Rosa Luxemburg and imperialism

Submitted by AWL on 23 January, 2019 - 10:46 Author: Martin Thomas
Luxemburg speaks

Rosa Luxemburg considered her most important contribution to be her book, The Accumulation of Capital, published in 1913.

The legacy of the Polish­-German revolutionary socialist leader who was murdered by a right­-wing militia operating under the aegis of a Social­ Democratic government just over 100 years ago has come down to us through a haze of sentimental misrepresentation and selective republishing, but now can and should be reconsidered.

For decades the two most widely ­available texts from Luxemburg were critical notes on the Bolshevik revolution, drafted in jail in 1918, and not published by Luxemburg (in fact, in part, implicitly discarded by her) after she was freed; and a passing polemic against Lenin from 1904. The 1906 article in which she aligned firmly with the Bolsheviks against the Mensheviks was unknown.

The Accumulation of Capital was also available in a 1951 academic edition, but not much discussed. Beyond that, there were thin pamphlets produced by the Trotskyists of Sri Lanka (then Ceylon, and then the world’s strongest Trotskyist group). That was all.

From the early 1970s, several one ­volume selections of English translations from Luxemburg’s writings were produced, and a Collected Works in German which in fact failed to “collect” a big proportion of what she wrote. The new Complete Works, now being edited by Peter Hudis, will be fourteen volumes. In the days when Lenin and Luxemburg were both active, as comrades and friends in the left wing of the world socialist movement of their day, no­one talked of “Leninism” and “Luxemburgism”. Both would have subscribed to what Luxemburg wrote:

“Marxism does not consist of a dozen persons who have granted each other the right to be the ‘experts’, before whom the masses are supposed to prostrate themselves in blind obedience, like loyal followers of the true faith of Islam.

“Marxism is a revolutionary outlook on the world that must always strive toward new knowledge and new discoveries... Its living force is best preserved in the intellectual clash of self-­criticism and in the midst of history’s thunder and lightning”.

“Luxemburgism”, as an “­ism”, was invented by Ruth Fischer, then leader of the German Communist Party, in the first half of 1925. The invention was part of what was called “Bolshevisation”, and what was in fact incipient Stalinism — a process by which the Communist Parties outside Russia were made “monolithic”, and their political life increasingly dominated by a chase after “deviations”.

Just a couple of years earlier, at the 1922 Fourth Congress of the Communist International, the debate on the “Eastern Question” had been opened by a delegate expounding Luxemburg’s theories on imperialism, and no­-one complained or protested. Now activists were told that “Luxemburgism” was a heart-in-the-right-­place, but economistic and spontaneist, “deviation”.

In the early 30s, “Luxemburgism” was revived by groups like the half­-revolutionary half­-reformist SAP (Socialist Workers Party) of Germany, but now with positive connotations. Luxemburg, the new “Luxemburgists” said, offered a more easy­going and ecumenical version of revolutionary politics than “Leninism”.

That image has been passed on down the decades. John Berger’s words give a comforting and popular version: “she loved workers and birds. She danced with a limp”.

The image is condescending, maybe even sexist: Luxemburg as the fey, charming, warm­hearted, sentimental sort of revolutionary, easier to take as a model than the fierce Bolsheviks.

The real Rosa Luxemburg was the most formally­-educated economist in the whole world socialist movement of her day. She helped build a Marxist movement in Poland much factionally ­tighter than the Bolsheviks ever were.

She was damned as “Bloody Rosa” by the German ruling class and conservative Social Democratic leaders. She was an intense, dauntingly argumentative, sometimes over­rigid, theorist. She was not modest, either. When she thought she had new ideas, she wanted people to know that it was she who had developed them.

Frau Doktor Rosa Luxemburg reckoned that economics was “her field”. Like Antonio Gramsci, who resolved in prison to write something “für ewig”, something lasting, she declared she felt “the need to ‘say something great’... to write in such a way as to act on people like a thunderclap”.

Luxemburg alluded to increasing state intervention in capitalism, but — unlike Kautsky, Hilferding, Bukharin, Lenin, and others — did not make much of it. She continued to depict an anarchic market as the main regulator.

Luxemburg’s academic education in economics was at a university dominated by the so-­called “Historical School”. That school of theory is now scarcely mentioned even in university courses on the history of economic thought. At that time, however, it dominated German (and Swiss ­German) universities.

