The Economic Roots of Imperialism

Imperialism and the Accumulation of Capital

Written: 1924;

First Published: 'Der Imperialismus und die Akkumulation des Kapitals', Unter dem Banner des Marxismus, Vienna/Berlin, 1925-6, Vol II.

So far, our critique has shown that Comrade Luxemburg was wrong in every stage of her analysis of the process of reproduction; not only in her treatment of the abstract preconditions (i.e. the process of extended reproduction abstracted from the money factor) but also in her successive concretization of the problem (even under the conditions of an abstract capitalist society in general), i.e. taking into account the money factor and the analysis of crises. We thus have to turn to an even more concrete investigation, i.e. go beyond the frame of an abstract capitalist society and illuminate the problem of the relation of the economic circle of capitalism to its non-capitalist periphery. Yet first we have to pay attention to the methodological deductions which Rosa Luxemburg arrived at as a result of her assertions. The analysis of these ‘deductions' will simplify the question we have just indicated. We give the floor to Rosa Luxemburg:

There is no doubt that the explanation for the economic roots of imperialism must be deduced from the laws of capital accumulation, since, according to common empirical knowledge, imperialism as a whole is nothing but a specific method of accumulation. But how is that possible, if one does not question (!) Marx's assumptions in the second volume of Capital which are constructed for a society in which capitalist production is the only form, where the entire population consists solely of capitalists and wage labourers?

However, one defines the inner economic mechanisms of imperialism, one thing is obvious and common knowledge; the expansion of the rule of capital from the old capitalist countries to new areas, and the economic and political competition of those countries for the new parts of the world. But Marx assumes, as we have seen in the second volume of Capital, that the whole world is one capitalist nation, that all other forms of economy and society have already disappeared. How can one explain imperialism in a society where there is no longer any space for it?

It was at this point I believed I had to start my critique (i.e. not on the question, but on Marx, N.B.). The theoretical assumption of a society of capitalists and workers only - which is legitimate for certain aims of investigation (as in the first volume of Capital, the analysis of individual capital and its practice of exploitations in the factory) - does not seem adequate when we deal with the accumulation of gross social capital. (My emphasis, N.B.) As this represents the real historical process of capitalist development, it seems impossible to me to understand it if one abstracts it from all (?! N.B.) conditions of historical reality. Capital accumulation as the historical process develops in an environment of various pre-capitalist formations, in a constant political struggle and in reciprocal economic relations. How can one capture this process in a bloodless theoretical fiction, which declares this whole context, the struggle and the relations to be non-existent. [1]

This quotation, as one can see, represents on the one hand a certain theoretical résumé, on the other hand it gives the key to unlock further problems; it shows much more moral indignation than logical persuasive power. We could well say that we are faced here with an example of a certain basic lack of understanding of Marx's abstract theoretical method — its meaning, its limitations and (at the same time) its correctness. However, a closer analysis of this point now will enable us to understand more easily some of her subsequent arguments. Thus, let us investigate the sentences quoted from Rosa Luxemburg.

First. To start with, Rosa Luxemburg's assumption, according to which in the first volume of Capital the 'individual capital' (!), i.e. the individual unit of capital, the individual factory, and the individual capitalist, is analyzed, is wrong. In Marx we find nothing of that sort. In as far as he does use such examples, the capitalist appears as the incarnation of capital. Essentially, the objective ‘social' method of looking at economic phenomena is no less characteristic for the first volume than for all the other volumes of Capital. The first volume deals with the production of social capital, the second with the circulation of the social capital, the third with the 'total process', i.e. the total movement of the social capital.

Second. It follows from that that the distinction of methods of investigation, as recommended by Rosa Luxemburg, is totally unacceptable. Indeed, Rosa Luxemburg herself puts the question of reproduction at the centre. But once this question is raised, the question of production is raised as well, for reproduction beyond or without production is absurd. If the process of accumulation, and consequently the process of extended reproduction, cannot be analysed outside the context of the non-capitalist milieu, it is ridiculous to believe that one could leave this context out of consideration when analysing the process of the production of capital. The 'total process' would look nice, if out of the process of production the entire non-capitalist economic sphere would be eliminated, while in the process of circulation values are taken into account which originate from just this sphere. Such a detachment of production from circulation radically contradicts the concept of reproduction.

