Decadence of Capitalism (ix): The Comintern and the virus of “Luxemburgism” in 1924

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The previous article in this series showed how rapidly the hopes for an immediate revolutionary victory, kindled by the proletarian uprisings of 1917-19 had, a mere two years later, in 1921, given way to a more sober reflection among revolutionaries about the overall course of capitalism’s historical crisis. At the Third Congress of the Communist International, a key question for debate was this: the capitalist system has certainly entered an epoch of decline, but what happens if the proletariat does not immediately respond to the new period by overthrowing the system? And what is the task of communist organisations in a phase when the class struggle and the proletariat’s subjective understanding of its situation are in retreat, even when the objective historical conditions for revolution are still present?

This acceleration of history, which gave rise to different and often sharply conflicting responses from the revolutionary organisations, continued in the years that followed, as the degeneration of the revolution in Russia, its increasing isolation, opened the way to the triumph of an unprecedented form of counter-revolution. The year 1921 was a fateful turning point: faced with widespread proletarian discontent in Petrograd and Kronstadt, as well as a wave of peasant revolts, the Bolsheviks took the catastrophic step of using massive repression against the working class, while simultaneously banning fractions inside the party. The New Economic Policy, introduced immediately after the Kronstadt rebellion, conceded to some of its demands on the economic front, but not at all at the political level: there was to be no relaxation in the domination of the soviets by the party-state machinery. And yet a year later Lenin began to complain that the state was escaping the control of the proletarian party itself, dragging it in a direction it could not foresee. In the same year, at Rapallo, the “Soviet” state concluded a secret deal with German imperialism at a time when Germany was still in a state of social ferment: this was a clear sign that the Russian state was beginning to place its national interests above the needs of the international class struggle. In 1923, in Russia, there were more workers’ strikes and the formation of illegal left communist groupings like Miasnikov’s Workers’ Group, as well as a “legal” left opposition within the party, regrouping not only old dissidents like Ossinski but Trotsky himself.

Lenin died in January 1924 and in December of the same year Stalin tentatively raised the slogan of “socialism in one country”. By 1925/26, it had become official policy in the Russian party. The new line symbolised a decisive break with internationalism.

Bolshevisation versus “Luxemburgism”

Virtually all of the communists who came together to form the new International in 1919 were agreed that capitalism had proved to be a system in historic decline, even if they differed on the political implications of the new period and the means needed to develop the revolutionary struggle – for example, whether bourgeois parliaments should be used as a “tribune” for revolutionary propaganda, or should be boycotted in favour of action on the streets and in the workplace. Regarding the theoretical underpinnings of the new epoch, there had been little time for sustained debate. The only really coherent analysis of the “economics of decadence” had been provided by Rosa Luxemburg just before the outbreak of the world war. As we have seen,[1] her theory of capitalist breakdown provoked many criticisms from reformists and revolutionaries alike, but the criticisms were largely negative – there was little sign of an alternative framework for understanding the fundamental contradictions that had impelled capitalism to enter its epoch of decay. In any case, disagreements on this point were rightly not considered fundamental. The essential thing was to accept that the system had reached the stage where revolution had become both possible and necessary.

In 1924, however, within the Communist International, there was a revival of the controversy over Luxemburg’s economic analysis. Luxemburg’s views had always had a considerable influence in the German communist movement, both in the official KPD and the left communist KAPD. But now, given the growing pressure to more firmly tie the communist parties outside Russia to the needs of the Russian state, a process of “Bolshevisation” was launched throughout the Comintern, with the aim of chasing away unwanted divergences in theory and tactics. At a certain moment in the Bolshevisation campaign, the persistence of “Luxemburgism” in the German party was identified as being the fountainhead of a multitude of deviations – in particular, “errors” on the national and colonial question, and a spontaneist approach to the role of the party. At the most abstract “theoretical” level, this drive against Luxemburgism gave rise to Bukharin’s Imperialism and the Accumulation of Capital, written in 1924.