Against the Historical School’s schematising about nudging capitalism into more “social” forms, Luxemburg insisted on the governing role of market mechanisms. But, almost uniquely among economists whether bourgeois or Marxist, she argued that capitalist markets could not balance — not even imperfectly and via crises — without help from outside.

Because that “outside” would tend to become exhausted, the system tended towards collapse. (Of course, she added, the difficulties of capitalism along the way would surely spur the working class into overthrowing the system long before the notional final collapse).

Of all economists other than Marx, her warmest appreciation was for the early 19th century writer J C L
de Sismondi, who also, though vaguely, suggested that capitalist markets would not just have crises but be inherently incapable of balancing.

Luxemburg derived her theory, in The Accumulation of Capital, of the necessity of help from the non-capitalist “outside” from flaws (as she saw them) in the jumbled and incomplete discussion in Marx’s unfinished volume 2 of Capital of schemes of “expanded reproduction” — simple forms of the input-­output analysis later developed by Wassily Leontief.

Her core argument, however, is really not to do with the balance between the two departments, production of means of production and production of consumer goods, which Marx uses in his schemes. is about where the purchasing power is found to “realise” surplus value, i.e. to sell the commodities in which surplus value is embodied.

On a first approximation this is a problem even with “simple reproduction” (an economy where the capitalists and their hangers­ on personally consume all surplus ­value, and production and its proportions are the same each year).

If the capitalists start each period with just enough money to buy the means of production and the labour power required to produce in that period, then the total purchasing power available at the end of the period (in the hands of workers who have sold labour ­power, and capitalists who have sold products) will be exactly enough to buy only the same inputs for the next period, and not enough to buy the extra commodities in which surplus-­value is embodied.

All that is required there, however, is that the capitalists should have a cash reserve large enough to purchase a period’s surplus-­product. That cash reserve changes hands among the capitalist class, but returns to them, collectively considered, after each period. A one-­off cash reserve deals with the problem of circulating the surplus-­product for any number of periods.

What about “expanded reproduction”, though, when the surplus ­product includes, in each period, a greater and greater mass of “investment goods” and industrial inputs?

At points Luxemburg appears to be asking, where does the ever­greater stock of money come from to circulate the ever­-greater output? At others, she seems to be asking, what is the purpose of this ever­-greater output? Are the capitalists just producing for the sake of producing?

If I understand Luxemburg right, her core argument is a bit different. It is: how does the purchasing power to circulate the ever-­increasing surplus product come into the hands of the capitalists?

Even if they want an endless spiral of investment-­profit-­investment­-profit,
how do they find the purchasing power to enable that flow? Even if more gold or notes or other money has been produced somewhere, how does it get into the capitalists’ hands?

“We do not ask here... where does the money for the circulation of surplus value come from?... We ask rather: How does new money capital come into the pockets of the capitalists...”

Of course each capitalist can get new money by selling their own surplus-­product: but the capitalists collectively can only do that if they, collectively, already have the extra money with which to finance buying that surplus-­product. A one­-off extra cash “float” will not solve this problem, as it does with “simple reproduction”, because in each period an expanded “extra” is called for.

Luxemburg’s answer to this puzzle was that the capitalists find an external source of purchasing power in the “non­-capitalist environment”, notably in Asian, African, and other countries then largely still pre-capitalist.
Yet how do the peasants and others in “non­capitalist environments” get purchasing power? They can do that only selling commodities, that is, by obtaining through exchange some of the purchasing power originally held by capitalists and workers.

When capitalists or their associates loot the “non­-capitalist environment” without exchange, as of course they did, that only sharpens the puzzle: where do the looters find the purchasing power to sell the stuff they have looted?

The problem of how to sell the surplus product certainly exists as a chronically-­recurrent one. That is not because of absolute lack of purchasing power. It is because capitalists with purchasing-­power are holding on to their cash, or restricting credit — because it looks more profitable to wait before making new investments, because they need cash to deal with suppliers demanding prompt payment for goods already received, or because their credit has imploded in a financial crash. That happens repeatedly, but not all the time.

In fact purchasing power is expanded by the continuous creation of credit and credit-money. Most money is created by commercial banks through book-keeping operations: today in the UK, only about 4% of the stock of money (potential purchasing-power) is notes and coins of any sort.

Capitalists use credit to make the transactions in the first place. Then, outside a slump, each capitalist’s extension of credit to buy their inputs is “validated”, and more, by the payments they receive in due course for their outputs.

