This article seeks to review and reflect on the two volumes of Rosa Luxemburg's Complete Works published so far.
Only a scattering - a much thicker scattering since the 1970s, but still a scattering - of Luxemburg's writings have been available in English until now.
Since the 1970s there has been a "Collected Works" in German. Even that misses out a lot. The new Complete Works, edited by Peter Hudis, will be fourteen volumes.
As Hudis explained in an article in Solidarity 356 (11/3/15: bit.ly/hudis-rl), "given the amount of time, care, and attention that she gave to developing her major economic works, it makes sense to begin the Complete Works with her contributions to the field of Marxian economics", and those fill the 1200 or so pages of the first two volumes.
Rosa Luxemburg's four actual books (three published, and a larger one never completed) were all about economic theory: The Industrial Development of Poland, The Accumulation of Capital, the Anti-Critique, and the Introduction to Political Economy.
The Introduction was never completed: Luxemburg's work on it was broken off first by her decision to write The Accumulation of Capital, and then by the preoccupations of World War One, prison, and the German revolution of 1918-9. Some of what Luxemburg drafted has been lost.
The first two volumes of the Complete Works contain all that survives of the Introduction; The Industrial Development of Poland; an article of 1900 about economic methodology; a new translation of The Accumulation of Capital, more complete than the one which, thanks to the influence of a maverick Cambridge professor, Joan Robinson, was brought out by an academic publisher in 1951; a new translation of the Anti-Critique; and some minor texts.
Rosa Luxemburg has come down to later generations of socialists as an icon, usually but fuzzily taken to represent a more easy-going and ecumenical strand in revolutionary socialism than such comparatively harsher and more aggressive figures such as Lenin.
John Berger's words give a comforting and popular image: "she loved workers and birds. She danced with a limp".
But more. Forced to leave her native Poland at the age of 18, before entering the German socialist movement she studied for eight years at the University of Zürich, which in 1863 had become the first university in Europe to admit women students. The doctorate she won at the end of those eight years marked her out both in the socialist movement and among economic theorists.
Hardly anyone else in the socialist movement had formal training in economics. Bernstein was self-educated, beyond secondary school; Kautsky had studied history at university; Hilferding, medicine; Bukharin's studies at Moscow university had been broken off by arrests. Few people in Europe had doctoral degrees of any sort: before World War One such degrees scarcely existed outside German (and Swiss-German) universities, and the USA.
Although many universities by then had departments of political economy, few of the leading writers had been trained in them. The formal training of Marshall, Wicksell, Fisher, and Keynes was in mathematics; of Walras and Pareto, in engineering; of Pigou, in history; of Böhm-Bawerk and Menger, in law; of Wicksteed, in classics; of Edgeworth, in languages.
Frau Doktor Rosa Luxemburg was a formidable theorist by all standards, and one who 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".
The woman who helped build a Marxist movement in Poland much factionally-tighter than the Bolsheviks ever were; who was damned as "Bloody Rosa" by the German ruling class; who was murdered by one of their gangs under Social Democratic protection in 1919, was an intense and dauntingly argumentative theorist, not an ecumenical sentimentalist. She was not modest. When she thought she had new ideas, she wanted people to know that it was she who had developed them.
In 1899-1900 she wrote the pamphet Social Reform or Revolution, a reply to Eduard Bernstein, who, considered the world's leading Marxist theorist after the death of Engels, had nevertheless drifted to Fabian gradualism. She was concerned to get the ideas right, but also to make her mark.
To a friend she wrote "the Bernstein question must be the 'great work' that I will have to write... One must work quickly because the whole work will be good for nothing if somebody gets in first".
Social Reform or Revolution has been rightly considered, both at the time and since, a classic demonstration that "people who pronounce themselves in favour of the method of legislative reform in place of and in contradistinction to the conquest of political power and social revolution do not really choose a more tranquil, calmer and slower road to the same goal, but a different goal".
In economic theory specifically, distinctive about Social Reform or Revolution was that to Bernstein's notion of the softening of capitalist contradictions it counterposed a theory of capitalist "collapse".
