FiftyyearsofstruggleoverMarxism1883–1932TranslatedfromGermanbyRickKuhnandEindeO’Callaghan

IntroducedandeditedbyRickKuhn

AMarxistLeftReviewpublication

Copyright©RickKuhn2014SocialistAlternativeTradesHall54VictoriaStCarltonSouthVIC3053

Contents

Introductionto“FiftyyearsofstruggleoverMarxism,1883–1932”BibliographyFiftyyearsofstruggleoverMarxism,1883–1932A.MarxistsoftheearlyperiodB.Theadvanceofreformisma)Revisionismb)TheNeo-Kantiansc)Theradicalsonthedefensived)ReformisminMarxistdisguise(theneo-harmonists)C.TheresurgenceofrevolutionaryMarxisma)Thedecayofrevisionisttheoryb)Thedevelopmentofthematerialistconceptionofhistoryc)Theproblemsofimperialismandward)Theproblemoftheproletarianseizureofpower.MarxisttheoryandtheSoviet

Unione)TheendofcapitalismLiteratureBibliography

RickKuhnistheauthor,amongstotherworks,ofLabor’sConflict:BigBusiness,WorkersandthePoliticsofClass,(withTomBramble,2010)andabiographicalstudyofHenrykGrossman,HenrykGrossmanandtherecoveryofMarxism(2007),whichwontheprestigiousDeutscherMemorialPrizein2007.AnadjunctreaderinSociologyattheAustralianNationalUniversity,RickisalongtermpoliticalactivistandmemberofSocialistAlternative.

Introductionto“FiftyyearsofstruggleoverMarxism,1883–1932”

RickKuhn[1]HenrykGrossman’spioneeringaccountof thehistoryofMarxist theorybetweenMarx’sdeathandthe early 1930s was written from a revolutionary Marxist standpoint. It explains the majorcontroversies and creativity of Marxist analysis in the context of capitalist development and thehistoryofthelabourmovement.Hisoverviewconcludeswithanimplicitreplytocriticsofhisownimportant contributions to Marxist economic theory and the understanding of Marx’s method inCapital.Grossman’saccountwaspublishedinapeculiarplace:aGermandictionaryofeconomics,inthree hefty volumes, which was a standard reference work. It was the final section, in which hereferredtohimselfinthethirdperson,on“ThefurtherdevelopmentofMarxismtothepresent”,oftheentry“Socialistideasandtheories(ISocialismandCommunism)”.Theessayalsoappearedasanoffprint,FiftyyearsofstruggleoverMarxism,1883–1932.[2]Grossman’smentorCarlGrünberg,theeconomic historian who was the first Marxist to hold a professorial chair at a German-speakinguniversity, hadwritten the initial sections of the entry for an earlier edition of the dictionary. Theeditor,LudwigElster,allowedGrossman,asanexpert,scopetoexpresshisownpoliticalviewsinaforthright tone; the samewas trueof the entry “Socialist ideas and theories (NationalSocialism)”,writtenbyaNazieconomist.[3]

OnlyKarlKorsch’sarticle“Marxismandphilosophy”,whichprovidedashorteroverviewofthe history ofMarxism fromHegel to 1923, is an obvious immediate predecessor ofGrossman’sstudy, inwhich itwasverybrieflybutfavourablymentioned.Therewereearlierdiscussionsof thehistoryofsocialist ideasandMarxistorganisationsbutnoneexamined thedevelopmentofMarxistthought,especiallyafterMarx’sdeath,morethansuperficially.Otherworks,themostoutstandingofwhichwasVladimirIlyichLenin’sStateandrevolution,haddealtwithparticularcontroversieswithinMarxism.[4]

Grossmanwaswell-placedtoconductasurveyofthehistoryofMarxisttheory.[5]Hewasbornin1881inKrakówandbecameactiveinthePolishSocialDemocraticParty(PPSD)ofGalicia, thePolishprovinceoftheAustro-HungarianEmpire,andtheJewishworkers’movement,aroundtheturnof the century. As the class struggle in the Austria-Hungarian empire heated up, parallelingdevelopmentsacrosstheborderintsaristRussiathatledtotherevolutionof1905–6,Grossmanwasafounding leader, the secretary and theoretician of the Jewish Social Democratic Party of Galicia,establishedonMayDay1905.HewasalsoinvolvedinsmugglingliteratureforRosaLuxemburg’sorganisation,theSocialDemocracyoftheKingdomofPolandandLithuania,intoRussian-occupiedPoland.DespitethehostilityofthePPSDandthefederalAustrianSocialDemocraticParty,theJSDPgrewrapidly,organisedmanyJewishworkersintotradeunionsforthefirsttime,mobilisedtheminstruggles against their exploitation asworkers and oppression as (mainlyYiddish-speaking) Jews,undertookextensiveeducationalandpropagandaworkandpublishedaweeklynewspaper.TheJSDPled Jews in strikes and street protests alongside workers of other nationalities, particularly in thestruggleforuniversalmalesuffrage.DuringthisperiodGrossmanwasstillauniversitystudent.

Asthelevelofclassconflictsubsidedin1907,Grossmancompletedhisfirstuniversitydegree,marriedandleftKrakówtocontinuehisstudiesinVienna.TherehewrotealargestudyofAustria’strade policy in Galicia during the 18th century, from a tacitly Marxist perspective, that puncturedmyths about the province’s development cherished by Polish nationalists. DuringWorldWar I hefought on the Russian front and was later a researcher in theWarMinistry in Vienna. The racist

policiesofthefirstgovernmentoftherumpAustrianrepublic,headedbytheSocialDemocratKarlRenner,deemedGrossman,likelargenumbersofotherGalicianJewswhomovedtoViennaduringthewar, a Pole. Hewas therefore unable to take up a post that had been lined up in the AustrianCentralStatisticalCommission.

GrossmanmovedtoWarsaw,wherehewasinchargeofindependentPoland’sfirstpopulationcensus,at thePolishCentralStatisticalOffice.In1920,hejoinedtheCommunistWorkers’PartyofPoland.HewasappointedtoaprofessorialchairattheFreeUniversityofPolandandwasinvolvedinfrontorganisationsof the illegalCommunistParty.After five arrests andprison stretchesofup toeightmonthsforhispoliticalactivity,GrossmanleftforajobattheInstituteforSocialResearchinFrankfurtamMain.GermanywaslessrepressivethanPolandandtheInstitute,underCarlGrünberg,wasanexcellentplacetowork.ItwasassociatedwiththeUniversityofFrankfurtamMainbutfundedbyanendowmentfromtheradicalsonofaverywealthybusinessmantoconductMarxistresearch.

Grossman remained a revolutionary Marxist; he was a fellow traveller of the GermanCommunistPartyandtheCommunistInternational.ButhissituationasanexileandhispositionintheInstituteforSocialResearchofferedhimfreedomtoconductresearchandwriteunconstrainedbyapartylineortherestrictionsofanormalacademicpost.SohewasinsulatedfromtheStalinisationofthe German Communist Party and the International, completed by the end of the 1920s, thataccompaniedthedefeatoftherevolutioninRussiaandtheemergenceofabureaucraticstatecapitalistrulingclass.Grossman’sbestknownworkwaswritteninFrankfurt.HisMarxisteconomicstudy,TheLaw of Accumulation and Breakdown of the Capitalist System: Being also a Theory of Crises,contradictedtheexplanationofcrisesthatbecametheStalinistorthodoxyandearnedhimthecriticismof Stalin’s lieutenant in economic theory, Yenö Varga. This book and an essay also spelt outGrossman’s earlier account of Marx’s method of successive approximation in Capital.[6] WhenGrünbergwasincapacitatedbyastroke,GrossmantookoverhistasksforElster ’sdictionary,writingbiographical entries on prominent socialists, including Vladimir Ilyich Lenin, socialist andcommunist parties, Bolshevism, the Second and Third Internationals, anarchism and Christiansocialism,aswellashisessayonMarxismafterMarx.

Inhissurvey,Grossmancondensedahugeliteraturebyhighlightingkeyworksandarguments,focusingparticularlyon issues inMarxisteconomicsandofsocialiststrategy.HestartedbynotingthattheappreciationofCapital’sfullsignificancewasverylimitedfordecades.Engelswasonlyabletopublishthesecondandthirdvolumes,whichheputtogetherfromMarx’sdraftsandnotes,in1885and 1894. A version ofMarx’smanuscripts on the history and critique of economic theories waseventually published byKarl Kautsky, as the three volumes ofTheories of surplus value, between1905and1910.Therelativeimmaturityoftheworkers’movement,itsresourcesandorganisations,alongwithrepression,alsomadeitdifficulttograspthesignificanceofMarx’sstudyofcapitalism’sanatomy.

AftertheAnti-SocialistLawlapsedin1890andtheSocialDemocraticPartyofGermany,thelargestsocialistorganisationintheworld,couldoperateopenly,theinfluenceandsophisticationofMarxistanalysisgrewrapidly.Butitwaschallengedbytheriseofrevisionism.ThiscurrentarguedthatMarx’s theories and core ideas, including his explanation of economic crises and capitalism’stendency to break down and his advocacy of the revolutionary destruction of the capitalist state,needed to be modified or abandoned altogether because they were dated or wrong. The mostprominent revisionistwasEduardBernstein,withKarlKautskyEngels’ joint literaryexecutor.TheRussian/Ukrainian economist Mikhail Tugan-Baranovsky, who like Bernstein believed that thefundamental basis for socialism was a moral rather than a materialist critique of capitalism andrejectedMarx’s labour theory of value in favour ofmainstream economic concepts , provided aninfluential justificationfor theassertion that therewerenoeconomicreasonswhycapitalismcould

notcontinueforever.The most effective response to Bernstein was Rosa Luxemburg’s empirical and theoretical

refutation, with its clear explanation of the relationship between the struggle for reforms andrevolution[7]andinsistencethatcapitalismdoeshaveatendencytocollapseeconomically.Grossmanalsomentioned the value of Parvus’s critiques of revisionism between 1901 and 1910. FollowingLuxemburg,Grossman pointed out thatKautsky, themost prominentMarxist theorist in theworldwho did make some telling criticisms of Bernstein, fundamentally revised Marxist politics too.Marx’s understanding of the state was only “reconstructed again by Lenin, a quarter of a centurylater”.HeinrichCunow,in1898,explainedcapitalism’sbreakdowntendencyinunderconsumptionistterms:workerswerenotpaidenoughtobuyallthattheyproducedandexportmarketswouldonlybeable to absorb this excess for a limited period, before capitalism developed the whole world.Luxemburg, Karl Kautsky, between 1901 and 1911, and Louis Boudin, in his widely read Englishworkof1907,alsoexpoundedthisargument.

LikeLenin,Grossmanexplainedtheriseofrevisionismastheresultoftheemergenceofathinlayerintheworkingclassesofdevelopedcapitalistcountries,an“aristocracyoflabour”,thatgainedmaterialbenefitsfromtheimperialistexploitationofthecolonialworld.Thiswasaweakargument.Totheextentthatimperialismimprovedthelivingstandardsofwell-paidworkers,becauseofmorebuoyantlabourmarketsandaccesstocheaprawmaterialsandfoodstuffs,ithasdonesofortherestoftheworkingclassintheimperialistheartlandstoo.Betterwagesindevelopedcapitalistcountrieshavealsofrequentlybeenassociatedwithhigherdegreesofexploitationbecauseworkersinthemusemore efficient technologies, machinery and equipment. Workers with superior technology canproduce more of the same commodity in a given time than those with inferior technology andtherefore spend a smaller proportion of their working days making the value equivalent of theirwages and a larger proportion making profits. Furthermore, the successes of better paid andorganisedworkers in fighting for theirwagesandconditionshaveoftenprovidedamodel for thestrugglesofotherworkers.[8]

More compellingly, Grossman associated revisionism with a period of peaceful capitalistexpansion,duringwhichtheworkingclasswasabletoextractconcessionsfromtherulingclass,andtheriseofalayeroflabourmovementofficials,particularlyinthetradeunions.Whileessential tothe functioningofworkers’ keydefenceorganisations and capable of leading important struggles,full-time union officials are not, by definition, workers themselves. They are employed by theirunions, not a boss, and generally have better pay, conditions and greater autonomy than theirmembers.Theirday-to-dayactivitydoesnotinvolvecreatingprofitsforbossesthroughtheirlabour,butratherorganisingworkersanddoingdealswithemployers.Theyarewaryofmilitantaction,letalone revolutionary struggles, that might risk the organisations on which they depend for theirlivelihoods.

Grossman labelled those such as the Austrian social democratic theoreticians RudolfHilferding,OttoBauer andKarl Renner, and otherswho embraced Tugan-Baranovsky’s approach“neo-harmonists”.Theyclaimedthat,ifappropriatelyregulated,“organisedcapitalism”couldavoideconomiccrises,reproducingtheharmoniousconclusionsofJean-BaptisteSay,thefatherofvulgarpoliticaleconomywhocontendedthatsupplycreatesitsowndemand.AsinternationalanddomesticclasstensionsandconflictincreasedandthescopeforthetacticsofpeacefulreformdeclinedbeforeWorldWarI,theirviewswerelessandlessplausible.Butcrudereformistideaswerewidespreadintheworkers’movement,promotedbyfigureslikeMorrisHillquit,aleaderoftheSocialistPartyofAmerica. Grossman paid particular attention to the work of Karl Renner, who was the mostprominent, explicit and theoretical exponent ofmodern revisionism.During theWar,Renner usedMarxist language todefendthisapproach,dismissMarx’spoliticsandeconomicsand toargue that

workersshouldsupporttheirownrulingclasses’militaryandcolonialefforts.Grossman did not devote much space to the application of historical materialist analyses

outside the areas of politics and economics. But he mentioned studies by Kautsky and “brilliant”writingsbyFranzMehringandGeorgiiPlekhanovonphilosophy,historyandliterarycriticism.Healso highlighted the work of Karl Korsch and, in particular Georgy Lukács’s “fine and valuablebook”History and class consciousness, before providing a bibliography ofwritings on historicalmaterialism and its application to law, economic history and the sociology of knowledge. Theabsence of Antonio Gramsci from Grossman’s survey may seem surprising to contemporaryMarxists. But very few of the ItalianCommunist leader ’sworks appeared in languages other thanItalianinhislifetime.Gramsci’sprisonnotebookswerestillbeingwrittenin1932.ItwasyearsafterWorld War II before his major works appeared in translation. Grossman’s judgements abouthistoricalmaterialismhereandaserious readingofhiseconomicworkscontradict theaccusation,bandiedaboutbyhissocialdemocraticandStalinistcriticsandsloppilysustainedbylaterwriters,thatGrossmanwasamechanical,SecondInternationalMarxist.[9]

In the period before World War I, international tensions and domestic class strugglesintensified, as economic conditions changed and capital went onto the offensive. Against thisbackground,Marxistsstartedtodevotemoreattentiontotheissueofimperialism.RosaLuxemburg,in1913,providedamore systematicgrounding for the theoryof capitalistbreakdown thanearlierMarxistefforts.ShedrewespeciallyontheworkofSimondedeSismondi,earlyinthe19thcentury,andarguedthatimperialismresultedfromthepursuitofnon-capitalistmarketswhichwereessentialfor capitalism’s survival. Grossman paid tribute to Luxemburg for recognising that, contrary toTugan-BaranovskyandHilferding,thetheoryofbreakdownwasakeyelementofMarx’sanalysisofcapitalismandthecaseforsocialism.HishighregardforLuxemburgasaconsistentrevolutionaryfrequently led Grossman to use her theory as a foil in arguing for his own, superior account ofcapitalism’seconomiclogic,whichhadoriginallybeenoutlinedbyMarx.LikeCunow,shedefendedMarx’s position on capitalism’s breakdown with a faulty under-consumptionist argument, whichLenin rejected in his critique of theNarodniks. The underconsumptionistMarxists thought that, ascapitalismdeveloped, surplusvaluecould increasinglyonlybe realisedonexternalmarkets.Leninarguedthatthedrivetoimperialistexpansionaroseinthesphereofproductionandeffortstoincreaseprofits, rather than in circulation and the need to find markets in which surplus value could berealisedatall.Inthecontextofinter-imperialistrivalrythatleadstowar,Grossmanstressedthat“theproletariat has the task of transforming war between peoples into civil war, with a view to theconquest of power and, for this reason, of preparing strategically and organisationally forrevolution”. This was the position, he noted, of Lenin, Grigorii Zinoviev, Leon Trotsky, NikolaiBukharinandHermannGorter.HewentintogreaterdetailabouttheseissuesinhisdictionaryentriesonLeninandBolshevism.[10]

Grossman’s survey ofMarxism did not discuss the theory of permanent revolution,with itsimportantimplicationsforpoliticalandeconomicanalysis,althoughhedidmisleadinglyattributeitscorecontenttoLeninin1905.ThetheorywasdevelopedbyParvusandTrotskyandtacitlyembracedbyLeninandtheBolshevikParty,in1917.[11]ItexplainedhowsocialistrevolutionwaspossibleinarelativelybackwardcountrylikeRussiabecauseitwaspartoftheinternationalcapitalistsystemandexhibitedsomeparticularlymodernfeatures,likeacombativeworkingclassandadvancedindustry,even though thevastmajorityof thepopulationwascomposedofpeasantsworkingwith relativelyprimitive technologies. The Russian revolution could survive if it spread to more developedcountries.[12]Grossmandidrefertoandrejectthistheory’sbasiccontentinhisentryonBolshevism,whereheacknowledgedthatithadbeenacomponentof“Leninism”,butfalselyassertedthat,attheendofhis life,Leninhadendorsedthenotionofsocialisminonecountry,whichwassubsequently

advocated by Bukharin and Stalin.[13] Contrary to Grossman’s assertion in his survey, that theRussianCommunistsdidnotassociatethepossibilityofrevolutionwithaspecificlevelofcapitalistdevelopment,thetheoryofpermanentrevolutionidentifiedthesystemofglobalcapitalism’smaturityasacrucialpreconditionforsocialistrevolution.

ThetheoryofpermanentrevolutionwasamuchmoreprofoundargumentthanBukharin’snodoubt useful insight that in less advanced countries ruling class power was often more fragile.Grossman unnecessarily criticised Bukharin’s contention, in the mistaken view that it wasincompatiblewithhisownviewthattheRussianrevolutionwasasymptomandthestartofcapitalistbreakdown,whichmadedevelopedcountriesvulnerable torevolution.HealsomisleadinglydeniedthatBukharin’s insightwas alsoLenin’s andwas silent about thevicious repressivenessofStalin’sregime.Inthisway,GrossmanwasabletoavoidalienatingtheStalinistleadershipoftheCommunistmovementmorethannecessarilyindefendinghisownposition.Indoingso,hewasaidedbyStalin’sowncontortiononpreciselythispoint.[14]Whenhewrotethisessay,Grossmanwasstillasupporterof theCommunist International,now thoroughlydominatedbyStalinandhis subordinates, and theGermanCommunistPartywhichtoedthelinefromMoscow.HealsothoughtthatStalinistRussiawason the path to socialism and that the First Five Year Plan was a massive step forward for theinternationalworkingclass.

Inhis survey,Grossmandidnot, however, simply reproduce theStalinist falsificationof thehistory of the Russian revolutionary movement. He acknowledged contributions to the workers’movementbysocialistsandCommunistswhosepositiveroletheRussianregimenowsimplydenied,notably Parvus, Zinoviev, Bukharin and Gorter and even its principal hate figure, Trotsky.Emphasising the impact that the Russian revolution had onMarxist theory, Grossman referred toBukharin’sspecificversionoftherevolutionaryargumentthatthedevelopmentofcapitalisminthewomboffeudalismcouldnotbethepatternforthetransitiontosocialism.GrossmanacknowledgedthecontributionofDavidRiazanov,whohadacloseassociationwithCarlGrünbergandtheInstitutefor Social Research, to the history of Marxism and leadership of the Marx-Engels Institute inMoscow,eventhoughhehadbeenarrestedasananti-Sovietconspiratoranddismissedfromthatpostin1931.

Like very many other Communists who remained committed to working class self-emancipation, the essence ofMarxism, in principle,Grossman did not recognise the defeat of theRussianrevolution,whichwasamassivesetbackfortheinternationalworkingclass,inpractice.Bytheendofthe1920s, theStalinistcounter-revolutionwascomplete.[15] Isolated inaneconomicallybackward country, the revolution had degenerated. The civil war and disruption of the economydecimated the working class. Many of its most class conscious elements were drawn into thehierarchies of the army, government and party; the vibrant democracy of the workers’ councils,which had been the distinctive core of the new workers’ state, withered and died. A bureaucracy,increasinglyawareofitsowndistinctiveinterests,emergedatthetopoftheCommunistPartyandthestate machine to take control of productive resources and the whole of society. Under Stalin’sdictatorship,itpurgeditselfandRussiaofdissidentsandconsolidateditspower.Throughaprogramof often arbitrary economic decision-making embodied in the First Five Year Plan, Russiaindustrialised very rapidly. Genuine socialist planning, based on reliable information through thedemocraticinvolvementoftheworkingclass,wasimpossible.Attheexpenseofpeasantandworkingclasslivingstandards,therecentlyemergedstatecapitalistrulingclassimproveditsabilitytodefenditself militarily in the face of competition from other countries. Ongoing and often randomoppression,especiallyof individualswhohadfallenoutwithStalinatone timeoranother throughpoliticaloppositionorbyaccident,kepttheregimeinpowerandsustainedtheextremeexploitationof the mass of the population. The Stalinist ruling class treated the Communist International and

nationalCommunistPartiesasinstrumentsofitsforeignpolicy.TheCommunistmovement’sblindnesstothesignificanceofHitler ’sriseandseizureofpower

in 1933 joltedGrossman into amuchmore critical attitude to its leadership for several years.HerecommendedTrotsky’sdiscussionofthe“Germancatastrophe”toPaulMattick[16]andforawhileidentified with the dissident Communists who came to lead the German Socialist Workers Party(whichoriginatedinasplitfromtheSocialDemocraticPartyofGermany).DuringtheSpanishCivilWar,however,hereturnedtoessentiallyuncriticalsupportfortheSovietUnion’smaindomesticandforeignpolicies.

Grossman devoted the final section of his survey to a summary of his own contribution toMarxist crisis theory.Heused theopportunity to refuteargumentswhichhadbeenmadeagainst it.Thiswascertainlynotamodest thingtodobut itwasjustifiedinanaccountwhosemainemphasiswas on Marxist economics, because Grossman’s contribution to Marxist economics paralleledLenin’stoMarxistpoliticsandLukács’stoMarxistphilosophy.

Grossmanwas the first to spell outMarx’smethod of successive approximation inCapital,whichwas crucial for his grasp ofMarx’s crisis theory.[17]Capital abstracts from less importantfeaturesofcapitalismtoidentifyitsfundamentalfeaturesandthensuccessivelyreintroducesthemtomake the analysismore concrete.Rejecting both underconsumptionist and neo-harmonist theories,Grossman recovered Marx’s explanation of capitalism’s breakdown tendency in terms of theprogressivenatureofcapitalistproduction,whichhasrepeatedlymeantthatlesslabourcanproducemore commodities. This very process entails a tendency for the rate of profit to fall. Capitalaccumulation is biased towards investment in constant (raw materials, machinery and equipment)ratherthanvariablecapital(employingworkers):eachworkeroperatesmoreequipment;theratioofthecostofthecapitalusedtothewagesbillincreases,asUScensusstatisticsdemonstrated.Inotherwords, theorganiccompositionofcapital rises.But it isonly living labour thatcreatesnewvalue.Therateofprofit,theratiobetweenprofitandcapitalists’totaloutlays,falls.Eventuallyapointwillbereachedwherethemassofsurplusvalueisinsufficienttomaintainanygivenrateofaccumulation.This is evenmore the case because the absolute value of individual, new items of constant capital(machines,buildingsetc.)also tends togrow.As therequirements for theaccumulationofconstantcapitalencroachonthesurplusvalueavailablefortheconsumptionofthecapitalistsandtopayfortheemploymentofnewworkers,classstrugglesbecomemoreintense.

