Rosa Luxemburg and Michał Kalecki: A Marxian View

Rosa Luxemburg is not an under-consumptionist stressing the tendency to stagnation, it is rather an under-investment perspective: the effective demand crisis results from the disequilibria determined by a vibrant capitalist accumulation, and stems from production rather than circulation. To show this, the chapter deals with three dimensions of Rosa Luxemburg's economic thought. First, how Luxemburg's approach in her 1913 book is related with some of her prior writings, especiallySocial Reform or Revolution?and theIntroduction to Political Economy. Second, the re-reading that Luxemburg herself provided of her own argument in terms of a macro-monetary circuit model like the one we read in herAnti-Critique. Third and last, in which sense Marx's monetary labour theory of value was for her the essential starting point, which cannot be just set aside. This last point will be preceded by adétour, the critical consideration of some key papers by Kalecki on capitalism and reform, including his late paper with Kowalik on the ‘crucial reform’. The chapter concludes with some hints pointing towards an interpretation of capitalism and its recurring crises where exploitation and effective demand are both essential in accounting for the ascent and collapses of different forms of capitalism itself.