That idea was not a commonplace. The term "collapse" ("Zusammenbruch") does not appear anywhere in Marx's Capital as a probable or necessary terminus of capitalism. Karl Kautsky, in his reply to Bernstein about the same time as Luxemburg's, responded to Bernstein's claim that capitalism would not collapse thus: "No special 'theory of collapse' was presented by Marx and Engels. The term comes from Bernstein, just the word 'theory of impoverishment' comes from opponents of Marxism". Yet Luxemburg asserted: "The theory of capitalist collapse is the cornerstone of scientific socialism". She would elaborate on that theme.
Volume 1 of the Complete Works contains two unfinished texts, one titled "History of Crises", the other "Volume 2 of Marx's Capital", which review all the chief economic crises since 1815. Luxemburg was scathing about the "underconsumptionist" theories of capitalist crisis favoured especially by the trade-union leaders in the SPD. Though she did not question the notion, repeated by Marx following other economists, that the rate of profit would have a long-run tendency to fall, she neither referred to that tendency as a factor in particular crises, nor took it to underpin the "theory of collapse". Noting that Marx also argued that an increased mass of surplus value would compensate big capitalists for the tendency, she wrote sarcastically that: "There is still some time to pass before capitalism collapses because of the falling rate of profit, roughly until the sun burns out".
There is little generalisation in those texts on crises. There is also little discussion of how crises can be turning-points for capitalist development, jolt it onto new paths, change what some writers have called the "mode of regulation".
She presents the general cause of crises as the anarchy of market regulation and an inherent tendency of capitalist production to overreach limited markets. Other Marxist writers had begun to present capitalism as having mutated into a highly monopolised and managed system, "planned" in its own special way. Luxemburg presented cartels as unstable, in contrast to other Marxists who saw them as an organic mechanism of an increasingly organised capitalism.
Rudolf Hilferding, in his influential 1910 book Finance Capital, argued that just by "taking possession of six large Berlin banks", "the state conquered by the working class" would immediately gain control of the most important spheres of large-scale industry. Frederick Engels himself, in his comments on the Erfurt Program in 1891, had written that "when we pass on from joint-stock companies to trusts, which dominate and monopolise whole branches of industry, this puts an end not only to private production but also to planlessness"; and in Socialism Utopian and Scientific: "In the trusts, freedom of competition changes into its very opposite - into monopoly; and the production without any definite plan of capitalistic society capitulates to the production upon a definite plan of the invading socialistic society. Certainly, this is so far still to the benefit and advantage of the capitalists".
Luxemburg alluded to increasing state intervention in capitalism, but in passing. She continued to depict an anarchic market as the main regulator. She nowhere developed this point as an explicit polemic with Hilferding or others. With hindsight she may have been more right than them about cartels being unstable and capitalist state intervention being, at least in the long term, ancillary to market forces. She had no time for the idea that economic control by the state was in and of itself socialist, whatever the nature of that state. All her projections about superseding the market economy were contingent on the working class establishing its own democratic rule in society. She did not bother much with the polemics against "state socialism" of other Marxist writers in her time. It looks as if she considered the possibility not worth polemicising about. Either capitalism would continue, anarchically regulated by the market, or the working class would take power and establish democratic planning. Those were the only two possibilities.
That perspective on market regulation, and the implicit idea that essentially only one line of development of it existed, governed both her theory of imperialism and her views on the national question.
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 universities, and they in turn were the main universities teaching economics in the 19th century (as a stream within their Faculties of Law, and mainly for future lawyers and state officials). The "Historical School" rejected economic models and abstract theories and devoted itself to historical description of economic development. The main writers of the school, all now forgotten, included Wilhelm Roscher, Bruno Hildebrand, Gustav von Schmoller, and Adolph Wagner. Generally they were socialistic conservatives, "Kathedersozialisten", nationalistic, moralising, keen to give Bismarck's statist economic policies a welfarist bias. Marx scattered frequent curt comments on Roscher ("eclectic professorial twaddle") through Capital volume 1, and wrote exasperated "Marginal Notes on Wagner" (chiefly on Wagner's muddles about "value) in 1881, but generally did not consider their work merited the close study which he gave to the writings of Adam Smith, Ricardo, or even Ramsay, Jones, McCulloch, etc.
