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1978: Ernest Mandel - Rosa Luxemburg and political economy

12 July 2020
Rosa Luxemburg

1. The Introduction to Political Economyi was the product of Rosa Luxemburg’s activity as a professor at the central school of the German Social Democratic Party in Berlin.ii This school was opened on 15 November 1906 and received some fifty students per semester. From 1 October 1907 on, it counted Luxemburg among its teachers. She replaced Hilferding and Pannekoek, who had been banned from teaching politics by the Prussian police; they taught political economy and economic history. From 1911 on, she also gave a course on the history of socialism, replacing Franz Mehring.iii

The idea of having these lectures published came to her, it seems, in 1908. But, in the meantime, the subject that would allow Luxemburg to make her personal contribution to the history of Marxist economic theory – the problem of imperialism, or, as Luxemburg titled it The Accumulation of Capital – increasingly absorbed her materially and intellectually.

The Accumulation of Capital was published in 1913, and it was probably only after completing her magnum opus that Luxemburg resumed writing her Introduction to Political Economy. Interrupted once again, now by the outbreak of war, she continued to work on the Introduction during her stay in prison in Wronke, in the German province of Posen, in 1916-17.

Paul Levi, who was executor of her last will, wanted to publish her complete works, but The Introduction was published as a separate work. No doubt he thought it was not a finished book. This is what he wrote in the preface to the German edition of 1925:


These pages of Rosa Luxemburg are the product of the lectures she gave at the Social Democratic Party school. They are manuscripts, but the style often betrays the fact that it is a written speech. Neither is the book complete. In particular, it lacks the theoretical parts on value, surplus value, profit, etc. – in effect, what is set out in Karl Marx’s Capital on the function of the capitalist system. The state of the posthumous manuscript does not make it possible to grasp the reasons for these gaps. Was it the abrupt end of her life that prevented Luxemburg from completing what she had undertaken? Was it because the bandits, guardians of ‘order’, who had broken into her house, stole among other things the missing parts of the manuscript? In any case, the posthumous manuscript offers certain clues that the text, as it stands today, cannot be considered complete.iv


However, Paul Frölich, one of Luxemburg’s main disciples, is more precise than Paul Levi. In his biography of Luxemburg he writes:


From a letter written by Rosa Luxemburg on 28 July 1916, from the women’s military prison (Barnimstrasse) in Berlin to the party publisher, I.H.W. Dietz, we know the general plan of the whole work, which was to have included the following chapters:
1. What is Economics?
2. Social Labour (Die gesellschaftliche Arbeit).
3.Economic-Historical Perspectives: Primitive Communist Society.
4. Economic-Historical Perspectives: Feudal Economic System.
5. Economic-Historical Perspectives: Medieval Town and the Craft Guild.
6. Commodity Production
7. Wage-labour.
8. The Profit of Capital
9. The Crisis.
10. The Tendencies of Capitalist Development.
In the summer of 1916 the first two chapters were ready for printing, and all the other chapters already in draft. However, only chapters 1, 3, 6, 7, and 10 could be found among her literary remains These were published in 1925 by Paul Levi, unfortunately with many errors, arbitrary alterations and the omission of important notes.v

It must be stressed, however, that if, as Paul Levi asserts, the problems of value and surplus value are not dealt with systematically in the chapters that we have now, these problems are satisfactorily clarified in the chapters on commodity production and on wages.

2. Little is known about a subject that deserves more attention from all those who care about the history of Marxism, of socialism or, in general that of the workers’ movement and social struggles between 1880 and 1914: namely, the way in which Marxism was welcomed, understood and assimilated by those who, at the time, called themselves Marxists. Today, it is clear that the inexorable progress of Marx’s ideas within the international labour movement, warmly celebrated by Engels towards the end of his life, was more apparent than real. Outside Germany, distribution of Capital was As for the German version, while the seventh edition of volume I was almost exhausted shortly before Engels’ death, volumes II and III were distributed in 1914 in only a few thousand copies. It is certainly no exaggeration to say that Marx’s masterpiece has been read more in then ten years between 1960 and 1970 than in the first half-century after it was written.

