Imperialism and the Accumulation of Capital, Bukharin 1925


The Theory of Capitalist Collapse

As we have explained above, Rosa Luxemburg's incorrect theory of accumulation also leads to an incorrect theory of imperialism. And the latter leads to an incorrect theory of capitalist collapse. Rosa Luxemburg therefore attempts, arguing e contrario, to prove that she is right:

Capitalist accumulation becomes (objectively) limitless once capitalist production has built a sufficient market for itself. As production will still grow, i.e. the productive forces will develop without limit, even when all mankind is divided into capitalists and proletarians, as there is no end to the economic development of capitalism, the one specifically Marxist foundation crumbles. According to Marx, the rebellion of the workers, the class struggle, is only the ideological reflex of the objective historical necessity of socialism, resulting from the objective impossibility of capitalism in a certain economic stage. Of course, that does not mean to say that the historical process has to be, or even could be, exhausted to the very limit of this economic impossibility. The objective tendency of capitalist development in this direction is much sooner sufficient to produce such a social and political sharpening of contradictions in society, that they must terminate the dominant system. But these social and political contradictions are essentially only a product of the economic indefensibility of capitalism. As this becomes increasingly obvious, the sharpening of the situation continues.

If we assume, with the 'experts', the economic endlessness of capitalist accumulation, then the vital foundation on which socialism rests will disappear. We then flee into the mist of pre-Marxist systems and schools, which attempted to deduce socialism purely from the injustice and evils of today's world and from the revolutionary determination of the working classes. [1]

Rosa Luxemburg's model is extremely simple and, to a certain extent, illuminating. Capitalism is possible to the extent that it is ‘impure', in other words, to the extent that a periphery of 'third persons' exists alongside the 'capitalist productive' centre. The third persons' constitute a premise of the process of the realization of surplus value, hence also a necessary condition of the process of expanded reproduction. Nonetheless, the movement of capital is, according to its tendency, a movement towards 'pure' capitalism, as to a certain mathematical limit of development. If, according to this theory, the solution of the contradiction between the process of the production of surplus value and its realization takes place at the expense of the 'third persons', the solution cannot be repeated for ever, since the number of third persons is decreasing relatively. Here we come up against the objective-economic limit of capitalism as a specific, historically limited mode of production. Capitalism becomes an economic impossibility. This historical-economic necessity breaks through in the workers' revolution. With this, we are supposed to be faced with the ‘strict outlines of economic laws' which form the basis of the gay assortment of socio-political social relationships, whose surface conceals the deeper driving forces of the historical process.

Though imperialism is the historical method for prolonging the career of capitalism, it is also a sure means of bringing it to a swift conclusion. This is not to say that capitalist development must be actually driven to this extreme: the mere tendency towards imperialism of itself takes forms which make the final phase of capitalism a period of catastrophe.

So much for -the 'Theory of Capitalist Collapse' as developed by Rosa Luxemburg.

What makes this theory so attractive?

Its ‘economic determinism' ('objective limits to capitalism', ‘strict outlines of economic laws', etc.). Further, its (alleged) confirmation by empirical facts (sharpening of the situation as a result of the hunt for markets, periods of catastrophes, 'catastrophical character' of the whole imperialist epoch, etc.). Last –but not least – its 'revolutionary' character.

Nevertheless, Rosa Luxemburg's theory of capitalist collapse is simply false. It is wrong primarily as a theory, i.e. as a series of postulates which is not content with illustrating a number of extremely important social phenomena, but which tries to explain them as well.

We have already exposed the major points of the theoretical weakness of Luxemburg's thought. The whole collapse' clearly rests on the impossibility of realization within the framework of a ‘pure capitalism', i.e. on a false theory, as we have demonstrated. Apart from that, we have shown that Rosa Luxemburg's theory results in a constant and peaceful reproduction of the relations between the capitalist sphere and the 'third persons'. In short, we have proved that Rosa's replacement of exploitation through realization has to result in a peaceful character to the process, however revolutionary her 'conclusions' may turn out to be.

