Henryk Grossman and the End of Capitalism

Ted Reese

June 21, 2022

“The problem of the possible future end of [the capitalist mechanism] has never been taken up within the investigative scope of [bourgeois] economics! Just raising the problem throws them into a fearful panic,” writes Henryk Grossman in his 1929 The Law of Accumulation and Breakdown of the Capitalist System – a tour de force of economic theory and unsurpassed defense of Marx’s Capital. “But even within the Marxist camp, the conditions for understanding Marx’s life-work were extremely unfavorable. From the correspondence between Marx and Engels, it is apparent how mortified Marx felt by the fact that party circles in Germany were almost unbelievably indifferent to Capital... Even the leading thinkers of the workers’ movement were incapable of grasping the decisive aspects of Marx’s theory.”

That theory expounds on capitalism’s necessary tendency to breakdown – eventually absolutely. Anticipating a “massive” stock market crash in the US, Grossman felt compelled to produce a major study that would expose the revisionists and reformists in the socialist movement who claimed that, so long as consumption and distribution were properly regulated, capital could accumulate harmoniously and indefinitely. His book was the first accurate explanation of Capital’s structure and revolutionary implications.

Grossman, Capital, and Crisis

Grossman, a Polish Jew born in 1881, was not altogether surprised that Capital – especially volume three and its more detailed account of crisis theory – had sunk in a sea of idealism following a “period of vigorous capital accumulation” between 1890 and 1913, bringing about a “departure from Marx’s theory rather than its deepening”.

Following the appearance of Capital, two generations had to march across the historical stage before capital accumulation’s advance and its consequences had sufficiently ripened capitalism into its present imperialist phase and spawned conflicts that found a temporary end in the convulsions of the World War. Only now does the problem of realising socialism descend from the nebulous regions of the socialist programme to the reality of day-to-day practice. Only now are lessons and answers sought in Capital to questions that are no longer purely ‘academic’, no longer simply problems of theory but are thrown up by the harsh necessities of everyday life. In the changed historical situation, the inquisitive gaze reveals previously unnoticed words and content.

Grossman’s book was the most read publication produced by a member of the Frankfurt School – the academic institute focused on Marxist philosophy – and came out just months before the depression-inducing Wall Street Crash, immediately confirming Grossman’s suspicions, which had not been shared by reformists. But with the New Deal managing to prevent any sustained revolt in the US and fascism emerging to beat back reformist and revolutionary forces in Germany, thereby isolating the Soviet Union, Grossman’s book and crisis theory met with almost universal hostility. Even Stalin’s closest economic advisor Jenő Varga dismissed Grossman’s work and, like his reformist counterparts, located capitalism’s contradictions at the level of consumption and distribution.

Although Grossman repeatedly stressed that only a victorious struggle for socialist revolution could make a breakdown absolute, his insistence that such a manifestation must eventually become an objective necessity – since capitalism must come up against an insurmountable ‘final breakdown’ – was disingenuously but roundly attacked for neglecting the importance of class struggle.

Grossman thus met with the same fate as Marx – as did the idea of socialism’s historical necessity with the fall of the Soviet Union. Marx was wrong and historical progress had, in fact, ended.