Henryk Grossman

Henryk Grossman
Born	(1881-04-14)14 April 1881 Kraków,Austrian Poland
Died	24 November 1950(1950-11-24)(aged 69) Leipzig,East Germany
Nationality	Polish
Academic career
School or tradition	Marxian economics
Influences	Carl Grünberg,Karl Marx,Jean de Sismondi

Henryk Grossman(alternative spelling:Henryk Grossmann;14 April 1881 – 24 November 1950) was a Polish economist, historian, andMarxistrevolutionary active in both Poland andGermany.

Grossman's key contribution to political-economic theory was his book,The Law of Accumulation and Breakdown of the Capitalist System,a study inMarxiancrisis theory.It was published inLeipzigmonths before theStock Market Crash of 1929.

Early life and education

Grossman was born as Chaskel Grossman into a relatively prosperous Polish-Jewish family inKraków,Poland(then part ofAustrianGalicia).Although his parents were assimilated into Krakow society, they nevertheless ensured their sons were circumcised and registered as members of the Jewish community.His father died at the age of 54 when Henryk was 15.

He joined thesocialistmovement around 1898, becoming a member of theSocial Democratic Party of Galicia(GPSD), an affiliate of theSocial Democratic Workers' Party of Austria.The GPSD, led byIgnacy Daszyński,was formallyMarxist,but dominated byPolish nationalistsclose to thePolish Socialist Party(PPS).When theUkrainian Social Democratic Partyin Galicia (USPD) was formed in 1899, the GSPD became thePolish Social Democratic Party(PPSD) and the Polish nationalist current was strengthened.Grossman led the resistance oforthodox Marxiststo this current. Along withKarl Radek,he was active in the socialist student movement, particularly inRuch(Movement), which included members of the PPSD as well as of the two socialist parties in theKingdom of Poland,the PPS and theSocial Democracy of the Kingdom of Poland and Lithuania(SDKPiL – led byRosa LuxemburgandLeo Jogiches).He was the main figure in the newspaperZjednoczenie(Unification), which took a line close to the SDKPiL, against the pro-PPS politics ofRuchs main organ,Promieńfor which he was censured by the PPSD and its newspaperNaprzód.

During this period, Grossman learnedYiddishand became involved in the Jewish workers' movement in Kraków. Grossman was the founding secretary and theoretician of theJewish Social Democratic Partyof Galicia (JSDP) in 1905. The JSDP broke with the PPSD over the latter's belief that the Jewish workers should assimilate to Polish culture. It took a position close to theBund,and was critical of thelabour Zionismof thePoale Zionas well to assimilationist forms of socialism.The JSDP sought to affiliate to the Social Democratic Workers' Party of Austria (the General Party), but this was refused. However, the JSDP was active alongside the General Party, for example foruniversal suffrage.

Grossman earned hisJuris Doctorin 1908 from theJagiellonian University.At the end of 1908, he went to theUniversity of Viennato study with the Marxian economic historianCarl Grünberg,withdrawing from his leadership role in the JSDP (although he remained on its executive until 1911 and had contact with the small JSDP group in Vienna, the Ferdinand Lassalle Club).With the destruction of the Austro-Hungarian empire at the end ofWorld War I,Grossman became an economist inPoland,and joined theCommunist Party of Poland.

Career

From 1922 to 1925, Grossman was Professor of economics at theFree Polish Universityin Warsaw. He emigrated in 1925 to escape political persecution. The same year he was invited to join the MarxianInstitute for Social Researchin Frankfurt by his former tutor Carl Grünberg.

Hitler's accession to power in 1933 forced him first to Paris, and then via Britain to New York, where he remained in relative isolation from 1937 until 1949. In that year he took up a professorship in political economy at theUniversity of LeipziginEast Germany.

Grossman'sThe Law of Accumulation and Breakdown of the Capitalist System(1929) despite being one of the first publications of theFrankfurt Schoolwas only made available in English translation in 1979 byJairus Banaji,for an Indian Trotskyist organisation, thePlatform Tendency.A recent edition is:ISBN0-7453-0459-1.However, it is a condensed version and lacks the important concluding chapter of the German original.

Contribution to theory

While at Frankfurt in the mid-1920s, Grossman contended that a "general tendency to cling to the results" ofKarl Marx's theory in ignorance of the subtleties of "the method underlyingCapital"was causing a catastrophic vulgarisation of Marxian thought, a trend which was undermining the revolutionary possibilities of the moment.

