Imperialism and the Accumulation of
Capital, Bukharin
1925
2
Money and Expanded Reproduction
So far we have demonstrated that Comrade Rosa Luxemburg began
with a funeral oration on money and its importance in the analysis of
the total social production and ended with a cheer for it, at the very
moment when she began to run out of arguments to ensure the welfare of
her conception.
It turns out that this is the real reason, for Marx's models
are only
'real' and ‘conclusive' because the money-form of capital is hardly
considered in them. The author of Accumulation
makes fun of these
models, ‘ ... into which we have with pen and paper arbitrarily
written rows and rows of numbers, with which mathematical operations
run faultlessly and in which money capital is entirely neglected'. [1]
Let us see to what extent we are pledged to the loss of
‘sovereignty'
if we – naturally, with the help of pen and paper –give 'money capital'
its due respect.
In the process of social reproduction each individual capital,
each
atom of it, and as a result the total social capital too, must pass
through the money phase in the course of its development, i.e.
periodically assume the form of money capital, which, despite its
illusory character', is as essential for the movement of industrial
capital as is the productive form of the latter, incorporating ‘real
production'.
In this connexion, we must pose and answer the following
questions:
1. That of the original source of money;
2. That of the amount of money in circulation in relation to
the
process of social reproduction; and
3. That of the accumulation of money capital.
Re 1. Like any commodity, money is also a
product of labour, i.e. it
has to be produced. If, to simplify the analysis, we disregard the
difference between gold money and the gold material of money, the
production of money corresponds to a certain branch of production, the
gold industry. That money does not fall from heaven,
but must be produced in our earthly vale of tears, is in itself as
little mysterious as the fact that iron ore is produced in the mining
industry, rye in farming and machines in the machine industry. Seen
like this there is no difference in principle
between the question
about the origin of the money possessions of the entire capitalist
class and the question about the origin of their possession of means of
production. The historically conditioned social characteristics of
money do not in any way involve the negation of money as a product of
production.
In order that it may play the part of
money, gold must of course enter
the market at some point or other. This point is to be found at the
source of production of the metal at which place gold is bartered, as
the immediate product of labour, for some other product of equal value.
From that moment it always represents the realized price of some
commodity.[2]
Accordingly, if we look at the movement of the total social
capital
from the standpoint of the material form, i.e. of the material
proportions which are essential for the mutual replacement of the
material elements (‘ of the material change' within the ‘social
productive organism') and of the material links mediating this
replacement, we reach the conclusion that the capitalist system is
exposed to the pressure of the social necessity of the production of
money in exactly the same way as it is to the production
of the
material elements of productive capital. Thus, the reproduction of
money as a component part of the process is essential from the
standpoint of the specific-historical form of capital, even if, from
the standpoint of production alone, it does not belong to 'real
production'. In no circumstances, however, should it be forgotten that,
to a certain extent, the commodity pre-existed money.
We have already seen from the most
elementary expression of value, X
commodity A --- Y commodity B, that the object in which the magnitude
of the value of another object is represented, appears to have the
equivalent form independently of this relation as a social property
given to it by nature. We followed up this false appearance to its
final establishment, which is complete as soon as the universal
equivalent form becomes identified with the bodily form of a
particular commodity (my emphasis, N. B.) and thus
crystallized into the
money-form. What appears to happen is, not that gold becomes money, in
consequence of all other commodities expressing their values in it, but
on the contrary, that all other commodities express their values in
gold, because it is money. [3]
The division of the pure commodity function of gold from its
money
function finds its main and fundamental expression in the fact that the
product of the gold-mining industry appears on the one hand as a raw
material for industrial ends, on the other hand is converted into money
and functions in the quite specific form of a general
commodity-equivalent.
The production of money material, therefore, forms a component
part of
the social reproduction in its totality, and the figure of the gold
producer appears no more mysterious than the figure of the foundry
owner, the polish manufacturer or the chicken king'. To the question,
'but whence does the money come into the country ?' there can only be
(as the readers know, we are still thinking of an abstract and isolated
capitalist society) an extremely elementary and simple answer: from
the
gold-mining industry.
Re 2. Even if in capitalism money as such
[4] forms a
socially necessary moment of the process of reproduction, that does not
mean that it cannot play a quite specific role in the course of this
process. This specific role consists in the fact that it is not an
element of 'real reproduction', and remains accordingly continually in
the sphere of circulation. Money flows ceaselessly from one
pocket to
the other, leads a nomadic life similar to the gypsies among the
civilized peoples of Europe. The idea is completely absurd that each
and every new increase in the commodity value
must be accompanied by a
similar value-increase, hidden in a mysterious
golden shroud. Just as,
in spiritualist institutions, one and the same medium can ‘serve'
successive hundreds of idiots, the medium of the gold unit can serve
successively any number of commodity operations.
