The work of Rosa Luxemburg has received renewed attention in recent years. To celebrate the centenary anniversary of her seminal book The Accumulation of Capital in 2013, a collective of colleagues from within the Marxism Reading Group of the Centre for the Study of Social and Global Justice (CSSGJ) at Nottingham University have written the article ‘The Enduring Relevance of Rosa Luxemburg’s The Accumulation of Capital’, which has now been published online by the Journal of International Relations and Development. In this blog post, I will present some of the key findings of the article.
First published in 1913, The Accumulation of Capital represents Rosa Luxemburg’s quintessential contribution to Marxism and an exceptional, yet equally controversial, ‘modification’ to Marx’s original scheme of accumulation. Built on a cordial critique of Marx’s model of expanded reproduction, Luxemburg’s intervention offers not only a new framework to study capitalist economic development, but also a historical and political compass with which the expansion of capitalist social relations through colonialism and imperialism can be analysed.
According to Luxemburg, ‘the inherent contradiction between the unlimited expansive capacity of the productive forces and the limited expansive capacity of social consumption under conditions of capitalist distribution’ (Luxemburg 1913/2003: 323) result in crises, which cannot be solved within capitalism itself. Instead, new markets have to be opened up elsewhere. ‘The decisive fact is that the surplus value cannot be realised by sale either to workers or to capitalists, but only if it is sold to such social organisations or strata whose own mode of production is not capitalistic’ (Luxemburg 1913/2003: 332). In short, capitalism depends on the constant possibility of outward expansion.
This understanding of capitalist accumulation has come under criticism. Ray Kiely, for example, points out that Luxemburg overlooked capitalism’s ability to continue accumulation within the existing social relations of production. Historically, capitalist accumulation did not functionally depend on absorbing ever more non-capitalist space. Before World War I, for example, most capital was invested in, and trade took place between, advanced capitalist countries (Kiely 2010: 79-81).
Samir Amin, in turn, demonstrated that there is no ultimate limit to capitalist expansion. The moment when all non-capitalist space is integrated into capitalism is not an automatic endpoint to capitalism as such. Rather, capitalism has the ability to find new ways of constantly re-integrating peripheral space into the core and thereby continue the accumulation of surplus value. For example, Amin identifies a second phase of peripheral integration since 1945. Expanded reproduction has been possible not necessarily by integrating non-capitalist spaces, but through restructuring the already existing relations between the core and periphery. Through the export of capital, forms of production have been established in peripheral spaces, enjoying the advantage of low-wage costs. While centres of advanced capitalism have increasingly focused on products based on ultra-modern technology, peripheral spaces have increasingly focused on the export of labour intensive, finished manufactured goods (Amin 1976: 185-6). In short, capitalist accumulation can continue not only through expansion into non-capitalist spaces, but also through a re-constitution of the relationship between spaces of capitalist cores and peripheries around new forms of unequal exchange (see Bieler and Morton 2014).
Nevertheless, despite these criticisms, it is a fact that capitalism, in addition to intensifying existing relations of exploitation in the core, has constantly expanded outward in the attempt to overcome periodic crises. As we discuss in detail in the article, it is the identification of this particular dynamic, which we can currently find in the way Greece, for example, has become integrated into the core of the European political economy through large loans by German and French banks, or in the bomb and build strategy related to wars in the Middle East, which makes Luxemburg’s work so relevant today. The particular form of outward expansion has to be studied carefully in each instance, but analysing capitalist expansion as such remains highly topical and Luxemburg extremely relevant as a result.
Andreas Bieler is Professor of Political Economy and Fellow of the Centre for the Study of Social and Global Justice.