Try Red Pepper in print with our pay-as-you-feel subscription. You decide the price, from as low as £2 a month.More info ×
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.
Hsiao-Hung Pai meets people affected by the fire, and finds sadness and suffering mixed with a continuing wariness of the official investigations
Chris Williamson MP, winner of the election's tightest marginal, Derby North, and recently reappointed shadow minister for fire services, talks to Ashish Ghadiali about Jeremy Corbyn, the housing crisis and winning from the left
The Corbyn-supporting group is preparing for another election at any moment, writes Adam Peggs – and now has the potential to create powerful training initiatives, union links and party reform efforts
’We believe in you. We are with you. We will never forget.’ Grenfell solidarity sweeps East London in mass banner drops from housing estates
Michael Calderbank profiles Jeremy Corbyn's new supporters in parliament
The Democratic Republic of Congo (DRC) continues to witness devastating political violence, but the world refuses to act. Ishiaba Kasonga and Serge Egola Angbakodolo ask why?
When fire safety has become a privilege for the rich, it’s time to stop austerity and fund emergency mass works to raise standards immediately, writes Jane Shallice
The election result has irreversibly changed political discourse in the UK, writes James Fox
In commemoration of the 30th anniversary of Bernie Grant's election to parliament, Ayo Wallace explores the life and legacy of his radical representation of Tottenham's black communities.
Across Britain, hundreds of thousands of people have now taken part in mass rallies for Corbyn's Labour. Eli Regan soaks up the atmosphere in Warrington
Contribute to Conter – the new cross-party platform linking Scottish socialists
Jonathan Rimmer, editor of Conter, says it’s time for a new non-sectarian space for Scottish anti-capitalists and invites you to take part
Editorial: Empire will eat itself
Ashish Ghadiali introduces the June/July issue of Red Pepper
Eddie Chambers: Black artists and the DIY aesthetic
Eddie Chambers, artist and art historian, speaks to Ashish Ghadiali about the cultural strategies that he, as founder of the Black Art Group, helped to define in the 1980s
Despite Erdogan, Turkey is still alive
With this year's referendum consolidating President Erdogan’s autocracy in Turkey, Nazim A argues that the way forward for democrats lies in a more radical approach
Red Pepper Race Section: open editorial meeting – 11 August in Leeds
The next open editorial meeting of the Red Pepper Race Section will take place between 3.30-5.30pm, Friday 11th August in Leeds.
Mogg-mentum? Thatcherite die-hard Jacob Rees-Mogg is no man of the people
Adam Peggs says Rees-Mogg is no joke – he is a living embodiment of Britain's repulsive ruling elite
Power to the renters: Turning the tide on our broken housing system
Heather Kennedy, from the Renters Power Project, argues it’s time to reject Thatcher’s dream of a 'property-owning democracy' and build renters' power instead
Your vote can help Corbyn supporters win these vital Labour Party positions
Left candidate Seema Chandwani speaks to Red Pepper ahead of ballot papers going out to all members for a crucial Labour committee
Join the Rolling Resistance to the frackers
Al Wilson invites you to take part in a month of anti-fracking action in Lancashire with Reclaim the Power
The Grenfell public inquiry must listen to the residents who have been ignored for so long
Councils handed housing over to obscure, unaccountable organisations, writes Anna Minton – now we must hear the voices they silenced
India: Modi’s ‘development model’ is built on violence and theft from the poorest
Development in India is at the expense of minorities and the poor, writes Gargi Battacharya
North Korea is just the start of potentially deadly tensions between the US and China
US-China relations have taken on a disturbing new dimension under Donald Trump, writes Dorothy Guerrero
The feminist army leading the fight against ISIS
Dilar Dirik salutes militant women-organised democracy in action in Rojava
France: The colonial republic
The roots of France’s ascendant racism lie as deep as the origins of the French republic itself, argues Yasser Louati
This is why it’s an important time to support Caroline Lucas
A vital voice of dissent in Parliament: Caroline Lucas explains why she is asking for your help
PLP committee elections: it seems like most Labour backbenchers still haven’t learned their lesson
Corbyn is riding high in the polls - so he can face down the secret malcontents among Labour MPs, writes Michael Calderbank
Going from a top BBC job to Tory spin chief should be banned – it’s that simple
This revolving door between the 'impartial' broadcaster and the Conservatives stinks, writes Louis Mendee – we need a different media
I read Gavin Barwell’s ‘marginal seat’ book and it was incredibly awkward
Gavin Barwell was mocked for writing a book called How to Win a Marginal Seat, then losing his. But what does the book itself reveal about Theresa May’s new top adviser? Matt Thompson reads it so you don’t have to
We can defeat this weak Tory government on the pay cap
With the government in chaos, this is our chance to lift the pay cap for everyone, writes Mark Serwotka, general secretary of public service workers’ union PCS
Corbyn supporters surge in Labour’s internal elections
A big rise in left nominations from constituency Labour parties suggests Corbynites are getting better organised, reports Michael Calderbank
Undercover policing – the need for a public inquiry for Scotland
Tilly Gifford, who exposed police efforts to recruit her as a paid informer, calls for the inquiry into undercover policing to extend to Scotland
Becoming a better ally: how to understand intersectionality
Intersectionality can provide the basis of our solidarity in this new age of empire, writes Peninah Wangari-Jones
The myth of the ‘white working class’ stops us seeing the working class as it really is
The right imagines a socially conservative working class while the left pines for the days of mass workplaces. Neither represent today's reality, argues Gargi Bhattacharyya
The government played the public for fools, and lost
The High Court has ruled that the government cannot veto local council investment decisions. This is a victory for local democracy and the BDS movement, and shows what can happen when we stand together, writes War on Want’s Ross Hemingway.
An ‘obscure’ party? I’m amazed at how little people in Britain know about the DUP
After the Tories' deal with the Democratic Unionists, Denis Burke asks why people in Britain weren't a bit more curious about Northern Ireland before now
The Tories’ deal with the DUP is outright bribery – but this government won’t last
Theresa May’s £1.5 billion bung to the DUP is the last nail in the coffin of the austerity myth, writes Louis Mendee
Brexit, Corbyn and beyond
Clarity of analysis can help the left avoid practical traps, argues Paul O'Connell
Paul Mason vs Progress: ‘Decide whether you want to be part of this party’ – full report
Broadcaster and Corbyn supporter Paul Mason tells the Blairites' annual conference some home truths
Contagion: how the crisis spread
Following on from his essay, How Empire Struck Back, Walden Bello speaks to TNI's Nick Buxton about how the financial crisis spread from the USA to Europe
How empire struck back
Walden Bello dissects the failure of Barack Obama's 'technocratic Keynesianism' and explains why this led to Donald Trump winning the US presidency