Rick Kuhn’s Henryk Grossman and the Recovery of Marxism (University of Illinois Press/Amazon) is not just another biographical sketch of a Marxian economist. In fact, it is an authoritative attempt to understand and interpret Grossman’s contributions to the Marxist critique of political economy as realizations of his lifelong commitment to the working class and revolutionary politics. The book begins with a comprehensive and lucid survey of Grossman’s political activism at the turn of the twentieth century, when capitalist expansion, intensification and competition were increasingly met with a rise in the self-activity and organization of the working class against exploitation and national oppression. The biography shows how Grossman’s approach to Marxism and his theoretical agenda congealed against this backdrop. This entirely new approach to Grossman’s Marxism makes his complex theoretical insights equally accessible to political economists, activists and non-academic audience. The following discussion with Rick Kuhn touches upon some of the themes in Grossman’s life and work detailed in the book.
Radical Notes (RN): Let us begin by asking you about the meaning of the title that you chose for this tremendous biography, Henryk Grossman and the Recovery of Marxism. It seems it has a dual connotation. On the one hand, it may signify that the book tries to detail Grossman’s role in the recovery of Marxism during his own time, while on the other, it might be an attempt to assess the importance of Grossman’s contributions for the “recovery of Marxism” in our times. Is this ‘ambiguity’ intended, or we are just reading between the lines?
Rick Kuhn: The history of Marxism is not simply a history of doctrines and debates. We have to apply historical materialism to Marxism itself. Marx’s insights were only possible once capitalist society and particularly working class struggle had reached a certain level of development, in the middle of the nineteenth century. Without the growth of capitalist production and hence an extensive working class, Marxism, the theory and practice of working class revolution, is inconceivable. Later insights into the nature of capitalist society, and even more broadly, human society and its relations with nature, emerged in the context of the growth and achievements of the working class and the engagement of Marxists with new problems.
But the curve of Marxist theory is not a monotonic, upward sweep of accumulating insights. Particularly during periods of working class defeat or the adaptation of working class institutions to capitalism, earlier insights have been lost, distorted and denied. Under new, more favorable circumstances, later Marxists rediscover or reinvent them. Thus struggles for women’s liberation and over the environment were the contexts for recoveries and extensions of Marx’s previously neglected, misunderstood or obscured analyses of women’s oppression and capitalism’s implications for the natural world. Hence the work of recovery, in the first case, by Hal Draper, Barbara Leacock, Karen Sacks during the late 1960s and 1970s, and in the second by Paul Burkett and John Bellamy Foster around the turn of the millennium.
Against the background of his experiences in the workers’ movement before and after the First World War, and particularly the upsurge in class struggle during the period of the Russian revolution, Henryk Grossman recovered and extended some fundamental aspects of Marx’s critique of political economy. But Grossman’s best known publications during the late 1920s and early 1930s appeared after the revolutionary wave had crested. He continued his work in Marxist economics through to the 1940s and also made important contributions to the history of science. As Victor Serge put it, the 1930s were ‘the midnight in the century’. As a consequence of Stalinism and fascism the workers’ movement suffered not only terrible physical but also theoretical setbacks.
Hence, as you correctly observe, the need to recover Grossman’s own analyses and to re-recover those of Marx. The German New Left rediscovered Grossman during the 1960s in the context of a massive, international revival of class and other social struggles. I have continued this process. The later stages of my project happily coincided with the movement against capitalist globalization and the largest anti-war movement in history.
RN: One aspect that strikes us most in the text is that you have devoted around one third of the biography to Grossman’s formative period – to his politics in Poland and his contributions to a Marxist theorization of the national and Jewish questions. One reason, which immediately comes to mind, might be an attempt to rebut the general image of Grossman as an academic economist, not as a communist revolutionary, which you have effectively portrayed him to be. What lessons do we get from his early political life and his contributions to direct political questions like the question of national self-determination and its relationship with the proletarian revolution?
Kuhn: Those aware of Grossman’s work in economics have generally had little awareness, to put it kindly, of his engagement with working class organizations and their struggles. Just reading his publications, it is not difficult to spot his identification with the interests of the working class and commitment to the goal of socialist revolution. But those who propound the dominant interpretation of his economics still ignore this and have not bothered to investigate the details of his non-academic life especially before the First World War.
Although Grossman’s family background was bourgeois, he became an organic intellectual of the working class. In other words, experiences in his twenties, with building the organizations of the Jewish workers in Galicia (Austria-Hungary’s Polish province) from about 1902, at the latest, until after 1908 shaped his outlook. Despite some political shifts, for the rest of his life his understanding of the world was Marxist.
Grossman was the theoretician and outstanding early leader of the Jewish Social Democratic Party of Galicia. Before the foundation of the Jewish Social Democratic Party (JSDP), in 1905, he provided assistance to Marxists in Russia’s Polish territories. They were members of the Social Democratic Party of the Kingdom of Poland and Lithuania, to which the exiled Rosa Luxemburg belonged, and particularly the Bund, the organization of Jewish workers and then the largest Marxist organization in the Russian empire. During the waves of demonstrations, strikes and protests that swept Austria-Hungary when the 1905 Revolution was convulsing Russia, Grossman was a full-time revolutionary and agitator.
