Search results

Rosa Luxemburg is not an under-consumptionist stressing the tendency to stagnation, it is rather an under-investment perspective: the effective demand crisis results from the disequilibria determined by a vibrant capitalist accumulation, and stems from production rather than circulation. To show this, the chapter deals with three dimensions of Rosa Luxemburg's economic thought. First, how Luxemburg's approach in her 1913 book is related with some of her prior writings, especially Social Reform or Revolution? and the Introduction to Political Economy. Second, the re-reading that Luxemburg herself provided of her own argument in terms of a macro-monetary circuit model like the one we read in her Anti-Critique. Third and last, in which sense Marx's monetary labour theory of value was for her the essential starting point, which cannot be just set aside. This last point will be preceded by a détour, the critical consideration of some key papers by Kalecki on capitalism and reform, including his late paper with Kowalik on the ‘crucial reform’. The chapter concludes with some hints pointing towards an interpretation of capitalism and its recurring crises where exploitation and effective demand are both essential in accounting for the ascent and collapses of different forms of capitalism itself.

This chapter aims at introducing the key themes in two entries written by Tadeusz Kowalik for the Encyclopaedia Einaudi. These two long essays represent further developments of Kowalik's interpretation of the nature of capital and the cause and consequences of cyclical developments in capitalism. While the chapter is divided into two sections corresponding to the two entries, at the same time it tries to highlight the structural method of the author for which the categories of capital and crisis are historically, economically and politically entangled.

Despite profound differences, both the German Historical School and the critical theory of the Frankfurt School have in common a theoretical and cultural heritage in Central European traditions of social thought and philosophy. Although both schools often are perceived as quintessentially German traditions of economic and social research, their methodological presuppositions and critical intent diverge strongly. Since the objective of the Frankfurt School was to carry the theoretical critique initiated by Marx into the twentieth century, and since its members did so on a highly abstract level of theoretical criticism, the suggestion may be surprising that in terms of their respective research agendas, there was a common denominator between the German Historical School and the Frankfurt School critical theory. To be sure, as will become apparent, the common ground was rather tenuous and indirect. We must ask, then: in what respects did their theoretical and analytical foundations and orientations overlap? How did the German Historical School, as a nineteenth-century tradition of economic thinking, influence the development of the Frankfurt School?

In recent years, the concept of “reification” has virtually disappeared from debates in social theory, including critical social theory. The concept was at the center of the revitalization of Marxist theory in the early twentieth century generally known as Western Marxism. Georg Lukács in particular introduced the concept to express how the process described in Marx's critique of alienation and commodification could be grasped more effectively by combining it with Max Weber's theory of rationalization (see Agger, 1979; Stedman Jones et al., 1977).¹ In Lukács's use, the concept of reification captured the process by which advanced capitalist production, as opposed to earlier stages of capitalist development, assimilated processes of social, cultural, and political production and reproduction to the dynamic imperatives and logic of capitalist accumulation. It is not just interpersonal relations and forms of organization constituting the capitalist production process that are being refashioned along the lines of one specific definition of economic necessity. In addition, and more consequentially, the capitalist mode of production also assimilates to its specific requirements the ways in which human beings think the world. As a result, the continuous expansion and perfection of capitalist production and its control over the work environment impoverishes concrete social, political, and cultural forms of coexistence and cooperation, and it brings about an impoverishment of our ability to conceive of reality from a variety of social, political, and philosophical viewpoints.

In theorizing the dynamics of social processes, dialectical thinking informs Marx's historical materialist inquiries and both – dialectics and historical materialist principles – inform his political–economic analysis. In conceptualizing empirical observations during this work, Marx (1973b, p. 101) assumes that the “concrete is concrete because it is the concentration of many determinations, hence unity of the diverse” and that “With the varying degree of development of productive power, social conditions and the laws governing them vary too” (Marx, 1992, p. 28). This methodological tack strives for the flexibility needed for analyzing patterns in long-term social development (the structure of history) as well as the logic of specific systems in their totality and flux (the history of structures).