The extension of credit and the covering of it by payments received are both continuous processes — rather than there being any magic point in the circuit where purchasing power is pumped in from outside — and those processes, made possible and regulated by the basic mechanism of surplus­ value, themselves generate the increase in purchasing power.

The puzzle is heightened by Luxemburg, like many theorists, choosing to model the continuous processes of economic life as a sequence of discrete periods.
Between the start of each period demarcated by imagination (the purchase of means of production and of labour­ power) and the end (output being ready for market), nothing happens except production (and the capitalists and workers consuming the stocks of food and so on which they started with). How can more purchasing power have entered the system between the start and the end of the period?

In fact the expansion of purchasing power is a continuous and endogenous process throughout the circuit of capital, not an irruption from outside at this or that point in it.

So Luxemburg’s “logical” argument was wrong. It must have been wrong, because the “non­-capitalist environment” has been shrunk drastically in the last 100 years, and yet capitalism still has the capacity to grow.

Yet her theory shed light on issues otherwise left in shadow.

More clearly than any other writer of the time, she saw how industrialised capitalism moved inescapably to entwine the whole world. Even some other Marxists sometimes depicted international economic connections as secondary supplements, caused by “gluts” or other glitches in a system depicted as basically national.

Other Marxist accounts of imperialism from that time (Kautsky, Hilferding, Lenin, Bukharin, etc.) chiefly concerned themselves with analysis of the economic mechanisms in the metropolitan capitalist countries which generated competitive colony­grabbing, export of capital, etc. Their accounts of economic development in the colonies or economically­-dominated weaker countries were scathing, but cursory (except for one pamphlet by Kautsky).

Luxemburg differentiated between different imperialist relationships. She showed how imperial rule and oppression could come together with economic spoliation in one area, or with promotion of economic advance in another.

On the basis of that scheme, Luxemburg wrote, in the later chapters of The Accumulation of Capital, a brilliant account of how the European capitalist imperialism of her time was simultaneously despoiling countries and drawing them into capitalist circuits of trade. The “violent struggle in Europe”, she wrote, which “took the form of revolution against feudalism... in non­European countries took the form of colonial
policy”, of imposing a “political apparatus for the exploitation of the peasant economy for the purposes of capital — this is the actual function of all Oriental states in the period of capitalist imperialism”.

In her native Poland, however, so she argued in her first book, The Industrial Development of Poland, Russian imperial rule had fostered Polish capitalist industry and created an intertwined Polish-Russian capitalist class.

That was why Luxemburg simultaneously was a fierce champion of colonial revolts, and argued that the majority socialist view favouring the right of nations to self­determination was, for Poland and by extension for other weaker nations within Europe, not so much wrong as fantastical and diversionary.

Poland was then divided into an area ruled by Russia, and smaller areas ruled by Germany and Austro-Hungary. Contrary to much later slipshod summary, Luxemburg did not regard national feelings as irrelevant or unimportant. She did not minimise national oppression, or reckon that “economic” class issues must overshadow it.

She titled one of her articles on the plight of the Polish people “In Defence of Nationality”. She argued vehemently for autonomy for both the Polish regions under German rule and those under Russian rule. She declared: “The cause of nationalism in Poland is not alien to the working class — nor can it be...”

But she argued that to restore Polish unity and independence was as impossible and unrealistic as, say, remedying working­-class poverty by returning to a smallholder peasant economy.

She opposed agitation for Polish independence not because that was a bourgeois cause, but for the exact contrary reason: that she thought it impossible that there could be a real bourgeois movement for that aim. We know that Luxemburg was wrong on that too: an independent Polish state was in fact restored in late 1918, shortly before her death. Her comrades in Poland were thrown into disarray when what they had long
declared impossible now actually happened.

Yet again Luxemburg’s mistakes often contained more illumination than the routine “correct” ideas of others.

By her economic arguments on Poland, she pushed Lenin, in his debates on that issue, into clarifying the irreducible autonomy of politics from economics. Yes, Poland could not be “restored” as an “independent” economic unit: but that did not mean that political independence was impossible.

And by differentiating between the economics of Russian imperialism in Poland, and (say) German imperialism in what is now Namibia, she opened the way for theories of imperialism across the 20th century which would understand that there are many imperialisms and many anti-­imperialisms.

That is why we should be “Luxemburgists” — not in the Ruth Fischer or SAP sense, but in the sense that we are also Marxists, Darwinians, Newtonians...

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