So Rosa's whole theoretical construction is full of internal contradictions. Meanwhile, we shall analyse the arguments of Rosa Luxemburg reproduced above, in order to augment the existing mistakes with a number of new ones which are characteristic of the formulation of the theory of collapse, and the Anti-Critique which is related to it.

We want to proceed from facts. It is a fact that imperialism means catastrophe, that, we have entered into the period of the collapse of capitalism, no less. But it is also a fact that the overwhelming majority of the world's population belongs to the ‘third persons'. It is essential to distinguish between two concepts: the rule of capital in general and the rule of capital in a narrower sense; in other words, the existence of a 'pure' and an almost pure' capitalism. There is no doubt that capitalism has everywhere become the dominant economic form, that it is the conductor in the concerto of economic forms. But it is equally beyond doubt that it is not the industrial and agricultural wage workers but the peasants who form the majority of today's world population. Out of the 1,700 million people populating our planet, 900 million (over half) live in Asia. 400 million of the 430 million Chinese and about 170 million of the 320 million Indians are peasants. If we include small craftsmen and other third persons', we end up with an enormous number. Asia, Africa and America contain gigantic masses of 'third persons'. Moreover, nearly 50 per cent of the population of Europe is rural – an indirect proof of how enormously large the reserves of 'third persons' still are.

Even if Rosa Luxemburg's theory were even approximately correct, the cause of revolution would be in a really poor position. For, given the existence of such a huge reservoir of third persons', which exists in reality, there can be practically no talk of a collapse. Then we would say, la Cunow[2]: capitalist expansion still has such a colossal field of activity at its disposal, in the form of the third persons', that only utopians can talk seriously about some kind of proletarian revolution. The reality is that the illusion of an imminent victory of socialism has collapsed, not that socialism from the epoch of the Second International has collapsed. The reality is that capitalism has not yet fulfilled its historical mission, and one can not yet anticipate the end of capitalist development.

Unfortunately, such a 'Cunowist' conclusion follows unavoidably from Rosa Luxemburg's theory. The fact that she draws completely opposite conclusions from all this merely proves her logical inconsistency.

In fact, Rosa seems to be aware of the awkwardness of her whole proof. She admits that it would be ridiculous to assert that capitalism must first throttle every third person'. She explicitly stresses that capitalism will be blown up 'much earlier'. In her opinion, 'the objective tendency of capitalist development towards this end' is sufficient. However, the ‘objective tendency' towards this 'end' (I), etc., has always existed. The process has obviously to be extremely far advanced, the 'impossibility of realization' has to become valid, at least as an 'economic presentiment', to use a pictorial expression; the relation between the capitalist and the non-capitalist economic sphere must be objectively such that the third persons' in no case represent a majority.

In reality, nothing of all that is to be found. And yet the whole epoch is already showing the most acute sharpening of contradictions, the most acute and general tension, the most acute catastrophical character. And yet capitalism is already beginning to ‘burst'. And yet the dictatorship of the proletariat has already become reality in the form of the Soviet Union. How can all these contradictions be explained?

Very simply. Certainly not because there are no longer enough ‘third persons' but because these third persons', who bring capital a surplus profit (but capital 'absolutely" needs' a surplus profit) have already been divided up amongst themselves by the big powers of finance capital according to the law of monopoly.

Comrade Rosa Luxemburg totally ignores the question of the movement of profit, of the specific character of the extra profit, of the specific forms of monopoly capitalism. The result of this sin of omission is that the true nature of imperialism escaped her. Hence her contradictions.

Capital could very easily exist without 'third persons'. But once ‘third persons' are there, capital strives necessarily to eat them up, as such a meal brings in a surplus profit. There is still a huge amount of ‘third persons'. The struggle waged for them (i.e. the struggle for surplus profit) has already reached a stage of acute sharpening, as they have already been divided monopolistically into colonies, spheres of influence, etc.