FollowingMarx,Grossmanalsoidentifiedcounter-tendenciesthatslowortemporarilyreversethetendencyfortherateofprofittofall.Theseincludedthecheapeningofbothconstantcapitalandtheitemsworkersconsume,whichisaconsequenceoftheincreasedproductivityoflabour;reducedturnovertime;andthechannellingofsurplusvaluefromlesstomoredevelopedterritoriesthroughunequal exchangeandprofits fromcapital exports.Theeffectsof thecounter-tendenciesmean thatcapitalism’stendencytobreakdowntakestheformofrecurrenteconomiccrises.Whileexploitation,therateofsurplusvalue,risesand(uptoapoint)themassofsurplusvaluedoesincrease,neitherthisnor the other counter-tendencies is sufficient to fully offset the effect of the rising organiccompositionofcapitalontherateofprofitinthelongterm.

Henryk Grossman was a revolutionary Marxist who had reached political maturity anddevelopedhiscrisistheorybeforetheinternationalCommunistmovementhadbeensubordinatedtoStalinismandimposedadogmaforeveryimportanttheoreticalquestionCommunistsfaced.Asearlyas 1919 he had pointed out how the contradictory requirements for proportionality betweenproduction in different industries in both use-value and exchange-value terms could give rise toeconomic crises, and had highlighted the method of successive approximation which structuredCapital.Bythemid-1920shisextrapolationofBauer ’scalculations[18]hadledGrossmantoidentifythecrucialsignificanceof the tendencyfor therateofprofit tofall.Hestucktoanddevelopedthis

theoryofeconomiccrisisandbeliefinworkers’revolutionevenwhenhisownpoliticaljudgementswerecontaminatedbyStalinism.

Inaclearresponsetocritics,Vargaamongthem,whoarguedthathehadamechanicaltheoryofcapitalistbreakdown,GrossmancitedLeninandrepeatedLuxemburg’spointthattherevolutionarypositionisnottopassivelywaitforcapitalismtocollapse.[19]Marx’s(andhis)accountofeconomiccriseshelpedrevolutionariestoidentifysituationsinwhichtheireffortstooverthrowthesystemcanbemosteffective.

“Thepointofbreakdowntheoryisthattherevolutionaryactionoftheproletariatonlyreceivesitsmost powerful impetus from the objective convulsion of the established systemand, at the sametime, only this creates the circumstances necessary to successfully wrestle down the ruling class’sresistance.”[20]

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Stalin,IosifVissarionovich1954[1929],“Anecessarycorrection”,inIosifVissarionovichStalin,Works,Volume12,April1929–June1930,Moscow:ForeignLanguagesPublishingHouse,pp.143–145.Trotsky,Leon1969a[1906],ResultsandProspects,inLeonTrotsky,ThePermanentRevolutionandResultsandProspects,NewYork:Pathfinder,pp.125–281.——1969b[1930],ThePermanentRevolution,inLeonTrotsky,ThePermanentRevolutionandResultsandProspects,NewYork:Pathfinder,pp.125–281.——1970[1928],TheThirdInternationalafterLenin:theDraftProgramoftheCommunistInternational:aCriticismofFundamentals,NewYork:PathfinderPress.——1977[1930],HistoryoftheRussianRevolution,London:PlutoPress.

FiftyyearsofstruggleoverMarxism,1883–1932[21]HenrykGrossman[22]

A.MarxistsoftheearlyperiodUntiltheendoftheseventiesofthelastcentury,thecircumstancesforunderstandingofMarx’sideaswerenotveryfavourable,evenwithinthesocialistcamp.AparticulardifficultywasthatCapitalwasinitially only available as a torso, as only one of several volumes. Almost another three decadespassed before the volumes completing the system appeared (the second volume in 1885, the thirdvolumein1895).AndafurtherfifteenyearspassedbeforeKarlKautsky[23]broughtoutthelastofthe volumes of Theories of Surplus Value (1910). These, intended by Marx as the fourth part ofCapital, are amagnificent history of political economy from the end of the 17th century, one thatbourgeoishistoricalwritinghasbeenunabletoequal.

During the first decade after the founding of the German Empire it was hardly possible tospeak of “Marxism” in Germany (and still less in other countries). There was only a very looseconnectionbetweentheworkers’movementandthetheoriesofscientificsocialism.Manyyearsafter[Ferdinand] Lassalle’s death the German workers’ movement was still under the influence ofLassalle’stheoriesandactivities.[24]Apartfromthat,itdrewitsideasandsentimentsfrommemoriesof1848,from[Pierre-Joseph]Proudhon,[Karl]RodbertusandEugenDühring.[25]Manysocialistsjustified their demands by appealing to ethics and humanity or oriented themselves on thepublications of the International Working Men’s Association.[26] When the two tendencies in theGerman workers’ movement (the so-called the “Lassalleans” and the Marxist “Eisenachers”)[27]unitedat theGothaCongress (1875),Lassalle’s ideasanddemandswere in largepart incorporatedintothenewlyagreedGothaProgram(cf.Marx’scriticismsinhisCritiqueoftheGothaProgramme).[28]Initiallyworkersinlarge-scaleindustrywerenotorganisedineitherparty,ratherthebulkofthemovementwasworkers,suchasshoemakers, tailors,bookprinters, tobaccoworkersetc.,whostillretained close ties with the petty bourgeoisie. Lassalle’s pamphlets and demands, his woollyconceptionofthestate,hiscompletelackofclarityabouttheparty’sgoalevidentlyexpressedmuchmorethelabourmovement’slackofmaturityatthattimethanthecohesiveandmagnificentedificeofMarx’s theory. Even the leading figures in the labourmovementwere, for a long time, unable tograsp key aspects of Marx’s theory. Characteristic of this is the request, in 1868, by WilhelmLiebknecht,[29]whoduringhisstay inLondonhadhadacloserelationshipwithMarx, thatEngelsmake the actual differences betweenMarx andLassalle clear in an article for the party organ.[30]FromcorrespondencebetweenMarxandEngelsitisapparenthowdistressedMarxfeltaboutthefactthatGermanpartycircleswerealmostincrediblyindifferenttoCapital.

Onlygraduallyandinconstantstruggleagainstotherviewsthatwerewidespreadinthelabourmovement (the struggle against Proudhonism and Bakuninism in the First International, Engels’polemicagainstDühringin1878,etc.)[31]didMarxistideaspermeatetheworkers’movement.From1883KarlKautsky(born1854)soughttospreadMarxistideas,astheeditoroftheparty’stheoreticalorgan,NeueZeit.However, theperiodof theAnti-SocialistLaw (1878–90)wasquiteunfavourableforthetheoreticalconsolidationofMarxism.[32]

Thegreat popularity thatMarx’s lifework achievedwas initiallydue to those sectionsof thefirstvolume [ofCapital] that describe the immediate process of productionwithin the factory and

thusmakethesituationoftheworkingclass,itsexploitationbycapitalandeverydayclassstrugglestakingplacebeforeeveryone’seyes intelligible.So thisvolumebecamethe“bible”of theworkingclass for decades. The fate of those parts of the work which present the historical tendencies ofcapitalist accumulation and the tendency towards the breakdownof capitalism that follows in theirwakewasquitedifferent.HereMarxwassofarinadvanceofhisepochintellectuallythatthesepartsof his work, at first, necessarily remained incomprehensible. Capitalism had not yet achieved thematuritythatwouldhavemadeitsbreakdownandtherealisationofsocialismanimmediatereality.Soit is understandable that in a review ofVolume 2 ofCapital (1886)Kautsky explained that, in hisopinion, this volume had less interest for the working class than the first, that for them only theproductionofsurplusvalueinthefactorywasofimportance.[33]Theadditionalquestionofhowthissurplusvalueisrealisedwasofmoreinterest to thecapitalists thantotheworkingclass!Kautsky’swell-knownbookTheEconomicTheoriesofKarlMarxalsoexclusivelyconfineditselftodescribingthecontentsofthefirstvolumeofCapital.Onlyanextremelydeficientoutlineofthetheoriesinthesecondandthirdvolumeswasaddedtolatereditions.[34]

Twogenerationshad topassafter theappearanceofCapitalbeforecapitalism,asa resultofcapital accumulation, matured to its current heights and conflicts developed in its womb thattranslatedtheproblemoftherealisationofsocialismfromthedomainofaprogrammaticdemand,onlyappropriatefortheremotefuture,tothesphereofdailypoliticalpractice.TheunderstandingofMarx’sideashasalsogrown,incorrespondencewiththechangedhistoricalsituation.

The situation was different after the end of the Anti-Socialist Law (1890), when socialistpoliticsstartedtodeveloprapidlyfromasmall,persecutedgroupintothelargestpartyinGermanyand its appeal encompassed broad layers of intellectuals and the petty bourgeoisie, far beyond theworking class. Outwardly, the strength ofMarxism grew rapidly during this period. In the ErfurtProgram(1891)itachievedavictoriousexpression.But,preciselyatthetimewhentheappearanceofthe third volume ofCapital (1895) publicly concluded Marx’s theoretical system, with the rapidblossoming of international capitalism and the strengthening of an opportunist labour aristocracywithintheworkingclass,achangeoccurredthatwastobeofthegreatestsignificanceforthefurtherdevelopmentofMarxisttheory.Soonerorlatersocialdifferentiationintheworkingclasshadtobeexpressed not only in politics but also in its theoretical conceptions of the goals and tasks of thelabourmovement.

B.Theadvanceofreformisma)RevisionismThevictoryofopportunism,initiallyinEngland,theninFranceandGermany,aswellasaseriesofsmaller European countries, is necessarily connected with the structural transformation of worldcapitalism,whichexhibitedextremelypowerfuldevelopmentandincreasinglyshoweditsimperialistface, during the last decade of the previous century. Its fundamental economic traits are thereplacement of free competition by monopoly and colonial expansion combined with bellicoseentanglements.Throughcapitalexports,monopolisticdominationandexploitationofhuge regionsthat supply rawmaterials andprovideoutlets for capital investment inCentral andSouthAmerica,Asia andAfrica, the bourgeoisie and the financial oligarchyof the capitalist great powers acquirebillionsinsuperprofits.Thesemakeitpossibleforthemtowinoveranupperlayeroftheworkingclassandthepettybourgeoisfollowingofthesocialistpartieswithhigherwagesandvariousotheradvantages,sothatittakesaninterestincolonialexploitation,ispoliticallyboundtothemandentersacommunityofinterestswiththemagainstthebroadmassesandothercountries.Theseupperlayerswere the bourgeoisie’s channels of influence into the proletariat. The emergence of the labouraristocracy,whichfoundexpressionpoliticallyintheformationof“bourgeoisworkers’parties”onthemodeloftheLabourPartyinEngland,istypicalofalltheimperialistcountries.

These layers, which found the revolutionary tenets of Marxist theory inconvenient and ahindrancetotheirpracticaleffortstocooperatewiththebourgeoisieandtheorgansofthestate,soonwent onto the offensive against Marxist theory, with the argument that it was contradicted bycapitalism’srealtendencies.TheirmaindifferencewithMarxismwasthatitdeniedthepossibilityofalastingimprovementintheconditionsoftheworkingclassunderthecurrenteconomicorder(apartfrom temporary improvements for shorterperiods)andadvocated theoppositepointofview: that,withitsfulldevelopment,theimmanentpowersofcapitalismwouldnecessarilyleadtoaworseningofworkers’conditions.Incontrast,therepresentativesofreformismpointedoutthat,evenundertheexistingeconomicorder,alastingimprovementinthesituationoftheworkers—whetherbymeansofstate legislation (pensions, accident and unemployment insurance) or by means of self-help (byfounding and expanding trade unions and consumer cooperatives) —was possible and alreadyoccurring. Here the rather slight improvement, confined to a narrow upper layer only, wasovervaluedandgeneralisedanditscharacterwasmisjudged,totheextentthatitwasnotconsideredtemporarybutthestartofatransformationthatwasconsistentlyexpandinginbreadthanddepth.

Therisingstrengthofthetradeunionmovementwas,undoubtedly,themosteffectiveleverforthe enforcement of anti-radical attitudes. For the leaders of the trade unions—the typicalrepresentativesofthelabouraristocracy—reformismwastailor-made.Forthesemen,conductingthesmall-scalewarforentirelygradualimprovementsinthesituationoftheworkersthatwereagainandagainthreatenedbysetbacks,allradicalismrepresentedathreattothepositionstheyhadconquered,theirorganisationsand tradeunion funds.They thereforesought tonipevery intensificationof themethodsofstruggleinthebud.UndertheAnti-SocialistLaw,therewasnoroomforsuchefforts,asthetradeunionsthenhardlysufferedlessthanpoliticalsocialdemocracy.Withthestrengtheningofthetradeunionmovement,aftertherepealoftheEmergencyLaw,particularlyfromthefoundationoftheGeneralCommissionoftheFreeTradeUnionswhichwasconnectedwiththetightcentralisationofthemovement,therelationshipofthetradeunionstothepartychanged.Theinitialdependenceonthepoliticalmovementwas soon transformedand,atboth theKölnTradeUnionCongress inMay

1905andtheMannheimpartycongress inSeptember1905, the tradeunionsandtheir leadersknewhow to impose their demands—often on decisive questions too—against the will of the partyauthorities.Now their influence on the theoretical conceptions of the socialistworkers’movementwas also increasingly apparent. Gradually certain—essential—elements of Marxist theory wereerodedbythepracticaltradeunionnegotiatorsofwageagreements.Inthehandsofthetradeunionleaders the concept of “class struggle” experienced a gradual transformation, so that little of itsoriginal content remained.Under the same influences, the attitudeof the tradeunion leaders to thestatealsochanged.Theypointedoutthebenefitstheysawfortheworkingclassinthestateinstitutionsof social insurance, a system they hoped to be able to expand further. Thus these circles feltcompelled to revise the ideas previously inherited fromMarx (“revisionism”).During the ninetiesandaftertheturnofthecentury,thequestionwasoftenraisedofwhetheraspecialtradeuniontheorythatwouldjustifyreformism—theperspectiveofagradual“socialisation”,“dropbydrop”withintheexistingorder—oughttobecompiledforthesocialistinclinedtradeunions.Butitnevercametosuchatradeuniontheory.Allthefriendlierwasthetradeunionwelcomeforeffortsemergingwithinthepoliticalpartythataccommodatedtheirdesires.

RevisionismisinseparablylinkedwiththenameEduardBernstein(born1850).[35]HewasthefirsttosystematicallydemandarevisionofMarx’stheory,arguingthatitdidnotcorrespondwiththeactual development of capitalism, even though the former radical Georg vonVollmar had earlierdevelopedsimilarideas,inhisfamousEldoradospeechesinMunich(1891)andinthepamphletStateSocialism (1892), and advocated reformist tactics.[36] Eduard Bernstein, who seemed to be a truedisciple of the theorywhile Engelswas still alive, emerged as a critic only after the death of themaster,inhisNeueZeitarticlesof1896–7,on“Problemsofsocialism”(publishedinbookformasThePreconditionsofSocialism).OtherwritingsbyBernsteinarerelevant:HowisScientificSocialismPossible?, Guiding Principles for a Social Democratic Program, On the Theory and History ofSocialism.[37]

BernsteinneveropenlydescribedMarxisttheoryasawholeasfalse.Itisanessentialfeatureofrevisionismthat itneitherhad the intentionofnorsucceeded inconstructingacomplete theoreticaledificetoreplaceMarx’s.Itshistoricalsignificanceliesprimarilyintheinfluenceoftradeunionandpoliticalpractice.Theorywasonlyofconcern to theextent that itwasanobstacle to thispracticalreformism.Thiswastobedisposedofthroughtherevisionistcritiquethatadaptedtheorytopracticeso that inconsistency between inherited revolutionary theory and reformist activity could beovercome. For this purpose, in his critique of Marx’s theoretical edifice, Bernstein used theconvenient procedure of separating the enduring, generally valid elements of the theory—fundamentaltheoreticalpropositions—sharplyfromvariableelements,becausetheyarepropositionsofappliedscience.Underthecoverofthisdistinction,however,thefundamentalpropositionsofthetheory were also encompassed, albeit on the pretext that they were now reinterpreted as notfundamental.ThegoalofrevisionismwasneverdeclaredtobethedefeatofMarxism;itwas,instead,supposed to be amatter of rejecting certain remnants of “utopianism” thatMarxism still allegedlycarriedinitsbaggage.

Bernstein’s “act of purification”was an attempt to liberate socialism fromMarx’s theory ofvalue and surplus value. Value is a construct in thought and not a phenomenon.Whether Marx’stheoryofvalueiscorrectornot,Bernsteinargued,issuperfluousforthedemonstrationofsurpluslabour, as surplus labour is an empirical fact which suffices alone as a rationale for socialism.Bernsteinneverofferedsucharationale,apositivetheoryofcapitalism,builtonthefactofsurpluslabour,thatledtosocialism.Heremainednegative.

Bernstein concedes the accuracy of Marx’s predictions about increasing centralisation andconcentration of capital, increasing concentration of enterprises, a rising rate of surplus value

(exploitation) and the fall in the profit rate, butmaintains that the overall picture of capitalism inMarx’s work is one-sidedly distorted. Marx supposedly neglects the counter-tendencies in theprincipal matter. Divisions among already concentrated capitals counteract the tendency toconcentration.Incomestatisticsshowgrowthinthenumberofshareholdersandaveragemagnitudeof theirshare-holdings.Undeniablythenumberofpropertyowners isgrowingbothabsolutelyandrelatively.Andtheemploymentstatistics,fortheirpart,provethatthemiddleclassesareexpanding.Finally, enterprise statistics irrefutably demonstrate that in a whole series of branches of industrysmall andmedium-sized firms are quite viable alongside large concerns. This applies not only toindustrybutalso tocommerce.To theextent that largeenterprisesareconcerned,developments inagriculturedemonstrateeithernochangeatalloradeclineinthescaleofoperations.AfterBernstein,EduardDavidattemptedtoshowthatinagricultureadevelopmentinthesizeofoperationshadbegunthatwasdiametricallyopposedtoMarx’sprediction.Histhesiscontendedthatsmall-scaleoperationswerenotonlyviablebutwereevenasuperiorformofproduction.[38]

Bernstein regards the Marxist theory of crisis and breakdown as an a priori construct inaccordancewithHegel’sschemeofdevelopment.Invariousways,actualdevelopmentshavetakenadifferentcourse than theywouldhave ifbreakdownwasunavoidable forpurelyeconomicreasons.Bernsteinconcedesthepossibilityoflocalorparticularcrises,butthehugeterritorialexpansionoftheworldmarket,thereductionofthetimerequiredforcommunicationsandthetransportofgoods,combinedwiththeelasticityofthemoderncreditsystemandtheemergenceofcartels,havecreatedthe possibility that local disturbanceswill cancel each other out. The occurrence of general crisesshould,therefore,beconsideredunlikely.Bernsteindoesnottreatbreakdownfromtheperspectiveofwhether it was the necessary result of the immanent development of capitalism, whether with theexisting level of economicdevelopment and the degree ofmaturity of theworking class a suddencatastrophemightbetotheadvantageofsocialdemocracy.Bernsteinanswersthesequestionsinthenegativebecausethereisagreaterguaranteeofenduringsuccessesinasteadyforwardmarchthaninthepossibilitiesofferedbyacatastrophe.ItispreciselyinthetheoryofbreakdownthatBernsteinseesthequintessenceof“utopianism”inMarxism,becausethismakesthevictoryofsocialismdependentonits“immanenteconomicnecessity”.[39]Bernsteincombatsthe“ironnecessityofhistory”[40]andthematerialistconceptionofhistoryasatheoryofhistoricalnecessityandemphasisestheincreasingeffectiveness of ideological and ethical factors. Against Marx he appeals to Kant. The victory ofsocialismdoesnotdependoneconomicnecessitybutonthemoralmaturityoftheworkingclass,i.e.itsrealisationthatsocialismisdesirable.

UltimatelyBernsteinconjuresawaythefinalgoalofsocialism,(“[T]hefinalgoal…whateverit may be, is nothing to me, the movement everything.”)[41] The final objective is subordinate;instead,theattentionandenergyoftheworkingclassshouldbeconcentratedon“immediategoals”,on“daily,detailedwork”whichwillleadtoanadvanceinculturaldevelopment,highermoralityandlegalconceptions. It isapparent thatsucha formulationof the tasksof theworkers’movementhasnothingatall todowithsocialismandcoincideswiththeconceptionsofbourgeoisliberalism.Thegeneralperspective that inall individualgoals there is alwaysapointer toa furthergoalyet tobeachieved,thathastobepursuedlater,onlyleadsto“progressiontoinfinityandthatisdiametricallycounterposed to theessenceof socialism,whichat aparticular stageofdevelopment,wants toandshouldreplaceonedefinitesystemwithanother”.[42]

ItwasonlyconsistentthatwhenBernsteingaveupthefinalgoalhesimultaneouslyabandonedtherevolutionarytacticsnecessarytoachieveit.IncontrasttoMarx’stheoryofclassstruggleandhisconceptionthatforceisthemidwifeofeverysocietythatiscomingintobeing,Bernsteinemphasisesparliamentary activity as the means for emancipating the working class. The idea of conqueringpoliticalpowerthroughrevolutionaryactionissupposedlyaforeignbodyinMarxism,aremnantof

Blanquism[43]fromwhichEngelspartedtowardstheendofhislife.Fromhiscritique,Bernsteindrew theconclusion that itwas falseanddisastrous tocounton

greatsocialcatastrophesandtofocustheparty’stacticsonthem.Theutopiaofacomingrevolutionhadtobegivenup.Developmentbluntsclassantagonismsanddemocratisessociety.Itisappropriatetopromotethisdevelopment.Inordertogaininfluencesocialdemocracyhastofindthecourage“tomakeupitsmindtoappearwhatitisinrealitytoday:ademocraticsocialistpartyofreform”.[44]

Fromallthisitisapparent,asBrauercorrectlyemphasises,thatBernsteinisnosocialistintheMarxist sense, because he is caught up in political categories.[45] For Marx, the proletarianrevolution isnot justa“politicalact” that replaces theoldpower,basedonparliament,withanewone,butissimultaneouslya“social”revolutioninsofarasitabolishesthewholeofthepreviousformofsocietytoreplaceitwithanewone.Classstruggle—justlikeitshighestform,civilwar—isnot,forMarx,theproductofthegoodorbadwillofthepeopleandcannotbereplacedatdiscretionbyparliamentary activity. Instead, class struggle and revolution are inevitable concomitants of theimmanenteconomicnecessitywithwhichdevelopmentdrivestowardssocialism.

TheconsiderableinfluenceBernsteinexercisedonintellectualscanbeexplainedbythefactthattheboldnessofhisapproachwasinitiallycaptivatingbecause,incontrasttothefearthatMarxismwasbeingpetrified, it seemed topave theway for furtherdevelopment.At thesame time,hewonoverthosewho, foropportunist reasons,didnotwish to “commit” themselves and found inBernstein’slimiteddeterminationsandqualificationstheboltholestheydesiredfortheirownindecision.

