Capitalism-and-Its-Critics-A-History-From-the

“Capital knows no other solution to the problem than violence”

Rosa Luxemburg on Capitalism, Colonialism, and War

Rosa Luxemburg was born in 1871, in the Polish city of Zamość, the fifth child of an educated Jewish family that was prosperous enough to keep domestic servants. Her grandfather had established a timber business, and he sent his children, including Rosa’s father, to be educated in Germany. The eastern half of Poland, including Zamość, which is located about 150 miles southeast of Warsaw, was then part of the Russian Empire. When Rosa was still a toddler, her parents moved the family to Warsaw, where the schools were better than in Zamość. Around the age of three, she developed a hip disease that confined her to bed for a year and left her with a permanent limp. The ailment didn’t dampen her spirits or hamper her intellectual development. According to her first biographer, Paul Frölich, she could read and write by the age of five, and not long after that, she was teaching the family servants to read.1 Writing was an early passion. She submitted at least one piece of writing to a children’s magazine. In 1884, when she was thirteen, Kaiser Wilhelm I visited Warsaw, and she wrote a poem to mark the occasion. It ended:

Just one thing I want to say to you, dear William

Tell your wily fox Bismarck

For the sake of Europe, Emperor of the West,

13

Tell him not to disgrace the pants of peace.2

After finishing elementary school, Luxemburg was admitted to an allgirls high school favored by the Russian administrative elite, where all lessons and conversations were conducted in Russian, and Polish was forbidden. She routinely aced her tests, and in her final year, she finished top of the class. For some reason, the school didn’t award her the annual gold medal for academic achievement. Perhaps this was an example of discrimination, which even well-to-do Jews were forced to navigate. But Frölich suggests that it could also have been “on account of her rebellious attitude towards the authorities.”3 Details are scant, but either in her final years of high school or immediately after she graduated in 1887, Luxemburg began to mix with a group of young radicals who were associated with a banned group, the International Revolutionary Party Proletariat, often referred to as just the “Proletariat.” The group fused an anti-tsarist position with pro-worker sentiments and a willingness to engage in violence. In some ways, it resembled Narodnaya Volya, the Russian revolutionary group that, in March 1881, had assassinated Tsar Alexander II.

What role Luxemburg played in Proletariat’s activities isn’t exactly clear: she seems to have agitated mainly in student circles. It is known that she was in regular contact with the group’s leader, a working man named Martin Kasprzak, and that her activities drew the attention of the authorities. In 1889, facing the threat of arrest, she decided to leave Poland and cross into Germany. According to Frölich, Kasprzak organized her exit. When the two reached the area of the border, he told a local Catholic priest that “a Jewish girl had a burning desire to become a Christian, but could only do so abroad because of the vehement resistance of her relatives.” The priest agreed to help, and “hidden under straw in a peasant’s cart, Rosa Luxemburg crossed the border to freedom.”4

$$
\star \mathrm { ~ \bf ~ \star ~ } \star
$$

Germany was only an interim destination for Luxemburg. Eventually she made her way to Zurich, which was a noted gathering place for Jewish refugees and socialists. In 1890 she enrolled at Zurich University, a progressive institution that admitted female students. After initially studying the natural sciences, she switched to the law department, which encompassed economics and other social sciences. After she completed her bachelor’s degree, she started a doctoral dissertation on the industrialization of Poland. One of her advisers was Julius Wolf, a noted orthodox economist, who quickly recognized her talent despite disagreeing with her political views. “She came to me from Poland already as a thorough Marxist,” Wolf would recall in his autobiography. But he also described Luxemburg as “the ablest of my pupils.”5