This is how things are in reality. To a certain extent, Rosa Luxemburg replied correctly to the objection of one of her critics, that capitalism would eventually collapse because of the ‘fall in the rate of profit', when she replied to him:

How the dear man envisages this – whether the capitalist class will at a certain point commit mass suicide in despair at the low rate of profit, or whether it will somehow declare that business was so bad that it simply wasn't worth the trouble, whereupon it will hand the key to the proletariat? However, that may be, this comfort is unfortunately dispelled by a single sentence by Marx, namely in the statement that, 'large capitals will compensate for the fall in the rate of profit by mass production'. Thus there is still some time to pass before capitalism collapses because of the falling rate of profit, roughly until the sun burns out. [3]

Without doubt, all that is essentially correct. But Rosa Luxemburg does not notice, strangely enough, that her answer hits not only at the 'dear man' but also at ... the author of the Accumulation herself.

We do not wish to play the part of a devil's advocate; nevertheless, we have to admit Oat the said ' dear man' could come up with the following reply:

It would be ridiculous to demand that the process should reach its logical conclusion. The objective tendency of capitalist development towards this end is quite sufficient. Long before the ‘end', this tendency will sharpen the struggle for any possibility to gain an additional profit to such an extent, and will be accompanied by such a centralization of capital and sharpening of social relations, that the epoch of a low rate of profit will become the epoch of catastrophes.

Such an answer would only differ slightly from that of Rosa Luxemburg. For at the same time the rate of profit would be approximately nil, since the last 'third person', who would have postponed the terrible apocalyptic hour of the capitalist world, which would have brought an end to the realization of surplus value, would be beginning to disappear.

We have already mentioned the three factors which make Rosa Luxemburg's theory attractive. They were: its economic determinism, its ‘objective limits' of capitalism, its (alleged) confirmation by the facts (period of catastrophes, etc.) and the 'revolutionary character' of her whole construction. We must now, as ‘professional destroyers', admit that our criticism has left nothing from the three factors.

Let us take another look at the list and see what remains of all these factors.

Firstly, we saw that Rosa Luxemburg did not indicate any limits in the central question which could explain the collapse. In practical terms, the limit indicated by Rosa Luxemburg has not the slightest importance. Capitalism is already beginning to break up while three quarters of the world's population still remain in their capacity of third persons'. It is obvious that this explanation is completely contrived.

Secondly, the theory in no way corresponds to the facts. If catastrophes occur, Rosa Luxemburg's theory, as we have seen, is unable to explain them. The fact of the existence of immense numbers of ‘third persons' contradicts Rosa's theory of collapse.

Thirdly, not only can one not draw any revolutionary conclusions from Rosa's theory but, on the contrary, conclusions that make revolution appear impossible for a long time.

All these arguments against the author of the Accumulation form only an addition to the main thrust of our criticism in the previous chapters. It was demonstrated that both the main line and the subsidiary lines of Rosa's proof are equally untenable theoretically. This happened to Rosa Luxemburg because she had given up the standpoint of Marxist orthodoxy at precisely that part of Marx's analysis where the brilliance of the incomparable master has left us the most complete results of his genius.

Here we have to meet another of Rosa Luxemburg's arguments. We have already seen at the beginning of this chapter that Rosa Luxemburg had developed the following thoughts:

‘If capitalist production forms a sufficient market for itself, then capitalist accumulation becomes (objectively) a limitless process.'

From this she now draws the conclusion: hence production can ‘grow undisturbed', hence there are no limits to the economic development of capitalism, hence the one specifically Marxist pillar of socialism collapses'.

This chain of conclusions is logically untenable. That is because Rosa Luxemburg does not understand the dialectical character of social contradictions, the dialectical character of the social totality and the laws of its movement.

Capitalist society is a 'unity of contradictions'. The process of movement of capitalist society is a process of the continual reproduction of the capitalist contradictions. The process of expanded reproduction is a process of the expanded reproduction of these contradictions. If this is so, it is clear that these contradictions will blow up the entire capitalist system as a whole. We have reached the limit of capitalism. How acute the contradictions have to become to blow up the system is a question in itself. We have tried to give an analysis of this problem in another work. [4] The answer has to be looked for in the conditions of the reproduction of labour-power. If the explosion of the capitalist contradictions has led to a destruction of the economy and decline of the productive forces and, as a result of that the reproduction of labour force and so its functioning has become impossible from a certain point, then the social apparatus of production bursts apart, the barricades go up between the classes.