Jewish workers in Galicia, who overwhelmingly spoke Yiddish, experienced national oppression and exploitation. To mobilize them into the international workers movement they needed, Grossman argued, their own political party through which they could struggle for their own emancipation and that of the entire working class. The JSDP was a means of fighting oppression and exploitation and combating the politics of other left wing currents in Galicia. To neglect their national oppression, as the Polish nationalists of the Polish Social Democratic Party of Galicia did, left them open to the appeals of Jewish nationalists. Ignoring their exploitation and common interests with Polish and Ukrainian workers in Galicia and the international movement could only weaken their defense of their wages and conditions and the overall struggle for socialism.
RN: What are the major facets of Grossman’s rediscovery of the Marxist critique of political economy?
Kuhn: Key elements of Grossman’s economic work were already evident in his first publication on crisis theory, a lecture delivered in 1919. They were the relationship of economics to the class struggle, the importance of the distinction between use and exchange-value, Marx’s method in Capital and the inevitability of economic crises under capitalism.
The last is best known. Grossman argued that the tendency for the rate of profit to fall, discussed by Marx in volume three of Capital, constitutes a propensity for the system to break down. The tendency occurs because investment in improved labour-saving technology increases the ratio of capitalists’ outlays on machinery, equipment, buildings etc. compared with what they spend on purchasing labour power. It is only labour power, however, that creates new value, the basis of profits. Following and extending Marx, Grossman identified a variety of countervailing factors that can help maintain or improve profit rates. In fact he went into some detail about all the processes critics allege that he neglected. The offsetting mechanisms mean that the tendency to break down takes, in the longer term, the shape of successive crises rather than a single downward path to collapse.
Capitalist crises can also, Grossman pointed out, be understood in terms the impossibility of the outputs of different industries being consistently in the right proportions to maintain smooth growth. Both explanations of economic crises ultimately derive from the contradiction at the heart of capitalist production which is simultaneously the creation of use values, for the satisfaction of human needs, and of values, in the pursuit of profit.
RN: Throughout your work, not only in the book but also in other research articles, you have questioned the economistic and schematic interpretations of Grossman’s theory of crises. In fact you find the intersection between revolutionary politics and his classical Marxist theory of crises based on the decline in the rate of profit as “the core of Grossman’s major theoretical project in economics”. Could you elaborate on this?
Kuhn: I tried to make the biography of Grossman as accessible as possible. This included a style that is, hopefully, direct and engaging, and giving prominence to the story of Grossman’s life, the conflicts in which he was involved and the content of his writings. So references to subsequent evaluations of his ideas are relegated to the endnotes. With one exception. Giacomo Marramao observed that in ‘Lukács’s History and Class Consciousness that one finds the philosophical equivalent of Grossmann’s great attempt at a critical-revolutionary re-appropriation of Marxian categories.’ This is very important, although it needs to be extended because both Lukács and Grossman drew on Lenin’s recovery of Marxist politics and the inspiration of the Russian revolution. Both embraced Lenin’s theory of revolution and the revolutionary party.
Grossman explicitly stated that his best known work, The Law of Accumulation and Breakdown of the Capitalist System, was designed to supplement Marxist discussions about political revolution by examining the logic of economic crisis, which is an element in revolutionary situations. In relation to the dominant interpretation of Grossman-that he had a mechanical theory of economic breakdown-it is worth noting that he wrote this not in some obscure unpublished manuscript or letter, but in the book’s introduction.
The argument in Marx’s Capital, Grossman demonstrated, moves from discussion of fundamental, abstract features of capitalism through a series of steps to the everyday appearance of capitalist reality. The structure of Grossman’s book is similar. The final chapter, which is sadly not included in the abridged English translation, operated at a concrete level of analysis, focusing on the implications of the preceding analysis of crises for the class struggle. The purpose of the entire argument was to explore the objective preconditions for successful revolutionary action by the working class.
RN: Can you tell us briefly about Grossman’s understanding of imperialism? To what extent do his theorizations in this regard converge with and diverge from other major theorists of imperialism, especially, Lenin and Luxemburg?
Kuhn: This is one of my current areas of research. Like Luxemburg, Grossman argued that modern imperialism was a consequence of the advanced stage of capital accumulation and consequently the intensification of capitalism’s tendency to break down. But he rejected Luxemburg’s assertion that capital’s survival depends on finding non-capitalist markets in which to realize surplus value. For Grossman, the problem lies not in inadequate sales of commodities, but the system’s inability to create enough surplus value. Unequal exchange and monopoly control of key resources, imperialism, are responses to this problem of securing additional surplus value for metropolitan capitals. Meanwhile, the speculative export of capital and domestic economic speculation are consequences of the inability of capital to find profitable outlets for productive investment.
Grossman regarded Lenin’s Imperialism, the Highest Stage of Capitalism as containing descriptive insights, but as deficient when it came to providing an explanation of the logic of imperialism. He also refuted Hilferding’s emphasis, which Lenin took over, on the dominance of ‘finance capital’ as an ongoing feature of contemporary capitalism.
RN: You mention in the book that Sweezy in his survey of Marxist economic theory criticized Grossman’s crisis theory and Grossman in turn termed his criticism as “distortions”. Can you briefly tell us about these claims and counter-claims?