In her dissertation, Luxemburg adopted a Marxian framework to explain that Poland, like the rest of the Russian Empire, was entering the industrial age. Successive tsarist administrations, seeing how far Russia was falling behind other European powers, had tried to stimulate industrial development. They eliminated internal tariffs to create a national market, introduced external tariff walls to keep out foreign competitors, and built railroads to reduce the isolation of many areas of the country. The 1861 emancipation of the serfs had already provided a ready source of wage labor. “Thus, after all the main conditions of industrial development—a domestic market, means of transport, an industrial reserve army—had been called to life in the years 1860–77,” Luxemburg wrote, “the supervening tariff policy created a hot-house atmosphere of monopoly prices that placed Russian and Polish industry in an absolute El Dorado of primitive capitalist accumulation.”6 She cited statistics showing that between 1870 and 1890, industrial production in Poland virtually quadrupled, with wool and cotton textiles leading the way. The central city of Łódź turned into a “Polish Manchester”; near the western border with Prussia, “a whole new industrial area sprang up as though charmed out of the ground,” while in Warsaw the “trade of the whole country was concentrated from now on in the Stock Exchange and in countless banking and commission firms.”7

Soon after arriving in Zurich, Luxemburg met Leo Jogiches, another young radical, who had fled the tsar’s police in Vilnius. Jogiches also hailed from a wealthy Jewish background. In high school, he “began to make revolutionary propaganda,” Frölich relates, and subsequently founded a small revolutionary group, which led to his arrest and imprisonment.8 Four years older than Luxemburg, Jogiches arrived in Zurich in 1890, where he associated with a group of Russian Marxists that included the noted theoretician Georgi Plekhanov, who was an associate of Engels. Jogiches was a self-confident and strident figure, but according to Luxemburg’s longtime friend Clara Zetkin, he was also “one of those very masculine personalities—an extremely rare phenomenon these days—who can tolerate a great female personality in loyal and happy comradeship, without feeling her growth and development to be fetters on his own ego.”9 He and Luxemburg would be comrades and lovers for a decade and a half.

Jogiches used some family money to launch a Polish-language socialist magazine, Sprawa Robotnicza. Luxemburg wrote for the new journal and eventually edited it. In the Polish exile community, she quickly became a controversial figure, because she rejected the argument that the Polish Socialist Party, which was founded in 1892, should support national selfdetermination. Given the dependence of Polish industry on the Russian market, independence wasn’t economically viable, she argued. And in any case, nationalism represented a diversion from the essential task of building up the working-class movement. In August 1893, when the Second International, the successor to Marx’s First International, held a congress in Zurich, there was an attempt to remove Luxemburg and her associates from the Polish delegation.10 Rising to oppose this effort, Luxemburg, who was then twenty-three, insisted that Sprawa Robotnicza “expresses the view of the Polish proletariat.” According to one onlooker, “she advocated her cause with such magnetism in her eyes and with such fiery words that she enthralled and won over the great majority of the congress.”11

On the national question, however, Luxemburg didn’t prevail. Shortly after the conference, she and Jogiches and some of their allies quit the Polish Socialist Party and founded their own avowedly internationalist party: Social Democracy of the Kingdom of Poland (SDKP). Although it remained a splinter group, Luxemburg’s disputes with the nationalists brought her to the attention of senior figures in the international socialist movement, including Karl Kautsky, a leading theorist in Germany’s SPD, who published some of her articles on the political situation in Poland in his journal Die Neue Zeit. After completing her doctorate in early 1897, Luxemburg decided to move to Berlin. Jogiches tried to persuade her to stay in Zurich, but failed. To live in Prussia, she needed a residency permit. Resourceful as ever, she persuaded an older Polish friend who had a German husband to ask their son to marry her. The wedding ceremony took place in Basel in April 1897, and Luxemburg became Frau Gustav Lübeck.

