Samezō Kuruma (1893-1982) was a Japanese Marxist economist. This article, written between the World Wars and weeks before the onset of the Great Depression, attempts to understand the evolution of Imperialism in the context of Marx's theory of crisis from the Theories of Surplus Value (which is where Kuruma started) and Luxembourg's and Lenin's work..
An Introduction to the Study of Crisis
Samezō Kuruma (1929)
Japanese title: Kyōkō kenkū joron;
First published: Sep. 1929 issue of Journal of the Ohara Institute for Social Research, (vol. VI, no. 1);
Source: Chapter 1 of Kyōkō kenkū (Investigation of Crisis), Tokyo: Otsuki Shoten, 1965;
Translated: for marxists.org by Michael Schauerte;
The problem of crisis is gaining the attention of people worldwide. This is because crises of unprecedented scale, and unparalleled seriousness and tenacity, have struck throughout the world. Representatives of the two main classes in society are seriously engaged in the study of this problem with a rare level of seriousness; economists for the sake of somehow forging a path to stable capitalist production, and Marxists to provide a scientific basis for their tactics in this momentous period.
As long as political economy retains its bourgeois perspective, however, it will be incapable of moving forward to thoroughly understand the problem of crisis. We can in fact see that the outbreak of crisis, in the proper sense of the term, was a turning point in terms of political economy ceasing to exist as a science. Crisis, in its particular sense, is the collective explosion of all of the contradictions of capitalist production, and as such the outbreak of crisis, from two directions, necessarily brought bourgeois political economy as a science to an end. First, by actually thrusting upon political economy a new problem that was unanswerable from the bourgeois perspectivei.e. a problem that could only be answered by elucidating the contradictions of capitalist productioncrisis exposed in the clearest manner possible the fundamental defect of bourgeois political economy: the class-based limitations of its cognition. Second, the appearance of crisis threw out on the streets immense numbers of wageworkers, who had been gathered from every direction during the preceding period of prosperity, thereby revealing the anti-social figure of capitalist production in the most vivid manner and stimulating the class consciousness of the proletariat, so that the elucidation of the internal connections of capitalist production, which had been a weapon in the hands of the bourgeoisie, became a weapon to be wielded by the proletariat.
Here I would like to spend some time considering this history.
The first major crisis to strike capitalist production occurred in 1815. With the approaching downfall of Napoleon, capitalists in England, seeing that the continental market, which had long suffered from a shortage of goods due to the blockade, would once again be opened, prepared a massive quantity of goods for export. The Battle of Waterloo was fought in July 1815, followed by several months of robust trading and optimistic speculation. Before the end of the year, however, it became clear that expectations were entirely fictitious. One reason was that the blockade, by preventing the import of English goods, had stimulated the development of industry in continental countries to an unexpected degree. On top of this, the purchasing power of people on the continent had deteriorated as a result of war. There is no question that these people perceived a lack of goods, and the products that could relieve this scarcity were piled up in warehouses, but this collision between demand without purchasing power and a mountain of unsold goods ultimately resulted only in unmet needs and numerous bankrupt capitalists. This was the situation up to the spring of 1817. One bankruptcy followed another, and the ranks of the unemployed overflowed in the industrial cities, with riots breaking out in many places. The suspension of the Habeas Corpus Act in 1817 reflects the seriousness of the social unrest at the time. In spring of that year, signs of recovery did finally appear, but in 1819 business slumped again, leading to a rise in social unrest and ultimately the horrible Peterloo Massacre. The economic depression and social unrest continued into the following year, and only in 1821 did the road to recover finally come into view. The business climate gradually improved, and production developed unprecedented strength. But this in turn eventually culminated in another crisis, on an enormous scale, which broke out at the end of 1825.
Needless to say, the upheavals that greeted capitalist production in its youthful period, like a violent storm, also influenced the realm of political economy. One economist who experienced his first doubts regarding existing doctrine upon seeing the harsh convulsion of wealth, and the shocking social misery that accompanied it, was Simonde de Sismondi, who like Rosseau hailed from Geneva. At a young age, Sismondi read The Wealth of Nations and became strongly attached to Smith's theories. He apparently wrote his book De la richesse commerciale ou principes de l'economie politique appliqué à la legislation du commerce (1803) to explain and popularize Smith's doctrine, but following this Sismondi spent a considerable amount of time dedicated to historical research. He again turned his attention to political economy around 1818 when he was commissioned to write an entry on "political economy" for the Edinburgh Encyclopedia.
