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Reports to the Milan meeting 17-18 October 1959 Classic Solutions of Marxist Historical Doctrine for the Vicissitudes of Miserable Bourgeois Actuality Fundamental Questions of Marxist Economics (Il Programma Comunista No. 1 and 2, 1960)
The question of accumulation –
Theory of crisis –
Anarchy of production –
The historical discussion of accumulation –
Report on Luxemburg –
The historical environment of capitalist accumulation –
Report on Bukharin –
Bukharin’s ‘points’
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The historical dispute over the accumulation or expanded reproduction of capital revolves around the ‘schemas’ that Marx quantitatively expounds on in Section Three of this second book, and which we will expose in the numerical forms and symbolic expressions to which they lead in the near future.
But a few observations must be made on the classic dispute, and we apologise if they seem not only prejudiced but also paradoxical to some. Of Marx’s various commentators, some argue that the series of schemas is conclusive, others that it is contradictory and cannot be developed indefinitely. But for what purpose and in what field of general treatment are the schemas instituted? Perhaps to prove that on their tracks capitalism can run unimpeded indefinitely? Absolutely not. Insofar as the schemas of accumulation are intended to present the process in the pure capitalist economy, Marx wanted to construct them in such a way that they would be conclusive and not erroneous. But for the purposes of his entire construction – which, as we always show, is not descriptive of capitalism as an objective historical form, but is a platform for the programme of its revolutionary destruction – Marx’s objective is precisely the opposite: to show that capitalism, whether pure or mixed with pre-capitalist forms: CANNOT LAST; it must succumb to the inexorable impossibility of survival. Any group of schemas may be ARITHMETICALLY conclusive, but HISTORICALLY we must precisely come to prove that it cannot hold.
To arrive at this complex dialectical view of the matter, many important considerations must be taken into account.
Marx sets up his study of the circulation of capital – of which both simple and expanded reproduction are two aspects, dealt with in the present first Section – by warning that he considers a movement of production and reproduction of capital not in the real historical framework but with the working hypothesis that all exchanges between money and commodities that encompass the central process of production take place at prices equal to the general exchange value and without movement of the price and monetary standard. It is clear that no geographical capitalist country and no historical period of even a very few years can be chosen in which these conditions are fulfilled; whereas it is precisely the changing of all these conditions that gives rise to the progress of capitalism towards its crises and destruction.
There are then, at the basis of the much discussed and variously accepted or interpreted ‘schemas’, many other no less explicit theoretical suppositions: that the organic composition of capital does not change in the short course considered, that the rate of surplus-value does not change, and therefore that the ratios linking the three quantities of the schemas, i.e. C, constant capital, V, wage capital, S, surplus-value, are always the same. With difficulty, Marx, in order to remove certain obstacles, will concede that the rates may change when we pass from Department I producing means of production to Department II producing consumer goods.
If all those conditions were to occur, it is certain that capitalism could last eternally: but it is precisely because they never occur in social reality that it is heading towards its end.
What is more, another condition is assumed, that all remnants of pre-capitalist forms have disappeared, and that the integral mercantilism discussed earlier functions so that there are no non-salaried workers. This condition was not reached in Marx’s time even in England, and today there is still no country where it is reached. The central point of Marxism is that it is not at all necessary to wait until the whole economy is integral capitalism in order to overthrow capitalism in the communist revolution!
Whether or not the schemas add up, and what needs to happen for those accounts to add up, is not the vital aspect of the question, either of the presentation of the mechanics of capitalism or of the course of its downfall. Both are true: Marx’s abstract schemas walk well; and real capitalism walks infamously.
The theory of progressive accumulation is not yet the historical theory of the inescapable crises of the capitalist economy.
And one more important point: between the doctrine of the circulation of capital, which we seem to have absorbed at this point, and the doctrine of expanded reproduction, there is the doctrine of fixed capital and circulating capital, which is in the second Section and needs to be examined.