We last encountered Bukharin as a spokesman for the left of the Bolshevik party during the war – his almost prophetic analysis of state capitalism and his recognition of the need to return to Marx’s call for the revolutionary destruction of the capitalist state placed him in the real vanguard of the international movement; he was also very close to Luxemburg in his rejection of the slogan of “national self-determination”, much to Lenin’s anger. In Russia in 1918 he had been a leading member of the Left Communist group which had opposed the Treaty of Brest Litovsk and, more significantly, opposed the early bureaucratisation of the Soviet state. However, once the controversy over the peace treaty had faded, Bukharin’s critical faculties were overtaken by his admiration for the methods of War Communism, which he began to theorise as a genuine form of the transition to communism.[2] The man who had criticised the leviathan state created by imperialism now saw no difficulty in the “proletarian state” becoming increasingly all-powerful during the transitional period. In the 1921 trade union debate, Bukharin sided with Trotsky in calling for the direct subordination of the trade unions to the apparatus of this state. However, with the introduction of the NEP, Bukharin shifted his position again. He repudiated the methods of extreme coercion favoured by War Communism, especially with regard to the peasantry, and now began to see the NEP, with its mixture of state ownership and individual property, and the reliance on market forces instead of direct state decree, as the “normal” model for the transition to communism. But this transitional phase – just as in the period when he had been enamoured of War Communism – was increasingly seen by Bukharin in national terms, in contrast with his views during the war, when he had stressed the globally inter-dependent nature of the world economy. In fact, Bukharin can in some ways be seen as the “originator” of the thesis of socialism in one country, which Stalin then took on and ultimately used to rid himself of Bukharin, first politically, then physically.[3]

Bukharin’s Imperialism and the Accumulation of Capital was clearly intended as a theoretical justification for exposing the “weaknesses” of the KPD on the national, colonial and peasant questions – this is boldly asserted at the end of the work, although with no link in the argument between the attack on Luxemburg’s economics and their alleged political consequences. However, Bukharin’s all-out assault on Luxemburg on the theoretical question of capitalist accumulation has been taken up by some revolutionaries as though they are essentially independent from the dubious political aims of the document.

We think this is a mistake for a number of reasons. The political aim of Bukharin’s text cannot be separated either from its aggressive tone, or its theoretical content.

The tone of the text certainly indicates that its aim was to do a hatchet job on Luxemburg, to discredit her. As Rosdolsky points out: “The present-day reader may find Bukharin’s aggressive and often frivolous tone somewhat unpleasant, when one remembers that Rosa Luxemburg had fallen victim to fascist murderers only a few years previously. That his tone was dictated more by political than scientific interests provides some explanation. Bukharin saw his task as that of breaking the still very strong influence of ‘Luxemburgism’ within the German Communist Party (KPD) and any means seemed justified”.[4] You have to wade through pages of pages of sarcasms and patronising asides before, at the very end of the book, Bukharin grudgingly admits that Rosa has provided us with an excellent historical survey of the way that capitalism has dealt with the other social systems that constitute its milieu. There is no attempt whatever to begin the “polemic” by relating to the very real issues that Rosa Luxemburg was addressing in her work – the abandonment of the perspective of capitalism’s breakdown by the revisionists and the necessity to understand the tendency towards collapse inherent in the capitalist accumulation process. On the contrary, a number of Bukharin’s arguments give the impression that he is just striking out with whatever comes to hand, even if it means profoundly distorting Luxemburg’s thesis.

For example, what are we to make of the charge that Luxemburg provides us with a theory of imperialism which has it living harmoniously with the pre-capitalist world through a peaceful round of exchange of equivalents which, in Bukharin’s phrase means that “Both sides are quite content now. ‘The wolves have eaten, the sheep are unhurt’?[5] We have just mentioned that Bukharin himself admits elsewhere that a major strength of her book is the way it chronicles and denounces the way in which capitalism “integrates” the non-capitalist milieu – through plunder, exploitation, and destruction. This is the very opposite of the sheep and the wolves living in harmony. The sheep are either eaten or, through their own economic growth, they too become capitalist wolves and their competition further reduces the food supply...

Equally crude is the argument that, in Luxemburg’s definition of imperialism, only struggles for particular non-capitalist markets count as imperialist conflicts, and that “a fight for territories that have already become capitalist is not imperialism, which is utterly wrong”.[6] In reality Luxemburg’s argument that “Imperialism is the political expression of the accumulation of capital in its competitive struggle for what remains of the non-capitalist environment[7] is aimed at describing an entire era, a general context in which imperialist conflicts take place. The return of imperialist conflict to the heart of the system, the shift towards direct military rivalry between the developed capitalist powers, is already registered in the Accumulation and is developed at considerable length in The Junius Pamphlet.

