‘On the Formation of Marxism: Karl Kautsky’s Theory of Capitalism, the Marxism of the Second International and Karl Marx’s Critique of Political Economy’ reviewed by Jamie Melrose

Reviewed by Jamie Melrose

About the reviewer

Jamie Melrose teaches at the University of Bristol. His research focuses on the fin de …


First published in 1986, this new version of On the Formation of Marxism in Brill’s Historical Materialism series suggests that the series’ editors see Kautsky studies as being in need of reanimation. Any dernier cri as regards On the Formation of Marxism is to be found in its particular disciplinary focus. Unlike other full length studies in English – Massimo Salvadori’s (1990) and Gary P. Steenson’s (1978) for example – Gronow’s discourse on Karl Kautsky is concerned with political economy, specifically the close Marxian reading of Capital in which that text is ‘a complex, articulated conceptual structure that requires strenuous interpretation’ (Callinicos 2007, xi). Although Kautsky’s Marxist centrism – his position between radical left and reformist right – is touched upon in On the Formation of Marxism, Gronow’s critical question is not ‘did Kautsky read the revolutionary potential of the German and European proletariat right’, but rather, ‘did Kautsky read Capital right?’

Gronow’s answer is similar to many a commentator on Kautsky: not really. Kautsky misappropriated Capital. On the Formation of Marxism lays out Kautsky’s chief faulty extrapolation, his ‘Marxist’ theory of capitalism. In overly demarcated free-standing chapters, Gronow expounds the theory via Kautsky’s clashes with Lenin and Eduard Bernstein: the former over imperialism, the latter over the supposed empirical refutation of Kautsky’s theory. In terms of Kautsky’s misappropriation of Marx, chapter 5 is key, as it details Kautsky’s acceptance of a far too simple account of capitalist exploitation. Kautsky’s intellectual translation of Marx is central to this book – the short second part of which is dedicated to Marx’s analysis of capitalism in order to better compare it with Kautsky’s.

In Gronow’s analysis, Kautsky’s contribution to Social Democratic Marxism is no political soap opera, laced with snarky comments from his considerable correspondence. This is a reading of Kautsky in decidedly technical terms. As Capital has been received more and more in its Marxian (as opposed to Marxist) context, bursting the bubble of traditional interpretative myths, we have witnessed a far more immanent interrogation of Capital than in the late 19th century. Obviously, this interpretative shift is one that Kautsky could not have been privy to. On the Formation of Marxism’s disregard for context is, however, understandable in the context of Kautsky studies. Gronow’s framing of Kautsky, in light of the heavy-duty work that has gone on in the field of Capital analysis, is not typical in the Kautsky studies field. Yes, Kautsky’s cack-handed treatment of Marx’s ‘economics’ is self-evident to generations of sophisticates aware that Kautsky belongs to a bygone, unashamedly nomothetic era, but the extent to which Kautsky went awry according to the methodological premises of Marxian analysis is something Gronow is very keen to impress.

The state of Kautsky studies today is more advanced than may be thought. Gronow notes ‘the critical re-evaluation of Kautsky’s political and theoretical role’ (5). Critics have largely moved on from an all too familiar picture of Kautsky the grey Marxist doctrinaire. Far from being the vulgar economic fatalist of popular conception, for example, Kautsky was committed to working-class agency and the imperative of organisation. Acknowledging that the presentation of Kautsky as an advocate of ‘the automatic collapse of capitalism’ (301) is a cliché, Gronow is concerned with a more fundamental issue: Kautsky’s Marxian competence. For it is with Kautsky’s and his peers’ misreading of the complicated conceptual apparatus of Capital that post-Marxism, the Marxism after Marx’s original Marxism, took its definitive false step.