The Law of Accumulationwas his attempt to demonstrate that Marxian political economy had been underestimated by its critics and by extension that revolutionary critiques ofcapitalismwere still valid. Amongst other arguments, it sets forth the following demonstration (for a complete definition of the terms employed, the whole book is recommended):

Logical and mathematical basis of the law of breakdown

Apart from the arithmetical and logical proofs that we have been given already, mathematicians may prefer the following more general form of presentation which avoids the purely arbitrary values of a concrete numerical example.

Meaning of the symbols

c=constant capital.Initial value =c_o.Value afterjyears =c_j
v=variable capital.Initial value =v_o.Value afterjyears =v_j
s= rate ofsurplus value(written as a percentage ofv)
a_c= rate ofaccumulationof constant capitalc
a_v= rate of accumulation of variable capitalv
k= consumption share of capitalists
S= mass of surplus value, being:

$k+{a_{c}\cdot c \over 100}+{a_{v}\cdot v \over 100}$

Ω=organic composition of capital,orc:v
(Correction with respect to Grossman's text: From the formula below it follows that Grossman means byΩthe initial value of the organic composition of capital$c_{0}$:$v_{0}$)
j= number of years

Further, let
$r=1+{a_{c} \over 100}$

and let
$w=1+{a_{v} \over 100}$

Formula

Afterjyears at the assumed rate of accumulationa_c,the constant capitalcreaches the level: $c_{j}=c_{o}\cdot r^{j}$

At the assumed rate of accumulationa_v,the variable capitalvreaches the level: $v_{j}=v_{o}\cdot w^{j}$

The year after (j+ 1) accumulation is continued as usual according to the formula: $S=k+{c_{o}\cdot r^{j}\cdot a_{c} \over 100}+{v_{o}\cdot w^{j}\cdot a_{v} \over 100}={s\cdot v_{o}\cdot w^{j} \over 100}$

whence

$k={v_{o}\cdot w^{j}(s-a_{v}) \over 100}-{c_{o}\cdot r^{j}\cdot a_{c} \over 100}$

Forkto be greater than 0, it is necessary that: ${v_{o}\cdot w^{j}(s-a_{v}) \over 100}>{c_{o}\cdot r^{j}\cdot a_{c} \over 100}$

k= 0 for a yearn,if: ${v_{o}\cdot w^{n}(s-a_{v}) \over 100}={c_{o}\cdot r^{n}\cdot a_{c} \over 100}$

Note this line follows the German original inDas Akkumulations- und Zusammenbruchsgesetz des kapitalistischen Systems (zugleich eine Krisentheorie)because it is misspecified in the condensed English translation.

The timing of the absolute crisis is given by the point at which the consumption share of the entrepreneur vanishes completely, long after it has already started to decline. This means:

$({r \over w})^{n}={s-a_{v} \over \Omega \cdot a_{c}}$

whencen= ${log\left({\frac {s-a_{v}}{\Omega \cdot a_{c}}}\right)} \over {log\left({\frac {100+a_{c}}{100+a_{v}}}\right)}$

This is a real number as long ass > a_v

However, this is what we assume anyway throughout our investigation. Starting from time-pointn,the mass of surplus valueSis not sufficient to ensure the valorisation ofcandvunder the conditions postulated.

Discussion of the formula

The number of yearsndown to the absolute crisis thus depends on four conditions:

1. The level of organic compositionΩ.The higher this is the smaller the number of years. The crisis is accelerated.
2. The rate of accumulation of the constant capitala_c,which works in the same direction as the level of the organic composition of capital.
3. The rate of accumulation of the variable capitala_v,which can work in either direction, sharpening the crisis or defusing it, and whose impact is therefore ambivalent.
4. The level of the rate of surplus values,which has a defusing impact; that is, the greater iss,the greater is the number of yearsn,so that the breakdown tendency is postponed.

The accumulation process could be continued if the earlier assumptions were modified:

1. The rate of accumulation of the constant capitala_cis reduced and the tempo of accumulation slowed down.
2. The constant capital is devalued which again reduces the rate of accumulationa_c.
3. Labour power is devalued, hence wages cut, so that the rate of accumulation of variable capitala_vis reduced and the rate of surplus valuesis enhanced.
4. Finally, capital is exported, so that again the rate of accumulationa_cis reduced.

These four major cases allow us to deduce all the variations that are actually to be found in reality and which impart to thecapitalist mode of productiona certain elasticity...

