Abstract
Krätke offers a clear overview of the history of this seminal work by Rudolf Hilferding, from its inception to its making, its impact and reception and later plans by its author to rewrite the book. This chapter gives a full list of the major theoretical achievements of Hilferding’s Finance Capital, correcting the conventional view of the book as an historical account of the latest phase of capitalist development. Instead, and contrary to the conventional view, Krätke presents Hilferding’s work as an effort to continue Marx’s Capital and to deal with questions that Marx had left unsettled, such as the theory of competition, of credit and finance. Following an assessment of Hilferding’s main theoretical contributions, Krätke presents a full list of major amendments and conceptual changes that should allow us to understand the phenomena of contemporary financial market capitalism.
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Notes
- 1.
- 2.
- 3.
Original in German; the translation is my own.
- 4.
The original version of Marx’s main manuscript of 1864–1865 for Capital , Volume III, was published in 1992 for the first time, an English translation is available since 2015 (see Marx 2015).
- 5.
Original in German; the translation is my own. As the many drafts for the second and third volume of Capital have now been published in section II of the second MEGA, we are today able to answer Hilferding’s question. Yes, there are some passages in the manuscripts left by Marx that Engels should have included in his edition. Engels’s decision to leave them out, however, can be excused, as Marx himself was not fully aware of the relevance of all the discoveries he actually made.
- 6.
Engels’s fragmentary text, titled ‘Die Börse’, was published for the first time much later, in 1933 (see Engels 2003).
- 7.
It has to be emphasised that apart from Finance Capital and his critique of Böhm-Bawerk’s criticism of Marx (see Hilferding 1949), Hilferding’s work has remained virtually unknown in the English-speaking world. The only exception being Tom Bottomore’s anthology of writings from the Austro-Marxist school, published in 1978 (see Bottomore and Goode 1978). For a bibliography of Hilferding’s writings, although not complete, see Kurata (1974).
- 8.
Still in 1906, his close friend Otto Bauer wrote to Kautsky on Hilferding’s behalf, asking him to send some books that Hilferding could not find in Vienna (Bauer 1906). Although Hilferding wrote in the Preface to his book that the manuscript was already ready by the end of 1905, I doubt that. Once in Berlin, he resumed his work and finished it only at the end of 1909. The books belonging to his personal library, since the early 1950s in the custody of the University of Cologne, show clearly that he continued his study of banking in the Anglo-Saxon countries and in Central Europe for several years. It is remarkable that Hilferding studied German and American textbooks on the techniques and practices of banking—just as Marx had done thirty years earlier (see Hilferding 1957).
- 9.
His successor became the young Rosa Luxemburg. For some reason, she profoundly disliked Hilferding. Hilferding could only teach his introductory course on Marx’ economic theory for a few months, from October 1906 to March 1907. Unfortunately, Hilferding’s notes and outlines for his course at the Party School have not been preserved, nor have any notes on his lectures by students survived.
- 10.
More than sixty years later, another group of young Marxists in France set themselves the same task. These young economists realised that the analysis of the phenomena of contemporary capitalism could not be carried any further by just repeating the old formula or metaphors that Marxists used to cherish. They were successful in creating a theoretical movement or ‘school’, the so-called Regulation school, which gained a lot of fame but lost momentum after a few initial efforts. As a theoretical school, setting and working their way through a new agenda of (largely old) problems—from money, the wage labour relationship to the world market—they utterly failed; only a somewhat different phraseology, void of any clear theoretical content, has survived.
- 11.
Bauer’s partly diverging views on the matters addressed in Hilferding’s book can be found in the lectures on political economy which he gave for the Austrian Party School (cf. Bauer 1976).
- 12.
- 13.
Hilferding had explained his views further in two articles published a short while before his book (see Hilferding 1909a, b). Today, all this is largely forgotten. Even the best specialists on Marx’s theory of money, like the late Suzanne de Brunhoff, have to this day avoided discussing the debates on monetary theory in the era of classical Marxism.