So far as money circulates,
be it as a means of purchase or as a means
of payment — no matter in which of the two spheres and
independently of its function of realizing revenue or. capital
— the quantity of its
circulating mass comes under the laws developed previously in
discussing the simple circulation of commodities... . [English
edition, Chapter III, 2b1. The velocity of circulation, hence the
number of repetitions of the same function as means of purchase and
means of payment by the same pieces of money in a given term, the mass
of simultaneous purchase and sales, or payments, the sum of the prices
of the circulating commodities, and finally the balance of payments to
be settled in the same period, determine in either case the mass of
circulating money, of currency. Whether money so employed represents
capital or revenue for the payer or receiver, is immaterial and in no
way alters the matter. Its mass is simply determined by its function as
a medium of purchase and payment. [5]
One must differentiate between the increase in the
amount of
the
circulating money, an increase which is nonetheless in no
way
equivalent to the growth of reproduction, and the accumulation
of money
capital, as a specific form of capital, which has its
own particular
function and its own movement. The
entire amount of surplus value which
is repeatedly produced must never be identified with the newly
increased sum of money, since the process of realization has no need of
such a sum; equally, the accumulation of capital
must never be confused
with the accumulation of money capital.
‘As for the ... portion of profit, which is not intended to
be
consumed as revenue, it is converted into money capital only
when it is
not immediately able to find a place for investment in the expansion of
business in the productive sphere in which it has been made.'
[6] (My
emphasis, N. B.)
In the second part of the third volume of Capital
(Chapters
30, 31 and
32: 'Money-Capital and Real Capital') Marx also gives a detailed
analysis of the relation between accumulation of
money capital and the
accumulation of real capital. He reaches the following general
conclusion:
This process (accumulation of Joan
capital, N. B.) is very
different
from an actual transformation into capital; it is merely the
accumulation of money in a form in which it can be transformed into
capital. But this accumulation can reflect, as we have shown, events
which are
greatly different from actual accumulation. As long as actual
accumulation is continually expanding, this extended accumulation of
money capital may be partly its result, partly the result of
circumstances which accompany it, but are quite different from it, and,
finally, even partly the result of impediments to actual accumulation.
[7]
Ergo: Additional money, newly produced surplus
value, which is
destined
for accumulation, accumulation of money capital - all these amounts on
no account overlap each other.
Having stated this in advance, let us now turn to the
investigation of
the thought process of Comrade Rosa Luxemburg. We shall not at first
deal with the essence of her arguments, since
they are extremely
confused, and the basis of her errors can only be revealed in the
process of the analysis of her individual critical remarks. Thus, we
begin with a counter-attack, which we intend to lead on her dispersed
front from various directions, and for our part we shall summarize all
fundamental objections.
In a polemic against Mr S. Bulgakov, [8] whom she accuses of
following
Marx 'slavishly' (what a sin!), the author of Accumulation
formulates
Bulgakov's position as follows:
' His ' solution of the question has
not progressed one iota
from
Marx's analysis. It can be reduced to the following three extremely
simple sentences: (1) Question: How much money is necessary to realize
the capitalized surplus value? Answer: As much as is necessary
according to the general law of commodity circulation. (2) Question:
Where do the capitalists get this money to realize the capitalized
surplus value? Answer: They must have it. (3) Question: Whence does the
money come into the country? Answer: From the gold producers.
Then follows the sarcastic comment:
‘A method of explanation which is more suspicious than
fascinating in
its extraordinary simplicity.' [9]
But, since nothing is done with mere sarcasm, Comrade Rosa
Luxemburg attempts to operate with arguments, furnishing
passages taken
from Bulgakov with cheap interruptions and exclamation marks. She makes
the poor 'gold producer' the centre of her attack.
Is it not possible, writes Bulgakov,
quoted by Rosa Luxemburg,
for the
gold producer to purchase II's entire (my
emphasis, N. B.) accumulated
surplus value and pay for it with gold, which II ,will immediately use
to buy means of production from I and to expand the variable capital,
i.e. to purchase the additional labour-power? In this way, the gold
producer acts as a real foreign market.
Yet that is a completely absurd
premise. To assume that means
to make
the expansion of social production dependent on the expansion of the
production of gold. (Bravo!) This premises a production of gold which
completely fails to correspond with reality... . The entire
production of gold has to immediately take on vast proportions. (Bravo
!) . It is sufficient to point to one fact, which on its own destroys
this premise. This fact is - the development of credit, which
accompanies the development of the capitalist economy. (Bravo!) ...
In this way, the hypothesis stands in direct and open contradiction to
the facts and must be rejected. [10]
Whereupon Rosa says:
Bravissinio! Beautiful! But in saying
this Bulgakov himself
has also
rejected his only previous explanation of the question as to how and by
whom the capitalized surplus value is realized. At any event, in his
self-refutation he has only explained in more detail what Marx has
already said in one word, when he called the hypothesis of the gold
producer who swallows up the entire (my emphasis,
N. B.) social surplus
value ‘trite’. [11]
Now, what did Marx consider 'trite' and what has Bulgakov (who
in this
case too follows Marx ‘slavishly') really 'rejected'? Answer: the
hypothesis that the gold producer directly buys up the entire
accumulated surplus value of Dept II (this is as precisely formulated
by Bulgakov, in contradistinction to Rosa Luxemburg). Must this
hypothesis be rejected? Of course it must, because the assumption of
such a hypertrophy of gold production, even in the hypothetical case of
the existence of an abstract capitalism, is inadmissible. The
accumulated surplus value is obliged to
pass
through the money phase in its movement, yet it is not realized at
once, but bit by bit, not as a compact heap of commodities to which is
counterposed a compact heap of money, but by way of innumerable
commercial operations, in which one and the same money unit
successively realizes, out of the amount of commodity proportions, one
proportion after the other; each individual portion, according to its
value, is equal to this money unit.
If each money unit were converted only once;
if there were no
credit;
if it were impossible to increase the speed of
the conversion; if there
were no cancellations of mutual obligations; if
the production of gold
were completely identical with the production of money; if there
were
no store of money which had arisen historically; if
a premium on gold
coins, etc., were inconceivable and if with all
this a pure gold
circulation were to be assumed, then this very 'trite'
hypothesis would
correspond to reality, production and its expansion would be dependent
on the production of gold and the production of gold would take on vast
dimensions. By the side of Rosa Luxemburg's commodity heap there would
rise up a gigantic mountain of gold, vaulting higher and higher.
Hence, the triteness consists in the fact that the speed of
conversion
is neglected, the existence of credit ignored, etc. ; in other words,
what is trite is the conception of a heap of gold which is
supposed to
be adequate for a heap of commodities. On the other hand, nothing
is
more trite than the premise that the additional money comes
from the
gold producer, and it is equally trite that this
money mediates the
additional acts of exchange, in as much as the saving in means of
circulation and the increase in the speed of conversion fails to
compensate for and cover the increased need for money.
Thus, Comrade Rosa Luxemburg has failed to dispose of the
matter with a
few ironic exclamations in agreement. In this
connexion the truth is
not on her side. Therefore, it is not surprising that she alters the
question immediately after her ‘refutation' of Bulgakov and, in place
of the money question, sets the notorious riddle of ‘for whom', a
puzzle whose solution we have given in the first chapter.
Nonetheless, yet another argument can be found in Comrade Rosa
Luxemburg's arsenal concerning the solution of this question. It is
true that she presents it in a different place,
but in
approximately the same logical connexion. Rosa Luxemburg writes:
Either one considers the total social
product (of capitalist
economy)
simply as a mass of commodities of a certain value, as a
‘commodity-mash' and, under conditions of accumulation, sees only a
growth of this undifferentiated commodity-mash and the amount of its
value. Then, all there is left to do is to affirm that a corresponding
sum of money is needed for the circulation of this amount of value,
that this sum of money must grow if the amount of value grows - in case
the acceleration of transaction and its economization fail to
compensate for the increase in value. And we can answer a final
question, where, in the last analysis, does all the money come from,
with Marx: from the gold mines. That too is a
point of view, namely the
point of view of simple commodity circulation. But in that case one
does not need to introduce concepts like constant and variable capital
and surplus value, which belong not to simple commodity circulation,
but to capital circulation and social reproduction, and there is no
need to ask the question: Where does the money come from to realize the
social surplus value, in particular (1) under simple reproduction, (2)
under expanded reproduction? From the standpoint of simple commodity
and money circulation such questions are meaningless and pointless. But
once one has asked the question and initiated the investigation on the
lines of capital circulation and social reproduction one cannot look
for the answer in the realms of simple commodity circulation and then
-since the problem does not exist here and cannot be answered -
retrospectively explain that the problem has been answered long ago, it
does not exist at all. [12]
There lies in this tirade, which is supposed to have a
formally
convincing effect and appear methodically thought out, a stupendous
theoretical mistake, namely the following: Comrade Rosa Luxemburg, who
is always appealing to the specifically Historical, Special, Peculiar,
etc., overlooks precisely the special peculiarities of money and its
role. Let us remember our formulae of social reproduction on an
expanded scale:
I ... c1 +
v1 + α1 +
β1c + β1v
II ... c2 +
v2 + α2 +
β2c +
β2v
What rules do we get from the standpoint of the movement of
the total social capital? We had a series of equations, which
all came
down to the equation:
v1 + α1 + β1v = c2 +
β2c
As far as we are dealing with elements of 'real reproduction'
and
presupposing an economic equilibrium, the mutual interdependence of the
various branches of production gains its expression in the
counterposition of the amounts of commodities (and, at the same time,
values) produced on both sides. The above equations follow from this.
Let us now assume that we had a third
row, which corresponded
to the
production of gold, and also of money material or money. Would there be
the same type of equations for this
case too? The question could only
be answered in the affirmative if the premise were given that the heap'
of gold was opposed to the heap' of commodities and vice versa.
However, this premise does not prevail, for the
movement of money is
different from the movement of the commodity, the
social demand for
money is of a different kind than the demand for
any commodity, and in
the process of material change', money plays a quite specific
role. In
our formulae of social reproduction, which proceed from the basis of
'real reproduction', (v1 +
α1) exhibits a demand for c2,
and c2,
conversely, for (v1 +
α1),
β1v exhibits a demand for
β2c and vice
versa; hence, altogether (v1 +
α1 + β1v)
exhibits a demand for (c2 +
β2c), and it in turn for (v1 +
α1 + β1v);
the demand for money is of a
different type. It is arrant nonsense to assert
that here one is
completing the transition to the standpoint of simple commodity
circulation, which is distinct from the
standpoint of the movement of
capital. Here we take note of the specific factor which distinguishes
the movement of money in the process of the reproduction of the total
social capital from the movement of any materially determined form of
commodity. Nobody — not even Marx — can be made responsible for the
fact that the social necessity of money, hence also the demand for it,
is determined, not by the fact that it must replace an increase of
something in the field of production, but by the
functional role which
money plays in a very specific sphere, in the sphere of circulation.
[13] Everything else follows from this special role of money. Thus, we
read:
To reduce the difference between
circulation as circulation of
revenue
and circulation of capital into a difference between currency and
capital is therefore altogether wrong. This mode of expression is in
Tooke's case due to his simply assuming the standpoint of a banker
issuing his own bank-notes... . His notes ... cost him nothing . .
. they (the banknotes, N. B.) bring him money... .They differ from
his capital, however... . That is why there is a special distinction
for him between currency and capital, which, however, has nothing to do
with the definition of these terms as such, least of all with that made
by Tooke.
The distinct attribute –
whether it serves as the money form
of revenue
or of capital – changes nothing in the character of money as a medium
of circulation: it retains this character no matter which of
the two
functions it performs. [14] (My emphasis, N. B.)
Thus also, this axiomatic' argument of Comrade Rosa Luxemburg
is
untenable.
Let us now turn to the main points in Rosa Luxemburg's
argumentation,
which no longer lie in the direction of the question of 'for whom' the
accumulated surplus value is produced, but in the new direction: How
is
accumulation, which is accumulation of money
capital according to
Comrade Rosa Luxemburg's doctrine, possible?
For the sake of accuracy and clarity, and in order to avoid
being
accused in the future of having falsely attributed absurdities to
Comrade Rosa Luxemburg, let us first cite the most important passages
from her book concerning the question.
We ask the readers' indulgence for the necessarily somewhat
long
excerpts.
Let us first remind ourselves of a passage which we have
already
quoted. It reads:
If the capitalists as a class are the
only customers for the
total
amount of commodities, apart from the share they have to part with to
maintain the workers – if they must always buy the commodities with
their own money, then amassing profit, accumulation for the
capitalist
class cannot possibly take place. [15]
The author of the Accumulation
illustrates this topic most
explicitly
and concentratedly in the following passage:
To accumulate capital does
not mean to produce higher and
higher
mountains of commodities, but to convert more and more commodities into
money capital. Between the accumulation of surplus value in
commodities
and the use of this surplus value to expand production there always
lies a decisive leap, the salto mortale of
commodity production, as
Marx calls it: selling for money. Is this perhaps
only valid for the
individual capitalist, but not for the entire class, for society as a
whole? Definitely not... No, the accumulation of profit as money
profit is just such a specific and quite essential characteristic of
capitalist production, and is as valid for the class as it is for the
inthvidual employer. Marx himself also emphasizes, precisely with the
observation of the accumulation of gross capital, ‘... with the
accumulation of gross capital ... the formation of new money capital
which accompanies actual accumulation and necessitates
it under
capitalist production ...' (Capital, Vol. II, p. 507.
Emphasis by R.L.) . Capitalist
A[16] sells
his commodities to B, and so receives surplus
value in money from B.
The latter sells his commodities to A and
receives the money back from
A, which converts his surplus value into money.
Both sell their
commodities to C and so also receive a
sum of money for their' surplus
value from the same C. But where does the latter
get his money from?
From A and B. According to
our premise there are no other sources for
the realization of surplus value, i.e. no other commodity consumers.
But can new money capital be formed in this way to enrich A, B
and C? .
. . Exploitation is complete, the possibility of enrichment, of
accumulation has come. But exchange, the realization of the
increased
surplus value in increased new money capital, has to take
place in
order for possibility to become reality. Notice that we do not ask
here, (!) as Marx often does in the second volume of Capital:
where
does the money for the circulation of surplus value come from? to
answer finally: from the gold-miner. We ask rather: (!) how does new
money capital come into the pockets of the capitalists,
since (apart
from the workers) they are the only ones who can consume each other's
commodities? Here money capital wanders continuously out of
one pocket
into the other.
But wait: perhaps such questions are
putting us on quite the
wrong
track? Perhaps profit accumulation does take
place in this ceaseless
wandering from one capitalist's pocket into the other, in the
successive realization of private profits, where
the aggregate amount
of money capital does not even have to grow, because (? N. B.) such a
thing as the ‘aggregate profit' of all capitalists does not exist
outside of obscure theory?
But — oh dear — such an assumption
would simply lead us to
throw the
third volume of Marx's Capital into the fire. For
the doctrine of
average profit (emphasis by R.L.) Gross
capitalist profit is,
in fact, a much more material economic amount than, for instance, the
total sum of paid wages at any given time... . So the problem
remains: gross social capital continually realizes an
aggregate profit in
money form, which must continually grow for gross accumulation to take
place. Now, how can the amount grow if its component parts are always
circulating from one pocket to another?
It would appear that — as we have
assumed up until now — at
least the
aggregate amount of commodities which contain the profit can grow in
this way, and the only difficulty lies in supplying the money, which is
perhaps only a technical question of money circulation. But only
apparently (emphasis by R. L.), superficially. The
aggregate amount of
commodities will not increase, expansion of production cannot take
place, because in capitalist production the essential precondition
for
this is conversion into money, the universal realization of profit.
The
sale of increasing amounts of commodities, and the realization of
profit, from A to B, B
to C and C back again to A
and B can only take
place if at least one of them can in the end find a market
outside the
closed circle. If this does not happen the roundabout will
grind to a
halt after only a few turns. [17]
This is Comrade Rosa Luxemburg's proof. Despite their
confusion, these
arguments have a certain fixed, logical axis. It is: capital
accumulation is impossible, since it would have to be accumulation of
money capital by the total capitalist, while Marx's models assume that
money is continually wandering from one pocket into another, which
cannot provide a basis for the realization of the entire surplus value.
Here, too, let us examine Comrade Rosa Luxemburg's
argumentation, by
following her thought processes step by step and carefully considering
her reasons. And we shall make every effort to take into consideration
every semi-important logical link
in the
chain.
I. Definition of Accumulation
According to Rosa Luxemburg, accumulation consists, not in the
production of ever higher mountains of commodities,
but in the
conversion of an ever larger amount of commodities into 'money
capital', i.e. in the production of ever higher 'mountains of gold'.
Since, however, Rosa Luxemburg in no way denies the fact that expanded
production means an ever greater amount of commodity values (hence also
an even greater amount of use values, i.e. products in natura),
the
whole process of social reproduction, according to her, takes on the
character of the parallel production of, on the one hand, a mountain of
commodities and,' on the other, a mountain of gold, with the
accumulation of a gold mountain representing precisely the real essence
of the capitalist process of production. This conception lies at the
bottom of all her following considerations and also appears, amongst
other things, in the definition of accumulation as accumulation
of
money capital. Under no circumstances should the
accumulation of
capital be confused with the purely functional role of the latter (the
money phase of capital circulation). Still less, as we have seen above,
should one confuse the accumulation of capital with the accumulation of
its detached functional form, i.e. with the
accumulation of money
capital in the real sense of the word, of interest-bearing capital
(‘moneyed capital in the English sense'). The fact that the movement of
the total social capital is accompanied by an
accumulation of money
capital (as Marx correctly stresses), in no way means that the
accumulation of capital is equivalent to the
accumulation of money
capital, that it is identical with the latter.
The salto mortale is
valid for every capitalist, since every
capitalist must market his
commodity in some way or another in order to convert the redeemed money
into the material form of productive capital. But
if the salto mortale
is a matter of essential importance for any capitalist at all
– indeed,
is an unconditional necessity – it follows that it is also a matter of
essential importance and is unconditionally necessary for all
capitalists, i.e. for the total capitalist, for capitalist
society as a
whole. But this in no way means that the total capitalist
realizes his surplus value in one transaction
by exchanging the
commodity heap
against a heap of gold of equivalent value in one stroke. This
(‘Rosaist') idea is absurd.
II. Machinations of capitalists A, B and C
Rosa Luxemburg is dealing here with three branches of
production, which
are supposed to symbolize the social production as a whole,
specifically with the production of coal (A),
machines (B) and the
means of consumption (C). Further, a certain
amount of ready money is
assumed; the capitalists put this into circulation alternately, and
then 'fish it out' of circulation again. Now, how is accumulation, i.e.
the formation of new money capital in their (the capitalists') hands,
possible here ? – Rosa Luxemburg formulates her question. She answers:
It is impossible. Ergo, accumulation is also
impossible. After all we
have already explained, it is henceforth easy to refute this naive
sophism.
If one excludes the production of gold from the
very beginning
– under
conditions of (absolutely essential) abstraction from the external
market – then, of course, the additional gold will not fall from
heaven. A child can see that. After the capital turnover, exactly the
same amount of money will be available as before the said turnover.
This gold cum money 'helped' the productive capital to attain a new
material division of the elements into a direction which enables a new
circulation to begin on a new, expanded basis. What follows from this?
It follows that a real accumulation is possible without
accumulation in
the 'illusory form' of money, i.e. without the
'formation of new money
capital', as Rosa Luxemburg expresses it. Nota bene:
here, each of the
capitalists has made precisely that salto mortale
of which Rosa
Luxemburg speaks. Hence, this salto mortale,
which is in fact a sine
qua non of capitalist production, was completed by all
capitalists, and
also by the total capitalist, i.e. by the capitalist class as a whole.
But since Rosa Luxemburg is obviously not satisfied with this,
it must
(this follows with unrelenting logic from her whole argument) be
assumed that by money capital she understands, not the
money-form of
capital, which assumes industrial capital in movement, but money
capital as moneyed capital, which is of course accumulated as money and
only as money. But that means a
reductio ad
absurdum of her whole position.
Naturally, it is definitely not absolutely necessary for the
amount of
money in circulation to remain constant. The latter is only possible if
the growth of the amount of commodities, according to their value, is
compensated for by savings in means of circulation (speed of turnover,
credit, etc.). If such compensation does not
pertain, the additional
money flows precisely from that which Comrade Rosa Luxemburg hates so
unjustifiably – from the production of gold.
Therefore, her question,
'How does, new money capital reach the pockets of the capitalists?' is
not difficult to answer. It reaches their hands because c,
v and s of
the gold producer must be exchanged against means of production and
labour-power (and, through the workers, against means of consumption).
In any case, this ‘new money capital' was in her ‘total pocket' from
the start, since our gold producer is a member of the capitalist class,
thanks to divine and human provision. (We note in passing that the gold
producer, according to Comrade Luxemburg's point of view, is at the
same time both a stupid and an unnatural being, since he is continually
rejecting the gold form of his product.) Perhaps we can find the
explanation for Comrade Rosa Luxemburg's antipathy towards him here?
The ‘new money capital' originates here, thus, however much the author
of Accumulation may dislike it, from the
production of gold. If, on the
other hand, no gold production exists, then the question posed by Rosa
Luxemburg (not the one posed by. Marx but: ‘We rather ask: How does new
money capital come into the pockets of the capitalists?') is simply
meaningless, since there is no 'new" money capital', and
therefore none
can 'come in' either.
III. Accumulation of Capital and 'Average Profit'
Comrade Luxemburg does indeed come very close to a correct
solution of
the problem here, but, at the decisive moment, like a rubber ball
bouncing back, she leaps away from it in fright. We have already become
acquainted above with her formulation of the question about the partial
realizations. The question was not only posed absurdly, but answered
even more absurdly. In fact, let us once again present that critical
passage, where Rosa
Luxemburg
completes her own logical salto mortale.
Question: 'Perhaps profit accumulation does take place ... in
the
successive realization of private profits, where the aggregate amount
of money capital does not even have to grow, because such a thing as
the "aggregate profit" of all capitalists does not exist outside of
obscure theory?'
Answer: No, as the "average profit" forms the centre of the
third
volume of Capital, the "doctrine ... of average
profit" gives
concrete meaning to the theory of value in the first volume,' etc., etc.
We have here a real embarras de richesses
of inaccuracies and
mistakes.
Firstly, Rosa Luxemburg confuses realization
with
accumulation.
Realization means conversion from commodity form into money form,
nothing more. Thus realization is a pre-condition of accumulation.
Secondly, one cannot speak of a realization of profit, since
profit
itself is a result of realization. Surplus value, on the other hand,
undergoes realization.
Thirdly, accumulation is confused with
the growth of money
capital.
Real accumulated surplus value, which is already present in the form of
productive capital, is seen, to a certain extent,
no longer as an
element of accumulation, although precisely this forms a component part
of real accumulation.
Fourthly, the question about the 'total amount of money
capital' is
formulated obscurely. The following cases are possible:
The amount of money decreases (if the savings in means of
circulation
appear more important than the increase in commodity values, even this
case is possible); the amount of money remains
the same (the increase
in the amount of commodity values is compensated for by the savings in
means of circulation); the amount of money increases, but by no means
to the same extent as the value of the total amount of commodities
grows (the ‘normal' case); the amount of money increases to exactly the
same extent as the value of the amount of commodities grows. This last
case represents that absurd case which forms the basis of Luxemburg's
theory. If Rosa Luxemburg had formulated this point precisely,
the
absurdity of her proof would have been patently obvious.
Fifthly, Rosa Luxemburg quite arbitrarily
combines the
absolutely
correct view about the gradual character of realization with the
absolutely idiotic view which denies the reality
of the total profit of
the capitalists. Rosa Luxemburg 'thought', alias ‘discovered', this
connexion in order to be able to meet future arguments of future
opponents that much more easily. But, precisely by doing this, she has
closed off the way to a proper solution of the problem.
‘The total profit of the capitalists' is an objectively real
amount.
But that in no way means that one must imagine it as a simultaneously
existing heap of gold. Comrade Rosa Luxemburg completely fails to
understand this. Materially, at any given moment, it consists not only
of gold, not even predominantly of gold, since
accumulation consists
precisely in the addition of profit to capital, which must put on its
real working clothes, i.e. assume the form of productive capital, in
which way alone the essence of the matter, i.e. the process
of
increasing value, is ensured. In pure form, i.e. taken in
units of
calculation, it exists as an amount of money. Its amount, however, is
important for the objective laws of the movement
of society.
We shall illustrate this with an example which Comrade Rosa -
Luxemburg, in her heavy-handed way, intended to exploit for herself.
According to Rosa Luxemburg, the doctrine of average profit stands at
the centre of the 'most important discoveries of Marx's economic
theory'. Brilliant! However, as every economist knows, the average
profit itself is a derived figure, since it is determined from the rate
of average profit. (Let us note in passing that
this is the ‘centre' of
the above-mentioned discoveries, not the average profit. That is
characteristic of the accuracy of Rosa Luxemburg's economic
formulation.) 'The profit accruing in accordance with this general rate
of profit to any capital of a given magnitude, whatever its organic
composition, is called the average profit.'[18]
The rate of profit, however, is an abstract amount, it is
the fraction 
in
which s means the social surplus value (cum
sum of profit) and c + v
the total social capital. Now, in what
sense
does this rate of profit have an objective character? It is objective
in the sense of a social law, but not in the sense of an iron money
chest against which one can crack one's skull. The same is true of
total profit. It definitely does not have to assume money-form
at all
times, so to speak in all its parts, in order to be represented by this
form or to play an objective role in the process of the movement of
capital. But Rosa Luxemburg is quite incapable of grasping that.
IV. The Total Social Capital and the Total Profit
After Rosa Luxemburg has introduced the substantive arguments
we have
examined here, she finally strikes the balance. She writes:
‘The problem remains: gross social capital continually
realizes an
aggregate profit in money form, which must continually grow for gross
accumulation to take place. Now, how can the amount grow if its
component parts are always circulating from one pocket to another ?
'[19]
Now, it is also easy for us to strike the total balance of
this total
accumulation of mistakes which, it is true, continually wanders from
side to side with Rosa Luxemburg but which nonetheless constantly
increases in quantity, new additional inaccuracies, obliquenesses,
indeed downright errors, being added on the way.
It is true that the total social capital continually yields a
total
profit. It is incorrect that the total profit, in as much as we are
dealing with the form of the actual existence in a chronologically
given moment, only exists in money-form.
It is true that the profit accrues to the capitalists in
money-form, as
realized surplus value. It is incorrect that this realization
represents a unique act concerning the total surplus value.
It is true that the amount of circulating money usually
grows.
It is
incorrect that the accumulation of capital necessarily presupposes an
increase of money.
It is true that accumulation passes through the phase of the
money-form
of capital. It is incorrect that the accumulation of capital is an
accumulation of money capital.
It is true that the accumulation of capital is generally
accompanied by
an accumulation of money capital. It is incorrect that the accumulation
of capital is equal to or equivalent to the accumulation of money
capital.
And so on and so forth.
V. The Last Carousel of Comrade Rosa Luxemburg
At the end, the author of Accumulation
takes refuge in the
notorious
carousel which must 'grind to a halt', as she has
already done
occasionally in her precious proof in the question of 'for
whom'
expanded reproduction takes place. Why must it grind to a halt? Not
only because of the fact that it is difficult to get money, but also
because the amount of commodities will stop
increasing, since the
growth of the amount of commodities itself presupposes a 'generalized
realization of profit' (it should read: 'of surplus value', N. B.).
Here
we must once again cite the relevant passage, since along with an
attack she also demonstrates all the signs of a disorganized retreat.
Rosa Luxemburg writes:
The sale of increasing amounts of commodities and the
realization of
profit from A to B, B
to C and C back again to A
and B can only take
place if at least one of them can in the end find a market outside the
closed circle. If this does not happen the roundabout will grind to a
halt after only a few turns. [20]
There would definitely be no halt if the turnover speed of the
growth
of credit, etc., were to increase at the same speed as the amount of
commodities, as we have seen. The necessary realization would take
place with the help of the same amount of money. The money would
circulate faster. That is all. However, there is another interesting
question here. Rosa Luxemburg assumes that the problem could be solved,
as far as she is concerned, if a capitalist had realized his surplus
value outside the circle'. Now how is this?
In fact, let us assume that we had capitalists A,
B, C, D, E,
F, and so
on; the surplus value destined for realization would be a,
b, c, d, e,
f, and so on respectively.
We then have the series:
A ... a
B ... b
C ... c
D ... d
E ... e
F ... f
. .
. .
. .
The total surplus value is then a + b
+ c + d + e
+ f + ... and so on.
Let us further assume that one of the capitalists, let us say
F, has
left the circle' and realized the amount f on the other side'. But the
sum of the surplus value destined for realization is (a
+ b + c + d
+ e + f + ... and so on).
Now, how can the capitalist realize this sum? (For Rosa
says that they could, as soon as only one leaves
the circle.)
If Rosa were to answer that it would be possible because f
wanders from
one pocket into the other, she would give up her main
position. To
answer differently would be impossible - there is no other answer. Here
we are faced with the line of retreat along which
the flight takes
place. Against such a solution the entire: line of proof of Comrade
Luxemburg can be brought about, that the individual
capitalist can
realize his surplus value, the class of
capitalist could not realize
it, etc., etc.
But there is another side to that question. If the rate of
conversion
is not equal to the growth of the number of commodities, the additional
money reaches the channels of circulation by means of the gold
producer, where the product (also the additional product) possesses the
natural form of gold. Thus the circle is broken,
as long as such a
break really becomes a necessity. But as we have seen above, and as
follows from the reasons mentioned above, it is nonsense and nothing
but nonsense to assume that the additional amount of money must be
equal to the additional amount of commodities to be produced.
Ergo: Rosa Luxemburg's basic mistake is
that she takes the
total
capitalist as an individual capitalist. She underrates this total
capitalist. Therefore, she does not understand that the
process
of realization occurs gradually. For the same reason she portrays the
accumulation of capital as an accumulation of money capital.
From this – as we believe – results the manner in which she
explains
imperialism. Indeed, if the total capitalist is equated with the
typical individual capitalist, the first of course cannot be his own
consumer. Furthermore, if the amount of additional gold is equivalent
to the value of the additional number of commodities, this gold can
only come from abroad (as it is obviously nonsense to assume a
corresponding production of gold). Finally, if all
capitalist have to
realize their surplus value at once (without it wandering from one
pocket to another, which is strictly forbidden) they need ‘third
persons', etc.
In our first chapter we dealt with Luxemburg's theory in the
most
abstract form of questioning. There we were not yet dealing
with money.
Rosa Luxemburg's critical question is: 'For whom?' We have shown that
this question can be answered quite satisfactorily.
In our second chapter we moved one step closer to concrete
reality, by
analysing the money question. Here Rosa Luxemburg is already asking who
pays and what becomes possible by paying. We have also found a
satisfactory solution to this question by showing her basic mistake as
well as the individual errors in this second stage of our abstract
analysis.
It is the intention of the following chapter to bring us yet
another
step closer to reality by analysing the loss of equilibrium,
immanent
in the moving capitalist system and resulting from the contradictions
of capitalism, which we provisionally omitted.
Notes
[1] Anti-Critique, p. 74.
[2] Capital, Vol. I, p. 109.
[3] Capital, Vol. I, p. 92.
[4]
'Bullion may or may not be money, just as paper may or may not be a
bank-note.' Marx quotes Overstone (Capital, Vol.
III, I, p. 424).
[5] Capital,
Vol. p. 436.
[6]
ibid., p. 495. We are not dealing here with a technical impossibility,
but with a saturation of the relevant branch of production with capital
or with an insufficient disposable portion of capital.
[7] loc. cit.
[[8]Sergei
Nikolaevich Bulgakov (1871-1944). A student in a seminary but came
under the influence of Marxism and broke with the Church. Then studied
in Moscow, Berlin, London and Paris. Taught economics at the
universities of Kiev and Moscow. Later in life returned to the Church
and in 1918 was ordained a priest. Expelled from the Soviet Union in
1923 and lived in Paris until his death in July 1944.]
[9] Luxemburg, Accumulation, pp. 270-71.
[See p. 301, London
edn.]
[10]
S. Bulgakov, On the Markets of Capitalist Production
(Moscow, 1897), p.
132, cited by Luxemburg, op. cit., pp. 271-2. [See p. 301, London edn.]
[11] ibid., p. 272. [See pp. 302-3, London edn.]
[12] Luxemburg, Accumulation, pp. 135-6.
[See p. 164, London
edn.]
[13]
The accusations which Rosa Luxemburg makes against Marx here (why, she
says, ask complicated questions if one expects a relatively simple
answer?) as in other places, often stem from a misunderstanding of the
character of the argument in the second volume. In the first instance,
Marx was writing for his own purposes, made various
statements,
provisional notes and sketches to help him understand various questions
and so on. This is what Rosa Luxemburg completely neglects, especially
when she starts playing with words.
[14] Capital, Vol. III, pp. 435-6.
[15] Anti-Critique, p. 57.
[16]
In Rosa Luxemburg's example, Capitalist A
produces coal, B machines, C
provisions: let 'these three capitalists form the entirety of
capitalist employers'.
[17] Anti-Critique, pp. 71-3; (All
emphasis by me, unless
stated differently, N. B.)
[18] Capital, Vol. III, p. 156.
[19] Anti-Critique, p. 73.
[20] Anti-Critique, pp. 65-6.