In a letter of 1898 - after she had left university - she described herself as reading up on the work of Böhm-Bawerk, one of the leading writers of the "Austrian School" which still exists today as a maverick variant of the "neo-classical", "marginalist" theory which has dominated academic economics on a world scale since the late 19th century. There is a short passage in Social Reform or Revolution in which she swipes at Bernstein's complaisance towards Böhm-Bawerk, but nothing in the economic writings in the first two volumes of Complete Works which discusses "marginalist" theory. The task of replying to the book in which Böhm-Bawerk attempted to demolish Marx was left to Hilferding; that of writing a comprehensive critical review of "marginalist" theory to Bukharin. In Luxemburg's writings, the main representative of establishment economics polemicised against is the long-forgotten Karl Bücher, a professor of the "Historical School".
A central idea of the newer marginalist theory was that market supply-and-demand movements could explain not only short-term shifts in prices and quantities, but could efficiently determine and regulate the whole system of prices and quantities.
Older writers like Adam Smith and David Ricardo had implicitly assumed that markets could regulate capitalism. They also thought it necessary to investigate what relation the prices shaped by market-balancing would have to the organisation of labour, but they more or less took it for granted that markets could, with whatever glitches and troubles, shape a functioning system by moving towards balance.
Marx gave more thought to the pattern and shape and inevitability of the troubles along the way - capitalist crises - but he too thought that a capitalist market system had mechanisms working towards balance. "The different spheres of production, it is true, constantly tend to an equilibrium... there exists an inner relation which settles... proportions into a regular system, and that system one of spontaneous growth... This constant tendency to equilibrium of the various spheres of production, is exercised, only in the shape of a reaction against the constant upsetting of this equilibrium... an a posteriori, nature-imposed necessity, controlling the lawless caprice of the producers, and perceptible in the barometrical fluctuations of the market-prices" (Capital volume 1 chapter 14).
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, she argued that capitalist markets could not balance - not even imperfectly and via crises - without help from outside, and that because the help from outside would tend to become exhausted, the system tended towards collapse. She qualified that picture by writing that the difficulties of capitalism along the way towards final collapse would surely spur the working class into overthrowing the system long before the notional moment of final collapse arrived; but she still argued that the basic mechanisms of the system had an iron limit.
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. Marx described Sismondi in the Communist Manifesto as "the head of the school" of "petty-bourgeois socialism", but gave little attention to him as a writer of economic theory. Lenin, in his battles against the Russian populists, wrote a long series of articles, essentially a small book, refuting Sismondi's economics (bit.ly/lenin-si). Luxemburg slammed Lenin's critique as "merely demonstrat[ing] that [Lenin himself] had failed to notice the actual problem with which Sismondi was concerned".
Luxemburg developed a theory of the necessity for capitalism of interactions with the "non-capitalist environment" in her 1913 book The Accumulation of Capital and in her defence of that book, written in 1915, The Anti-Critique. No other Marxist writer besides, I think, Franz Mehring, accepted the thesis. Eckstein, in the centre of the SPD, Pannekoek, on the left, polemicised against it when the book was published. Lenin wrote exasperated notes when he read the book, and planned a polemic against it.
Bukharin wrote a comprehensive polemic in 1924. It was written then to be used in a demagogic battle against "Luxemburgist deviations" run by the leadership of the German Communist Party in 1924-5, with the support of Zinoviev and as part of the destructive project of so-called "Bolshevisation" in the Communist International, and its style bears the marks of the times. Nevertheless, the gist of its arguments was, I think, right, and no-one felt confident to try to refute them.
Luxemburg derived her theory of the necessity of help from the "non-capitalist environment" from consideration of the incomplete discussion presented in Marx's Capital, volume 2, of schemes of "expanded reproduction" - simple forms of the input-output analysis later developed by Wassily Leontief. (Leontief did his work in Germany and the USA, but must have learned about Marx's schemes when first studying economics at the University of Leningrad in 1921-5).