To the difficulties of diffusion of Capital – due both to the hostility of academic science and to the fact that the level of cultural development of the working class was still too low to grasp this challenging work – is added the slowness of publication of Marx’s other economic works. The Theories of Surplus Value were not available until between 1904 and 1910. As for the 1844 Manuscripts and the Grundrisse, Luxemburg was not even able to read them: they were published long after her assassination. Even today, hundreds of pages of Marx’s economic works have not yet appeared.

It was mainly ‘popularizers’ who had to satisfy the socialist workers’ thirst for knowledge. Among them, undoubtedly Karl Kautsky occupies the first place. His pamphlet Karl Marx’s Economic Doctrine (Karl Marxens Ökonomische Lehre) had fourteen editions in German until 1912, and numerous editions in various other European languages.vii It was from this veritable manual that two successive generations of socialists drew the bulk of their Marxist economic knowledge.

Compared to Luxemburg’s Introduction, Kautsky’s brochure is strikingly schematic and simplifying. As a dedicated disciple, Kautsky is content to summarize Marx’s doctrine in ‘more easily understandable’ language, sacrificing in part the dialectical richness of a thinking that is at once extremely nuanced and capable of the most daring generalizations. From this masterful synthesis of the abstract and the concrete, Kautsky draws only a sequence of syllogisms.

Certainly, in the face of the assaults of the revisionists, who put forward the thesis of the progressive attenuation of the economic and social contradictions of capitalism,viii Kautsky defended orthodoxy, and Luxemburg and Lenin would refer to him for a decade. But, apart from a few glimmers of genius,ix his routine orthodoxy barely covers the fundamental weakness which was to come to the surface from 1910 onwards, and of which the full extent would appear at the outbreak of World War I. This weakness is the following. For the materialist conception of history that sees in class struggle the motor of the historical process, and which conceives of social revolution as the outcome of the conflict between the productive forces and the relations of production, Kautsky substituted an increasingly fatalistic economic determinism, in which ‘economic necessities’ ended up condemning to failure the revolutionary struggles of the proletariat.x

After the dryness of Kautsky, Luxemburg’s Introduction to Political Economy comes as a bath of freshness. Returning to Marx’s method rather than summarizing Capital, she makes us realize the interconnectedness of history and economic theory, of the concrete and the abstract. Luxemburg has a similar capacity to that of Marx for analysis and generalization that avoids the traps of schematism and of falling into banal empiricism. It is enough to compare Kautsky’s pamphlet – one of his most valuable works – with Luxemburg’s book, to grasp the differences in temperament, imagination, sensitivity, and capacity for theoretical synthesis between the two.

Was Luxemburg the first to modify the teaching of Marxist economic theory as practised over two decades by the school of Kautsky? Much research will be needed to answer this question. In Austria, Belgium, the Netherlands, the United States, Italy and France, it seems that it was the tradition inaugurated by Kautskyxi that triumphed and caused havoc in the conception of Marxism, even in the early days of the Communist International. As far as Russian Social Democracy is concerned, on the other hand, there are many indications that here this was not the case. We know, for example, that at the famous Capri School of Russian Social Democracy, Bogdanov took a course in political economy in 1908-09, and, according to what our late friend Roman Rosdolsky told us, this course had many methodological similarities with that of Luxemburg. Is this a coincidence or a mutual influence? Did Bogdanov draw inspiration from Luxemburg? Was Luxemburg influenced by Bogdanov? Are there models of earlier presentations from which these two introductions derived? Today these questions cannot be answered.

3. Some passages in The Introduction to Political Economy have been criticized, some wrongly, some rightly. The entire first part of the book attempts to answer the question: ‘What is political economy?’ The answer to this question, which limits the application of this science to the capitalist mode of production (more precisely, to all societies that know commodity production) seemed to some, including Lenin, to excessively limit the field of this science.

To us it seems certain, however, that the problems traditionally associated with the study of economic phenomena are commensurate with commodity production.xii Without it, there are no problems of exchange value, circulation of money, equivalences, capital or capital accumulation, conjectural fluctuations, terms of exchange or balance of payments: all these problems arise from the doubling of commodities as both use values and exchange values, a doubling which is the result of their particular social nature. From the moment on when the products of labour are no longer anything more than use values, and the equilibrium to be established (or re-established) is only of a physical nature (diet; physical planning of the territory; economy of raw materials, etc.), political economy seems to dissolve into other scientific disciplines: the science of organization, that of communications, cybernetics, preventive medicine, food physiology, polytechnic disciplines, etc.