Third. The above is confirmed by further conclusions from the author of the Accumulation. Accumulation, she says, is a real historical process and one should not abstract from all the historical conditions of this process. But nobody suggests abstracting from all the historical conditions. To leave all historical conditions out of consideration means also to abstract from the capitalist mode of production, as is actually done by the bourgeois political economists. But it is another matter to abstract from the non-capitalist 'third persons'. Let us suppose that the capitalist textile industry sells its goods to small producers. If these small producers buy, they have to sell. Let us assume further that they sell cotton, i.e. raw material for the textile industry. Does it not seem obvious, then, that if we are not allowed to abstract from the small producers, as Rosa Luxemburg suggests, then we are not allowed to use this abstraction in the investigation of production? If one has to sell woven cloth to the small producers in the 'real process', one also has to buy cotton from them in order to produce woven cloth. So, either one must not abstract from the 'third persons', in which case neither must one do it in the analysis of capital production, or one is allowed to, in which case one can also do it in the analysis of the process of accumulation. The dualism of the method leads to absurdity, as we have shown.

Fourth. Such an abstraction is totally justified. Of course, not only does capitalist accumulation detached from production take place in the midst of a non-capitalist milieu, but the whole mechanism of capitalist production is constantly and in many different ways concretely linked to the non-capitalist milieu. Yet this is by no means an argument against such an abstraction. [2] One has to know that abstract theory is a 'key' to the knowledge of reality, and one has to know how to handle it. 'In reality' we see that value and price are never equal, supply and demand are not congruent, the working class does not receive the full value of its labour-power, etc., etc. Nevertheless, the abstraction of the theory allows us to move closer to the solution of the most concrete problems, as long as those using these abstractions are conscious of the fact, that between the abstractions and their applications to empirical reality there are a whole lot of logical steps, which under no circumstances may be omitted.

Fifth. What has just been said already contains the answer to the tricky' question raised with several variations by Rosa Luxemburg, as to how one can explain colonial robbery in a society in which there is no room for colonies. In other words: how can one explain things which are excluded a priori from an analysis? Such an undertaking equals the attempt to answer the well-known 'philosophical' question of the smell of the un-smelled' rose.

Is the argumentation of our critic convincing in this point at least? Not in the slightest.

Indeed, to explain the mutual relation between capitalist and non-capitalist milieu, one has of course to include this non-capitalist milieu in the investigation. Marx did not raise this problem, in Capital. To find a solution we have to move even closer to the concrete. Any analysis of the relation between the capitalist world and the 'third persons' has to be more concrete than the theoretical constructions of Capital.

That again does not at all contradict the statement that the abstract theory of Marx also indicates a solution to this problem. (We will see later on how he does this.) Furthermore, it is no argument in favour of the dependability of an explanation of concrete reality and the constant empirical co-existence of capitalists and 'third persons', nor of capitalist expansion with the aid of incorrect theoretical arguments, like the statement of the impossibility of accumulation without the existence of a non-capitalist milieu.

Here we get to the heart of the matter. But first Comrade Luxemburg has an unexpected surprise for us. She claims that if one refuses her theory of the impossibility of accumulation in a pure capitalist sphere, one is not allowed to talk about any relation between capitalism and third persons whatsoever. This she documents by using the not all that appropriate form of observations on foreign trade (not appropriate, we mean, since the term foreign trade does not necessarily indicate a difference in the mode of production).

Comrade Rosa Luxemburg writes:

A picture of reproduction like the above (she is talking about Bulgakov, N.B.) in fact has no room for foreign commerce. If capitalism forms a ‘closed circle' in every country from the very beginning (!? N.B.), if, chasing its tail like a puppy and in complete ‘self-sufficiency', it is able of itself to create an unlimited market for its products and can spur itself on to ever greater expansion, then every capitalist country as such must also be a closed and self-sufficient economic whole. In but a single aspect would foreign commerce appear reasonable: to compensate by imports from abroad for certain deficiencies due to the soil and the climate, i.e. the import of raw materials or foodstuffs from sheer necessity. ... International traffic of commodities does not here seem to flow from the character of the mode of production but from the natural conditions of the countries concerned. This theory at any rate has not been borrowed from Marx but from the economic experts of the German bourgeoisie. [3]

If one accordingly leaves the natural condition of the international division of labour out of consideration (how can that happen without sinning against the Holy Ghost of the 'concrete historical process'?) the ‘external trade' (better: exchange with the non-capitalist milieu) remains inexplicable. This is a thesis of Rosa Luxemburg. This thesis is meant to have destructive force. But as is commonly known, nothing is eaten as hot as it is cooked. Let us investigate Rosa Luxemburg’s ‘crushing' proof. 