Kuhn: Paul Sweezy’s The Theory of Capitalist Development, published in the early 1940s, has had a massive influence on radical economics in the United States. Its systematic and accessible introduction to Marxist economics was a major achievement. The book also introduced Grossman’s work, most of which was not available in English, to a large audience and included some favorable comments about some of his secondary arguments. But it simply ignored Grossman’s explanation of why crises will occur as the rate of profit declines, but well before it reaches zero. To justify his verdict that Grossman had a ‘mechanistic’ approach, Sweezy caricatured the role played by Otto Bauer’s reproduction schemes in Grossman’s analysis. In Research in Political Economy (preprint), I synthesized Grossman’s various published and unpublished replies to his critics, most written before 1942, which nevertheless deal with Sweezy’s unoriginal objections.
Interestingly, Sweezy takes the structure of his own explanation of crises, the balance between tendency and countertendencies, from Marx’s and Grossman’s discussions of the tendency for the rate of profit to fall. Both Luxemburg’s and Sweezy’s approaches were underconsumptionist. Luxemburg insisted that capitalism tends to break down. Sweezy, like Keynes, argued that ‘the deliberate action of the state’-expanded government spending-could theoretically prevent ‘chronic depression’.
RN: How relevant is Grossman’s approach today?
Kuhn: Grossman provides a framework for understanding fundamental contemporary developments. It highlights the ongoing crisis-prone nature of capitalism and developments that help restore profit rates. Neo-liberal policies-attacks on wages and conditions, dismantling of the welfare state, knocking down barriers to trade with less developed parts of the world-are not the result of the fevered imaginings of delusional politicians, but efforts to restore profits rates. The same is true of the United States’ current imperialist adventures in Iraq and Afghanistan. Grossman’s discussion of speculative activity as a response to capitalism’s crisis tendencies provides insights into the phenomenal growth in global financial flows over recent decades.
RN: As you note, “Changes in the level of population, through the availability of labor power, influence capitalism’s breakdown tendency. Capital accumulation increases the need for workers to valorize capital. Eventually the impossibility of this valorization, because population growth is too slow, gives rise to crisis and unemployment: ‘Unemployment was a consequence of insufficient population!’ The need for labor power pushes capitalists to attempt to extend the length of the working day, to seek supplementary sources of surplus value and labor on the world market. The mercantilist preoccupation with population … and early colonial policy were not about finding markets. They were concerned with capitalist production and hence the need for labor. As much of the labor used in colonial capitalist production was extracted from slaves, Grossman developed, for the first time, Marx’s comments on the importance of the slave trade for the emergence of capitalism in an account of the trade’s origins and significance from the fifteenth century.” (133)
Can you tell us more about Grossman’s analyses in this regard?
Kuhn: Grossman had a long term interest in slavery as an institution under different modes of production. In a manuscript, probably written in the early 1920s, he dealt with slavery among Christian peoples to the ninth century. During the 1930s, he noted that the development of machinery in the ancient world was in response to problems that could not be solved by the application of human labor because slavery could be regarded as a natural perpetuum mobile, a machine that continues to operate without the expenditure of additional energy. In a letter to Horkheimer he offered a critique of the depiction of slavery in Margaret Mitchell’s bestselling novel, Gone with the Wind. The Law of Accumulation examines the role of slavery during the early period of Spanish and Portuguese colonialism, and also identifies forms of tribute labor imposed on native populations of Central and South America. The account of slavery also deals with French and English colonial expansion and the institution’s economic significance in the Americas into the 19th century. He was making an historical case against Luxemburg’s explanation of imperialism, in terms of the realization of surplus value. So, rather than offering a history of colonial economies, Grossman explicitly confined himself to demonstrating that the underlying logic of capitalist territorial expansion was the creation of surplus value.
RN: Grossman’s The Law of Accumulation and other major works were conceived during his association with the Institute for Social Research which gave rise to the Frankfurt School. However, it seems that after Carl Grünberg’s death, Grossman distanced himself from the mainstream activities and engagements of the Institute. One can understand the political and organizational reasons for his disillusionment, but were there theoretical and methodological reasons too?
Kuhn: In Frankfurt am Main and exile, through to the end of the 1930s, Grossman was dedicated to the Institute and valued collaboration with his colleagues. In New York, however, the core of the Institute around Max Horkheimer moved away from Marxism, particularly its stress on the role of the working class in liberating humanity. In theoretical terms, this culminated in Horkheimer and Theodor Adorno’s The Dialectic of Enlightenment of 1944, which rejected the concept of scientific explanation. Grossman remained a Marxist. He stood by and developed his own earlier analyses. But the desperation of the midnight in the century affected him and led to a massive contradiction in his thinking. After being very hostile to Stalinism for a couple of years, he became an uncritical supporter of the Soviet Union around 1936. So distinct differences at the levels of high theory and more concrete political analysis emerged between Grossman and the Horkheimer clique. In addition, because of a financial crisis, Horkheimer and Friedrich Pollock tried to drive as many members of the Institute as possible off the payroll during the early 1940s. This led to personal stresses and hostilities.
RN: In Chapter 5, the section that discusses the reception of The Law of Accumulation is titled, “An Economic Theory without a Political Home”. Can you please give our readers a glimpse of this ‘homelessness’ of Grossman’s theory?