This was just following a serious economic downturn after the outbreak of the first major crisis in 1815. The crisis, as noted earlier, was one outcome of the Napoleonic Wars, arising from what could be called outside factors, so it cannot necessarily be considered a crisis in the proper sense of the term. But for Sismondi, the scale and breadth of the crisis, and the seriousness of its impact, were already sufficient to generate grave doubts regarding the capitalist mode of production. It was clear to him that regardless of the factors that generated it, the crisis itself and its dreadful results could not have arisen apart from the capitalist mode of production. His doubts were already growing when he was writing his encyclopedia entry, but he later said that considering the aim of the submission he did not use the opportunity to develop his new ideas. It was in his book Nouveaux principes d'dconomie politique, published in 1819, that Sismondi would begin developing his new doctrine. In the foreword to that book, he writes:
Among these explanations, those which I had given in advance have totally agreed with the events. Perhaps one should ascribe to such coincidence the quick sale of my book, and the demand which has brought me to prepare a new edition. I have done so in England, England has brought forth the most celebrated economists; their science is practiced there even today with redoubled ardor. Government ministers, already well versed in the doctrines of public welfare, have been seen to pursue studies with one of the most qualified professors of political economy; they have been heard to invoke his reasonings in Parliament. Universal competition, or the effort to always produce more, and always at a lower price, has been for a long time the English system, a system I have attacked as dangerous. That system has enabled English industry to make giant strides, but it also has, twice, thrown producers into frightful distress. It is in the face of such economic upheavals that I have seen it as my duty to review my arguments and compare them with the facts.
The study I have made of England has proven to me the validity of my New Principles. I have seen in that amazing country, which seems to go through a great trial for the instruction of the rest of the world, production increased while happiness decreased. The greater part of the nation, as well as the philosophers, seems to forget that increased wealth is not the goal of political economy, but the means it has to procure happiness for everyone. I have looked for such happiness among all classes, and I do not know where to find it. The upper English aristocracy has actually achieved a measure of wealth and luxury which surpasses everything one could see in all other nations. Nevertheless, it does not at all enjoy the opulence which it seems to have acquired at the expense of other classes; it lacks security, and in every family privation is felt more keenly than abundance. When I visit houses whose splendor is altogether regal, I hear their owners assert that if the corn monopoly they practice against their fellow citizens is abolished, their fortunes will be destroyed, because their estates, which extend over whole provinces, will not pay anymore the cost of production. Around these men I see numerous children, unequaled in any other aristocratic class; often one counts ten, twelve, sometimes more, but all the younger sons, and the daughters, are sacrificed to the glory of the eldest son; their share of the inheritance is not even equal to a year's income their brother receives. They must grow old as bachelors, and their dependence, at the end of their lives, is the high price they must pay for the luxury of their early years.
Below this titled and untitled aristocracy I see business occupy a distinguished position; its enterprises embrace the whole world, its agents brave the icy regions of the poles, and the heat of the equator, whilst everyone of its leaders, meeting at the Exchange, can dispose of millions. At the same time, in all the streets of London and of other large English cities, the shops display goods sufficient for the consumption of the entire universe. But has this wealth secured to the English merchant that kind of happiness one would expect? Not at allin no other country are bankruptcies as frequent. Nowhere are such colossal fortunes, sufficient in themselves to finance a public loan, to support an empire or a republic, destroyed more quickly. Everyone complains that business is scarce, difficult, hardly profitable. Within a span of a few years two terrible crises have ruined part of the bankers and spread desolation among all English manufacturers; at the same time another crisis has ruined the farmers, and its repercussions have been felt in the retail trade. On the other hand, business, despite its immense extent, has ceased to call for the young men who seek a career; all positions are taken, and in the upper, as well as the lower ranks of society most offer their labor in vain, without being able to obtain remuneration.
Finally, has this national opulence, whose material progress strikes every eye, benefited the poor? Not at all! The working classes in England are without comfort now, and without security for the future. There are no more freeholders on the land; they had to yield to day laborers; there are hardly any craftsmen left in the villages, or independent owners of small businesses, but only manufacturers. The factory hand, to use a word the system itself has coined, does not know what it is to have a station in life; he only gains wages, and since these wages cannot suffice equally for all seasons, he is almost every year reduced to ask alms from the poorhouse.
This opulent nation has found it more economical to sell all the gold and silver she possesses, to give up good coinage, and to accomplish its circulation with paper. She has thus voluntarily deprived herself of the most valuable of all the advantages of specie, price stability. The holders of provincial bank notes risk ruin every day from frequent, sometimes epidemic bank failures, and the entire state is exposed to a convulsion in all fortunes if an invasion, or revolution, should shake the credit of the national bank. The English nation has found it more economical to give up crops which demand much manual labor, and she has discharged half the cultivators who lived on the land; she has found it more economical to replace workers with steam engines, and she has dismissed, then rehired, then dismissed again, the workers in the villages; weavers have yielded to power looms, and now succumb to famine; she has found it more economical to reduce all workers to the lowest possible wages on which they can still subsist, and the workers, being no more than proletarians, have no fear of plunging themselves into even greater misery by raising ever larger families. She has found it more economical to feed the Irish with nothing but potatoes, and clothe them in rags, and now every packet boat brings legions of Irish who, working for less than the English, drive them from all employments. What are then the fruits of the immense accumulation of wealth? Has it had any other effect than to make all classes share sorrow, privation, and the specter of total ruin? Has England, by forgetting men over things, sacrificed the end for the means?
