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Über dieses Buch

This edited volume is focused on Hilferding's major work, Finance Capital. In revisiting this influential book from a methodological point of view, both historical and intellectual, this book affirms Hilferding's place in the Marxist tradition. Hilferding's ideas are used to criticise incumbent approaches in economics and enrich existing discussions and debates about the nature of modern capitalism. In doing so, this book highlights the importance of Hilferding's work in analysing and understanding modern capitalism and corporate developments.
The volume has contributions from a range of expert scholars addressing various aspects of Hilferding’s arguments. It elaborates on Hilferding’s central idea on the political economy, as well as its historical context, and its relation to Marx. Contributors move on to criticize Hilferding’s views on the political economy and politics in general. This book is relevant to those interested in the political economy, the history of economic thought, and European politics.



Introduction: Critically Returning to Rudolf Hilferding

In his book, Rudolf Hilferding. The Tragedy of a German Social Democrat, William Smaldone sums up: ‘The tragedy in Hilferding‘s life lay in his adherence to a political outlook that was incompatible with German reality in 1933’ (Smaldone 1998, 8). Although this may certainly be true, in this, Rudolf Hilferding did not differ from many others, and Smaldone’s book itself ultimately says much more about Hilferding’s actual tragedy: the talented economist and social democratic politician died in the hell of GESTAPO imprisonment and also played a part in the rise to power of those he had identified as mortal enemies early on, and who were able to maintain that power for many years.
Judith Dellheim, Frieder Otto Wolf

Rethinking Hilferding’s Finance Capital

Krätke offers a clear overview of the history of this seminal work by Rudolf Hilferding, from its inception to its making, its impact and reception and later plans by its author to rewrite the book. This chapter gives a full list of the major theoretical achievements of Hilferding’s Finance Capital, correcting the conventional view of the book as an historical account of the latest phase of capitalist development. Instead, and contrary to the conventional view, Krätke presents Hilferding’s work as an effort to continue Marx’s Capital and to deal with questions that Marx had left unsettled, such as the theory of competition, of credit and finance. Following an assessment of Hilferding’s main theoretical contributions, Krätke presents a full list of major amendments and conceptual changes that should allow us to understand the phenomena of contemporary financial market capitalism.
Michael R. Krätke

From Luxemburg to Sweezy: Notes on the Intellectual Influence of Hilferding’s Finance Capital

This chapter is about the key contributions to political economy that originated from Hilferding’s Finance Capital. It covers the period from its publication in 1910 to 1966, the year Monopoly Capital by Paul Sweezy and Paul Baran appeared. I will show that the ideas associated with Finance Capital dominated economic thinking on the left during the second and third decades of the twentieth century. In the 1930s, the Great Depression marked a setback for the book’s prestige. However, important economists like Natalie Moszkowska and Paul Sweezy, who elaborated on the realisation/underconsumption version of monopoly theory during that period, sparked fresh interest in this line of thought, concluding an intellectual effort that stemmed from the insights of Rosa Luxemburg. Their input established a paradigm that gained recognition among economists. Moreover, it offers an analytical explanation for the booming growth of finance following 1980 and the economic crisis that began in 2007/8. The most serious criticism of Hilferding is that Moszkowska and Sweezy’s conclusions rely on the neoclassical theory of perfect competition and its ‘dark side’ of monopolistic price setting. Neoclassical monopoly pricing implies the rejection of the labour theory of value and stands in stark contrast to Marx.
Nikos Stravelakis

Contradictions in Hilferding’s Finance Capital: Money, Banking and Crisis Tendencies

Hilferding’s theory of money, credit and capitalist crisis tendencies has never been more important to reconsider. Its strengths and weaknesses have been exposed to more than a century of testing. Similar to his era, today’s conjuncture combines financial power and vulnerability, and is popularly described as financialisation. Unearthing the laws of motion of the ‘finance capital’ formulation requires digging deeper than what was apparent in early twentieth-century Germany, Hilferding’s main empirical site of praxis, since so many features of economic organisation have subsequently evolved in very different directions. While Hilferding contributed to understanding how generalities of the capitalist debt system—especially corporate financing—could be advanced beyond the disorganised state of Marx’s Capital Volume 3, a critique is essential for both intellectual and practical purposes.
Patrick Bond