Her core argument, however, is not to do with interactions and balance between the the two departments, production of means of production and production of consumer goods, which Marx uses in his schemes. It 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 means-of-production) will be 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 (as in fact they do have) 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, and thus a one-off cash reserve deals with the problem of circulating the surplus-product for any number of periods.
What about "expanded reproduction", though? At points Luxemburg appears to be asking, where does the ever-greater 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?
Those questions have answers. As Bukharin commented, "To the question, 'but whence does the money come into the country ?' there can only be... an extremely elementary and simple answer: from the gold-mining industry" (bit.ly/buk-iac). Or in fact, from the capacity of the capitalists to use banknotes and other paper (or even electronic) forms of money on an increasing scale, even with a limited stock of gold, in fact even with no stock of gold.
Producing for the sake of producing is characteristic of capitalism. As Marx put it in Capital volume 1 chapter 4: "Use-values must therefore never be looked upon as the real aim of the capitalist; neither must the profit on any single transaction. The restless never-ending process of profit-making alone is what he aims at". Or: "Ricardo, rightly for his time, regards the capitalist mode of production as the most advantageous for production in general, as the most advantageous for the creation of wealth. He wants production for the sake of production and this with good reason [in capitalist terms]" (Theories of Surplus Value: bit.ly/tsv-difr).
If I understand Luxemburg right, her core argument is a bit different. It is: where do the capitalists get the purchasing power to circulate the ever-increasing surplus product? 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?
Thus Luxemburg writes in her Anti-Critique:
"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 the capitalist can get new money by selling their surplus-product: but they can only do that, collectively, if they, collectively, already have the extra money with which to finance buying that surplus-product.
"Who will buy... [the] portion of commodities... that represents... the part of profit that is designated... for accumulation?"
"If the capitalists as a class are always the only buyers... if they are forever buying their own commodities from each other with their own [initial collective stock of] money... [then] it would be impossible on the whole for accumulation to take place for the capitalists as a class".
Or, as she quotes the idea from Sismondi: "'It is the income of the past year that must pay for the production of the present year'. Yet how is capitalist accumulation supposed to proceed given these presuppositions?"
Luxemburg's answer to this puzzle was that the capitalists require an external source of purchasing power, and find it in the "non-capitalist environment", in the sectors of the capitalist economies where simple small-producer commodity production still prevailed and more notably in Asian, African, and other countries.
The process had inbuilt limits. As capitalism came to dominate the whole world, it would become unworkable. Long before that ultimate limits, however, working-class revolution would have been generated by the crises and tensions associated with the capitalist powers' competitive struggle for control over or access to an ever-decreasing sphere of non-capitalist economy.
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. Other Marxist accounts of imperialism from that time (Hilferding, Lenin, Bukharin, etc.) chiefly concerned themselves with analysis of the economic developments and mechanisms in the metropolitan capitalist countries which generated competitive colony-grabbing, export of capital, etc. Their accounts of economic development in the colonies or economically-dominated weaker countries were scathing, but cursory. Luxemburg also (so we shall see) showed how imperial rule and oppression can sometimes come together with stimulus and encouragement for economic advance.
Whether Luxemburg's theories about the trend to capitalist breakdown and the necessity of the "non-capitalist environment" were sound or faulty, her writings generated by those theories added a whole dimension to the discussion of high imperialism. That dimension has been developed since then by the studies of academic historians on the "non-European foundations of European imperialism", arguing that an impulse for high-imperialist colonial rule was the drive to create local machines of government in weaker countries capable of regulating the process of developing capitalist production there, uprooting the population sufficiently to create a wage-working class, protecting capitalist trade, securing payment of debts, collecting taxes, etc. (bit.ly/rr-roots).
Were Luxemburg's theories about the trend to capitalist breakdown and the necessity of the "non-capitalist environment" sound, or were they faulty? The fact that the mass of capitalist accumulation has increased even while capitalist relations have spread almost all across the world, and reduced trade between capitalist enterprises and "the non-capitalist environment" to small proportions, suggests they were faulty.
