Capitalism; Imperialism; Saving and investment; Socialism
Rosa Luxemburg garbles this argument considerably, and brushes it away
as beside the point. And it _is_ beside the point that she is concerned
with. She does not admit the savings and investment problem, for she
takes it for granted that each individual act of saving out of surplus
is accompanied by a corresponding amount of real investment, and that
every piece of investment is financed by saving out of surplus of the
same capitalist who makes it.[29] What she appears to be concerned with
is rather the inducement to invest. What motive have the capitalists for
enlarging their stock of real capital?[30] How do they know that there
will be demand for the increased output of goods which the new capital
will produce, so that they can 'capitalise' their surplus in a
profitable form? (On the purely analytical plane her affinity seems to
be with Hobson rather than Keynes.)
Needless to say, our author does not formulate the problem of the
inducement to invest in modern terminology, and the ambiguities and
contradictions in her exposition have left ample scope for her critics
to represent her theory as irredeemable nonsense.[31] But the most
natural way to read it is also the clearest. Investment can take place
in an ever-accumulating stock of capital only if the capitalists are
assured of an ever-expanding market for the goods which the capital will
produce. On this reading, the statement of the problem leads
straightforwardly to the solution propounded in the third Section of
this book.
Marx has his own answer to the problem of inducement to invest, which
she refers to in the first chapter.[32] The pressure of competition
forces each individual capitalist to increase his capital in order to
take advantage of economies of large-scale production, for if he does
not his rivals will, and he will be undersold. Rosa Luxemburg does not
discuss whether this mechanism provides an adequate drive to keep
accumulation going, but looks for some prospective demand outside the
circle of production. Here the numerical examples, as she shows, fail to
help. And this is in the nature of the case, for (in modern jargon) the
examples deal with _ex post_ quantities, while she is looking for _ex
ante_ prospects of increased demand for commodities. If accumulation
does take place, demand will absorb output, as the model shows, but what
is it that makes accumulation take place?
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