From the above, we can get an idea of the fundamental stance of Sismondi toward the various problems of capitalist production. There seems little need here to explain in detail that this stanceso well-intentioned and humanistic, but at the same time petty-bourgeois, conservative, querulous, and completely ineffective historically speakingseems pitiful when contrasted with the materialist conception of history later developed by Marx. Nor do we need to discuss how Marx's ideas represent a profound development of those of Sismondi. Here it seems sufficient to merely point out that one characteristic of the materialist conception of history is that instead of merely complaining about the problems of the day, it instead uncovers within these problems the elements for the development toward a new era.
I also think that there is no particular need here to take a detailed look at Sismondi's analysis of the causes of crisis or the countermeasures he proposes. Regarding these points it seems sufficient to merely note the following. According to Sismondi's doctrine, a system of production based upon competition necessarily brings forth crises in two senses. First, this is because the correspondence, or lack of correspondence, between supply and demand can only be known after the fact, via price increases or decreases, and not only is a correspondence between the two necessarily premised on constant disequilibrium, but the reestablishment of equilibrium between industrial sectors prompted by these fluctuating prices, is seriously obstructed by the difficulty of the transfer of capital and labor, so that this transfer cannot occur without actually bringing about the ruin of capitalists and misery to workers. Sismondi goes on to say, secondly, that in addition to the inevitability of such partial crises, under a system of competition the reduction of prices is the only competitive weapon among capitalists, and therefore the unavoidable condition for survival. He writes: "the attention of the manufacturer is therefore endlessly directed to the discovery of some savings of labor, in the use of materials, that will enable him to sell at a lower price than his competitors. As the materials in their turn, are the product of previous labor, his savings come down at all times, in the last analysis, to the use of less labor for the same product." [In other words] "Through improvements from the production method, one part of the workers employed will become a surplus and become unemployed. At the same time, one part of the income of society will have to be reduced. And this lost social revenue will not be compensated for by the slight decease in the price of the newly produced commodities or the gains of the capitalist." Thus, according to Sismondi, in general there inevitably arises an inconsistency between the income of society that determines demand (and therefore consumption) and production. That is, a general crisis is also not merely possible but inevitable under unlimited free competition. So what does he propose as a measure to counter these types of crises? Here Sismondi's stance is quite insufficient and indecisive. He basically believes in the need for some sort of intervention on the part of the state in order to place controls upon unrestricted competition.
In a short article such as this one, not intended to present the various doctrines regarding crisis, there does not seem to be a need to explore Sismondi's theory of crisis in greater detail. And there will be an appropriate moment shortly to deal with the defects in his analysis of the cause of crisis. What is essential to the aim of this article, rather, is to clarify how Sismondi, despite his powerless stance and incomplete analysis, had great significance for the history of political economy and for the self-awareness of the capitalist class.
Sismondi was himself a political economist. And despite his "new principles," he still remained within the framework of a bourgeois perspective. However, even while remaining within this framework, he already perceives the fundamental contradiction in the capitalist mode of production that had revealed itself, and he posits this as one important problem. The perspective that he adopts does not permit him to pose the problem in a correct form, and therefore he is unable to solve this problem. But we can still recognize the groundbreaking significance that Sismondi's manner of posing of the problem had for the development of political economy. The fundamental characteristic of classical political economy was that even while adopting a bourgeois perspective it advanced the elucidation of the internal connections of capitalist production. What made this scientific attitude of the pioneers of political economy possible was their unshakable belief in the capitalist mode of production. One example was their conviction that the capitalist mode of production was ideal for the development of productive power. The views of Adam Smith, needles to say, are strikingly optimistic, but even in the case of Ricardo, who was considered to be pessimistic by economic historians, we can see that this conviction underlies all of his arguments. Marx, for his part, said of Ricardo:
This path of self-doubt, traveled by Sismondi alone, may have been the only path left to classical political economy, but this was not the orthodox path for bourgeois political economists. The path of the orthodoxy was rather to employ sophistry to deny the existence of general overproduction, which had appeared in reality, while at the same time, with ill intent, deceiving people about the fundamental relations of capitalist production, which could no longer be confidently elucidated and defended. We can see this within the shift to a theory of the impossibility of general overproduction and the process of the complete vulgarization of the system of political economy.