Still on the subject of imperialism, we have Bukharin’s argument that, since there are still plenty of areas of non-capitalist production left in the world, capitalism would seem to have a bright future. “It is a fact that imperialism means catastrophe, that we have entered into the period of the collapse of capitalism, no less. But it is also a fact that the overwhelming majority of the world’s population belongs to the ‘third persons’...it is not the industrial and agricultural workers who form the majority of today’s world population.... Even if Rosa Luxemburg’s theory were even approximately correct, the cause of revolution would be in a very poor position”.[8]

Paul Frölich (one of the “Luxemburgists” in the KPD who remained in the party after the exclusion of the elements who were to found the KAPD) answers this very well in his biography of Luxemburg, first published in 1939:

Various critics, and in particular Bukharin, believed that they were playing an effective trump card against Rosa Luxemburg when they pointed to the tremendous possibilities of capitalist expansion into non-capitalist areas. But the originator of the accumulation theory had already removed the sting from this argument by emphasising repeatedly that the death throes of capitalism would inevitably set in long before the inherent tendency to extend its markets had run into its objective limits. Expansionist possibilities are not a geographical conception: it is not the number of square miles which is decisive. Nor are they a demographical conception: it is not the statistical comparison of capitalist and non-capitalist populations which indicates the ripeness of the historical process. A socio-economic problem is involved, and a whole complex of contradictory interests, forces and phenomena has to be taken into account.[9] In sum, Bukharin has patently confused geography and demography with the real capacity of the remaining non-capitalist systems to generate exchange value and thus constitute an effective market for capitalist production.  

Capitalist contradictions

If we now look at Bukharin’s treatment of the central issue in Luxemburg’s theory, the problem raised by Marx’s reproduction schemas, we find again that Bukharin’s approach is not at all unconnected to his political outlook. In a two-part critique published in 1982 (International Review n° 29 and n° 30, “To go beyond capitalism: abolish the wages system”), it is quite rightly argued that Bukharin’s criticisms of Luxemburg reveal profound divergences regarding the very content of communism.

Central to Luxemburg’s theory is the argument that Marx’s schemas of expanded reproduction in Capital Volume 2, which assume for the sake of argument a society composed exclusively of capitalists and workers, should be taken precisely as abstract schemas and not as a demonstration of the real possibility of harmonious capitalist accumulation in a closed system. In real life, capitalism has been constantly driven to expand beyond the borders of its own social relations. For Luxemburg, following Marx’s argumentation in other areas of Capital, the problem of realisation is posed to capital as a whole even if for individual workers and capitalists other workers and other capitalists can perfectly well constitute a market for all their surplus value. Bukharin accepts of course that for expanded reproduction to take place, there will be a need for a constant source of additional demand. But he insists that this additional demand is provided by the workers; perhaps not the workers who absorb the variable capital advanced by the capitalists at the beginning of the accumulation cycle, but by additional workers: “The employment of additional workers produces an additional demand, which realises precisely that part of the surplus value which is to be accumulated, to be exact, that part which must of necessity convert itself into functioning, additional variable capital”.[10] To which our article replies: “Applying Bukharin’s analysis to reality comes down to this: what should capitalists do to avoid laying off workers when their businesses can no longer find any outlets? Simple! – take on ‘extra workers’! It only needed someone to think of it. The trouble is that a capitalist who followed this advice would go rapidly bankrupt.[11]

This argumentation is on a similar level to Otto Bauer’s response to Luxemburg, which she tears to pieces in her Anticritique: for Bauer, the simple growth in the population constitutes the new markets needed for accumulation. Capitalism would certainly be flourishing today if population growth solved the problem of realising surplus value. But, strangely enough, in the last few decades population growth has been a constant factor while the crisis of the system has also “grown” at dizzying rates. As Frölich pointed out, the problem of realising surplus value is not a question of demographics but of effective demand, demand backed by the ability to pay. And since workers’ demand can absorb no more than the original variable capital advanced by the capitalists, taking on new workers is revealed as a non-solution the moment you consider capitalism as a totality. 

