Forgotten treasure: a new biography of Grossman

Issue: 114
Posted: 10 April 07

Chris Harman

Rick Kuhn, Henryk Grossman and the Recovery of Marxism (University of Illinois Press, 2007), £14.99

Sometimes exploring Marxist theory seems a bit like archaeology. It is necessary to do a lot of digging to find forgotten treasures of original thought from the years before the rise of Joseph Stalin and Adolf Hitler.

Henryk Grossman’s works are among those treasures. He was one those people who set about developing Marxist political economy in the first decades of the 20th century. But English speakers were not able to read his major work, The Law of Accumulation and Breakdown of the Capitalist System, until a partial translation by Jairus Banaji appeared in 1979. Now Rick Kuhn has done a lot more digging and produced a thorough and fascinating biography.

Grossman’s importance to political economy lies in the way in which he attempted to integrate the different insights into the dynamic of capitalism to be found in volumes two and three of Karl Marx’s Capital. Previous developments of Marx’s ideas had gone in two different directions. The first started with Rudolf Hilferding’s Finance Capital. It looked at the merging of banking and industrial capital and was carried through into the theories of imperialism of Nikolai Bukharin and Lenin.

The second was Rosa Luxemburg’s rather different theory of imperialism based on her critical interpretation of volume two of Capital. Here Marx had attempted to create ‘reproduction schemas’ showing how the outputs of each cycle of capitalist production fitted as inputs in the next such cycle. Luxemburg argued in The Accumulation of Capital that Marx was mistaken in believing that inputs and outputs could match over several cycles. Eventually there would be a ‘breakdown’ of capitalism, with insufficient demand for the all the goods produced. The only way to compensate for such underconsumption was for capitalists to find somewhere outside the system to sell their products. This ‘outside’, she argued, was to be found in colonisation of the precapitalist parts of the world.

Luxemburg provided a mass of important empirical material on the exploitation of the colonial world by the capitalists of the advanced countries. But her ‘-breakdown’ analysis was subject to refutation from two different quarters—from the revolutionary Bukharin and from the reformist Otto Bauer. Bauer in particular showed that Marx’s reproduction schema did not lead to imbalances as claimed by Luxemburg. That this was convenient for his reformist views did not in itself prove he was wrong.

Grossman set out to develop a ‘-breakdown theory’ that was not based on Luxemburg’s theory of imperialism (he favoured Lenin’s). He argued there was a fault in the reasoning of Luxemburg, Bauer and Bukharin alike. None of their reproduction schemas, based on volume two of Capital, took fully into account Marx’s theory of the tendency of the rate of profit to fall, developed in volume three of Capital. Once this was integrated into the reproduction schema, Grossman argued, there is no longer enough surplus value to provide for further accumulation after a certain number of cycles, leading production to grind to a halt. If capitalism had not yet collapsed it was because of counter‑tendencies, of which the most important was the capitalist crisis itself—although in one passage he argued war could have the same effect. So crises are not something that can be ‘managed’ as reformists such as Bauer believed, but built into the very character of the system.

Kuhn’s biography includes a fascinating account of the debates the theory produced. But there is much more to it than just that. For Grossman was a committed revolutionary activist in one of the most tempestuous parts of Europe long before he became known as a Marxist economist.

Born in a well‑off Jewish family in the Austrian occupied part of Poland in 1881, Grossman was a socialist by the age of 15, involved in producing a socialist magazine by the time he was 18 and at the centre of a mass strike movement influenced by the revolutionary upheavals in neighbouring Russian Poland in 1905‑6. Kuhn tells how Grossman’s activity thrust him into all the controversies within the international movement. At first he was a member of the Polish section of the Austrian Social Democratic Party, which, like the Polish Socialist Party in the Russian Empire, increasingly adopted a nationalist position. This nationalism involved, among another things, not taking seriously the oppression of the large Jewish minority. Grossman was driven to break with the Polish section, but at the last minute backed off from forming a multiethnic revolutionary organisation, which, Kuhn suggests, would have meant following the same line as Lenin in Russia. Instead he organised a Jewish breakaway, which combined agitation among Jewish workers, opposition to the particular oppression of Jews and a sustained internationalism that challenged the Jewish bourgeoisie and the Zionists.

The story is one of exciting struggles, which gives a sense of what the mass strikes of 1905 meant even outside the borders of the Russian Empire, but also of the nasty factional struggles and petty manoeuvres that are all too often part of building a revolutionary current.

Grossman managed to combine this activity with an increasing successful academic career, mainly involving studies of Austrian economic history. The years after the failure of the revolutionary movement of 1905-6 led many revolutionaries to drop out of active politics, and Grossman was no exception. By 1910 he had moved to Vienna, where, conscripted into the army during the war, he eventually ended up a prestigious statistician within the Austrian war economy. But the revolutionary turmoil of 1917‑21 drew him back into politics, combining a high ranking academic post in the new independent Polish state with membership of the country’s semi‑clandestine Communist Party. He was arrested in 1924 and released only when he agreed to go into exile to Germany. There he obtained a post with the famed Institut für Sozialforschung (Institute for Social Research) in Frankfurt run first by Carl Grünberg and then by Max Horkheimer. This brought him into contact with people such as George Lukács, Karl Korsch and Karl Wittfogel (then a very militant Communist).

It was in this period that Grossman began his major work on Marxist economics, seeing its purpose as being to vindicate Marx’s claim that socialism was not just an ethical question, as people like Bauer claimed, but something made possible and necessary by the inner trends of capitalism itself. But his efforts to get his work published became more difficult once the 1920s gave way to the 1930s. Kuhn tells how the Stalinisation of the Communist parties led to a clampdown on serious scientific discussion over political economy within the movement. Meanwhile, once the Frankfurt Institute had gone into exile in New York after the Nazi takeover of Germany, Horkheimer did his best to distance it from activist Marxism and was not keen on publishing Grossman’s research. Horkheimer’s own work with Theodore Adorno was ‘pessimistic, aphoristic, hostile to the Marxist project of human liberation through conscious struggle’. Kuhn’s account of this period is fascinating for the light it throws on the reality of the Frankfurt school, whose more obscure writings are often seen as maintaining a shining light of Marxism through a bleak period.

Grossman’s own political views in the 1930s were those of someone torn between his background in a genuine revolutionary tradition and the harsh reality of a world in which that tradition seemed defeated. For a time he was intensely critical of Stalin—sending Paul Mattick one of Leon Trotsky’s critiques of the disastrous Comintern policy in Germany, describing the results of Russian planning as having ‘nothing to do with socialist economics’, and condemning the Popular Front strategy. But then, like many others (Lukács and Bertolt Brecht, for instance), he swallowed his doubts because he saw no other way of beating back fascism. By the time the Second World War broke out he was an enthusiastic Stalinist and afterwards returned to East Germany to escape McCarthyism in the US, saying he wanted to make his ‘small contribution to the construction of a new better Germany’.

The new East German state was keen at this point to embrace academics of international standing and it seemed, when Grossman died in November 1951, that his contribution to Marxism was going to receive full official recognition. But a clampdown was already under way against any Marxist views that did not match the full Stalinist dogma, with the political police directing students to boycott lectures of independent thinkers such as Ernst Bloch, Georg Mayer, Hans Mayer and Fritz Behrens. And, Kuhn writes, ‘the German Democratic Republic never fully acknowledged Grossman’s contribution to Marxism. None of Grossman’s work was ever published in East Germany where textbooks condemned his analyses of crises.’

Marxists cannot develop revolutionary theory in the 21st century without, in the process, returning to the ‘hidden from history’ debates which took place between Frederick Engels’ death and the rise of Stalinism. Grossman is an important part of our heritage, alongside other participants in those debates such as Luxemburg, Bukharin, Isaac Rubin, Pavel Maksakovsky, Roman Rosdolsky, and even the reformists Hilferding and Bauer. For this reason Kuhn’s volume is a valuable addition to our theoretical armour.