Even this general, schematic, 'purely theoretical' and hence conditional explanation of the collapse of capitalism postulates a limit which is in a certain sense objective. The limit is given to a certain degree by the tension of capitalist contradictions.

Rosa Luxemburg makes things out to be much too simple: if realization in a purely capitalist society is impossible, the productive forces would keep on growing ‘undisturbed'; if capitalism could theoretically exist without ‘third persons' then that means that there are 'no limits' to 'economic development'.

We repeat: these confrontations, which are extremely characteristic for Rosa Luxemburg and her way of thinking, show the weak points of her proofs. One has only to look closer at these confrontations to realize how far away the author of the Accumulation is from a real solution to the problem, yes, even from a correct and methodologically logical way of posing the question.

Indeed, does the possibility of realization mean 'undisturbed' growth of the productive forces? Not at all. In Part 4 we have seen what confusions Rosa Luxemburg has caused. 'Undisturbed' growth means to her growth without contradictions, but even in ‘pure capitalism' the whole development is full of contradictions. If there is no continual over-production, there is a periodic one. If there is no continual impossibility of realization, there are periodic crises instead. If there is no final solution to the contradictions, there is instead temporary postponement, hence a conditioned solution'. If there is no continual possibility for capitalism to exist, there is instead expanded reproduction. And so on and so forth.

In other words, 'disturbances' are by no means excluded, but are, on the contrary, 'imminent' for capitalism. They are 'done away with' periodically, but only to reappear stronger periodically. Its increasing size and growing intensity will unavoidably lead to the collapse of capitalist rule.

Capitalist development is a process of the expanded reproduction of all the basic contradictions of capitalism. Here, too, Rosa Luxemburg makes it too easy for herself. She deals with one contradiction between the conditions of the production of surplus value and the conditions of its realization, the contradiction between production and consumption under conditions of capitalism.[5] 

This contradiction is not treated as a dialectical one, but as a superficial contradiction, from which the unavoidability of collapse is deduced. But one must not start from one contradiction but from a number of them, which should be seen in their dialectical movement. We then receive a quite different picture from that designed by Rosa Luxemburg, even if it was done in a masterly fashion. The contradiction between production and consumption, the contradiction between different branches of production, the contradiction between industry and an agriculture limited by rent, the anarchy of the market and competition, wars as means of competition – all that is reproduced on an expanded scale in the course of capitalist development.

This movement is closely connected to the movement of profits, the major propellent of the capitalist economy.

Today we are able to watch the process of capitalist collapse not merely on the basis of abstract constructions and theoretical perspectives. The collapse of capitalism has started. The October Revolution is the most convincing and living expression of that. The revolutionization of the proletariat was doubtless connected to the economic decline, this to the war, the war to the struggle for markets, raw materials and spheres of investment, in short with imperialist politics in general. The latter were nothing but the reproduction of the competitive struggle on a world-wide scale, where individual entrepreneurs or individual trusts were not the subjects of competition, but already consolidated 'state capitalist trusts'. These explosions of war include all major contradictions of the capitalist system that have already been mentioned. One can also categorize them differently if one conceives of them as a contradiction between the productive forces of the world economy and the ‘nationally' limited methods of appropriation of the bourgeoisie separated by states, or as the contradiction between production socialized on the widest scale and private economic or ‘national-bourgeois-economic' conditions of property. It would not be difficult to show through an extensive analysis that the collapse of capitalism sets free all contradictions of capitalism. It is its unfolded form in actu.

Theoretically, the possibility of a ‘second round' of imperialist war is not to be excluded, but is really quite obvious, as Comrade Lenin has already stressed.

Along with all these contradictions in the system of world economy goes another major contradiction: that between .the capitalist world and the new economic system of the Soviet Union. Through this the new conflict becomes even deeper, more acute and more destructive towards capitalism.