AmongthecriticsoftheMarxisttheoryofcrisisandbreakdownwho,likeBernstein,proceedfromanethicalperspective,theRussianprofessorMikhaelTugan-Baranovskyparticularlyexcelled,withargumentsthatwerelaterusedextensivelybyrevisionists(StudiesontheTheoryandHistoryofCommercial Crises in England, Theoretical Foundations of Marxism, Modern Socialism in itsHistoricalDevelopment).[46]AccordingtoTugan-Baranovsky,crisesandtheultimatebreakdownofcapitalismcannotbeduetoalackofmarketssince,inthecourseoftheexpansionofproductiontheindividual spheres of production reciprocally create newmarket opportunities. Tugan-Baranovskyseekstoprovethis,usingareproductionschemabasedonMarx’s.Norneedthe[relative]reductionofsocialconsumptionasaresultoftechnologicalprogressandthereplacementofhumanlabourbymachinesleadtooverproduction.Withtheexpansionofproduction,humanconsumptionisreplacedby productive consumption, i.e. stronger demand for means of production. According to Tugan-Baranovsky,theseresultsofabstracttheoreticalanalysisareconfirmedbytheempiricalfacts.Recentcapitalist development shows a strong expansionof the industries producingmeansof production,suchsectorsascoalandsteel,mechanicalengineering,chemicalsetc.,whoseproductsdonot flowintohumanconsumption,while those sectorsdirectly servinghumanconsumption, such as textiles(cotton)havealmostreachedastandstill.

Theabsolutelimitfortheexpansionofproductionisconstitutedbytheproductiveforcesthatsocietypossessesat any time.Capital cannever reach this limit to theextent that this expansionofproductionoccursproportionatelyinallbranchesofproduction.Capitalistcrisesarethusexclusivelythe result of disproportional investment in individual spheres. With proportional investment, theproductive forces of capitalism can develop without limit. “The capitalist economy cannot breakdown for economic reasons.”[47]Marx’s theory of value is superfluous for the demonstration ofsurplus labour.Surplusproduct isnot theproductof thewage laboureremployedandexploited inproductionalonebutistheproduceofthewholeofsocietyasaunit.Capitalistsociety’sdefectisthatthepropertiedclassappropriatesthissurplusproduct.Theendofthisunjustsystemcanthusonlybetheresultofethicalcauses.“Thereis,therefore,nooccasiontosupposethatcapitalismwillsomedaydieanaturaldeath;itwillbedestroyedbytheconsciouswillingeffortsofman,bythatsocialclasswhichhasbeentheforemostobjectofcapitalisticexploitation—theproletariat.”[48]Forthisreason,

Tugan-Baranovskypraisesso-calledutopiansocialism,whichwasfarmorescientificthanMarxism,totheextentthatitdidnotattempttoprovideuntenableobjectivejustificationsforitsethicaldemandsthattheexistingeconomicorderbereorganised.

Inadditiontothosementioned,ConradSchmidt,theauthorofavaluablebookonTheAverageRate of Profit on the Basis of Marx’s Law of Value which was praised by Engels, ought to bementioned.YethesoonbecameoneofthefiercestopponentsofMarx’stheoryofvalueandsurplusvalue.Hewasnot,however,contenttocriticiseandrejectMarx’sconception,buthimselfundertookasystematicanalysisofthecapitalisteconomyanditslaws(cf.hisarticlesonthetheoryofvalueandcrises in Sozialistische Monatshefte and, in particular, “On the method of theoretical politicaleconomy”.)[49] Here Schmidt reached the same conclusion that Marx deduced for the capitalisteconomy:with thepurchasingpower in the formofwages, towhichhe isentitled, theworkercanonly buy a portion of value for whose production only a fraction of the labour that he himselfperformedwasnecessary.Inotherwords,ifthecommoditiesheproducedaretobeprofitablefortheemployer,hemustalwaysperformsurplus labour.But, according toSchmidt, thisbasic resultwasachieved without having to use Marx’s untenable law of value. In this way many contradictionsassociatedwiththislawofvaluecanbeavoided.

b)TheNeo-KantiansIn addition to the revisionist movement, which sought to undermine the economic and politicalfoundationsofMarxism,astronger revisionistcurrent in the fieldofphilosophyalsoarosewithinsocialdemocracytowardstheendofthelastcentury.Theentryofbroadintellectual layersintotheworkers’ movement soon led to a discussion about the meaning and validity of the “materialistconception of history”. Engels had already made certain modifications, in letters to socialistuniversity graduateswho asked him for information (see, in particular the letter of 21 September1890toJosephBloch).Intheseletters,Engelswarnedagainstexaggerationsandobservedthat“someyoungerwritersattributemoreimportancetotheeconomicaspectthanisduetoit”[50]andthattheeconomic situation was not the only but merely the determining moment[51] of socio-historicaldevelopment in the last instance.These intellectuals imported secondary idealistic currents into theworkers’movement that abandon thematerialist conception of history or seek to combine it withidealism.This is particularly so inFrance,where Jean Jaurès in hisLatin dissertationof 1891[52]developsanidealistconceptionofhistory,accordingtowhichitistheproductofthehumanspirit—aconceptionthathealsoretainedlaterasasocialist.Theidealistcurrentisassistedbysomesupportersof the materialist conception of history such as, for example, Paul Lafargue (1842–1911), whosecrude interpretations helped discredit it.[53] In Germany a current, initially arising in universityphilosophydepartments,seekstojustifysocialismidealisticallyandtolinkitwith[Emmanuel]Kant.[54] It originateswithHermannCohen (1842–1918), the founder ofNeo-Kantianism, the so-called“MarburgSchool”who,inhis“Introduction”toFriedrichAlbertLange’sHistoryofMaterialism,[55]attemptedtoprovethatsocialismis“basedonthesocialismofethics”andtothisextentKantwas“thetrueandgenuine initiatorofGermansocialism”. InhisbookEconomicsandLawAccording to theMaterialistConceptionofHistory,RudolfStammler(ofHalle)recognisedthisas,sofar,thebestandmost consistent method for causal research into economic development but demanded that it besupplemented by goal-setting (“teleological”) considerations. Only by means of the latter is itpossible to achieve the highest social goal,whichStammler regards as the “community of peoplewhowant to be free”,where “everybodymakes the objectively justified purposes of the other hisown”.[56]FranzStaudinger (1849–1921) attempted evenmore in hiswritings (Ethics and Politics:Economic Foundations of Morality)[57] to reconcile the Marxist standpoint with Kant’sepistemologicalcritiqueandethics.EachKantianhad tocome toMarxby logicallydevelopinghisownbasicideas.Andviceversa:“AssoonasMarxismnolongermerelypursuessocialdevelopmentscientifically in accordance with the causal viewpoint but makes conscious and plannedtransformationofthegivenintoitsgoal,itarrivesatKant,asaresultofconsistentpursuitofitsownprinciple.”[58]AlongsimilarlinestoStaudinger,KarlVorländerinhiswritings(KantandSocialism,KantandMarx,andFromMachiavellitoLenin)[59]advocatedacombinationof“Marx”and“Kant”,i.e.acombinationofaneconomic,historicalwithanepistemologicallycritical,ethical justificationforsocialism.

Thiscurrent,which initiallyaroseoutside thesocialistmovement, soonalsocreatedanechowithinit,particularlyintheranksoftherevisionists:EduardBernstein,ConradSchmidtandLudwigWoltmann(HistoricalMaterialism),whoalsoattemptedtoundermineMarxismthroughphilosophy;butalso in the ranksof the thenradical,youngerVienneseMarxists, suchasMaxAdler (Causalityand Theology in the Dispute about the Economy,Marx as Thinker, Kant and Marxism, MarxistProblems)andOttoBauer(“Marxismandethics”,directedagainstKautsky),whoultimatelydeviatedinto the camp of reformism.[60] They all demanded a stronger consideration of “ideological”

moments, epistemological critique and ethics in socialist theory. Similar attempts by Russianrevisionism in the field of philosophy evoked the resolute resistance of [Georgii Valentinovich]Plekhanov and [Vladimir Ilyich] Lenin (Materialism and Empiriocriticism).[61] On the whole,revisionism remainsnegativephilosophicallyandproves itself tobe just as infertilehereas in thefieldofeconomics.WiththevictoryofreformisminGermansocialdemocracyduringandaftertheWar,however,thesecurrentssucceedincomingintotheirown.Itischaracteristicofthecompletelyaltered attitude of socialism in this period that the article on the philosophical foundations ofsocialisminTheProgramofSocialDemocracy:Suggestion for itsRenewal,whichappearedbeforethe Görlitz party congress, was written at the request of authoritative party circles by the above-mentionedKantianKarlVorländer.[62]

As far as revisionism as a whole is concerned, it is not only the circumstance that bothBernstein and Tugan-Baranovsky subscribe to the theory of marginal utility[63] that lends it anindividualistic aspectbut, aswas shown,also its attempt to replace theMarxistmaterialistdialecticwith Kantian ethics and epistemological critique. For, in contrast to socialism insofar as it is afundamentalsocialism,Kant’sstartingpoint,itmustbeinsisted,istheautonomouspersonality.Here,however, there is a fundamental contradiction with socialism in general andMarxist socialism inparticular,whichonlyknowsandexplainsindividualsasconditionedbythesocialenvironment.

RevisionismasawholehasnotbeenabletoreplaceMarxisttheorywithoneofitsownthatinany respect grasps the economicmechanismwith its social interconnections. It remained stuck incritiqueandthereforethequestionofwhether,inprinciple,revisionismshouldbepronouncedtobesocialismhastobeansweredinthenegative.Butalsoaspurecritiquethestandpointofrevisionismhasprovedtobefalse.OneonlyneedstocompareitscritiqueoftheMarxistaccountofthepronenessofartisanalproductionandthemiddleclassestocrisesandconcentrationandfinallyitsconceptionofthe superiority of small-scale operations in agriculturewith the experience of the post-war period(seeFriedrichPollock,SocialismandAgriculture, and JulianGumperz,TheAgrarianCrisis in theUnitedStates),[64] inorder tosee thathistoryhasproved thatnot revisionismbutMarx iscorrect.Anyonewhodelves intoCapital today, after sevendecades, has to concedewith astonishmenthowcorrectly,indeedpropheticallyMarxunderstoodthelarge-scaletendenciesofcapitalistdevelopment.

OverthetwodecadesbeforetheWorldWar,reformismbecameaninternationalphenomenon.Much earlier than in Germany, it appeared in England. There, the first mass movement of theproletariat, theChartistmovement,wasdefeatedinthe1830sand1840s.Butitsstrugglehadshownthe English bourgeoisie the danger that threatened it. Subsequently, it knew how to calm thedissatisfactionoftheworkingclassbymeansofconcessionsandthetimelygrantofrealbenefitstoits upper layer, which its supremacy on the world market permitted. In this manner over a longperiod, it successfully prevented the English proletariat from combining to create an independentpolitical party. Thewhole energy of the working class turned to developing trade unions, mutualfundsandcooperatives.Thegreatreorganisationoflocalgovernmentgaveworkerstheopportunitytorepresenttheirinterests,throughautonomouslocalauthorities,inthefieldofmunicipaleconomicand welfare services. The trade unions developed a purely reformist practice. The revolutionarytraditionsofChartismwereforgotten.Thereformist-socialistFabianSociety,foundedin1883–4andconsistingofafewhundredintellectuals,gainedconsiderableinfluenceinbourgeoiscirclesandthetrade union bureaucracy, under the leadership of SidneyWebb (born 1859) and George BernardShaw.The report theywrote for the International SocialistCongress inLondon (1896) provides aclearinsightintotheessenceoftheFabians.[65]

TheFabiansdonotwanttobeaparty,insteadtheywanttopermeateallexistingorganisationsandmovementswithFabianideas.The“tacticofpermeation”isoneofthespecificcharacteristicsofthe Fabians. “The Fabian Society endeavours to rouse social compunction by making the public

conscious of the evil condition of society under the present system.”[66] Apart from the FabianSociety’snumerouspamphlets(tracts),Englishreformismfounditstheologicalexpressionaboveallin theworks of the couple Sidney andBeatriceWebb (History of British TradeUnionism, with anafterwordbyEduardBernstein;Industrialdemocracy,ThePreventionofDestitution;AConstitutionfortheSocialistCommonwealthofGreatBritain;TheDecayofCapitalistCivilisation)andofJamesRamsayMacDonald (Socialism and Society).[67] The Labour Party, which was finally founded in1900,immediatelyadoptedthereformistprinciplesandpracticeoftheFabiansandthetradeunions.

InFranceonealreadyfindsreformisminthepamphletsthatPaulBroussepublishedinParisin1881–2.[68]Broussewasthefounderofthepartyoftheso-called“Possibilists”,whichexisteduntil1899.Subsequently,reformistideasweremoststronglypromotedbytheactivityofJeanJaurès,whoalso advocated participation in a bourgeois government (ministerialism) in 1899. In the SocialistPartyofItalytoo—despitetheweakindustrialdevelopmentofthecountry—strongreformistcurrentsappeared, essentially represented by petty bourgeois intellectuals who participated in all thetheoreticalcontroversiesaboutthetheoriesofimpoverishmentandconcentrationthatwerefoughtoutfromtimetotimeintheparty’stheoreticalorganCriticasociale in theperiod1895–1905,after thepublicationofVolume3ofCapital.ThesyndicalistArturoLabriola, inhisStudyofMarx,was theforemost critic of the theory of impoverishment and breakdown.[69] InEconomic Speculation andTheDictatorshipoftheBourgeoisie,[70]hedealtwiththeproblemofimperialism.Withthestrongerindustrialdevelopmentofthecountryafter1905,therelatedintensificationofclassstrugglesandtheadvance of reaction within the bourgeoisie, numerous intellectuals abandoned socialism. ÉmileVandervelde inBelgiumworkedwith the same orientation as Jaurès in France (Worker’s Belgium;CollectivismandIndustrialEvolution;AgrarianSocialismandAgriculturalCollectivism;Essays ontheAgrarianQuestioninBelgium;TheWorkers’PartyofBelgium1885–1925).[71]ReformismtookaspecificforminRussia.ItsmostnotabletheoreticalrepresentativeswereTugan-BaranovskyandPetrBerngardovichStruve[72]who,however,soonswungover to liberalism. Itachievedmasspoliticalinfluenceintheworkers’movementinMenshevism.

c)TheradicalsonthedefensiveTheeffortsofrevisionismweresooncounteredbytheso-called“radicals”or“orthodoxMarxists”,KarlKautsky,FranzMehring,HeinrichCunow,ParvusbutaboveallRosaLuxemburg,inNeueZeitand in specific polemical writings, while the revisionists used the newly founded SozialistischeMonatshefte.[73]

Kautsky’sAgrarianQuestionistargetedagainsttherevisionistcritiqueofMarx’spresentationof developmental trends in agriculture.[74] This is Kautsky’s most significant and independenteconomic work, although even here the historical-descriptive element crowds out the purelytheoreticalaspect. Inhisanti-critiquedirectedagainstBernstein’scritique(Bernsteinand theSocialDemocratic Program),[75] Kautsky deals with the questions of method, program and tactics,particularly the tenets disputed by Bernstein: the theory of breakdown, developmental trends withregardtoenterprisesize(largeandsmallenterprises),theincreaseinthenumberofpropertyownersand the middle class, the theory of impoverishment and crisis. Here Kautsky seeks to refuteBernstein’s claims about the alleviation of capitalist contradictions, by means of philologicalinterpretationofMarx’stextsandcomprehensivecompany,taxandotherstatistics,andtodefendthethesis thatclasscontradictionsare intensifying.In thecourseofdoingso,herelaxesorcompletelyabandons important fundamentals of Marxist theory. Even the Erfurt Program (1891), which wasdrawn up by Kautsky and signified the highpoint in the Marxist development of German socialdemocracy, portrays the decisive point of the political program very vaguely. The process ofcapitalistdevelopmentseemstobetheresultofblindsocialforces.Theconquestofpoweriswrappedintotaldarkness.Thedictatorshipof theproletariat isnotevenmentioned.Asaresult, thepoliticalaspectofMarxismwasvirtuallydecapitated,untilitwasreconstructedagainbyLeninaquarterofacenturylater.[76]Engels’critiqueofthedraftprogramof1891wasdisregardedandineffective,justasMarx’scritiqueof thedraftGothaProgramhadbeen in1875.[77] In thedisputewithBernstein,KautskynowintensifiedthereinterpretationofMarx’soriginal theoryevenfurther.ComparedwithBernstein’s demand that the party should become a democratic socialist party of reform, Kautskyemphasisedthatsocialdemocracy“hadtobecomeapartyofsocialrevolution”.[78]Here,however,Kautskyaddedthatitwasnotamatteroftheconceptofrevolution“inthesenseofanarmeduprising”butof“everylarge-scalepoliticalconvulsionthatspeededupthepoliticallifeofthenationandmadeitpulsatemostenergetically”.Admittedly“extra-legaluseofviolence”couldformanepisodeinsucha convulsion but could never be the revolution itself. In this reinterpretation of the concept of“political revolution”, its real content—the transfer of power into the hands of a new class—wasclearlylost.Atthetime,Engels’“politicaltestament”,hisfamousintroductiontoTheClassStrugglesin France, written in 1895, played a not unimportant role in the debate over tactics. He allegedlyrevised the tactics of the workers’ movement and supposedly counterposed barricade struggles—violent revolution—topurely legal struggle—parliamentarism. It emerged30years later, thanks toDavidRiazanovwhouncovered the correct text, that the “Introduction”waspublishedby thepartyexecutiveinanabridgedformwhichsignificantlydistorteditsmeaning.[79]

KautskyalsoreinterpretedtheeconomicsideofMarxisminimportantpoints,byinterpretinghis own conceptions intoMarx’s text. Initially, thiswas not sufficiently recognised by the socialistpublic,sinceheappearedintheroleofthedefenderofMarx’stheoryagainstBernsteinandadheredtoMarx’straditionalterminology.ThatwasparticularlythecaseforMarx’stheoryofbreakdownandcrisis.InsteadofmaintainingMarx’stheoryofbreakdown,thetheoryoftheobjectivenecessityofthedemise of capitalism, in its genuine form against the distortion in the revisionist critique, that the

breakdowncouldhappen“automatically”without the active interventionof theproletariat,KautskydeniedthisdecisivepositionofMarx’ssystemaltogetherandportrayedthetheoryofbreakdownasBernstein’sinvention.Atthesametimeandincontradictiontothis,hemaintainedinrelationtocrisesthat,whileproductioncouldexpandpracticallywithoutlimit,externalandinternalmarketshadtheirlimits. Consequently, “from a specific historicmoment onwards the capitalistmode of productionwould become impossible”. Not only a temporary crisis but “incurable chronic overproduction”wouldthensetin,asthe“finallimit”onthemaintenanceofthecapitalistregime.Thesignificanceofthis “utmost limit of the viability” of today’s societywas that socialism [would emerge] from thesphereofnebulousideas“tobecomeanecessarygoalofpracticalpolitics”.[80]

ThatKautsky’sunclearandcontradictoryattitudetoimportantelementsofMarx’stheorywasunsatisfactoryisclear,andallthemoresowhenKautsky’stheoreticalconfusionincreasedinhislaterwritings. Three years later, in a series of articles on “Crisis theory”, directed against Tugan-Baranovsky’s critique, he combats Tugan-Baranovsky’s view that crises arise from lack ofproportionalityinproductionandarguesagainsthisassertionofthepossibilitythatcapitalismcouldexpandwithoutlimit:“thecapitalistmodeofproductionhasitslimitswhichitcannottranscend”.Yet,afterquarterofacentury,inhis“Preface”tothepopulareditionofthesecondvolumeofCapital,heembraced Tugan-Baranovsky’s theory of disproportionality as the cause of crises, which he hadearliercombated,withoutanyreservations.[81]Inhislastlargework(TheMaterialistConceptionofHistory), in theautumnofhis life,Kautsky finallyabandoned theMarxist theoryof the impassablelimitsofcapitalistdevelopmentandbasedhimselfonTugan-Baranovsky’stheoryofthepossibilityoftheunlimitedexpansionofcapitalism,whichhehadcriticised25yearsearlier,andwiththatdisownedhis lifework.The pattern that everymode of production ultimately survives to become a fetter onproduction during its decline does not apply to capitalism. Industrial capitalism does not lead todecline,but“toanevermorerapiddevelopmentoftheproductiveforces”.Kautskyclaimsthatpost-warcapitalismhas“demonstratedinpracticeinthemostimpressivefashionitsabilitytosurviveandtoadapttothemostdiverse,eventhemostdesperatesituations.Therearenoargumentsofeconomictheory that could call its vitality into question.”Although he—Kautsky—had anticipated a chroniccrisisofcapitalismthreedecadesearlier,thisprovedtobefalse.“Capitalism…istoday,consideredfromthepurelyeconomicstandpoint,moresolidlyestablishedthanever.”[82]

IfonebearsinmindKautsky’slaterdevelopment,alreadypresentinnascentformatthetimeofhisdisputeswithBernsteininhisunclearandvacillatingpositiononimportantpointsoftheoreticalprinciple,itiscomprehensiblethatthecontroversybetweenthesetwotheoreticiansdidnotandcouldnotresultintheclarificationoffundamentalquestionsofMarxisttheory.BothhadabandonedMarxisttheoryindecisivepointsandconductedthestruggleonlyoverlessimportantpoints,inpartmerelyoverwords.Atthetimethiswasonlynoticedbyafew(RosaLuxemburg).HowevergreatKautsky’sservicewasinpopularisingMarxism,therealrevolutionarycharacterofMarxismremainedalientohim.InKautsky’sstrugglewithBernstein,ultimatelyBernsteinwasthevictor.

Thearguments thatParvus(IsraelLazarevichHelphand),anenthusiasticsocialpatriotduringthe War, advanced in a series of writings against revisionism, were more effective (CommercialCrisisandTradeUnions,TheTradeUnionStruggle,SocialismandSocialRevolution,ColonialPolicyandBreakdown).[83]

MostimpressiveandenduringwereRosaLuxemburg’sessays,thehighpointofwhich,onthetheoreticalside,isherSocialReformorRevolution,publishedagainstBernstein’sPreconditions.