The basic tenet of the orthodoxy to demonstrate the impossibility of general overproduction is generally referred to as the "théorie des débouches" [or "Say's Law"]. This theory was first advocated using this particular term in the first edition of Jean Baptiste Say's Traite d' économie politique published in 1803. For the second edition and subsequent editions Say made some revisions but this did not alter his main point, which, when applied to the matter at hand, comes down to the following argument. A product is ultimately exchanged for another product. Money is merely the mediator of exchange. Thus, the purchasing power vis-a-vis one product is created by the production of another product, and conversely the production of a product creates the purchasing power vis-a-vis another product. Therefore, the overproduction or lack of a sales channel for one product can only signify underproduction of another product, so that an excess of production common to every product is, by its very nature, impossible.
This argument of Say was later adopted by Ricardo, who in Principles of Political Economy writes:
The arguments of Say and Ricardo, in denying a general crisis, demonstrate the fundamental defect in their understanding of these basic relations of capitalist production, but during the period when a general crisis had yet to become a reality, this defect was not yet demonstrated by reality. As long as this was the case, they could at least manage to present their arguments without betraying their scientific conscience. This situation changed completely in 1825, when a general crisis appeared as an actual fact. How did this change in the situation alter the theory of crisis held by orthodox political economy? Ricardo, as mentioned earlier, had already died in 1823, so there is nothing we can say regarding him. But we can take a look at Jean-Baptiste Say, the father of the théorie des débouches.
To counter an attack from Sismondi, who indicated the actuality of crisis in England, Say wrote:
The negative relation between bourgeois political economy and crisis is not limited to that mentioned above. Periodic crises unceremoniously threw large numbers of wageworkers, who had been gathered from various directions during the preceding period of prosperity, into the ranks of the unemployed, and by instilling in them a keen awareness of their own suffering and the contradictions of capitalist production this effectively stimulated their rebellious feelings and class consciousness. The clearest demonstration of this is that with every crisis there were countless riots and one socialistic doctrine after another arose. The early socialistic doctrines "Ricardian socialism" inherited Ricardo's theory of value and sought to use it as a weapon to attack capitalist production. According to Ricardo, the source of value is labor, while profit and rent are merely one part of this labor. Thus, profit and rent are stolen from labor, meaning that the current organization of society is an organization of theft. The Ricardian socialists argued that such an unmoral organization of society should be swept aside and replaced by a correct one where distribution is carried out according to each person's labor. There is no real need here to explain how utterly powerless this moralistic and utopian standpoint was. Nevertheless, this attack was at least a menace to the capitalist class at the time. And the attack made an appeal to the proletarian class. The capitalist class was unable to come up with an effective rebuttal to this attack. The outbreak of crises had already robbed economists of their only basis to counter this criticism namely the belief that capitalist production is the ideal form for the development of productive power. The elucidation of the internal connections of capitalist production, which had once been a weapon in the hands of the capitalist class, turned into a weapon to be used against them. This situation ultimately determined the transformation of bourgeois political economy from its classical system into a vulgar one. The labor theory of value was discarded, and in its place the "trinity formula" according to which rent arises from land, profit (and interest even more so) from capital, and wages from labor became ascendant.
Still, the sophistry used to reject the possibility of a general crisis and the dogma to conceal the class nature of capitalist production were incapable of preventing the gradually awakening of the working class that occurred along with the periodic outbreak of crisis. A crisis is an example of a stubborn fact that cannot be denied through mere sophistry. The need to whitewash the internal relations of capitalist production grew with the passage of time, while at the same time there was an increasingly acute awareness of the need for policies to prevent, or at least alleviate, a crisis. This change in the situation led to a change in the attitude toward crisis within the capitalist camp. It was no longer possible to deny the possibility of crisis. Moreover, spurred by the new necessity, bourgeois scholars even engaged in an active study of the process that generates crisis. It was never possible, however, for them to investigate the necessity of crisis as the developmental outcome of the fundamental contradictions of capitalist production. To do so would have meant ultimately arriving at a rejection of capitalist production itself. Thus, instead of raising the question of the ultimate cause of crisis (as in the debate between Sismondi and Say), or its internal process of development (as in the later system of Marx), a new tendency arose of setting the goal of searching out the superficial relations between phenomena within the process of the business cycle, which is one aspect of crisis. This is the shift from a "metaphysical=deductive" theory of crisis to a "scientific=inductive" theory of crisis. But this was in fact rooted in the same socio-historical necessity as that of the historicist tendency within political economy in general (which was also the tendency for social policy). That is to say, in both cases, it was not possible to conceal the reality of the contradictions of capitalist production and in the case of the former in particular this was the most acutely contradictory phenomenon of crisis and at the same time this developed to the point where a hands-off approach was no longer possible. Meanwhile, in order reject the exposure of the internal significance of these contradictory phenomena, while on the other hand pursuing the self-contradictory goal of preserving capitalist production itself while averting its undesirable outcomes, they denied comprehensive=theoretical research itself, while at the same time attaching the word "scientific method" to describe their pursuit of historical facts and examination of the superficial relations between these facts (without touching on the fundamental relations of capitalist production).
