Rosa Luxemburg and Say’s Law

InThe Accumulation of Capital(2015a), Rosa Luxemburg emphasises the importance of demand realisation in Marx's economics. First, by studying the history of political economy a refutation is provided of the suggested harmony between production and consumption (what came to be called Say's Law) first proposed by Say and J. Mill. Second, in her analysis of Marx's reproduction schemes, Luxemburg identifies the key role of demand constraints, set in the circulation of money. Central to this analysis is how the specific peculiarities of capitalism, such as constraints on the demand for commodities by wage labour, serve to intensify problems associated with Say's Law. The main purpose of this chapter is to consider how a refutation of Say's Law can be established in Luxemburg's treatment of the reproduction schemes that featured in Polish discussions of economic reproduction. This analysis builds on the examination of Say's Law provided byTrigg (2020)under the confines of simple commodity circulation. Luxemburg's simple reproduction scheme provides a useful starting point for extending this refutation to the arena of capitalism. Core to this approach is how commodity money undergoes wear and tear as money circulates: a phenomenon that is considered by Luxemburg introducing a new department of production for the money commodity. By developing this system, and drawing on Marx's writings inTheories of Surplus Value, part 2 (Marx, 1968), the analysis will provide a systematic exploration of Marx's inevitability theory of crises under capitalism, as an extension of the more established possibility theory of crises under simple circulation.