If Bernstein was expecting the transition to socialism [to result] from the progressivedevelopmentofthebourgeoislegalsystem,fromstatutorysocialreform,RosaLuxemburgexplains,thenhewascommittingafundamentalerrorwithregardtotheessenceofcapitalistclassrule.Thisrests, in contrast to earlier class societies, not on legally anchored “acquired rights” but on real

economicforces.“Inourjuridicalsystemthereisnotasinglelegalformulafortheclassdominationoftoday.”“Nolawobligestheproletariattosubmititselftotheyokeofcapitalism.Poverty,thelackofmeansofproduction”,whicharetakenfromitnotbylawbutbyeconomicdevelopment,“obligestheproletariattosubmititselftotheyokeofcapitalism”.Theexploitationoftheworkingclassasaneconomic process cannot, therefore, be abolished or moderated by legal provisions within theframeworkofbourgeoissociety.“Socialreform”,factorylaws,healthandsafetyregulations,donotindicateanelementof“socialcontrol”intheinterestsoftheworkingclass,theydonotconstitute“athreattocapitalistexploitationbutsimplytheregulationofexploitation”intheinterestsofcapitalistsocietyitself.Infact,developmentleadstoanaccentuationandintensificationofthecontradictionsofcapitalism.Fromthestandpointofindividualcapitalists,credit,businessassociationsandothermeansthatallegedly serve toovercome thesecontradictionsand to regulateproductionareonly suited toadjusttheirinsufficientmeanstothedemandsofthemarket,toraisefallingprofitratesincartelisedbranchesofindustryattheexpenseoftheothers.Cartelscancelouttheirowneffectivenesswhentheyextend toall themore importantbranchesofproduction.From thestandpointof theeconomyasawhole, credit helps increase production beyond the limits of the market and promotes the mostreckless speculation. Far from beingmeans tomoderate the contradictions of capitalism, businessassociationsandcredit,onthecontrary,powerfullyaggravateandpromotecrisesandmustaccelerateitsdownfall.Thebreakdownofbourgeoissociety—saysRosaLuxemburg,notonlyagainstBernsteinbutevidentlyagainstKautskytoo—isthecornerstoneofscientificsocialism.Thehistoricalnecessityof socialist upheaval is based “[f]irst, on the growing anarchyof [the] capitalist economy, leadinginevitablytoitsruin”.If,however,itisassumedthattheprogressivemoderationofcontradictions,ifit is assumed “that capitalist development does not move in the direction of its own ruin, thensocialism ceases to be objectively necessary”. Then its justification is only possible by means of“pure reason”, that is an “idealist explanation”, while “the objective necessity of socialism, theexplanationofsocialismastheresultofthematerialdevelopmentofsociety,fallstotheground”.[84]

Withthesameacuity,RosaLuxemburgalsodevelopsherprincipaltacticalideasabouttheclassstruggle. Radical Marxism too desires everyday social reform work, the tactical orientation oncurrent questions—the trade union struggle over wages, the struggle for social reform and thedemocratisation of political institutions—just asmuch as reformism. “The difference is not in thewhat, but in thehow.” Because it starts from the assumption that the political seizure of power isimpossible,reformismwants,through“tradeunionandparliamentaryactivity[to]graduallyreducecapitalistexploitationitself.Theyremovefromcapitalistsocietyitscapitalistcharacter.Theyrealiseobjectivelythedesiredsocialchange.”Bycontrast,forMarxismtradeunionandpoliticalstruggleissignificantonlyasnecessarypreparationofthesubjectivefactorinsocialistupheaval—theworkingclass—forthedecisiverevolutionarybattle,firstorganisingtheworkers“asaclass”andeffectingtheemergenceofunderstanding,ofunitedproletarianclassconsciousness.Thesocialist transitionwillnot come of its own accord by fatalistically waiting for it to occur. It results, instead, from theunderstanding, won in the everyday struggle of the working class, that the supersession ofcapitalism’s objectively intensifying contradictions through social upheaval is indispensable. ThusforRosaLuxemburg,aslaterforLenin,reformsareonlyby-productsofclassstruggleorientedonrevolution.Revisionism,bycontrast,makeseverydayworkindependentofthefinalsocialistgoal.Itseparates reform from revolution and, by raising the movement to an end in itself, changes itscharacter.Itisnolongerameanstoachievethatgoal—socialupheaval—butinsteadofthisupheavalhas itself become the goal. This undialectical attitude sees only mutually exclusive opposites—either/or, reform or revolution—but not the subsumption of these opposites in the totality of thesocialprocess.[85]

As we see, only with these explanations is the concept of the “final goal”, neglected in the

ErfurtProgram,defined.RosaLuxemburgdoesnotunderstandthe“finalgoal”astheidealstateofthefuture,tobeerectedafterthesocialistupheaval,buttheconquestofpoliticalpower,therevolutionitself. If the future state is understood as the “final goal” then every democratic or economicachievement can be consider to be a step on this path to this goal.But if the conquest of politicalpower through the revolution is regarded as the final goal, a sharp boundary is drawn withreformism, which replaces the strategic task of developing people’s revolutionary capacity withcurrent, opportunist work or the propagation of a more or less vague final goal to be awaitedfatalistically.SoRosaLuxemburg’s interpretationofMarxismassigns thedecisive role toworkingclasspoliticalactivism,throughtheorientationofcurrentworkonthefinalrevolutionarygoal,eventhoughtheseizureofstatepowerisdependentontheobjectivecourseofmaterialsocialdevelopmentand“presupposes…adefinitedegreeofmaturityofeconomicandpoliticalrelations”.[86]Marxismisthereforesharplydistinguishedfrombothfatalismandpurevoluntarism.

Forthefateofthedisputebetweenreformistsandradicals,seethearticle“Internationals”.[87]Reformismwasdefeatedinalltheoreticalskirmishes,condemnedbyresolutionsofpartyconferencesandinternationalcongresses,refutedagainandagainanewbytheprevailingintensificationofclasscontradictions in thecourseofactualdevelopment.But,maturingonthebasisof thearistocracyoflabour, it nevertheless made a triumphal procession through the daily practice of the workers’movement.ThegrowingpowerofMarxismwas,however,demonstratedby the fact that,ofall thesocialist tendencies in all European countries during the first half of the 19th century—Saint-Simonism,Proudhonism,[88] laterBlanquismetc., it alonedominated themasses intellectually andthatreformism,inordertobeabletowinoverthemasses,hadtosailundertheflagofMarxism.

d)ReformisminMarxistdisguise(theneo-harmonists)Herewereferprimarilyto“Austro-Marxism”,agroupofVienneseintellectuals—RudolfHilferding,Otto Bauer, Max Adler and Karl Renner[89]—grouped around the newly established theoreticalreviewKampf(from1908).Theyattemptedtoprovidetheoreticalformulationsforreformistpractice.The most important book from this tendency, one that strongly influenced later theoreticaldevelopment, isRudolfHilferding’sFinanceCapital. Its two components have to be distinguished.On the one hand, Hilferding strives to integrate the latest phenomena of economic life—trusts,cartels, export of capital, imperialist expansionism—in short monopoly capitalism, which hasreplacedcompetitivecapitalism,intothesystemofMarx’seconomics.Ontheotherhand,followingTugan-Baranovsky’s theory of crisis and renouncing theMarxist theory of breakdown,Hilferdingendeavours toreinterpret theMarxist theoryofbreakdownin theharmonisticspiritof the limitlesspossibilities for capitalist expansion. Reviving Jean-Baptiste Say’s old theory, whichMarx alwayscombated, that primarily general overproduction is impossible because individual spheres ofproduction create markets for each other, Hilferding reaches the conclusion that crises are notnecessarily associated with the essence of capitalism. They arise simply from disproportion ingrowth among individual spheres, i.e. only from “unregulated production”. If the distribution ofcapital among individual branchesof industry is proportional then there is no limit to production,“productioncanbeexpandedindefinitelywithoutleadingtotheoverproductionofcommodities”.Inshort,ifproduction,evenonacapitalistbasis,canberegulated,crisescanbeavoided.[90]

The foundationof thework isHilferding’s theoryofmoney and credit,whichdeparts fromMarx’s theoryofmoneyanddistorts it in thespiritofKnapp’s“chartalism”.[91]Certainly, for thispurpose, Hilferding has to breach the general validity of Marx’s law of value for the moneycommodity,whichKarlKautskycorrectlyassertedmeant“thesuicideofMarxism”.[92]The theoryoffinancecapitalisbuiltonthefoundationofthistheoryofmoney.Thecharacteristicfeatureofthemostrecentdevelopmentsisthedominantroleofbankcapitalcomparedwithindustry.Withcapitalistdevelopment,thetotalsumofmoneymadeavailabletothebanksbythenon-productiveclassesandthrough the banks to the industrialists, i.e. the role of bank capital in the form of money that istransformed into industrial capital, constantly grows. A particular role falls here to the type ofenterprise known as a joint stock company.With shares so-called fictitious capital, detached fromproductivecapitalfunctioninginfactories,arises.Itenablesbankstorapidlyconcentrateownership,independently of the concentration of factories and is accelerated by speculation on the stockexchangeandtheaccumulationofpromoter ’sprofit[93]bythebanks.Bymeansofthis“mobilisationofcapital”,anevergrowingportionofcapitalinindustrybecomesfinancecapital, i.e. itnolongerbelongstotheindustrialistsworkingwithit.Thedirectionofcapitalinvestedinindustryfallsmoreand more to banks. “[T]hey become founders and eventually rulers of industry.” The tendencytowards concentration in banking, towards progressive elimination of competition among banks,“wouldfinallyresultinasinglebankoragroupofbanksestablishingcontrolovertheentiremoneycapital.Sucha‘centralbank’wouldthenexercisecontroloversocialproductionasawhole.”[94]

Aparallel tendency towardscombination isalsoatwork inproduction. Ina sectionon“Thehistorical tendency of finance capital”, probably intended to be a counterpart to Marx’s famouschapteron“Thehistorical tendenciesofcapitalistaccumulation”,Hilferdingpresents thecourseofhistorical development quite differently fromMarx.[95] The latter depicted the limits of capitalistaccumulation that, in a dialectical shift at a definite stage of development, ultimately leads to the“expropriationof theexpropriators”.[96]Hilferdingwants todemonstrate thepeacefulandgradual

growthofcapitalismintoaregulatedeconomy.Thecartelisationofindustry,inordertoraisepricesandprofits,lowerstherateofprofitinthenon-cartelisedindustries,intensifiescompetitioninthemandthusthetendencytowardsconcentration.Thisleadstofurthercartelisation,intheseindustriestoo.So a tendency towards the continuous extension of cartelisation emerges. The result of thisconcentration movement, its ideal, theoretical endpoint, will be the complete cartelisation of allbranchesofindustrynotonlyinthenationalbutalsointheworldeconomy,auniversalor“generalcartel”whichconsciouslyregulatestheentiretyofcapitalistproductioninallitsspheres,setspricesandalsoundertakesthedistributionofproducts.Withtheadvanceoftheconcentrationmovementinindustry,productionisincreasinglyplanned(“organisedcapitalism”)andfinallyreachesitshighestexpression in the general cartel. The anarchy of production disappears, crises are eliminated andreplacedbyproduction“regulated”by thegeneral cartel, even if still on thebasisofwage labour.“Thetendenciestowardstheestablishmentofageneralcartelandtowardstheformationofacentralbank are converging”,[97] hence a peaceful and painless transition from capitalism to socialismbecomes possible. “The socialising function of finance capital facilitates enormously the task ofovercomingcapitalism.Oncefinancecapitalhasbroughtthemostimportantbranchesofproductionunderitscontrol,itisenoughforsociety,throughitsconsciousexecutiveorgan—thestateconqueredbytheworkingclass—toseizefinancecapitalinordertogainimmediatecontrolofthesebranchesofproduction.”“Eventoday,takingpossessionofsixlargeBerlinbankswouldmeantakingpossessionofthemostimportantspheresoflarge-scaleindustry.”[98]

After the war (1927), Hilferding declared that he had always “repudiated every theory ofeconomic breakdown”, and thatMarx had also considered them to be false. The overthrow of thecapitalistsystemwould“nothappenbecauseofinternallawsofthissystem”buthadinstead“tobetheconsciousactofthewilloftheworkingclass”.[99]

The other neo-harmonists, such as Otto Bauer (“The accumulation of capital”) and KarlKautsky,duringthepost-warperiod,alsoderivecrisessimplyfromdisproportioninthedistributionofcapital among individualbranchesof industry.Theyconsidercrises tobeavoidableevenundercapitalism,ifthedistributionofcapitalisregulated,andtheunlimiteddevelopmentofcapitalismtobepossible.Bauer ’sassertionthatthecapitalistmechanismautomaticallyenforcesthisproportionaldistributionofcapital—evenifitismediatedbyperiodiccrises—giveshisharmonisticinterpretationof Marx’s theory of crisis a specific colouration. “[T]he mechanism of capitalist productionautomatically[cancelsout]overaccumulationandunder-accumulation.”WhileMarxhadmaintainedthat the progressive growth of the industrial reserve armyof labourwas necessary,Bauer tries toprovetheopposite:“Thereexistsinthecapitalistmodeofproductionatendencyfortheadjustmentofcapitalaccumulationtothegrowthofpopulation.”[100]

C.TheresurgenceofrevolutionaryMarxisma)ThedecayofrevisionisttheoryAs already shown, reformism was the result of the relatively peaceful period of capitalistdevelopment between 1872 and 1894. Revolutionary Marxist theory, itself the product of therevolutionaryperiodof1848,nolongerseemedtosuitthispeacefulperiod.ThereformistattempttodivestMarxismofitsrevolutionarycharacter,inordertoadaptittothereformistpracticeofpeacefulconstructivework,wasultimatelydoomedtotheoreticalfailure.Economicdevelopmentattheendofthepreviouscenturyexperiencedadecisiveshift,oncemoredemonstratingthatthe“practiceofthepeacefulworkofconstruction”wasentirelyquestionable.

The policy of imperialist expansion,which in themost advanced countrieswas temporarilyabletosecureadvantagesfortheupperlayeroftheworkingclass,attheturnofthecenturyledtoasharpeningofallantagonismsinbothdomesticandforeignpolicy.Theimperialisteraofheightenedcolonialpolicy,offeverishmilitaryandnavalarmsbuild-ups,andfinallyofbellicosecollisionsthatledtotheoutbreakoftheWorldWarbegan.

A sharpening of domestic class antagonisms in all capitalist countries went in parallel withgrowing tensions in foreign policy. The great advances of the socialist workers’ movementacceleratedtheprocessofcombinationofemployersintopowerfulassociationsforstruggle,whichforcedworkersontothedefensiveinalleconomicstruggles.Kautskydemonstratedin1908“thatthefactorswhichhadresultedinincreasedrealwagesoverpreviousdecadeswereallalreadygoingintoreverse”.The period of rising realwageswas replaced by fallingwages and certainly notmerelyduring periods of transient depression “but even in periods of prosperity”.[101] The fact ofdeterioratingconditionsofworkingclasslifeoverthisperiodhasbeendemonstratedbyprivateandpublicinvestigationsinaseriesofadvancedcapitalistcountries(America,Germany).[Theadvanceof] state protection for workers also came to a halt under the pressure of employer associations.Moreandmore,inthiscontext,thetradeunions’oldmethodsofstruggleprovedtobeinsufficient.Theperiodofisolatedstrikesinindividualenterpriseswaspast.Developmentdroveontolargemasseconomic struggles inwhole branches of a country’s industry.On the other hand, the bourgeoisiebecameprotectionistandreactionary.Politicalliberalismbegantodieout.Therecouldnolongerbetalkofthefurtherextensionofdemocracy,whichhadbeenpromotedearlierbyacertain[degreeof]cooperation between the liberal bourgeoisie and the working class. This entire development wasstrengthened and accelerated even more by the impact of the Russian revolution of 1905. Thedevelopment, predicted by the reformists, of progressive improvement in the condition of theworkingclassandtheweakeningofclassstruggles,didnotoccur.Instead,classstrugglesintensified.As itwas apparent that the old trade union and parliamentarymethodswere no longer capable ofachievingfurthergains, theworkingclasswasforced to lookaroundfornewmethodsofstrugglethat took into account rising economic and political pressure from the bourgeoisie. This was thesignificanceofthediscussionaboutthepoliticalmassstrike.[102]

Insuchcircumstances,duringtheeraofbellicoseimperialismandcolonialexpansionaswellas reactionary domestic policies, reformism of the old kind was a typical product of epigones:repetition of dated lines of thought, diametrically counterposed to reality. As an example of thisoversimplifiedpopularisationofsocialismthatspreadouteverywhereintheworkers’movementatthe beginning of the 20th century and, despite its Marxist phraseology, retaining nothing of thegenuine content ofMarx’s socialism, mention should be made of a book byMorris Hillquit, the

current leader of the American “Socialist Party”, Socialism in Theory and Practice.[103] In thechapteron“Socialismandthestate”,Hillquitsettlesaccountswithtwodozendefinitionsofthestate,startingwithAristotleandCicero, through[AnneRobertJacques]Turgotand[Jeremy]Benthamto[PierrePaul]Leroy-BeaulieuandAntonMenger,[104]accordingtowhomthestateis theorganisedhumanity of a given territory. To this definition, designated as faulty, Hillquit counterposes the“entirelycorrect”“socialistdefinitionofthestate”,accordingtoMarxandEngels,andshowsthatthe“state,asaproductofclass[divisions]”aroseatthesametimeastheinstitutionofprivatepropertyand“hasat all timesbeen the instrumentof thepropertiedclasses”and, “asanorganisationof theruling classes”, necessarily “keeps the exploited classes in a condition of dependency”. From this“entirely correct” definition, however, Hillquit draws no conclusions for working class policy. Inrelation to the “present-day”, “modern state”, Hillquit nevertheless allows the validity of thebourgeois definition and asserts that it has experienced “deep inroads made in its substance andfunctions by the rising class of wage workers”. “Under the pressure of the [socialist and] labourmovement,thestatehasacquirednewsignificanceasaninstrumentofsocialandeconomicreforms.”“The state which came into being solely as an instrument of class repression, has gradually, andespeciallywithin the last centuries assumed other important social functions, functions inwhich itlargelyrepresentssocietyasawhole,andnotanyparticularclassinit.”Itsexploitativefunctionintheinterests of the ruling classes are “curbed”more andmore,while its “generally useful” functionsclaim its attentionmore andmore, as it protects “workers from excessive exploitation”, so it “isgraduallycomingtoberecognisedbythe[workers]asamostpotentinstrumentforthemodificationand ultimate abolition of the capitalist class rule”. The ruling capitalist class will, indeed, nevervoluntarilygiveupitspropertyandthesupremacythatresults.Hillquitdrawstheconclusion,notthatithastobeexpropriatedeconomicallyandpolitically,butinsteadthattheprocessoftransformationwill come to pass gradually through “a series of economic and social reforms and legislativemeasurestendingtodivesttherulingclassesoftheirmonopolies,privilegesandadvantages,stepbystep”.Violencedoesnot,consequently,have tobeemployed.Thatwouldbe“butanaccidentof thesocial revolution… [violence] has no place in the socialist program”. Through these reforms, a“periodof transition”willbeentered, inwhich thestate,althoughnotyetsocialist, isno longeranorganofthecapitalistclassbutinsteada“transitionalstate”.“Definitelinesofdemarcation”,whereitbeginsandwhere itendscannotbespecifiedbut today“[a]numberofmunicipalitiesandstatesarealready wholly or partly under socialist control”. Many of the political or social “transitionalreforms”ofsocialismhave, toacertaindegree,beenrealisedincountries inEurope,AmericaandAustraliaandthe“concededtendency”ofallmodernlaw-makingisdirectedtowardstheextensionofsuchreforms.Inthissense,itmaywellbesaidthatweareinthemidstorinanycaseatthestartofthe“transitionalstate”.Hillquit,logically,recommendstacticsthatareconfinedto“electoraltactics”andthe“positiveworkofparliament”,“withoutviolatingtheprincipleoftheclassstruggle”.[105]

Ifsuch theorieswerestronglyutopianduring theperiodbefore theWar theycompletely lostanyconnectionwithrealityaftertheoutbreakoftheWorldWar.Inordertoavoidshipwreckonthiscontrastwith reality, reformist theorywas forced to adapt to it. In pure logic, this correctionwaspossibleintwoways.Fromtheproletarianstandpoint:throughareturntorevolutionaryMarxism.Ina further, consistent development of its nature, reformism chose the other way and placed itselfentirelyonthegroundofbourgeoissocietyandthecapitaliststate.KarlRennerdrewthisconclusion,contained in embryo inHilferding’s book, with great clarity in articles published in theVienneseKampfandArbeiter-Zeitung(whichappearedinbookformasMarxism,WarandtheInternational).[106]ExtendingtheresultsofHilferding’sbook,heseekstoportraytheupheavalthathastakenplacein the fabric of the economy, state and society, the mutual relations of classes, the character ofownership and the external relations of economic territories, finally also in the tasks of today’s

proletariat,sinceMarx’sdeath.AlthoughhepositsdifferentdevelopmentaltendenciestoMarxinalltheseareas,althoughheabandonsallthefundamentalcomponentsofMarx’stheoreticaledificeandfinallyidentifiesdifferentgoalsandtasksfortheworkers’movementtoMarx,hedoesnotforegoaMarxist disguise for his theory. Instead, he claims to be a proponent of genuine Marxism whostruggledagainstthe“reactionarymisconstrual”ofMarx’sthought,againstthe“vulgarorientation…ofMarxism”, against the “ossification” and “oversimplification” “of the [Marxist] theory of classstruggle”.NothebutratherthesupposedMarxistshaddistortedthetheoryofthemaster.Intheshortperiod sinceMarx was active, class relations have often, “almost every decade and a half”, beentransformed.Insteadof luggingaroundtheold“catechisticpropositions”ofMarx’ssystemas“oldgoods”, it is necessary to revise the theoretical baggage in all areas. So his book is a “Marxistexamination”ofthenewmaterialofsocialdevelopment”,adraftofa“studyprogramforMarxists”.[107]

Marx’sentireperiodofactivityfalls,accordingtoRenner,intotheliberalsocialepoch,withitsindividualistic-anarchisticeconomicmode,forwhichthepowerofthestatewasabogeyman.Marxresearched this epochanddescribed it inCapital. Inorder toexpose its laws in theirpure, logicalform, every state intervention had to be conceptually disregarded. This “capitalist society, whichMarx experienced and described, does not exist any more”, something that Marxists have so faroverlooked.Theessentialfeatureofthefundamentalchangesinthestructureofsociety,whichwerecompletedbetween1878and1914,consistsofthe“statification”ofthepreviouslystatelesseconomy,that is, precisely “whatKarlMarx’s system logically andpractically excluded”,whatMarxdidnotexperience or describe. There were important consequences of this statification because “theeconomy more and more exclusively serves the capitalist class, the state more and morepredominantlytheproletariat”.Consequently,thestateisthetool,withthehelpofwhichthehistoricaloverthrowofcapitalismintosocialismwillbecarriedout.Butitisa“crazyconception”tothinkthattheconquestofpoliticalpowerbytheproletariatcanbecarriedoutthroughasuddenoverthrowofthesystem,throughapoliticalsurpriseattack.Thoseareconceptionsthathavebeensmuggledfromthe political history of the bourgeoisie into theworld of socialist ideas.The statewill, instead, beconquered step by step in daily struggles. Its transformation is carried out through the gradualsocialisationofalleconomicfunctions.Marxwasfarfromcondemningandnegatingthestate,from“state nihilism”, “with which contemporary Marxism coquettes”. Through the state all economiccategories are fundamentally transformed. The competitive price of the private economy istransformedintocartelprice.Finally,duringtheperiodofhighprotectionandundertheinfluenceofthe state, regulated price develops into national price,whose form and extent differs from state tostate. “It is only one step further to state legislation directly prescribing the price”: “tax price” or“politicalprice”.“Theeconomyisnotsufficienttoexplainsuchpricing”,overall“deviationfromthenaturallawsoftheeconomy”isdeterminedbytheprocessofstatification.“Anextra-economiclaw…imposeditselfoverthebasiceconomiclaw.AndthatisnowthenewproblemofMarxism”,asthedeliberateallocationofgoods,thatistheexclusivemodeofcirculationofasocialistsociety,istodayalreadymergedintothesystemofautomaticcommoditycirculation.[108]

Whatcanbesaidofcommoditypricescanalsobesaidofthecategoryofwages.Thewagessystem is being fundamentally reorganised by the state. Today the worker ’s wage is alreadycomprised of an individual and a collectivewage. The state socialises variable capital, i.e. capitalspent onwages, through compulsory contributions byworkers and employers for health, accidentand old age insurance, after individuals are paid. Basically, the state has already long done thisthroughcertainpublicoutlays,e.g.publicschoolsthatcontributetothemaintenanceandrenewalofthe working class. “The working class, consequently, already receives a part of its wagescollectively.”“Development is towards thecollectivisationofanever largerpartofwages.”Toan

increasingextent,theworkerbecomesthesubjectandobjectof“publicinstitutions”.“Theprocessofsocialisationintegrateshimasanelementintothestate.”[109]

