Luxemburg 150

Yesterday, 5 March 2021, was the 150th anniversary of the birth of Rosa Luxemburg, the great revolutionary socialist of the Polish-German labour movement.  Luxemburg’s contribution to socialist ideas and to the struggle to replace capitalism is too manifold for a short blog post to do her justice.  So I won’t attempt to do a proper job here.  Instead, I shall offer a few comments on her contribution to Marxist political economy along with some suggestions for some very useful critiques of her work.

Since the 1970s there has been a Collected Works in German. But more recently, there is a new Complete Works in English, edited by Peter Hudis, in fourteen volumes.  As Hudis explained in an article in Solidarity 356 (11/3/15:, “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.”

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.  She was a formidable economist by all standards, and one who reckoned that economics was “her field”. Her most famous work was The Accumulation of Capital in which she set out to refute the reformist views of Bernstein and Kautsky, the German Social Democrat leaders, that capitalism would not ‘collapse’; and the theory of Rudolf Hilferding, the Austrian Marxist that monopoly and finance capitalism would provide a degree of stability for capitalist accumulation.

As is well known among Marxist circles, Luxemburg attempted to refute these views in her book by arguing that there was an inherent tendency for capitalist accumulation to overreach the market for buying the goods and services being produced.  In her view, that showed that capitalism could and would get into crises; and moreover, it also explained imperialist expansion.  To avoid  crises of overproduction at home, capitalism was forced to search for new markets overseas and find buyers for its goods in the non-capitalist sectors of the world.

She argued that Marx’s analysis of crises fell short here.  Marx had failed to see in his reproduction schemas in Volume Two of Capital that this was the ultimate cause of crises: namely the overproduction of capital goods relative to demand (both from capitalists and workers in the imperialist countries), forcing capitalism to find that demand from the colonial non-capitalist peasants.

She was not afraid to take on Marx as well as other leading theorists.  As she concluded in her Anti-Critique: “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”.

There are many effective critiques of Luxemburg’s thesis.  I can list a few papers here that go into those critiques in much more detail than this short post.

I think the most effective critique of Luxemburg’s crisis theory came from Henryk Grossman.  Grossman acknowledged Luxemburg’s work.  He agreed with her that the expansion of imperialism was due to the capitalist system’s proneness to economic crises. But he differed from Luxemburg in regarding imperialism as a factor which offset the tendency for the rate of profit to fall, not as the need for capitalism to find markets for over-production. Imperialism was a counteracting factor to the key underlying cause of crises and ‘breakdown’ in capitalist production, namely the tendency for the rate of profit on capital to fall over time.

Lenin was also critical of Luxemburg’s explanation of imperialism.  In his famous book on Imperialism, he argues that imperialism is the result of capitalism’s need to export capital which arises “from the fact that in a few countries capitalism has become ‘overripe’ and (owing to the backward state of agriculture and the poverty of the masses)” and “capital cannot find a field for ‘profitable’ investment.”  Grossman went further than Lenin: “[W]hy,” then, “are profitable investments not to be found at home?…..The fact of capital export is as old as modern capitalism itself. The scientific task consists in explaining this fact, hence in demonstrating the role it plays in the mechanism of capitalist production.”

Luxemburg knew from reading Marx’s Capital about the law of profitability, although Marx’s notes on Capital, Grundrisse, were not available to her. But she dismissed the law as irrelevant to capitalist crises.  For her, the law was a long-term thing. Indeed, it was so long-term, as she famously put in Anti-Critique, when answering criticisms of her Accumulation book, that “There is still some time to pass before capitalism collapses because of the falling rate of profit, roughly until the sun burns out”.

But Marx did not see the law of profitability as something in geological time but very relevant to human time.  “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).

