The accumulation of capital

The Accumulat ion of Capit al ‘The Accumulation of Capital is arguably the most important advance on Marx’s political economy to date Written by a working-class revolutionary leader who begins by critically analyzing Marx’s draft Volume of Capital and ends by relating to militarism, Luxemburg develops a theoretical foundation for the global drive and structural crisis of capitalism Although opposed by contemporaries Lenin and Bukharin, her book has passed historical test and can be avoided only at our peril.’ Paul Zarembka Rosa Luxemburg The Accumulation of Capital Translated by Agnes Schwarzschild With a new introduction by Tadeusz Kowalik London and New York Die Akkumulation des Kapitals first published 1913 English edition first published 1951 by Routledge & Kegan Paul First published in Routledge Classics 2003 by Routledge 11 New Fetter Lane, London EC4P 4EE 29 West 35th Street, New York, NY 10001 Routledge is an imprint of the Taylor & Francis Group This edition published in the Taylor & Francis e-Library, 2003 This edition © 2003 Routledge Introduction to the Routledge Classics edition © 2003 Tadeusz Kowalik All rights reserved No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalog record for this book has been requested ISBN 0-203-36186-5 Master e-book ISBN ISBN 0-203-37444-4 (Adobe eReader Format) ISBN 0–415–30445–8 (Print Edition) C ONTENTS Introduction to the Routledge Classics Edition Translator’s Note A Note on Rosa Luxemburg Introduction SECTION I The Problem of Reproduction The Object of our Investigation Quesnay’s and Adam Smith’s Analyses of the Process of Reproduction A Criticism of Smith’s Analysis Marx’s Scheme of Simple Reproduction The Circulation of Money Enlarged Reproduction Analysis of Marx’s Diagram of Enlarged Reproduction Marx’s Attempt to Resolve the Difficulty The Difficulty Viewed from the Angle of the Process of Circulation ix xv xvii xxi 19 35 48 65 79 92 111 128 vi contents SECTION II Historical Exposition of the Problem 10 11 12 13 14 First Round Sismondi–Malthus v Say–Ricardo–MacCulloch 145 Sismondi’s Theory of Reproduction MacCulloch v Sismondi Ricardo v Sismondi Say v Sismondi Malthus 147 165 177 185 194 Second Round The Controversy between Rodbertus and von Kirchmann 201 15 v Kirchmann’s Theory of Reproduction 16 Rodbertus’ Criticism of the Classical School 17 Rodbertus’ Analysis of Reproduction 18 19 20 21 22 23 24 145 203 214 228 Third Round Struve–Bulgakov–Tugan Baranovski v Vorontsov–Nikolayon 247 A New Version of the Problem Vorontsov and his ‘Surplus’ Nikolayon Struve’s ‘Third Persons’ and ‘Three World Empires’ Bulgakov and his Completion of Marx’s Analysis Tugan Baranovski and his ‘Lack of Proportion’ The End of Russian ‘Legalist’ Marxism 249 255 263 271 277 290 303 SECTION III The Historical Conditions of Accumulation 25 Contradictions within the Diagram of Enlarged Reproduction 26 The Reproduction of Capital and its Social Setting 27 The Struggle against Natural Economy 28 The Introduction of Commodity Economy 29 The Struggle against Peasant Economy 30 International Loans 307 309 328 348 366 375 399 contents 31 Protective Tariffs and Accumulation 32 Militarism as a Province of Accumulation index 426 434 448 vii I NTRODUCTION TO THE R OUTLEDGE C LASSICS E DITION Rosa Luxemburg has been known not only (perhaps even not so much) as an economic theoretician, but also as one of the leaders of the German Social Democratic Party and founder of the Social Democratic Party in the Kingdom of Poland In non-communist socialist circles her political pamphlet criticising the Russian Revolution remains most popular In the academic milieu the reception of Luxemburg’s economic works came rather late as they were written in Marxian (Marxist) language and deeply involved in the controversies amongst the socialists The first English edition (1951) of her book The Accumulation of Capital was vindicated as one of the pioneering works of the effective demand theory and Joan Robinson’s introduction attempted to translate the main message of this Polish–German economist into the language of Keynesian economics Rosa Luxemburg was born in 1870, in Zamos´c´ (a part of Polish territory under Russian occupation) She went to university in Zurich, moving from the study of philosophy and natural sciences to economics Her PhD dissertation, presented there in 1897, was on the industrial development of the Kingdom of Poland (Die industrielle Entwicklung Polens) A year later she moved to Germany