Accumulation of Capital
First published 1913
Rosa Luxemburg’s Accumulation of Capital was timely when it was published in 1913 and reads like a contemporary book today. Concluding her analysis of capitalist accumulation and imperialism, she forecast ‘a string of political and social disasters … punctuated by periodical economic catastrophes’. This diagnosis was more accurate than Karl Kautsky’s elaborations about great power cooperation (published, ironically, in September 1914, a month into the first world war) and had more predictive power than Lenin’s 1917 pamphlet on imperialism.
Today’s readers will find striking parallels between Luxemburg’s analyses of early 20th-century industrial development in Russia and modern China. Her discussions of capital’s ‘Struggle against the Peasant Economy’, the role of ‘International Loans’, and ‘Militarism as a Province of Accumulation’ (chapters 29, 30 and 32) read as if she is writing about present-day multinationals, international financial institutions and military-industrial complexes.
In the first part of Accumulation of Capital, Luxemburg developed an abstract model of reproduction that, in her view, showed that neither investment nor consumer demand suffice to buy all commodities produced in any period and thus realise the surplus value needed to keep the accumulation process going. Additional demand, she concluded, must come from non-capitalist social strata – peasants and craft producers who, so far, lived outside the circuits of capital accumulation, but become part of them once they start purchasing commodities from capitalist producers.
Once all non-capitalist strata are absorbed into the process of capitalist production and reproduction, the external source of demand and capitalist accumulation dries up; the capitalist economy ends up in stagnation. Intensified class struggle, competition among firms and imperialist rivalries are the result of this economic process, because each capitalist has to accumulate to stay in business and, by doing so, outcompete other capitalists. This, in a nutshell, is Luxemburg’s model of accumulation. But it is nothing more than a model; the crucial question is how it applies to reality.
This is why the neglected second part of Accumulation of Capital is worth revisiting. Here, Luxemburg discussed historical debates between economists who denied that capitalist accumulation would ever suffer from a lack of effective demand and theoreticians of insufficient demand. The former painted the prospects of capitalist accumulation in bright colours and considered political intervention as an impediment to economic development. The latter saw capitalist economies plagued by insufficient demand and suggested all kinds of interventions to fix this problem.
Luxemburg didn’t make an argument about a linear descent from capitalist accumulation to stagnation, let alone the breakdown of capitalism. Instead, she showed how political conflicts recurrently opened up new spaces for accumulation, and how these phases of capitalist expansion mitigated class conflict – until the respective spaces for expansion were exhausted, capitalism got stuck in crisis and class struggle intensified again.
This ‘non-deterministic’ interpretation allows us to understand the long post-war boom and its supersession by a long decline, ending with today’s crises that bear so much resemblance to early 20th-century capitalism. Two world wars, revolutions, depression and the expansion of Soviet communism led to a fundamental reorientation of capital accumulation. The industrialisation of western countries and concomitant colonisation of the global South were replaced by, however incomplete, industrialisation projects in the post-colonial South and the colonisation of working-class households in the west.
Southern developmental states and western welfare states invaded so many non-capitalist territories and social strata that even investment in the already industrialised centres of the capitalist world-system reached unprecedented levels. Naturally, the combined investment booms in the centres and peripheries created an overabundance of production capacities.
In the 1970s, the question of finding sufficient demand was high on the business agenda. At that time, dreams of mass consumption weren’t fulfilled in all corners of the world – in fact, not even for everyone in the capitalist centres. So creating additional consumer demand would have been an economic possibility. Recurrent crises in the 1970s didn’t mark capitalism’s final frontier, at least not if one leaves ecological limits to accumulation out of the equation. Yet the subjugation of new social strata under the imperatives of capital accumulation had also produced new, potentially anti-systemic, movements of women, immigrant workers and ethnic minorities in the west and an upsurge of anti-imperialist struggles in the South.
Under these circumstances increasing numbers of capitalists found it preferable to slow down their investments, even if this meant lower profits, and use the combined forces of unemployment, fiscal and foreign debt crises to roll back workers, welfare and developmental states.
The irony of this capital offensive was that welfare and developmental states had created considerable public spheres during the boom that were partially disconnected from the accumulation process and could now be penetrated by capital. Thus, the privatisation of these public spheres opened new space for capitalist expansion. The collapse of Soviet communism and China’s world-market turn helped even further in this regard. Austerity policies in the aftermath of the recession are the latest effort to restart accumulation by dispossession.
Yet anti-austerity protests and strikes in the west and food riots or outright revolutions in the South indicate that ‘revolt against the rule of capital’ has become a necessity again, just as it was when Luxemburg wrote Accumulation of Capital.