Kuhn: The roots of the widespread misinterpretation of Grossman’s arguments lie in the initial reception ofThe Law of Accumulation. Bourgeois economists, social democrats and orthodox Communists were all hostile. Conservatives and social democrats obviously disliked the argument that capitalism is inherently crisis-prone and that the solution is workers’ revolution.
The defeat of the Russian revolution and the victory of state capitalism-personified in Stalin-led to the establishment of dogmas in all areas of Soviet intellectual life, including genetics. The explanation of economic crises which Grossman advocated did not comply with the views of Stalin’s man in economics. Jenö Varga explained crises in particularly crude underconsumptionist terms. Grossman therefore had to be wrong.
By the 1930s, social democracy and Stalinism dominated working class organizations around the world. Representatives of both currents accused Grossman of believing that capitalism would mechanically break down and that organized working class action was therefore superfluous. So no significant section of the labour movement took up his analysis.
RN: Despite a rediscovery of Grossman’s works in the late 1960s, till now his major book has been translated in English only in an abridged form, and your standard biography has only just appeared. Does this not show that this ‘homelessness’ continues? What could possibly be the reason behind this?
Kuhn: Yes, to some extent. But today the nature of the homelessness is different and less absolute. From the 1920s to the 1960s, the influence of Stalinism and social democracy meant that the space for classical Marxist politics and theory in the labor movement was very restricted. That has changed. The 1960s and 1970s saw the emergence of a new or revitalized revolutionary left. Then the downturn in the levels of class struggle around the world during the late 1970s through to the 1990s, coupled with many defeats weakened the organized labor movement. The end of state capitalism in Russia demoralized the Stalinist left, old and new, and led to the collapse or final embrace of reformism by many organizations which had illusions in the USSR. In many countries, the neo-liberal trajectory of social democratic parties since the end of the long boom, in the mid 1970s, weakened their leftist pretensions and eroded their memberships.
Of course this is a generalization, there have been ups and downs. The Brazilian Workers Party, for example, emerged out of working class mobilizations before emulating the neo-liberal behavior of its older social democratic siblings. In South Korea, Italy and France there have been some periods of quite sustained class struggles. And there have been important social movements, especially against the USA’s wars.
Overall, then, the left has declined drastically in size. But there is somewhat more space for currents, like that of the unorthodox Trotskyist tradition, to which I belong, which are open to Grossman’s analysis.
RN: Since for several years now you have been working on Henryk Grossman, can you tell our readers about your initial motivation? Also, what went into making the book? What are your hopes for the book regarding its contributions and achievements, politically and within Marxist circles?
Kuhn: Through Anwar Shaikh’s excellent 1978 essay on the history of Marxist crisis theory I became aware of Grossman. The fall of the Berlin Wall in 1989 prompted me to start learning German again. Before that my research was mainly on Australian politics and political economy, an area which I continue to explore. This, however, does not provide much scope for international travel. I wanted to do some work on Germany andAustria. Once I had a certain proficiency in German, around 1993, I began the Grossman research.
Studying Grossman was, in part, a search for my own roots. Not only because my parents were Jewish refugees from Vienna-Grossman’s home for several years-and my mother’s mother was, I discovered as a bi-product of my project, even born in a Galician shtetl (Jewish village) where there was a JSDP branch. Tracing Grossman’s story was also an investigation of my heritage as a socialist: the history of the institutions and struggles of the labor movement.
The research has taken me on many journeys through time, space and different cultures. A couple of examples. To grasp Grossman’s experiences in Galicia it was necessary not only to understand the institutions of the Austro-Hungarian empire and the history of eastern European Jewry but also to trace the activities of the JSDP, which led me to learn to read Yiddish and to add an appreciation of klezmer to my musical tastes. Grossman participated in or was affected by Marxist debates about the best way to organize and the national question, the zig-zags in the line of the Communist International, particularly as they impacted on the Polish and German Communist Parties. I stalked primary material from Kraków and Warsaw to Boston and Berlin, from Vienna and New York to Frankfurt am Main and the village of Tellow in the north-eastern German state of Mecklenburg-Vorpommern. In New York, the Australian novelist Christina Stead and her partner, the banker, writer and economist, William Blake were amongst Grossman’s closest friends. This led me into their biographies and a key source, Stead’s papers in the National Library of Australia back in Canberra, my hometown.
Hopefully my detailed and sympathetic account of Grossman’s life and work will disrupt the cycle of distortion of his ideas that social democrats and Stalinists began in 1929. Grossman vindicated the Marxist synthesis of theory with practice, analysis of objective realities and constraints with strategy and tactics designed to realize the working class’s capacity to be an historical, revolutionary subject. He provided useful tools for people who not only want to understand but also want to change the world. But I have no illusions about the impact of my publications on the level of the class struggle, the fundamental driver of socialist politics. There is no substitute for practical activity: building campaigns against the immediate consequences of capitalist exploitation and oppression, and constructing an organization capable of merging them in the struggle for socialism.