Gronow underscores that Kautsky’s main Marxian task was extending a theory of capitalism that he and other Second International Marxists such as Engels and Rudolf Hilferding had located in Capital. For Kautsky, Capital was historico-descriptive, law-like, a narrative of how the simple exchange of commodities became an unjust, exploitative industrial system, rife with contradictions, none bigger than the private appropriation of social wealth by a small group of capitalists. For Gronow, ‘[t]his interpretation, understandable as it is, would have been quite harmless and acceptable as a simplified formula’ (23). But Kautsky never appreciated that the theory of Capital was not merely a theory; that is, a propositional explanation of capitalist development – monopolisation of wealth, immiseration, increasingly anarchic competition, proletarisation – which provided the judgmental grounds for successful socialistic revolutionary intervention. Though anyone reading the historical tendency of capitalist accumulation in Capital could construe a positive law of capitalist development, to Gronow and to an authentically construed Marx, Capital is a critique of economic relationships which exposes and transcends ‘a specific relation of exploitation’ (298) present in the capitalist private property setup. Capital was not a clarion call for the rationalisation of capitalist anarchy in favour of the labourer, as it became in first Engels’s then Kautsky’s exposition; it was a critique of the labouring activity on which the anarchy of the capitalist system was predicated.

For example, Gronow argues that Kautsky’s ‘critique of capitalism comes close to a radical version of natural rights theory’ (290). Spelt out in his time-honoured text The Economic Doctrines of Karl Marx, Kautsky’s case for concluding capitalism was capitalism’s systematic exploitation of the labouring worker, her debasement from one-time owner of her product to expropriated industrial producer. ‘Capitalism was to be blamed,’ Gronow points out, ‘because it did not respect the original right of the worker to his own products’ (298). The worker’s product is now used against her in an alien appropriation by the boss class. It follows therefrom that although capitalism’s negative characteristics are not tameable, and are clearly not reversible, they are increasingly manageable in the form of the replacement of the guardians and owners of capital by the working class wielding state power. There comes an intelligible point at which this replacement was achievable, at which the capitalist mode of production has unsustainably run amok. Thus, the political theorem from Kautsky’s theory of capitalist development was the corrective role of state power: ‘[a] socialist society was then essentially a society in which the anarchy of production and the antagonisms of distribution had been replaced by state planning and regulation’ (25).

Marx came at it somewhat differently than Kautsky. Gronow highlights that what was at stake for Marx was the conditions of exchange under which the act of labouring was wrought in capitalist relations of production, how appropriation took place in the form of manifestly just transfer, the worker surrendering her labour for an equivalent wage from the capitalist. The labourer was not, as Kautsky fixated on, actively repressed, the true value of her product appropriated from her due to the capitalist’s corrupt performance of surplus extracting thievery, as much as this had a certain presentational validity. Labour under capitalist relations became something objectively different for Marx, different from previous conceptions.

In one of the most important passages of the book, Gronow channels the main thesis of Projekt Klassenanalyse’s differentiation of Marx and Kautsky (83-7). In sticking to the historical semblance of simple commodity production, a stage before the corruption of capitalism, Kautsky thought that the circulation of the product of the proletariat – labour – under capitalism had inherent in it the original state of fair exchange and therefore its transgression, ‘a relation….in which they [the proletariat] are faced by capital as an alien force’ (84). Yet Capital demonstrates that it is only in the circulation of the product of the proletariat – labour power – in capitalism that capitalist appropriation is socially possible. Not through its misuse, but in its use, is the faculty of labour power exploited, surplus value extracted in its consumption. Exchange value is respected. The bourgeois pretence of free and fair exchange of legitimately acquired property is a formal necessity, not a transmogrified veil over the extraction of surplus value. In the exchange of commodities, the material embodiment of previous surplus labour, the labourer is now plugged into an exploitative relationship which, far from being a tension that makes no capitalist sense – and which thus leaves the door open to Kautsky’s organised socialism – is in fact a prerequisite.

The implication of Gronow’s authentically Marxian position contra Kautsky is communism: the end of the property relation and the class rule that it enshrines. The implications of Kautsky’s position is socialism: the end of the maldistribution of property and money by a universal social body and the privileging of class rule in that a responsibility towards just socialisation is prioritised over the active dismantling of the relations of production.