The above, of course, is merely a blanket evaluation of the totality of the new stance taken by bourgeois political economy toward crisis. When observed more closely, this tendency certainly does not have a single, uniform appearance. It passed through various developmental stages, and actually split into several branches. Here it is not possible to provide a detailed description of this, but in very general terms it could be said that this tendency was manifested in three developmental stages and that the final two stages form the two main currents today. The first, or pioneering stage, is represented by the achievements of Clement Juglar. He was the pioneer of the new tendency in terms of shifting the object of study from "crisis" to the entire process of the "business cycle," which encompasses one aspect of crisis, and replacing the "abstract-deductive" method of investigation with a "demonstrative-inductive" method based on historical materials. But Juglar's field of vision was primarily limited to the area of finance and did not encompass the entirety of the national economy. The second stage is represented by continental scholars, first and foremost Arthur Spiethoff, who drew ideas from the work of the Russian "revisionist" Marxist Tugan-Baranovsky that appeared at the end of the nineteenth century, and they were also driven by the crisis that broke out in the beginning of the twentieth century and developed ideas based on new materials such as the surveys carried out by Vereins fur Socialpolitik. The intention of these scholars was to move from the historical study of the process of changes in the business cycle, to elucidate the relation of cause-and-effect of the wave-like movement of the economy, and this led to various "discoveries." But even the "discoveries" of some value had already been clarified earlier by Marx. The only difference is that unlike Marx, who had grasped the various moments within the total process of capitalist production, in terms of their particular relation to the totality, on the basis of a complete understanding of the internal relations of capitalist society, these scholars severed the moments from this relation, emphasizing them in an isolated, abstract, and therefore one-dimensional manner. Later I will have the opportunity to touch further on this point. Finally, in the third stage, which developed with particular rapidity after the Second World War, instead of seeking the cause of fluctuations in the business cycle in the meager and imprecise materials, the most urgent matter at hand was considered to be the gathering of large amounts of materials to clarify the process of change in the cycle itself, and efforts were made to quantitatively express this process using, above all, complex mathematical methods, and by evaluating the order of the succession of various indicators appearing within the process they tried to utilize the knowledge gained to devise policies related to the business cycle. This approach, by its nature, could not rely on the achievements of individual scholars, and had to be carried out as a joint effort involving significant cost and large numbers of personnel. The various business-cycle research centers, which first appeared in the United States and then spread to other countries, were created to carry this out. Some representative institutions in the United States are the Harvard University Committee of Economic Research established in 1917, and the National Bureau of Economic Research and the Washington D.C. based Institute of Economics, both founded in 1920. Learning from this, similar research centers were founded elsewhere, such as the centers in Stockholm (1922), London (1923), Paris (1925), and Rome (1926). No definite statement can be made about the research results of these institutions, considering how recently they have been established, but one thing has at least been clear from the outset: there is no way to correctly investigate the business cycle without a correct theory of political economy. This is because it is only in accordance with an established theoretical basis that one is able to decide which facts are to be observed, in what manner, and from which direction, from out of the infinite number of economic facts with an infinite range of meanings that exist within an infinite number of relations. If this theoretical basis is not established, or is mistaken, most investigations, no matter how accurate or large in scale, will end up being a waste of energy. Granted, some results of value will be arbitrarily generated just as a dog that walks around, as the [Japanese] saying goes, will eventually come across a bone or it is more accurate to say that such results will be endowed with real value by being reorganized in line with a correct theory. For this reason, we do not hold out many expectations for the findings of these capitalist research centers, but at the same time, instead of rejecting their work out of hand, we should pay attention to what can be utilized from their research.
Thus far I have looked at the development of crisis theory within the capitalist camp and the historical significance of this development. Now I would like to address the question of the developmental process of the theory of crisis within the camp of Marxism and the current state of this theory.