This chapter offers the first full translation from Russian to English of the Balance of the National Economy of the USSR, 1924–26’s first chapter. Involving 12 authors and composed of 21 chapters, the Balance is a collective work published in June 1926 in Moscow by the Soviet Central Statistical Administration under the scientific supervision of its former director, Pavel Illich Popov (1872–1950). In this first chapter, titled ‘Studying the Balance of the National Economy: An Introduction’, Popov set the theoretical foundations of what might be considered as the first modern national accounting system and paved the way to multisector macroeconometric modelling.

There have been times in recent years when it has seemed that the US economy, in particular, has defied economic gravity. This was certainly the case in the late nineties of the twentieth century. Many heaved a sigh of relief when the Nasdaq and the Dow responded to the pull of economic gravity and fell to earth in the early part of the twenty first century. The Earth at the time, in 2002, appeared to be indices of around 8,000 for the Dow and 1,250 for the Nasdaq. These measures still indicated huge wealth in terms of saleable bits of paper as well, indicating the underlying huge capacity of the real economy for creating surpluses. Both indices climbed back, though the Nasdaq was a long way from its astronomic former heights before the next (2007) crisis hit. True to the cyclical record of modern capitalism, however, by 2006 the US and the world stock markets were booming again. The nominal value of shares traded worldwide in 2006 by some estimates was nearly $70 trillion (Bogle, 2005). In 2007, another crisis appeared, ushered in supposedly by the collapse of the sub-prime mortgage market in the United States; subsequent events took their toll in economic and financial terms not only in the United States but worldwide in most of the major economies. The terms “credit crunch” and “sub-prime” had become so pervasive within a few weeks of the onset of the latest economic crisis that by July 2008, the Concise Oxford Dictionary provided definitions for them. While these terms are now embedded in the language of economics and everyday speech, inevitably the affected economies will recover from the crises and continue to grow. While there is no shortage of reasons posited for the latest crisis and those preceding it, far fewer explanations have been forwarded to tell us why economies survive economic shocks and, despite dire predictions and expressions of gloom, recent crises have not been as disastrous as was once the case, notably as in the Depression years of the 1930s. During the Depression of the Thirties, production fell by a third between 1929 and 1933, unemployment reached 13 million and even by 1938 one person in five were unemployed. No economist has predicted these dire consequences even for the crisis of 2007–2009. In 1999, Paul Krugman published his short book: The Return of Depression Economics in which he not only reminded us of the 1930s Depression but suggested that the then economic crises bore an “eerie resemblance to the Great Depression.”¹ He retreats within a few pages and describes the events as the Great Recession because the global damage has been “well short of Depression levels” (Krugman, 1999). A decade later, Krugman, by then a Nobel laureate for economics in 2008, began his 2009 revised edition of Return of Depression Economics thus: “The world economy is not in depression: it probably won't fall into depression (though I wish I could be completely sure about that)” (Krugman, 2009). By early January 2009, he surprised other economic commentators by using the term “depression” in his New York Times column.

There is little doubt that in terms of speed and scale, China's economic transformation is without parallel in the past. Never has the world seen a major economic power emerge in such a short time span and attain such a weight in the total world economy. Intriguingly, few social scientific analyses have explicitly interpreted the massive socio-economic changes taking place within China as associated with the emergence of a capitalist political economy.

This introduction to the essays that follow argues that the chief problem with the dominant understanding of world affairs in the disciplines of International Relations and International Political Economy, including their Marxist versions, is an a historical, non-contradictory and economically cosmopolitan conception of capitalism. In their place, geopolitical economy is a new approach which returns to the conception of capitalism embodied in the culmination of classical political economy, Marxism. It was historical in two senses, distinguishing capitalism as a historically specific mode of social production involving by value production and understanding that its contradictions drive forward capitalism’s own history in a central way. This approach must further develop and specify uneven and combined development as the dominant pattern in the unfolding of capitalist international relations, one that is constitutive of its component states themselves. Secondly, it must understand the logic of the actions undertaken by capitalist states as emerging from the struggles involved in the formation of capitalist states and from the contradictions that are set in train once capitalism is established. Finally, it must see in the ways that class and national struggles and resulting state actions have modified the functioning of capitalism the possibilities of replacing the disorder, contestation and war that are the spontaneous result of capitalism for international relations the basis for a cooperative order in relations between states, an order which can also be the means for realising the permanent revolution and solidifying its gains on the international or world plane.