Finance Capital, Financialisation and the Periodisation of Capitalist Development

This chapter provides a detailed comparison between Hilferding’s work on finance capital and contemporary accounts of financialisation. Kilmister focuses in particular on the work of Costas Lapavitsas, showing how Lapavitsas both draws on and criticises aspects of Hilferding’s analysis. This provides the basis for a discussion of the links between differing conceptions of financialisation and corresponding analyses of the periodisation of capitalism. The chapter concludes by examining some criticisms that can be made of Lapavitsas’ approach and exploring the extent to which a re-examination of Hilferding can help in responding to these criticisms. It is suggested that Hilferding’s work does provide opportunities for developing accounts of financialisation but that this will require embedding his insights in a broader framework, so that the tendencies he identified are connected with other developments to provide a richer picture of the changing periodisation of capitalism.
Andrew Kilmister

A New Finance Capital? Theorising Corporate Governance and Financial Power

Hilferding’s work provides important theoretical foundations for a much-needed ‘Institutional Marxist’ theory of corporate governance. By tracing the evolution of state and corporate organisation since the late nineteenth century, this chapter illustrates that such a theory constitutes a key basis for the periodisation of capitalist development. Drawing on Hilferding’s theorisation of ‘finance capital’ as a fusion of financial and industrial capital dominated by money-capital, we suggest that the restructuring of capitalism since the 2008 crisis has led to the emergence of a ‘new finance capital.’ Through a process linking the internal restructuring of ‘non-financial’ corporations with new forms of concentration and centralisation of finance across the economy, new institutional linkages between finance and industry have been consolidated, constituting a new organisational form of corporate power. Finally, we reflect on the implications of this theory for the democratic socialist movement today.
Stephen Maher, Scott M. Aquanno

Finance Capital and Contemporary Financialisation

In contrast to the judgement that Hilferding’s concept of finance capital is irrelevant to contemporary developments because today the relations between money capital and industrial capital are the opposite of what he posited, this chapter argues that, in Finance Capital, Hilferding contrasted the development of the financial sector in ‘free trade England’ with that of the ‘protectionist countries’, particularly Germany and the United States. In the former, short-term, market based, money-dealing capital focused on trading fictitious capital in a parasitical relation with industrial capital. In the latter, the ‘model states’ of finance capital, the relation between the banks and industry was so structured that, while the banks dominated, they used their dominance to engineer the productive expansion of industrial capital. Furthermore, this chapter argues that both Marx and Hilferding expected the English model to be superseded by the more productive model of finance capital, an expectation that was not fulfilled. The United States’ desire, only partially fulfilled after World War II, to emulate British financial dominance gave the British pattern a longer lease on life. Only now, its unravelling is being witnessed.
Radhika Desai

Finance Capital and Militarism as Pillars of Contemporary Capitalism

This chapter analyses two pillars of theories of imperialism, namely finance capital and militarism, and their place in contemporary capitalism. It looks to the writings of Hilferding and Luxemburg, two major contributors to the debate. In a critical reading of Hilferding, the author explores the double face of capital defined as social relations and incarnated into capital both in productive capital and capital-property (property rights). He offers a definition of contemporary finance capital as the intertwining of monopoly industrial, merchant, real estate, land and bank capital under the control of capital-property. He then addresses the relationships between finance capital and militarism. He contrasts Hilferding’s and Luxemburg’s approach to this issue, provides historical evidence of the connections between finance capital and militarism, and concludes on the relevance of Luxemburg’s analysis of militarism with regard to present-day contemporary capitalism.
Claude Serfati

Hilferding and the Large-Scale Enterprise

Hilferding identified the divorce of ownership and control which was beginning to take place in the large-scale corporations of his day. And he anticipated the relegation of shareholders to the status of simple ‘money capitalists’ who had, as the studies of Berle and Means were to demonstrate, traded in their economic control against the liquidity of their holdings of securities. Drawing on subsequent analyses, it is argued that this trend continues into our own day in spite of the neo-liberal attempt to restore the previous patterns of ownership and economic organisation. It is possible to suggest some of the ways in which the separation of ownership and control may be transforming socioeconomic relations, but there is as yet no full answer to a key problem posed by these developments: the lack of social control over large-scale enterprises.
John Grahl