In simple reproduction, constant and variable capital, which form the total anticipated capital, remain the same in all cycles, and surplus value is consumed by the capitalists while the workers spend the variable capital. It is easy to find the relation that ensures that so many means of consumption are found on the market that both the capitalists’ surplus and the workers’ wages are spent, and we will see this later when we discuss the two departments and accept the hypothesis that everyone is either a personal capitalist or a wage earner. But when one goes to expanded reproduction, a part of the surplus-value is taken away from the capitalist’s consumption and goes to buy new means of capital, which must be found produced in society. The simplest, Marx says (as we know) in these pages, is to assume that all surplus value goes to new capital, i.e. Marx already eliminates the persons and mouths of capitalists, and shows that capital functions (the usual Russia). But once such a scheme is made to balance, nothing is explained, because all balancing is done between circulating capitals, which is the real capital in our economic science, the sum of all the value of social products. But to make an extra machine worth a thousand pounds work, we will have taken from the schemas only the ten pounds of annual wear and tear: where does one get the rest? Marx would have replied immediately that this far greater remainder is not real productive capital but fixed capital, such as construction. It is the famous ‘objectified human labour’ provided by all generations and held by the ruling class-state. It was formed in the initial or primitive accumulation of the First Book, historically, and Marx replies that all capital was formed this way. Thus the clash between fully bourgeois and pre-bourgeois economic forms is evident, which Luxemburg rightly introduces but without adding anything to Marxism; for which it is classically clear that the contact must be seen both historically and geographically; and here is another immense field of work for our organisation on the tremendous problem of ‘backward’ peoples.
Theory of crisis
The other observation that should not seem so paradoxical as it is obvious is that one does not need to go into the realm of progressive accumulation to prove the inevitability of crises in capitalist production.
The Marxist doctrine of crises appears in simple reproduction. It is fundamental that capitalism is condemned to accumulate by extending general capital even at the cost of sacrificing to this inexorable fate all privilege and the very life of capitalist-people. This notwithstanding, even in the humble hypothesis of the constancy of social capital and simple reproduction, Marx presents the evidence of crisis theory. In other words, this means that in its turbulent race, beset by the need to produce more surplus-value in order to increase the volume of total capital, the capitalist world or one of its sectors can also make us witness phases of ‘regressive reproduction’, like the overwhelming phases of progressive accumulation. We will prove as usual not to have discovered this.
Even with the unfortunate immediatist formula that would arrive at what Marx derides as the ‘generalisation of misery’, with the sharing of surplus value among wage earners, the economic machine would remain mercantile and capitalist and would be subject to leapfrogging in the crises of its operation, however dim it may be.
The paragraph on simple reproduction, which precedes the one on ‘Accumulation and Reproduction on an Extended Scale’ (where it is said that the simplest will be to admit that all surplus-value is accumulated) goes in the French edition on p. 110 to p. 133. The actual theory of crises is taken off pages 129-130.