The great interest that Marx and Engels had in crisis is clear from the Communist Manifesto and Capital alone, as has been pointed out by many commentators. Still, if we read the direct accounts of their lives, and trace all of the connections within their systematic critique of political economy, we can no doubt renew our sense of wonder on this point. From their writings we get a keen sense of how excited they were by any indication of a crisis and the degree of their practical interest in crisis. The extent of this theoretical interest is evident from the fact that their entire criticism of political economy, ultimately, can be viewed as a study of the developmental process of crisis. (This is a point I will address in subsequent chapters.)
Around the end of the 1870s, however, for specific reasons (which must be elucidated in the main theory of crisis), a remarkable change took place in the situation of the world market, and therefore in the aspects of the progression of capitalist production. In line with this change, a shift occurred in the immediate aim of the proletarian movement, and the original spirit of Marxism was neglected following the death of Marx. The issue of crisis as a catastrophe of capitalist production was, at least for the moment, no longer the focus of either practical or theoretical attention. It was Bernstein's efforts to "revise" Marxism that hardened this tendency, turning what had been passive neglect into active rejection. But Bernstein's proposals, unexpectedly, ended up providing a great stimulus to the Marxist camp, with many opposing his "revisionism." And the necessities of the debate itself provided an opportunity to restore the revolutionary theory of Marx centered on the problem of crisis. This situation was strengthened by the presentation of the work of the "revisionist Marxist" Tugan-Baranowsky  in Russia, and by the outbreak of crisis at the beginning of the new century. The problem of crisis frequently came to the forefront. Two or three meaningful proposals were made, but ultimately they were limited by the proposal of Bernstein that called them forth. There were not adequate opportunities for the new development of a Marxist theory of crisis.
These opportunities ripened along with the ripening of a new stage of capitalist production. This new stage is what Lenin referred to as the "stage of imperialism."
This stage is characterized by capitalist production undergoing a fundamental formal metamorphosis during its process of development, which is the transformation from its "liberal" to its "monopoly" form. However, just as this transformation does not signify the abolishment of capitalist production itself, it also does not signify the superceding of the contradictions of capitalist production. Rather, this provided a developmental transformation of the form of these contradictions. And this developmental transformation necessarily brought about a developmental transformation of the form of crisis, which is both the explosion and self-dissolution of the contradictions. This was a transformation from purely economic crises to the occurrence of world wars. In other words, within the new form the contradictions of capitalist production, in their cyclical accumulation, necessarily exploded not merely as an economic crisis but as a world war. This took on the quality where the contradictions could only be dissolved through the explosion of a world war. There thus arose the necessity not only of an economic crisis, but the occurrence of world war as the developed form of such a crisis.
This shift to the new situation the arrival of inevitable world war could naturally be keenly felt even before it was theoretically elucidated. And the awareness of this steadily ripening situation gradually awakened great attention from every direction, including of course Marxists. This can be seen from the fact that at the congresses of the International heated debates arose over the policy to be taken toward war. In these debates, we can see three different tendencies among the opinions expressed on war. One was a clear jingoistic tendency, the second was a utopian pacifist tendency, while the third recognized the inevitability of war as the explosion of the contradictions of capitalist production and at the same time saw within such war the final catastrophe of capitalist production. Needless to say, it was this third tendency that took the most active interest in this problem. This was represented by those who had experienced the 1905 revolution in Russia that broke out in part because of the Russo-Japanese War, starting first and foremost with Lenin, and represented by Rosa Luxemburg. It is no accident that they were the two who carried out the most innovative work for developing a scientific analysis of imperialism.
The work by Luxemburg I am referring to is of course her famous book The Accumulation of Capital: A Contribution to an Explanation of Imperialism (1913). In it, she begins by critically examining Marx's schema for the process of the expanded reproduction of the total social capital, attempting to demonstrate that in a society where capitalist production is universally dominant and monopolistic, it is quite impossible for capital to be accumulated. An indispensable condition for the accumulation of capital, she asserts, is the existence of non-capitalist societies or social layers. This means that the necessity of capital accumulation at the same time necessitates the forced advance of capitalist societies into the non-capitalist areas and the competition among groups of capitalists (states) to make such advances in a word it necessitates imperialism. Subsequently, these non-capitalist areas themselves become capitalistic, so that the non-capitalist areas disappear, thereby robbing the areas themselves of their own possibility to advance further. There must be some ultimate limit to this historical process of capital accumulation, and therefore a limit to the fate of capitalism itself. This is the gist of what Luxemburg sought to demonstrate in The Accumulation of Capital.