Marx and Engels, although also restricting the application of political economy and its critique as they had conceived it, to the domain of commodity production (the subject of Capital is obviously the commodity and the capitalist mode of production, and not ‘economic phenomena in general’, as something apart from the specific mode of production in which they appear), add that the economy of labour time is and will remain the foundation of every human society.xiii This gives rise to a certain ambiguity. Since the law of value is only ‘the particular form’ in which under the regime of commodity production the more general equilibrium of working time operates, could we then not deduce the ‘laws of political economy’ from their particular form specific to the capitalist mode of production to a more general form applicable to all human societies?

We know that Marx himself vigorously opposed this hypothesis.xiv The ambiguity is based on a confusion. Indeed, as Luxemburg rightly points out, the very necessity of economic science arises from the opacity of economic phenomena in a regime of commodity production. The nature of exchange value does not automatically emerge from a price list; the nature of surplus value does not automatically emerge from reading a worker’s payslip; the explanation of cyclical crises does not immediately emerge from seeing fluctuations in stock market share prices (or in industrial production indices) – to discover the secrets of these phenomena a scientific discipline is gradually organized.

As soon as the phenomena of commodity production make way for the conscious organization of economic life, based on the satisfaction of needs, there are no longer any particular ‘economic mysteries’ to be solved. The only ‘laws’ that could be discovered are banalities or tautologies along the lines of: ‘Humanity can never consume more than it has at its disposal’ (consumption can never exceed the sum of current production and stocks); ‘without maintaining or increasing the stock of machines, production and consumption will eventually decrease’; ‘if all current production is consumed, the stock of machines cannot be increased’, etc. As soon as one tries to convert these banalities into formulas based on labour expenditure, one comes up against insurmountable difficulties; or more precisely, one is tempted to let oneself slide imperceptibly backwards, towards ‘laws’ inspired by commodity production.

Thus, there is no necessary proportionality between the rate of growth of the social product and its distribution, between funds of consumption and funds of accumulation; a communist society of abundance may indeed have considerable reserves of productivity (because of scientific knowledge that is currently not applied to production, because an additional investment effort was deliberately avoided) which mean that even a slight increase in the overall working time devoted to the manufacture of machines and factories can increase the mass of consumer goods much more strongly. And, since we are no longer calculating in value terms, the aim is obviously not to ‘restore’ some kind of ‘balance’ in labour expenditure in each branch, but simply to achieve, at the lowest overall labour costs, a desired assortment of physical masses of products.

If Luxemburg is right against her critics in her definition of the object of political economy, she is wrong in her elaboration of Marxist wage theory. Or, more precisely, she makes excessive concessions to the thesis of absolute impoverishment, attributed to Marx by his bourgeois and revisionist critics – a theory which the founder of scientific socialism never defended in this form.

Let us be clear: Luxemburg remains within well-established Marxist orthodoxy, and resolutely rejects Lassalle’s ‘iron law of salaries’, a theory of Malthusian and Ricardian inspiration. With Marx, Luxemburg stresses that it is the accumulation of capital and not demographic movement that periodically grows and shrinks the industrial reserve army. With Marx, she distinguishes two parts in the value of labour-power: one part that must satisfy purely physiological needs, and one part that corresponds to the historically acquired needs of the working class, needs that depend as much on national historical peculiarities as on the level of material civilization achieved in a given country and on the organized strength of the working class.

Luxemburg even insists, and rightly so, that it is only thanks to the trade union and socialist organization of the workers, and thanks to their class struggle, that labour power is sold at its value (and not below its value), and that a series of cultural needs are definitively integrated into the minimum standard of living that the wage is supposed to satisfy. She sees this as ‘the great economic significance of Social Democracy’ (of the labour movement). And, together with Marx, Luxemburg particularly insists on the importance of the relative share of the newly produced value that goes to the producers. The tendential reduction of this share, the relative impoverishment of the proletariat, is rightly conceived as a historical law that can be abolished only by the abolition of the capitalist regime – whereas under this regime effective trade union organization can, under certain historical conditions, succeed in halting the downward trend of real wages.