In this passage Marx makes the opposite assumption to the one underlying the ‘verification’ of the schemas, namely that not everything is sold and not everything is consumed. The final product C’ must be sold so that, in simple reproduction, it is divided between c consumed by the capitalist and C with which the cycle starts again. But: ‘[w]hether C’ is bought by the ultimate consumer or by a merchant for resale does not affect the case’. And shortly afterwards, following the well-known observation that the stimulus is the need of capital to reproduce itself and not the famous supply and demand of the gentlemen ‘circulators’, or even the need of human beings to be satisfied:
‘Within certain limits, the process of reproduction may take place on the same or on an increased scale even when the commodities expelled from it did not really enter individual or productive consumption. The consumption of commodities is not included in the circuit of the capital from which they originated (…) So long as the product is sold, everything is taking its regular course from the standpoint of the capitalist producer. The circuit of capital-value he is identified with is not interrupted. And if this process is expanded – which includes increased productive consumption of the means of production – this reproduction of capital may be accompanied by increased individual consumption (hence demand) on the part of the labourers. (It must not be forgotten that in the formula of expanded reproduction when the new commodity expenditure becomes greater, Marx admits that, as the anticipated capital grows, the constant capital may grow, but not the wage capital, neither relatively nor absolutely, when the rate of organic composition changes; which will not be assumed until Luxemburg in outlining the schema of Part III), since this process is initiated and effected by productive consumption. Thus the production of surplus-value, and with it the individual consumption of the capitalist, may increase, the entire process of reproduction may be in a flourishing condition, and yet a large part of the (produced) commodities may have entered into consumption only apparently, while in reality they may still remain unsold in the hands of dealers (the wholesale ones, who have already paid the capitalist producer and reinvestor), may in fact still be lying in the market. Now one stream of commodities follows another, and finally it is discovered that the previous streams had been absorbed only apparently by consumption. The commodity-capitals compete with one another for a place in the market. Late-comers, to sell at all, sell at lower prices (here we are dealing with what is in Marxist economics the price of production, the price equal to the value containing the exact part of the capital advance and surplus value at the average social rate). The former streams have not yet been disposed of when payment for them falls due. Their owners must declare their insolvency or sell at any price to meet their obligations. This sale has nothing whatever to do with the actual state of the demand. It only concerns the demand for payment, the pressing necessity of transforming commodities into money. THEN A CRISIS BREAKS OUT. It becomes visible not in the direct decrease of consumer demand, the demand for individual consumption (this would be the usual and also very modern explanation of conformist economists: see a current example in our article in the last issue on the crisis in US agriculture), but in the decrease of exchanges of capital for capital, of the reproductive process of capital’.
This is perhaps one of the most eloquent descriptions of crisis in Marx’s work. When the capitalist system enters into crisis, not only does the strident and lacerating contradiction with its historical need to expand occur, but it is also the case that its circulation in constant quantity is prevented, i.e. there is a negative reproduction as opposed to simple reproduction, a part of the value that has already taken the form of productive, industrial capital is pulverised, and the social sum of the means of production circulating as capital falls frighteningly from the historical level reached.
Anarchy of production
In this framework lies the well-known demonstration of the effects of the anarchy of capitalist production. The mechanism, the secrets of which are powerfully revealed in our original doctrine, succeeds in fulfilling its task of incorporating into the belly of the monster that is total capital the ancient patrimonies, that is, the dead labour of past generations and the labour of the proletarian army into which the living are regimented, and satisfies, among terrible alternatives, the delivery of reproducing itself in more monstrous dimensions; but what it will never resolve, indeed less than any ancient historical form of economy, is the proportioning of productive efforts to the rational needs of men.
One of the ancient aspects of the irreconcilable contradiction has become clear in the glimpse we have just reproduced and commented on soberly, and in our entire reconstruction of the circulation of capital, which is quite different from the circulation of commodities and money. When we are in a moment, a good one, for bourgeois society and the capitalist form, when the ‘schemas’ flow and accumulation ascends with positive rates, to greater constant capital (and greater fixed capital) corresponds (see Abacus) a greater product, but generally a lesser global variable capital (total part of the working class), or at least a lesser individual part (wages) for each of its components; while with the increased global value of the product and the increased productivity of labour the share of the capitalist class grows, and it matters little to us whether it goes into the jaws of its individual slavers or into those, more greedy for human flesh, of the single monster that personifies the social machine of capital.
If, on the other hand, the days of sorrow for the monsters and for the Monster come, if the Crisis worthy of the name appears (and we showed this with the figures of the American 1929), if Black Friday occurs, the warehouses are overflowing with unsold goods, prices fall below the production price, at first, as Marx’s passage echoed, there will be a more favourable distribution of consumption to the wage-earners and the entire proletariat will take more as a class, even if unemployment will advance in the field opened up by the collapse of the profits plundered by capital. This preludes the general ruin, but at the same time it preludes the phase of maximally rotating schemas of high production and market conquest. Behind this mirage too is the great crisis; war, destruction with ever more ruthless weapons, carnage and bloodshed, the rarefaction of vital consumption and the debasement of money in the hands of the surviving petty-bourgeoisie raised in eternal ‘kolkhozian’ and ‘conciliatory’ illusions.
At either extreme, whether the schemas run or jam, revolutionary Marxism will always have won – yesterday a battle of doctrine by dispelling the circulationist and welfarist lie which in the free or cunningly directed individual monetary games presents the deception of absurd equilibria, and places them at the end of a long course of overwhelming accumulation – tomorrow a revolutionary battle and a social war, when the domination of the volcanology of social crises will allow the theoretical consciousness and strategic leadership of the resurrected Marxist party to bring down under the blows of the communist dictatorship the immense and inhuman beast of accumulated capital, in its all infamous metamorphoses of commodities, financial fictions, and corporate production galleys for wage slaves.
The historic discussion on accumulation
In what follows a very extensive development of the presentation made in Milan of Karl Marx’s ‘Economic Abacus’ about the beginning of the second volume of Capital, which is being distributed as a formulary among the organisation’s groups (the Abacus, or formulary, of the first volume will be found by readers in the recently published No. 10 of Programme Comuniste of January-March 1960).
The purpose of this extensive development was also to present the reports on classical Marxist polemics that had been entrusted, for Rosa Luxemburg’s work to a French comrade, and for N. Bukharin’s work to a comrade from the centre of Milan, and to which we now make room.
For the intelligence of the discussion among Marxists, it is good to remember (since it was decided to postpone the quantitative formulae to the next meeting and its reports) that the whole debate relates to the ‘realisation’ of surplus value, i.e. of the whole product, and to the question of whether it was possible on the assumption that everyone in society was either an industrial capitalist or a wage-earning proletarian. Suffice it to recall that Marx divided all production in a society into two departments: the first producing means of production and the second producing means of consumption. For each, we know that the final product brought to the market is composed of the respective constant capital, variable capital and surplus value. The money-bearers to realise these commodities are the proletarians for the variable capital of the two departments, and the capitalists for everything else. Customers of the first department can only be the capitalists who buy back (between them) all the product – customers of the second for the commodities are the proletarians for the variable capital of both departments, and the capitalists for the surplus-value of both departments. Indicating the two departments with Roman numerals as subscripts of the known letters C, V and S, we would say that all the money to be spent on consumption is VI + VII + SI+ SII. But it is clear that all consumable goods are the product of Department II, i.e. CII + VII+ SII. Bukharin and Luxemburg agree that everything flows in simple reproduction, and that the obvious condition arising from the comparison of the two sums is that CII equals VI + SI. Thus if everything is realised (both monetarily and as commodities) the law of simple reproduction is that the constant capital of the second department must equal the variable capital of the first plus the surplus value of the first.
With expanded reproduction the complication begins, and for now we will give neither Marx’s and Luxemburg’s numerical schemas, nor Bukharin’s formulas. Apparently, for the former, not all surplus-value can be realised in expanded reproduction, whereas for the latter it can. We have shown how neither Marx nor any Marxist wants to prove that the capitalist economy can function as a stable system, not even in simple reproduction. Never can capitalism realise all that it produces or overproduces. Its condemnation is the series of crises that demonstrate that the system neither knows nor can consume all that it produces nor produce what society actually needs to consume. By its very nature, capitalism does not realise, which leads to the subversion of commodity-currency equivalences, and the outcome of giving away or destroying, worse than selling off, its commodities, i.e. squandering human labour power, due to its inability to impose an organised discipline on labour.
Report on Luxemburg
Comrade Rosa Luxemburg’s work on the Accumulation of Capital and her later writings in response to criticism of it were part of a debate that lasted more than a century. Two questions were posed by all: the first, why does expanded reproduction occur and what demand does it respond to; the second, linked to the first: who realises the surplus value?
Marx had also posed this problem by drawing a schema of expanded reproduction, which Luxemburg examines by noting that its presupposition is the same as that of simple reproduction – that is, a society composed exclusively of capitalists and proletarians and, on the other hand, capitalist production realising surplus value within itself. Now Luxemburg says: this presupposition corresponded perfectly to simple reproduction, since in this one can admit the case of the development of the reproduction of individual capital as an internal element of capitalist society, but it no longer fits the reproduction of social capital which historically arises in a certain geographical environment in which there exist social forms which are not yet capitalist. Thus, according to Luxemburg, this theoretical assumption prevents the fundamental questions of the historical polemic from being answered: for whom does expanded reproduction take place? And who realises the surplus value?
Let us now take the schema itself: of course it is ruled out – and everyone has ruled it out – that the capitalist and the proletarian can, in expanded reproduction, realise surplus value, for in this case we would return to the case of simple reproduction. The proletarian can exchange for money the commodity corresponding to the variable capital of Departments I and II; the capitalist can realise surplus value by consuming it. But the part of surplus-value that is capitalised, the capitalist cannot realise it, unless we admit that the capitalist realises his surplus-value by accumulating it, and only accumulates for the sake of accumulation. This would lead one to describe capitalist society in this way: coal production is increased so that iron production can increase, in turn iron production increases so that mechanical production increases, and so on ad infinitum.
Now, this, according to Luxemburg, would result in an ‘empty joust’, nor can such be the deduction to be drawn from Marxist theory as a whole. She would therefore like (and it must be stated immediately that Luxemburg does not deny the necessity of schemas in general in order to eliminate the secondary aspects of the question and pose the problem in all its purity) to bring the problem of accumulation back into its real historical framework, because, by not doing so, the two questions already mentioned are not answered: for whom is the demand expanded? And who realises the surplus-value? Nor the correlative question: how is the surplus-value capitalised?
Capitalism, Luxemburg notes, was born at the end of the Middle Ages in a European environment around which non-capitalist countries continue to exist. Moreover, in the very bosom of capitalist society, there remain social environments that can be considered ‘external’ in the sense that they live in economic relations that are not yet capitalist in character: for example, the small peasant farm. And it can also be said that these environments, although becoming ever smaller, continue to exist today, since not in every country does peasant production take place within the framework of capitalist relations. In the historical discussion around the problem of accumulation, Luxemburg further notes, two answers played an enormous role: international trade and foreign trade. But economists have failed to realise that to invoke these factors merely shifts the problem, since for us, when we speak of total social capital, we speak of capitalist society in general. The problem of international trade must therefore be understood in the sense not of the political geography of the various nations, but in that of the social economy taken as a whole, and giving the term ‘international trade’ the content it deserves, we can see that the demand which provokes the expansion of total reproduction is a demand external to capitalist society, coming neither from proletarians nor from capitalists: those who realise surplus-value are therefore this external demand, whatever it may be.
The historical environment of capitalist accumulation
Of course, the problem does not arise in the same form in all stages of capitalist development. Three stages can be considered: 1) Around capitalism there is a natural economy that completely ignores money; which on the one hand produces for needs and on the other has no unconsumed surplus: everything that is produced is consumed. 2) After the natural economy, of which, without going back to primitive communism, we have many historical examples, there is the other model of the medieval feudal economy and, 3), after this, the simple mercantile economy, whose formula is not M-C-M, but C-M-C. This form, characteristic of the crafts of the Middle Ages, survives to this day, albeit on a restricted scale.
If capital accumulation takes place through the struggle against the natural economy, this must be replaced with a mercantile economy for capitalism. Why? Well, because the natural economy – as well as the semi-natural economy of the Middle Ages in the countryside – demands nothing from capitalism and offers it nothing: it is locked completely within itself. It can give it neither the means of subsistence that would be necessary for the capitalisation of realised surplus value, nor labour-power, held captive as it is by pre-capitalist relations of production. An example of this is serfdom during the Middle Ages, which establishes a relationship of personal domination between the peasant-serf and the lord, and which prevents peasants from going to the city to work for capital, as it permanently binds them to serfdom. This relationship must be broken, and this has been the case throughout the history of capital during the Middle Ages and, even more so, in that of imperialism’s struggle in the colonies, where it is necessary to destroy social institutions still resting on pre-capitalist relations of production in order to utilise not only the raw materials produced by that society, but also ‘coloured’ labour power without which capitalism could not exploit the resources of climatic zones where whites cannot work. But, once social relations based on the natural economy have been destroyed, capital has not yet achieved its goal – the establishment of a relationship in which it can draw new riches from the historical social and economic environment to continue its accumulation also from the physical point of view: new raw materials, new labour forces. In other words, capitalism must replace the natural economy with a mercantile economy.
How does it achieve this goal? Apparently (and, of course, the apologists for capitalism say it is a peaceful process) it seems that the superiority of the capitalist model in terms of living standards and productive techniques imposes this transformation on its own: in reality, it is only possible by destroying and ruining entire centuries-old societies. Luxemburg, who gives an extensive illustration of these countries in the phase preceding capitalist accumulation, recalls the ruin of primitive communism in India or among the Berber tribes of North Africa, or, more simply, that of the American farmer who, until the middle of the century, was at the same time farmer and producer of everything (tools, clothing etc.) he needed. The replacement of this quasi-natural economy came about through the introduction of English manufactured goods (railway equipment, industrial equipment); and, later, through the formation of a manufacturing industry in North America itself. This whole process leads to the separation of agriculture and rural trades; little by little, the peasant class is forced to limit itself to the only form of activity that capitalism cannot immediately take away from it, the cultivation of the soil (especially given the property relations prevailing in the New World), and to buy the goods produced by the great capitalist manufacturing industry – all this through violence that can be open or merely economic (increased taxes, etc.). Once the simple mercantile economy has been introduced, when the peasant is forced to limit himself to agricultural activity because the rural trades have disappeared, a third phase of the struggle begins, the competitive one, which has as its goal the ruin of the simple economy through price competition, since the goods produced by capitalist manufacturing cost less and easily replace those of artisan origin, which are no longer bought because they are too expensive. Here, too, the example is given by the United States, and Luxemburg shows how, after the Civil War, the speculative development of railway construction and increasing emigration led to the constitution of an agriculture that developed in purely capitalist forms: very large estates, entirely industrial management methods, enormous production with which the small farm of the direct farmer, of the individual peasant, is no longer able to compete. Result: complete ruin of the farmer.
But the example could be repeated for many other countries and social classes, because in addition to the ruin of the peasant, there was that of the artisan: the generalisation of capitalist production relations is sown with rubble.
In conclusion, Luxemburg shows how, for a century, the problem of accumulation had divided economists into two camps: on the one hand, the sceptics who denied the possibility of expanded accumulation (e.g. Sismondi), perhaps because they felt what revolutionary results it would lead to; on the other, the so-called gross optimists for whom capitalism was capable of indefinite self-perpetuation and, therefore, was the eternal social form.
Such are the conceptions that Luxemburg, as a militant Marxist, intends to combat. It is foolishness, she says, to take literally a scheme that is merely a method of examining a problem to want to conclude from it the eternity of the social form we are fighting. The Marxist solution to the problem of accumulation lies between the two extremes of scepticism and optimism, and resides – according to the spirit (if one can call it that) of all Marxist doctrine – in a dialectical contradiction: on the one hand, capitalist accumulation needs a non-capitalist social environment in order to be realised; on the other hand, it cannot go forward without exchanges with this environment (exchanges, of course, anything but peaceful) and without its erosion and, ultimately, its ruin.