Peter Hudis has added an interesting anecdote to Luxemburg’s rejection of Marx’s ‘most important law in political economy’. He wrote to me in an email:  “what is less well known, is the person she is responding to” in dismissing the relevance of the law of profitability in crises. “He was an anonymous reviewer of ‘The Accumulation of Capital’ in ‘Dresdener Volkszeitung’ of January 1913.  Several years ago, when I was editing ‘The Letters of Rosa Luxemburg’, I managed to track down that the author was Miran Isaakovich Nakhimson. Born in 1880, he joined the Bundists in 1898 and became known as one of its most prominent political economists. Although virtually forgotten today, he was a considerable presence at the time.”

Hudis goes on: “It’s fairly clear from Luxemburg’s correspondence that she was particularly irritated by Nakhimson’s critique–which is interesting, since he was virtually alone among her critics in going after her for neglecting Marx’s law of the rate of profit. In a letter to Franz Mehring in February, 1913, she writes, “Too bad that Nackhimson has a slap in the face coming to him, but perhaps in the end this would be too great an honor to give this scoundrel and expert at confusion.”  A little harsh, it seems, on the Bundist economist.

Rosa Luxemburg was murdered by the Freikorp troops under the control of the Social Democratic government during the 1919 uprising.  Nakhimson was murdered by Stalin’s NKVD in 1938.  Both economists were revolutionary fighters for socialism and suffered a similar fate, if by different hands.

18 thoughts on “Luxemburg 150

  1. More important to understand Luxemburg’s thought and theory is her party, the SPD. It is impossible to separate both.

    We don’t have this notion nowadays, but by Luxemburg’s time, it was the SPD which was the worldwide socialist party, socialism’s reference. The Bolshevik Party (future Communist Party of the Soviet Union – CPSU) still didn’t exist and, during Luxemburg’s lifetime, it was still considered an insignificant group of enthusiasts or even fanatics (to the eyes of the social-democrats). Luxemburg, up to the very end of her life, treated Lenin and the Bolsheviks are mere footnotes of the socialist intellectual landscape. She was frequently dumbfounded by Lenin’s insistence on organization of the party and other factor that, for her, were already a given or a reality.

    That’s because she lived through the height of the SPD. During the SPD’s apex (end of the 19th Century to the first decade of the 20th Century), the working classes from Germany were achieving gains never seen before with an ease never seen before. Luxemburg lived in an era where there really was an illusion socialism could be achieved through institutional reforms. She never fell for the reformist illusion, but it certainly influenced her thought.

    When she realized the Bolsheviks were right, it was too late, as she was only some weeks away from being executed by the Freikorps (the future Nazis).

    1. Actually, the Bolsheviks existed as a public faction of the Russian Social Democratic Labour Party (RSDLP), and since 1912 as a separate party, which stood her own candidates for the Duma. “Akkumulation des Kapitals” was finished in 1912, in the same year as the Bolshevik party was formed.

  2. I could only find this guy on Google: Semen Mikhailovich Nakhimson (pseudonyms: Mikhalchi, Pavel Salin; November 25, 1885, Libava – July 6, 1918, Yaroslavl) was a member of the revolutionary movement in Russia and military commissar of the Yaroslavl District. I couldn’t find Miran Isaakovich Nakhimson anywhere on Google, other than the mention made of him by you here. Any tips?

  3. Good job, very clarifying. But, in my view there’s kind of mystery in this story. For thirteen years before her harsh answer to Nackhimson, in her famous polemical work against Bernstein, Luxemburg wrote the following:
    “In the ‘unhindered’ advance of capitalist production lurks a threat to capitalism that is much greater than crises. It is the threat of the constant fall of the rate of profit, resulting not only from the contradiction between production and exchange, but from the growth of the productivity of labour itself.”
    What happened in those thirteen years in order to change her mind in a so extrem way? I think that the answer to this question might help us to understand the difficulties to develop Marx’s critical of political economy. Have you got any hypothesis about that?