This “process of socialising theworker ’swage” has not yet been analysed byMarxists.Butlargetransformationsoftheindividualcomponentsofthewagealsotakeplace.Theindividualwageis replaced by the trade union wage and finally by the regulated wage. “These institutions …transformtheworkerfromaserfintoaneconomiccitizen.Theleapfromthefreewagecontracttothe regulated system is of the same significance as that frommanorial subjection and patrimonialjusticetothebourgeoiscourt.”“Buttheregulatedwageisstillnotthehighestpointofdevelopment.Giant capitalist enterprises construct service programs for theirwhite collar employees and, to anextent, theirworkers”,with “awage scale that is calculated over theirwhole lives, including theirdeaths”,inshort,formsofwagepaymentthatRennercallsthe“programmaticwage”.“Fromthisitisonlyasteptothedirectsettingofwagesbythestate,toataxwage.”Throughstatification,“todaytheworking classes find themselves in a different social situation from Marx’s period”. Ownershipbecomes a “public institution”, work a “public job”. A “regrouping of classes” takes place.Industrialismisnolongerthepredominantformofenrichmentincontemporarysociety.Thefactoryowneroftheoldkindisnolongercounterposedtotheproletariat.Ratherthedominantpowerswithinthe capitalist class have become agrarianism and finance capital. An upheaval in the economicfunction of land ownership occurs. While the process of statification and socialisation is veryextensive in agriculture, landownership, encompassed economically as ground rent, has becomemoreandmoreparasitic.Thequestionofgroundrentwillbecometheprincipalsocialquestionoverthenextfiveyearsanddecades.[110]

Loancapitalhas alsoexperiencedmassive transformations.Loancapitalof theoldkindwasusury,amereparasiticeconomicfunction.Theusurerswere,however,defeated.“Creditcapital”ofthenewkindisnotparasiticandis“generallyfelttobeablessing”.[111]

The purpose of Renner ’s arbitrary construct, which cannot be fully itemised here, is thejustifications produced by the conclusions towhich he comes: theworking class has to affirm thecontemporarystateand,thoughthe“policyofchangingalliances”withindividualbourgeoisclasses,painstakingly, stepbystepwork itswayupand“takepoweroverbourgeois society intellectually”,positionitselfeverywhereonthebasisofthestateandbourgeoissociety.Suchanalliancepolicyis“notawateringdownofclassprinciplebutitsfulfilment”.Astheproletariataffirmsthestateitmustalsoaffirmstatepolicy.Thereisno“amorphousinternationality”butinternationalityisfirsttheresultof the actions of groups of nation stateswhich is “specifically new” in our period. “Capital is notinternationalbutnational.”“Nationalcapitalorganisedbythestatehasbecometheactiveagentonthetribuneoftheworld.”Marx’scategoriesareuniversal,Marxistsstartwiththecategoryofthestatelessworld economy but for the time being this unit is still not a single state. For the time beingdevelopment has achieved the level of national-political, territorial states. Hence there is also no“worldproletariat”,whichisonlya“mysticalunit”;inrealityonlynationalproletariatswithinstateterritories exist. The world economy is only coming into being, promoted by the tendency ofindividual states to extend their economic territories. “In terms of specific states, expansionisttendencies appear as colonial policy and colonial exploitation, domination and servitude.”But this“moralistic standpoint” lies “deep below Marx’s mode of thought”, as behind these “mundanecomplaintsaboutcolonialpolicy”the“seculargreatnessoftheeconomisationoftheworld”shouldnotbeoverlooked.[112]

“In this way, to be an opponent of the colonial systemmeans being an opponent of worldhistory.”So long as capitalismpersists in the economyand the anarchistic antagonismof states inpolitics,warsareunavoidable,becausecompetitivestrugglesamongeconomicterritoriestakeplacein two ways: peacefully through states’ trade agreements and aggressively through conquest.

Imperialistwarshouldnotbejudgedethicallybutshouldbeacceptedasafact,justliketradepolicy.Itis nothing other than the turning of “price competition” “into arms competition”. At most, thereshouldbeeffortsto“civilisewar”andtheextensionoftheorganisationoftheworldintoa“peacefulassociationofnations”,throughinternationallaw.Solong,however,assucha“future,supranationalorganisation of the world” has not been achieved, war remains “possible and, in certaincircumstances, necessary”, because it concerns the existence of a state and its economy. As tradeunionwork’smethodsofstrugglerest“onthebasisofthiscapitalistorder”,itmustactpositivelyinthe struggle. No trade union desires the destruction of industry. “The existence, continuation andfutureofthiscapital”alsoaffecttheworkingclasspositively.“Inbellicoseperiodstheworkingclassalsostrugglesforthatcontinuation.”If thereiswar, theproletariatalsohastotakethepathofwar:thispathisalso“apathofhistory”and,“astheproletariatcannotabsentitselffromhistory,ithastotravel this path”. From themoment of the outbreak ofwar, there is no other possible attitude than“alignmentwith itsownstate”.Thestandof theproletarianpartieson4August1914was justified.[113]

ObviouslyRenner ’stheoremscannotbereconciledwithproletariansocialism.Theyshouldbeevaluatedasanattempttodiverttheproletariatfromitstasksasaclassandtobringitintothetrainoftheimperialistbourgeoisie.Withhisproducts,reformismsankfromthelevelofsocialcriticismtoapologetics for bourgeois society. It was therefore unavoidable that reformism, having come topowerafterthewarandtheoutbreakofrevolutioninthedefeatedstates,wasincapableoffulfillingevenoneofthetasksposedbyproletariansocialism.

EclecticismandthetendencytoturnawayfromMarxismarecharacteristicofreformisttheoryduringthepost-warperiod.EmilLedererrestrictstheapplicabilityofMarx’slabourtheoryofvaluein twoways. In hisOutlines of Economic Theory,[114] he restricts it to the terrain of competitivecapitalism.He regards it as insufficient to explainmonopoly prices and hence tries to construct afusionofthelabourtheoryofvaluewithmarginalutilitytheory.HeregardsMarx’slabourtheoryofvalue, secondly, as only suited to the explanation of static economic processes but not dynamicconjuncturalcycles(“Economiccycleandcrises”.)[115]Lederer ’sexplanationofcrisesisinessenceanunderconsumptionist theory—onadetour throughmonetary theories of crisis (extensionof thelabourprocess“onlythroughadditionalcredit’[116]—withallitsattendantdeficiencies.

AlfredBraunthal’sTheContemporaryEconomyand its Laws is intended to be a textbook ofsocialisteconomics,“faithfultotheideaofMarxism”.Infact,BraunthalcombatsMarx’stheorywithargumentsborrowedfrombourgeoiscriticismofMarx:itprovides“noinformationaboutthelawsaccording to which the social product, in fact, is divided into wages and returns to capital”. The(bourgeois)theoryofproductivityis,inthisrespect,“withoutdoubtsuperiortoMarxisttheory”.Herefers further to the “secure results” of marginal utility theory. His account of the contemporaryeconomy is essentially a simplified compilation of Hilferding’s thoughts about the progressiveorganisationoftheeconomyandRenner ’sideasaboutstatificationandtheeverstrongerinfluenceofthe statewhich isbeingproletarianised.Through itsgrowing regulationof theorganisationof thewhole economy, finally through “cold socialisation”, i.e. through the encroachment of the publiceconomy, the free economy with its market mechanism is more and more superseded. For thisreason, Braunthal thinks, we stand at the beginning of a social revolution, “a society which ischangingfromcapitalismintosocialism”.[117]

WiththetransitionintheleadershipoftheworldeconomyfromEuropetotheUnitedStatesofAmerica and impressed by American “prosperity” after the World War, a flush of uncriticaladmiration ofAmericanmethods of organisation andwork (“rationalisation”) arose in bourgeoisEurope.TheemulationofthesemethodsbyGermancapitalistsfoundthefullestapprovalamongtheproponents of tradeunion theory andpractice.A typical product of this current is theworkof the

chairperson of the German Woodworkers’ Association, Fritz Tarnow, Why be poor? “The oldeconomictheoriesaboutthesocialquestion”,Tarnowthinks,“originatedprimarilyinEngland…ThenewtheoriesarebeingshapedinAmerica.”Americahasshownthatpovertyisnoeconomicnecessitybut a social illness, “whose curability, even within the framework of the capitalist economy, isundoubted”.Wages,asacostfactor,havedeclinedinsignificancebutasafactorinpurchasingpowertheyhavegainedimportance.Increasingconsumptionand,aboveall,massconsumptionisthe“keytothedevelopmentofproduction”.Inviewoftheenormousdevelopmentoftheproductiveforces,fromnowonwasteisablessingandrestraintacurse.Notonlyislabourdependentoncapitalbutcapitalisalso dependent on the purchasing power of worker consumers. High wages are in the well-understoodinterestsoftheemployersthemselves.Countrieswithhighwageshaveaccumulatedmoststronglyandcancompetemostsuccessfully.Americanemployersareadvancingalongthe trackofthis knowledge which is the basis of the secret of the continuing boom in the United States ofAmerica. Henry Ford’s book,My Life and Work is “certainly the most revolutionary text of alleconomicliteraturetothepresent”.[118]

In addition, the various sub-species and currents of reformism as they appear in individualcountriesor internationallyshouldalsobementionedbriefly.First“municipalsocialism”,which isconcernedwithreformistactivityintheareaoflocalpolitics—amongstotherthings,alsotheefforttomunicipalisewater,gasandelectricityservicesfortheurbanpopulationinthegeneraleconomicinterest,withoutreferencetotheirprivatesectorprofitability(seeHugoC,i.e.HugoLindemann,CityAdministrationandMunicipalSocialisminEnglandandGermanyCityAdministration.)[119]

Acurrent in theEnglishworkers’movement isknownas “guild socialism”. It aspires to thecontrol of production and the supersession of the wages system through the organisationalunificationofallmanualandintellectualworkers,notaccordingtoprofessionortradeuniongroups,but in associations (guilds) of whole industries. It seeks to achieve this goal, possibly through ageneralstrike.Guildsocialismdiffersfromsyndicalisminthatitdoesnotopposethestatebutinsteadallocates it certain functions outside the sphere of production (seeGeorgeRobert StirlingTaylor,GuildPolitics: aPractical Programme for the LabourParty;GeorgeDouglasHowardCole,Self-government in Industry;GeorgeDouglasHowardColeGuild Socialism; GeorgeDouglasHowardColeandWilliamMellor,TheMeaningofIndustrialFreedom).[120]

So-called “liberal socialism” stands outside theworkers’movement and has less to dowithsocialismthan liberalism, i.e.capitalism.Representedby the isolatedeffortsofFranzOppenheimer(NeitherCapitalismnorCommunism),drawingonthetheoriesofEugenDühring,itseekstomaintainthemechanismofexchange.[121]

b)ThedevelopmentofthematerialistconceptionofhistoryThe materialist conception of history, drafted by Marx with Engels’ collaboration in a series ofyouthfulwritings(1842–59)ininspiredoutlines,wasneversystematicallydevelopedbythem.ItwasonlyMarx’sstudentswhoundertooktoextenditphilosophicallyandepistemologically,deepeningit,above all, through fruitful, specialised research, in various areas of social, economic and culturalhistory.KarlKautskydealtwithitphilosophically,aboveallinEthicsandtheMaterialistConceptionofHistory,ClassAntagonismsintheEraoftheFrenchRevolution,ThomasMoreandhisUtopiaandTheFoundationsofChristianity.[122]Inhislastlargework,TheMaterialistConceptionofHistory,Kautskyrevisedhisearlierconceptionofthedrivingforceofhistoricaldevelopmentjustashehadinrelationtohiseconomicandpoliticalconceptions(compareKarlKorsch,TheMaterialistConceptionofHistory:an Argument with Karl Kautsky).[123] FranzMehring (1846–1919) in his The LessingLegendchosetheliteratureandthehistoryof[GottholdEphraim]LessingandFriedrichIIashisfieldofapplication.[124]InbrilliantessaysinNeueZeit,hedealtwiththemostdiverseareasofhistoryandliterary history. In his consummate, broadly conceivedHistory of German Social Democracy, thatadmittedly only extended to the beginning of revisionism, he illuminated the economic and socialcontextofthegrowthofthesocialistworkers’movementandcombinedthiswithapresentationofitstheoreticaldevelopments.[125]GeorgiiPlekhanov,thecreatorofthematerialistsociologyofcultureandart,enteredthestruggleagainstrevisionismasoneofthemostbrilliantproponentsofdialecticalmaterialism(aboveallinFundamentalProblemsofMarxism,HenrikIbsen,EssaysontheHistoryofMaterialism).[126] From the post-war period: the fine and valuable book, History and ClassConsciousness: Studies in Marxist Dialectics, by Georg Lukács[127], and Karl Korsch’s CentralPointsofHistoricalMaterialismandMarxismandPhilosophy,shouldbementioned,aboveall.[128]Finally, in addition to the works byMax Adler, already mentioned, also Heinrich CunowMarx’sTheoryofHistory,SocietyandtheState.[129]

Significantwritingsonhistoricalmaterialisminparticularcountries:FranceSorel,Georges1925[1901],Laruinedumondeantique:conceptionmatérialistedel’histoire(TheCollapseoftheAncientWorld:theMaterialistConceptionofHistory),Paris:M.Rivière.Rappoport,Charles1925[1901],Laphilosophiedel’histoirecommesciencedel’évolution(ThePhilosophyofHistoryasanEvolutionaryScience),Paris:M.Rivière.ItalyCroce,Benedetto1915[1901],HistoricalMaterialismandtheEconomicsofKarlMarx,London:GeorgeAllen&Unwin.——1913[1909],PhilosophyofthePractical:EconomicandEthic,London:Macmillan.Mondolfo,Rodolfo1912,IlmaterialismostoricoinFedericoEngels(TheHistoricalMaterialismofFriedrichEngels),Genova:Formiggini.——1932,IIconcettomarxisticodella“umwälzendePraxis”esuoigermiinBrunoeSpinoza(TheMarxistConceptof“RevolutionaryPraxis”anditsOriginsinBrunoandSpinoza.)Labriola,Antonio1908[1896],Essaysonthematerialistconceptionofhistory,Chicago:Kerr.——1912[1898],SocialismandPhilosophy,Chicago:Kerr.

PolandBrzozowski,Stanisław1990[1910],Idee:wstępdofilozofiidojrzałościdziejowej(Ideas:introductiontothephilosophyofhistoricalmaturity),Kraków:WydawnictwoLiterackie.RussiaBukharin,Nikolai1925[1921],HistoricalMaterialism,InternationalPublishers,NewYork.Deborin,Abram2012[1916],Vvedenievfilosofiiudialekticheskogomaterializma(AnIntroductiontothePhilosophyofDialecticalMaterialism),Moskva:Librokom.,2012[1916],GeorgiiPlekhanov’sprefacefromtheoriginaleditionisinPlekhanov,Georgii1976[1916],SelectedPhilosophicalWorks.Volume3,Moscow:ProgressPublishers,pp.577–99.HollandGorter,Hermann1919,DerhistorischeMaterialismus(HistoricalMaterialism),withaforewordbyKarlKautsky,Stuttgart:Dietz.

Writingsaboutparticularareasofapplicationofhistoricalmaterialism:

LawPashukanis,Evgeny2002[1924],LawandMarxism:aGeneralTheory,Transaction:NewBrunswick.Stutschka,Peteris1991[1922],DasProblemdesKlassenrechtsundderKlassenjustiz(TheProblemofClassLawandClassJustice),inEugenPaschukanis,AllgemeineRechtslehreundMarxismus,editedbyHermannKlenneandLeonidMamut,Freiburg:RudolfHaufeVerlag,pp.233–68(comparewithKelsen,Hans1931,“AllgemeineRechtslehreimLichtematerialistischerGeschichtsauffassung”(“Thegeneraltheoryoflawinthelightofthematerialistconceptionofhistory”),ArchivfürSozialwissenschaftundSozialpolitik,66(3):449–521).Szende,Paul1932,“NationalesRechtundKlassenrecht,BeiträgeausderungarischenRechtsundWirtschaftsgeschichte”(“Nationallawandclasslaw:contributionsfromHungarianlegalandeconomichistory”),inMaxAdleretal.,FestschriftfürCarlGrünberg—Zum70.Geburtstag,Leipzig:Hirschfeld,pp.445–78.

EconomichistoryCunow,Heinrich1926–1931,AllgemeineWirtschaftsgeschichte.VonderprimitivenSammelwirtschaftbiszumHochkapitalismus(GeneralEconomicHistory:fromthePrimitiveGathererEconomytoAdvancedCapitalism),4volumes,Berlin:Dietz.Theprocessoftransitionfromthefeudalstateofthe18thcenturytothemoderncapitaliststateisdealtwith,usingtheexampleofAustriaandPolandin:Grossman,Henryk1925,“StrukturaspołecznaigospodarczaKsięstwaWarszawskiegonapodstawiespisowludnosci1808–1810roku”(“ThesocialandeconomicstructureoftheDuchyofWarsawonthebasisoftheresultsofthecensesof1808and1810”),KwartalnikStatystyczny2:1–108.Grossmann,Henryk1914,ÖsterreichsHandelspolitikmitBezugaufGalizieninderReformperiode1772–1790(Austria’sTradePolicywithRegardtoGaliciaintheReformPeriod1772–1790),Wien:Konegen.——1916,“DieAnfängeunddiegeschichtlicheEntwicklungderamtlichenStatistikinOesterreich”(“ThebeginningsandhistoricaldevelopmentofofficialstatisticsinAustria”),Statistische

Monatsschrift,newseries21:331–423.Hartmann,LudoMoritz1919,RömischeGeschichte(RomanHistory),Gotha:Perthes.——1910[1903],DerUntergangderantikenWelt(TheFalloftheAncientWorld),Heller,Wien.Wittfogel,KarlAugust1931,WirtschaftundGesellschaftChinas(China’sEconomyandSociety),Leipzig:Hirschfeld.

SociologyofknowledgeHorkheimer,Max1993[1930],“Anewconceptofideology?”inMaxHorkheimer,BetweenPhilosophyandSocialScience,Cambridge,Massachusetts:MITPress,pp.129–150.Szende,Paul1922,“VerhüllungundEnthüllung:DerKampfderIdeologieninderGeschichte”(“Maskingandunmasking:thestruggleofideologiesinhistory”),ArchivfürdieGeschichtedesSozialismusundderArbeiterbewegung,10(2–3):185–270.

c)TheproblemsofimperialismandwarWepointed out earlier that, towards the end of the previous century, the development of capitaliststates took on more and more imperialist features and was distinguished by arms build-ups andcolonialexpansion.SocialistsschooledintheMarxistapproachtohistoryveryearlyrecognisedthesignificanceoftheseprocesses.Fromthestartofthenewcentury,inaseriesofwritings(TheSocialRevolution, The Road to Power, Trade Policy and Social Democracy), Karl Kautsky predicts theapproachofanewepochofrevolutionasaresultofcolonialpolicyandimperialism.Particularlyintheeast, ineastAsiaand theentireMuslimworld,heexplained,anageofconspiracies,coupsandconstantsocialupheavals,wasbeginning.Eventuallythewestwouldbecaughtupinthese.“Aworldwarisbroughtwithinthreateningproximity.”Inallthesewritings,Kautskydescribesthefeaturesofcapitalism that had changed during its imperialist period, its inclination to arm for war, acts ofviolenceandconquestinthestruggleovertheworldmarket.Atthetime,thesedevelopmentsdidnotappear tohimasconsequencesof thewhimsof individualpower-holdersbutasboundupwith theinnernatureofcapitalism.“[T]heironnecessityofeconomicrequirementsdrivesmodernindustrialnationstowardsruin.”[130]

This conceptionof capitalism’sdevelopmental tendencies,until thengenerallywidespread intheworkers’movement,couldnotbereconciledwithTugan-Baranovsky’sandHilferding’stheoriesof theunlimitedpossibilities for thedevelopmentof capitalism, alreadymentioned.Theharmonistconception of capitalist development obviously contradicted reality, with its steadily growingcompetitionandtheescalationofstrugglesamongtheadvancedcapitalistcountriesovermarketsandspheres of investment; it also contradicted the fundamental notion of historical materialism thatexplains politics on the basis of the economy. In her book The Accumulation of Capital: aContributiontotheEconomicExplanationofImperialism,[131]RosaLuxemburgsetherselfthetaskof resolving this contradiction. If the neo-harmonists’ conception of capitalism’s unlimitedpossibilitiesfordevelopmentwasright,thentheimperialistfeatureswhichwereappearingwithsuchintensitycouldnotbeexplainedintermsofthenatureofcapitalism.Theywereinsteadtobeevaluatedasmerelyaccidentalphenomena.Ontheotherhand,asRosaLuxemburgcorrectlyemphasises,“thetheoryofcapitalistcollapse…isthecornerstoneofscientificsocialism”.[132]Andthisisthegreathistorical significance of Rosa Luxemburg’s book: that, in conscious opposition to the attempteddistortions of the neo-harmonists, she adheres to the fundamental idea inCapital of an absoluteeconomic limit to the development of the capitalistmode of production, even though the concretejustificationthatsheprovidedforthetheoryofbreakdown,today,hastobeidentifiedasmistaken.Inher critique ofMarx’s analysis of the accumulation process,which assumes a society that consistssolelyofcapitalistsandworkersanddoesnotengage in foreign trade, shecame to theconclusion“thatMarx’sschemaofaccumulationdoesnotsolvethequestionofwhois tobenefit intheendbyenlargedreproduction”.Purelyabstractly,assumingtherelationsofdependenceandproportionsofMarx’sschema,Marx’sanalysisgivestheappearancethatcapitalistproductioncanbyitselfrealiseallsurplus value and employs capitalised surplus value to satisfy its own requirements. That is,“capitalistproductionbuysupitsentiresurplusproduct”.[133]Forexample,coalminingisextendedinordertomaketheexpansionoftheironmakingandthenmachinebuildingindustriespossible;thelatterareexpandedtomaketheextensionoftheproductionofmeansofconsumptionpossible.Thisextensionof industryproducingmeansof consumption,however, createsmarkets for theextendedproductionofthecoalmining,ironmakingandmachinebuildingindustries.Individualbranchesofindustry thus create markets for each other. Setting out Marx’s analysis in this way, which Rosa

Luxemburgregardsasmistaken,productioncanbeextended“adinfinitum…incircles”,without itbeingapparent“whoistobenefit…whoarethenewconsumersforwhosesakeproductionisevermore enlarged”.[134] Such accumulation does not serve consumption but is “production forproduction’ssake”.[135]Actuallyworkerscanreallyonlyconsumeapartoftheenlargedproduct,thepart which expresses the value of their wages. Part of the product serves to replace means ofproductionthathavebeenusedup;theremainderthatisleft,surplusvalue,consistentlygrowsinthecourse of accumulation. Who realises the consistently growing surplus value? The capitaliststhemselves only consume a part of it, while they employ an ever-growing part of it for furtheraccumulation.Butwhatdotheydo,then,withtheevenlargerannualproduct,withtheirsurplusvalue?RosaLuxemburgcomestotheconclusionthat“therealisationofthesurplusvalueforthepurposesofaccumulationisanimpossibletaskforasocietywhichconsistssolelyofworkersandcapitalists”thatis,suchacapitalismcannotexist.Thecapitalistmodeofproductionrequiresforitsexistence“asitsprimecondition…that thereshouldbestrataofbuyersoutsidecapitalist society”, that is sociallayers,“whoseownmodeofproductionisnotcapitalistic”andrealisethecapitalistsurplusvalue.Butcapitalismdoesnotonlyrequirenon-capitalist“milieus”torealisesurplusvalue,evenmoreinordertoobtainalargepartofthemeansofproduction,inparticularrawmaterials(constantcapital);andfinally: “Only the existence of non-capitalist groups and countries can guarantee such a supply ofadditional labourpowerforcapitalistproduction.”[136]It is thereforeapparent that“theprocessofcapitalaccumulationisconnectedwithnon-capitalistformsofproductioninallitsvalueandmaterialrelations: constant capital, variable capital and surplus value”.[137] Capitalist accumulation “as anhistorical process” is, in practice, dependent on “the given historical setting” of non-capitalistcountriesandlayers:artisans,peasants.Withoutthismilieuitis“inanycaseunthinkable”.Theresultis capital’s aggressive drive to bring non-capitalist territories under its sway. In this way, RosaLuxemburgbelievesthatshehasexplainednotonlyaccumulationandtheconditionsunderwhichittakes place but also the driving force behind imperialism and the tendency to colonial expansion.Military occupation of colonies, the violent theft of theirmeans of production and labour power,“planning for the systematic destruction and annihilation of all the non-capitalist social units”, thestruggleofcapitalismagainstthenaturaleconomyandtheruinofindependenteconomiesofartisansandpeasants,allresultfromthedrivetorealisesurplusvalue.Incontrasttothe“crudeoptimism”of[David]Ricardo,[Jean-Baptiste]Say[138]andTugan-Baranovsky,forwhomcapitalismcandevelopwithoutlimit,“withthelogicalcorollaryofcapitalism-in-perpetuity”,[139]herownsolutionseemstobeinthespiritofMarx’stheoryofthefinalbreakdownofthecapitalistsystemofproduction,whichisfoundedon“thedialecticalcontradictionthatthemovementofcapitalaccumulationrequiresnon-capitalist formationsas itscontext…andcanonlyexistas longas thismilieu ispresent”.[140]Asnaturaleconomiesaresubordinatedtocapitalism,thesituationwhichMarxpredictedinhisanalysisdrawsnearer, namely capitalist production as “the exclusive anduniversal dominationof capitalistproductioninallcountriesandforallbranchesofindustry”.[141]“Butthisisthestartofadeadend.Oncethefinalresultisachieved…accumulationbecomesimpossible.”[142]Thehistoricallimitsofaccumulation, the impossibility for the productive forces to develop further, is apparent here. Theconsequence is the end of capitalism. Its imperialist phase is thus the final period in its historicalcareer.Sotheeconomicanalysisofnon-capitalistmarketshastheclosest innerconnectionwiththeemergence of socialism. Socialism is not merely dependent on subjective-voluntarist factors butresultsfromtheeconomy’scourseofdevelopment,connectedwiththeforceswithincapitalismthatobjectivelyworktowardsitsnecessarybreakdown.