But Luxemburg is wrong when she says that ‘ the real wage has the constant tendency to fall to the absolute minimum, the minimum of physical existence, in other words there is a constant tendency on the part of capital to pay for labor-power below its value. Only workers’ organization provides a counterweight to this tendency of capital’xv In this absolute and unqualified form, the formula is inaccurate.

It could be debated whether such a trend would exist in a hypothetical, abstract globally homogeneous capitalist society. But in the real world, dominated by huge differences in productivity and level of industrialization between various capitalist nations, the tendency mentioned by Luxemburg does not exist. She implies a global levelling of wages in the period before the emergence of powerful trade union organizations (or, which amounts to the same thing, an international levelling of the industrial reserve army, with more or less equivalent difficulties for the organization of workers, confronted by an equivalent mass of unemployed). The reality, highlighted by Marx, is obviously that there are large wage differentials between different capitalist countries, and that in general, if the level of productivity of a capitalist nation is on average higher than that of its neighbours, the level of wages will also tend to be higher.

This is not because the level of wages is a function of the level of industrial productivity, as bourgeois economists claim. We need to consider the fluctuations of the industrial reserve army to understand this correlation. In ‘empty’, underpopulated countries with large reserves of unoccupied land, high productivity is neither cause nor consequence of high wages. Such wages are rather a function of an acute labour shortage. In the countries that industrialized first, higher wages are a function of the fact that such countries export a significant part of their industrial production. This means that jobs lost through capital accumulation are mostly lost abroad, while at home jobs are newly created. It is only in capitalist countries which are only beginning to industrialize that we can, therefore, speak of a tendency of capital to push the wage down to the physiological minimum, because the industrial reserve army there tends to be large and permanent. For the same reason, in such countries, organization of workers in trade unions faces major difficulties.

4. The entire Introduction to Political Economy can be summarized in three Hegelian triads: the primitive production of use values leads to market production, which will reproduce production for needs, but incorporating the colossal expansion of humanity’s needs and potentialities made possible by market production; the organization of production in primitive communities leads to the anarchy of capitalist production, which will lead to the socialist planning of tomorrow, infinitely more complex and varied than the organization of yesteryear; primitive collective property leads to generalized private property under capitalism, which leads to the collective property of tomorrow (collective property which will however differ from primitive collective property by the fact that this collectivity will no longer be a small group bound by blood, a horde, a clan or a tribe, but a very large collectivity, a nation, a continent, even the whole of humanity).

The order of these three triads is obvious. It is the development of commodity production within the primitive community that disintegrates it, accentuates social differentiation, and brings forth the private appropriation of the social surplus product and the means of production. On the other hand, it is the decline of private property – the result of capitalist competition itself – and the advancing objective socialization of production under this same capitalism, which makes it ripe to be replaced by a socialism. But this sequence is not gradual, evolutionary and unavoidable. It proceeds through crises and violent explosions, in which the actions of social classes play a decisive role. Primitive communities do not automatically fall apart. Their destruction is most often carried out through the iron and fire of conquerors, and this path is traced not only in the blood of victims but also in that of resistance fighters. Luxemburg’s references to the extermination of the American Indians by the Spaniards, to the barbarity of the enslavement of black people, to the colossal price that colonialism has imposed on the human race, sound strikingly modern. Here as well, a wide gulf separates The Introduction, conceived in 1908, from Kautsky’s commentary of 1886, from which the ‘Third World’ (two-thirds of humanity) is virtually absent.

In the same way, the contradictions of generalized commodity production, that is to say of capitalism, are not described as automatically leading to its collapse, but necessarily provoking the reaction of the exploited, of the proletarians; it is their class struggle that can substitute a socialist society for capitalist society.

