REVIEW: Ted Reese’s ‘The End of Capitalism: The Thought of Henryk Grossman’

Ted Reese’s ‘The End of Capitalism: The Thought of Henryk Grossman’ sets out to introduce the ideas and life of Henryk Grossman, an important if somewhat little known Marxist economist. 

Grossman, a Polish born economist wrote ‘The Law of Accumulation and Breakdown of the Capitalist System, a study in Marxian crisis theory.’ Though the work was largely sidelined by the official Marxist movement subordinate to Soviet interests, there has been something of a resurgence of interest in Grossmans ideas. This has proven valuable, as Grossmans efforts to expand upon Marxs insights may be amongst the most valuable put to paper.

Before Reese’s book, the little of Grossman that has been published in English has largely been through the efforts of Australian author Rick Kuhn. A rather unfair legacy for a deep thinker, Grossman’s virtue lies in the strength of his arguments defending the theory of the falling rate of profit and its implication; crisis in capitalism. 

Essentially Grossman, via Marx, saw that capitalism’s greatest contradiction lay in the nature of production (as opposed to circulation). As we know, it makes sense for capitalists to constantly invest in more efficient forms of production which require increasingly less living labour (workers). So while society develops these technologies and produces more commodities, increasingly cheap and consumable, overall (remember this is a general trend) there is a tendency to make less profit as time goes on. 

Eventually, this general trend will reach a point where capitalists, despite their great wealth, see no point in continuing to invest given the lack of return. The system begins to hit its limit. Not only that, but the less wealth workers have from wages the less they can consume these very commodities. This sounds too simple to be true, but it is demonstrated with powerful logic and empirical evidence. Grossman also deals with the other multitude of capitalist contradictions, but those are for Reese to explain.

Grossman’s arguments are in fact well complemented by Reeses’ own speciality, writing on automation and capitalist crisis. Published earlier this year, Reese’s The End of Capitalism thus presents Grossman in a manner that makes a convincing argument of just why capitalism is so bound to crisis, and why the gigantic capitalist crisis (or at least, series of crises) that are to be just around the corner will be so catastrophic.

Though The End of Capitalism is an introduction to Grossman, it should be made clear that it is definitely not an introduction to Marxist economic theory. Unless the reader is familiar with most Marxist jargon from value to valorisation to the organic compositions of capital and Departments I & II they will have a hard time following the text as it sometimes too rapidly skims over valuable topics. I can’t help but feel that Reese missed an opportunity to really write a more thoroughly engaging introductory text not only to Grossman but to Marx and economics in general. 

So when Reese regularly refers to Grossman’s critiques of Varga (chief economist of the USSR during Stalin’s period as secretary), Bukharin, Luxemburg and others, unless the reader is familiar with their specific theories they will be left a little lost as to why these critiques are so important. While Reese generally achieves his objective in elucidating Grossman’s views, a lack of clear exposition hampers the context, depth and importance of how his theories fed into his contemporaries’ debates.

Though Grossman was largely ignored and marginalised by the established Marxist movement, his theories were thoroughly  engaged with by the German ultra-left or ‘council communists. While Anton Pannekoek wrote a critique of Grossman, Paul Mattick came to his defence. Karl Korsch subsequently joined the debate. Unfortunately none of this is referenced in Reese’s book, however there is a short section dealing with the friendly relationship between Grossman and Mattick.

The structure of The End of Capitalism also struggles a little to tie together the actual life and ideas of Grossman in a fluid and engaging manner. Born a Polish Jew, Grossman had significant experience in the Polish socialist movement and it’s many minority-national iterations. In particular Grossman was a member of the Social Democratic Party of Galicia and founder of the Jewish Social Democratic Party. He experienced the Russian and German revolutions and taught at the Institute of Social Research (ISR). For those unfamiliar, the ISR was home to the legendary Frankfurt School.

While Grossman and the aforementioned Mattick may have had similar views on economics and a relatively close relationship, Grossmans Communist politics were more conventional and he defended the USSR as non-capitalist, if not exactly progressive. After exile during the Second World War, during which his family were murdered in the Holocaust, Grossman moved to the German Democratic Republic.

Unfortunately, The End of Capitalism does not paint a picture of Grossman that feels particularly relatable as a human being, a strength of better biographies of authors and their ideas.  The book also ends in a strange manner; Grossmans theories are applied to the contemporary economy convincingly painting an extremely grim picture. However Reese also contradicts some of the arguments he lays out earlier in the book (ie Reese seemingly advocates arguments of Luxemburg regarding the realisation of surplus and imperialism that he has taken the trouble to explain Grossman’s critique of). Finally we are presented with some unusual political conclusions; such as the need for nuclear power, and labour time credits as a system of currency. A number of his more speculative positions are both somewhat unconvincing and unclear how directly they relate to Grossman’s views.

That being said, The End of Capitalism does present enough of a picture that the reader understands why Grossman was both important, and marginalised. It is short enough to be accessible to the curious, if relatively Marx-literate reader, and inspires further research into a valuable theorist.

The End of Capitalism: The Thought of Henryk Grossman.

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