First, we again have to remove the confusion created by the author of the Accumulation because of her inability to adopt a correct attitude towards the methodological question of the relation between the abstract theoretical and the concrete historical. An 'isolated', ‘abstract', 'purely capitalist' society has never and nowhere existed and could nowhere exist everyone knows that. Therefore, when Rosa Luxemburg writes: 'When capitalism forms this "closed cycle" in every country at the very beginning of its development', etc. – then she completely misses the point, as nobody claimed that capitalism has anywhere, or even in every country' and especially 'at the very beginning of its development', fried in its own fat, practiced celibacy and had no sinful intercourse with non-capitalist producers. On the contrary, it has everywhere and all the time extended its influence into the non-capitalist periphery, has constantly raped them for its greater glory.

What is all the fuss about? Why introduce all these 'ifs', which have no value, as everyone sees? But what is the real cause of capitalist expansion?

Firstly, it lies in the difficulties which result, if not from an absolute and constant over-production, then nonetheless from crises, including all their consequences.

Secondly (incomparably more important, as it is a permanent factor), it rests in the possibility of acquiring a larger profit from the outside.

As regards the first cause, it hardly needs lengthy explanations. If we have for instance a temporary over-production (crisis) with the simultaneous existence of an additional' market, the stream of commodities will of course rush to the latter, an additional expansion of the market will follow on the basis of new economic contexts, etc. Obviously, this will not in the least shake the thesis of the possibility of accumulation in a purely capitalist society. If there was no additional market, that fact alone could not destroy the foundations of the existence of capitalism. The same would still be quite ‘conceivable'. But if such a market exists, the concrete development necessarily leads towards the least resistance; without that it is quite inconceivable.

As far as the second cause is concerned, things here are already more complicated, and so we are forced to investigate this question more closely - although Marx has already dealt with it explicitly. One wonders at Rosa Luxemburg overlooking that.

Say, in his annotations to Ricardo's translation by Constancio, makes only one correct statement on foreign commerce. Profit can only be made through swindle, the one wins, while the other loses. Loss and profit balance out within one country, but not among different countries. And even looking at Ricardo's theory — Say does not realize — (from the point of view of this theory, N.B.) three work days of one country can be exchanged for one of another. The law of value is here essentially modified. Or, as within one country qualified complicated labour relates to unqualified simple labour, thus could the work days of different countries relate. In this case the richer country exploits the poorer, even if the latter gains through the exchange, as John Stuart Mill too has laid out in Some Unsettled Question, etc. [4]

So, even when the 'poorer' country gains from the exchange, the 'richer' country has a surplus profit.

Marx formulates the same idea even more accurately in Capital:

Capitals invested in foreign trade can yield a higher rate of profit, because in the first place, there is competition with commodities produced in other countries with inferior production facilities, so that the more advanced country sells its goods above their value even though cheaper than the competing countries. In so far as the labour of the more advanced country is here realized as labour of a higher specific weight, the rate of profit rises, because labour which has not been paid as being of a higher quality is sold as such. The same may obtain in relation to the country to which commodities are exported and to that from which commodities are imported; namely, the latter may offer more materialized labour in kind than it receives, and yet thereby receive commodities cheaper than it could produce them. Just as a manufacturer who employs a new invention before it becomes generally used undersells his competitors and yet sells his commodity above its individual value, that is, realizes the specifically higher productiveness of the labour he employs as surplus-labour. He thus secures a surplus-profit. As concerns capitals invested in colonies, etc., on the other hand, they may yield higher rates of profit for the simple reason that the rate of profit is higher there due to backward development, and likewise the exploitation of labour, because of the use of slaves, coolies, etc. Why should these higher rates of profit, realized by capitals invested in certain lines and sent home by them, not enter into the equalization of the general rate of profit and thus tend, pro tanto, to raise it, unless it is the monopolies that stand in the way? [5]

Finally, to quote a passage which is also mentioned by Rosa Luxemburg where, strangely enough, she does not realize that this quote radically contradicts her theory. Yet in this case it is not about commodities, but capital, not about the export of commodities, but of capital. But as we have already shown in the case of the analysis of reproduction, this difference is immaterial, especially from the standpoint of the question before us. (It is material from other points of view, but that is not important at the moment.)

What does Marx say about export of capital:

‘If capital is sent abroad, this is not done because it absolutely could not be applied at home, but because it can be employed at a higher rate of profit in a foreign country.'[6]

Consequently: (1) if it is an occasional exchange trade capital gains a surplus profit, using all means, including deceit, violence and robbery;
(2) if foreign exchange becomes a regular occurrence, the country with a higher structure inevitably gains a surplus profit [because of the productivity differential, Ed.];
(3) if capital is exported, that too happens in order to gain additional profit.

One has to wonder that Comrade Rosa Luxemburg, having so accurately posed the problem of profit as a specific category of capitalist society, remains deaf and blind towards this problem at other places in her work, and especially there where that problem should have been stressed. Has not the saying - profit, profit and profit again form the 'goal' and 'driving force' of capitalism - become a commonplace? How can one then neglect the question of the amount of profit when analysing the movement of commodities and capital from one country to another?

We see that the strict critic of Marx in this question has overlooked one of Marx's most essential sentences. Therefore Rosa Luxemburg claims wrongly to have solved the problem according to the spirit of Marx's system. This is just not true. Her solution contradicts the 'letter' as well as the ‘spirit' of Marx's teaching. In this point, she has - quite unnoticed by herself - slipped down to the petty-bourgeois conception of the populists.

Here we face one of the most important and interesting general questions, which is essential from the point of view of judging Rosa Luxemburg's theory.

The reader will have noticed how strangely Rosa Luxemburg formulates the question of the economic roots of capital expansion. As she overlooks the factor of the search for larger profits, she reduces everything to the bare formula of the possibility of realization. Why does capital need a non-capitalist milieu? To realize the surplus value that cannot be realized within the capitalist economic sphere. In this way, the problem of realization is separated from the problem of larger profits, thus from the question of the exploitation of non-capitalist economic forms. A strange theoretical contradiction: Rosa Luxemburg, wanting to be ultra-revolutionary and giving indeed a brilliant and masterful description of colonial exploitation, offers a theory that, as far as the theoretical nucleus of the matter is concerned, obscures and weakens capitalist reality. Comrade Luxemburg describes this reality excellently. She composes an extremely lucid picture of the merciless destruction of the ‘third persons' to add to the glory of capitalist civilization. She sums up this side of accumulation with 4, the following words:

Its predominant methods are colonial policy, an international loan system — a policy of spheres of interest — and war. Force, fraud, oppression, looting are openly displayed without any attempt at concealment, and it requires an effort to discover within this tangle of political violence and contests of power the stem laws of the economic process. [7]

Splendid! What a pity, though, that Comrade Rosa Luxemburg does not search for the 'stem laws of the economic process' where they can be found.

Indeed, which basic tendency do we assume for the exchange relationship between capitalist and non-capitalist sphere, if we come down from the 'heights' of the abstraction of Capital and incorporate the ‘third persons' in our analysis? There can only be one answer: the tendency to absorb non-capitalist spheres, to make them disappear.

What is this process linked to? Of course, to the exploitation of these forms by capital. This exploitation again is connected with gaining increased profits - that is the ‘soul' and the ‘driving force' of capitalist economy. Increased profit, exploitation, destruction and decay form the links of the real relation between the capitalist sphere and the non-capitalist milieu, in so far as we wish to stress the basic, essential and common mechanism of this relation. In this reside 'the stern laws of the economic process'.

And for Rosa Luxemburg?

Well, there the 'stern laws' - unfortunately - do not fit the stormy and powerful reality. Instead of stressing the exploitation, the surplus profit et al., Rosa Luxemburg stresses the bare formula of realization. Of course, additional profit is impossible without realization. The gaining of extra profit means realization. Yet the essential economic fact is that we are not faced with any realization, but the realization of extra profit. That is the specific point of the phenomenon of capital expansion. Whoever does not understand this, will - whether he wants to or not gloss over the faults of reality. He will therefore not be able to explain the real facts, however much he may stress them while describing the matter. Rosa Luxemburg exhibits such a paradox.

Let us take a closer look at the matter.

How does the author of the Accumulation describe the mechanisms of the exchange relation between capitalist and non-capitalist milieu? As follows:
"the capitalists are not able to realize the surplus value, which is to be accumulated within the capitalist sphere, since it cannot be bought by either the workers or the capitalists. This part of the value is sold to the' third persons'. The capitalists deliver means of production and consumption, receive money and use it to buy raw materials from the 'third persons'. So the capitalists can accumulate and produce, the 'third persons' can produce. They have exchanged equivalents. The realization, i.e. the conversion of a natural material form of a certain amount of value, has taken place. What happens now? The same again - to our surprise. The capitalists, with the help of the workers, produce an even bigger surplus value. But also the 'third persons', receiving an equivalent, can extend their production, and increase demand. They have voluntarily once again fulfilled their duty to capitalism. Both sides are quite content now. 'The wolves have eaten, the sheep are unhurt.' Realizers and 'third persons' both feel quite well. So the same perpetuates, an extremely peaceful game, i.e. a very strange exchange of mutual 'services', quite in accordance with the apostles of harmony like Bastiat & Co. [8]: the capitalist renders a 'service' to the other side by delivering means of production and consumption, while the ‘third persons' pay back equivalently by strongly supporting this slightly 'risky' business of realization. This idyllic ‘roundabout' - to use one of Rosa Luxemburg's favourite expressions - keeps spinning around and around. This pleasant picture nevertheless inspires neither anger nor doubt in the learned critic of Marx formulae. [9]

The following example may show what sort of a net of contradictions Rosa Luxemburg entangled herself in concerning Marx's theory and the 'real historical process'.