Not only is all surplus value not realisable within the bosom of capitalist society, but its very capitalisation requires the exploitation of all the material and human resources of the globe. With the extension of capitalism on a world scale, the capitalisation of surplus-value becomes more and more difficult, because new sources of raw materials and labour-power can no longer be found; on the other hand, the part of the social product that corresponds to C and S grows in relation to V due to the increase in the organic composition of capital. Hence the contradiction (according to Luxemburg, writing in 1911-12), hence the universalisation of capitalism and, at the same time, the catastrophe towards which it proceeds. Hence the fact that the capitalist countries depend more and more on each other for the capitalisation of surplus-value, because if C increases in relation to V this is, of course, in the form of raw materials that may come from outside but also of machinery that can only be produced in highly capitalist relations of production, whereas for the realisation of surplus-value they always depend on an extra-capitalist environment, and thus enter into increased competition with each other for its division, for the imperialist domination of the world. The conditions of surplus-value realisation and the conditions of capital renewal thus fall into an increasing mutual contradiction which is only a reflection of the tendential law of the falling rate of profit, itself contradictory.
Luxemburg’s entire critique could be summarised by noting that she only takes Marx’s schema as a starting point in order to fight against the apologetic theories of capitalism, which foresee the eternity of this social form, and to fight the revisionists of revolutionary Marxism. Her outline is, in short: capitalism feeds on an extra-capitalist environment; by feeding on it it destroys it; when it has destroyed it all, the historical hour will come in which it must, in turn, necessarily succumb (which is not to say: let us wait for capitalism, by extending its relations of production to the whole world, to destroy itself: Luxemburg identifies a historical tendency, the stronger the more prolonged in time; the revolutionary struggle of the proletariat can shorten it and, if victorious, cut it off abruptly on a world scale).
Report on Bukharin
Bukharin’s study – Imperialism and the Accumulation of Capital – in order to refute Luxemburg’s deduction concerning the contradictions to which the schemas given by Marx in the 2nd volume of Capital would lead, does not consist in giving new numerical tables of the two departments relating to successive cycles (years) of capitalist production that resolve the doubts raised through numerical balancing. Instead, as in a lecture Bukharin gave in Moscow at the time of the 4th Congress of the Communist International, he develops a set of formulae that we will not quote for now. He divides the surplus-value of Department I and II into two parts, one of which is to be consumed by the capitalists and thus realised by purchasing Department II (consumption) goods on the market, and the other to be added to the capital brought forward in the new cycle; and evidently to be realised on the market in the purchase of more constant capital and a greater sum of labour-power. Bukharin shows that, as in simple reproduction, the continuity of the cycle does not always occur, but is linked to the condition we have stated, namely that ‘the constant capital of the second department is equal to the sum of the variable capital and surplus-value of the first’.
In the case of expanded reproduction Bukharin develops an analogous relation which we merely quote without algebraic demonstration, and it is this: ‘The constant capital of the second department, increased by the part of the surplus-value of this one taken to constant capital, must be equal to the variable capital of the first department, plus the surplus-value consumed of this one, plus still the part of the surplus-value of this one taken to variable capital’. In fact, the surplus-value of each department is divided into two parts as stated, and then that reserved for investment is divided between investment in constant capital and investment in wages.
The meaning of Bukharin’s research is meant to be this; if these relations are respected, it will always be possible to construct a series of schemas in which all surplus-value, consumed and not, remains entirely ‘realised’, i.e. put into mercantile circulation, without the obligation introduced by Luxemburg to bring a third type of buyer onto the scene, one that is neither capitalists nor the workers employed by them.
Bukharin’s ‘points’
This algebraic-arithmetic research may be carried out, but it remains limited to the formal character of the question. The reminder that even simple reproduction is only assured if a certain condition occurs, which in the generality of cases is lacking, seems important to us. So even in simple reproduction it is not certain that ‘all surplus-value is realised’ and the hiccup can arise, along with the rupture of the cycle and the ‘crisis’ as Marx foresaw, indeed as he wanted to show inevitable in all scenarios.
For now, it is interesting to briefly note what Bukharin, premised on the above, responds to what he calls, perhaps a little too formally, Luxemburg’s criticism of Marx.