In his writings on imperialism and his exchanges with Bernstein, Kautsky’s theory of capitalist development shows his essentially insufficiently anti-capitalist credentials whatever his propagandic anti-capitalism. Kautsky had a highly moral take regarding imperialism: ‘capitalists are exploiting the people without even an illusion of equality in their relations’ (293). Like his foe, Lenin, he considered a capitalist truth to be writ large in imperialism, but unlike Lenin, much of what Kautsky uttered on the topic suggested that ‘it is both rational and possible to oppose the use of imperialistic methods in capitalism’ (125). One did not need to resort to Lenin’s stark counterpoising of imperialism and war versus a socialist revolution. What united the two men was their economism, their dualistic belief in the self-evident nature of capitalism’s abject failure being the catalyst for the revolutionary subject, and in the proletariat having a degree of political independence from capitalism. Kautsky’s clash with Bernstein in the revisionist controversy is indicative of post-Marxists’ confused approach, too. As they read Marx after Marx, they did not get it, the core of Marx’s theoretical message. In Kautsky’s response to Bernstein’s negative answer to the question ‘[i]n what sense is the socialist doctrine and the strategy of the working class based on the idea of the necessary economic development of capitalism?’ (55), Kautsky emphasised the subjective in Marxist development theory, and his commitment to it. The organised proletariat, taking on bourgeois rule, was just as essential as the objective tendencies of modernity. But Kautsky and Bernstein, fighting over the objective and subjective sides of Marxist development theory, effectively posited that there was one such theory, complete with dualistic sides. Such contraposing by the two men made rigid (objective versus subjective, the course of economic development versus the fashioning of a revolutionary subject) that which in Gronow’s view should be mediated in the Marxian deconstruction of capitalist categories (154).

There are a few minor slip ups in On the Formation of Marxism. In respect of Bernstein’s treatment, I noted a missing bibliography entry for a reference to a 1904 work by Bernstein (38). I was surprised that, given On the Formation of Marxism has been updated, Henry Tudor’s translation and edition of Bernstein’s Die Voraussetzungen des Sozialismus und die Aufgaben der Sozialdemokratie is not preferred to Edith Harvey’s. Plus, to state that Bernstein ‘explicitly rejected … the materialist conception of history’ (36) is to ignore the places where Bernstein stated that he was very much committed to the materialist conception of history, if not to its reductionist interpretation.

Not much good is ever said about the Marxist theoreticians of the Second International. Or if it is, it is done under the cloud of the general theoretical paucity of Second International Marxism. Here Gronow is in good company. What defines On the Formation of Marxism is its presentation of Kautsky’s methodological shortcomings. To put it bluntly, we know that Kautsky’s Marxism, as with his mentor Engels, was coloured by the dominant epistemological trends of their time. We are aware of the critical, radical Marx, oft contrasted with Kautsky and Engels’s ponderous Gründlichkeit. But perhaps we need to know more regarding Kautsky’s grasp of the logic of Capital, even if we know its substantial result. Such is Gronow’s contribution. Using Marxian exchange theorists such as Isaak Rubin and Hans-Georg Backhaus, furthering their and others’ intense examination of Capital’s statements, he details post-Marxism’s immaturity when it came to Marx, and how a generation of Marxists, with Kautsky at their head, took an unorthodox course.

15 January 2017


  • Callinicos, Alex 2007 Foreword to the English Translation of Jacques Bidet’s Que faire du “Capital”? Exploring Marx's Capital: Philosophical, Economic and Political Dimensions Jacques Bidet, trans. David Fernbach (Leiden, Brill).
  • Salvadori, Massimo 1990 Karl Kautsky and the Socialist Revolution 1880-1938 trans. Jon Rothschild (Verso, London).
  • Steenson, Gary P. 1978 Karl Kautsky 1854-1938: Marxism in the Classical Years (University of Pittsburgh, Pittsburgh).

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