Ive started a new thread to ask a few questions about luxemburg’s thesis rather than continue the discussion on the decomposition thread.
Alf wrote: ‘A final word about Rosa Luxemburg's analysis. Link seems to imply that we have sidelined Luxemburg's thesis, or at least jettisoned its more "dogmatic" aspects. On the contrary, the self-critical discussions we have been having about crisis and decadence have led us towards a deeper understanding of Luxemburg's theory, not least a rejection of the idea that the extra-capitalist milieu was exhausted in 1914, which was not at all the thesis of The Accumulation of Capital. And as the recent contribution on the Silk Road also reminds us, capitalism's dynamic rapport with the extra-capitalist milieu is not only a question of markets, but also of the exploitation of new sources of labour power and natural resources, and their integration into the capitalist system’
Of course its not wrong to revise and re-interpret what Luxemburg said as Alf suggests, but the article mentioned by Alf, The New Silk Road, suggests that only now is capitalism exhausting extra capitalist markets:
“In principle, however, once the producers outside capitalism have been transformed into proletarians or capitalists, they constitute part of the existing capitalist market, no longer providing new outlets for capitalist expansion ... This is why capitalism cannot expand and accumulate eternally. At the latest when the great majority of humankind has been turned into either wage labourers or their “employers”, the system reaches its expansion limits. This is not yet completely the case today at the planetary level. But the “leveling off” of the expansion of China today is a clear sign that, although this expansion has not yet reached this limit, it is coming close enough to it to markedly slow things down”
This is quite an amendment to luxemburg’s thesis and may itself be thought to question the basis of decadence?
So first question on population
China’s population in 1914 was about 430m, 1950 was 540m whereas the population now is 1.4bn. World pop in 1914 was 1.6bn, in 1950 2.5bn, and in 2020 7.8bn
Why am I quoting figures again? Population growth doesn’t happen independently to the economy. To indicate the increase in market size obviously but if it is being said that the growth of the economy during decadence is related to the exploitation of new extra-capitalist markets then it appears that its not extra capitalist markets that have been around since 1914 but that they have been expanding and particularly since 1950,
Is this what the ICC is theorising or do you have a different interpretation?
This is an expansion at a far greater rate than the pre-capitalist economies achieved even at their height. . In fact if it is considered that the growth of China is a tumour, a product of the decomposition of capital, then presumable the theory must be that decadence is causing extra-capitalist markets to grow in order to enable capitalism to grow further. In itself that sounds extremely clever organisation, not really decomposition.
Second question on economic growth.
I think its correct to say that in The Accumulation of Capital Luxemburg did not suggest the extra capitalist markets were exhausted in 1914, but she does say this:
"Imperialism is the political expression of the accumulation of capital in its competitive struggle for what remains still open of the non-capitalist environment. Still the largest part of the world in terms of geography, this remaining field for the expansion of capital is yet insignificant as against the high level of development already attained by the productive forces of capital; witness the immense masses of capital accumulated in the old countries which seek an outlet for their surplus product and strive to capitalize their surplus value, and the rapid change-over to capitalism of the pre-capitalist civilisations.”
and in The Junius Pamphlet she goes further:
“Reduced to its objective historic significance, the present world war as a whole is a competitive struggle of fully developed capitalism for world supremacy, for the exploitation of the last remnant of non-capitalist world zones.” The Junius Pamphlet
World gdp % increase in period
These figures on economic growth also suggests that the extra capitalist markets must have been growing rather than diminishing as Luxemburg expected. This also poses the question, how has capital been able to achieve far higher growth rates in decadence, during the imperialist phase of decadence than in the ascendant phase when there were clearly far more extra cap markets available? Doesn’t this suggests economic growth is in fact dependant on something other than extra capitalist markets?
Last but not least, a question on Luxemburg’s theoretical basis.
Luxemburg states in The Accumulation of Capital:
“In real life the actual conditions for the accumulation of the aggregate capital are quite different from those prevailing for individual capitals and for simple reproduction. The problem amounts to this: If an increasing part of the surplus value is not consumed by the capitalists but employed in the expansion of production, what, then, are the forms of social reproduction? What is left of the social product after deductions for the replacement of the constant capital cannot, ex hypothesi, be absorbed by the consumption of the workers and capitalists— this being the main aspect of the problem—nor can the workers and capitalists themselves realise the aggregate product. They can always only realise the variable capital, that part of the constant capital which will be used up, and the part of the surplus value which will be consumed, but in this way they merely ensure that production can be renewed on its previous scale. The workers and capitalists themselves cannot possibly realise that part of the surplus value which is to be capitalised. Therefore, the realisation of the surplus value for the purposes of accumulation is an impossible task for a society which consists solely of workers and capitalists."
Would someone please explain what this means? I genuinely cannot work out the rationale for her conclusion here.
This is one of the 2 key points of Luxemburg’s thesis. However, we know that the money in circulation is only a small percentage of actual value of physical and financial assets so how does it matter how much money is in existence in order to be able to purchase/realise the whole of the surplus value? Ok, its correct that the element of surplus value destined to increase production shouldn’t by purchased by workers or capitalists for their own personal subsistence, but why on earth cannot the growth element of surplus value be purchased by productive industry and services or even the state. Why can it only be sold/realised in extra-capitalist markets?
Without this factor, her whole thesis falls down, so it is actually very important.