This theory, which places emphasis on the problem of markets, on the question of therealisation of surplus value, is not capable of satisfactorily explaining the characteristic feature ofcapitalism’s imperialist period, the export of capital (see Lenin’s theory of imperialism, below).

Furthermoretheseideaswerenotnew;theyhaveahistoryofmorethanahundredyears.Inessence,theywerealreadydevelopedbySimondedeSismondiinhisNewPrinciplesofPoliticalEconomyof1819 andRobertMalthus in the chapter on accumulation inhisPrinciplesofPoliticalEconomy of1820.[143]TheseideaswerelaterextendedbysocialisttheoriststoexplainimperialismbyHeinrichCunow(“Oncrisistheory”),LouisB.Boudin(TheTheoreticalSystemofKarlMarx,withaforewordbyKarlKautsky)andKautskyhimself (seeabove).[144]Luxemburg’sachievementwasnew in thatsheusedMarx’sreproductionschemastodemonstratethenecessityofnon-capitalistareas.

Thisisnottheplacetoofferanextensivemethodologicalandmaterialcritiqueofthetheory.Inthis regard, refer to theworks ofHenrykGrossman, discussed further below.Directly opposed toRosaLuxemburg’sisthepositionofVladimirIlyichLenin,whoalreadyarguesagainsttheRussianNarodniks[145] in his A Characterisation of Economic Romanticism (Sismondi and Our NativeSismondists).TheNarodniksadoptedSismondi’s theoryof theexternalmarketas thecondition forthe existence of capitalism in full. Lenin repeatedly criticises the theory that it was impossible torealise surplus value under “pure” capitalism in his principal work against the Narodniks, TheDevelopmentofCapitalisminRussia.[146]Thecontradictionbetweenthelimitsofconsumptionandlimitless expansion of “production for the sake of production”[147] does exist. But this is not acontradiction in a theory but a real contradiction in the capitalist system.Nothingwould bemorevulgar,however,thantoconcludefromthecontradictionsofcapitalism,i.e.fromitsirrationality,thatit is impossible. This contradiction is not capitalism’s only one. It can neither exist nor developwithoutcontradictions.“Nothingcouldbemoresenselessthantoconclude…thatMarxdidnotadmitthe possibility of surplus value being realised in capitalist society, that he attributed crises tounderconsumption,andsoforth.”[148]Instead,differentbranchesofindustryconstitutemarketsforeach other. As, however, they develop unevenly and overtake each other, because there is noregulationtoimposeconsistencyonindividualbranches,“themoredevelopedindustry”necessarily“seeks a foreign market”.[149] This uneven development of individual branches of industry is,therefore,thefinalcauseofcrisesandcapitalism’sexpansionisttendencies.AftertheoutbreakoftheWorldWar, as theproblemof imperialismnaturallyattractedgreaterattention,Leninundertook tolay bare the nature of imperialism, its economic and social roots, in his book Imperialism: theHighest Stage of Capitalism.[150] He identified these in the structural transformation of worldcapitalism,inthedisplacementofcompetitionbymonopoly,whichopenedthephaseofcapitalism’sdecline. Its characteristic feature is no longer the export of commodities but of capital. Themonopolisticcharacterofcapitalismexplainscontinuouscolonialexpansionandthedivisionoftheworld amongmonopolist associations of capitalists, dominated by the financial oligarchy. Capitalexport,throughthedominationofenormousterritoriesinAsiaandAfricathatsupplyrawmaterials,securescolossalsuperprofitsforthebourgeoisiesoftherulingcapitalistcountries.Theessenceofimperialistexpansiondoesnotlieinthesphereofcirculation(therealisationofsurplusvalue)butinthesphereofproduction(raisingprofits).

Theemergenceofimperialismopenedaperiodofconstantwarandthreatofwar.Warsareaproduct of imperialism, an unavoidable result of the antagonisms of the epoch of decline. In thisrespect, the character of wars has changed; the formal distinction between wars of defence andoffencehaslostanymeaning.For, incontrastwiththewarsofnationalliberationduringtherisingphaseofcapitalism,warsintheperiodofdeclinearepredatorywarsamongstimperialistcountriesandagainsteconomicallylessdevelopednationsandstates.Asaconsequence,theworkingclasshasspecialresponsibilitiesinquestionsofwar,civilpeace,defenceofthefatherlandandapprovingwarcredits. During the phase of capitalism’s decline, the proletariat has the task of transforming warbetweenpeoplesintocivilwar,withaviewtotheconquestofpowerand,forthisreason,ofpreparingstrategically and organisationally for revolution. Grigorii Zionoviev (The War and the Crisis of

Socialism),VladimirIlyichLeninundGrigoriiZinoviev(AgainsttheCurrent:ArticlesfromtheYears1914–16),LeonTrotsky(TheWarandtheInternational),NikolaiBukharin(ImperialismandWorldEconomywithanintroductionbyVladimirIlyichLenin)andHermannGorter(Imperialism,theWorldWarandSocialDemocracy)takesimilarstancesontheproblemofimperialismandwar.[151]

d)Theproblemoftheproletarianseizureofpower.MarxisttheoryandtheSovietUnionTheestablishmentoftheSovietUnionis,inprinciple,notsimplyaturningpointofgreatimportancein the political and economic history of capitalism but also in the field of Marxist theory. TheoutbreakoftheRussianrevolutionconfirmedthecorrectnessoftheprognosisofMarxists,whohadpredicteditsadventandthusbasedtheirstrategyandtacticsonitfordecades.Further,itprovedthecorrectnessofthosewho,likeLeninin1905,hadalreadypredictedonthebasisofMarxisttheorythatthecomingrevolutionwouldbeanupheavalofanewkind—proletarianrevolutionwhich,initsgoal,organsand tacticswouldmovebeyond thebourgeoisworld.[152]The internationalsignificanceoftheOctoberRevolution[153]anditshistoricalmeaningfromthepointofviewofMarxisttheoryis,moreover,thatthesoleruleofthecapitalistsystemhasreacheditsend.WiththeOctoberRevolution,thebourgeoismodeofproduction,beforethisturningpointthedominantandthemostprogressivemodeofproduction,lostitsauraofpermanenceandindestructibility,provingtobeanhistorical,i.e.atransitory,category.Previouslyonlyremnantsofsocialformationsthathavegoneunderandareincomparisonmorebackward(artisans,peasant,theprimitiveeconomiesofcolonialpeopleinAfricaand Asia) have survived alongside it. In contrast to capitalism, socialism was previously only ademand for the future arrangement of society.Now—as experience seems to confirm—a superioreconomicsystemin theSovietUnionconfrontscapitalism,whichhasbeenconvulsedby theworldeconomiccrisis.Throughtheformulationof thefirstFiveYearPlanof1928–32this isonthebestpath torealising,for thefirst timeinhistory, the ideaofasocialist,plannedeconomy,after initial,transitional difficulties are overcome. In a sixth of the world, particularly in the previouslymostbackwardareasofAsiaticRussia,theSovietUnionknewhowtoconstructasocialisteconomyonthebasisofthemostadvancedtechnologyatagigantictempointheareasofeconomicsandculture,forwhichthereisnohistoricalanalogy,boldlyleapingoverwholehistoricalstagesofdevelopment.Thegreatpopularityoftheplannedeconomy’sconfiguration,inalmostallthehighlydevelopedcountriesofEuropeandintheUnitedStatesofAmerica,expressestheshakenfaithinthejustificationforandadequacyofthecapitalistmarketeconomy.Capitalism’sdifficultiesseemtohavebecomemoreacutebecauseofthefactoftheveryexistenceoftheSovietUnionalone,asaconsequenceofitssuccessfulsocialist construction. Social contradictions and class antagonisms are no longer, as earlier,contradictionsbetweenrealityandahoped-forsocialistfuturebutrathertheevermorepronouncedcontradictions between two social and state systems that exist side by side. The foundation of theMarx-Engels Institute inMoscow, under the leadership of the well-knownMarx researcher DavidRiazanov, is of the greatest significance for the scientific deepening and development ofMarxisttheory.Ittookonthemonumentaltaskof[producing]theMarx-EngelsCollectedWorks(inmorethan40volumes)whichwillpublishfundamentallyimportantpartsofMarx’sandEngels’sworldofideasthatwerepreviouslyunknown.[154]Marx-Engels-Archiv,whichalsoappearsinGerman,istheorganoftheInstitute.

Research into the particular conditions of the existence and development of the peasanteconomy plays a specific role in the socialist literature of the Soviet Union. From the extensiveliteratureonly the following arementioned:AlexanderVasilyevichChayanov,TheOptimal Size ofAgriculturalEnterprises,TheTheoryofthePeasantEconomy,TheTheoryofPeasantCo-operatives;Nikolai Pavlovich Makarov, The Peasant Economy and its Evolution. Further, the InternationalAgrarianInstituteinMoscowanditsjournaldealwiththeseproblems.[155]

Russian socialist literature, however, engages above allwith the theoryof socialist upheavalandtheperiodoftransitiontosocialism.InhisspeechontheprogramoftheThirdInternational,in

1922,Bukharincriticisedthosewhowanttodelaythesocialistupheavaluntilsocialismhasripenedwithin capitalism. In contrast to the classical statement inMarx’sCapital that “capitalismmaturedfullyunderfeudalrule”untiltheneworderwasabletofullydevelopaftertheconquestofpoliticalpower, the Russian Communists, especially Bukharin, insist that this theory does not apply tosocialism.Underfeudalism,thebourgeoisiecouldalreadypossessamonopolyoverindustrialmeansofproduction, achieve leading roles in industrialproductionand,drawingon its economicpower,alsoovertakethefeudalclassculturally.Incontrast, theworkingclasscannotbecometheownerofthemeansofproductionandcontrolproductionundercapitalism.Norcanitrisetoahigherculturallevel than the bourgeoisiewithin the framework of capitalism. “Socialism can never ripen in thismanner,evenunderthemostfavourableconditions…It is impossiblefor theworkingclass totakeproductioninhandwithinthewombofcapitalistsociety…[T]heproletariat…canlearnallthatonlywhenithasalreadyachievedthedictatorshipoftheproletariat.”[156]—“Socialismdoesnotarise,itmustbeconsciouslyconstructed.”[157]

Accordingly,fortheRussianCommunists,thepossibilityofaproletarianrevolutionisnottiedto any definite developmental maturity of capitalist society. Only a sufficient concentration ofproduction is required to make the planned organisation of the economy possible and acorrespondingly advanced union of proletarian atoms into a revolutionary class, to guarantee theoverthrowofthebourgeoisieintherevolutionandtheconstructionoftheapparatusoftheproletariandictatorship. In addition to these twoobjectivemoments, two subjectivemoments are required: therevolutionaryenthusiasmoftheproletariatanditsdesiretoendthecapitalistorder,andtheincapacityof thebourgeoisie toeffectively resist theproletariat.All thesemoments,however, arecompatiblewith the most diverse economic conditions. The breakdown of capitalism, according to thisconception, can just as easily take place at a high or a relatively low level of capitalism’s innermaturity.Acountrydoesnotnecessarilyhavetobeamongsttheleadingcapitalistcountriesintermsofitsgenerallevelofeconomicdevelopment.Onthecontrary,sincethecapacityofthebourgeoisieis,ceterisparibus,[158]directlyproportionaltotheeconomicmaturityofcapitalism,itislikelythat“thecollapseof the entire systemensues,beginningwith theorganisationallyweakest linksof thatsystem”(Bukharin,TheEconomicsoftheTransitionPeriod).[159]Laterwewillseethatthistheoryofbreakdown, which constitutes nothing other than a formulation of the specific Russian situationduringtheWar,neithercorrespondswithLenin’sconceptionoftheoverthrowofcapitalismnordoesitapplyatalltotheadvancedcapitalistcountriesofwesternEurope.

Theproblemsofsocialisteconomicconstructioninindustryandagricultureareofimmediate,current significance and at the same time present the greatest theoretical difficulties.No doubt theexpropriationofthemeansofproductionhaslongbeenafixedcomponentofallsocialistprograms.Butthequestionoftheextentoftheexpropriationofindustrialandcommercialcapital,thenatureandextent of the connection between the socialist elements of the economy without markets, and theremainderofthecapitalisteconomy,i.e.thequestionoftheextenttowhichthemarketeconomyistoberetainedandaneconomywithoutmarketsandmoneyistobeintroduced,nowhadtobeanswered.Theproblemofthesocialistrestructuringofthevillagehadtobesolved:whetherastatemonopolyoveragriculturalproductsshouldbeintroducedorprivatepeasantproductionandprivatesales,onlyburdenedwithataxinkind,shouldremain.Likewisethequestionofwhethercollectiveagriculturalproductionshouldbeintroducedand,finally,towhatdegree.Everywhere,thefirsttentativeattemptsat proletarian economicpolicyhad tobemade.They eventually achieved apreliminary resolutionwiththeformulationoftheFirstFiveYearPlanandofrulesforaplannedeconomy,whichalsolaidthefoundationsforanewscience.

UntiltheOctoberRevolution,itwasalmostonlywithintheRussianworkers’movementthattheproblems of the proletarian seizure of power were discussed concretely. With this event, most

stronglyinspiredbyLenin’sTheStateandRevolution,[160]theymovedtothecentreofdiscussionswithin the workers’ movement of the entire world, particularly western Europe: the question ofwhether the conquest of power by the proletariat would take place by parliamentary orextraparliamentarymeans,i.e.throughtherevolutionaryactionoftheworkingclass;thequestionofthe choice between the dictatorship of the proletariat—the council system—as the realisation ofproletariandemocracyandparliamentarydemocracyastheformofappearanceofthedictatorshipofthebourgeoisie;thequestionofthechoicebetweenspontaneousproletarianrevolutionandconsciousorganisation through a party and thus the fundamental relationship between party and class; theproblem of the organisation of a new proletarian international, whether it should be organisedaccording to the principles of democratic centralism as a unitary world party with the task ofpracticallypreparingfortheworldrevolution;thetaskofconqueringthemiddlestratainthetownsandcountrysideasalliesoftheproletariat;thequestionofcolonialpeoples’struggleforfreedomandtherightofnationstoself-determination,thatistheproblemofmobilisingtheoppressedmassesoftheentireworldagainstimperialism.

Theassessmentofthetendenciesofeconomicdevelopmentofworldcapitalismis,naturally,ofdecisiveimportanceinansweringthesequestions.Atpresent,thoselikeKautskyandthespeakersattheBrusselsCongressoftheSecondInternationalin1928areoftheviewthatcapitalismstandsattheoutsetofafurthereraofup-swing.Others,onthecontrary,assumethatitisinaperiodofdecline,which is indeed punctuated by short periods of temporary stabilisation, but that on the whole acontinual sharpening of class antagonisms is apparent, which must finally lead to the decisivestruggleforpower.

The experiences and lessons of the Russian revolution are a current problem for westernEuropean capitalism if it is in themidst of decline, placing the question of thewestern Europeanrevolutionontheagendaforthenextperiod.Thisisthesignificanceofdebatesovertheconquestofstate power inside the leftwing of the Second (Socialist) International, e.g. the debates at theLinzCongressofAustriansocialdemocracy(30October–3November1926),[161]atwhichthenewpartyprogramwasadopted.Thecoreproblemwasthequestionofwhethercivilwarandtheuseofforceshouldbeavoidedbytheworkingclassinitsstruggleforstatepowerandsocialism.Theresultofthediscussioncanbesummarisedthus:theworkingclassshouldinprinciplemakeuseofthelegalmeansof democracy in its struggle. It should not, however, ignore the fact that it is probable that thebourgeoisie will have recourse to force against the working class and its state if the proletariatconquers political power by means of democracy, if therefore democracy is decisively deployedagainst thebourgeoisie itself, asno rulingclassgivesup itspowerwithouta struggle.Under suchcircumstances,theworkingclassforitspartcannotabstainfromtheuseofforce.

e)TheendofcapitalismWhilethesoleruleofthecapitalistsystemwasconvulsedbythevictoryoftheOctoberRevolutioninRussia,itdidnotresolvethequestionoftheendofcapitalisminsocialisttheory,giventheconcretecircumstances in which this victory was possible.With the October Revolution, the breakthroughfromthecapitalistsystemtookplaceatitsweakestpoint,namelywheretherevolutionisingeffectsofcapitalism had hardly begun at the moment of the social explosion. For the technologicalbackwardnessofoldRussiawasstillmorecharacteristicoffeudalismthanofcapitalism.TheRussianexampleisnot,therefore,toberegardedastypicalofthebreakdownofcapitalismintheindustriallymostdevelopedcountries.Theircapacitytoresist,asBukharinsays,isindirectproportiontotheireconomic maturity, thus significantly greater than was the case in Russia, whose capitalistdevelopmentwasjustbeginning.IftheOctoberRevolutionwasasymptomandalsothebeginningofthebreakdownofthecapitalistworldsystem,theimmediateconcretecausesofthiseventarestilltobe found in factors other than the likely causes of the breakdown of capitalism in fully capitalistcountries,likeEngland,GermanyandtheUnitedStatesofAmerica.Afterasbeforeit,thebreakdownof capitalism therefore remains a problem from the standpoint of Marxist theory and the labourmovement.

Duringthepost-warperiod,HenrykGrossmanundertooktoreassertanewthevalidityofthishighlydisputedbutbasicconceptofMarx’ssystem.Previously,thereweretwovariantsofthetheoryof breakdown. One (for example, Bukharin, Imperialism and the Accumulation of Capital) onlyspeaks generally about the “limit … given to a certain degree by the tension of capitalistcontradictions”which“willunavoidablyleadtothecollapseofcapitalistrule”,[162]withoutprovingthis “unavoidability”, i.e.without providing the theoretical explanation ofwhy these contradictionsmust culminate in the final impossibility of balance. Just as little does this interpretation provideconcreteindicatorsbywhichthe“degree”ofcriticaltensionincontradictionsthatmakebreakdown“unavoidable”canbeidentifiedinadvance.Thiscanonlybedeterminedexpost,after theadventofthebreakdown.Then,however,thetheoryofbreakdownissuperfluousasaninstrumentofscientificknowledge. Such a “general” explanation of breakdown must be considered to be unsatisfactorybecause of its scientific indeterminacy, as it really does not fulfil the “Marxist requirement ofconcreteness”(Lenin).[163]

The other variant of breakdown theory, represented by Cunow, Kautsky (in writings of theperiod 1901–11, cited above), Boudin and Rosa Luxemburg, sought to derive the necessity of thedownfallofthecapitalistsystemfromthelimitationsofthemarket,thusfromprocessesinthesphereofcirculation(“therealisationproblem”).

Inhis1898article,alreadymentioned,Cunowinvestigates thecoreproblemof“whetheroureconomic development drives towards a general catastrophe”. Previously, the steady expansion ofcolonial possessions functioned toweaken the tendency to break down, resulting from insufficientmarkets.Assuchanextensionofmarketshasitslimit,however,the“unavoidabilityofbreakdown”isalso a given. Without gaining external markets, “England would long ago have faced a conflictbetweenthecapacityofitsdomesticandforeignmarketstoconsumeandthegiganticescalationofitscapitalist accumulation”. ForCunow, breakdown is not in doubt; rather [it is] simply [amatter of]“howlongthecapitalistmodeofproductioncansurvive…andunderwhatcircumstancesbreakdownwilltakeplace”.[164]

AfterKautsky’sendorsement in thepreface,Boudin’sbookdealswith“thedecisivepointsofMarx’s system”. Boudin also sees in the sale of surplus value “the great problem” on which the

existence of the economic constitution of capitalism depends. “It is the inability to dispose of thatproductthatisthechiefcauseofthetemporarydisturbanceswithinitsbowels.”Indeedifcriseshavepreviously ended and further accumulation has been made possible again, it is only because“capitalisticcountries…hadanoutsideworldintowhichtheycoulddumptheproductswhichtheycouldnot themselvesabsorb”.But thissolutionwasonlytemporary.Thethoroughcapitalisationoftheterritoriesofagrarianmarketssignifies“thebeginningoftheendofcapitalism”andwillleadto“theinevitablebreakdownofthecapitalisticmodeofproduction”.[165]

In contrast to all previous breakdown theorists, Henryk Grossman treads a new path in hisprincipal work, The Law of Accumulation and Breakdown of the Capitalist System and numerousmethodological and critical essays (“A new theory of imperialism and social revolution”, “Thechange in the original plan forMarx’sCapital”, “Gold production in the reproduction schema ofMarxandRosaLuxemburg”,“Thevalueprice transformationinMarxandtheproblemofcrisis”).[166]Heexplainsthedecisivecauseoftheinevitabledemiseofthecapitalistsystemintermsoftheoveraccumulationofcapitalinhighlydevelopedcountriesand theresulting insufficientvalorisationofcapital, thus in termsof theprocessofproduction itself (“thevalorisationproblem”).Withnewproofstakenfrommoderneconomicrelations,GrossmanseekstosupportthetheorydevelopedbyMarx, today almost forgotten but already present in John Stuart Mill and Adam Smith in anembryonicform.[167]Itholds thatonceanation’scapitalexceedsadefinitescale, itsaccumulationfindsnofurtherprofitableopportunitiesforinvestmentandconsequentlyeitherliesidleorhastobeexported. Since Tugan-Baranovsky’s book on crisis, the problem of crisis and breakdown in theMarxist literature of the last thirty years has simply been dealt with from the point of view ofdisproportionalitybetweenindividualspheresofproduction.Grossmandemonstratesthat,forMarx,thedecisiveproblemwasnotprimarilypartialcrisesarisingfromdisproportionalitybutrather theprimarilygeneralcrisis,“generalglut”,whichiscausedby“parallelproduction…whichtakesplacesimultaneouslyoverthewholefield”.[168]“PreciselythepossibilityofsuchprimarilygeneralcrisesandnotprimarilypartialcrisesarisingfromdisproportionalityistheobjectofMarx’sdisputewiththeSay-Ricardoconception.”[169]

Thatanevergrowingmassofmeansofproduction(MoP=machines,buildings,rawmaterials,instruments of production) can be set in motion with a progressive decline in the expenditure oflabour(L)isanempiricallawcharacteristicofthecapitalistmodeofproduction,asever-expandingreproduction.On thebasis of capitalism, that is expressed in the constant growth in the amountofconstant capital per worker in relation to variable (wage) capital (c : v, as the Marxists say, theorganic composition of capital), which American census figures also confirm. As a result of theprogressivelyhigherorganiccompositionofcapital,becauseoftheassociatedrisingproductivityoflabour, wages do account for an ever smaller portion of total production. To the extent that thesurplusvaluegeneratedbyagivenworkingpopulationgrowsabsolutely (the rateofsurplusvalueincreases),however,itfallsinrelationtothecontinuouslyexpandingtotalcapital(c+v).Thisisthefactthatunderliesthelawofthetendencyfortherateofprofittofall.