The following year she moved to the Prussian capital, never to associate with her husband again. Initially, at least, she didn’t have a positive impression of her new home. “Berlin is the most repulsive place,” she wrote to a friend, “cold, ugly, massive—a real barracks, and the charming Prussians with their arrogance as if each one of them had been made to swallow the very stick with which he had got his daily beating.”12

★ ★ ★

Luxemburg arrived in Berlin just as a bitter ideological debate was beginning in the SPD. On one side was Eduard Bernstein, a socialist theoretician who had lived in exile in Britain for many years, and on the other side was Kautsky and much of the SPD’s intellectual leadership. Bernstein was a longtime associate of Engels (who died in 1895) but had come to believe it was high time for socialists to accept the reality that many of the claims in The Communist Manifesto and Capital had been falsified, including the notion that capitalism was on the verge of a breakdown. Between 1896 and 1898, Bernstein wrote a series of articles on “Problems of Socialism” for Die Neue Zeit. In early 1899, he published his arguments in a book, The Prerequisites of Socialism, which was translated into English under the title Evolutionary Socialism.13

Since Marx’s death in 1883 some of his followers had queried aspects of his work, but Bernstein’s contribution amounted to a frontal assault. Challenging the basic Marxist claim that capitalism divided society into two classes—the bourgeoisie and the proletariat—squeezing out the propertyowning middle class, he wrote: “The number of members of the possessing classes is to-day not smaller but larger.” The record showed that as capitalism developed, “the middle classes change their character but they do not disappear from the social scale,” Bernstein added.14 He also criticized Marx’s claim that the centralization of capital and the emergence of large monopolistic combines led to the demise of small businesses. “Trade statistics show an extraordinarily elaborated graduation of enterprises in regard to size,” Bernstein wrote. “No rung of the ladder is disappearing from it.”15

Bernstein’s heresies didn’t end there. He also questioned the notion that the cyclical crises endemic to capitalism were intensifying, and that one of them would eventually bring about a collapse. The emergence of cartels and monopolies was taming some of the anarchy of the market, he argued, and the expanded availability of credit was another stabilizing factor. Turning to politics, he pointed out that in many countries, the voting franchise was being extended to working people, labor unions were being legalized, and labor cooperatives were making progress. In some places, governments were introducing policies designed to improve the living standards of the masses. Bismarck’s Germany had led the way. During the 1880s, it had introduced a national system of social insurance for illness, accidents, and old age. Given all these developments, Bernstein said, the key question was whether gradualist reform or a commitment to violent revolution during an economic crisis was the best strategy to secure working-class control of the state. “In my judgment,” he wrote, “a greater security for lasting success lies in a steady advance than in the possibilities offered by a catastrophic crash.”16

Although Kautsky agreed to publish Bernstein’s essays in Die Neue Zeit, he was aghast at their content. “Your Marxism has collapsed,” he wrote to his old comrade. “You have not developed it to a higher form but capitulated before its critics.”17 In public, Kautsky and other SPD leaders initially held off attacking Bernstein, who was a respected party veteran. Their reluctance to engage presented Luxemburg with an opportunity to make her mark in Berlin. In the summer of 1898, which she spent organizing voters in Silesia at the behest of the SPD, she began composing a lengthy response to Bernstein’s arguments. Timing was key. A party congress was coming up in September, and she wanted to publish something before the gathering. “I am ready to give half my life for that article, so much am I absorbed in it,” she wrote to Jogiches.18

In September 1898, a left-leaning newspaper in Leipzig published a series of pieces by Luxemburg that contested the claims Bernstein had made in his articles for Die Neue Zeit. When Bernstein’s book appeared early the next year, the same newspaper published more critical pieces by Luxemburg. Subsequently, she combined her essays into a pamphlet, Reform or Revolution? The crux of her argument was that the developments highlighted by Bernstein hadn’t changed the exploitative nature of capitalism, which was based on capitalists’ owning the means of production. Even if labor unions and cooperatives could attenuate the “depressing tendency of economic development” on workers’ living standards, she wrote, they were “totally incapable of transforming the capitalist mode of production.”19

Luxemburg also pointed out that expansions of credit could destabilize the system, rather than stabilize it, and she dismissed as naive Bernstein’s critique of the theory of the centralization of capital. While many small businesses still existed, she wrote, they merely played the role of “pioneers,” creating new methods of production before larger companies swallowed them up. The development of rival capitals wasn’t a onetime battle in which the “troops of the weaker party continue to melt away directly and quantitatively. It should rather be regarded as a periodic mowing down of the small enterprises, which rapidly grow up again only to be mowed down once more by large industry.”20 There was some evidence to back up Luxemburg’s argument. As the German economy had grown at a breakneck pace, industrial consolidation had proceeded rapidly. In the steel industry, the vertically integrated Krupp and Thyssen corporations had emerged as dominant players. In the chemicals industry, BASF, Bayer, and Hoechst were already operating on a global scale and exporting most of their products.

