What İs Economics Rosa Luxemburg

What is Economics?

From 1907 until World War I, Rosa Luxemburg taught a course in economics for the German Social Democratic Party. While asserting that the average working man and even the writer and teacher of economics hardly understood what economics dealt with, she began her lectures by addressing the question "what is economics?" Because of the difficulty of the question and the lack of clarity of its history, Luxemburg concluded that learned professors should not even bother trying to reveal when, how, or why the science of economics originated.

In response to the definition "economics is simply the science of the economic relations among human beings" (1970, p. 224), Luxemburg recited several examples why this definition was inadequate because economic relations among human beings highly differed for people living in different time periods. Peasants, for instance, lived during a time where production was largely conducted for the benefit of one's own use in fulfillment of basic needs, and where economic relations were highly transparent. The only matter left for scientific investigation for this economic time period was the historical origin of these relations.

Today, however, economic relations and conditions were totally different and not so transparent. According to Luxemburg, commercial crisis experienced in modern life was "looked upon and treated by all concerned, by all of society, as something beyond the sphere of human volition and beyond human control" (p. 232) -that it was natural and not a social phenomena like an earthquake sent down from the heavens. In fact, today we have before us a question of economic life that none of the participants can explain. While the medieval economy produced exactly what people needed to survive, in the modern economy the satisfaction of needs and the produce of labor no longer agreed. Ironically, we confronted the effects of natural disasters, such as floods, with more collective help than we did with any of the adverse effects of the economic system, such as unemployment.

The social phenomena of a commercial crisis and unemployment were in most people's minds exceptions to the normal course of events. However, the fluctuation in prices for commodities and equities was a daily occurrence and commonly led to changes in the distribution of social wealth. No one controlled this process. Hence, unlike medieval times, scientific investigation was more needed in this world where economic relations were hidden and where economic activity did not correspond to the intentions or conscious control of its participants. This was, according to Luxemburg, the immediate reason for the birth of economics.

In the contemporary world, competition was now the only regulator of economic relations, and planning was only executed within the firm. Today, only one ruler dominated the working class - capital. However, it was not despotism, but anarchy. In fact, according to Luxemburg, the very essence of the science of economics resulted from an unwillingness to identify "anarchy" as the "vital motive force of the rule of capital" (p. 238). Luxemburg's science of proletarian economics, as opposed to bourgeois economics, was highly related to social struggle.

The age of economics as a science, then, corresponded to the birth of the capitalist mode of production. In discussing the origin of the nation state, Luxemburg argued that the formation of the bureaucratically centralized nation state was in fact the product of the growth of capitalist production. As capitalism developed, new economic relations were established as a new class of people was created with nothing to sell but their labor power. This class was created as people were thrown out into the capitalist system due to the agricultural revolution, the growth of wool manufacturers, and the enclosure movement.

The rapid growth in commerce in the centers of the world of trade located in Italy and Spain gave rise to the first questions of economics, one of which was "what determines the wealth of a state?" (p. 242). It was subsequently taught (some of the first teachings of economics) that it was commerce that created wealth, especially if a country imports more gold than allows to be exported.

Economics was a source of class-consciousness and political power for the bourgeoisie. Although feudalism was not reformed according to their original plans, bourgeoisie's ultimate goals were realized as the capitalist mode of production gradually developed out of commerce and as writers such as Adam Smith and David Ricardo became a supportive arsenal for furtherance of their designs.

One interesting assertion that Luxemburg made was that by understanding why and how economics as a science originated, we could also understand what its eventual fate would be. For Luxemburg, capitalism was not eternal but merely a transitory phase. In other words, as soon as economics came to understand the laws that dictated the decline of capitalism, that same understanding would become a "weapon in the revolutionary class struggle waged for the emancipation of the proletariat."

Beginning with Babeuf during the French Revolution, socialist theorists and advocates (including Saint-Simon, Fourier, Owen, Weitling, Proudhon, and Louis Blanc) made the mistake of attempting to introduce social equality into the system without proper foundations. Marx and Engels, on the other hand, departed from all previous socialists by trying to understand the economic relations of the capitalist mode of production and showing that capitalism would eventually collapse due to increasing anarchy. From this, Luxemburg concluded that the final task of economics as a science would be to create a planned world economy.