The classical economists (Ricardo) already correctly identified the tendency for the rate ofprofittofallasaphenomenonbutmistakenlyattemptedtoexplainitasalawofnature,resultingfromthe decline in the productivity of the soil. Ricardo drew pessimistic conclusions for the future ofcapitalismfromthisphenomenon,aswithoutprofit“therecouldbenoaccumulation”.Heconsoledhimself that “happily”, from time to time, industrial and agricultural inventions (mechanicalengineeringandagronomy)canbreakthroughthispernicioustendency,sothatitwillonlyhaveanimpactinthedistantfuture.[170]

Manyearlier theorists, likeBoudinbutaboveallGeorgCharasoff (TheSystemofMarxism),[171]feltthatMarxalsoconnectedthebreakdownofcapitalismwiththefallintherateofprofit.They

couldnot,however,demonstratethecontentofthisconnectionand“thegreatimportancethatthislawhasforcapitalistproduction”.[172]Thatiseasytoexplain,astheyonlyeverpointedoutthefallintherateofprofitalone.Therateofprofit,however,onlyexpressesaproportionalrelationship,nothingotherthananumericalconcept.Itisapparentthatthiscannotleadtothebreakdownofarealsystem.Forthattohappenrealcausesarerequired.

Moreover, the tendency for the rate of profit to decline has been a constant, concomitantphenomenonof capitalism from its beginnings until today, that is, during thewhole process of itsdevelopment.Where, then, does the sudden shift to breakdown come from?Why can’t capitalismsurvivewitharateofprofitof4percentjustaswellaswithoneof13–15percent,asthedecliningrateisoffsetbyarisingmassofprofit?Indeed,thegrowthinthemassofprofit,asaconsequenceoftheevenfastergrowth in totalcapital,wouldbeexpressed ineversmallerpercentages.Therateofprofitwouldapproachzero,thatistheboundarypointinthemathematicalsense,withoutreachingitandyetthecapitalistclasscouldneverthelessfeelcomfortableasaconsequenceofthegrowthinthemassofprofit.

Grossmanwasthefirsttopointoutthatbreakdowncannotbederivedfromorexplainedbytherate of profit, that is by the index number of profits, butmust be understood in terms of what isconcealedbehindit:therealmassofprofitinrelationtothesocialmassofcapital.For,accordingtoMarx, “accumulation depends not only on the rate of profit but on the amount of profit”.[173] Ifaccumulationproceedsasacontinuousprocess,thesurplusvalueofthecapitalistsmustbeusedforthreepurposes,bedividedintothreeparts.First,partmustbeusedasadditionalconstantcapital(ac);asecond part as additional variable capital (av)—for the application of additional labour power; theremaining third part can be used as funds [f], for the capitalists’ consumption. Now, the mass ofsurplus value does grow absolutelywith the development of the capitalistmode of production. If,however,theorganiccompositionofcapitalgrows—asisnecessaryforcapitalistproductionandisalsoassumedinthetheoreticalanalysis—thenarelativelyeverlargerpartofthesurplusvaluemustbededucted for thepurposesofadditionalaccumulation (ac).As longas theabsolutemassof totalsocialcapital—witha loworganiccomposition—issmall,surplusvalue is relatively largeand thisleadstoarapidincreaseinaccumulation.Forexample,withacompositionof200c+100v+100s,constantcapital(c)canbeincreasedby33⅓percentofitsinitialsize(assumingtheemploymentofallthesurplusvalueforthepurposesofaccumulation).Atahigherlevelofcapitalaccumulation,withasignificantlyhigherorganiccompositionofcapital,e.g.of14,900c+100v+150s,theexpandedmassofsurplusvalueisonly1percent,whenit isemployedasadditionalcapital(ac).It iseasytocalculate thatwith continuing accumulation on the basis of an ever higher organic composition, apointmustcomewhenallaccumulationceases.Thisisallthemoresobecauseitisnotanyarbitraryfractionalamountofcapital thatcanbeemployedbutratheradefiniteminimalamountisrequired,whosescaleconsistentlygrowswithincreasingaccumulationofcapital.Withtheprogressofcapitalaccumulation,therefore,aneverlargerpart,notonlyabsolutelybutalsorelatively,mustbedeductedfrom surplus value for the purposes of accumulation.So at high levels of accumulation,when theextentofthetotalsocialcapitalisgreat,thepartofsurplusvaluerequiredforadditionalaccumulation(ac)willbesolargethatitfinallyabsorbsalmostallofthesurplusvalue.Apointmustbereachedatwhichthepartofsurplusvaluedestinedfortheconsumptionoftheworkersandthecapitalists(av+f)declines absolutely.That is the turning point atwhich the previously latent tendency to breakdownbegins to take effect. Now it is apparent that the conditions required for the continuation ofaccumulationcannolongerbeentirelyfulfilled,thatthemassofsurplusvalue,althoughithasgrownabsolutely,isnotsufficientforthethreefunctions.If,aspreviouslyassumed,theadditionalconstantcapital(ac)isdeductedfromsurplusvaluetotherequiredextent,thentherevenuepartisnotsufficient

to cover the consumption of workers and employers to the previous extent. An intense strugglebetween the working class and the employers over the division of revenue, rising pressure fromemployers on the level of wages becomes unavoidable. If, on the other hand, the capitalists areforced, under pressure from the working class, to maintain the previous level of wages andconsequentlythepartdestinedforadditionalaccumulation(ac)isreduced,thetempoofaccumulationwouldslowdown.Thiswouldsignifythattheproductiveapparatuscannotberenewedandexpandedto the extent required by technological progress. A relative technological backwardness in theproductiveapparatuswouldsetin.Anyfurtheraccumulationmustinsuchcircumstancesincreasethedifficulties,becausethemassofsurplusvaluecanonlybeincreasedtoaninsignificantextent,withagiven population. Surplus value flowing from previous capital outlaysmust therefore lie idle; anexcess of inactive capital searching in vain for investment opportunities eventuates. In this way,Grossmanexplainsthetechnologicalbackwardnessofoldercapitalistcountries,likeEngland,withahigherlevelofcapitalaccumulationandthetendencyapparentthereforthelevelofwagestostagnateordecline.

In“pure”,i.e.isolated,capitalism,thesetendenciesmustsoonprevail,i.e.leadtothebreakdownof the system, under the pressure of intensifying class antagonisms. In capitalism which isinterdependentwiththeworldeconomy,numerouscounter-tendenciesoperatetoweakenthetendencytobreakdown,whichisthenonlyexpressedintemporarycrises.

Valorisation (the rate of profit) is repeatedly improved and increases themass of profit byreducingthecostofproducingconstantcapitalandvariablecapital(thelevelofwages),shorteningturnover time, improving the organisation of transport, reducing stocks and commercial expensesandtheperiodicdevaluationofavailablecapital.Theadvantagesderivedfromthedominationoftheworld market operate in the same way. Unequal exchange takes place in foreign trade—thetechnologically advanced countries receive a higher value in exchange for the value of theircommodities—whichalsoincreasesprofits.Thisalsoappliestotheexportofcapital.Capitalexportoccurs because an over-accumulation of capital predominates in the highly developed capitalistcountries and consequently there is a lack of opportunities for investment. As a consequence, thecapital-exporting country receives an additional injection of surplus value, that improves theinsufficientvalorisationofcapitalandweakensortemporarilysuspendsthetendencytobreakdown.This explains the intensity of imperialist expansion during the late phase of capital accumulation.Imperialismisanattempttoimprovecurrentlyinsufficientvalorisationandhencetoextendthelife-spanofthecapitalistsystem,byweakeningtendenciestobreakdown,throughthetransferofsurplusprofits from colonial territories to highly developed capitalist countries. In this way, Grossmancombinesthetheoryofbreakdownwiththetheoryofcrisis.Crisisisanexpressionofbreakdownthathasnotfullydeveloped,becauseithasbeenmitigatedbycounter-tendencies.Butsoonitisapparentthat,becauseofthenatureoftheabovecounter-tendencies,theyareonlytemporaryandonlyabletocounteract the tendency to breakdown to a certain extent. Stocks can only be reduced to a definitelowerlimit,breachingwhichwoulddisruptthecontinuityoftheproductionprocess.Wagescanonlybedepressedtoadefinitelimit,breachingwhichwouldmeanthat thelabourpoweroftheworkingclass was not fully reproduced, instead the intensity and quality of labour would decline. Thereductionofcommercialprofitscanonlyimprovetheprofitabilityofindustrytoalimitedextent.Themore commerce is reduced, the smaller themitigating effects of a further reductionwill be. Thecounter-effects of capital export can also only be temporary. To the extent that the number ofcountries with excess capital and consequently seeking to export increases in the course ofaccumulation,competitionontheworldmarket,thestruggleoverprofitablespheresforinvestment,increases.For this reason too, the tendency to breakdownmust becomemore intense, at a definitepoint. The increase in fixed capital does not have a different effect. At higher levels of capital

accumulation, at which fixed capital accounts for a larger component of constant capital, thecontraction of production during the crisis has ever smaller significance: a firm’s burden ofdepreciationandinterestpaymentsforfixedcapitaldoesnotdeclinewhenproductionisreduced.

So it is apparent that the immanent laws of capital accumulation themselves progressivelyweaken the counter-tendencies. Overcoming crises becomes ever more difficult, the tendency tobreakdownmoreandmoreholdssway.Theperiodsofupturnbecomeevershorter,thedurationandintensityofcrisisperiodsrises.InhisformulaforcrisesGrossmanattemptstodeterminethephaselengthof theeconomiccycle theoretically,bymeansofmathematics,and to identify thefactorsonwhichtheextensionorcontractionoftheeconomiccycledepend.Ifcrisisis,forhim,thetendencytobreakdownwhichhasnotfullydeveloped,thebreakdownofcapitalismisnothingotherthanacrisisthatisnotcheckedbycounter-tendencies.

Socapitalismapproachesitsendasaresultofitsinnereconomiclaws.FromthestandpointofaMarxist theoryofcrisisandbreakdown, it isobvious toGrossman

fromthestartthatthequestionofperhapsfatalisticallyawaitingthe“automatic”breakdown,withoutactively intervening, does not arise for the working class. Old regimes never “fall” of their ownaccord, even during a period of crisis, if they are not “toppled over” (Lenin).[174] According toGrossman, the point of a Marxist theory of breakdown is only to demarcate voluntarism andputschism,whichregardrevolutionaspossibleatanytimewithoutconsidering[whetherthereis]anobjectivelyrevolutionarysituationandasdependentonlyonthesubjectivewilloftherevolutionaries.The point of breakdown theory is that the revolutionary action of the proletariat only receives itsmostpowerfulimpetusfromtheobjectiveconvulsionoftheestablishedsystemand,atthesametime,only this creates the circumstances necessary to successfully wrestle down the ruling class’sresistance.

Grossmancouldachievetheseresults,whichheregardsasareconstructionofMarx’stheoryofcrisisandbreakdown,becausehehadpreviouslyresearchedandrecoveredMarx’smethodandtheplanwhichunderliesCapital.

RosaLuxemburgassumedthattherewasagapinCapital,thatMarxhadnotconsideredforeigntrade; the only explanation of this assumption is that the method which underlies the structure ofCapital as a specific theoretical problem had not previously been recognised. For this reason,however,itwasnotpossibleforLuxemburgtofullyunderstandMarx’ssolution.

If theprocessof isolation served theclassical economists,Marx—according toGrossman—employs the so-called procedure of successive approximation. In order to research causes in thecomplicatedworldofappearances,Marx,liketheclassicaleconomists,makesnumeroussimplifyingassumptionsbymeansofwhichhedepartsfromtheconcretetotalityofappearances,althoughthisispreciselyinordertoexplainit.Theunderstandingachieved[inthisway]canonlyhaveapreliminarycharacter,canconstituteonly thefirststageofacquiringknowledge in theprocedureofsuccessiveapproximation,whichmustbefollowedbyafurther,definitivestage.Toeachsimplifyingassumptiontherecorrespondsasubsequentcorrection,whichinthefinalresulttakesintoaccounttheelementsofactualrealitythatwereinitiallyneglected.Allphenomenaandproblemsaredealtwithatleasttwiceinthisprocedure:firstundersimplifyingassumptions, thenin theirfinalform.ThismethodunderliesMarx’s analysis in all three volumes of Capital. Those from whom this remains hidden mustencountercontinual“contradictions”betweentheindividualcomponentsofMarx’stheory.

Literature

Olderliteratureisidentifiedinthepreviouseditionofthisdictionary;[175]itisexpresslyreferredtohere.OfthemorerecentliteratureseeAshcroft,Thomas1922,AnOutlineofModernImperialism,London:PlebsLeague.Bauer,Otto1931,KapitalismusundSozialismusnachdemWeltkriege(CapitalismandSocialismaftertheWorldWar),Wien:WienerVolksbuchhandlung.Beer,Max1957[1922,1929],TheGeneralHistoryofSocialismandSocialStruggles,intwovolumes,NewYork:Russell&Russell.Bober,MandellMorton1927,KarlMarx’sInterpretationofHistory,Cambridge,Massachusetts:HarvardUniversityPress.Brauer,Theodor2012[1929],DermodernedeutscheSozialismus(ModernGermanSocialism),Paderborn:Salzwasser.Graziadei,Antonio1927,Capitaleecolonie(CapitalandColonies),Milano:Casaeditricesociale.Heider,Werner1931,DieGeschichtslehrevonKarlMarx(KarlMarx’sTheoryofHistory),Stuttgart:Cotta.Heimann,Eduard1922,MehrwertundGemeinwirtschaft:kritischeundpositiveBeiträgezurTheoriedesSozialismus(SurplusValueandSocialEconomy:CriticalandPositiveContributionsontheTheoryofSocialism),Berlin:Engelmann.——1931,KapitalismusundSozialismus:RedenundAufsätzezurWirtschafts-undGeisteslage(CapitalismandSocialism:SpeechesandEssaysontheEconomicandIntellectualSituation),Potsdam:Protte.Heimburger,Karl1928,DieTheorievonderindustriellenReservearmee(TheTheoryoftheIndustrialReserveArmy),Halberstadt:Meyer.Jenssen,Otto1927,DerKampfumdieStaatsmacht:WaslehrtunsLinz?VerhandlungendesLinzerParteitagesderdeutsch-österreichischenSozialdemokratie(TheStruggleoverStatePower:WhatDoesLinzTeachUs?ProceedingsoftheLinzCongressofGerman-AustrianSocialDemocracy),Berlin:Laub.Jostock,Paul1928,DerAusgangdesKapitalismus:IdeengeschichteseinerÜberwindung(Capitalism’sExit:theHistoryofIdeasofOvercomingit),München:Duncker&Humblot.Laidler,HarryWellington1927,AHistoryofSocialistThought,NewYork:Crowell.Laurat,Lucien1932,Unsystèmequisombre(ASystemthatisSinking),Paris:l’Églantine.Lenin,VladimirIlyich1960–8[from1920],CollectedWorks,Moscow:Progress.Leubuscher,Charlotte1921,SozialismusundSozialisierunginEngland:EinÜberblicküberdieneuereEntwicklungdersozialistischenTheorienundüberdieProblemederIndustrieverfassunginEngland(SocialismandSocialisationinEngland:anOverviewofRecentDevelopmentsinSocialistTheoryandtheProblemoftheIndustrialConstitution),Jena:Fischer.Lewin,David1913,DerArbeitslohnunddiesozialeEntwicklung(TheWageandSocialDevelopment),Berlin:Springer.Liebert,Arthur1931,“MaterialistischeGeschichtsphilosophie”(“Thematerialistphilosophyof

history”),inAlfredVierkandt(ed.),HandwörterbuchderSoziologie(DictionaryofSociology),Stuttgart:Enke,pp.360–70.Louis,Paul1931,Lesidéesessentiellesdusocialisme(TheEssentialIdeasofSocialism),Paris:Rivière.Luxemburg,Rosa1972[1921],“TheAccumulationofCapital—anAnti-critiqueorWhattheEpigoneshavemadeofMarx’stheory”,inRosaLuxemburgandNikolaiBukharin,ImperialismandtheAccumulationofCapital,London:AllenLane,pp.44–153.——1919[1916],TheCrisisofSocialDemocracy,NewYork:SocialistPublicationSociety.Mallock,WilliamHurrell1918[1917],TheLimitsofPureDemocracy,London:ChapmanandHall.Spectator(Nakhimson),MyronIsaevich1929,Mirovoehozjajstvodoiposlevojny,Volume3(TheWorldEconomybeforeandaftertheWar.Volume3),Moskva:Izdatel’stvoKomakademii.Pollock,Friedrich1926,Sombarts“Widerlegung”desMarxismus(Sombart’s“Refutation”ofMarxism),Leipzig:Hirschfeld.Ralea,Mihai1923,Révolutionetsocialisme:essaidebibliographie(RevolutionandSocialism:BibliographicEssay),Paris:PressesuniversitairesdeFrance.Rosenberg,Arthur1934[1932],AHistoryofBolshevism:fromMarxtotheFirstFiveYears’Plan,Oxford:OxfordUniversityPress.Séé,Henri1982[1927],Matérialismehistoriqueetl’interprétationéconomiquedel’histoire(HistoricalMaterialismandtheEconomicInterpretationofHistory),Genève:Slatkine.Seligman,EdwinRobertAnderson1967[1902],TheEconomicInterpretationofHistory,NewYork:ColumbiaUniversityPress.Seydewitz,Maxetal.,1931,DieKrisedesKapitalismusunddieAufgabederArbeiterklasse(TheCrisisofCapitalismandtheTasksoftheWorkingClass),Berlin:VerlagderMarxistischenBüchergemeinde.Sorel,Georges1990[1911],“Theeconomicinterpretationofhistory”,inGeorgesSorel,FromGeorgesSorel:HermeneuticsandtheSciences,NewBrunswick:Transaction,pp.191–208.SozialdemokratischeArbeiterparteiÖsterreichs1926,ProtokolldessozialdemokratischenParteitages1926,abgehalteninLinz,vom30.Oktoberbis3.November(MinutesoftheSocialDemocraticPartyCongress,heldinLinz,from30Octoberto3November),Wien:VerlagderWienerVolksbuchhandlung.Stalin,Joseph1934[1924–6],ProblemsofLeninism,NewYork:InternationalPublishers.Trotsky,Leon1975[1922],BetweenRedandWhite:aStudyofSomeFundamentalQuestionsofRevolution,withParticularReferencetoGeorgia,Westport,Connecticut:HyperionPress.——1970[1928],TheThirdInternationalafterLenin:theDraftProgramoftheCommunistInternational:aCriticismofFundamentals,NewYork:PathfinderPress.——1977[1930],HistoryoftheRussianRevolution,London:PlutoPress.Turgeon,Charles1932,Critiquedelaconceptionmatérialistedel’histoire(CritiqueoftheMaterialistConceptionofHistory),Paris:RecueilSirey.Wilbrandt,Robert1919,Sozialismus(Socialism),Jena:Diederichs.

[Journals]

DieGesellschaft:InternationaleRevuefürSozialismusundPolitik,since1924.UnterdemBannerdesMarxismus,since1925.ArchivfürdieGeschichtedesSozialismusundderArbeiterbewegung,1911–30.

