An Examination of Critical Theories of Finance from Adam Smith to the Present Day
Chapter 4: Rosa Luxemburg and the Marxist Subordination of Finance
Rosa Luxemburg is best known for her attempt in her book The Accumulation of Capital to show that capitalist accumulation requires external markets in order to overcome a tendency to stagnation. These external markets formed the basis of her theory of imperialism, which was taken over by Lenin and subsequent Marxists. However, in chapter XXX of that book, on ‘International Loans’, Rosa Luxemburg examined the role of finance in capital accumulation. This analysis was perhaps peripheral to her argument. But it has sufficient critical elements to warrant a place for Luxemburg among the pioneers of critical finance, while the fate of that analysis among Marxists reveals how the most important school of radical political economy in the twentieth century came to an attenuated view of finance as a factor in capitalist crisis. 1. ROSA LUXEMBURG’S CRITICISM OF INTERNATIONAL BANKING For Luxemburg, the context of the system of international loans was crucial. Advanced capitalist countries faced crises of ‘realisation’, that is, inadequate demand to allow profits to accrue. At the same time, developing countries lacked the markets for commodity production to take place on a capitalist scale. She argued that international loans are crucial in providing finance so that dependent and colonial countries can buy the equipment to develop their economic and industrial infrastructure, reaching political independence but tied into financial dependence on the older capitalist states: In the Imperialist Era, the foreign loan played an outstanding part as a means for young capitalist countries to acquire independence. The contradictions inherent...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.