As is commonly known, capital was already conducting ravening colonial policies at a very early stage of its development. It had any amount of 'third persons' at its disposal: peasants, small craftsmen, etc. What need was there to wander to distant lands? Rosa Luxemburg herself rejects the natural 'reason' (overseas products of a different nature, etc.). Or perhaps for realization? But they had a whole ocean of third persons at their disposal at home. Once again: what drives those odd capitalist madcaps to foreign countries? Resting on the ground of her own theory, Rosa Luxemburg cannot possibly answer this question.

So foreign trade remains inexplicable, not from the standpoint of Marx and his orthodox pupils, but from the point of view of Rosa Luxemburg.

The author of the Accumulation makes similar mistakes on a different subject. We have already seen how the question of markets and driving forces urging for additional markets is incorrectly posed, just as she poses the question of the labour markets incorrectly.

Everyone knows the fact, the 'gross' empirical fact of the hunt for colonial labour power. What is this hunt based on? Why does capital want ‘yellow labour’? Perhaps it is lacking in other labour power or could not exist without additional colonial labour, as the one ‘at home' does not suffice?

Not at all! The reason is simply that in hunting for maximum profits it looks for cheaper labour and, at the same time, the highest rate of exploitation. This difference in the remuneration of labour, which is functionally related to profit, is the true reason for the hunt.

Rosa Luxemburg sees that quite differently. Let us give her the word once more, so that we can prove later on how dangerous it is for anyone who wants to stay a revolutionary in the field of theory to 'criticize' Marx:

Hitherto we have considered accumulation solely with regard to surplus value and constant capital. The third element of accumulation is variable capital which increases with progressive accumulation. ... One of the fundamental conditions of accumulation is therefore to supply a living labour. ... This supply can be increased under favourable conditions - but only up to a certain point - by longer hours and more intensive work. Both these methods of increasing supply, however, do not enlarge the variable capital or do so only to a small extent (e.g. payment for overtime). Moreover, they are confined to definite and rather narrow limits which they cannot exceed owing to both natural and social causes. The increasing growth of variable capital which accompanies accumulation must therefore become manifest in ever greater numbers of employed labour. Where can this additional labour be found? [10]

After raising this question and examining Marx's solution (Marx was envisaging an abstract solution here, too), Rosa Luxemburg arrives at the result that this solution was obviously unsatisfactory. ...

If natural propagation (of the working class) were the only foundation for the development of capital, accumulation, in its periodical swings from overstrain to exhaustion, could not continue, nor could the productive sphere expand by leaps and bounds, and accumulation itself would become impossible. [11]

Marx ... ignores, however ... the very process ... of incessant transition from non-capitalist to capitalist conditions of a labour power that is cast off by pre-capitalist, not capitalist modes of production in their progressive breakdown and disintegration. Besides the decay of European peasants and artisans we must here also mention the disintegration of the most varied primitive forms of production and of social organizations in non-European countries.

Since capitalist production ... can no more confine itself to the natural resources and productive forces of the temperate zone that it can manage with white labour alone. [12]

... capitalist production cannot manage without labour-power from other social organizations. [13]

These observations, coy at first sight, conclude in reality in a denial of the most essential points of Marx's economic theory and unavoidably end up in opportunistic conclusions.

Let us try once more to clear this mass of contradictions contained in the quotations.

First we have to point out a confusion that — by the way — is characteristic of Comrade Rosa Luxemburg's entire book. Here, too, she confuses the concrete with the abstract. Concretely, the mass of the additional labour force comes from the countryside, from the non-capitalist sphere of economy. But that really should be no reason for Rosa Luxemburg to borrow arguments from the bourgeois Franz Oppenheimer, [14] who believed himself to be dealing the ‘deadly blow' to the dragon Marx by pointing out this fact. The problem lies in the following: what relation exists between accumulation and labour force in an abstract capitalist society? Marx answers: as a result of the relatively faster growth of constant compared with variable capital, there develops necessarily a reserve army, that becomes either larger or smaller according to the fluctuations of the industrial situation. As the mechanism of capitalism knows how to secure a market (even though without that sweet ‘harmony'), so it can dispose of the masses of labour force by ensuring augmentation on the one hand and by forming the reserve army on the other.