The buyers in the "non-capitalist environment" would not in fact solve the postulated problem of inadequate purchasing-power. Luxemburg argued at length that the so-called "third persons" of capitalist society ("liberal professions... the clergy... state officials... armed forces") could not solve the problem, because they got their incomes by deduction from the purchasing power of capitalists or workers, in exchange for notional or real services.
Much the same argument really applies to peasants and others in "non-capitalist environments". How do they get purchasing power? By selling commodities, that is, by obtaining through exchange some of the purchasing power originally held by capitalists and workers. It does not even help here when capitalists or their associates loot the "non-capitalist environment" without exchange, as of course they did. Where do the looters find the purchasing power to sell the stuff they have looted?
The "non-capitalist environment" does not solve the postulated problem of inadequate purchasing-power. That problem certainly exists as a chronically-recurrent one. That is not because of absolute lack of purchasing-power, but 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. As Marx put it: "When Adam Smith explains the fall in the rate of profit from an over-abundance of capital, an accumulation of capital, he is speaking of a permanent effect and this is wrong. As against this, the transitory over-abundance of capital, over-production and crises are something different. Permanent crises do not exist" (Theories of Surplus Value: bit.ly/perm-cr).
Evidently capitalists do have a way to get the purchasing power to circulate the ever-increasing surplus product. How can that be? How can it be that at the end of a period of production, but even before the sale of the output, the capitalists collectively have more purchasing power than at the start of it?
For the individual capitalist (let alone for the individual worker), moving from having an amount M of money to a bigger amount, M+, is, even with no worries about total purchasing-power in society, an effort. In fact it is the effort. That is what all the capitalists' plans, ventures, pressure on their workforces, competitive manoeuvres, are about.
Paradoxically, for the aggregate, increasing the stock of money is easy. British statistics show the stock of money rising smartly even before the era which Marxists called "finance capital". Gross bank deposits in the UK grew from £410 million in 1870 to £825 million in 1900, and the "M3" stock of money (which includes a few instruments in addition to bank deposits) from £498 million to £913 million . Current-prices GDP rose 1.8% pa in that period (inflation was slightly negative over the thirty years), and nevertheless gross bank deposits rose 2.4% a year. The increase in gold and silver coin was much smaller, £95 million in 1870 to £120 million in 1900, or 0.8% a year (Capie and Webber: A Monetary History of the UK 1870-1982, p.30, for bank deposits; and Total Coin and Coin in Circulation in the United Kingdom, 1868-1914, Journal of Money, Credit and Banking, Feb 1983, for coin).
The stock of broadly defined money was equal to almost six months' output (GDP) in 1900. When shortages of effective demand (purchasing power) arose in crises, they were entirely due to firms and households preferring to hold cash, and sometimes to an actual shrinkage of purchasing power (we will see how), rather than to a long-term absolute dearth requiring buyers from "non-capitalist environments" to remedy it.
With the evolution of capitalist finance, today only about 4% of money in the UK is notes or coin of any sort, and none of it precious-metal coin. But the social facility to expand the money stock operated even before anyone started talking of "finance capital".
Say commercial banks are holding £1000 in notes and coins, or in accounts with the central bank. Since the banks know that few of the recipients will withdraw the whole amount in notes and coins, they are confident to create new bank balances totalling £900 for capitalists A, B, C by giving them loans or overdrafts, and keeping £100 for reserves. A, B, C use their bank balances to make purchases from D, E, F; and D, E, F deposit their £900 sales revenue in the banks. The banks create new balances by extending loans for another £810. That, again, is used for purchases and returns to the banks. The next cycle sees another £729 added to the total of customers' deposits at the banks, and the one after that, £656.10... Eventually the stock of money (capitalists' bank balances) has risen to £10,000.
The banks, by then, are holding £1000 in reserves (generally in accounts at the Bank of England). When the banks need to make large amounts of the money which firms (or households) have already acquired in the form of bank deposits available in the form of cash - as for example they used to have to do on pay-days, when wages were paid in cash - then they withdraw part of their reserves the Bank of England in the form of notes and coins. The Bank of England's issuing of new notes and coins (beyond replacement of worn-out ones) is determined by that demand.
