The Accumulation of Capital

Her correction of Marx's own figures: capitalism can keep growing only by absorbing the non-capitalist world around it.

German, the original language

Original title: Die Akkumulation des Kapitals
First published: 1913(aged 42)
Original language: German

Overview

A textbook would not come out right. In January 1912 Rosa Luxemburg sat down to finish a popular introduction to Marx's economics, based on her lectures at the Social Democratic party school in Berlin, and found that she could not explain clearly how capitalist production as a whole keeps expanding. She decided the trouble was in Marx. In the second volume of Capital, which he left unfinished, Marx had drawn up tables in which a society made up only of capitalists and workers grows year after year. Luxemburg asks who buys the growing surplus of goods. Workers can spend only their wages, capitalists who consumed the whole surplus themselves would not be accumulating, and no one, she argues, invests in more machines only in order to produce still more machines. Her answer is that the buyers must come from outside: peasants, craftsmen, colonies, any economy that is not yet capitalist. Capital needs them as markets and as sources of land, labour and raw materials, and it destroys them in absorbing them. The last of the book's three sections shows this happening in British India, in French Algeria, in the opium wars against China, in the foreign loans to Egypt and in the arms budgets of the European powers. Imperialism, she concludes, is the way accumulation continues, and it has a limit, because the outside world is finite. She wrote the book in about four months, and it came out in Berlin in 1913. Reviewers in her own movement were almost all hostile. Otto Bauer, the leading Austrian socialist theorist, and others held that accumulation could go on without outside buyers, and Lenin rejected the book too; she wrote a reply to her critics in prison in 1915. The English translation of 1951 carried an introduction by the Cambridge economist Joan Robinson, and the Polish economist Michał Kalecki adapted the book's idea of external markets to government spending.

Key concepts

What are Marx's schemas of reproduction?

They are tables in the second volume of Capital that show how a whole economy renews itself from year to year. Marx divides all production into two departments, one making means of production such as machines and raw materials, the other making consumer goods. The tables trace how each department's output is bought by the other, so that work can start again. Luxemburg accepts them as a tool and asks whether they show where growing demand comes from.

What separates simple from expanded reproduction?

In simple reproduction a society produces the same amount every year, and whatever surplus arises is used up. In expanded reproduction part of the surplus is put back into production, so that output grows. Luxemburg points to the old village communities and craft workshops of India and China, repeating themselves for generations, as cases of the first. Capitalism lives by the second: a capitalist who merely stood still would be driven out by competitors.

What does it mean to realise surplus value?

It means selling the goods in which the surplus is contained and so turning it into money. Surplus value is the part of what workers produce that exceeds their wages. Fresh from the factory it exists only as cloth, coal or machines. Until those are sold the capitalist has no profit and nothing to reinvest. The whole book turns on this step, since each year's larger pile of goods requires buyers who did not exist the year before.

What does Luxemburg mean by natural economy?

Natural economy is production for the producers' own use, with little or nothing made for sale. A peasant household, a village that holds its land in common and a feudal manor are her examples. Such an economy buys almost nothing and offers neither its land nor its people for hire, so capital can do nothing with it. Luxemburg describes the struggle against it as the first stage of expansion, carried out by taxation, conquest and forced trade.

Who are the non-capitalist buyers in Luxemburg's argument?

They are all producers who do not work for wages in a capitalist firm: peasants and craftsmen inside Europe as well as whole societies overseas. Her example is the English cotton industry, which for two thirds of the nineteenth century sold its cloth to peasants and townspeople on the Continent and in India, America and Africa. Luxemburg stresses that this outside is defined by how people produce and not by borders. A German peasant belongs to it too.

How does The Accumulation of Capital define imperialism?

Imperialism is, in Luxemburg's sentence, the political expression of the accumulation of capital in its competitive struggle for what is left of the non-capitalist world. The definition ties foreign policy to economics. Colonies, protective tariffs, foreign loans and arms races appear as means by which rival national capitals secure outside markets and resources. Because the unclaimed area keeps shrinking while the capital seeking outlets grows, she expects the rivalry to become more violent.

Themes of the book

What this book returns to, gathered into themes and ordered by how much of the text each one occupies.

Who buys the growing surplus

If more is produced each year than the year before, someone has to buy the difference. Luxemburg looks for that buyer in Marx's own tables and does not find one.

Marx's growth tables contain two classes. Workers can spend only their wages, which the capitalists have advanced to them. Capitalists who consumed the whole surplus would not be accumulating. That leaves the idea that industry buys from itself, more machines to make more machines, which Luxemburg calls a merry-go-round turning in empty air, since nobody invests without a final customer in view. The middle of the book follows the question through a century of disputes, from Sismondi against Ricardo to the Russian economists of the 1890s. Her verdict is that the sums come out because paper accepts any equation, and that Marx posed the problem without solving it.

capital accumulation
social reproduction
surplus value
effective demand
consumption
overproduction
economic modeling
simple reproduction
markets
reproduction
marxism

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Why capital needs a world that is not capitalist

Luxemburg's buyers stand outside capitalism: peasants, craftsmen, whole countries that still produce for their own use. What does capital do to them, and what becomes of it when they are gone?

Capital needs the non-capitalist world three times over: as a market for its surplus, as a source of land and raw materials, and as a reserve of labour. It cannot wait for such societies to dissolve, so it breaks them open. Luxemburg documents the methods: the British in India, French governors in Algeria declaring clan land an impossibility, opium forced on China by war, loans that delivered Egypt's peasants to European banks. Force is thus a standing method of accumulation and no mere episode at its birth. Imperialism is the rivalry of capitalist states for what remains. Since the remainder shrinks, it prolongs capital's life and hastens its end.

colonialism
imperialism
militarism
international trade
commodity exchange
capitalism
wage labor

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Within this work

passages held: 866
distinct concepts: 595
by passages held, corpus-wide: #72

What this book thinks together

The wheel takes this book’s leading concepts and shows how often they come up together. The wider the band between two, the more of its passages speak of both. Among them, most often together: “capital accumulation” and “surplus value”.

Concept co-occurrence, strongest first 8 concepts, joined by 24 pairings. 82 pairings reach beyond these concepts and are not drawn.
Concept	Paired concept	Shared passages
capital accumulation	surplus value	83
capital accumulation	social reproduction	60
capital accumulation	reproduction	46
social reproduction	surplus value	27
reproduction	surplus value	24
capitalism	social reproduction	23
capital accumulation	economic crises	22
capitalism	surplus value	21
capitalism	colonialism	20
capital accumulation	consumption	17
consumption	surplus value	16
capital accumulation	capitalism	14
capitalism	economic crises	14
economic crises	surplus value	12
capital accumulation	colonialism	11
capitalism	consumption	9
consumption	economic crises	9
consumption	social reproduction	9
economic crises	social reproduction	5
consumption	reproduction	4
capitalism	reproduction	2
colonialism	surplus value	2
economic crises	reproduction	2
colonialism	economic crises	1

Works held

The author's work in order, this book marked in place. Your-language title first, the original beneath it where the two differ; side chips show which full texts are held.

1899 Reform or Revolution (Sozialreform oder Revolution?)
Within a year of her arrival in Berlin she had written the newspaper articles gathered here. Their case about where reform stops is the ground she argues from in everything later.
DE
1904 Organizational Questions of Russian Social Democracy (Organisationsfragen der russischen Sozialdemokratie)
Written against Lenin's plan for a party, this is her sustained piece on how one should be organised. The prison manuscript on the Russian Revolution took the argument up again fourteen years later.
DE
1905 Socialism and the Churches (Kościół a socjalizm)
The Polish side of her work: a pamphlet for the party she helped to lead in Russian Poland, written in the revolutionary year that she analysed afterwards in The Mass Strike.
DE
1906 The Mass Strike, the Political Party and the Trade Unions (Massenstreik, Partei und Gewerkschaften)
The fullest statement of her view that mass action cannot be scheduled by leaders. The dispute it opened with the trade unions came back in 1910 as her break with Karl Kautsky, the party's leading theorist.
DE
1913 The Accumulation of Capital (Die Akkumulation des Kapitals) you are here DE
1916 The Crisis in the German Social-Democracy (The “Junius” Pamphlet) (Die Krise der Sozialdemokratie)
The account of imperialism from The Accumulation of Capital, applied three years later to an actual war and to the party that had voted for it.
DE
1919 Aufsätze und Artikel
Newspaper and journal pieces from 1893 to 1919, the running record beside the books. They include the 1910 polemics against Karl Kautsky and her last articles for Die Rote Fahne.
DE
1919 Reden
What she said aloud, on the questions her articles and pamphlets argue in print, from her first months in Germany in 1898 to the last weeks of her life.
DE
1922 The Russian Revolution (Die russische Revolution)
She left it unfinished in Breslau prison in 1918, and Paul Levi printed it four years later. It returns to the objection she had made to Lenin in 1904, now that his party held a state.
DE
1925 Introduction to Political Economy (Einführung in die Nationalökonomie)
Her economics as she taught it: plainer than The Accumulation of Capital, which grew out of it, and the place where her reading on communal societies before capitalism is set out.
DE

— or open another of their works