- 14.
Even his last book, a collection of articles published anonymously in Paris 1938, was devoted to an analysis of the successes and failures of the Nazi economy, which he rightly saw as a war economy geared towards total warfare (for details, see Krätke 2019).
- 15.
Parts of this manuscript, especially the endnotes, remain unpublished to this very day. For the circumstances of Hilferding’s arrest in Arles and his death at the hands of the Gestapo in Paris see Kurotaki (1984).
- 16.
What a pity that Hilferding never had the opportunity to study Marx’s original manuscripts for Volumes II and III. There he would have found a further extension of Marx’s rudimentary analysis of modern finance—the concept of fictitious accumulation.
- 17.
See, for a recent attempt, Durand (2017).
- 18.
This task was actually performed by Otto Bauer twenty years later. He started his great project on the transformations of capitalism since World War I in the 1920s. The first volume of his planned work, the volume dealing with the process of rationalisation in capitalist firms appeared in 1931, the manuscript for the second volume, although far advanced, was lost as Bauer himself believed. However, this second volume, Otto Bauer’s analysis and explanation of the world economic crisis of the 1930s, the second Great Crisis in the history of modern capitalism, had survived (see Krätke 2008).
- 19.
It actually took more than a century to firmly establish the monopoly of central bank notes as legal tender everywhere. In federal states, like the United States of America, the struggle lasted much longer.
- 20.
It is a pity that even Suzanne de Brunhoff has avoided a serious discussion of Hilferding’s attempt to extend the scope of Marx’s theory of money (see de Brunhoff 1976).
- 21.
In Germany and Austria, this profound change did not occur before the end of the 1950s. Still then, the majority of wage labourers—as opposed to salaried employees or white-collar workers—were paid in cash.
- 22.
It was Hilferding’s friend Karl Renner, a jurist by training, who emphasised the importance of good knowledge of the intricacies of money, credit and finance for the socialist movement. In order to teach his fellow socialists and the crowd of young budding Marxists more about these matters, he wrote one of the very best textbook introductions to Volumes II and III of Marx’s Capital (see Renner 1924).
- 23.
When Hilferding wrote his book, he did not know anything about Marx’s later studies of financial markets. Many of Marx’s notebooks from the late 1860s and the 1870s have not yet been published.
- 24.
The third pole in the economic field characterising modern capitalism is, of course, occupied by the modern state, a very special economic power in its own right and more than that. Besides the relations between capital and labour and the relations between capital and capital, in every investigation of the basic structures of modern capitalism we have to take the relationships between state and capital into account—as well as the relationship between wage labour and the state. Last but not least, the relations between wage workers and other wage workers should be integrated into this overall picture. As the state only appears as a unified body without any differentiation in philosophical imagination, we are finally obliged to deal with state–state relationships as well.
- 25.
Obviously, it would have been a good idea to introduce further kinds of capital like agriculture capital and mining capital, or the capital of the extractive industries. Those had remained largely unexplored and undertheorised in the Marxist tradition. Kautsky’s early study of capitalist agriculture was one of the rare exceptions (see Kautsky 1988).
- 26.
Hilferding wrongly used the term ‘central bank’ for this, which only caused confusion.
- 27.
For a discussion of the salient problem of how to use Marx’s theory of capitalism in general for an analysis of recent (or older) changes and developments in the history of capitalism, including its ‘contemporary history’, see Krätke (2007).
- 28.
For a different attempt to do so see Chesnais (2018).
- 29.
Renner’s analysis and his various formulas depicting the special circuits for merchant and banking capital and other forms of interest-bearing capital provide a good starting point. His work, apart from his ground-breaking ideas on the forms and functions of private law (see Renner 2017), remains virtually unknown in the English-speaking world.
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Krätke, M.R. (2020). Rethinking Hilferding’s Finance Capital. In: Dellheim, J., Wolf, F.O. (eds) Rudolf Hilferding. Luxemburg International Studies in Political Economy. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-47344-0_2
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