Journals DieGesellschaft.

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InternationaleRevuefrSozialismusundPotitik. UnterdemBannerdesMarxismus. ArchivfrdieGeschichtedesSozialismusundderArbeiterbewegung. See,further,theliteraturesidentifiedinthearticlesBolshevism,Internationals,Social democraticandcommunistpartiesandalsothebiographiesof[dictionaryentrieson individual]socialists.

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