Rosa Luxemburg — Introduction to Political Economy


1. What is political economy?




  • Raw materials: to the value of 5,262 million marks
  • Semi-finished products: 1,246 million marks
  • Finished products: 1,776 million marks
  • Foodstuffs and consumer goods: 3,063 million marks
  • Live animals: 289 million marks
  • Raw materials: 1,720 million marks
  • Semi-finished products: 1,159 million marks
  • Finished products: 6,642 million marks
  • Foodstuffs and consumer goods: 1,362 million marks
  • Live animals: 7 million marks
  • in England from 162 to 269 million tons
  • in Germany from 74 to 222 million tons
  • in the United States from 101 to 455 million tons
  • in England from 7.5 to 10.2 million tons
  • in Germany from 3.7 to 14.8 million tons
  • in the United States from 4.1 to 27.7 million tons
  • in England from 13,000 to 27,400 million marks
  • in Germany from 6,200 to 21,300 million marks
  • in the United States from 5,500 to 16,200 million marks




2. Material on economic history (1)





3. Material on economic history (2)



4. Commodity production




  1. The process that we described as a catastrophe that happened suddenly, destroying the communist society overnight and transforming it into a society of private producers, in reality happened over millennia. The idea of a transformation of this kind as a sudden and violent catastrophe is certainly not pure fantasy. This idea does correspond to reality, everywhere that primitive communist tribes come into contact with other peoples already at a high capitalist stage of development. We see cases like this with most discoveries and conquests of so-called savage and semi-civilized lands by Europeans: the discovery of America by the Spanish, the conquest of India by the English and of the East Indies by the Dutch, and the same with the seizures of the English, Dutch and Germans in Africa. In most of these cases, the sudden arrival of Europeans in these lands was accompanied by a catastrophe in the lives of the primitive peoples who inhabited them. What we have assumed as a process of twenty-four hours, often needs no more than a few decades. The conquest of territory by a European state, or the mere settlement of a few European trading colonies in these countries, very soon results in a violent abolition of common property in land, the break-up and fragmentation of landownership into private property, the confiscation of herds of cattle, the reversal of all traditional social relations — with the difference that the general result here is not, as we assumed, the transformation of the communistic community into a society of free private producers with commodity exchange. For the dissolved common property does not become the private property of local people, but rather the stolen goods of the European encroachers, and the indigenous people themselves, robbed of their old forms and means of existence, are made either into wage-slaves, or slaves pure and simple, of European merchants, if they are not just exterminated, as happens when neither of these two options is feasible. For primitive peoples in colonized territories, therefore, the transition from primitive communist conditions to modern capitalist ones always does take place as a sudden catastrophe, an unforeseeable misfortune with the most frightful sufferings (as it is presently true of the Germans with Negroes of South West Africa). With the peoples of Europe, on the other hand, it was not a catastrophe but rather a slow, gradual and unnoticeable process, lasting for several hundred years. The Greeks and Romans still appear in history with common property. The old Germans, who spread from north to south soon after the birth of Christ, destroying the Roman Empire and settling in Europe, still brought with them the communistic primitive community, and maintained this for a good while. The developed commodity economy of the European peoples, as we described it, only came into being at the end of the Middle Ages, in the fifteen and sixteenth centuries.
  2. The second correction that has to be made to our depiction is a consequence of the first. We assumed that all possible branches of labor were already specialized and separate in the womb of the communist community, i.e. that the division of labor in society had reached a very high stage of development, so that with the occurrence of the catastrophe that abolished common property and introduced private production and exchange, the division of labor was already in place as the basis for such exchange. This assumption is historically incorrect. In the conditions of primitive society, so long as common property persists, the division of labor is very little developed, still embryonic. We have seen this in the example of the Indian village community. Only a dozen or so individuals had separated out from the mass of inhabitants to concentrate on special trades, no more than six of these being actual artisans: the smith, the carpenter, the potter, the barber, the washerman and the silversmith. Most handicraft work, such as spinning, weaving, making clothes, baking, butchery, sausage-making, etc., was all carried out by each family as a side occupation along with their main agricultural work, as is still the case even today in many Russian villages, in so far as the population have not already been drawn into exchange and trade. The division of labor, i.e. the separation of individual branches of labor as exclusive special professions, can only properly develop if private property and exchange are already in place. Only private property and exchange make possible the emergence of particular special trades. For only when a producer has the prospect of regularly exchanging his products against others does it make sense for him to devote himself to specialized production. And it is only money that gives each producer the possibility of storing and accumulating the fruits of his efforts, and accordingly also the impetus to regularly expand production for the market. On the other hand, however, this producing for the market and accumulation of money only has a purpose for the producer if his product and the receipts from it are his private property. In the primitive communist community, however, private property is precisely ruled out, and history shows us that private property only arose as a result of exchange and the specialization of labor. It turns out, therefore, that the emergence of specialist professions, i.e. a highly developed division of labor, is possible only with private property and developed exchange. It is conversely clear, however, that exchange itself is possible only if the division of labor is already present; for what purpose would there be in exchange among producers who all produce one and the same thing? Only if X for example only produces boots, whereas Y only bakes bread, is there a sense and purpose in the two exchanging their products. We thus come up against a strange contradiction: exchange is only possible with private property and a developed division of labor, but this division of labor can only come about as a result of exchange and on the basis of private property, while private property for its part only arises through exchange. This is even a double contradiction, if you examine it closely: the division of labor must exist prior to exchange, even though exchange must at the same time exist prior to the division of labor; moreover, private property is the precondition for the division of labor and exchange, but the only way it can develop is from the division of labor and exchange. How is this tangle possible? We are clearly going round in a circle, and even the first step away from the primitive communist community seems an impossibility. Human society was apparently caught in a contradiction here, whose resolution depended on the further advance of development. But this inescapability is only apparent. A contradiction may well be something inextricable for individuals in everyday life, but in the life of society as a whole, you find contradictions of this kind everywhere you look. What today appears as the cause of a particular phenomenon is tomorrow its effect, and vice versa, without this continuous change in conditions of social life ever ceasing. On the contrary. The individual person cannot take a step further when he faces a contradiction in his private life. He will even accept in matters of everyday life that contradiction is something impossible — so that an accused person who gets tangled up in contradictions when he appears in court is thereby already found guilty of untruth, and in certain circumstances contradictions can lead him into prison or even to the gallows. But human society as a whole develops continuously in contradictions, and rather than succumbing to these, it only starts to move when it meets contradictions. Contradiction in the life of society, in other words, is always resolved by development, in new advances of culture. The great philosopher [G.W.F.] Hegel said: “Contradiction is the very moving principle of the world.” And this movement in the thick of contradictions is precisely the actual mode of development of human society. In the particular case we are concerned with here, i.e. the transition from communist society to private property with the division of labor and exchange, the contradiction that we found is also resolved in a particular development, a long historical process. But this process was essentially just as we originally depicted it, apart from the corrections we have just made.


5. Wage-labor








6. The tendencies of the capitalist economy


  • By commodity exchange and the money economy, whereby all individual producers, and the most remote regions of the earth, are economically linked together, and a division of labor accomplished that spans the world;
  • By free competition, which ensures technological progress and at the same time constantly transforms small producers into wage workers, whereby capital is supplied with purchasable labor-power;
  • By the capitalist law of value, which on the one hand automatically takes care that wage workers never rise up from the proletarian state and escape labor under the command of capital, while on the other hand making possible an ever greater accumulation of unpaid labor into capital, and thereby ever greater concentration and extension of means of production;
  • By the industrial reserve army, which provides capitalist production with a capacity for extension and adaptation to the needs of society;
  • By equalization of the rate of profit, which governs the constant movement of capital from one branch of production into another, and thus regulates the balance of the division of labor; and finally
  • By price fluctuations and crises, which in part daily, and in part periodically, lead to a balance between blind and chaotic production, and the needs of society.



The Acheron In Motion is run by a passionate Communist from a post-Soviet state, publishing about revolutionary history and the fundamental theses of Marxism.

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The Acheron In Motion

The Acheron In Motion is run by a passionate Communist from a post-Soviet state, publishing about revolutionary history and the fundamental theses of Marxism.