See,further,theliteratureidentifiedinthearticles“Bolshevism”,“Internationals”,“Socialdemocraticandcommunistparties”andalsothebiographiesof[individual]socialists.[176]

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[1]IamgratefultoSandraBloodworth,TomBrambleandPeterJonesfortheircommentsondraftsofthisintroduction,andtoDavidMayer for valuable advice about the historiography ofMarxism.Grossman’s survey, togetherwithmany other economic studies thathavenotpreviouslybeentranslatedintoEnglishorarerelativelyinaccessible,willformthefirstvolumeofhisworks,intheHistoricalMaterialismbookseries,publishedbyBrillandHaymarketBooks.[2]Grossmann1932;Grossmann1933.[3]Jessen1933.[4]Korsch1970;Lenin1964c.ForadditionalbiographicalinformationaboutLeninandotherpeoplementionedinthisintroduction,seethefootnotesinGrossman’ssurvey.[5]ForadetailedaccountofGrossman’slifeseeKuhn2007.Unlessotherwiseindicated,thisisthesourceofbiographicaldetailsaboutGrossman.[6]Grossmann1929;Grossmann1992;Grossman2013.[7]Grossman had expressed this perspective inGrossman 1906: “[Working class] power is used in differentways.Therewere timeswhen theproletariat fought,weapons inhand,on thebarricades.Thenweaponsgaveway tovotingslips.Nowwearepreparing foramassstrikewhichisthestartofanactiverevolutionarystruggle…Themassstrike,thelaststeponthelegalpath,isthefirststepoftherevolution!”ForthecontextseeKuhn2007,p.50.[8]Cliff1957;Post2010;Bramble2012.[9]Kuhn2007,pp.138-46.[10]Grossmann1931.ThebibliographyofthisentryincludedTrotsky’sbookPermanentrevolution,whichappearedin1930,Trotsky1969b.TrotskyalsodiscussedthetheoryintworeferencesincludedinthebibliographyofGrossman’ssurvey,Trotsky1970andTrotsky1977.[11]Lenin1964b,p.341.[12]SeeTrotsky1969a.[13]Grossman1931,p.437.[14]SeeLenin1964a;Stalin1954.[15]SeeHaynes2002;andTonyCliff’sclassic,Cliff1974.[16][PaulMattick(1904–1981)wasaGerman-UScouncilcommunist(i.e.anti-Leninist)friendofGrossmanwhoadvocatedhistheoryofcapitalistcrises.][17]Grossman2000.[18]InBauer1986.[19]Luxemburg2008,p.89.[20]Grossmann1933,p.336.[21]Originallypublishedasanoffprint,Grossmann1932f,fromGrossmann1933.[22]Grossman’ssignaturewas“HenrykGrossman”andhisworkoriginallypublishedinPolishandEnglishappearedunderthisname.Hisnamewasgenerallypresentedas“Grossmann”inhisGermanpublications.[23] [KarlKautsky (1854–1938)was the leading theoretician of the Second International and theGerman SocialDemocratic Partybefore World War I. Words in square brackets are the editor’s, except in quotations where they are Grossman’s, unless otherwiseindicated.][24] [FerdinandLassalle (1825–64)was aGerman lawyer andnon-Marxist socialist.Hewas the founding, dictatorial leader of the

GeneralGermanWorkers’Associationin1863.][25][FromFebruary1848,awaveofrevolutions,startinginParis,swepteastacrossEurope.Pierre-JosephProudhon(1809-1865)wasanearlytheoristofanarchisminFrance.KarlRodbertus(1805-1875)wasaGermaneconomistandtheoristof“statesocialism”.EugenDühring (1833-1921)was aGerman economist and philosopherwho advocated a “socialism” of competing production cooperatives.Marxwrotecritiquesoftheeconomicideasofallthree.][26][MarxplayedavitalroleintheleadershipoftheInternationalWorkingMen’sAssociation,laterknownastheFirstInternational,between1864and1872,whenitmoveditsseattoPhiladelphia.Itwoundupin1876.][27][TheSocialDemocraticWorkers’Party,ledbyAugustBebelandWilhelmLiebknecht,wasfoundedatacongressinEisenachin1869.][28]Marx1989a.[29] [WilhelmLiebknecht (1826–1900)was a leader of theSocialDemocraticWorkers’Party, aMarxist organisation and, after itsfusion with the Lassallean General GermanWorkers’ Association in 1875, of the Socialist Workers’ Party of Germany, which wasrenamedtheSocialDemocraticPartyofGermanyin1890.][30]Liebknecht1963,p.88.[31][MikhailBakunin(1814-1876)wasaRussiananarchistwhoorganisedconspiraciesagainsttheleadershipoftheFirstInternational.Engels1987.][32] [TheAnti-Socialist or “ExceptionalLawagainst thepublic danger ofSocialDemocratic endeavours”banned social democraticorganisations,publicationsandtradeunionsinGermany.][33]Kautsky1886,p.164.[34]Kautsky1925a.[35] [EduardBernstein(1850-1932)wasanearly leaderandMarxist theoreticianofGermansocialdemocracyand later the leadingtheoreticianoftheparty’srevisionistwing.][36] [Georg von Vollmar (1850-1922) was a revolutionary until the mid-1880s. A member of the German federal parliament andsimultaneouslytheSaxonthentheBavarianstateparliaments,headvocatedaprogramofreformandallianceswithbourgeoisparties,intwospeechesinMunich’sEldoradopub;Vollmar1891;Vollmar1892.][37]Bernstein1993;Bernstein1901b;Bernstein1909;Bernstein1901a.[38]David1903.[EduardDavid(1863–1930)wasaleadingrevisionistpolitician.][39]Bernstein1993,pp.199-200.[40]Bernstein1993,p.20.[41]Bernstein1898,p.556;BernsteinmakesaverysimilarstatementinBernstein1993,p.190.[42]Brauer1929,p.142.[TheodorBrauer(1880–1942)wasaGermanandlaterUSChristiansocialisteconomist.][43][BlanquismisapoliticalapproachinfluencedbyorsimilartothatofLouisAugusteBlanqui(1805–1881),arevolutionarysocialistwho regarded revolution as the product of the efforts of a small group of dedicated conspiratorswhichwould establish a temporarydictatorshipintheinterestsofthemasses.][44]Bernstein1993,p.186.[45]Brauer1929,p.148.[46] Tugan-Baranowsky 1901; [Tugan-Baranowski 2000, a translation of chapters I and IV in Tugan-Baranowsky 1901]; Tugan-Baranowsky1905;Tugan-Baranowsky1910.[MikhailIvanovichTugan-Baranovsky(1865–1919)wasaRussian/Ukrainianeconomistandforaperioda“legalMarxist”intheRussianempire.][47]Tugan-Baranowsky1904,p.304etseq.[48]Tugan-Baranowsky1910,p.96.[49]Schmidt1889;Schmidt1899;Schmidt1901;Schmidt1910;Schmidt1915. [ConradSchmidt (1863–1932)wasaGermansocialdemocraticeconomistandjournalist,andtheolderbrotherofthesocialistartistKätheKollwitz.][50]Engels2001,p.36.[51][“moment”isaHegelianterm,herewiththesenseof“aspect”.][52] Jaurès1891. [Jean Jaurès (1859–1914)was aFrenchhistorian and leader of thenon-MarxistFrenchSocialistParty.GrossmanwroteanentryonJaurès,Grossmann1932e.][53]Cf.Lafargue1909.[PaulLafargue(1842–1911)wasaprominentFrenchsocialistpoliticianandason-in-lawofKarlMarx.][54][EmmanuelKant(1724–1804)wasthemostinfluential18thcenturyGermanphilosopher.][55]Cohen1896.[56] Stammler 1896, pp. 575-6. [Karl Eduard Julius Theodor Rudolf Stammler (1856–1938) was a German academic and legalphilosopher.]

[57]Staudinger1899;Staudinger1907.[FranzStaudinger(1849–1921)wasateacherinanGermanacademichighschool,philosopherandadvocateofconsumercooperatives,associatedwiththerightwingoftheSocialDemocraticParty.][58]Staudinger1899,p.159.[59] Vorländer 1900; Vorländer 1926; Vorländer 1926. [Karl Vorländer (1860–1928) was a teacher in an German academic highschoolandphilosopher.][60]Woltmann 1900;Adler 1904;Adler 1908;Adler 1913;Adler 1925. Bauer 1906;Kautsky 1906. [LudwigWoltmann (1871–1907) was a racist German anthropologist and philosopher. Max Adler (1873–1937) was an Austrian social democratic lawyer,educationistandsocialphilosopher.OttoBauer(1881-1938)wasanAustriansocialdemocratictheoristandthemostprominentleaderofthePartyafterWorldWarI.][61]Lenin1962b,pp.17-362. [GeorgiiValentinovichPlekhanov(1856–1918)wasapioneeringRussianMarxistpolitical leaderandtheorist.Vladimir IlyichLenin (1870–1924)wasaRussianMarxist, themost influential leaderand theoreticianof theBolshevikPartyandtheearlyRussianCommunistParty.][62]Vorländer1920.[63][i.e.mainstgreamneoclassicaleconomics,asopposedtoMarx’slabourtheoryofvalue.][64]Pollock1932;andGumperz1931.[FriedrichPollock(1894–1970)wasaGermanMarxisteconomistandcolleagueofGrossmanattheInstituteforSocialResearch.JulianGumperz(1898–1972)wasUS/GermaneconomistwhosePhDthesisPollocksupervised.HesubsequentlyworkedasajuniorresearcherattheInstituteforSocialResearch.][65] Shaw 1896. [SidneyWebb (1859–1947)was anEnglish social commentator, economist and political scientist.GeorgeBernardShaw(1856–1950)wasanEnglishplaywright,socialcommentatorandliterarycritic.][66]Shaw1896,p.7.[67]WebbandWebb1895,originaleditionWebbandWebb1894;WebbandWebb1897;WebbandWebb1911;WebbandWebb1920;WebbandWebb1923;MacDonald1912,originaleditionMacDonald1905.[BeatriceWebb(1858–1943)wasanEnglishsocialcommentator, economist and political scientist. James RamsayMacDonald was a British Labour politician and prime minister (1924,1929-31)andthenLabourratandprimeminister(1931-5).][68]Brousse1882.[PaulBrousse(1844–1912)wasaFrenchanarchistandlaterananti-Marxist,reformsocialistpolitician.][69]Labriola1926.[ArturoLabriola(1873–1959)wasanItaliansocialistjournalistandlaterreformistpolitician.][70]Labriola1907;Labriola1924.[71]Vandervelde1906;Vandervelde1901;Vandervelde1908;Vandervelde1902;Vandervelde1925. [ÉmileVandervelde (1866-1938)wasaBelgiansocialistpolitician.HewasthepresidentoftheSocialist(Second)Internationalfrom1900untilitdissolvedin1916andthenofitsnewincarnation,theLabourandSocialistInternational,from1923until1938.][72][PetrBerngardovichStruve(1870–1944)wasaRussianlegalMarxistandlaterliberaleconomistandpolitician.][73]Kautsky1899b.WheneditorofthedailySächsigerArbeiter-Zeitung,Parvuswroteaseriesofarticles,1898.Mehring’sarticlesappeared in another daily party newspaper,Mehring 1898a,Mehring 1898b,Mehring 1898c; Cunow 1898; Luxemburg 2008a. [Forwritingsbymajorcontributors to thedebateandan introductoryoverview, seeTudorandTudor1988.ThecontentsofNeueZeit, theofficial theoretical journal of theGermanSocialDemocraticParty, andSozialistischeMonatshefte, the organ of the rightwing of theParty, for the period are accessible online fromhttp://library.fes.de/inhalt/digital/ zeitschriften.htm, accessed 20 June2013.Parvus, thenameforpoliticalpurposesofAlexanderIsraelLazarovichHelphand(1867-1924),wasaprominentMarxistrevolutionaryandjournalistin the Russian and German social democratic movements, who particularly advanced the development of the theory of permanentrevolutionwithLeonTrotsky.FranzMehring(1846–1919)wasaGermanMarxistjournalist,literarycriticandhistorian.HeinrichCunow(1862–1936)wasaGermansocialdemocratic theorist,anthropologistandpoliticianwhoshifted to therightof thePartyduringWorldWarI.RosaLuxemburg(1871-1919)wasarevolutionaryPolishandGermantheoristandpoliticalleaderoftheSocialDemocraticPartyof the Kingdom of Poland and Lithuania, the German Social Democratic Party, the Spartacist League and the Communist Party ofGermany.][74]Kautsky1988a.[75]Kautsky1899b.[76][ThisisareferencetoLenin1964d.][77]Engels1990a;Marx1989a.[78]Kautsky1899b,pp.181-3.[79]Engels1990b.[Thiseditionindicatestheabridgementsmadewhenthe“Introduction”wasfirstpublished.DavidRiazanov(1870–1938)wasarevolutionaryMarxisttheorist,historianandarchivist.][80]Kautsky1899b,pp.142,145.[81]Kautsky1902;Kautsky1926.[82]Kautsky1988b,pp.421,424-56.[83]Parvus1901;Parvus1908;Parvus1910;Parvus1907.

[84]Luxemburg2008a,pp.45-7,61,90-2.[Luxemburg’semphasis.Editor’sinterpolation.][85]Luxemburg2008a,pp.66-9.[Luxemburg’semphasis.Editor’sinterpolation.][86]Luxemburg,Socialreformorrevolution,p.95.[87]Grossmann1932c;andGrossmann1932d.[88][Saint-SimonismreferstothetheoriesoftheFrenchutopiansocialistHenrideSaint-Simon(1760–1825)andhisfollowers.][89][RudolfHilferding(1877-1941)wasanAustrianthenGermansocialdemocratictheoristandpolitician.KarlRenner(1870-1950)wasaleadingsocialdemocraticparliamentarianandtheoreticianinAustriafrombeforeWorldWarIuntilafterWorldWarII.HewasthefirstchancelloroftheAustrianrepublicfrom1918until1920.][90]Hilferding1981,p.241.[91][“Chartalism”isatheoryoffiatmoney,issuedandbackedbylawratherthanpreciousmetals,elaboratedinKnapp1924.][92]Kautsky1911b.[93][theprofitsmadebyfloatingsharesinanewjointstockcompany.][94]Hilferding1981,pp.105etseq.,226,180.[95]Hilferding1981,pp.227-35;Marx1976,pp.927-930.[96]Marx1986,p.335.[97]Hilferding1981,p.234.[98]Hilferding1981,pp.367,368.[99]Hilferding1927,p.2.[100]Bauer 1986, pp. 106, 107. [This translation has beenmodified, as indicated by the square brackets.The previously publishedtranslationseriouslydistortedthemeaningofBauer’sGermantextbyrendering“aufhebt”as“generates”;seeBauer1913,p.872.][101]Kautsky1908b,pp.546,549.[102]SeeLuxemburg2008b.[103]Hillquit1909.[MorrisHillquit(1869–1933)wasalawyerandleaderoftheSocialistPartyofAmerica’srightwing.][104][Aristotle(384-322BCE)wasaGreekphilosopher.Cicero(106–43BCE)wasaRomanpoliticianandphilosopher.AnneRobertJacques Turgot (1727–1781) was a French economist and public servant. Jeremy Bentham (1748–1832) was an English socialphilosopherandfounderofutilitarianism.PierrePaulLeroy-Beaulieu(1843–1916)wasaFrencheconomist.AntonMenger(1841–1906)wasanAustrianlegalacademic,socialtheoristandanti-Marxistsocialist.][105]Hillquit1909,pp.97-105,174,181,189.[Grossmanwrote“classstruggles”wheretheoriginalhad“classdivisions”;andleftout“socialistand”fromthequotationstarting“Underthepressure…”;Hillquittookthequotation“withoutviolatingtheprincipleoftheclassstruggle”fromKautsky1901,p.37,whointurnquotedhisownletter,Kautsky1899a.][106]Renner1918.[TheArbeiter-ZeitungwasthedailynewspaperofAustrianSocialDemocracy.][107]Renner1918,pp.61-2,70,90,97.[108]Renner1918,pp.7-12.28,41-3.[AccordingtoRenner,theregulatedpricewasaconsequenceoftheinteractionofcartelsandprotectivetariffs.][109]Renner1918,pp.46-7.[110]Renner1918,pp.47-55,61,64-5,67.[111]Renner1918,pp.82-3.[112]Renner1918,pp.63,65-66,101,106,112-3,123.[113]Renner1918,pp.281-22,331,360-1,328-9,353.[114]Lederer1922.[EmilLederer(1882-1938)wasaGermansocialdemocraticprofessorofsociologyandeconomics.][115]Lederer1925,pp.355-413.[116]Lederer1925,p.387.[117]Braunthal1930,pp.62-3,241,63,46,220.[Braunthal(1897–1980)wasanAustrianandsubsequentlyGermanandUSsocialdemocraticjournalistandeconomist.][118]Tarnow1928,pp.10,19,70,71;Ford1922.[FritzTarnow(1880–1951)wasaGermansocialdemocraticpoliticianaswellasatradeunionleader.][119] Lindemann 1906a; and Lindemann 1906b. [Hugo Lindemann (1867–1949) was an independent author and local socialdemocraticpolitician,lateranacademicpoliticalscientist.][120]Taylor1921;Cole1920a[theGermanedition,referredtobyGrossman,SelbstverwaltunginderIndustrie,Engelmann,Berlin,1921,wasintroducedbyRudolphHilferding];Cole1920b;[ColeandMellor1918waspublishedtogetherwithCole’sGuildSocialism

in Cole andMellor,Gildensozialismus 1921. George Robert Stirling Taylor (?‑1939) was an English lawyer and historian. GeorgeDouglasHowardCole(1889–1959)wasanEnglisheconomistandhistorian.WilliamMellor(1888–1942)wasanEnglishjournalist.][121]Oppenheimer1932.[FranzOppenheimer(1864-1943)wasprofessorofsociologyandeconomicsattheUniversityofFrankfurtamMainfrom1919until1929.HewasaZionistandproponentofmarketsocialism.][122]Kautsky1906;Kautsky1908a;Kautsky1927;Kautsky1925b.[123]Kautsky1988b;Korsch1929.[KarlKorsch(1886–1961)wasaGermanlegalacademic,philosopherandCommunistpolitician(1920-26).HewassubsequentlyacriticofStalinismfromtheleft.][124] [GottholdEphraimLessing(1729–1781)wasanEnlightenmentGermanphilosopher,dramatistandliterarytheorist.FrederickII(“theGreat”)(1712–1786)wasamodernisingkingofPrussia(1740–1786).][125]Mehring1938;MehringpublishedmanyhundredsofarticlesinNeueZeit;Mehring1921a;Mehring1921b.[126]Plekhanov1976b;Plekhanov1908[1906];Plekhanov1976a.[127]Lukács1971.[GyörgiLukács(1885–1971)wasaHungarianMarxistphilosopher,literarytheoristandaleaderoftheCommunistPartyofHungary(1918–28)].[128]Korsch1922;Korsch1970.[129]Cunow1923.[130]Kautsky1903;Kautsky1909,p.117;Kautsky1911a,p.94.[131]Luxemburg1951. [This translationofLuxemburg1975 isunsatisfactory inplaces.Where that is the case,new,moreaccuratetranslationsfromtheGermanoriginalareprovidedandwhereSchwarzschild’s translationhasbeenusedandher terminologydivergesfrom the translations in the Penguin editions ofCapital, her texts have been modified. The term “diagram”, for example, has beenreplacedwith“schema”.][132]Luxemburg1951,p.96.[133]Luxemburg1951,p.330.[134]Luxemburg1951,p.330.[135]Marx1976,p.742.[136]Luxemburg1951,pp.350-2,361.[137]Luxemburg1975,p.314.[138] [DavidRicardo(1772–1823)wasapreeminentEnglishtheoristofclassicalpoliticaleconomy.Jean-BaptisteSay(1767–1832)wasaFrencheconomistandcapitalist,oneof thebest-knownrepresentativesofvulgarpoliticaleconomy,afterwhomSay’sLaw, thenotionthatsupplycreatesitsowndemand,wasnamed.][139]Luxemburg1951,pp.365-6,370.[140]Luxemburg1975,p.315.[141]Luxemburg1951,p.417.[142]Luxemburg1975,p.364.[143]Sismondi1991;Malthus1836,pp.308-438. [JeanCharlesLéonardSimondedeSismondi (1773–1842)wasaFrenchpoliticaleconomist,historianand literary theorist,whowascriticalofcapitalism.Grossmanwrote twostudiesofhiswork,Grossman1924andGrossman1934.RobertMalthus(1766–1834)wasaconservativeEnglishpoliticaleconomist.][144] Cunow 1898; Boudin 1907 [Kautsky’s foreword was only published in the German edition, Boudin 1909. Louis B. Boudin(1874–1952)wasaUSlawyer,MarxisttheoristandleftwingmemberoftheSocialistPartyofAmericafromitsfoundationuntil1919];Kautsky1902.[145][TheNarodnikswerepopulistswhoopposedtsarismandidentifiedwiththepeasantryinlate19thcenturyRussia.][146]Lenin1960b.[147]Marx1976,p.742;Lenin1960a,pp.161,182.[148]Lenin1960b,p.58.[149]Lenin1960b,p.66.[150]Lenin1963.[151]Sinowjew1924[asectionofthebookisinEnglishtranslation,Zinoviev1952-3];LeninandSinowjew1921[acollectionof74articles,thelongestarticlesavailableinEnglishareLenin1964aandLenin1964b];Trotsky1971;Bukharin1929;Gorter1915.[GrigoriiZinoviev(1883–1936)wasaleaderoftheBolshevikPartyandtheRussianCommunistPartyuntil1925whenhemovedintooppositionagainstStalinuntilhecapitulated in1928.NikolaiBukharin(1888-1938)wasaBolshevikandRussianCommunist theoristand leader.His alliancewith Stalin from 1924 ended in 1929. LeonTrotsky (1879–1940)was aMarxist theorist and leader, from 1917, of theBolshevikPartyandthentheRussianCommunistParty.HeopposedtheStalinistcounter-revolutionandwassubjectedtocontinuingandincreasinglyoutrageouspubliccampaignsofslanderfrom1923.HewasexpelledfromtheSovietUnionin1929.HermanGorter(1864–1927)wasaDutchpoetandMarxist.HewasamemberoftheCommunistPartyofGermanyuntil1920whenhewasacofounderofthe

CommunistWorkers’PartyofGermany,acouncilcommunistorganisation.][152][In1905LenindidarguethattheworkingclasswouldplayaleadingroleintherevolutionagainstthetsarinRussiaandfortheestablishmentofa“revolutionary-democraticdictatorshipof theproletariatandthepeasantry”,Lenin1962a.Thiswouldclear thewayforcapitalistdevelopment.Buthemaintainedthatthecomingrevolutionwasdefinitelynotasocialistrevolution,Lenin1962a,p.28.Onlyin1917didLeninconcludethatsocialistrevolutionwasontheimmediateagenda,Lenin1964e,p.341.][153][i.e.theBolshevikRevolution,whichtookplaceinNovember1917,accordingtothemodernGregoriancalendar.][154] [Marx and Engels 1927-41. This project was terminated under Stalin. Riazonovwas dismissed as the head of the Institute inFebruary1931.][155]Chayanov1930;Chayanov1966 [theRussian editionpublished in1925wasbasedon an editionpublished in1923, towhichGrossman refers]; Chayanov 1991; Makarov 1920. [Alexander Vasilyevich Chayanov (1888–1937) was a Russian agriculturaleconomistandadvocateofpeasantcooperatives.NikolaiPavlovichMakarov(1887–1980)wasaRussianagriculturaleconomist.TheInternationalAgrarianInstitute,MezhdunarodniiAgrarniiInstitut,publisheditsjournalAgrarproblemeinGermanfrom1928until1934.][156]Bukharin2012,p.491[emphasisinBukharin’soriginal.ThefirstquotationisfromBukharinratherthanMarx,butseeMarx1976,p.875.][157][ThisquotationdoesnotappearintheEnglish,Bukharin1979,ortheGermanedition,Bucharin1929,towhichGrossmanreferred.Itssense,however,isapparentinBukharin1979,p.99:thebourgeoisie“didnotbuildcapitalism,butitwasbuilt.Theproletariat,asanorganisedcollectivesubject, isbuildingsocialismasanorganisedsystem.Ifthecreationofcapitalismwasspontaneous,thebuildingofcommunismistoamarkeddegreeaconscious,i.e.organised,process”.][158][otherthingsbeingequal.][159]Bukharin1979,p.65.p.[160] Lenin 1964d. [The book was written in August-September 1917 but not published until 1918. Its perspectives, however,underpinnedLenin’sactivityandpublishedwritingsintheperiodleadinguptotheBolshevikRevolution.][161][SozialdemokratischeArbeiterparteiÖsterreichs1926.][162]Bukharin1929,p.265.[Bukharin’semphasis.][163]Lenin1964c,pp.308-9,similarlyp.316.[164]Cunow1898,pp.425,427,430.[165]Boudin1907,pp.150,235,244[Boudin’semphasis].[166]Grossmann1929;Grossmann1928;Grossman2013;Grossmann1932a;Grossmann1932b.[167]Mill1900,book4, chapter4,pp.481-91;Smith1910,book1, chapter9,pp.77-89. [JohnStuartMill (1806–1873)wasanEnglishpoliticaleconomistandphilosopher.AdamSmith(1723–1790)wasapreeminentScottishtheoristofclassicalpoliticaleconomy.][168]Marx1989b,pp.115,136.[“Generalglut”inEnglishinMarx’sandGrossman’soriginaltexts.][169]Grossmann1929,p.211.[170]Ricardo1912,pp.71,73.[171]Charasoff1910.[GeorgCharasoff/GeorgiiArtemovichKharazov(1877–1931)wasaRussianmathematician,economist,physicistandproponentofpsychoanalysis.][172]Marx1981,p.319.[173]Marx1989b,p.165.[174]Lenin1964a,p.214.[175]Grünberg1911.[176]Grossmann1931;Grossmann1932b;Grossmann1932c;Grossmann1932d;GrünbergandGrossmann1933.