Yasmin Gunaratnam reflects on John Berger’s gut solidarity with the stranger
Charlie Clarke and Heather Mendick discuss how to work through the tensions within Momentum
As man-made global warming gets closer to the tipping point, Andrew Simms finds reasons to be positive about averting catastrophic climate change
In this extract from his new book The Candidate, Alex Nunns tells the inside story of how Jeremy Corbyn scraped onto the Labour leadership ballot in 2015
Graham Jones proposes a framework for a diverse movement to flourish
Musician Eliane Correa reflects on the fading revolution
Trump's victory is another sign of the failure of the centre-left's narrative on climate change. A new message is needed, and new politicians to deliver it, writes Alex Randall
Siobhán McGuirk says the question we are too afraid to ask is simple - what kind of society leads to Donald Trump as President?
The battle lines are clear. Democracy is in peril and the left must take itself seriously electorally and politically. Ruth Potts speaks to Gary Younge, who was based in Muncie, Indiana, for the US election, about the implications of Donald Trump’s victory
We need a society built on openness, community and equality to truly defeat everything that trump stands for, writes Nick Dearden.
Utopia: Work less play more
A shorter working week would benefit everyone, writes Madeleine Ellis-Petersen
Short story: Syrenka
A short story by Kirsten Irving
Utopia: Industrial Workers Taking the Wheel
Hilary Wainwright reflects on an attempt by British workers to produce a democratically determined alternative plan for their industry – and its lessons for today
Mum’s Colombian mine protest comes to London
Anne Harris reports on one woman’s fight against a multinational coal giant
Bike courier Maggie Dewhurst takes on the gig economy… and wins
We spoke to Mags about why she’s ‘biting the hand that feeds her’
Utopia: Daring to dream
Imagining a better world is the first step towards creating one. Ruth Potts introduces our special utopian issue
Utopia: Room for all
Nadhira Halim and Andy Edwards report on the range of creative responses to the housing crisis that are providing secure, affordable housing across the UK
A better Brexit
The left should not tail-end the establishment Bremoaners, argues Michael Calderbank
News from movements around the world
Compiled by James O’Nions
Podemos: In the Name of the People
'The emergence as a potential party of government is testament both to the richness of Spanish radical culture and the inventiveness of activists such as Errejón' - Jacob Mukherjee reviews Errejón and Mouffe's latest release
Survival Shake! – creative ways to resist the system
Social justice campaigner Sakina Sheikh describes a project to embolden young people through the arts
‘We don’t want to be an afterthought’: inside Momentum Kids
If Momentum is going to meet the challenge of being fully inclusive, a space must be provided for parents, mothers, carers, grandparents and children, write Jessie Hoskin and Natasha Josette
The Kurdish revolution – a report from Rojava
Peter Loo is supporting revolutionary social change in Northern Syria.
How to make your own media
Lorna Stephenson and Adam Cantwell-Corn on running a local media co-op
Book Review: The EU: an Obituary
Tim Holmes takes a look at John Gillingham's polemical history of the EU
Book Review: The End of Jewish Modernity
Author Daniel Lazar reviews Enzo Traverso's The End of Jewish Modernity
Lesbians and Gays Support the Migrants
Ida-Sofie Picard introduces Lesbians and Gays Support the Migrants – as told to Jenny Nelson
Book review: Angry White People: Coming Face to Face With the British Far-Right
Hilary Aked gets close up with the British far right in Hsiao-Hung Pai's latest release
University should not be a debt factory
Sheldon Ridley spoke to students taking part in their first national demonstration.
Book Review: The Day the Music Died – a Memoir
Sheila Rowbotham reviews the memoirs of BBC director and producer, Tony Garnett.
Power Games: A Political History
Malcolm Maclean reviews Jules Boykoff's Power Games: A Political History
Book Review: Sex, Needs and Queer Culture: from liberation to the post-gay
Aiming to re-evaluate the radicalism and efficacy of queer counterculture and rebellion - April Park takes us through David Alderson's new work.
A book review every day until Christmas at Red Pepper
Red Pepper will be publishing a new book review each day until Christmas
Book Review: Corbyn: The Strange Rebirth of Radical Politics
'In spite of the odds Corbyn is still standing' - Alex Doherty reviews Seymour's analysis of the rise of Corbyn
From #BlackLivesMatter to Black Liberation
'A small manifesto for black liberation through socialist revolution' - Graham Campbell reviews Keeanga-Yamahtta Taylor's 'From #BlackLivesMatter to Black Liberation'
The Fashion Revolution: Turn to the left
Bryony Moore profiles Stitched Up, a non-profit group reimagining the future of fashion
The abolition of Art History A-Level will exacerbate social inequality
This is a massive blow to the rights of ordinary kids to have the same opportunities as their more privileged peers. Danielle Child reports.
Mass civil disobedience in Sudan
A three-day general strike has brought Sudan to a stand still as people mobilise against the government and inequality. Jenny Nelson writes.
Mustang film review: Three fingers to Erdogan
Laura Nicholson reviews Mustang, Deniz Gamze Erguven’s unashamedly feminist film critique of Turkey’s creeping conservatism
What if the workers were in control?
Hilary Wainwright reflects on an attempt by British workers to produce a democratically determined alternative plan for their industry