War and Capital

TOWARD THE end of her book, The Accumulation of Capital, Rosa Luxemburg extends Marx’s observation that “‘Sweating blood and filth with every pore from head to toe’ characterizes not only the birth of capital, but also its progress in the world at every step, and thus capitalism prepares its own downfall under ever more violent contortions and convulsions.”

Imperialism is as much a fact of capitalism today as when Luxemburg wrote those words exactly one hundred years ago. As such, for more than a century socialists have emphasized the centrality of analyzing its roots, criticizing its ever-changing forms, and developing strategies to confront it. Richard B. Day and Daniel Gaido have performed a tremendous service by making available for the first time in English fifty-five articles documenting the debates among socialists (primarily, but not exclusively, within the German socialist movement) with respect to imperialism in the decade and a half leading up to World War I. Prefaced with a substantive and informative introduction, Discovering Imperialism: Social Democracy to World War I opens a window into an era when millions of workers throughout Europe and the United States read daily and weekly newspapers and journals featuring contending diagnoses of capitalism’s spread to all corners of the world by means of conquest and colonialism.

Before 1914, it seemed that the majority of European socialists opposed colonialism and would honor pledges made year after year at congresses of the Second International (the coalition of mostly European socialist parties) to follow Marx’s dictum “Workers of the World, Unite!” Yet, when push came to shove in August of that year, the most powerful leaders of the German and French parties, the most important in the International, supported their “own” states in what would become the bloodiest war ever seen till that time.

What explains the betrayal? Lenin famously refused to believe the news of the German socialists’ vote in favor of the war budget. He thought it was a hoax by the German police authorities to confuse the workers’ movement and sow division. But should he have been so surprised? Day and Gaido present compelling evidence that the rot was much deeper than Lenin realized. In fact, Rosa Luxemburg emerges in Day and Gaido’s presentation as the most consistent and trenchant critic of both the forces driving capitalism toward war as well as those trends within the socialist movement that where either complicit in these developments or turned a blind eye to the dangers they presented.

Broadly speaking, the protagonists in prewar debates about imperialism fell into three camps. On the right stood men like Victor Berger of the Socialist Party of the United States and Eduard Bernstein of the German Social Democratic Party (SPD). Both accepted colonialism as a natural consequence of the so-called civilizing mission of European capital and forthrightly advocated the superiority of white workers. As Bernstein wrote in 1896, “Races who are hostile to or incapable of civilization cannot claim our sympathy.... We will condemn and oppose certain methods of subjugating savages. But we will not condemn the idea that savages must be subjugated.”

In the center, Karl Kautsky, Rudolf Hilferding, and Otto Bauer differed over many details, and each of them spoke out often (if not entirely consistently) against colonialism, but they also believed that there was no necessary relationship between capitalism, colonialism, and interimperialist warfare. Imperialism was simply a mistaken political policy that benefited only one section of the capitalist class. Thus, it might be successfully challenged within the bounds of capitalism. They advocated a political strategy aimed at mobilizing workers to pressure capitalism into a path of peaceful development (or to return to such a path) that would eventually pave the way to a nonviolent transition to socialism by means of parliamentary elections and gradual reform.

On the left, Vladimir Lenin, Rosa Luxemburg, Nikolai Bukharin, Anton Pannekoek, and Leon Trotsky argued that the outbreak of World War I (as well as the spread of colonial occupations by the European powers, the United States, and Japan) sprang from the very structures of capitalism. Imperialist war and colonial domination were an inherent component of capitalism and, therefore, only a revolutionary strategy aimed at overturning the power of the capitalist class could hope to end the system’s drive to war.

These arguments were put forward in a series of books and pamphlets before and during World War I and are available in English, such as Lenin’s Imperialism: The Highest State of Capitalism (1916), Bukharin’s Imperialism and the World Economy (1915), and Trotsky’s The War and the International (1914). The collection of articles and essays assembled by Day and Gaido provide extensive background to these better-known works and demonstrate how authors shifted their analysis over time. This review will concentrate on several aspects of the debate between the Center and the Left (the openly racist arguments of the Right can be more easily dismissed).

The first question the authors collected in Imperialism address why capitalism developed so unevenly across the globe. In the Communist Manifesto in 1848, Marx and Engels wrote that the bourgeoisie would “create a world after their own image.” But they could not imagine exactly how capitalism would spread around the world. In Capital, Marx notes that capitalism in Europe was partially based on what he termed “primitive accumulation,” that is the physical destruction by the emerging capitalist class of the old peasant economies in Europe, genocide and pillage in the New World, and the unpaid labor of African slaves. But he also implied in some of his writings that all this violence would lead to the growth of industrial capitalism in the colonies. By the late nineteenth century it was obvious that rather than industry spreading evenly everywhere, capital concentrated in competing imperial systems based on a handful of European nation-states—as well as the United States and Japan—and their associated colonies and spheres of influence. Queen Elizabeth’s adoption of the title “Empress of India” in 1876, the carve-up of the entire continent of Africa by European powers at the Conference of Berlin in 1884, and the Spanish-American and Boer Wars of 1898 signaled a dramatic increase in interimperialist rivalry and an intensification of colonial conquests, drawing the entire world for the first time into the orbit of capitalist competition.