Such is the situation in a 'purely ' capitalist society. In concrete society, things are, of course, not as simple as that. The more important the specific weight of the 'non-capitalist' mode of economy, the more substantial the corrections' of this analysis have to be. It is accordingly pointless to try to refute Marx's theory by referring to the fact of introducing additional labour from the non-capitalist milieu.

Let us take a close look at another assertion, Rosa's main postulate. Basically, it leads to the statement that capitalism is impossible without the labour force from the non-capitalist sphere, and that accumulation is just as impossible without this labour force as realization is without the 'third persons'. The realizing ‘third persons' receive theoretical support from the exploited former 'third persons', who after losing their quality as such have now become agents of capitalist production.

So, according to Marx, in a purely capitalist society a labour surplus (a reserve army) is unavoidable, so is the misery of the working class, and a contradiction between the masses' production and consumption, etc.

But, according to Rosa, not a surplus, but a shortage of labour is unavoidable. This shortage becomes so dominant that even accumulation itself becomes impossible.

We leave out the question about the extent to which accumulation becomes impossible under such circumstances, although it is of major interest.

The following has to be noticed: if a labour shortage develops, wages would obviously climb. The greater the 'shortage', the higher the wages. That would be very nice for the working class. But in such a case allow us this 'cunning' question: what happens to the theory of increasing misery? Or is even Bernstein correct when he asserts that it has long been redundant? -And how about the contradiction between consumption and production? Can it be annihilated after having fulfilled its task (not very explicitly by the way) to support the theory of realization or wither away as being 'no longer relevant'?

Comrade Rosa Luxemburg is so naive that she does not even realize that her thesis of the ‘impossibility' of capitalism without non-capitalist labour destroys the foundations of her own theory, as this thesis denies the 'misery of the masses', without which one cannot take a single step. Still more. The thesis does not only destroy Rosa's own theory, it radically contradicts the foundations of the correct revolutionary theory of Marx. She prettifies capitalism with her theory. It denies the immanent tendencies of capitalism, expressed in the impoverishment of the masses, in the growing class contradictions, in the disproportionality of production and consumption, etc.

Rosa Luxemburg wanted to be more revolutionary in her theory than Marx. But our assertions have demonstrated that her critical attitude towards Marx has led her to give a moderated picture of capitalism. Exploitation was replaced by tame realization. The same is repeated in this case. Wishing to substantiate the ‘terribly revolutionary' conclusion that capitalism will decay without a colonial labour force has put her unwillingly into opposition to the revolutionary theory of capitalist development.

Such is the revenge of Marx's teaching, which does not forgive critical attacks on its unity.

So far, we have looked mainly at the question of capitalist expansion in general, including its economic roots. Now it is time to examine the question of the economic roots of imperialism.

In the preface to her work Comrade Rosa Luxemburg expresses the expectation that the Accumulation of Capital should 'apart from a merely theoretical interest ... also have some importance for the practical struggle against imperialism'. Comrade Luxemburg believes that her investigation is closely related to the question of imperialism. That, of course, is right. The intentions of the author, as well as her later role in the class struggle, are unambiguous. Nevertheless, her work contains no solution to this question. The specific traits of a specific, historically demarcated epoch disappear behind general observations on the expansion of capital (which are not even correct - as we have seen).

It is characteristic that Rosa Luxemburg does not mention the ‘treatment of the cartels and trusts' in more than one little footnote. [15]

Rosa Luxemburg not only offers no solution to this question, she does not even pose it correctly, and so reaches a number of incorrect theoretical conclusions. For instance, she defines imperialism as follows:

 'Imperialism is the political expression of the accumulation of capital in its competitive struggle for what remains still open of the non-capitalist environment.'[16]

Here we are faced with a whole pile of various mistakes, which are by no means accidental, but on the contrary, all follow along the same line. Firstly, capital has always fought for 'remains' (a more than unprecise term). Secondly, it follows from this definition that a fight for territories that have already become capitalist is not imperialism, which is utterly wrong. Thirdly, it follows from the same definition that a fight for already 'occupied' territories is not imperialism either. Again, this factor of the definition is utterly wrong. The whole definition suffers from the basic fault that it treats the problem without any regard to the necessity of a specific characterization of capital as finance capital. Trade capitalism and mercantilism, industrial capitalism and liberalism, finance capital and imperialism - all these phases of capitalist development disappear or dissolve into capitalism as such'. The specific matter of finance capitalist conditions of production disappears, the conditions of monopolistic production, held together by the banks, disappears. However, can the specific 'political expression' of capitalism be understood without understanding the specific form of this capitalism? After all, politics are nothing but the means to expand the existing conditions of production. It is just this that Rosa Luxemburg does not understand, distinguish or even notice. She prefers to talk about things ‘in general', without regard to the real, concrete, historical peculiarities of our epoch, which as such need a special analysis.