Opinions are divided over whether Luxemburg's attempt was on target in terms of grasping the problem and the process of inference she employed. I have a number of doubts myself, and will probably have an appropriate time to discuss each one subsequently. Still, no one can ignore the historical significance of Part One of The Accumulation of Capital. With an increasingly keen awareness of the approaching crisis of world war, which accompanied the gradual unfolding of the contradictions particular to the imperialist stage of capitalism, the decision by the Social-Democratic Party regarding the policy to adopt toward war became increasingly crucial. Luxemburg made the first theoretical achievement intended to sweep aside the petty-bourgeois attitude of the "central faction" of the party and put in place a truly proletarian stance as its foundation. The historical significance of The Accumulation of Capital is demonstrated by the incredibly controversy it generated within the Social-Democratic Party. As Luxemburg writes:
Obviously, out of such enormous superprofits (since they are obtained over and above the profits which capitalists squeeze out of the workers of their "own" country) it is possible to bribe the labor leaders and the upper stratum of the labor aristocracy. And that is just what the capitalists of the "advanced" countries are doing: they are bribing them in a thousand different ways, direct and indirect, overt and covert.
This stratum of workers-turned-bourgeois, or the labor aristocracy, who are quite philistine in their mode of life, in the size of their earnings and in their entire outlook, is the principal prop of the Second International, and in our days, the principal social (not military) prop of the bourgeoisie. For they are the real agents of the bourgeoisie in the working-class movement, the labor lieutenants of the capitalist class, real vehicles of reformism and chauvinism. In the civil war between the proletariat and the bourgeoisie they inevitably, and in no small numbers. take the side of the bourgeoisie, the "Versaillese" against the "Communards".
Unless the economic roots of this phenomenon are understood and its political and social significance is appreciated, not a step can be taken toward the solution of the practical problem of the communist movement and of the impending social revolution.
We have clarified the significance of Luxemburg's The Accumulation of Capital for the developmental history of this theory. So now we need to consider how Lenin's Imperialism represents a step forward compared to Luxemburg's work.
This development can be seen, essentially, in how Lenin grasped the problem. And the locus of this development in grasping the problem can already be seen externally from the titles each author gave to their books. Luxemburg chose the title, The Accumulation of Capital: A Contribution to an Explanation of Imperialism, whereas Lenin clearly entitled his work Imperialism: The Highest Stage of Capitalism. I think that both titles, in a sense, clarify that imperialism is the product of the modern development of capitalism. Imperialism as the outcome of the modern development or the modern aspect of imperialism is the historical reality that underlies the emergence of both works. Each book has particular historical significance in terms of adopting a truly proletarian stance toward this new situation. But Rosa Luxemburg does not seem to have an adequate awareness of her corresponding historical mission. Indeed, according to the passage from An Anti-Critique quoted above, the particular historical significance of The Accumulation of Capital only first reached her consciousness through the "unexpected" shock its publication had within the Social-Democratic Party; unless she was using this expression as a rhetorical expression within the debate. This is not the extent of the problem, however. If we look at the structure of her book, as already noted, its fundamental part is composed of a general analysis of the reproduction process of social capital. She concludes that expanded reproduction (capital accumulation) is absolutely impossible in a purely capitalist society. From this impossibility, she demonstrates that non-capitalist environments are indispensable to capital accumulation in general. And it is here that she seeks to locate the economic basis of imperialism. It may be possible, through such a general basis as the general characteristic of capitalism to explain imperialism, but this will be quite unable to explain the imperialism that characterizes capitalism's modern stage or the particular modern aspect of imperialism. What actually motivated Luxemburg, spurring her to write The Accumulation of Capital in 1913 on the eve of a world war, clearly must have been the latter, yet what she explained was the former. Herein lies a defect in her work. And it is the existence of this defect that highlights the ground-breaking significance of Imperialism. In Lenin's book, the object of study is clearly defined from the outset in terms of "imperialism as the highest stage of capitalism." From this, he is clearly aware that unless "the fundamental economic question, that of the economic essence of imperialism" is studied, "it will be impossible to understand and appraise modern war and modern politics." Lenin, thus, does not pose the question in terms of the general process of capital accumulation, but instead considers the "concentration of production and monopolies," "banks and their new role," and "finance capital and the financial oligarchy," which were ground-breaking developments at the end of the nineteenth century and early twentieth century. Unlike Rosa Luxemburg, he does not raise the problem of the general relation between capitalist societies and non-capitalist societies. Instead, he considers the "export of capital," "division of the world among capitalist associations," and the "division of the world among the great powers," which characterize the modern stage of this relation. The consideration of these problems by Lenin provides an essential grasp of imperialist war in its most modern form i.e. not war in general or a general view of capitalist aggression, as explained by Luxemburg, but rather as a world war among great powers to divide up the world, which is the explosion that occurred in 1914 and will continue to occur as long as capitalism still exists and he also reveals the basis of the tendency of "social patriotism" that appeared along with the necessity of war. Moreover, unlike Luxemburg, from the outset Lenin considers where the most dangerous enemies are, pointing out that "special attention has been devoted in this pamphlet to a criticism of Kautskyism, the international ideological trend represented in all countries of the world by the most 'prominent theoreticians,' the leaders of the Second International cand a multitude of socialists, reformists, pacifists, bourgeois democrats and parsons."  Finally, unlike Luxemburg, who abstractly speaks of the general self-contradictions of capitalism, and explains the ultimate deadlock of capitalism from these self-contradictions, Lenin locates within imperialism, as the modern form of capitalism, a clear sign of the decline of capitalism and a clear transitional aspect leading toward socialism.
