The Realisation Problem: A Reappraisal of the Kalecki and Luxemburg Discussion on the Schemes of Reproduction

Rosa Luxemburg and Michał Kalecki are two outstanding economists from the first half of the 20th century (although Kalecki published until the end of 1960s) that had several factors in common. First, they shared similar backgrounds; both were Polish-Jewish academics not widely recognised in their countries nor in their schools of thought. Second, they were knowledgeable on Marx’s writings which, following the critical tradition, they used to understand and transform the capitalist economic system. Kalecki’s particular idea is a development of the effective demand theory that, unlike Keynes’s, was based on imperfect competition and non-neoclassical theories of value and price. It employed these in order to highlight that direct cost adjustments (wages and raw materials) and mark-up (capitalist returns) remain relatively constant to price changes; wages are the accommodative variable. Meanwhile Luxemburg introduced the concept of imperialism as a means of showing the unequal relations between countries in which imperialist countries export capital to colonial countries as a way of realising their surplus, provoking social rebellions that can limit the capital reproduction of the entire capitalist system.1