Here is a striking example to illuminate the untenability of Luxemburg's conception of imperialism. We mean the occupation of the Ruhr territory by the French [1923-4].

From Rosa Luxemburg's point of view this is not imperialism, since (1) the ‘remains' are missing; (2) there is no 'non-capitalist milieu'; and (3) the Ruhr territory already had an imperialist owner before the occupation. In short, all symptoms of Rosa Luxemburg's characterization fail to apply in the given case.

On the other hand, Portugal's trade wars, for example, fall into the category of imperialism, or Spanish policies in America immediately after its discovery. The criterion of certain conditions of production disappears, the only criterion that allows us to understand the peculiarities of a historical epoch. Now we ask: is there any connexion between the general postulates of Rosa Luxemburg's theory and her false definition of imperialism? We believe – certainly.

Indeed, why should one annex capitalist territories? It does not help the realization, only ‘third persons', only non-capitalist ‘producers' can help the realization, supporting capitalism in its difficult task of realization. The annexation of territories, ruled by foreign capital, seems perverse from this point of view.

Rosa Luxemburg stresses just the non-capitalist character of the objects of imperialist operation. So she writes on militarism: ‘Militarism ... plays a decisive part ... (as) a weapon in the competitive struggle between capitalist countries for areas of non-capitalist civilization.'[17]

So: ‘non-capitalist civilization ' I Capitalist areas are simply eliminated – against all reason. This elimination is due to the fact that Rosa Luxemburg has misunderstood the problem of realization, instead of dealing with the level and amount of profit. Strangely enough, imperialism has been defined in the same way by no less a man than Karl Kautsky. According to Kautsky, imperialism is the fight for additional agrarian territory (in spite of the fact that Kautsky thinks of the agrarian countries mainly as suppliers of raw materials). Kautsky, as well as Rosa, is unable to understand that the struggle of the big monopoly capitalist organizations cannot be contented with this aim. The destructive effect of imperialist operations is not only extended to the servile 'third persons', but also to capitalist territories; yes, even to the foreign territories of finance capital. The struggle has changed from a mere fight for the distribution of the agrarian countries into a division of the world.

Thus we arrive at the result: Rosa Luxemburg is unable to explain the process of accumulation as such. The process resulting from the relation of capitalist to non-capitalist spheres remains unexplained, and this means that Rosa Luxemburg is unable to explain the expansion of capital properly. Even less can she explain the specific symptoms of imperialism.

Finally a brief sketch of the latter problem should be given. That means answering the following questions:

I. What conditions the expansion of capital and what are its economic roots?

2. How can the extreme sharpening of the competitive struggle among capitalist states be explained?

3. How can the specific form of the struggle (use of violence, wars) be explained?

Let us try to answer the questions briefly.

I. The expansion of capital is conditioned by the movement of profit, its amount and rate, on which the amount depends. The movement of commodities and capital follows the law of the averaging out of the rate of profit. There is no doubt that this process must be seen from the standpoint of the reproduction of the total social capital. The formula of reproduction is

We are faced with three parts of the process. The change of the money-form of capital into the form of productive capital (money changes into means of production and labour force); the productive capital functions as such (the actual process of production –marked by the letter P – at the same time being the process of the production of surplus value) resulting in the change of the form of productive capital into the form of commodities; finally the change of the amount of commodities with an increased value into money, i.e. the change of the form of commodity of capital into its money-form. Clearly, the amount of profit can fluctuate according to the conditions of the first, second and third processes, which together form the entire cycle of capital.

If cheaper means of production and cheaper labour are available, the rate of profit climbs accordingly, and capital tries to exploit this situation. If there are other conditions connected to the position of industry, i.e. the geographical situation, conditions which increase the rate of profit, then capital moves in that direction. Finally, if we have more advantageous conditions to realize the amount of commodities, then again the profit rate climbs, while capital increasingly orientates itself in that direction. As a result of that, the roots of capitalist expansion lie in the condition of buying as well as in the process of production itself, and finally in the conditions of selling. Three problems are generally related to that; the problem of the raw material markets and labour-power; the problem of new spheres for capital investment; lastly the problem of market. Non-capitalist economic forms, especially those far away from the centres of developed capitalism, are the main attraction, as they guarantee a maximum profit (even including high transport costs). The gaining of a colonial 'surplus profit' explains the direction of capitalist expansion. That does not mean that the struggle only goes or only can go in that direction. On the contrary, the further it develops (of course, under the condition that capitalism continues to exist) the more it will become a struggle for the capitalist centres as well. In this case, too, the movement of profit is the main reason (for example, the connexion of French iron with the Ruhr coal guarantees an enormous increase in profit).

2. The immense sharpening of competition among capitalist countries is explained by the adaption of free objects of capitalist exploitation in the three directions corresponding to the three parts of the general formula of reproduction. Here quantity turns into quality. This problem has been sufficiently illuminated by the existing literature.

3. The specific forms of the competitive struggle (the shifting of the stress from the struggle by means of lower prices to the method of increased pressure, finally war) result firstly from the monopolistic structure of modern capitalism, secondly from the fact that the importance of the struggle for raw materials and territories for capital export (where competition by means of lower prices is out of the question) has increased under the condition of monopolized property in these territories; thirdly from the fact that the market problem is different today, as it is no longer a competition of equal entrepreneurs, but the fight of gigantic state-capitalist trusts' supported by state power.

If different enterprises fight each other (for instance the coal trust and the iron trust), the tactic of lower prices is pointless. If combined enterprises fight, their methods necessarily become combined. But now modern capitalist states are, in economic terms, nothing but gigantic combined economic trusts. Furthermore, the problem of the struggle for a market for a similar product is essentially different under the rule of monopoly capital, which is forced to strive for exclusive ownership of a given market, its demarcation through tariff barriers and the subjection of its state organizations.

Accordingly, the objective content of capital expansion changes also – within certain limits. We saw that the forms of expansion changed towards a sharpening of the methods of fighting. Further we have seen that this again is caused by a change of the forms of capital itself. As war is nothing but 'the continuation of politics with other means', so is politics nothing but the method of the reproduction of certain conditions of production. So the modern expansion of capital differs from the previous in the fact that it reproduces the new historical type of the conditions of production on an extended level, i.e. the type of the conditions of finance capitalism. In this rests the basic constitutive characteristic of imperialism, which Rosa Luxemburg completely overlooked. What is the point of all this talk about imperialism, if one does not understand its specific historical characteristics? It means a misunderstanding of the demands of Marxist methodology as well as of the 'concrete historical process', which is so often called as a witness against the soulless formulae' in Marx's Capital.

Notes

[1] Luxemburg, Anti-Critique, pp. 61-2.

[2] Mentioned as an aside, Rosa Luxemburg claims in her Anti-Critique that Marx never deals with an 'isolated' capitalist society, but indicates the real tendency of capitalism towards universal rule. This confrontation is logically inadmissible. Also the statement that Marx never deals with an 'isolated society' is factually wrong. We remind ourselves of the following: 'To simplify the question, we abstract from external trade and investigate a secluded nation' (Theories of Surplus Value, Vol. II, p. 244). 2, 478

[3] Luxemburg, Accumulation, pp. 234-5. Footnote: as far as the last sentence is concerned, which contains an incorrect confrontation, we have to mention the following by Marx: 'Different communities find different means of production and different means of subsistence in their natural environment. Their way of production, way of living and products are thus different. It is this natural difference which causes the exchange of the products ...' (Capital, Vol. I, p. 316).

[4] Theories of Surplus Value, Vol. III, pp. 279-80. (My emphasis in last sentence, N.B.)

[5] ibid., pp. 232-3.

[6] ibid., p. 251. (Also quoted in my work, World Economy and Imperialism where this question is dealt with explicitly, N.B.)

[7] Luxemburg, Accumulation [p. 452, London edn.].

[[8] Frederic Bastiat (1801-51). French political economist, born at Bayonne. Wrote various works against protectionism, and was considered to be the foremost spokesman of free trade in his lifetime. Also wrote anti-socialist works.]

[9] This question is dealt with in the extremely interesting and well written article by Comrade Kritzman, 'On Accumulation of Capital and Third Persons ',Wjestnik Sozialistitscheskoij Akademii, 5, Moscow, 1923 (in Russian).

[10] Luxemburg, Accumulation [pp. 359-60, London edn.].

[11] Luxemburg, Accumulation [p. 361].

[12] ibid. [p. 362].

[13] ibid. [p. 364].

[[14] Franz Oppenheimer (1864-1943). German economist and sociologist. Began career in medical profession, receiving M.D. at Berlin University in 1885. Changed career later and studied at Kiel. In 1919 became Professor of Economics at Frankfurt. Left Germany in 1933.]

[15] p. 457, London edn.

[16] op. cit. [p. 4461

[17] op. cit. [p. 454].