Anti-Colonial Marxism  

Rosa Luxemburg was an outstanding internationalist who was renowned for her groundbreaking critiques of colonialism and imperialism. As a Jewish woman growing up in Russian-occupied Poland, she was acutely aware that colonial domination is an offense to humanity.

Her opposition to it only deepened when the new global stage of imperialism emerged in the years preceding her move to Germany in 1898, where she became a leading figure in the Second International. From her earliest writings, Luxemburg was determined to show that the destruction of indigenous peoples and social formations in the non-Western world by Euro-American capitalism was not an accidental or secondary feature of capital accumulation but rather its fundamental prerequisite.

She was not alone in this effort. The Second International comprised a wide variety of tendencies, from reformists who apologized for or even supported colonialism to revolutionary Marxists who castigated it. Karl Kautsky, considered the “Pope of Marxism” prior to 1914, issued a number of powerful denunciations of imperialism, arguing that anti-colonial revolts in China and India could inspire the European labor movement to deepen its struggles against capitalism.

Heinrich Cunow, who taught alongside Luxemburg at the school of the German Social Democratic Party (SPD) in Berlin, authored an analysis of communal formations in the Andean region of South America, arguing that “the greater part of what the Social Democrats strive for today as their conceived ideal, but at no time has achieved, was carried out in practice by the Incas.” And Vladimir Lenin, who spent two-thirds of his political career as part of the Second International, wrote a famous study contending that imperialism was inextricably tied to the emergence of monopoly capitalism.

The claim made by some in recent years that the revolutionary Marxists of the era prioritized the European working class to the exclusion of the interests of the “wretched of the earth” in the Global South is therefore clearly unsustainable. Nevertheless, Luxemburg went further than other Marxists of her time by producing what is arguably the most comprehensive and theoretically sophisticated analysis of the connection between capitalism and imperialism in The Accumulation of Capital.

Barriers to Accumulation

This massive book — supplemented by her Anti-Critique, penned two years later — was the product of years of reflection on a critical problem in economic theory. The drive of capitalism to maximize profit tends to disregard any human or natural limits that get in its way. In doing so, it also tends to suppress demands for higher wages and better living conditions that threaten profit maximization.

Since the value of commodities is realized only when they are put on the market and consumed, what or who supplies the purchasing power that enables the value of the surplus product to be productively reinvested, which is a precondition for the accumulation of capital on an ever-larger scale? According to Luxemburg’s analysis, it clearly cannot be supplied by the working class, whose productive output far outstrips its purchasing power. Nor can it be supplied by the consumption of luxury goods by capitalists, who are relatively few in number (even if their greed is infinite).

She first addressed the problem in 1899:

The tendency toward crises results from the simple and indisputable fact that while ceaseless expansion is a prerequisite for the survival of capitalist production, and while [the drive for] this expansion is limitless, there are limits for each specific country concerning the possibility of sales on the domestic and foreign market. This contradiction between the expansion of production and the limits of the market, in which capitalism fails at the point of its own sales relations, has to eventually bring about, with natural necessity, a point in time at which capitalism becomes a societal impossibility and socialist transformation becomes a necessity in equal measure.

Capitalism, of course, tries to get around these limits — the drive for profit maximization compels it to do so. But how does it manage to find the purchasing power needed to keep the system not only running at a steady state of equilibrium (“simple reproduction”) but continuously growing (“expanded reproduction”)?

This question was in Luxemburg’s mind as she turned to an intense study of non-Western societies between 1907 and 1912, when she taught Marxist theory and the history of economics at the SPD school in Berlin. Guided by the intuition that capitalism cannot extricate itself from crises by remaining on its home turf, she explored an array of precapitalist societies — ancient Greece and Rome, feudal Europe — as well noncapitalist ones that were still existing in her own time.

These included the Australian aborigines, the Lunda Empire of south-central Africa, the Kabyles and Arabs of North Africa, and the Iroquois and Seri of North America. Other societies that Luxemburg took into account were the Botocudo and Bororó of South America, the Aka, Twa, and Chewa of Central Africa, and the Mincopie, Kubu, and Aeta of South and East Asia. Writing at a time when most Europeans — including many socialists — stressed the “inferiority” of non-Western peoples, she singled out the positive contributions that their communal forms of living made.