Radical Notes
On Henryk Grossman, A Revolutionary Marxist – An Interview with Rick Kuhn
Rick Kuhn’s Henryk Grossman and the Recovery of Marxism (University of Illinois Press/Amazon) is not just another biographical sketch of a Marxian economist. In fact, it is an authoritative attempt to understand and interpret Grossman’s contributions to the Marxist critique of political economy as realizations of his lifelong commitment to the working class and revolutionary politics. The book begins with a comprehensive and lucid survey of Grossman’s political activism at the turn of the twentieth century, when capitalist expansion, intensification and competition were increasingly met with a rise in the self-activity and organization of the working class against exploitation and national oppression. The biography shows how Grossman’s approach to Marxism and his theoretical agenda congealed against this backdrop. This entirely new approach to Grossman’s Marxism makes his complex theoretical insights equally accessible to political economists, activists and non-academic audience. The following discussion with Rick Kuhn touches upon some of the themes in Grossman’s life and work detailed in the book.
Radical Notes (RN): Let us begin by asking you about the meaning of the title that you chose for this tremendous biography, Henryk Grossman and the Recovery of Marxism. It seems it has a dual connotation. On the one hand, it may
signify that the book tries to detail Grossman’s role in the recovery of Marxism during his own time, while on the other, it might be an attempt to assess the importance of Grossman’s contributions for the “recovery of Marxism” in our times. Is this ‘ambiguity’ intended, or we are just reading between the lines?
Rick Kuhn: The history of Marxism is not simply a history of doctrines and debates. We have to apply historical materialism to Marxism itself. Marx’s insights were only possible once capitalist society and particularly working class struggle had reached a certain level of development, in the middle of the nineteenth century. Without the growth of capitalist production and hence an extensive working class, Marxism, the theory and practice of working class revolution, is inconceivable. Later insights into the nature of capitalist society, and even more broadly, human society and its relations with nature, emerged in the context of the growth and achievements of the working class and the engagement of Marxists with new problems.
But the curve of Marxist theory is not a monotonic, upward sweep of accumulating insights. Particularly during periods of working class defeat or the adaptation of working class institutions to capitalism, earlier insights have been lost, distorted and denied. Under new, more favorable circumstances, later Marxists rediscover or reinvent them. Thus struggles for women’s liberation and over the environment were the contexts for recoveries and extensions of Marx’s previously neglected, misunderstood or obscured analyses of women’s oppression and capitalism’s implications for the natural world. Hence the work of recovery, in the first case, by Hal Draper, Barbara Leacock, Karen Sacks during the late 1960s and 1970s, and in the second by Paul Burkett and John Bellamy Foster around the turn of the millennium.
Against the background of his experiences in the workers’ movement before and after the First World War, and particularly the upsurge in class struggle during the period of the Russian revolution, Henryk Grossman recovered and extended some fundamental aspects of Marx’s critique of political economy. But Grossman’s best known publications during the late 1920s and early 1930s appeared after the revolutionary wave had crested. He continued his work in Marxist economics through to the 1940s and also made important contributions to the history of science. As Victor Serge put it, the 1930s were ‘the midnight in the century’. As a consequence of Stalinism and fascism the workers’ movement suffered not only terrible physical but also theoretical setbacks.
Hence, as you correctly observe, the need to recover Grossman’s own analyses and to re-recover those of Marx. The German New Left rediscovered Grossman during the 1960s in the context of a massive, international revival of class and other social struggles. I have continued this process. The later stages of my project happily coincided with the movement against capitalist globalization and the largest anti-war movement in history.
RN: One aspect that strikes us most in the text is that you have devoted around one third of the biography to Grossman’s formative period – to his politics in Poland and his contributions to a Marxist theorization of the national and Jewish questions. One reason, which immediately comes to mind, might be an attempt to rebut the general image of Grossman as an academic economist, not as a communist revolutionary, which you have effectively portrayed him to be. What lessons do we get from his early political life and his contributions to direct political questions like the question of national self-determination and its relationship with the proletarian revolution?
Kuhn: Those aware of Grossman’s work in economics have generally had little awareness, to put it kindly, of his engagement with working class organizations and their struggles. Just reading his publications, it is not difficult to spot his identification with the interests of the working class and commitment to the goal of socialist revolution. But those who propound the dominant interpretation of his economics still ignore this and have not bothered to investigate the details of his non-academic life especially before the First World War.
Although Grossman’s family background was bourgeois, he became an organic intellectual of the working class. In other words, experiences in his twenties, with building the organizations of the Jewish workers in Galicia (Austria-Hungary’s Polish province) from about 1902, at the latest, until after 1908 shaped his outlook. Despite some political shifts, for the rest of his life his understanding of the world was Marxist.
Grossman was the theoretician and outstanding early leader of the Jewish Social Democratic Party of Galicia. Before the foundation of the Jewish Social Democratic Party (JSDP), in 1905, he provided assistance to Marxists in Russia’s Polish territories. They were members of the Social Democratic Party of the Kingdom of Poland and Lithuania, to which the exiled Rosa Luxemburg belonged, and particularly the Bund, the organization of Jewish workers and then the largest Marxist organization in the Russian empire. During the waves of demonstrations, strikes and protests that swept Austria-Hungary when the 1905 Revolution was convulsing Russia, Grossman was a full-time revolutionary and agitator.