Lenin's theory of imperialism, then, is a study of the historical characteristics of the particular aspect of the current stage of capitalism, or what could be called the current stage of capitalism manifested in its imperialistic characteristics. The essence of this historical character, he says, lies in the contradictions of capitalist production, as the outcome of the self-development of these contradictions, which brings about a formal transformation. By elucidating the contradictions of capitalist production within these new forms, Lenin was able to clarify the inevitability of world war as the explosion of these contradictions, and the decisive significance such war must have for the fate of capitalism, while clearly discerning the boundaries of the enemy camp in the struggle against imperialist war. His work thus establishes general standards for the struggle of the proletarian class against modern capitalism centered on imperialist war, thus giving this book great practical significance. As is well known, this was useful as a guiding principle in the Russian Revolution, and subsequently as a guiding principle for the Third International, and it continues to be useful today.
We therefore need to clarify the value of Lenin's work, while at the same time not overlooking its inherent limitations. This is a work that was originally written in order to elucidate certain phenomena, so we should not expect it to resolve matters that it did not originally set out to address.
As noted already, it is a study of the nature of the current stage of capitalism, and does not go beyond this study of its nature as a stage. But if the current stage of capitalism is to be observed further, it is clear that it does not have a uniform appearance. That is to say, within it are encompassed various developmental aspects. In other words, the contradictions of capitalist production within the imperialist stage are also themselves developed through a wave-like process. From the outset, Lenin's Imperialism does not set out to elucidate this process of development. And this is natural. Lenin's work was written in the midst of a world war, as an urgent response to this situation. The development of contradictions had already passed a certain point. The contradictions regardless of the nature of their process of development were exploding in reality. At issue was the task of revealing the essence of the crisis that had actually arrived, as a crisis of capitalism in general which had to be realized as such. Clearly, the question of the twists and turns leading up to the arrival of the crisis was a secondary issue at the time. But today the situation has changed. For the moment, the page of the Great War has been turned, with the direct outcome being that the wave of the worldwide revolutionary movement has receded. The task today is to prepare for the new crisis that will soon arrive. This new period of crisis will probably once again take the form of a world war. But even prior to this, it will likely assume the form of an economic crisis. In either case, however, the greatest task in the current period is to prepare for the upcoming major crisis. How can we accomplish this task in the most efficient and effective manner? First of all, we must confirm the necessity underlying the arrival of the new crisis, and also recognize the current position as one step in the journey leading toward this. It is only possible to attain the theoretical basis for this recognition by grasping all the contradictions of capitalism in their mutual organic relation, i.e. as moments in the dialectical development of capitalist production, and to thereby elucidate the process of the inevitable development up to the point where these contradictions explode. It is precisely the elucidation of this theoretical basis as will be explained in more detail subsequently that is the task of a truly Marxian theory of crisis. And this is precisely what Marx set out to achieve throughout his entire systematic critique of political economy. In this sense, the entire system of his critique (within which Capital is the most fundamental part) at the same time is a system of a theory of crisisor a system that is concentrated within the "theory of crisis" as the most comprehensive, conclusive parts of the totality. Yet, these relations do not seem to have been adequately understood by many Marxist researchers. In fact, the problem of crisis has mainly been considered from a narrow and one-dimensional perspective. Crisis and the problems related to it have not been elucidated, and at times have been distorted. The various causes of crisis its intrinsic, ultimate causes, and its real forms, conditions, etc. in most cases have been severed from their original relations to be grasped abstractly in isolation, and therefore as mutually unrelated (or only superficially united), or even as mutually unrelated. In such a situation, every debate ends up being waged for the sake of debate alone, and naturally do not generate results that take us a step forward. This, I think, is one reason why the system for a theory of crisis not only remains incomplete but there is no indication of any constructive progress of any sort. Of course, the completion of a theory of crisis is certainly no easy task. In all likelihood it could not be achieved by a lone individual and would instead require the cooperation of many people. However, in order for the cooperation of many to be effective there must be a common basis or uniform standpoint. And we can only look to Marx to provide this. This is the reason why I have taken a look back on Marx in this article which I have entitled "An Introduction to the Study of Crisis."
Endnotes to the article: