How Kautsky finally abandoned Marx’s theory of accumulation and of breakdown

In his latest book (1927) Kautsky abandons his earlier method of distorting Marx under the guise of defending him, in order openly to oppose the basic ideas of Capital. In the chapter called ‘the downfall of capitalism’, he asks, ‘will capitalism end the same way that feudalism did before it?’ That it will is a pure assumption, according to Kautsky, and one which ‘Marx and Engels never completely rid themselves of’ (p. 539). Here we have a good example of Kautsky’s method of distortion. He tries to create the impression that at one time Marx and Engels supported the idea of the economically necessary downfall of capitalism, but tried to rid themselves of it without ever fully succeeding. In fact the idea of the necessary downfall of capitalism is absolutely basic to Marx’s theory of accumulation and crises in both Capital Volumes One and Three.

According to Kautsky, the notion of breakdown contradicts the facts. Like the bourgeois critics of Marx he argues that the Marxian theory of immiseration is an empirical deduction from the conditions prevailing in the 1840s. It was valid in the terms of the frightful ravages caused by capitalism in the working classes of the early nineteenth century. But after 1847, Kautsky continues, England saw the repeal of grain tariffs, the institution of a ten-hour working day and the beginnings of a new epoch of expanding industry and unionism: ‘In industries covered by the Factory Acts the condition of the working class improved significantly’ (p. 541). Political methods likewise contributed to improving the economic position of the workers:

As democracy expanded the proletariat of the large towns increasingly gained control of their administration and, even in the midst of bourgeois society, gained the capacity to improve their conditions of welfare and life to such a degree that their general conditions of health improved perceptibly. (p. 542)

Kautsky concludes that ‘it is no longer possible to maintain that the capitalist mode of production prepares its own downfall through the very laws of its own development’ (p. 541). Kautsky’s argument is based entirely on the fact that the position of the working class improved after the conditions described in the Communist Manifesto. From this fact he draws the conclusion that Marx’s theory of the development of the productive forces under capitalism is untenable, especially the idea, basic to Marx, that from a certain stage onwards capitalism is a fetter on the productive forces. To this Marxist theory Kautsky counterposes the directly opposite conception: ‘If earlier modes of exploitation ultimately led to a destruction of the productive forces, despite short spasms of expansion, industrial capital is defined by its tendency to augment them’ (p. 539).

A few pages later Kautsky says that in ‘Capital Volume One, 1867, Marx spoke an entirely different language’ (p. 541) to that of two decades earlier. In Capital Marx is supposed to have abandoned the theory of pauperisation. Yet the essential aspects of Marx’s theory of immiseration and breakdown were first presented only in Capital. This was possible, despite his acknowledgement that the position of the working class had improved, because he did not derive the inevitable pauperisation of the working class under capitalism from the empirical conditions of England in the 1840s, but by way of a deduction from the very nature of capital or the law of accumulation peculiar to capitalism.

The worsening position of the working class and the growth of the reserve army are certainly not the primary facts from which the breakdown is deduced; rather they are the necessary consequences of the accumulation of capital at a specific stage of capitalism. It is the accumulation of capital that forms the primary cause that leads ultimately to the economic failure of capitalism due to an imperfect valorisation of the accumulated capital. Characteristically Kautsky completely ignores the theory of accumulation and breakdown formulated in the chapter on the general law of capitalist accumulation. This is especially obvious in the way he refutes Luxemburg’s view as:

Yet another hypothesis that attempts to deduce the ineluctable necessity for a final economic breakdown of capitalism from the conditions of its process of circulation - despite, or rather precisely because of its expansion of the productive forces - in direct opposition to Marx who proved the exact opposite in Capital Volume Two. (p. 546)

So in Volume Two Marx is supposed to have proved the possibility of an unfettered development of the productive forces under capitalism. Kautsky finally has to appeal to Bauer’s reproduction scheme, describing it as ‘the most important critique’ (p. 547) of Luxemburg’s theory. Bauer likewise defends the thesis of a possible unlimited accumulation (Bauer, 1913, p. 838).

Tugan-Baranovsky was the first to suppose that Marx’s reproduction schemes at the end of Capital Volume Two are proof that Marx himself was convinced of the possibility of a crisis-free, unlimited development of the productive forces of capitalism. Tugan-Baranovsky admits that Marx never explicitly formulated the thesis of equilibrium that allegedly underlies the reproduction schemes and that these schemes were never developed logically by Marx: ‘The logical deductions that flow from them, which Marx himself totally neglected, are a blatant contradiction with the ideas he professed before constructing the schemes’ (1913, p. 203). Naturally Tugan-Baranovsky has to clarify this astonishing contradiction, and he tries to do this by seeing the system prior to the construction of the schemes as an older, outdated draft of Marx’s theory. Because Marx never reworked this earlier portion his earlier ‘analysis remained incomplete’ (p. 203).

In accepting Bauer’s theory Kautsky rejects the notion of a final limit to capitalist accumulation, and stands on the same ground as Tugan-Baranovsky 25 years earlier.But if Tugan-Baranovsky was at least aware of the contradiction contained in an harmonist interpretation of the reproduction schemes, it is characteristic of Kautsky, Bauer and Hilferding that they are not in the least bothered by it. When the contradiction is apparent they abandon Marx’s theory and stick to their own harmonist interpretations. To Kautsky crises are only temporary disruptions caused by the lack of proportionality between individual branches. But ‘the correct proportionality is always re-established’ (1927, p. 548).

Kautsky is not content simply with abandoning Marx’s theory of the final economic end of capitalism. He becomes an unconditional admirer of capitalism. During the great catastrophe of the War:

capitalism did not collapse. It showed us that its elasticity, its capacity to adjust to new conditions, was much stronger than its vulnerability. It stood the test of war and stands today, from a purely economic point of view, stronger than ever. (p. 559)

Kautsky’s faith in the economic future of capitalism, his optimistic enthusiasm for it, are carried so far that like Bernstein he concludes that capitalism is always capable of surmounting all obstacles; that not only has no one ever produced a theoretical proof of its economically necessary downfall, but that such a proof is impossible. The practical experiences of capitalism ‘more than testify to its capacity to survive and to adjust to the most manifold and even desperate situations’ (p. 559). ‘Three decades ago’, Kautsky says:

I dealt with the problem of crises. Since then capitalism has survived so many crises, has shown its capacity to adapt to so many new, often quite astonishing and extraordinary demands that today it seems to me, from a purely economic point of view, far more capable of survival than it did some decades back. (p. 623)

It is quite sad to watch a thinker of such exceptional merit, towards the closing stages of his active life, rejecting his entire life’s work at a single stroke. The conclusions Kautsky draws constitute an abandonment of scientific socialism. If there is no economic reason why capitalism must necessarily fail, then socialism can replace capitalism on purely extra-economic - political or psychological or moral - grounds. But in that case we abandon the materialist basis of a scientific argument for the necessity of socialism, the deduction of this necessity from the economic movement. Kautsky himself senses this:

The prospects for socialism depend not on the possibility or necessity of a coming collapse or decline of capitalism but on the hopes we must have that the proletariat attains sufficient strength, that the productive forces grow sufficiently to provide abundant means for the welfare of the masses ... finally, that the necessary economic knowledge and consciousness develop in the working class to ensure a fruitful application of these productive forces by the class - these are the preconditions of socialist production. (p. 562)

Kautsky displaces the question from economics to politics, from the sphere of economic laws to the sphere of justice. Once problems of distribution become decisive, socialism retrogresses three-quarters of a century to its historical starting-points, to Pierre Joseph Proudhon and his demand for just distribution. To abandon materialism as our basis is to abandon socialism in favour of reformism.

Once the economic basis for the destruction of capitalism is given up, where is the certainty that the proletariat, having become the decisive class, will define its goal as the destruction of capitalism? Will it not perhaps prefer to reconcile itself with the existing order of society? Why should the working class come out against capitalism when it is not only capable of an unfettered development of the forces of production, but secures for it a constant improvement in its conditions of life and ever increasing protection through social reforms?

Capitalism is doing all that, Kautsky assures us, and yet the working class will realise socialism. According to Kautsky - despite all the developments of the productive forces, despite all the improvements in the position of the working class, despite all advances in social legislation - class antagonisms become progressively sharper, not milder, under capitalism so that the conscious intervention of the proletariat is something inevitable. Kautsky enumerates a series of subsidiary moments that will lead to a sharpening of class antagonisms: ‘Here, and not in the accumulation of capital or the growth of crises, will the fate of socialism be decided’ (p. 563). Kautsky fails to realise that he is simply moving in circles. If the causes of sharper class struggle are economically conditioned, then his own standpoint proves the necessary collapse of capitalism, with only this difference; that the causes given by Marx (growing accumulation and its consequences in insufficient valorisation and crises) are replaced byother causes. Or - and this is the second alternative - these causes are not economically conditioned, in which case the growth of class oppositions are traced to the consciousness of the working class as something pure, something cut loose from the economic movement. In truth this is the ultimate basis on which Kautsky’s socialism is grounded - the realisation of socialism purely voluntaristically, through the conscious will of the workers, without any economic failure of capitalism and despite improvements in the conditions of life of the proletariat.