Revisiting a Marxist classic

Issue: 148

Susie Helme

Henryk Grossman, Fifty Years of Struggle over Marxism 1883-1932 (Marxist Left Review, 2014), £9.99

The classic Fifty Years of Struggle over Marxism 1883-1932 by Henryk Grossman has recently been translated by Rick Kuhn and Einde O’Callaghan. Originally published as an entry in a German dictionary of economics, it is one of the earliest reviews of Marxist thought and one of the first critiques of revisionism—theories based on a significant revising of Marxist premises.

A Jewish economist from Kraków, Poland, then part of Austro-Hungarian Galicia, Grossman joined the Galician wing of the Social Democratic Party (GPSD) in 1898. When the nationalists dominant in the party led a split to form the Polish Social Democratic Party (PPSD), he led the opposition to this current. He continued to be active in the “Ruch” (Movement), a coalition with members of the PPSD along with the Polish Socialist Party and Rosa Luxemburg’s Social Democracy of the Kingdom of Poland and Lithuania (SDKPiL).

He learned Yiddish and founded the Jewish Social Democratic Party (JSDP) in 1905, which broke with the PPSD over its insistence that Jewish workers assimilate to Polish culture. Grossman was also critical of Zionism. In 1908 he went to Vienna to study with Marxist economist Carl Grünberg, and after the First World War he joined the Communist Party of Poland (see Rick Kuhn’s biography Henryk Grossman and the Recovery of Marxism).

Arrested in 1924, he was released only when he agreed to go into exile in Germany. He took up a post with the Institut für Sozialforschung (Institute for Social Research) in Frankfurt. Theorists associated with this institute, including Grossman, became known as the Frankfurt School. With the Nazi takeover of Germany, the Frankfurt Institute went into exile in New York. Initially critical of the Soviet Union, by the time the Second World War broke out, Grossman had become a committed Stalinist, as is evident in the last section of Fifty Years of Struggle where he lauds the Soviet Union’s ­“superior economic system” (p70).

However, the bulk of the book is concerned with recounting how Marx’s theory was reinterpreted during the years between Karl Marx’s death in 1883 and the early 1930s and offers a critique of those theories that had swerved towards reformism. Materialists like Marx had contradicted earlier “utopian” concepts like those of the “neo-Kantians” who centred on purely “ethical justifications” for socialism (p31). However, reformism, born out of the “peaceful period for capitalist development” 1872-1894 (p47), had, by the end of the First World War, become embedded not only in the ranks of the trade union bureaucracy but also in socialist parties. For the new working class leaders, “reformism was tailor-made” (p22). They desired a more gradual, piecemeal transition to socialism and demanded a revision of Marxism to purge the theory of its class antagonism.

These ideas influenced revisionists like SDP theoretician Eduard Bernstein and the Fabian Society in Britain, who had gone the whole way to reformism. Bernstein saw the path to socialism in the “moral maturity of the working class” (p26), that they would simply grow to realise its desirability. In particular he rejected Marx’s theories of crisis and breakdown, and value and surplus value. He believed that the expansion of credit would bolster the economy indefinitely. This development would blunt class antagonisms, and society could simply grow into socialism without any revolutionary upheaval. Likewise, the Fabians considered it sufficient to “permeate” organisations with socialistic ideas and make the public conscious of the evil nature of capitalism.

Grossman saw that revisionist understandings had undermined revolutionary opportunities, leading to “voluntarism and putschism” (p84), and welcomed the resurgence of revolutionary Marxism after the turn of the century.

Marxist revisionism had mainly gone in two directions. The first was typified by Rudolf Hilferding, who dealt with the merging of banking and industrial capital and influenced Nikolai Bukharin’s and Lenin’s ideas on imperialism. Other theorists posited various factors as causing crises in capitalism other than the declining rate of profit.

The second was that of Rosa Luxemburg, She said that economic crisis was caused by the exhaustion of demand after several production cycles, leaving no markets left for all the goods produced. She believed capitalists could shore up their profits by looking outside the system for a market. This “outside” could be found, she said, in the colonisation of pre-capitalist parts of the world. Though Luxemburg was a revolutionary, this theory could lead to a conclusion that as long as new markets can be found, capitalism could go on forever.

Grossman criticised both strands of theory. He wrote that neither the “neo-harmonists” of Hilferding nor the “under-consumptionists” like Luxemburg fully took into account Marx’s law of the tendency of the rate of profit to fall, as outlined in Volume 3 of Capital. Marx argued that overall profit rates in the economy would increase with an increase in surplus value but decrease with a rise in the organic composition of capital. As individual capitalists strive to increase the organic composition, for example by using technology to replace workers, this reduces profit rates in the system as a whole leading to an economic crisis. For Grossman, once this was factored in, falling profit rates would mean that a point would come when there was no longer any surplus value to feed back in as input and capitalist production would indeed break down. He confirmed that capitalism cannot be “managed” as reformists claimed.

That the breakdown had not yet happened by the 1920s was due to countervailing tendencies (such as war), not to the theory being wrong. Just months before the great crash of 1929, Grossman demonstrated, in Law of the Accumulation and Breakdown, that Marx’s revolutionary critique of capitalism was still applicable. Even today critics of Marx either follow classical economic models, claiming that the law of the tendency of the rate of profit to fall isn’t valid—supply and demand do even out, and crisis is due to other factors—or that capitalism can be propped up by counter-tendencies (such as war or finance capital).

Grossmann died in 1950 and so could not have foreseen the development of the “permanent arms economy”, where post-war arms expenditure resulted in an offsetting of the fall in the rate of profit and thus a long period of boom; nor that this countertendency would eventually run out of steam. Arms expenditure taxed capital and thus attenuated the rise in its organic composition, but could not provide a ­permanent fix.

In this edition Rick Kuhn, whose biography of Grossman won the 2007 Deutscher Memorial Prize, adds an introduction, in which he outlines Grossman’s life story and the debates his writings provoked. Kuhn provides insight on the contributions of Grossman and the Frankfurt school to Marxism during the dark days of Stalinism. The translation is cogent and free of incomprehensible jargon, and the footnotes are very useful.

Amid the rise of the left reformism of Syriza in Greece and Front de Gauche in France and hopes in Britain that Jeremy Corbyn can “reclaim Labour”, Grossman’s critique of revisionism is all the more relevant today.