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This chapter is an introduction to the English version of Karl Kautsky’s essay “Theories of Crises,” which in turn is a review of Michael von Tugan-Baranowsky, Studien zur Theorie und Geschichte der Handelskrisen in England (Studies on the Theory and History of Commercial Crises in England), published in 1901. The chapter contextualizes Kautsky’s essay in the framework of the ongoing revisionist controversy within the Social Democratic Party of Germany and the Second International, and well as of the debate between Marxists and Populists in Russia.

In the second half of the 1980s, together with Perestroika in the Soviet Union, a process took place to end the Cold War as a confrontation between the United States of America and the Soviet Union. At the same time, this process caused the collapse of the Soviet Union and socialist system and thereafter the separation and independence of the many nationalities that constituted the Soviet socialist system in the East and South Europe. However to our regret, such nationalities could not enjoy freedom by independence, but went to brutal wars between separated nationalities. Even after many local wars and brutalities we cannot yet find the final solution through peace and justice for peoples.

Nobody concerned with political economy can neglect the history of economic doctrines. Structural changes in the economy and society influence economic thinking and, conversely, innovative thought structures and attitudes have almost always forced economic institutions and modes of behaviour to adjust. We learn from the history of economic doctrines how a particular theory emerged and whether, and in which environment, it could take root. We can see how a school evolves out of a common methodological perception and similar techniques of analysis, and how it has to establish itself. The interaction between unresolved problems on the one hand, and the search for better solutions or explanations on the other, leads to a change in paradigma and to the formation of new lines of reasoning. As long as the real world is subject to progress and change scientific search for explanation must out of necessity continue.

This is the first English version of Karl Kautsky’s essay “Theories of Crises,” originally published in 1902 in Die neue Zeit, the theoretical organ of the Social Democratic Party of Germany. Kautsky’s essay was a review of Michael von Tugan-Baranowsky, Studien zur Theorie und Geschichte der Handelskrisen in England (Studies on the Theory and History of Commercial Crises in England), published in 1901. Kautsky’s review of Tugan-Baranovsky’s book is divided into five sections: (1) “Introductory Remarks”; (2) “The Decreasing Tendency of the Rate of Profit”; (3) The Explanation of Crises by Underconsumption; (4) Tugan-Baranovsky’s Theory of Crises; and (5) The Changes in the Character of Crises. We have translated in full the Sections 3 to 5.

Extensions/applications/revisions of the Marxian vision of socialism can broadly be categorized into two polar strands: the centralized and the decentralized strands of socialist economic systems. Explores the main postulates of a decentralized version of a socialist economic system as provided by Kautsky, Luxembourg, Bernstein, Bukharin and Lange. The centralized strand of socialist economic systems has been elaborated drawing mainly from the writings of Lenin, Trotsky, Dobb, Sweezy and Baran.

This article investigates the intellectual roots of perestroika. Mikhail Sergeyevich Gorbachev, the architect of perestroika claims that his programmes and policies are aimed at a revolutionary transformation of the Soviet economy from an overly centralised command system of management to a democratic system based mainly on economic methods and on an optimal combination of centralism and self‐management. To facilitate the restructuring process, Gorbachev simultaneously initiated two sweeping political reforms: glasnost (no “radical change is possible without it”); and demokratizatsiya (”there is no present‐day socialism, nor can there be, without democracy”). Therefore, prominent features envisaged by perestroika would presumably include: an optimal combination between centralism and self‐management, that would imply decentralisation in the economic management of the country; replacement of administrative methods by economic methods, that would emphasise economic incentives and market processes more than machineries of central planning; democratisation and openness in Soviet society, aimed at guaranteeing greater democratic rights for citizens, and pluralism in governmental and political processes.

Analyses the economics of socialism within the Marxian tradition. The ideas of Marx and Engels are included, as are those of the theorists of the Second International. The debate on market socialism associated with Oskar Lange also receives attention. The evolution of Mises′s and Hayek′s responses is traced, and there is an outline of how economists in Eastern Europe have come to similar conclusions to these Austrians. Concludes with an assessment of the economics of socialism in the work of contemporary theorists.

This chapter attempts an evaluation of Lenin's economic thought from a Marxian standpoint. This chapter argues that Lenin's reading of Marx's Capital in Development of Capitalism in Russia (1899) was biased toward Ricardian or logic-historical interpretation of value, disproportionality theory of crisis as well as economic determinism, characteristic of the Second International Marxism. While admitting that Lenin overcame economic determinism and reformist politics of the Second International Marxism in his Imperialism (1917), this chapter shows that some essential elements, such as thesis of progressiveness of capitalism, stagiest or typologist conceptions of capitalism, still persisted within and after Imperialism. Moreover, this chapter argues that Lenin's Imperialism cannot be considered as a successful concretization of three latter parts of Marx's plan of critique of political economy in Grundrisse (1857), that is, State (Part 4), Foreign Trade (Part 5), and World Market Crisis (Part 6). This chapter also argues that the ambivalence of Lenin's economic thoughts and incomplete break with the Second International Marxism unexpectedly led to Stalinist thesis of state monopoly capitalism, market socialist ideas, and reformist conception of “varieties of capitalisms.”

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.