Marx, Breakdown and the renegade Kautsky

by Jehu

I have come across a very interesting paper by Terrence McDonough and Robert Drago with the absurdly long title, “Crises of Capitalism and the First Crisis of Marxism: A Theoretical Note on the Bernstein-Kautsky Debate“. The paper tries to get a handle on the link between the capitalist recovery from the first “Great Depression” (what some today call “The Long Depression“) at the end of the 19th century and the first crisis among the Marxist leaders of the Second International.

According to McDonough and Drago, Marxists at the turn of the 20th century were not prepared for the recovery that welcomed the dawning of the 20th century. This unexpected recovery of capitalism, the authors argue, triggered the crisis sometimes referred to as the rise of Bernstein revisionism:

“The Marxists of the Second International had no concepts with which to handle the Phoenix-flight of capitalism that they were experiencing. The Second International had developed a somewhat mechanical view of Marxism and the world. All phenomena were seen as an expression of certain laws inherent in the nature of matter. This notion was transferred to the analysis of the capitalist economy. Marx’s tendencies became laws analagous to the laws of physics. This included Marx’s observations about capitalism’s tendency toward crisis (Colletti 1972). Such a view was unable to explain capitalist recovery from long-term crisis. The crisis of Marxism was, in the last analysis, a product of the recovery from the Great Depression.”

Whether this explanation make sense is of no concern to me. I am not in the habit of trying to trace purely contingent political events back to their economic causes. Mostly it is a fool’s errand in my opinion.

What brought me up short, however, was the charge against Marx and Engels, leveled by Bernstein, that they held to a theory of capitalist breakdown.

As McDonough and Drago put Bernstein’s argument:

“The immediate evidence for the crisis is to be found in a largely unconstructive debate over the significance of the recovery for the strategy of the socialist movement (Sweezy 1947: 190-213). Marxists had looked for a swift, worldwide proletarian revolution produced by the worsening of the capitalist crisis. When recovery instead of revolution materialized, a debate began concerning the role of economic crisis in revolutionary theory.

“This “breakdown controversy” was an argument between orthodox Marxists, who claimed that capitalist crisis would continue to worsen, thereby producing a revolutionary conjuncture, and Bernstein’s followers, who participated in the controversy in order to reject revolutionary tactics. The latter argued that revolution is only required if capitalism breaks down. For if the system will not fail of its own accord, then the class struggle can be ameliorated within the existing political framework, and men will be able to realize ‘the continuance of free development (Bernstein 1961: 203).'”

Right or wrong, Bernstein’s argument was simple to understand: if capitalism was headed toward a breakdown, a revolutionary strategy made sense. Bernstein admits Marx and Engels believed capitalism was headed toward a breakdown and formulated a revolutionary strategy based on this inevitable outcome. And Bernstein honestly disagreed with this conclusion and said so openly. On the basis of this disagreement with Marx’s conclusion, Bernstein argued a revolutionary strategy was unnecessary. You may agree or disagree with his argument here, but you cannot really fault Bernstein’s logic.

Faced with Bernstein’s frontal assault on Marx and Engels’ theory, what did Kautsky argue? According to McDonough and Drago, Kautsky just denied Marx and Engels ever had a theory of breakdown:

Kautsky answered that there was no such thing as a breakdown theory (Joll 1956: 4). He argued that while Marx and Engels believed economic conditions would worsen, the growing power and maturity of the proletariat would be the decisive factor in bringing about the transition to socialism. However, Kautsky had not always been so definitive. In his commentary on the Erfurt Program, he had written:

Capitalism has failed; its dissolution is only a question of time; irresistible economic development leads with natural necessity to the bankruptcy of the capitalist mode of production. The erection of a new form of society in place of the existing one is no longer something merely desirable; it has become something inevitable (cited in Colletti 1972: 55-6).

Kautsky’s reply to Bernstein was that, in the first place, he was wrong on economic grounds, and secondly, that revolution does not require economic breakdown. Kautsky used Tugan’s figures to show that crises were indeed worsening. He posited that the productive forces must expand more quickly than the market in the long run, though short-run ups and downs would continue. Thus Kautsky arrived at a theory of “chronic depression,” where “the continued existence of capitalist production remains possible… but it becomes completely intolerable for the masses” (Sweezy 1942: 198).

Kautsky expected that “the victory of the proletariat will intervene in time to turn the development in another direction before the forced situation in question arrives (Sweezy 1942:198).” Ultimately, however, Kautsky merely substituted the notion of chronic stagnation for “breakdown” and retained the concept as a backup in case his optimistic view of proletarian victory did not prevail in the meantime.

Kautsky, who should have known better, just as Bernstein knew better, since both had access to Marx and Engels’ papers, including the Grundrisse, denied Marx and Engels ever had a theory of capitalist breakdown. In effect, Kautsky, while appearing to refute Bernstein’s argument against Marx and Engels, in fact handed Bernstein his most important argument for abandoning revolutionary strategy: Nothing in Marx’s analysis of the capitalist mode of production suggested capitalism was headed toward an inevitable breakdown.

In the so-called struggle against Bernstein revisionism, both sides essentially argued capitalism could go on accumulating forever!


The kicker to this story is that this paper by McDonough and Drago was published in 1989, almost fifty years after the Grundrisse was first published in the original German and sixteen years after it was translated into English in the United States. Marx’s prediction of breakdown of production based on exchange value is plainly written in black and white in that text, yet McDonough and Drago never once reference it in their paper as at least indirect proof Marx did indeed hold to a breakdown theory as Bernstein asserted in the debate.

Had they referenced the fragment on the machine from that text, Kautsky would have been exposed a third time for what he was: an incompetent liar who betrayed Marxism and helped doom it to century of failure.