For Luxemburg, “communist ownership of the means of production afforded, as the basis of a rigorously organized economy, the most productive social labor process and the best assurance of its continuity and development for many epochs.” Exploring such formations with an eye to how they could inform the nature of a future socialist society, she mercilessly castigated the drive of Western capitalism to undermine and destroy them. The bulk of her notes, lectures, and essays on this subject were only discovered relatively recently and appeared in 2013 for the first time in English translation in volume one of her Complete Works.

Expanded Reproduction

Luxemburg summarized her studies in a 1911 draft of Introduction to Political Economy — one of her most important books, which was published only after her death. She argued that the capitalist mode of production was “still able to achieve powerful expansion” by encroaching upon and suppressing forms of production deemed “backward” by capitalist criteria:

But precisely through this development capitalism becomes caught in a fundamental contradiction. The more that capitalist production takes the place of more backward forms, the more tightly the limits placed on the market by the interest of profit constrict the need of already existing capitalist firms to expand. The matter becomes clear if we imagine for a moment that the development of capitalism has proceeded so far that on the whole Earth everything that people produce is produced capitalistically, i.e., only by private capitalist entrepreneurs in large firms with modern wage-workers. Then the impossibility of capitalism clearly appears.

In the course of delving deeper into this problem in The Accumulation of Capital, Luxemburg became profoundly dissatisfied with Marx’s discussion of expanded reproduction of capital at the end of volume two of Capital. Marx had left this book unfinished at his death in 1883 and it was edited for publication by Friedrich Engels in 1885.

In part three of Capital’s second volume, Marx put forward a series of mathematical formulas that sought to provide an abstract model of the expanded reproduction of the entire social capital. In doing so, he assumed away — “for purposes of simplification” — foreign trade and realization crises, treating the entire world as if it were a single capitalist society. Marx fully understood that this model did not prevail in the “real” world: the law of value, he consistently held, is a law of the world market. As he wrote in volume two: “The circulation of industrial capital is characterized by the many-sided character of its origins, and the existence of the market as a world market.”

Marx made these “simplifying assumptions” not to deny capitalism’s drive for global dominance but rather to focus on what he considered to be its essential feature: the preponderance of means of production over means of consumption, or the domination of dead labor (constant capital) over living labor (which in capitalism takes the form of variable capital). For Luxemburg, however, Marx’s unfinished schema — he was revising it as late as 1881 — failed to explain the necessity for capitalism to engage in imperialist expansion.

Luxemburg’s critique of Marx in The Accumulation of Capital is often misrepresented, perhaps because many do not seem to take the trouble to read the entire work or familiarize themselves with volume two of Capital. Yet Luxemburg clearly stated that her book does not consist of a generalized critique of Marx but rather tackles (as she put it in the Anti-Critique) “a purely theoretical question about a complicated technical issue involving abstract scientific analysis.”

She did not say Marx was Eurocentric, failed to support anti-colonial struggles, or celebrated capital’s “civilizing mission” of taking over and “modernizing” the non-Western world. She was fully aware that he tied the birth and expansion of capitalism to the trans-Atlantic slave trade and colonialism in such works as The Poverty of Philosophy (1847) and volume one of Capital (1867). 

Nor did Luxemburg accuse Marx of ignoring or downplaying the suffering imposed upon indigenous peoples by capitalism and colonialism. She instead held that his abstract model of expanded reproduction at the end of volume two was not informed by his analyses of capitalism’s global character.

This deeply concerned her, since his abstraction from foreign trade and realization crises could be read — and was read by most of her critics in the Second International — as suggesting that capital accumulation could in principle go on forever. If that was so, Luxemburg argued, it followed that creating a socialist society was not a historical necessity but merely a pious wish.

Effective Demand

Luxemburg’s analysis centers on effective demand. Since the value of commodities cannot be realized (and thereby enter the circuits of capital) unless they are purchased and consumed, the inability of workers and capitalists within a given capitalist society to supply effective demand threatens to throttle capital accumulation.

Capitalism works to overcome this tendency to overproduction and underconsumption by finding — and creating — the effective demand it needs in the noncapitalist world. It destroys precapitalist “natural” economies that are based on self-sufficient, nonmonetary social relations and transforms them into adjuncts of capital accumulation. It does so with violence, fraud, deception, and in some cases genocide — the term itself did not exist in Luxemburg’s time, but her searing critique of German imperialism’s effort to exterminate the Nama and Herero people in Southwest Africa pinpoints the exact process.

According to Luxemburg, we cannot explain such acts in terms of the subjective motives of “bad capitalists” (as if there are good ones). Imperialism is not primarily driven by politics or ideology, although both clearly play an important role in facilitating the process. It is driven by the logic of capital itself. That is why it is embraced by both autocratic and “democratic” forms of capitalism.

Forcing peasants off the land; destroying their indigenous communal social relations and having them sell their labor power for wages; compelling them to use those wages (minimal as they be) to purchase goods produced in the imperialist metropole instead of by themselves — all of this, and much more, Luxemburg argued, is how capitalism obtains the effective demand that is otherwise unavailable to it.

One of many examples is what the British did to India: prior to their arrival, India was a self-sufficient producer of textiles, many of the finest quality. British imperialism destroyed its textile industry in order to obtain a new market for textiles made in Manchester. It is not without reason that eschewing British imports by using homespun clothing was such a central component of the campaign for Indian national independence.

Another example comes from British rule over Egypt. Britain deliberately provided high-interest loans to the country’s autocratic rulers before invading when the Egyptian state couldn’t pay the loans back, proceeding to sell off the country’s communal lands to private investors. The specifics may vary depending on the time and place, but Luxemburg would not be surprised to see the process occurring throughout the Global South today, even if the culprits are no longer restricted to Western capitalists, with states like Japan and China also involved.

Dead and Living Labor

Luxemburg’s Accumulation of Capital is gaining a renewed hearing from contemporary socialist, decolonial, and anti-racist activists and thinkers, since it posits an intrinsic connection between capitalism and imperialism — and by implication, between racism and capital accumulation, even though she did not explicitly theorize the latter. As she writes in The Accumulation of Capital:

While it is true that capitalism lives from non-capitalist formations, it is more precise to say that it lives from their ruin; in other words, while this non-capitalist milieu is indispensable for capitalist accumulation, providing its fertile soil, accumulation in fact proceeds at the expense of this milieu, and is constantly devouring it. Historically speaking, the accumulation of capital is a process of metabolism occurring between capitalist and pre-capitalist modes of production: i.e., accumulation of capital cannot proceed without these pre-capitalist modes of production, and yet accumulation consists in this regard precisely in the latter being gradually swallowed up and assimilated by capital. Accordingly, capital accumulation can no more exist without non-capitalist formations, than these are able to exist alongside it. It is only in the constant and progressive erosion of these non-capitalist formations that the very conditions of the existence of capital accumulation are given.

Kohei Saito has recently argued that Luxemburg’s invocation of the metabolic relation between capitalist and precapitalist modes of production contains an implicit ecological critique of capitalism: “Luxemburg found the absolute limit to capital in its dependence upon this kind of unequal exchange with the Global South.”

Michał Kalecki, the renowned Polish economist, once said that The Accumulation of Capital supplied “the clearest formulation of the problem of effective demand until Keynes.” Luxemburg might have been amused, had she lived to see it, to find herself praised for anticipating the work of a figure whose aim was to save capitalism, when hers was to destroy it.

But there are more important reasons to question the central role played by effective demand in The Accumulation of Capital. Effective demand operates on the level of the market, and the market is an expression of underlying relations of production. Central to the latter is the domination of constant capital (dead labor, machinery, etc.) over variable capital.