Luxemburg reserved her most cutting criticisms for Bernstein’s gradualist political strategy, which she described as turning “the sea of capitalist bitterness into a sea of socialist sweetness, by progressively pouring into it bottles of social-reformist lemonade.”21 In focusing on the narrow material advances that workers had made, his “theory tends to counsel us to renounce the social transformation, the final goal of Social-Democracy, and, inversely, to make of social reforms, the means of the class struggle, its aim,” she wrote.22 A revolutionary commitment to replacing capitalism with socialism was “the only decisive factor distinguishing the Social-Democratic movement from bourgeois democracy and from bourgeois radicalism.”23

$$
\star \mathrm { ~ \bf ~ \star ~ } \star
$$

The publication of Reform or Revolution? burnished Luxemburg’s reputation as a rising left-wing theoretician. Eventually, Kautsky and other senior figures in the SPD published their own criticisms of Bernstein’s arguments, confirming a split in the party between “radicals” and “revisionists.” Luxemburg had got in early. In 1900, Jogiches joined her in Berlin. By that time, the SDKP, the Polish socialist party they had founded, had become the SDKPiL: the Social Democracy of the Kingdom of Poland and Lithuania, and it still took up a good deal of their time. In 1903 Jogiches created a party magazine modeled on Kautsky’s Die Neue Zeit, and Luxemburg wrote for the new publication. She also continued to publish in the German media. For a time, she served as the editor of the Leipzig newspaper that had published her critiques of Bernstein. But the appointment of such a firebrand led to an outcry from other publications, and the job lasted only a few months.24 In 1905, Luxemburg was appointed to the board of Vorwärts, the SPD party newspaper, with which she’d previously had a fractious relationship.25

The energy and commitment that Luxemburg and Jogiches devoted to the socialist cause was boundless. Later in 1905, after a revolution broke out in Russia, they traveled under fake identities to Warsaw, where they were liable to be arrested and imprisoned at any moment. In March 1906 the authorities detained her. Initially, at least, Luxemburg kept her spirits up. “Here I am sitting in the Town Hall where ‘politicals,’ ordinary criminals and lunatics are all crowded together,” she wrote in a letter to Kautsky and his wife, Luise. “My cell is a veritable jewel; with its present ornaments  … it now contains 14 guests, fortunately all of them political cases.”26 She was transferred to a regular prison, then to a harsh highsecurity facility, the Warsaw Citadel, which was used to house long-term political inmates. Her health started to deteriorate, partly because, for a time, she engaged in a hunger strike. She ended up being held for four months. Finally her friends and family managed, through bribery, to get her released on medical grounds.27

Rather than returning directly to Berlin, Luxemburg went to Kuokkala in Finland, where Vladimir Lenin, the leader of the Russian Bolshevik Party, and some of his followers were based. Originally Luxemburg had supported the Bolsheviks’ political rivals on the Russian left, the Mensheviks. But during the revolution of 1905, the bold efforts that Lenin and his colleagues had taken to instigate a full-scale workers’ rising had impressed her, even though they failed. In Kuokkala, she spent a lot of time talking with the Bolshevik leader, and they established a political relationship that would endure for some years.28 Meanwhile, Jogiches was still being held in Warsaw. At his trial, in January 1907, he refused to participate and was sentenced to eight years of hard labor in Siberia. The outlook for him seemed bleak, but somehow, aided by an associate who bribed a policeman, he managed to escape before being transported.29