    1. It’s a good quote.
      My hypothesis is that luxemburg considered the law of profitability as explaining the transient nature of capitalism namely that falling profitability would conflict with rising productivity of labour and thus eventually stop it. But this threat was long term and not relevant to periodic crises

  4. think that Rosa would have been better served if you had emphasized her positive contributions to the evolution of marxist analysis. I’m not an economist. I’ve only read Luxemburg’s Accumulation of Capital. But I think she is largely misunderstood by many of her critics, of which I have read few that were not Russian.

    Rosa accepted Marx’s theory of the falling rate of profit as true and responsible for crises, but argued that within itself trpf will not lead to revolutionary change, but to a death spiral (of humanity, not capitalism) of increasingly destructive countervailing efforts. But she (like Lenin) was a revolutionary, and was driven by historical forces she could not ignore.

    As you point out, Luxemburg was an excellent economist. But, in The Accumulation of Capital, it is her theory of imperialist exploitation/expropriation as a the product of an inherent contradiction (exposed within Marx’s reproduction schemata) in the expanded reproduction of industrial capitalism that is her greatest contribution to marxist theory and practice. This critique enabled her (like Marx, whom she underestimated because at the time the critical texts remained unpublished) to understand the inherently violent, expropriatory nature of modern industrial capitalism, for which the conquistadors, pirates, and state sponsored merchant company colonialists cleared the bloody way. Rosa’s critique shows rather convincingly that modern industrial capitalism, within its free market exchanges, cannot expand its productive forces (c+v) without murdering and stealing the human and natural resources non-capitalist peoples to pay for that expansion.

    Marxists at the global peripheries (the best marxists these days) owe much to Rosa. Most marxists at the imperial centers tend to view capitalism’s imperial crimes (wars and extortions) as exogenous, non-economic phenomena (even those marxists living in the US (! ) like David Harvey)… as if stealing Venezuelan gold, Iraqi oil, endless wars, and even the bald threat of nuclear war, are not by now obviously necessary activity for the reproduction of the imperial system of profit making.

    Of course, I admire your work. It’s just this piece that confuses me.You are hardly euro-centric in your approach. Why so negative?

  5. Mike Ballard: The reason you can’t find him under the name ‘Miran’ is because that was not his name. It was Miron. You’d think either Hudis or Roberts would not have made this error. I am stunned that only one person (you) thought to raise the matter — which stunningly suggests no one else thought he was worth looking up.

    His name as ‘Miron’ is given, for example, in Rick Kuhn: ‘ECONOMIC CRISIS AND SOCIALIST REVOLUTION: HENRYK GROSSMAN’S LAW OF ACCUMULATION’ (Nothing to do with Luxemburg writing against him, though)

    Other source suggests he used the aliases Spektator and J Heller. His name may also appear in the literature as NI Nakhimson.

    And a relative (?) or not, in the matter under disussion here, he has nothing to do with that other Nakhimson.

      1. It is maybe not in the translatoin used by MIA, but I see it as a faithful translation of the actual German text, which I have in front of my eyes. Would it help someone here if I quote this German text?

        When I see at the top of the MIA publication, I see:

        Translated: (from the German) by Rudolf Wichmann.
        Transcription/Markup: Steve Palmer.
        Copyright: Kenneth J. Tarbuck and Rudolf Wichmann 1972.

        as if this were a very young translation.

    1. The translator of the version used by MIA translated the “geschichtlichen Blitz und Donner” not verbally as “history’s thunder and lightning” but as ” the rough and tumble of history”.

      Two legitimate translations, methinks.

  6. Actually the SPD was Rosa Luxemburgs second party. The other was the “Socjaldemokracja Królestwa Polskiego i Litwy”, short SDKPiL (“Social Democracy of the Kingdom of Poland and Lithuania” in english) of which she was a founding member together with Leo Jogiches and Julian Marchlewski. It was as a leading member of this party inside of the Russian Empire that she polemicized against Lenin on the national question and the unalieniable right to secede.

    The Karl Dietz Verlag in Berlin is working on publishing her works she wrote in Polish and have never been translated to German before.

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