Most of the book is devoted to explaining the fundamental differences between an economy based on the production of use values, intended to satisfy the needs of producers, and an economy based on the production of commodities. Luxemburg attempts to present the different logics of these two economic systems. In the first, planning, meaning the conscious organization of work, prevails; on the second, competition, meaning the absence of planned organization, chaos is the inevitable result. The transitional forms from one to the other are dissected with great care, especially the transition from mutual aid to the free labour provided by one part of society for the exclusive benefit of another.xvi

Readers who compare these analyses with the evolution of capitalism since the beginning of the 20th century will wonder whether Luxemburg weakened her demonstration by forgetting to mention the rise of ‘organized capitalism’, of monopoly capitalism. She could have maintained the integral parallelism of the exposition: just as in an economy based on the production of use values elements of the future generalized commodity production already begin to blossom, so the first elements of the future planned economy, based on the satisfaction of the needs of all, begin to develop within the generalized commodity production that is capitalism. And just as commodity production was only able to develop fully and manifest all its possibilities by rejecting the old skin of the village community, so tomorrow’s economy of abundance can only be fully realized by emerging from the cocoon in which capitalist commodity production – production for profit and not for the satisfaction of needs – is holding it prisoner.

The empirical data on the rise of trusts, cartels and financial capital available to Luxemburg were already abundant in 1908. Hilferding’s Financial Capital appeared a year after Luxemburg began writing The Introduction, at Christmas 1909, and is based on an extensive bibliography. The theoretical publications of international Social Democracy, notably the Neue Zeit, contain numerous references to the movement of capital concentration.xvii Moreover, did Luxemburg herself not emphasize this phenomenon in her polemics with Eduard Bernstein and Konrad Schmidt in 1899?xviii Why is this movement not described in the Introduction?

It is possible that the part of the manuscript which, according to Paul Levi, was lost, did contain work in this regard. But one fact is striking. In The Accumulation of Capital, the phenomena of trusts, cartels and holding companies, and the analysis of the elements of ‘organization’ that this introduces into the anarchy of capitalism – an idea that plays such an important role in Lenin’s work, for example throughout Imperialism, the Highest Stage of Capitalism – does not occupy an important place; it is hardly mentioned. It is therefore likely that at least from a theoretical point of view, this phenomenon was of little concern to Luxemburg in the period 1908-14.

There are two main reasons for this lack of interest. First, what interests Luxemburg (and this will be the Leitmotif of The Accumulation of Capital) is the functioning of capitalism as a whole, that is, the specific characteristics of the capitalist mode of production that distinguish it from all previous modes of production. Generalization of market production; universal competition and anarchy of production; equalization of the rate of profit which distributes capital among various industrial branches so as to re-establish the equilibrium of the division of labour; increasingly intensified exploitation (at least from the relative point of view) of Labour by Capital thanks to the pressure of the industrial reserve army; inevitable crises of overproduction: this is how Luxemburg herself summarizes this functioning at the beginning of the last chapter of this book. The question she is interested in is how capitalism can function despite the anarchy of production. This question is the fundament of the whole Introduction to Political Economy. In the context of this question, the problem of whether competition pits a few thousand large or medium-sized industrialists against each other, or whether it pits only a few almighty trusts against each other, seems to be of secondary importance. Like Marx, Luxemburg sees competition as an essential condition for the existence of capitalism; but the forms of this competition, and the magnitude of the forces it brings into play, do not change the substance of the reasoning.

However, the question: ‘How can capitalism work?’ logically raises another one: ‘What are the absolute barriers to the functioning of capitalism?’ We encounter this question at the conclusion of this text and it is the subject of The Accumulation of Capital. However, we know that in order to answer it, Luxemburg resorted to a conceptual simplification which is undoubtedly at the source of the errors of analysis contained in The Accumulation of Capital: the concept of the capitalist class forming a whole, the concept of capitalism reduced to a single capital.xix Here we have the second reason for Luxemburg’s lack of interest in the phenomenon of the formation of capitalist monopolies.

From the moment that one thinks about the ‘big picture’, about the macroeconomic data of aggregate labour income and aggregate capital income, the question of how capital income is distributed among the different fractions of the bourgeois class once again appears to be of secondary importance. The question of whether the degree of concentration of capital modifies the distribution of income is not even raised, because, in Marxist theory, this modification operates at the expense of the non-monopolized sectors of the bourgeoisie and the petty bourgeoisie, rather than at the expense of the working class (it is only indirectly that the formation of monopolies can reduce the share of Labour in the distribution of income, through a modification of the ‘relationship of forces between the combatants’ in favour of Capital).

In the field of production, competition is the law of capitalism; in the field of income distribution (realization of surplus value, capital accumulation), the problem of concentration does not arise. This is Luxemburg's theoretical approach, which seems to lead her to neglect the phenomenon of monopolies.

The superiority of Hilferding’s analysis and of that of Lenin which complements it, is obvious. And here a methodological remark is in order. The strength of The Introduction is precisely the masterly way in which Luxemburg, following the example of Marx, distinguishes the evolution of the structures from their revolution, from their overthrow. History is understandable only as a combination of these two movements. Social revolutions are inconceivable without the prior undermining work of evolution.xx But the minute analyses that Luxemburg applies to primitive and feudal society, the transformations she describes in the village community, the successive stages of the decomposition of the collective ownership of the land she distinguishes – all this analytical finesse suddenly disappears when it comes to describing the evolution of capitalism. Here, there seems to be room only for immutable contradictions. The effort to adapt for self-preservation, if not denied, is not even considered in the analysis of fundamental evolutionary tendencies, of the laws of development.

Basically, there is here only one essential movement, that of the destruction of the non-capitalist sectors of the economy (crafts and small and medium peasantry in the industrialized countries; all the indigenous productive sectors in the non-industrialized countries). When this movement is complete, the machine must stop. That the movement itself transforms the machine; that monopoly capitalism functions partially in a different way from free competition capitalism – while maintaining the essential features of the latter and of capitalism in generalxxi – this is what Luxemburg does not seem to admit.

Bernstein and the revisionists had proclaimed that capitalism’s ability to adapt meant its capacity to resolve its fundamental contradictions. Luxemburg replies: capitalism is incapable of resolving its fundamental contradictions, so it cannot adapt.xxii The more correct reply to the revisionists would be to say that in order to survive, capitalism constantly adapts itself to the progress of technology and to the fluctuations of the class struggle, but in doing so it does not resolve its fundamental contradictions and even creates new ones. This is the Lenin reply had given it in his pamphlet on Imperialism. In the current phase of the evolution of capitalism we see a similar process.

But even when in error, Luxemburg’s intellectual power and revolutionary spirit stand out from the mediocrity of so many ‘orthodox’ who do not stray from the correct path. For what is the attempt to abstract, if not an effort to grasp the historical movement from a long distance rather than allowing oneself to be fascinated by conjunctural movements?

The great debate with the revisionists had brought Luxemburg to the conclusion that too much attention to short-term fluctuations ran the risk of distracting from the great conflagrations that lay ahead. Imperialist wars and revolutions – those two social cataclysms that made economists, even ‘Marxists’, only shrug their shoulders at the end of the last century, as if they were now only nightmares that ‘economic evolution’ had driven out of the realm of the possible – remained at the centre of her concerns. She foreshadows this in her description of the increasingly acute inter-imperialist conflicts, the growing weight of militarism, which lead to The Accumulation of Capital. Luxemburg did not see all the paths leading to the summit, but she did discern the peaks while they remained hidden in the clouds for the great majority of socialists of her time.

We said that the question ‘How can capitalism work?’ leads to another one: ‘What are the absolute barriers to the functioning of capitalism?’ The last part of the book is devoted to answering this question. We find there summarized the thesis that Luxemburg would develop in The Accumulation of Capital: capitalism arrives at its ultimate development when it has suppressed all non-capitalist milieux, both within Western nations and across the surface of the globe, by integrating into the capitalist mode of production all the producers of colonial and semi-colonial countries. On the one hand this extends the wealth of capital, and on the other hand it increases the misery of the popular masses, on a world scale. Thus the contradiction between the innate expansionist tendency of capital and the possibility of the effective expansion of the capitalist market is deepened. The closer we get to the moment when the whole world is industrialized under capitalist conditions, the more capitalist expansion slows down. When the whole of humanity is divided into capitalists and wage workers, capitalism can no longer function.

In other words: no capitalist expansion without a non-capitalist milieu. If in The Introduction the demonstration of this thesis is held at the level of a few vague formulas,xxiii in The Accumulation of Capital Luxemburg will seek to prove it by trying to demonstrate that the complete realization of surplus-value produced is impossible without a non-capitalist milieu, and that, without this milieu, there will always be in the capitalist regime a residue of unsaleable consumer goods.

We do not intend to summarize here all the controversy opened by this thesis. In our opinion, Luxemburg is mistaken when she asserts, on the basis of Marx’s reproduction schemes, that in the context of expanded reproduction there is necessarily an unsaleable remnant of consumer goods. The function of the patterns of reproduction is not to analyse the laws of development of capitalism, nor to underline the contradictions of the system. They must demonstrate why and how the equilibrium of capitalist production can be established periodically, despite the anarchy of capitalist production. They are part of the problem of ‘capital as a whole’, while crises and conjunctural movements are part of the problem of ‘multiple capitals’, i.e., competition, whose patterns are precisely disregarded. The reality of the world of capitalist production is the unity of these two problems. This is what Luxemburg lost sight of, partly because she had not had the opportunity to study systematically the variations in Marx’s plan for the different volumes of Capital.xxiv

But if the thesis of the impossibility of realizing all surplus value in expanded reproduction, without the intervention of non-capitalist buyers, is indefensible from a theoretical point of view, it is on the other hand evident that such buyers have played and still play an essential role in explaining the concrete historical expansion through which the capitalist mode of production has passed from 1750 to the present day. In other words: what Luxemburg has provided is not a Marxist theory of crises, nor a Marxist theory of the internal limits of the capitalist mode of production, but a theory of capitalist growth.

When she asserts that without exchanges with a non-capitalist milieu, the pace of capitalist expansion would slow down, she reveals one aspect of such a general Marxist theory of economic growth in the capitalist mode of production. Paradoxically, Lenin too, in his analysis, parallel to that of Luxemburg, highlights one of the aspects of this expansion: the transfer of the colonial surplus-profits. In our work, we have insisted for several years that these two hypotheses reveal two particular aspects of a much more general phenomenon: capitalist growth presupposes differences in rates of profit, that is, different levels of productivity and different rates of surplus-value in different sectors of the economy. Whether these sectors are continents, countries, regions or branches of activity (agriculture, different industrial branches, etc.) is irrelevant. The important thing is that there is a difference. Without this difference, there would really be a tendency for the capitalist mode of production to experience a declining rate of growth and to move towards secular stagnation.

But the very nature of capitalist competition makes the full equalization of the rate of profit and productivity between all sectors a utopia. The same fundamental force, namely competition (competition between capitalists as well as competition between Capital and Labour), which pushes the trend towards the equalization of the rate of profit, also pushes towards the suppression of this equality of the rate of profit between various branches (regions, countries). Capitalist investments, the accumulation of capital under the whip of competition, systematically seek the possibilities of obtaining surplus-profits. It is this search that ultimately drives economic growth under capitalism. Lenin and Luxemburg rightly emphasized the exploitation of the colonies (and agriculture) as sources of surplus-profits for capitalist monopolies. But technological innovation (the exploitation of a technological advance), the presence of a reserve of labour, a sudden fall in the organic composition of capital, a sudden rise in the rate of surplus value (as a result of wars, the destruction of trade unions, etc.) can all be equivalent sources of surplus-profits.

In itself, asking the question is a great step forward. It is to Luxemburg’s credit, and a sign of originality, that she did not content herself with the general formulas on the contradictions inherent in the capitalist mode of production that Kautsky had copied from Marx, but sought to ask questions where Kautsky and his school saw only answers. How do these contradictions manifest themselves in the long run, if the capitalist regime persists for a few more decades? What is the structure of the international capitalist system that replaces in real life the methodologically necessary abstraction, used by Marx, of a ‘pure’ capitalist system? How has the growth of the capitalist mode of production actually taken place?

That the answers she gave to these questions were insufficient and partly wrong is, in the final analysis, less important than the fact that she understood that there were indeed questions there, to which Marx himself had not given answers. It took genius to ask these questions, within the framework of the Marxist problematic. No Marxist can deny that Rosa Luxemburg had genius.


i [Originally published as the preface to Rosa Luxemburg, Introduction à l’economie politique (Paris, 1970). The original text refers to ‘Rosa’ - to make naming convention consistent with those of others, this has been changed to ‘Luxemburg’. Translation by Alex de Jong].

ii The ‘Introduction to Political Economy’ is published in: Complete Works of Rosa Luxemburg, Volume I, Economic Writings 1 (London, 2014), pp. 89-301.

iii J. P. Nettl, Rosa Luxemburg (London, 1966) Vol.1, pp. 389-392.

iv Paul Levi, introduction to Einführung in die Nationaloekonomie (Berlin, 1925), p. V.

v Paul Fröhlich, Rosa Luxemburg: Ideas in Action (Chicago, 2010), p. 148.

vi The second volume of Capital was published first by Engels in 1885. A second edition appeared in 1893. Volume III was published by Engels in 1894.

vii The fifth German language edition appeared in 1921.

viii See, for example, Eduard Bernstein, Evolutionary Socialism: A Criticism and Affirmation (New York, 1909 [1899]).

ix For example, the conclusion to Foundations of Christianity (London, 1908), in which he raises the issue of a possible bureaucratic degeneration of the workers’ movement, and his articles in Neue Zeit on the Russian revolution of 1905 in which he foresees the international repercussions of this revolution, both as a trigger for a series of bourgeois revolutions in Asia and as a ‘detonator’ for the proletarian revolution in Europe.

x Kautsky, for example, declared that the failure of the German revolution in the aftermath of World War I was ‘inevitable’ because of the disorganization of production as a result of the war and Germany’s defeat.

xi Before World War I, Kautsky’s method of popularization and simplification was generally followed in the works of Dutch Marxists Pannekoek, Gorter, H.R. Holst and others), Belgians (De Brouckère and De Man), American, (Budin), French (Rapport, the Guesdistes), Italians and other Marxists.

xii We have discussed this issue in Marxist Economic Theory (London, 1968), pp. 664-668.

xiii See, for example, Karl Marx, Grundrisse, Notebook VII, ‘The Chapter on Capital’, online at [].

xiv See the introduction to the second French edition of volume I of Capital, in which Marx quotes with approval the May 1872 statement in the journal Viestnik Evropy (‘Herald of Europe’) that for him there are no abstract economic laws, applicable to past and present.

xv See section 5.6 of ‘Introduction to Political Economy’.

xvi We have tried to examine the same phenomenon in Marxist Economic Theory, pp. 57-59.

xvii See the journal Neue Zeit in the period 1900-19191, notably the articles on the organization of trusts in the United States, and on industry and electricity in Germany.

xviii Rosa Luxemburg, Reform or Revolution (London, 1986), chapter III, online at [ ].

xix On the other hand, Marx makes it explicit that capitalism is only conceivable as ‘multiple capitals’, that is to say, taking into account competition. See Le Capital, Vol. II, p. 16. (Paris 1928). It is only within the framework of competition that the laws of development of capitalism can be discerned.

xx Kautsky develops this same idea, although in a rather mechanistic way, in his commentary on the Erfurt programme, Das Erfurter Programm (Stuttgart, 1908) pp. 10-110.

xxi In his draft programme for the eighth congress of the RCP (B), Lenin precedes the description of imperialism with that of capitalism, contained in the old Party programme, and introduces this passage: ‘The nature of capitalism and of the bourgeois society which still dominates in most civilized countries and the development of which it inevitably leads, and has been leading, to the world communist revolution of the proletariat was described in our old Marxist programme in the following terms’. Lenin, Collected Works (London, 1977) Vol.29, p. 100.

xxii See again chapter III of Reform or Revolution.

xxiii In her preface to the French edition of The Accumulation of Capital, Rosa Luxemburg wrote:; ‘When, last January, after the Reichstag elections [of 1912], I was preparing to complete, at least in broad outline, this work of popularizing Marx’s economic theories, I suddenly encountered an unexpected difficulty. I had not succeeded in presenting with sufficient clarity the process of capitalist production in its concrete relations as well as with its objective historical limit.’ It was then that she decided to write The Accumulation of Capital.

xxiv This question has been carefully studied by Roman Rosdolskv, Zur Entstehungsgeschichte des Marxschen ‘Kapital’ (Frankfurt, 1968), volume pp. 24-78.

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