Hilferding and Kalecki

Toporowski identifies the origin of Kalecki’s theory of the business cycle in Hilferding’s account of monopoly capital, in which changes in the business cycle are associated with shifts in the distribution of profits between monopoly capitalist firms, cartels, and non-cartelised businesses. Hilferding himself was sceptical about the possibilities of capitalist stabilisation. But his hints at the potential to stabilise capitalism through the proliferation of cartels, and their combination into a ‘general cartel’, aroused discussion among Austro-Marxists. Kalecki unconsciously followed one of them, Emil Lederer, to argue that cartelisation tended to make business cycles more extreme rather than less so. Kalecki also was able to make the leap from Marx’s schemes of reproduction, which provided the framework for Hilferding and Lederer’s analysis of the modern system of national income accounts.
Jan Toporowski

A Socialist Third Way? Rudolf Hilferding’s Evolutionary Socialism as Syncopated Note to Early Neoliberalism

Higgins exposes a little-known contribution of Hilferding to the development of twentieth-century political economy: how he served as an explicit foil to the coordinators of the Walter Lippmann Colloquium, the birthplace of neoliberalism. Hilferding’s sophisticated theories of moderate, evolutionary socialism produced a syncopated note to the advent of the dominant Western ideology in the twentieth century by helping to set its stage, particularly in the German milieu. This chapter not only significantly serves to restore some of the lustre of the work of a misunderstood and underappreciated thinker, but is also timely as the West is currently involved in a process of ideological reconstruction and critique of finance capitalism, to which a revival of Hilferding’s moderate, but revolutionary democratic socialism still has much to say.
J. Patrick Higgins

Hilferding as an Eclectic: A History of Economic Thought Perspective on Finance Capital

Hilferding was not an orthodox Marxist but an eclectic. Two examples illustrate this: first, the terms Gemeinschaft/community and Gesellschaft/society from Tönnies, which Hilferding used as the basis for his description of the development of capitalism; and, second, the literature on American corporate finance, which Hilferding used as the basis for his definition of promoter’s profit. Evidently for Hilferding, this profit is primarily capitalised monopoly profit in the concentration process. The analysis of Hilferding’s private library helps explore these backgrounds. Besides, as honourable as the translation of Hilferding into English is, in principle, the translation is not always as precise as necessary to make these connections visible.
Jan Greitens

Rudolf Hilferding on the Economic Categories of ‘Joint-Stock Company/Share Capital’: A Refinement of the Critique of Political Economy?

The question whether Hilferding’s analysis represents a refinement of the categories of ‘joint-stock company’ and ‘share capital’ in the critique of political economy must be answered with a ‘not yet’, consequently warranting a more precise definition. The corresponding study suggests that left-wing scholars have to address the fact that large parts of the left in the West are generally much closer to Hilferding in their actual way of thinking and working than to, for example, Marx and Luxemburg: they have not taken on an understanding of progress oriented towards socialisation that proceeds from people acting in a self-determined manner, in solidarity and ecologically. The correction needed implies a shift towards an understanding of the interplay of concentration, centralisation and decentralisation of resources and decisions that would allow for a maximum degree of individual freedom and equality, maximum resource efficiency and a minimum strain on natural living conditions.
Judith Dellheim

Hilferding’s Impressive Failure. A Reading of His Last Major Text

Hilferding’s last theoretical text (1940; published only in 1954) provides an insight into the creativity, as well as into the limitations, of Hilferding’s approach. While he shows himself, indeed, aware of the major challenges confronting Marxism in its crisis in the 1930s, he has an overwhelming tendency to look for solutions in the context of the academic mainstream. Still, his reflections do present a substantial challenge to the Marxist mainstream, which deserves to be taken up and properly answered.
Frieder Otto Wolf

Correction to: Rudolf Hilferding on the Economic Categories of ‘Joint-Stock Company/Share Capital’: A Refinement of the Critique of Political Economy?

Judith Dellheim


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