Abstract

Henryk Grossman was the first person to systematically explore Marx’s explanation of capitalist crises in terms of the tendency for the rate of profit to fall and to place it in the context of the distinction between use and exchange value. His The law of accumulation and breakdown of the capitalist system remains an important reference point in the Marxist literature on economic crises. That literature has been plagued by distortions of Grossman’s position which derive from early hostile reviews of his book. These accused Grossman of a mechanical approach to the end of capitalism and of neglecting factors which boost profit
rates. Grossman, in fact, contributed a complementary economic element to the recovery of Marxism undertaken by Lenin (particularly in the area of Marxist politics) and Lukács (in philosophy). In both published and unpublished work, Grossman also dealt with and even anticipated criticisms of his methodology and treatment of countertendencies to the tendency for the rate of profit to fall. Far from being mechanical, his economic analysis can still assist the struggle for working class self-emancipation.

Introduction

In 1929, Henryk Grossman sought to provide an economic analysis of the conditions under which the struggle for socialism could be successful. His book, The Law of accumulation and breakdown of the capitalist system, being also a theory of crises, contrasted what he regarded as fundamental aspects of Marx’s theory with the ideas of other interpreters of Marxism. They included reformists, like Rudolph Hilferding and Otto Bauer, who held that capitalism could avoid economic crises and be peacefully transformed into socialism, as well as voluntarists, like Fritz Sternberg, for whom the lack of sufficient working class will and consciousness was the only serious obstacle to socialist revolution.

Contradictions at the heart of the capitalist production process itself, Grossman insisted, give rise to economic crises. This he identified as the ‘law of capitalist breakdown’. In his book and an essay published before it appeared, Grossman anticipated his critics’ main objection, that he was guilty of a mechanical, purely economic theory of the demise of capitalism. He carefully situated his argument in the context of Lenin’s work on the politics of revolution and the perspectives which informed the foundation of the Communist International (Comintern) in 1919, contending that crises can be a crucial objective condition for workers’ revolution.

The orthodoxy of the Second International in the period before the First World War, particularly as expounded by its leading theoretician, Karl Kautsky, had emphasized the importance of organization and ideas. But is was much less clear about the role of revolutionary working class action (as opposed to the consequences of inexorable historical forces or the deeds of social democratic parliamentarians, trade union officials and party leaders) in simultaneously transforming workers’ consciousness, overturning the capitalist state and establishing new relations of production. Most of the parties of the International paid lip-service to the principal of independent working class politics. But on the outbreak of the World War, a large majority of them supported the ruling classes of their ‘own’ countries in a conflict between rival imperialist blocks. Kautsky had come to regard wars under capitalism as avoidable. Even after the killing machines had startedto grind the bodies of millions of workers and peasants, he still insisted that the interests of the modern imperialist bourgeoisie were incompatible with war (Kautsky 1909; Kautsky 1915; Salvadori 1979; Schorske 1983; Haupt 1972).

Eduard Bernstein’s ‘revisionist’ argument in 1899, that capitalism need not suffer from general and severe economic crises, was rejected by mainstream Marxists at the time (Bernstein 1899, Kautsky 1899). After the War, this idea was incorporated into the orthodoxy of social democracy from which most radicals had split to establish Communist parties.

Lenin, especially in State and revolution, reasserted the active role of the working class in Marxist politics. For millions of working class militants, the Bolshevik revolution demonstrated the proletariat’s capacity to make revolution. György Lukács, whose History and class consciousness Grossman regarded very highly (Grossmann 1932a p. 316), reinstated the working class at the core of Marxist philosophy, in his analysis of ‘reification’ and of the working class as both the object and (potentially) the subject of history. Grossman made a parallel contribution to the recovery of Marxism, in the field of economics, conditioned by the intense class struggles in Europe from 1916 to 1923 and his own experiences as a revolutionary leader in Galicia from the turn of the 20th century until 1908 (Kuhn 2000, Kuhn 2001). Drawing attention to the importance of the use value side of commodities and hence the labor process aspect of production, he was the first Marxist to
systematically explore the tendency for the organic composition of capital to rise and hence for the rate of profit to fall as a fundamental feature of Marx’s explanation of economic crises in Capital.

Economic crisis and socialist revolution: Henryk Grossman’s Law of accumulation, its first critics and his responses