Rosa Luxemburg on the recession.

I’ve been reading through some Rosa Luxemburg essays as part of some personal study around the German socialist revolution of 1918 – 1923.

I thought this was a particularly timely quote from Luxemburg’s “Reform and Revolution,” criticizing the socialist Edward Bernstein’s theory of capitalism’s ability to adapt and be reformed particularly by the rise of credit. A little over two decades later Bernstein’s hypothesis would be disproven by the Great Depression.

“We see that credit, instead of being an instrument for the suppression or the attenuation of crises, is on the contrary a particularly mighty instrument for the formation of crises. It cannot be anything else. Credit eliminates the remaining rigidity of capitalist relationships. It introduces everywhere the greatest elasticity possible. It renders all capitalist forces extensible, relative and mutually sensitive to the highest degree. Doing this, it facilitates and aggravates crises, which are nothing more or less than the periodic collisions of the contradictory forces of capitalist economy … In short, credit reproduces all the fundamental antagonisms of the capitalist world. It accentuates them. It precipitates their development and thus pushes the capitalist world forward to its own destruction. The prime act of capitalist adaptation, as far as credit is concerned, should really consist in breaking and suppressing credit. In fact, credit is far from being a means of capitalist adaptation. It is, on the contrary, a means of destruction of the most extreme revolutionary significance.”

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