Jewish workers in Galicia, who overwhelmingly spoke Yiddish, experienced national oppression and exploitation. To mobilize them into the international workers movement they needed, Grossman argued, their own political party through which they could struggle for their own emancipation and that of the entire working class. The JSDP was a means of fighting oppression and exploitation and combating the politics of other left wing currents in Galicia. To neglect their national oppression, as the Polish nationalists of the Polish Social Democratic Party of Galicia did, left them open to the appeals of Jewish nationalists. Ignoring their exploitation and common interests with Polish and Ukrainian workers in Galicia and the international movement could only weaken their defense of their wages and conditions and the overall struggle for socialism.
So Grossman belonged to the very substantial tradition of opposition to Zionism amongst Jewish socialists. This is something I particularly identify with, as a Marxist with a Jewish upbringing whose political activity includes supporting Palestinian resistance against the intrinsically racist state of Israel. The relationship between racism and capitalist interests is also a focus in my current work on anti-Muslim racism in Australia.
RN: What are the major facets of Grossman’s rediscovery of the Marxist critique of political economy?
Kuhn: Key elements of Grossman’s economic work were already evident in his first publication on crisis theory, a lecture delivered in 1919. They were the relationship of economics to the class struggle, the importance of the distinction between use and exchange-value, Marx’s method in Capital and the inevitability of economic crises under capitalism.
The last is best known. Grossman argued that the tendency for the rate of profit to fall, discussed by Marx in volume three of Capital, constitutes a propensity for the system to break down. The tendency occurs because investment in improved labour-saving technology increases the ratio of capitalists’ outlays on machinery, equipment, buildings etc. compared with what they spend on purchasing labour power. It is only labour power, however, that creates new value, the basis of profits. Following and extending Marx, Grossman identified a variety of countervailing factors that can help maintain or improve profit rates. In fact he went into some detail about all the processes critics allege that he neglected. The offsetting mechanisms mean that the tendency to break down takes, in the longer term, the shape of successive crises rather than a single downward path to collapse.
Capitalist crises can also, Grossman pointed out, be understood in terms the impossibility of the outputs of different industries being consistently in the right proportions to maintain smooth growth. Both explanations of economic crises ultimately derive from the contradiction at the heart of capitalist production which is simultaneously the creation of use values, for the satisfaction of human needs, and of values, in the pursuit of profit.
RN: Throughout your work, not only in the book but also in other research articles, you have questioned the economistic and schematic interpretations of Grossman’s theory of crises. In fact you find the intersection between revolutionary politics and his classical Marxist theory of crises based on the decline in the rate of profit as “the core of Grossman’s major theoretical project in economics”. Could you elaborate on this?
Kuhn: I tried to make the biography of Grossman as accessible as possible. This included a style that is, hopefully, direct and engaging, and giving prominence to the story of Grossman’s life, the conflicts in which he was involved and the content of his writings. So references to subsequent evaluations of his ideas are relegated to the endnotes. With one exception. Giacomo Marramao observed that in ‘Lukács’s History and Class Consciousness that one finds the philosophical equivalent of Grossmann’s great attempt at a critical-revolutionary re-appropriation of Marxian categories.’ This is very important, although it needs to be extended because both Lukács and Grossman drew on Lenin’s recovery of Marxist politics and the inspiration of the Russian revolution. Both embraced Lenin’s theory of revolution and the revolutionary party.
Grossman explicitly stated that his best known work, The Law of Accumulation and Breakdown of the Capitalist System, was designed to supplement Marxist discussions about political revolution by examining the logic of economic crisis, which is an element in revolutionary situations. In relation to the dominant interpretation of Grossman-that he had a mechanical theory of economic breakdown-it is worth noting that he wrote this not in some obscure unpublished manuscript or letter, but in the book’s introduction.
The argument in Marx’s Capital, Grossman demonstrated, moves from discussion of fundamental, abstract features of capitalism through a series of steps to the everyday appearance of capitalist reality. The structure of Grossman’s book is similar. The final chapter, which is sadly not included in the abridged English translation, operated at a concrete level of analysis, focusing on the implications of the preceding analysis of crises for the class struggle. The purpose of the entire argument was to explore the objective preconditions for successful revolutionary action by the working class.
RN: Can you tell us briefly about Grossman’s understanding of imperialism? To what extent do his theorizations in this regard converge with and diverge from other major theorists of imperialism, especially, Lenin and Luxemburg?
Kuhn: This is one of my current areas of research. Like Luxemburg, Grossman argued that modern imperialism was a consequence of the advanced stage of capital accumulation and consequently the intensification of capitalism’s tendency to break down. But he rejected Luxemburg’s assertion that capital’s survival depends on finding non-capitalist markets in which to realize surplus value. For Grossman, the problem lies not in inadequate sales of commodities, but the system’s inability to create enough surplus value. Unequal exchange and monopoly control of key resources, imperialism, are responses to this problem of securing additional surplus value for metropolitan capitals. Meanwhile, the speculative export of capital and domestic economic speculation are consequences of the inability of capital to find profitable outlets for productive investment.
Grossman regarded Lenin’s Imperialism, the Highest Stage of Capitalism as containing descriptive insights, but as deficient when it came to providing an explanation of the logic of imperialism. He also refuted Hilferding’s emphasis, which Lenin took over, on the dominance of ‘finance capital’ as an ongoing feature of contemporary capitalism.
RN: You mention in the book that Sweezy in his survey of Marxist economic theory criticized Grossman’s crisis theory and Grossman in turn termed his criticism as “distortions”. Can you briefly tell us about these claims and counter-claims?
Kuhn: Paul Sweezy’s The Theory of Capitalist Development, published in the early 1940s, has had a massive influence on radical economics in the United States. Its systematic and accessible introduction to Marxist economics was a major achievement. The book also introduced Grossman’s work, most of which was not available in English, to a large audience and included some favorable comments about some of his secondary arguments. But it simply ignored Grossman’s explanation of why crises will occur as the rate of profit declines, but well before it reaches zero. To justify his verdict that Grossman had a ‘mechanistic’ approach, Sweezy caricatured the role played by Otto Bauer’s reproduction schemes in Grossman’s analysis. In Research in Political Economy (preprint), I synthesized Grossman’s various published and unpublished replies to his critics, most written before 1942, which nevertheless deal with Sweezy’s unoriginal objections.
Interestingly, Sweezy takes the structure of his own explanation of crises, the balance between tendency and countertendencies, from Marx’s and Grossman’s discussions of the tendency for the rate of profit to fall. Both Luxemburg’s and Sweezy’s approaches were underconsumptionist. Luxemburg insisted that capitalism tends to break down. Sweezy, like Keynes, argued that ‘the deliberate action of the state’-expanded government spending-could theoretically prevent ‘chronic depression’.
RN: How relevant is Grossman’s approach today?
Kuhn: Grossman provides a framework for understanding fundamental contemporary developments. It highlights the ongoing crisis-prone nature of capitalism and developments that help restore profit rates. Neo-liberal policies-attacks on wages and conditions, dismantling of the welfare state, knocking down barriers to trade with less developed parts of the world-are not the result of the fevered imaginings of delusional politicians, but efforts to restore profits rates. The same is true of the United States’ current imperialist adventures in Iraq and Afghanistan. Grossman’s discussion of speculative activity as a response to capitalism’s crisis tendencies provides insights into the phenomenal growth in global financial flows over recent decades.
RN: As you note, “Changes in the level of population, through the availability of labor power, influence capitalism’s breakdown tendency. Capital accumulation increases the need for workers to valorize capital. Eventually the impossibility of this valorization, because population growth is too slow, gives rise to crisis and unemployment: ‘Unemployment was a consequence of insufficient population!’ The need for labor power pushes capitalists to attempt to extend the length of the working day, to seek supplementary sources of surplus value and labor on the world market. The mercantilist preoccupation with population … and early colonial policy were not about finding markets. They were concerned with capitalist production and hence the need for labor. As much of the labor used in colonial capitalist production was extracted from slaves, Grossman developed, for the first time, Marx’s comments on the importance of the slave trade for the emergence of capitalism in an account of the trade’s origins and significance from the fifteenth century.” (133)
Can you tell us more about Grossman’s analyses in this regard?
Kuhn: Grossman had a long term interest in slavery as an institution under different modes of production. In a manuscript, probably written in the early 1920s, he dealt with slavery among Christian peoples to the ninth century. During the 1930s, he noted that the development of machinery in the ancient world was in response to problems that could not be solved by the application of human labor because slavery could be regarded as a natural perpetuum mobile, a machine that continues to operate without the expenditure of additional energy. In a letter to Horkheimer he offered a critique of the depiction of slavery in Margaret Mitchell’s bestselling novel, Gone with the Wind. The Law of Accumulation examines the role of slavery during the early period of Spanish and Portuguese colonialism, and also identifies forms of tribute labor imposed on native populations of Central and South America. The account of slavery also deals with French and English colonial expansion and the institution’s economic significance in the Americas into the 19th century. He was making an historical case against Luxemburg’s explanation of imperialism, in terms of the realization of surplus value. So, rather than offering a history of colonial economies, Grossman explicitly confined himself to demonstrating that the underlying logic of capitalist territorial expansion was the creation of surplus value.
RN: Grossman’s The Law of Accumulation and other major works were conceived during his association with the Institute for Social Research which gave rise to the Frankfurt School. However, it seems that after Carl Grünberg’s death, Grossman distanced himself from the mainstream activities and engagements of the Institute. One can understand the political and organizational reasons for his disillusionment, but were there theoretical and methodological reasons too?
Kuhn: In Frankfurt am Main and exile, through to the end of the 1930s, Grossman was dedicated to the Institute and valued collaboration with his colleagues. In New York, however, the core of the Institute around Max Horkheimer moved away from Marxism, particularly its stress on the role of the working class in liberating humanity. In theoretical terms, this culminated in Horkheimer and Theodor Adorno’s The Dialectic of Enlightenment of 1944, which rejected the concept of scientific explanation. Grossman remained a Marxist. He stood by and developed his own earlier analyses. But the desperation of the midnight in the century affected him and led to a massive contradiction in his thinking. After being very hostile to Stalinism for a couple of years, he became an uncritical supporter of the Soviet Union around 1936. So distinct differences at the levels of high theory and more concrete political analysis emerged between Grossman and the Horkheimer clique. In addition, because of a financial crisis, Horkheimer and Friedrich Pollock tried to drive as many members of the Institute as possible off the payroll during the early 1940s. This led to personal stresses and hostilities.