The biggest theoretical merits of Rosa Luxemburg are that she raised the question of the relation between the capitalist and the non-capitalist milieu. But she only raised it. She silently or almost silently evaded the specific questions concerning this extensive problem (the question of the character of exchange, structural variation, modifications in the law of value, extra profit, the increased accumulation at the expense of third persons', etc., etc.). But doubtless the mere question deserves great respect. Comrade Rosa Luxemburg did not gain less merit for stressing the question of reproduction. To stress the question of reproduction is today more necessary than ever – as we have proved on other occasions. [6]

But Rosa Luxemburg has overlooked the fact that the extended reproduction of capitalist conditions at the same time is the extended reproduction of all capitalist contradictions. Had she seen that clearly, she would not have bothered with the problem of the ‘objective limits' of capitalism – that limit, that she believes to have found in the disappearance of the ' third persons', after ascribing to the ‘third person' the role of the only reali7ers' of the surplus value produced by the wage slaves of capitalism.

Another of Rosa Luxemburg's extraordinary theoretical merits is that she raised the question of the historical necessity of imperialism. Opposed to the reformists, who had betrayed Marxism with open cynicism, and opposed to the quasi orthodox la Kautsky, who was at that time already starting to stutter about the possibilities of an 'English style' reformed 'ideal capitalism', Rosa Luxemburg sharply raised the question of imperialism as the unavoidable 'immanent appearance' of capitalism at a certain stage of development. At any rate, she was not able to understand the problem theoretically as the specific problem of our time. She did not try to find the basis of imperialism in the hunt for larger monopoly profits and in the necessary movement of finance capital in that direction, but in the absolute impossibility of the existence of capitalism ‘without third persons'.

Nevertheless, she has raised the question about the necessity of imperialism and in general answered it properly, although her answer was based on theoretically wrong arguments. Rosa Luxemburg's work rose high above the bungling efforts and the miserable chattering of the reformists of both directions, the open revisionists as well as the Kautskyans. It represents a daring theoretical attempt, it is the deed of a brilliant theoretical intellect. We do not have to mention especially that the historical part of the work has remained unsurpassed until today in its description of the history of the colonial conquests of capitalism.


[1] Luxemburg, Anti-Critique, p. 76.

[[2] Heinrich Cunow. German Social Democrat. Associate of Rosa Luxemburg on the left of the SPD pre-1914. At the outbreak of war took up a patriotic position and rapidly evolved to the right.]

[3] Anti-Critique, p. 76n.

[4] N. Bukharin, Economy of the Transformation Period. The concept of production as production of capitalist contradictions has been extensively treated in our book, Imperialism and World Economy (St Petersburg, 1918). [English edition: Martin Lawrence Ltd., London.]

[5] Mentioned on the side, no less a person than the father of revisionism, Eduard Bernstein, came to a similar conclusion, although from a different angle. He writes: 'What characterizes the modern mode of production above all is the great increase in the productive power of labour. The result is a no less increase in production – the production of masses of commodities. Where axe these riches?

'Or, in order to go direct to the heart of the matter: where is the surplus product that the industrial wage earners produce above their own consumption limited by their wages? If the "capital magnates" had ten times as large stomachs as popular satire attributes to them ... their consumption would only be a feather in the scale against the mass of the yearly national product. ... Where then is the quantity of commodities which the magnates and their servants do not consume? If they do not go in one way or another to the proletarians they must be caught up by other classes. Either a relatively growing decrease in the number of capitalists and an increasing wealth in the proletariat, or a numerous middle class – these are the only alternatives which the continued increase of production allows.' (E. Bernstein, Evolutionary Socialism (New York, 1961), pp. 49-50.)

According to Bernstein, the solution is to be found in the 'middle classes'. If we remember that the revisionist especially stressed the ability to survive of small farming enterprises, the similarity becomes obvious. Certainly the ‘ends', as well as the conclusions of Bernstein and Rosa Luxemburg, are diametrically contrary, but it remains characteristic that the starting point of the analysis, the way the question is posed and the estimation of the conditions of capitalist development are the same: the 'third persons' are the sine qua non of capitalism.

[6] Bukharin, World Economy and Imperialism. Also Economy of the Transitional Period.