for good, in order to be active in a leading European socialist party Her name became widely known not only in Germany, but also within The Socialist 444 the historical conditions of accumulation constant capital of the society, those who provide the upkeep for all the workers, and finally those who create the entire surplus value for the capitalist class If, then, the workers’ consumption is curtailed, only workers in the second category will lose their jobs Ex hypothesi, these workers had never created surplus value for capital, and in consequence their dismissal is therefore no loss from the capitalist’s point of view but a gain, since it decreases the cost of producing surplus value The demand of the state which arises at the same time has the lure of a new and attractive sphere for realising the surplus value Some of the money circulating as variable capital breaks free of this cycle and in the state treasury it represents a new demand For the technique of taxation, of course, the order of events is rather different, since the amount of the indirect taxes is actually advanced to the state by capital and is merely being refunded to the capitalists by the sale of their commodities, as part of their price But economically speaking, it makes no difference The crucial point is that the quantity of money with the function of variable capital should first mediate the exchange between capital and labour power Later, when there is an exchange between workers and capitalists as buyers and sellers of commodities respectively, this money will change hands and accrue to the state as taxes This money, which capital has set circulating, first fulfils its primary function in the exchange with labour power, but subsequently, by mediation of the state, it begins an entirely new career As a new purchasing power, belonging with neither labour nor capital, it becomes interested in new products, in a special branch of production which does not cater for either the capitalists or the working class, and thus it offers capital new opportunities for creating and realising surplus value When we were formerly taking it for granted that the indirect taxes extorted from the workers are used for paying the officials and for provisioning the army, we found the ‘saving’ in the consumption of the working class to mean that the workers rather than the capitalists were made to pay for the personal consumption of the hangers-on of the capitalist class and the tools of their class-rule This charge devolved from the surplus value to the variable capital, and a corresponding amount of the surplus value became available for purposes of capitalisation Now militarism as a province of accumulation we see how the taxes extorted from the workers afford capital a new opportunity for accumulation when they are used for armament manufacture On the basis of indirect taxation, militarism in practice works both ways By lowering the normal standard of living for the working class, it ensures both that capital should be able to maintain a regular army, the organ of capitalist rule, and that it may tap an impressive field for further accumulation.4 We have still to examine the second source of the state’s purchasing power referred to in our example, the 150 units out of the total 250 invested in armaments They differ essentially from the hundred units considered above in that they are not supplied by the workers but by the petty bourgeoisie, i.e the artisans and peasants (In this connection, we can ignore the comparatively small tax-contribution of the capitalist class itself.) The money accruing to the state as taxes from the peasant masses— as our generic term for all non-proletarian consumers—was not originally advanced by capital and has not split off from capital in circulation In the hand of the peasant it is the equivalent of goods that have been realised, the exchange value of simple commodity production The state now gets part of the purchasing power of the non-capitalist consumers, purchasing power, that is to say, which is already free to realise the surplus value for capitalist accumulation Now the question arises, whether economic changes will result for capital, and if so, of what nature, from diverting the purchasing power of such strata to the state for militarist purposes It almost looks as if we had come up against yet another shift in the material form of reproduction Capital will now produce an equivalent of war materials for the state instead of producing large quantities of means of production and subsistence for peasant consumers But in fact the changes go deeper First and foremost, the state can use the mechanism of taxation to mobilise much Ultimately, the deterioration of the normal conditions under which labour power is renewed will bring about a deterioration of labour itself, it will diminish the average efficiency and productivity of labour, and thus jeopardise the conditions for the production of surplus value But capital will not feel these results for a long time, and so they not immediately enter into its economic calculations, except in so far as they bring about more drastic defensive measures of the wage labourers in general 445 446 the historical conditions of accumulation larger amounts of purchasing power from the non-capitalist consumers than they would ordinarily spend on their own consumption Indeed the modern system of taxation itself is largely responsible for forcing commodity economy on the peasants Under pressure of taxes, the peasant must turn more and more of his produce into commodities, and at the same time he must buy more and more Taxation presses the produce of peasant economy into circulation and compels the peasants to become buyers of capitalist products Finally, on a basis of commodity production in the peasant style, the system of taxation lures more purchasing power from peasant economy than would otherwise become active What would normally have been hoarded by the peasants and the lower middle classes until it has grown big enough to invest in savings banks and other banks is now set free to constitute an effective demand and an opportunity for investment Further the multitude of individual and insignificant demands for a whole range of commodities, which will become effective at different times and which might often be met just as well by simple commodity production, is now replaced by a comprehensive and homogeneous demand of the state And the satisfaction of this demand presupposes a big industry of the highest order It requires the most favourable conditions for the production of surplus value and for accumulation In the form of government contracts for army supplies the scattered purchasing power of the consumers is concentrated in large quantities and, free of the vagaries and subjective fluctuations of personal consumption, it achieves an almost automatic regularity and rhythmic growth Capital itself ultimately controls this automatic and rhythmic movement of militarist production through the legislature and a press whose function is to mould so-called ‘public opinion’ That is why this particular province of capitalist accumulation at first seems capable of infinite expansion All other attempts to expand markets and set up operational bases for capital largely depend on historical, social and political factors beyond the control of capital, whereas production for militarism represents a province whose regular and progressive expansion seems primarily determined by capital itself In this way capital turns historical necessity into a virtue: the ever fiercer competition in the capitalist world itself provides a field for accumulation of the first magnitude Capital increasingly employs militarism as a province of accumulation militarism for implementing a foreign and colonial policy to get hold of the means of production and labour power of non-capitalist countries and societies This same militarism works in a like manner in the capitalist countries to divert purchasing power away from the noncapitalist strata The representatives of simple commodity production and the working class are affected alike in this way At their expense, the accumulation of capital is raised to the highest power, by robbing the one of their productive forces and by depressing the other’s standard of living Needless to say, after a certain stage the conditions for the accumulation of capital both at home and abroad turn into their very opposite—they become conditions for the decline of capitalism The more ruthlessly capital sets about the destruction of noncapitalist strata at home and in the outside world, the more it lowers the standard of living for the workers as a whole, the greater also is the change in the day-to-day history of capital It becomes a string of political and social disasters and convulsions, and under these conditions, punctuated by periodical economic catastrophes or crises, accumulation can go on no longer But even before this natural economic impasse of capital’s own creating is properly reached it becomes a necessity for the international working class to revolt against the rule of capital Capitalism is the first mode of economy with the weapon of propaganda, a mode which tends to engulf the entire globe and to stamp out all other economies, tolerating no rival at its side Yet at the same time it is also the first mode of economy which is unable to exist by itself, which needs other economic systems as a medium and soil Although it strives to become universal, and, indeed, on account of this its tendency, it must break down—because it is immanently incapable of becoming a universal form of production In its living history it is a contradiction in itself, and its movement of accumulation provides a solution to the conflict and aggravates it at the same time At a certain stage of development there will be no other way out than the application of socialist principles The aim of socialism is not accumulation but the satisfaction of toiling humanity’s wants by developing the productive forces of the entire globe And so we find that socialism is by its very nature an harmonious and universal system of economy 447 I NDEX abstinence, theory of 80, 122, 212, 314 accumulation of capital 432–4, 447; see also enlarged reproduction Algeria 357–65 armaments xxxii, 400, 432, 438–41 Australia 406 Bastiat, Frédéric 214 Bernstein, Eduard xiii–xiv Bismarck, Otto von 428 bourgeois economics 78, 80, 143, 149, 151, 154, 164, 183–4, 189, 245, 258–9, 274, 304 Bright, John 427 British rule: in India 351–7; in South Africa 393–7 Buecher, Professor 286–7 Bulgakov, S 253, 277–90 passim, 294, 296, 300, 304–5 Canada 389–91 capital replacement 59, 232, 236, 334 capitalism, criticisms of 149, 195, 267–70 Cavour, Camillo 429 China 367–74, 399 circulating capital 30–2, 36, 55, 130, 158, 235, 335 Cobden, Richard 427 colonialism 223, 345, 350–5, 432, 434; in Algeria 357–65; in India 351–7 commodity economy 397–9, 408 commodity markets 16–17, 53 compensation, theory of 177 ‘constituted value’ 217 consumer goods 31–5 passim, 86–8, 104–6, 134, 212, 278, 282, 295–6, 301, 333–4, 337, 437 450 index consumption, concept of 283–4, 296 cotton industry 332–3, 337–9, 343, 402, 427 credit 281–2, 312 crises, economic 190, 221–31, 237– 8, 243–5, 260, 291, 294, 303–4, 312, 322, 326–7, 404 cycles, economic 7–8 Dalrymple, Oliver 383–4 deflection of investment xxxii demand 104–7, 110, 128, 138, 167, 229, 291–2, 446 Diehl, Professor 204–5, 233, 242 division of labour: international 256–7, 287; social 52, 101–2, 168, 209, 276 East India Company 354–5, 367 Edinburgh Review 166 Egypt 409–19 Engels, Friedrich 74–5, 126, 139–42, 217, 226, 253, 269 England: economic conditions 149–51; cotton industry 332–3, 337, 343, 402, 427; foreign trade 286, 292, 402–6, 431; structure of working population 272 enlarged reproduction 63–4, 79– 89, 92, 95, 98–9, 102–3, 107, 116–18, 122, 128, 136, 183, 236, 279, 285, 293, 302, 309–10, 315, 319–20, 325, 331–2, 341, 397–8, 408–9 entrepreneurs 225–6 exchange of commodities 167–8, 210 expanded reproduction see enlarged reproduction exploitation 155–7, 232, 250, 314, 323–4 extractive industries 336–7 famine 265, 267, 356 feudal system 348–9 fixed capital 28–32, 35–6, 46–8, 55, 59, 62–4, 131 force, use of 351, 366, 399; see also militarism foreign loans 401–25, 432 foreign trade 108, 179, 222–3, 258, 262, 273–6, 285–9, 292, 331, 340 France 357–65, 428–30 free trade doctrine 179, 214, 219, 427–32 Germany 276, 333, 419–24, 428, 430 gold: production of xxv, 71–5, 113, 126–7, 137, 280–2, 408–9; tariffs on 250 handicrafts 375 Hansen, Alvin xxxi hoarding 112–19, 122, 131, 321–2, 446 Hobson, J.A xxv, 293 home markets 264, 271–5 Ilyin, Vladimir (Lenin) xiv, 163, 253, 282, 296, 300 imperialism 398–401, 426–7 incentives for reproduction 11 income, concept of 153–6, 238–9, 242 India 265, 351–7 indirect taxation 441, 444–6 internal markets 346–7 Ireland 151 index Ismail Pasha Issayev, Professor 253 Italy 429, 431 Kablukov, Professor 253 Kant, Immanuel 306 Kareyev, Professor 252 Kautsky, Karl 297–9 Keynes, J.M xxxi Kirchmann, J.H von 204–13, 224, 229, 236–8, 244, 288–9, 331, 346 labour power 45–6, 49–51, 66, 85, 88, 106, 126, 155–6, 235, 336, 345–6, 409, 435–8; emancipation of 343 labour supply 340–4 labour theory of value 33, 36–42, 238 Lake Moeris 60–1 landowners 107–8, 277, 331 Lavrov, Peter 252 Leipsic Book Fair 168–9 Lenin see Ilyin, Vladimir Luxemburg, Rosa, life and work of xiii–xv luxury products 171–4, 211–13, 236–7 MacCulloch, J.R 