RN: In Chapter 5, the section that discusses the reception of The Law of Accumulation is titled, “An Economic Theory without a Political Home”. Can you please give our readers a glimpse of this ‘homelessness’ of Grossman’s theory?
Kuhn: The roots of the widespread misinterpretation of Grossman’s arguments lie in the initial reception ofThe Law of Accumulation. Bourgeois economists, social democrats and orthodox Communists were all hostile. Conservatives and social democrats obviously disliked the argument that capitalism is inherently crisis-prone and that the solution is workers’ revolution.
The defeat of the Russian revolution and the victory of state capitalism-personified in Stalin-led to the establishment of dogmas in all areas of Soviet intellectual life, including genetics. The explanation of economic crises which Grossman advocated did not comply with the views of Stalin’s man in economics. Jenö Varga explained crises in particularly crude underconsumptionist terms. Grossman therefore had to be wrong.
By the 1930s, social democracy and Stalinism dominated working class organizations around the world. Representatives of both currents accused Grossman of believing that capitalism would mechanically break down and that organized working class action was therefore superfluous. So no significant section of the labour movement took up his analysis.
RN: Despite a rediscovery of Grossman’s works in the late 1960s, till now his major book has been translated in English only in an abridged form, and your standard biography has only just appeared. Does this not show that this ‘homelessness’ continues? What could possibly be the reason behind this?
Kuhn: Yes, to some extent. But today the nature of the homelessness is different and less absolute. From the 1920s to the 1960s, the influence of Stalinism and social democracy meant that the space for classical Marxist politics and theory in the labor movement was very restricted. That has changed. The 1960s and 1970s saw the emergence of a new or revitalized revolutionary left. Then the downturn in the levels of class struggle around the world during the late 1970s through to the 1990s, coupled with many defeats weakened the organized labor movement. The end of state capitalism in Russia demoralized the Stalinist left, old and new, and led to the collapse or final embrace of reformism by many organizations which had illusions in the USSR. In many countries, the neo-liberal trajectory of social democratic parties since the end of the long boom, in the mid 1970s, weakened their leftist pretensions and eroded their memberships.
Of course this is a generalization, there have been ups and downs. The Brazilian Workers Party, for example, emerged out of working class mobilizations before emulating the neo-liberal behavior of its older social democratic siblings. In South Korea, Italy and France there have been some periods of quite sustained class struggles. And there have been important social movements, especially against the USA’s wars.
Overall, then, the left has declined drastically in size. But there is somewhat more space for currents, like that of the unorthodox Trotskyist tradition, to which I belong, which are open to Grossman’s analysis.
RN: Since for several years now you have been working on Henryk Grossman, can you tell our readers about your initial motivation? Also, what went into making the book? What are your hopes for the book regarding its contributions and achievements, politically and within Marxist circles?
Kuhn: Through Anwar Shaikh’s excellent 1978 essay on the history of Marxist crisis theory I became aware of Grossman. The fall of the Berlin Wall in 1989 prompted me to start learning German again. Before that my research was mainly on Australian politics and political economy, an area which I continue to explore. This, however, does not provide much scope for international travel. I wanted to do some work on Germany andAustria. Once I had a certain proficiency in German, around 1993, I began the Grossman research.
Studying Grossman was, in part, a search for my own roots. Not only because my parents were Jewish refugees from Vienna-Grossman’s home for several years-and my mother’s mother was, I discovered as a bi-product of my project, even born in a Galician shtetl (Jewish village) where there was a JSDP branch. Tracing Grossman’s story was also an investigation of my heritage as a socialist: the history of the institutions and struggles of the labor movement.
The research has taken me on many journeys through time, space and different cultures. A couple of examples. To grasp Grossman’s experiences in Galicia it was necessary not only to understand the institutions of the Austro-Hungarian empire and the history of eastern European Jewry but also to trace the activities of the JSDP, which led me to learn to read Yiddish and to add an appreciation of klezmer to my musical tastes. Grossman participated in or was affected by Marxist debates about the best way to organize and the national question, the zig-zags in the line of the Communist International, particularly as they impacted on the Polish and German Communist Parties. I stalked primary material from Kraków and Warsaw to Boston and Berlin, from Vienna and New York to Frankfurt am Main and the village of Tellow in the north-eastern German state of Mecklenburg-Vorpommern. In New York, the Australian novelist Christina Stead and her partner, the banker, writer and economist, William Blake were amongst Grossman’s closest friends. This led me into their biographies and a key source, Stead’s papers in the National Library of Australia back in Canberra, my hometown.
Hopefully my detailed and sympathetic account of Grossman’s life and work will disrupt the cycle of distortion of his ideas that social democrats and Stalinists began in 1929. Grossman vindicated the Marxist synthesis of theory with practice, analysis of objective realities and constraints with strategy and tactics designed to realize the working class’s capacity to be an historical, revolutionary subject. He provided useful tools for people who not only want to understand but also want to change the world. But I have no illusions about the impact of my publications on the level of the class struggle, the fundamental driver of socialist politics. There is no substitute for practical activity: building campaigns against the immediate consequences of capitalist exploitation and oppression, and constructing an organization capable of merging them in the struggle for socialism.
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