Day and Gaido open their volume with a series of articles by Max Beer, a well-known Jewish Austrian journalist of his time, who condemned territorial expansion, but tended to explain it as a political ploy adopted by the ruling classes aimed at diverting working class rebellion within the imperial states. Beer quotes Cecil Rhodes, who pioneered British imperialism in southern Africa, in 1895 saying “The Empire... is a bread and butter question. If you have not to be cannibals [that is if the British working and ruling classes are not to fight among themselves], you have got to be imperialists.” While condemning Rhodes, Beer saw imperialism as an unfortunate retreat from supposedly more democratic political forms, writing, for example that “American democracy... gave way to imperialism.” (110) This facile acceptance of “American democracy,” despite its basis on conquest and slavery, only goes to show some of the limits of the earliest socialist analyses of imperialist expansion.

Writing during the wars of 1898, Kautsky challenged Berstein’s support for colonialism in a series of articles attempting to provide a material explanation for German expansionism. In one of his first writings on the topic, Kautsky argued in 1898 that colonialism was driven by precapitalist elements within the German ruling class (feudal landlords and the powerful military junker caste). He soon substituted this emphasis with an argument that certain sections of the rising capitalist class itself were taking an interest in overseas investment (especially mining and railroads), and that they needed the military protection of their home state to secure their profits. This insight into the specifically economic roots of colonialism set the stage for Rudolf Hilferding’s Finance Capital (1910), widely hailed as “almost an additional volume of Capital.” Day and Gaido translate glowing reviews of this work by Austrian socialist leader Otto Bauer (of the Center) and Julian B. Marchlewski (of the Left), a Polish socialist very close to Luxemburg, as well as noting the high regard in which Lenin held the book. Central to Hilferding’s thinking was the concept of what he labeled “finance capital,” meaning the tendency for “the power of the banks over industry” to grow, as Bauer commented. Hilferding predicted that “in the violent clash of these hostile interests the dictatorship of the magnates of capital will finally be transformed into the dictatorship of the proletariat.”

This analysis seemed to leave little room for doubt. Capital was being concentrated remorselessly into fewer and fewer hands to the detriment of all democratic tendencies in society, and the system could only be overturned in a “violent clash” leading to the “dictatorship of the proletariat.” It is important to keep in mind that this was the prevailing orthodoxy among socialists in the days before World War I. We will see later how Kautsky retreated from the implications of this analysis, but first it is necessary to review the political background to these debates within the Second International and, especially, the SPD.

Kautsky and Hilferding appeared to be trouncing the Right in their theoretical analyses of imperialism and colonialism; however, the Right was making steady progress in taking control of the apparatuses of the socialist parties, as Day and Gaido document. This process received an enormous jolt during the 1907 elections in Germany when, after twenty years of steady growth in their election results, the SPD lost almost half its votes due to an upsurge of patriotism brought about by Germany’s genocidal colonial conquest of Namibia and the massacre of more than 65,000 Herero people. While many in the party, the majority in fact at the 1907 Stuttgart Congress, spoke out decisively against these German atrocities, the Right and elements of the Center concluded that the SPD must become a procolonial party in order to win votes in parliamentary elections. As Bernstein stated, the SPD must “develop a positive, socialist colonial policy.”

Although defeated in its outright support for imperialism, the Right’s accommodations to German militarism grew steadily in a series of votes in parliament designed to soften the party’s opposition to the growth of the military. Kautsky opposed this process in words, but began to speak of unity with a supposedly peaceful section of the German ruling class that had an “aversion to war,” as he put it. Kautsky repeated this idea in a widely circulated position paper in 1911 after war nearly broke out between Germany and France over colonial influence in Morocco. This time he provoked Luxemburg’s wrath.

Luxemburg ridiculed Kautsky’s commentary on the Moroccan adventure, asserting that he argued as if he only opposed colonialism “because it doesn’t pay.” Just one year after Hilferding’s seemingly robust condemnation of capital as intrinsically colonial and imperialist, Kautsky was now talking as if the growing war threats were merely the opportunistic policy of a renegade section of German capital, and that the more farsighted rulers would never support a war. This political crisis led Luxemburg to produce one of her greatest and most controversial works, The Accumulation of Capital (1913).

Day and Gaido place great emphasis on Luxemburg’s work, not only translating four long reviews of her book, but also dedicating a special appendix to explaining why they believe (as did Lenin and most other socialist commentators) that her technical economic critique of Marx’s second volume of Capital (specifically her treatment of what is referred to in Marxist economic discussions as the “realization problem”) were based on a misunderstanding of Marx’s arguments. In essence, Luxemburg believed that capitalists could not “realize” their profits (that is convert surplus value extracted from the exploitation of the working class into goods sold in the market) without having access to precapitalist markets where they could essentially skim off the wealth piled up outside of capitalism itself. She noted that Marx had pointed to the central role played by what he called primitive accumulation in the early stages of capitalism whereby peasants were dispossessed in Europe, Latin America was despoiled, and Africans were enslaved in order to pile up enough wealth to jumpstart capitalism in Europe. Luxemburg believed that the growing intensity of interimperialist rivalry could be explained by the increasingly desperate efforts of European (and American and Japanese) capital to secure the few remaining precapitalist markets where they could translate their industrial productivity into profit. She predicted the final exhaustion of precapitalist markets would give rise to a severe and eventually fatal crisis in capitalism that could only be solved by socialist revolution.

Day and Gaido translate a review of Dutch revolutionary socialist Anton Pannekoek pin-pointing the problem with Luxemburg’s economic analysis. Taking issue with aspects of Luxemburg’s presentation, he wrote, “The existence of non-capitalist buyers and suppliers is a practical fact, albeit not a necessity without which an emerging capitalism could not exist.” He goes on to explain the great merit of Luxemburg’s work lay precisely in her focus on this “practical fact.” In essence, she was right for the wrong reason; but by highlighting the crimes of British, French, American, and German imperialism in the colonies in far greater detail than any other socialist writing at the time, Luxemburg’s book threw down a challenge to both the Right and Center who either supported the subjugation of Africa, Asia, and native peoples the world over (as Bernstein had written), or who, like Kautsky, hoped to unite the Second International with supposedly peace-loving sections of capital to temper the system’s brutality. The gap between Luxemburg’s solidarity with the sparks of anticolonial resistance and Kautsky’s indifferent phrase that “a lasting resistance from the native population... is not to be expected,” only goes to show how alert she was to the distance Kautsky had drifted from the anti-imperial positions he had professed in earlier years.

Incredibly, even after the outbreak of World War I, Kautsky continued to argue “imperialism is just a question of power, not an economic necessity.” He presented the war as a power grab by a self-serving group of arms dealers, financial manipulators, and politicians that could be reversed by the democratic unity of the working class and the industrial (good) capitalists. A return to peace might even give rise to a period of “ultra-imperialism” whereby the dominant sections of capital would realize how damaging wars had become so they would strive to peacefully compete with one another. Here, Kautsky retreated from a materialist analysis of the war— as the outcome of a whole phase of capitalist development that pit the world’s dominant powers against each other for world hegemony—and put his hopes in what Luxemburg called a “utopia.” As he put it, “the mobilization was not declared because of the war, but war because of the mobilization.” Luxemburg mocked Kautsky’s “utopia.” She wrote that according to Kautsky, “Imperialism is simply a beastly ‘method...’ [to achieve] what is legitimate and necessary in itself but can be achieved ‘much better’ through other methods, namely, ‘democracy.’”

Day and Gaido include several essays by Pannekoek, Trotsky, and Polish revolutionary Karl Radek, drawing the political implications of World War I for socialists within the Second International still committed to workers’ revolution. Radek asserted that the war itself would destroy the narrow, nationalist consciousness of workers in different states, bringing and end to “the age of the isolated nation with its separate struggles.” Pannekoek debunked Kautsky’s notion of fundamental splits within the ruling classes, writing that the “entire possessing classes, from big capital and the nobility to the petty bourgeoisie and the officials, are behind this policy: the feeling that Germany needs world power in order to give free reign to its expansion.” Trotsky concurred, asserting “the state has become too narrow for the economy,” thereby forcing national capitalist classes to militarily confront their rivals on a global scale. Pannekoek then drew the logical conclusion that “reformists and revolutionaries, who, during the period of small reforms, could remain together in the same organization, no longer belong together, but must become mortal enemies.

Lenin’s writings from this period are already available in English, so Day and Gaido do not include any of his essays in their volume. In their introduction, they argue that Lenin succeeded in assembling the most dynamic Marxist critique of imperialism, by combining the best insights of both the Center and the Left writers, while avoiding the temptation to mistake potential abstract economic tendencies for real life. “The very concept of purity indicates a certain narrowness, a one-sidedness of human cognition, which cannot embrace an object in all its totality and complexity,” he wrote. If Lenin succeeded in this endeavor in 1916 in his little book Imperialism: the Highest Stage of Capitalism, it was only because he was then a careful student of many of the authors Day and Gaido have made available to us to study today as we confront what they rightly label the “obscene parasitism” of capital that continues to rule over our lives.


Issue #104

Spring 2017

Resistance and reaction in the time of Trump

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