Lukacs and Hilferding on Bourgeois Economics

Here, once again, we can clearly observe the close interaction between a class and the scientific method that arises from the attempt to conceptualise the social character of that class together with its laws and needs. It has often been pointed out-in these pages and elsewhere-that the problem that forms the ultimate barrier to the economic thought of the bourgeoisie is the crisis. If now-in the full awareness of our own one-sidedness-consider this question from a purely methodological point of view, we see that it is the very success with which the economy is totally rationalised and transformed into an abstract and mathematically orientated system of formal ‘laws’ that creates the methodological barrier to understanding the phenomenon of crisis. In moments of crisis the qualitative existence of the ‘things’ that lead their lives beyond the purview of economics as misunderstood and neglected things-in-themselves, as use-values, suddenly becomes the decisive factor. (Suddenly, that is, for reified, rational thought.) Or rather: these ‘laws’ fail to function and the reified mind is unable to perceive a pattern in this ‘chaos’.

This failure is characteristic not merely of classical economics (which regarded crises as ‘passing’, ‘accidental’ disturbances), but of bourgeois economics in toto. The incomprehensibility and irrationality of crises is indeed a consequence of the class situation and interests of the bourgeoisie but it follows equally from their approach to economics. (There is no need to spell out the fact that for us these are both merely aspects of the same dialectical unity). This consequence follows with such inevitability that Tugan-Baranovsky, for example, attempts in his theory to draw the necessary conclusions from a century of crises by excluding consumption from economics entirely and founding a ‘pure’ economics based only on production. The source of crises (whose existence cannot be denied) is then found to lie in incongruities between the various elements of production, i.e. in purely quantitative factors. Hilferding puts his finger on the fallacy underlying all such explanations:

"They operate only with economic concepts such as capital, profit, accumulation, etc., and believe that they possess the solution to the problem when they have discovered the quantitative relations on the basis of which either simple and expanded reproduction is possible, or else there are disturbances. They overlook the fact that there are qualitative conditions attached to these quantitative relations, that it is not merely a question of units of value which can easily be compared with each other but also use-values of a definite kind which must fulfil a definite function in production and consumption. Further, they are oblivious of the fact that in the analysis of the process of reproduction more is involved than just aspects of capital in general, so that it is not enough to say that an excess or a deficit of industrial capital can be ‘balanced’ by an appropriate amount of money-capital. Nor is it a matter of fixed or circulating capital, but rather of machines, raw materials, labour-power of a quite definite (technically defined) sort, if disruptions are to be avoided.”

G. Lukacs citing R. Hilferding

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