First point. For whom does expanded accumulation take place? According to Bukharin, this finalistic question introduces a subjective and voluntarist element into the objective analysis that is outside the Marxist dialectic.
Second point. Luxemburg having admitted that the consumption of society, both of capitalists and proletarians, grows (although the number of the former decreases, of the latter it grows), Bukharin observes that in this way she has already answered the question: for whom does production expand. In every social form the very fact of the growing population determines the possibility of greater consumption, without one can impute to Marx the degenerations of those (Tugan-Baranovsky) who fell into vulgar economics by treating production and consumption separately.
Third point. It is incorrect to say that accumulation is explained if capitalists consume surplus value but is no longer explained if they partially invest it by ‘refraining’ from consuming it. Bukharin accuses this critique of contradiction and reduces it to the fallacy of saying: since capitalists are the ruling class, the phenomena of the capitalist economy occur according to the desires of capitalists. Bukharin is right, but Luxemburg knew this no less!
Fourth point. Luxemburg says that it cannot be the aim of the capitalists to maintain an ever-increasing army of workers. Bukharin tries to show that this is a necessity, and therefore an aim, in the sense that the capitalist class would lose its domination if the number of proletarians did not continually increase. Perhaps it would not even conquer it against the old historical powers. Bukharin’s thesis does not translate into a philanthropy of the capitalists towards the working class population, yet, in the early days of capitalism, they truly believed it.
Fifth point. Luxemburg finds it strange that the capitalists are fanatical about the enlargement of production as an end in itself and without benefit to either the proletarians or the bourgeois themselves, and calls this reasoning an ‘empty joust’ that cannot provide a scientific explanation. Bukharin’s answer is given by quoting a passage from Marx’s ‘Theories on Surplus Value’, which corresponds to the many we have given in our research.
‘The industrial capitalist... as personified capital produces for the sake of production, he wants to accumulate wealth for the sake of the accumulation of wealth. In so far as he is a mere functionary of capital, that is, an agent of capitalist production, what matters to him is exchange value and the increase of exchange value, not use value and its increase. What he is concerned with is the increase of abstract wealth, the rising appropriation of the labour of others. He is dominated by the same absolute drive to enrich himself as the miser, except that he does not satisfy it in the illusory form of building up a treasure of gold and silver, but in the creation of capital, which is real production… the industrial capitalist becomes more or less unable to fulfil his function as soon as he personifies the enjoyment of wealth, as soon as he wants the accumulation of pleasures instead of the pleasure of accumulation. He is therefore also a producer of overproduction, production for others’.
This applies, Bukharin adds, subjectively, that is, from the point of view of the ‘animating motive’ of the capitalists, although one cannot deny the objective consequences of these subjective tendencies, consequences that consist in the satisfaction of the growing needs of society as a whole.
At this point, one might ask Bukharin whether he did not see an active side to industrial social production only up to a certain historical point after which the expansion of production becomes completely anti-social in all its effects; and thus imposes precisely the necessity to overthrow the capitalist form. But these were things that Bukharin, although sometimes a fierce formalist in his polemics, knew inside out.
He finally comes to refute the thesis that the buyers that capitalism does not find within itself must be sought in socially pre-capitalist countries and examines Luxemburg’s thesis point by point. He certainly does not dispute its historical aspects in the contemporary world context, but merely wishes to deny that without non-bourgeois markets capitalism cannot exist in the countries where it first appeared, and above all that the need for its overthrow has not already arisen.
Further study of this debate can only show how the great revolutionaries Luxemburg and Bukharin are on the same side of the barricade against the nefariousness of revisionist opportunism, which in a parallel manner killed them both.
However, it is the duty of the Marxist movement that follows them and us to bring order to these issues by bringing the vital transitions between economic analysis and historical and political analysis, and, to put it in the usual abbreviated way, philosophical analysis into the right light.
This work was given at the meeting by the various comrades who worked on it a d the contributions we have reported, serve as the basis for the further development in the various sectors and fields.