There is however, another side to Bukharin’s argument, since he also argues that the capitalists themselves also constitute the additional market needed for further accumulation because they invest in the production of means of production. “The capitalists themselves buy the additional means of production, the additional workers, who receive money from the capitalists ... buy the additional means of consumption”.[12] This side of the argument is much more favoured by those who also consider, along with Bukharin, that Luxemburg had raised a problem that does not exist: producing and selling additional means of production solves the problem of accumulation. Luxemburg had already criticised the essentials of this argument in her critique of Tugan-Baranowski’s efforts to prove that capitalism faced no insuperable barriers in the accumulation process; she supported her argument by referring to Marx himself: “Besides, as we have seen (vol 2, part 3), continuous circulation takes place between constant capital and constant capital (even regardless of accelerated accumulation). It is at first independent of individual consumption because it never enters the latter. But this consumption definitely limits it nevertheless, since constant capital is never produced for its own sake, but solely because more of it is needed in spheres of production go into individual consumption.[13]For Luxemburg, a literal interpretation of the reproduction schemas such as Tugan-Baranowski’s would result “not in capital accumulation, but growing production of the means of production with no aim at all.[14]

Bukharin is aware that the production of producer goods is indeed not a solution to the problem, because he brings in the “extra workers” to buy up the increasing mass of commodities produced by the additional means of production. In fact he takes Tugan-Baranowski to task for not grasping that “the chain of production must always end with the production of means of consumption...which enter into the process of personal consumption”.[15] But he only puts forward this argument in order to accuse Luxemburg of mixing up Tugan-Baranowski with Marx. And in the end he answers Luxemburg, as have many others after him, by quoting Marx in a misleading manner which once again seems to imply that capitalism can be perfectly content in basing its expansion on an endless production of producer goods: “Accumulation for accumulation’s sake, production for production’s sake: by this formula classical economy expressed the historical mission of the bourgeoisie.[16]These are certainly Marx’s words but Bukharin’s reference to them is misleading: Marx’s language here is polemical rather than exact: capital indeed bases itself on accumulation for its own sake, i.e. the accumulation of wealth in its historically dominant form of value; but it cannot achieve this merely by production for its own sake. This is because it only produces commodities and a commodity realises no profit for the capitalists if it is not sold. It does not produce for its own sake, merely to fill the warehouses or throw what it produces into the sea (even if these are often the unfortunate results of its inability to find a market for its goods). 

Bukharin’s state capitalist solutions

Bukharin’s biographer Stephen Cohen, who cited the above critical comments by Bukharin on Tugan- Baranowski, notes another basic contradiction in Bukharin’s approach.

At first glance, his inflexible approach to Tugan-Baranowski’s arguments seem curious. Bukharin himself, after all, had frequently emphasised the regulatory powers of state capitalist systems, later even theorising that under ‘pure’ state capitalism (without a free market) production could continue crisis free while consumption lagged behind[17]

Cohen has put his finger on a key element of Bukharin’s analysis. He is referring to the following passage in Imperialism and the Accumulation of Capital:

Let us imagine three socio-economic formations: the collective-capitalist social order (state capitalism), in which the capitalist class is united in a unified trust and we are dealing with an organized, though at the same time, from the standpoint of the classes, antagonistic economy; then, the 'classical' capitalist society, which Marx analyses; and finally socialist society. Let us follow (1) the manner of the course of expanded reproduction; thus, the factors which make an ‘accumulation’ possible (we give the word ‘accumulation’ quotation marks, because the designation ‘accumulation’ by its very nature presupposes only capitalist relations); (2) how, where and when crises can arise.

