Abstract
Higgins exposes a little-known contribution of Hilferding to the development of twentieth-century political economy: how he served as an explicit foil to the coordinators of the Walter Lippmann Colloquium, the birthplace of neoliberalism. Hilferding’s sophisticated theories of moderate, evolutionary socialism produced a syncopated note to the advent of the dominant Western ideology in the twentieth century by helping to set its stage, particularly in the German milieu. This chapter not only significantly serves to restore some of the lustre of the work of a misunderstood and underappreciated thinker, but is also timely as the West is currently involved in a process of ideological reconstruction and critique of finance capitalism, to which a revival of Hilferding’s moderate, but revolutionary democratic socialism still has much to say.
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Notes
- 1.
The influence of Hilferding on Lenin’s thought is well -documented in academic literature. Lenin himself makes the admission, on the first page of Imperialism, where he references Hilferding’s magnum opus, Finance Capital as ‘[a] very valuable theoretical analysis of “the latest phase of capitalist development” as the subtitle of Hilferding’s book reads’ (Lenin 1916, p. 1). For other sources of Hilferding and Lenin’s relationship, see Zarembka (2003), Coakley (2000), Smaldone (1998), Zoninsein (1990), James (1981), and Sweezy (1949).
- 2.
The power of his critique is still considered by contemporary Marxist thought. In his introduction to Hilferding’s response, titled Böhm-Bawerk’s Criticism of Marx, Sweezy acknowledges that it was a major impetus for the energy of reformist socialism at the turn of the twentieth century. One student of the history of the debates recounted in 1939 that:
Böhm-Bawerk anticipated nearly all the attacks on Marxism from the viewpoint of those who hold the political economy to centre on a subjective theory of value. On the whole, little has been added to his case by other critics; their important contributions are outside the theories he chose to contest. (Sweezy 1949, p. x)
- 3.
Lavoie (1985) argues that this was one of the strongest elements in the complex and confusing ‘socialist calculation debates’ that occurred in the 1920s. Neither party was able to fully understand each other, and as such, the debate essentially was never completed, but merely faded into the background as more important political and economic concerns, for example, fascism, emerged and this impasse to a very real extent has defined the course of modern economics.
- 4.
This is, essentially, Foucault’s entire thesis in his lectures on neoliberalism as the political technology that enables the rise of biopolitics: that the government was not merely a reflex of the economic system, and, while its possibilities were shaped by the material constraints of the time, they were also shaped by the ideological space as well, that is, that it was the rise of political economy as a science which enabled the formation of governmental reason with regard to the economic space (Foucault 1994).
- 5.
It was Hilferding’s conjunction of neoclassical and marginalist economics that would make Finance Capital so penetrating and important. Caldwell (2004) and Foucault (1994) posit that the debates of the neoliberals with socialists, Marxists, and fascists—which the neoliberals broadly referred to as collectivists, statists, or interventionists—proved to be the ‘road to Damascus’ necessary for their full maturation, and Kirzner (1988) and Lavoie (1985) describe the dialogue as one reason for an increased self-understanding on the part of both the Austrians and the socialists. Furthermore, Hilferding’s analysis reveals two tensions within the neoliberal cadre: that of competition and of markets (Izzo and Olga 1997).
- 6.
Much of Böhm-Bawerk’s criticism of Marx is clarified by Lavoie’s (1985) explanation that a major difference between socialist and Marxist economics, as variants of classical economics, and the Austrian School is that the Austrians view competition as rivalrous, that is, that market interactions are fundamentally a clash of human practices in continuous disequilibrium. The market system thus does not always stabilise in a manner beneficial to society—if at all—and it actually may be quite disruptive in the long run. The Marxists establish a long-term equilibrium, and from this point, they view rivalry and competition as anarchistic and detrimental to society, rather than as inherent to complex production (ibid., pp. 22–7). As such, competition and its role are only grudgingly acknowledged by Marx where ‘anarchism’ rather means dis-coordination than total chaos; thus, while Marx acknowledges competition, he views it as an outgrowth of the capitalist system that is necessarily alienating and detrimental (ibid., pp. 36–9).
- 7.
This line of thought was a significant influence on Lenin’s own Imperialism ([1919] 2010), but Lenin took it further, reasoning that banks used financial capital to control industries through direct manipulation of credit and interest rates in addition to ownership of stock ventures (Lachmann 1944).
- 8.
A key point of ordoliberalism/German neoliberalism is the tension emerging from the view that the foundation of the market system was competition, whereas society thrives on unity and the elimination of competition (Hartwich 2009; Boarman 2000; O’Leary 1979; Röpke [1942] 1992). As such, several of the neoliberals were concerned with the construction of liberalism and the construction of a good society, which extended far beyond the simple economic relations that Mises concerns himself with, and in their humanist critiques (Boarman 2000; Friedrich 1955), they share many points with socialists and Marxists. However, unlike Marxists, they believe that this tension is a question of balancing the social and economic spheres or putting them in their proper order, for example, the Ordnungsökonomik, rather than something that is fundamentally fatal to the political and economic systems.
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Higgins, J.P. (2023). A Socialist Third Way? Rudolf Hilferding’s Evolutionary Socialism as Syncopated Note to Early Neoliberalism. In: Dellheim, J., Wolf, F.O. (eds) Rudolf Hilferding. Luxemburg International Studies in Political Economy. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-08096-8_12
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