Much of the remainder of Grossman's book is devoted to exploring these "elasticities" or counter-crisis tendencies, tracking both their logical and their actual, historical development. Examples of each would include:

1. Depressed interest rates, investment capital transferred to unproductive speculation, e.g. housing stock, art objects.
2. Enlarged state sector bleeds value from the accumulation process via taxes. Wars destroy capital values.
3. Thereserve army of labour(unemployed) created to discipline wage claims.
4. Imperialism

Personal life

Grossman lost his immediate family in the Holocaust. His wife Jana and his son Jan were murdered in Auschwitz in 1943.His return to Leipzig was considered in the newly formedGerman Democratic Republicto be a success for the regime, and he was nominated by the city of Leipzig in March 1950 for theNational Prize'for the totality of his scientific achievements in the area of scientific socialism', but did not win. He was plagued with ill health and died after suffering with prostate problems andParkinson's disease.

See also

• Reproduction (economics)
• Capital accumulation
• Crisis theory
• Tendency of the rate of profit to fall
• Surplus value
• Organic composition of capital
• Paul Mattick- Grossmanite critique of Keynesianism

Further reading

• Kuhn, Rick (ed.)Henryk Grossman Works, Volume 4: Writings on Economic and Social HistoryBrill, 2023
• Kuhn, Rick (ed.)Henryk Grossman Works, Volume 3: The Law of Accumulation and Breakdown of the Capitalist System, Being also a Theory of CrisesBrill, 2021
• Kuhn, Rick (ed.)Henryk Grossman Works, Volume 2: Political WritingsBrill, 2020
• Kuhn, Rick (ed.)Henryk Grossman Works, Volume 1: Essays and Letters on Economic TheoryBrill, 2018
• Freudenthal, Gideon and Mclaughlin, Peter (editors)The Social and Economic Roots of the Scientific Revolution: Texts by Boris Hessen and Henryk GrossmannSpringer 2009ISBN978-1-4020-9603-7
• Grossman, HenrykThe Law of Accumulation and Breakdown of the Capitalist SystemPluto 1992ISBN0-7453-0459-1
• Kuhn, RickHenryk Grossman and the Recovery of MarxismUrbana and Chicago: University of Illinois Press, 2007.ISBN0-252-07352-5
• Grossman, Henryk [2017]Capitalism’s Contradictions: Studies in Economic Theory before and after MarxEd. Rick Kuhn, Trans. Birchall, Kuhn, O’Callaghan. Haymarket, Chicago.ISBN978-1-60846-779-2
• Scheele, JuergenZwischen Zusammenbruchsprognose und Positivismusverdikt. Studien zur politischen und intellektuellen Biographie Henryk Grossmanns (1881–1950)Frankfurt a.M., Berlin, Bern, Bruxelles, New York, Wien: Peter Lang, 1999.ISBN3-631-35153-4.

External links

• Grossman, Henryk,The Henryk Grossman Internet Archive.A collection of Grossman's writings.
• Grossman, HenrykFifty years of struggle over Marxism 1883‐1932
• Harman, Chris,"Forgotten treasure: a new biography of Grossman",International Socialism,No. 114, Spring 2007. A review of Kuhn's Grossman biography.
• Heartfield, James,"Why Grossman still matters",Spiked Review of Books,No. 3, July 2007. Another review of Kuhn's Grossman biography.
• Kuhn, Rick,"Capital development",Socialist Review,No. 245, October 2000. A short biography of Henryk Grossman.
• Kuhn, Rick,"Economic crisis and socialist revolution: Henryk Grossman's Law of accumulation, its first critics and his responses",preprint version of an essay in Paul Zarembka and Susanne Soederberg (eds)Neoliberalism in crisis, accumulation and Rosa Luxemburg's Legacy:Research in Political Economy21 Elsevier, Amsterdam 2004 pp. 181–22. A discussion of aspects of Grossman's contribution to the Marxist theory of economic crisis.
• Kuhn, Rick,"Henryk Grossman and the recovery of Marxism",preprint version of an article inHistorical Materialism13 (3), 2005. On Grossman's contributions to and place in the history of Marxism.
• Kuhn, Rick,"Henryk Grossman – Capitalist Expansion and Imperialism"Archived2017-11-06 at theWayback Machine,International Socialist Review,No. 56, November 2007. On the relevance of Grossman's analysis for understanding globalisation and the current crisis.
• "On Henryk Grossman, A Revolutionary Marxist: An Interview with Rick Kuhn",Radical Notes,9 April 2007
• Mattick, Paul,"Economic Crisis and Crisis Theories",1974. (The book places Grossman's work in the context of other theories of economic crisis.)