151, 163–77, 180–1, 185, 195, 241 Malthus, Thomas xxviii, 155, 194–9, 277, 284, 288, 331 Manchester doctrine 214, 249, 427 Manuilov, Professor 253 Marx, Eleanor 142 Marx, Karl xv, xviii, xxi, xxv–xxix, 3, 8, 9, 14, 37–40, 48, 56–7, 63, 71–85, 90–5, 103–8, 112–36 passim, 163– 4, 177, 189, 195, 198, 205, 209, 217, 220, 234, 241–2, 252–3, 260, 274, 278–85, 289–96, 300–4, 309–34 passim, 339–41, 345–6, 397–8, 408, 435, 438–9; contents of Capital 139–43 Mehring, Franz 243 Mikhailovski, Nicolai 252 militarism xxxii, 262, 277, 331, 351, 399, 419, 434–40, 445–7 Mill, James 196–7, 352 Mill, John Stuart 258 money xxv, 65–6, 112–13, 128–31, 167–8; circulation of 66–71, 77, 112–13, 131–3, 136–7, 304, 311; sources of 71–5, 131–8, 280–1; see also velocity of circulation Napoleon III 428 Napoleonic wars 147 national income and product 160–1; distribution of 229–33, 240, 261 natural economy 348–51, 397, 399, 408 Nikolayon, V 253, 263, 266–72 passim, 278, 288–9, 331, 346 Opium Wars 367–71, 427 over-production 174–5, 187, 196–7, 211, 226–30 passim, 258–62 passim, 304 Owen, Robert 149, 165 pauperism see poverty peasant communities 348–50, 375–6, 446 Peel, Robert 222 Peffer, W.A 377–8, 381–2 Physiocrat theory 27–9, 33, 209 Plekhanov, George 251, 253 451 452 index political economy 149, 205 population growth 105–6, 341 populism 251, 253, 255, 266, 269–76, 288, 304 poverty 205–6, 216, 221, 228, 260–1, 265–6, 291 prices 136–7 productivity of labour 52, 155–6, 171, 181–2, 205, 216, 220, 226, 235, 265–6, 300, 315–18, 336 profits 51, 235–6, 259, 300, 302, 305, 318 propensity to exchange 39 Proudhon, P.J 109, 217, 241–2 purchasing power of society 230, 438, 441, 445–7 Quesnay, F 3, 20–2, 28, 65, 76–7 railway-building 333, 400–2, 405–8, 420–5 religious ceremonials reproduction: capitalist process of 5–9, 13–14, 17–20; concept 3–6; incentives for 11; of individual and of social capital 20; social process of 44; see also enlarged reproduction revolutionary movements 203–4, 399 Ricardo, David 24–6, 29, 33, 39, 77–8, 81–2, 153, 155, 163–90 passim, 194–8, 206–9, 213, 217, 220, 225, 238, 244, 249, 258, 260, 284, 303–4, 325–6, 330–1, 346, 427 Rodbertus, J.K xxvii–xxviii, 203–6, 213–45 passim, 250, 253, 260–1, 331 rubber industry 339 Russia 399; capitalism in 251, 255–7, 262, 266–7, 273–4; economic conditions in 250–2 St Simon, Henri de 165 saving 237–8 Say, J.B 24–7, 33–4, 151–4, 163, 165, 180, 185–9, 194–7, 206–7, 213, 225, 241, 244, 258, 284, 303–4, 346 Schaeffle, A.E.F 273, 286, 405 Schmoller, G 273, 276 Shi Hoang Ti Sismondi, J.C xxviii–xxix, 7, 24–5, 87, 149–99 passim, 203–7, 213, 225–6, 236–40, 244, 250, 253, 260, 266, 271–2, 288–91, 296, 322, 330–1, 345–6, 403–5 Skvortsov, Professor 253 slavery 5, 11, 14, 126, 134, 184, 218, 220, 231–2, 339, 343 Smith, Adam 8, 22–48 passim, 55, 77–8, 81–2, 140–3, 154, 159–64 passim, 174, 185, 189, 204–9 passim, 233, 237, 240, 243, 249, 326, 331 social capital 20, 24–6, 32–3, 37, 51, 257 social insurance 50 social product 48, 53, 210–12, 239, 278, 282–3; composition of 291, 302, 317, 334 socialist society 101–2, 253, 301–5, 447 sociology, subjective method in 252 South Africa 391–7 spheres of interest 427, 432, 434 stagnation thesis xxxi Struve, Peter van 253, 271–7, 286, 289, 304–5, 331 index Tableau Économique 20–2, 28, 76–7 tariffs 430–2 Taussig, F.W 380 tax-farming 423 technical progress 235, 264, 294–5, 299–302, 315, 319–21 Tugan Baranovski, M xxviii, 253, 282, 285, 289–305, 311, 315–16, 325–6, 346, 402–4 Turkey 399, 419–24 unemployable labour 83 United States 273, 276, 286, 376–89, 403–5 velocity of circulation of money 132–3, 137 Vorontsov, V xxviii, 252–62 passim, 266, 271–2, 278, 282, 288–9, 331, 346 wages 66, 205–7, 235–6, 264; real 239, 441 wages fund theory 220, 281 wages law 218, 220 Wagner, Adolf 233, 242–3, 273, 276, 286 wealth, nature of 154–6, 158–9, 225 wear and tear on capital 58–9, 235, 321 Wilson, James 355–6 453 ... rate of accumulation which exceeds the rate of increase in the stock of capital appropriate to technical conditions, then there is a chronic excess of the potential supply of real capital over the. .. have the capitalists for enlarging their stock of real capital? 30 How they know that there will be demand for the increased output of goods which the new capital will produce, so that they can ‘capitalise’... involved in the controversies amongst the socialists The first English edition (1951) of her book The Accumulation of Capital was vindicated as one of the pioneering works of the effective demand theory