1. State capitalism. Is an accumulation possible here? Of course. The constant capital grows, because the capitalists’ consumption grows. New branches of production, corresponding to new needs, are continually arising. Even though there are certain limits to it, the workers’ consumption increases. Notwithstanding this ‘under-consumption’ of the masses, no crisis can arise, since mutual demand of all branches of production, and likewise consumer demand, that of the capitalists as well as of the workers, are given from the start. Instead of an ‘anarchy of production’ – a plan that is rational from the standpoint of Capital. If there is a ‘miscalculation’ in means of production, the surplus is stored, and a corresponding correction will be made in the following period of production. If, on the other hand, there has been a ‘miscalculation’ in means of consumption for the workers, this excess is used as ‘fodder’ by distributing it amongst the workers, or the respective portion of the product will be destroyed. Even in the case of a miscalculation in the production of luxury articles, the ‘way out’ is clear. Thus, no crisis of over-production can occur here. The capitalist’s consumption constitutes the incentive for production and the plan of production. Hence, there is no particularly fast development of production (small number of capitalists)”.[18]

Froelich, like Cohen, also highlights this passage and comments:

“[Bukharin’s] solution turned out to be an indirect confirmation of her crucial thesis...” And this solution is “astonishing. We are presented here with a ‘capitalism’, which is not economic anarchy, but a planned economy in which there is no competition, but rather a general world trust, and in which capitalists do not have to bother about the realisation of all their surplus value....”.[19]

Our article is equally scathing about the idea of throwing away the surplus product:

Bukharin claims to solve the problem theoretically by eliminating it. The problem in capitalist crises of overproduction is the difficulty in selling what is produced. Bukharin tells us: all that needs to be done is ‘give it away free’! If capitalism were able to distribute its products for nothing, it would indeed never undergo any major crises – since its main contradiction would thus be solved. But such a capitalism can only exist in the mind of a Bukharin who has run out of arguments. The ‘free’ distribution of production, that is to say the organisation of society in such a way that men produce directly for themselves, is indeed the only way out for humanity. But this ‘solution’ is not an organised form of capitalism, but communism.[20]

When he turns to “classical” capitalist society in the ensuing paragraphs, Bukharin accepts that crises of overproduction can take place – but they are merely the result of temporary disproportions between the branches of production (a view previously expressed by the “classical” economists and criticised by Marx, as we showed in the article “The mortal contradictions of bourgeois society” in International Review n° 139,). Bukharin then devotes a few scant lines to socialism as such, and makes the obvious point that a society which produces only to satisfy human need would have no crises of overproduction. But what seems to interest Bukharin above all is this hyper-planned capitalism where the state irons out all problems of disproportion or miscalculation. In other words, the kind of society which, in the USSR of the middle twenties, he was already describing as socialism... Admittedly, Bukharin’s science fiction state capitalism has become a world trust, a global colossus with no pre-capitalist remnants surrounding it and no conflict between national capitals. But his vision of socialism in the Soviet Union was a similar nightmarish utopia, to all intents and purposes a self-contained trust with no internal competition and only a manageable peasantry partially and temporarily outside its economic jurisdiction.

Thus, as we said earlier, the article in International Review n° 29 correctly concludes that Bukharin’s attack on Rosa Luxemburg’s economic theory reveals two fundamentally opposed visions of socialism. For Luxemburg, the fundamental contradiction in capitalist accumulation derives from the contradiction between use value and exchange value, inherent in the commodity – and above all in the commodity labour power which has the unique characteristic of being able to engender an additional value which is the source of the capitalist’s profit, but also the source of his problem of finding sufficient markets to realise his profit. Consequently, this contradiction and all the convulsions that result from it can only be overcome by abolishing wage labour and commodity production – the essential prerequisites of the communist mode of production.

Bukharin on the other hand criticises Luxemburg for having things too easy and “singling out one contradiction”, when in fact there are many: the contradiction between branches of production, between industry and agriculture; the anarchy of the market and competition.[21] All of which is true, but Bukharin’s state capitalist solution shows that for him there is one fundamental problem with capitalism: its lack of planning. If only the state can take charge of production and distribution, then we can have crisis-free accumulation.

Whatever confusions the workers’ movement prior to the Russian revolution may have had about the transition to communism, its clearest elements had always argued that communism/socialism could only be created on a world scale because each country, each capitalist nation, is inevitably dominated by the world market; and the liberation of the productive forces set in motion by the proletarian revolution could only become effective when the tyranny of global capital had been overthrown in all its major centres. In contrast to this, the Stalinist vision of socialism in one country posits accumulation in a closed system – something which had been impossible for classical capitalism and was no more possible for a totally state regulated system, even if Russia’s vast size (and huge agricultural sector...) made an autarkic phase of development a temporary possibility. But if, as Luxemburg insisted, capitalism as a world order cannot operate in the confines of a closed system, this is still less the case the individual national capitals, and Stalinist autarky in the 1930s – founded on the frenzied development of a war economy – was essentially a preparation for its inevitable military-imperialist expansion, realised in the second imperialist holocaust and the conquests which followed it.

***

Between 1924 when Bukharin wrote his book, and 1929, year of the Great Crash, capitalism underwent a phase of relative stability and in some areas – above all the USA – of spectacular growth. But this was merely the lull before the storm of the greatest economic crisis capitalism had ever experienced. In the next article in this series we will look at some of the attempts made by revolutionaries to understand the origins and implications of this crisis, and above all its significance as an expression of the decline of the capitalist mode of production.

Gerrard, May 2011.

 

 


[3]. In his biography of Bukharin, Bukharin and the Bolshevik Revolution, London 1974, Stephen Cohen traces Bukharin’s initial version of the theory to as early as 1922. See pp.147-148

[4]. Roman Rosdolsky, The Making of Marx’s Capital, Pluto Press 1989 edition, vol. 2 p.458n). As we noted in a previous article (“Rosa Luxemburg and the limits to the expansion of capitalism”, International Review n°142), Rosdolsky has his own criticisms of Luxemburg, but he does not dismiss the problems she poses; with regard to Bukharin’s treatment of the reproduction schemas, he argues that while Luxemburg herself made mathematical errors, so did Bukharin; and more importantly, took Marx’s formulation of the problem of expanded reproduction for its actual solution: “Bukharin completely forgot that the extended reproduction of the total social capital must not only lead to the growth of c and v but also to that of α, i.e. to the growth of the individual consumption of the capitalists. Nevertheless, this elementary mistake remained unobserved for almost two decades, and Bukharin was generally regarded as the most authoritative defender of Marxist ‘orthodoxy’ against Rosa Luxemburg’s attacks ‘on those parts of Marx’s analysis, which the incomparable master has handed down to us the completed product of his genius’ (Imperialism,p.158 of the London 1972 edition). Nevertheless, Bukharin’s general formula for equilibrium is very useful although he too (like most critics of Rosa Luxemburg) mistook the mere formulation of the problem for its solution” (The Making of Marx’s Capital, p.450)

[5]. Imperialism and Accumulation of Capital, p.248, Monthly Review Press, New York, 1972.

[6]. Ibid, Chapter 4, p.253.

[7]. Rosa Luxemburg, The Accumulation of Capital, Chapter XXXI, “Protective Tariffs and Accumulation”, p. 446, Monthly Review Press, New York, 1968.

[8]. Bukharin, op.cit, p. 260.

[9]. Frolich, Rosa Luxemburg, p.162, Pluto Press 1972.

[10]. Bukharin op.cit. p. 166-167.

[11]. International Review n° 29.

[12]. Bukharin, op. cit. p.177.

[13]. Capital Vol III, chapter 18, p 304-5, cited by Luxemburg op. Cit., XXV, p.346.

[14]. Luxemburg, op. cit., p.335).

[15]. Imperialism and the Accumulation of Capital, cited by Cohen, op. cit, p.174.

[16]. Capital Vol. I, p.595.

[17]. Cohen, p.174.Cohen uses the term “at first sight” because he goes on to argue that what Bukharin actually had in mind here was less the old controversy with Tugan than the new controversy in the Russian party, between the “super- industrialisers” (initially Preobrazhinski and the left opposition, later Stalin) who tended to focus on the forced accumulation of the means of production in the state sector, and his own view which (ironically, considering his dismissal of Luxemburg’s estimation of the important of non-capitalist demand) continually stressed the need to base the expansion of state industry on the gradual development of the peasant market rather, as the super-industrialisers shockingly insisted, on a direct exploitation of the peasants and the spoliation of their wealth. 

[18]. Bukharin, op. cit., p.226

[19]. Froelich, op. cit., p.160.

[20]. International Review n° 29.

[21]. It is worth noting that Grossman also criticises Bukharin for talking vaguely about contradictions without locating the essential one that leads to the breakdown of the system. See Grossman, The Law of Accumulation and Breakdown of the Capitalist System, London 1992, p 48-9