Writers on the history of economic thought tell us that the mechanisms by which commercial banks - not central banks, not gold mines - expand the stock of moiney was known in outline by 19th century writers like Thomas Tooke. They had a predecessor in the system of "bills of exchange" used by one capitalist to pay another, and reusable to pay a third, and the "discount houses" which dealt with them. Bank cheques, now becoming obsolete, were in origin "bills of exchange" from banks. The formal theory of the "bank deposit multiplier" did not enter academic usage until the 1920s. Marx, however, was well aware that capitalist trade found ways to expand "commercial money", and quoted estimates from his time on how a relatively small base of gold reserves could underpin a big expansion of "commercial money".
"Such bills of exchange, in their turn, circulate as means of payment... they form the actual commercial money... they act absolutely as money, although there is no eventual transformation into actual money [i.e. gold]... The bill of exchange form[s] the basis of credit-money proper, of bank-notes, etc." (bit.ly/cap-3-25). Further: "the formation of new money-capitals keeps pace with the extension of production, so that the material for corresponding hoard formation must be available... the entire credit mechanism is continually occupied in reducing the actual metallic circulation to a relatively more and more decreasing minimum by means of sundry operations, methods, and technical devices. The artificiality of the entire machinery and the possibility of disturbing its normal course increase to the same extent" (bit.ly/cap2-21).
There is a "normal course" which develops organically along with capitalism. The possibilities of it faltering and crashing also develop. The first modern capitalist crisis, in Britain in 1825, in which capitalists became hesitant about accepting anything but hard cash in payment, was "bottomed out" when the Bank of England "made advances on the deposit of bills of exchange to an immense amount" (Jeremiah Harman, then governor of the Bank: J A James, Financial History Review, December 2012).
Around the 2008 crash, between mid-2007 and mid-2009, in Britain, the ratio of money held in bank accounts to banks' reserves went down from 90 to about 12. There was a credit crash, mitigated by the Bank of England pumping out vast amounts of credit to the banks.
The elasticity of "commercial money" does not guarantee against sudden slumps of overall purchasing-power - in fact, the system makes it more or less certain that the "elastic" will snap back from time to time - but it does mean that those slumps are not due to a permanent long-term dearth of purchasing power.
The answer to Luxemburg's puzzle is that capitalists get the purchasing power to sell the surplus product by... selling the surplus product. They may and do use credit to make the transactions in the first place, but, outside a slump, each capitalist's extension of credit to buy their inputs is covered, 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.
In a way Luxemburg's puzzle is similar to the ancient Greek paradox, named for Zeno, of the arrow which cannot move. At any instant the arrow is where it is, and nowhere else. But time is made up of instants. The arrow cannot move in any one instant, so it cannot move in any time. Likewise: at any instant, purchasing power is what it is... 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, presumably, the capitalists and workers consuming the stocks of food and so on which they started with), and so it becomes difficult to see how more purchasing power can 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.
Zeno's paradox, in its general form, was resolved by the 19th century mathematical theories of limits and of the continuum. The speed of an arrow at an exact point of time cannot be determined by a snapshot. If it is in fact a snapshot, the arrow will look the same whether it is moving or not. But a speed at an exact point of time can be conceptualised and calculated by reference to the arrow's position at other instants in some span of time which includes that instant, the twist being that this span of time can be made as small as you like (bit.ly/zeno-a).
Luxemburg (in an article "Back to Adam Smith", in volume 1 of these Complete Works) described the scientific quality of the Historical School as "pitiful". "The 'historical' critique of the classical 'absolute theories' [of Smith, Ricardo, etc.] is a protest of bourgeois society against the recognition of its own inner laws... The newer historical school... elevates the misrecognition of the laws of social economy to a scientific dogma, to an economic method". She wrote that "it was against [the socialist] doctrine that the historical school arose in reaction".
She also, and especially, pilloried the nationalist bias of the Historical School, who used the term Nationalökonomie for what in English was called political economy, and generally regarded international economic connections as secondary supplements. Long before she developed her theory of the necessity of the "non-capitalist environment", she saw capitalist economics as inherently international. As early as 1900, in Social Reform or Revolution, she highlighted "the contradiction existing between the international character of capitalist world economy and the national character of the State", a theme which Leon Trotsky would later develop at length.
Yet while Ricardo, Marx, and the "marginalists", all in their different ways, gave much attention to analytic and deductive reasoning, Luxemburg, did so less, except in her unsound attempts at deductions from the schemes of expanded reproduction. Her History of Crises, unlike many Marxist texts on the subject, which propose an abstract scheme of crisis and then tack illustrative facts onto it, has as its core a factual account of the development and process of each crisis.
In contrast to the Historical School, and also to many Marxists of her time, Luxemburg gave little weight to, and stressed the instability of, conscious capitalist regulation of the capitalist economy (cartels, state intervention, etc.) She stressed that capitalism meant regulation only by anonymous markets, and the "disappearance from the economy of any plan or organisation", except within enterprises. Pretty much all the other Marxist writings on imperialism of that time - Kautsky, Parvus, Hilferding, Lenin, Bukharin... - saw colony-grabbing and the development of spheres of influence, in one way or another, as driven by what they saw as new tendencies for capitalism to become more regulated in its own way: cartels, monopolies, domination by high finance, state intervention. Luxemburg saw them as driven primarily by unorganised, impersonal market mechanisms.
That economic analysis connected up with her atypical views on the national and colonial questions. Luxemburg argued that the majority socialist view on the right of nations to self-determination was, for her native Poland and by extension to other weaker nations within Europe, not so much wrong as fantastical and diversionary. To restore Polish unity and independence was as impossible and unrealistic as, say, remedying working-class poverty by returning to a smallholder peasant economy. (See Eric Blanc's excellent article, bit.ly/blanc-rl).
"When Social Democracy took for the historical basis of its program and tactics the joint capitalistic development of Poland and Russia, it merely stated an objective, historical fact, not depending on the will of the socialists. From this fact, the revolutionary conclusion should have been drawn in the form of a united class struggle of the Polish and Russian proletariat".
"The solutions of... Social Democracy [i.e. Marxist socialism]... are always outdone by socialist parties which are not hampered by scientific 'doctrines' and which therefore always have their pockets full of the most beautiful gifts for everyone... In comparison with such parties, Social Democracy is and always will be a poor party, just as Marx in his time was poor in comparison with the expansive and magnanimous Bakunin, just as Marx and Engels were both poor in comparison with the representatives of 'true' or rather 'philosophical' socialism...
"Social Democracy, on the other hand, stands firmly on historical ground in its aspirations, and therefore reckons with historical possibilities. Marxian socialism differs from all the other brands of socialism because, among other things, it has no pretensions to keeping patches in its pocket to mend all the holes made by historical development".
Simultaneously, she protested more vividly and more vehemently against the oppression of the peoples of Asia and Africa by European colonists than any other Marxist of her time.
This dichotomous view - sympathising with proto-national revolts in Asia, Africa, etc., but scorning national revolts within Europe as archaic and hopeless - was rooted in her economic theory. We shall see how. The way is best first cleared by showing that modern reports or summaries of Luxemburg's views on the national question are often inaccurate.
She did not regard national feelings as in themselves irrelevant, unimportant, or regressive. She did not minimise national oppression, or reckon that "economic" class issues must overshadow them.
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, autonomy which would, for example, overthrow the imposition of German-language-only schooling and Russian-language-only schooling in the respective regions.
"The cause of nationalism in Poland is not alien to the working class - nor can it be... To the credit of mankind, history has universally established that even the most inhumane material oppression is not able to provoke such wrathful, fanatical rebellion and rage as the suppression of intellectual life... or as religious or national oppression... The working class must experience national oppression as an open wound, as a shame and disgrace... [even while] the possessing classes tolerate national oppression... toady to it servilely".
She did not base her objection to demands for restoration and independence for Poland on the argument that an independent Polish state would oppress the minorities in its borders, Jewish, Ukrainian, Byelorussian, German, though in fact it would. For her that argument was irrelevant, since the independent Polish state was impossible.
She did not argue against the labour movement supporting national independence on the grounds that this would ally the labour movement too closely with the national bourgeoisie. On the contrary, her argument was that economic interests would ensure that the Polish bourgeoisie would never support national independence, and so any working-class group which supported that cause would only be throwing its lot in with the remnants of the old Polish aristocracy and backward-looking fragments of the bourgeoisie.
All those species of arguments have been motives for different groupings of socialists in later years opposing national struggles. Rosa Luxemburg's case is often, in summaries, assimilated to such later arguments. But in fact it was different.
Her argument was presented in her first book, her doctoral thesis, The Industrial Development of Poland. Poland had been partitioned between Russia, Germany, and the Austro-Hungarian Empire in 1792, 1793, and 1795, and finally (as Luxemburg saw it) in 1815 at the Congress of Vienna, at the end of the Napoleonic Wars. Russia had the largest portion, called "Congress Poland", and Luxemburg's book referred to "Congress Poland" simply as "Poland".
In great statistical detail, she demonstrated that Russian rule - Russian imperialism, as it was in fact - had, from 1820 at least, and especially from the 1870s, fostered and boosted capitalist industry in Poland. Poland became the third industrial centre of the Russian Empire, after Moscow and St Petersburg, and was integrated with the Russian economy. "Poland is for Russia a source of supply for yarn, machines, coal etc. etc., while Russia furnishes Poland with raw wool, raw iron, coke, and cotton".
Groups of Russian capitalists bemoaned Polish competition, and groups of Polish capitalists bemoaned Russian competition, but those conflicts were more sectoral than national. In later parlance, groups which might appear "comprador" in one context were "national" in another, and vice versa. "On countless, extremely important questions, the Polish and Russian bourgeoisies are bound together in a solidarity of interests", into a single class. "And... this fusion of Russian and Polish economic interests advances every day". "To bind Poland to Russia through material interests, and to create a counterweight to the nationalist ferment of the [Polish] nobility in a capitalist class arisen under the very wing of the Russian eagle" was "the aim of Russian policy", and one which it was reaching.
She saw Russian capitalist development as unstoppably dynamic. "Russia", she wrote in her Introduction to Political Economy, "as soon as it casts off the fetters of an obsolete form of state [i.e. Tsarism]... will... appear... alongside Germany, England, and the United States as a powerful industrial country, if it does not indeed overshadow them". (So much for the idea that later Russian economic development signalled unique virtues for Stalinism).
Luxemburg indicated why in other parts of the world (Asia, Africa, etc.) the same arguments would not hold as for Poland. "If the conflicts of economic interests coincide with national borders... this creates a broad basis, circumstances permitting, for national aspirations. This can only be the case, however, insofar as the enemy nationalities represent different, inherently antagonistic, forms of production". Between Russia and Poland there was a "homogeneity of economic structure".
Luxemburg did not spell out the other side of the argument in her book on Poland, but it is clear: between the European powers and the Asian, African, etc. peoples of "the non-capitalist environment", there was heterogeneity. As Luxemburg would show in The Accumulation of Capital, the relations then made the local state, colonial or semi-colonial, "the political apparatus for the exploitation of the peasant economy for the purposes of capital... the actual function of all Oriental states in the period of capitalist imperialism".
Hindsight shows Luxemburg's thoughts on Poland to have been an error of over-extrapolation of economic trends, and over-confidence that economic trends will overwhelm all else. And those errors, in turn, must be linked with her picture of capitalist development as a process always driven by market mechanisms, more or less along a straight line, without shifts in "mode of regulation" other than those generated by the undoing of the "fetters of an obsolete form of state".
Luxemburg concluded her Anti-Critique by writing: "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".
To use the hindsight which the lapse of a century gives us to question and criticise Luxemburg's theorising - and yet to see also where even errors led her into brilliant investigation - is the best tribute we can pay today.