Profit maximization means raising the productivity of labor, and this is best achieved by replacing living labor with labor-saving devices. As a result, the sole source of value, labor power, diminishes relative to the amount of accumulated capital, and a tendential decline in the rate of profit results.

Faced with this problem, capitalists respond by decreasing investments in less profitable sectors, as in recessions. This leads to layoffs and a decline in workers’ living standards. It appears, from the phenomenal standpoint of the market, that a lack of effective demand is what caused the crisis. But in reality, the lack of effective demand is actually the effect of the crisis in production.

Capitalists work to counteract declines in profit rates by increasing the rate of exploitation, offshoring productive facilities to low-wage areas, using technologies to extract natural resources more efficiently, and so on. We can therefore see imperialism as primarily driven not by the lack of effective demand but by capital’s impulse to accentuate the domination of dead over living labor.

A Closed System

Luxemburg rejected this perspective because she was living in an era when capitalism was awash with super-profits from imperialism. Yet ironically, it is precisely Marx’s “simplifying assumptions” at the end of volume two of Capital that provide a basis for theorizing the link between capitalism and imperialism today.

As the mass of accumulated capital grows to immense proportions, while the non- or under-employment of labor continues apace, capitalism encounters a profit squeeze. What better way to try and counteract this tendency than by increasing the exploitation of the Global South, which contains both the largest number of peasants still attached to the land and the largest proportion of yet-to-be-accessed natural wealth?

The argument that capital accumulation depends upon the existence of noncapitalist societies may have made sense in Luxemburg’s time, when most of the world was not capitalist. Today, however, virtually the entire world is capitalist, so how can capital accumulation continue in a world that is fully capitalist?

One can argue there are still noncapitalist sectors within capitalist societies, but this hardly provides an adequate answer. After all, the noncapitalist sectors within Western societies were much larger in Luxemburg’s time than they are today, and yet she never suggested that they could supply the purchasing power required to consume the surplus product.

She did not make this argument for a good reason. Since the mass of accumulated capital is much greater in capitalist societies than noncapitalist ones, and the noncapitalist sectors are correspondingly much smaller, there simply is no way for the latter to provide the purchasing power needed to reproduce the value of the former.

If matters were any different, there would have been no need for Luxemburg to write The Accumulation of Capital. Irony or not, it appears that Marx’s theoretical assumption of a closed capitalist society composed of workers and capitalists with no “outside” to capitalism is beginning to match actual reality, even though noncapitalist formations within capitalist societies clearly persist.

Socialist Agency

Another problem posed by the argument in The Accumulation of Capital concerns the question of agency. Although Luxemburg held that capitalism must collapse once it takes over the entire world, she was too much of a revolutionary to accept such fatalism. She insisted that the proletariat would rise up and put an end to capitalism “long before” that terminal point was reached. But did that conclusion flow from her theory of accumulation, or was it dragged in by an act of will?

Moreover, this subjective agency that would create socialism was located in the capitalist West. Luxemburg held that noncapitalist or semicapitalist societies in which the proletariat was a small minority could not achieve a transition to socialism, at least not for a long time. She rejected out of hand the notion that socialism could be created by a minoritarian working class, while at the same time holding that the peasantry was not socialist since its members hungered for private ownership of the land.

Unlike the late Marx, Luxemburg rejected the notion that Russia, which was 90 percent peasant at that time, could achieve a socialist revolution on the basis of such communal forms as the obshchina and mir. She passionately supported anti-colonial revolts, but not on the grounds that they were or could be socialist.

Luxemburg entrusted her hopes for socialism to countries where the proletariat constituted the vast majority of the populace, since for her, there could be no socialism without democracy and no democracy without socialism. The latter argument remains her most inspiring declaration. But she combined her theory of capital accumulation with an overly restrictive conception of revolutionary forces that does not make sense for today’s world.

These limitations aside, The Accumulation of Capital remains one of the greatest works ever composed on the integral link between capitalism and imperialism. Just as Luxemburg never stopped returning to Marx, even when criticizing him, we too have much to gain from a critical encounter with her work as a revolutionary activist, political theorist, and economist.