By the time Luxemburg and Jogiches returned to Berlin and resumed their regular political activities, their imprisonment in Warsaw had added to their reputation on the German left. But their personal relationship had come to an end. The Austrian-British historian J. P. Nettl, in his monumental two-volume biography of Luxemburg, which was originally published in 1966, suggests that Jogiches betrayed Luxemburg with another woman in Poland, and that she immediately cut off relations with him. After the breakup, Nettl recounts, Luxemburg took a younger lover, Konstantin Zetkin, the son of her friend Clara Zetkin. When Jogiches heard about this match, he was so furious that he threatened to kill Luxemberg and Zetkin, prompting her to buy a revolver for self-protection.30

In 1907, the SPD’s Central Party School, which provided instruction for political candidates and party workers, invited Luxemburg to join its teaching staff. Kautsky helped her secure the post by assuring the head of the school, “In Rosa Luxemburg you will be getting one of the best brains in Germany.”31 The return to academia sat well with Luxemburg. As part of her duties, she taught courses in political economy and economic history. Outside class, she began working on an introduction to Marxian theory, covering the history of capitalism and some basic economic concepts, such as commodity production and wage labor.

With the tensions between Germany and other European countries intensifying, Luxemburg also turned her attention to the economic roots of imperialism, which wasn’t a new subject to her. In an 1899 letter to Jogiches, she had warned of the danger of wars of territorial acquisition carried out by “capitalist and state interests,” adding: “It’s clear that the dismemberment of Asia and Africa is the final limit beyond which European politics no longer has room to unfold.”32 In 1907, at the seventh congress of the Second International, she had joined Lenin in pushing through an anti-imperialist resolution that proclaimed: “Wars between capitalist states are as a rule the result of their rivalry for world markets.”33

Toward the end of 1911, the year of the Agadir Crisis, Luxemburg decided to break off her textbook and focus her energies on a book about imperialism. “I want to find the cause of imperialism,” she wrote to Konstantin Zetkin. “I am following up the economic aspects of this concept … It will be a strictly scientific explanation of imperialism and its contradictions.”34 Researching and writing the book, which Luxemburg titled The Accumulation of Capital: A Contribution to the Economic Theory of Imperialism, took more than a year of intense work, but she found the endeavor highly fulfilling. “The period while I was writing Accumulation belongs to the happiest of my life,” she would later recount. “I lived really as if in a state of intoxication, day and night seeing nothing but this one problem that was unfolding itself so beautifully in front of me, and I don’t know which afforded me greater pleasure: the thinking process, whereby I pondered a complicated question while walking slowly up and down the room … or the shaping of results into literary form on paper. Do you know that I wrote the entire 30 galleys in one go within four months—something unheard-of!”35

★ ★ ★

In the foreword to the book, which was published in 1913, Luxemburg said she hoped it would have “some implications for our practical struggle against imperialism.”36 She also emphasized that it was primarily a theoretical work that had arisen out of some problems she had encountered with Marx’s treatment of “the reproduction of total social capital,”37 or what we would call economic growth. Two aspects of The Accumulation of Capital were immediately obvious to anybody who opened it. It was a work of deep scholarship. As well as closely analyzing Capital, it discussed the work of many other economists, from the Ukrainian Mikhail Tugan-Baranovsky back to Sismondi, Malthus, and Ricardo. Secondly, even for readers familiar with the Marxist idiom, it was a dense read.

In the Marxist world, providing a “scientific explanation” of imperialism necessarily involved analyzing how it fit into the economic framework Marx had created in Capital. The heart of Luxemburg’s argument related to the famous “reproduction schemes” in the final chapters of volume II. Marx had used these analytical devices, which divided the economy into two sectors—a capital goods sector (“Department I”) and a consumer goods sector (“Department II”)—to examine whether it was possible for a capitalist system to grow in a consistent manner, with saving and capital accumulation balancing each other. Tugan-Baranovsky, among others, had pointed out that Marx’s analysis seemed to raise the possibility of perpetual balanced growth rather than catastrophic breakdown.