With Keynes to Market Socialism – on the work of the German Marxist Stephan Krüger

7th Mar, 2017

Marx and Keynes

Thomas Weiss on Stephan Krüger

Thomas Weiss works since 1991 as an economist with the Federal Ministry of Labour and Social Affairs in Berlin, Germany. His research interests are empirical studies with a background of Marxian economics, for example, about the tendency of the rate of profit to fall.


This article presents selected aspects of the work of the German Marxist Stephan Krüger. With his numerous publications since the 1970s Krüger has covered a wide range of topics such as Marxist economic theory, the development of world and German capitalism, the relationship between Marx and Keynes and questions of policy for socialists. This article deals first with Krüger’s Marxist explanation of the capitalist economy. Krüger’s analysis of the business cycle in terms of a Goodwin model on the basis of fluctuations of the reserve army of labour is presented and commented on. Proceeding to long term developments, the article shows Krüger’s discussion of the tendency of the rate of profit to fall and how this finally leads to a situation of secular stagnation. Krüger’s detailed suggestions for a market socialism to overcome capitalism are presented. The article concludes with a discussion of his politics.

Keywords: Marxian economics - Keynesianism – business cycle – crisis – history of capitalism – market socialism - tendency of the rate of profit to fall

Stephan Krüger is a German Marxist, who, according to his own self-description, has been working since the 1990s as an advisor for employees and their representatives such as factory councils, employee representatives on company boards and trade unions.[1]

Stephan Krüger is loosely affiliated with the Hamburg political magazine Sozialismus, whose forerunners were Projekt Klassenanalyse - which published on Marxist economics in the 70s - and the Sozialistische Studentengruppen (SOST), whose publications date from the 80s. Sozialismus addresses the left of the trade unions and of the political parties, particularly the German left party DIE LINKE, the SPD and the German Green party.[2]

Also, Krüger has set up a private data bank in order to use the framework of the National Income and Product Accounts (NIPA) and other data sources for Marxist analyses. For Krüger NIPA implicitly reflects a conceptual framework, which is closer to a Marxist than to any bourgeois theory.[3]

This article can give only a flavour of Krüger’s voluminous work. Due to the encyclopaedic scope and scale of Krüger’s publications it can only deal as examples with a selection of topics: Krüger’s Marxist theory of the capitalist economy, his history of capitalism and his political recommendations.[4]

Krüger’s Marxist theory of the capitalist economy

Krüger distinguishes short-term developments of capitalism from long-term ones. The former are the business cycle. The latter are, firstly, the tendency of the organic composition of capital to rise. This is in Krüger’s view a rise in the value of fixed capital with respect to value created by the productive workers. Based on this is the tendency of the rate of profit to fall.

The business cycle - the Goodwin model

Krüger follows the Goodwin model to explain the business cycle.[5] This model describes the periodic cycles of capitalist economies by the interplay between employment as a share of the total labour force and wages as a share of some measure of national income (this is the wage or labour share).[6] During the boom the employment-population ratio rises. This finally leads to rising wages and a rising wage share, not just, Krüger emphasises, because of the growing scarcity of the labour supply, but also because of the almost permanent struggle of the working class to defend their wages.[7] The profit share, the counterpart of the wage share, declines. This hampers further employment. The employment ratio starts to fall. With this the cause for rising wages ceases to operate. With a then falling wage share the incentives to expand employment reappear.

The mathematical formulation of Goodwin’s model as a “predator-prey-model”[8] implies that the employment ratio and the wage share should fluctuate together with the cycle. The wage share follows the employment ratio with a time lag. This can indeed be confirmed as a “stylised fact” of the business cycle.[9] Both ratios reach their maximum during or around the recessions, the wage share slightly after the employment ratio. Also, the rate of change of total employee compensation follows the rate of change of gross domestic investment with a lag.[10] Compensation follows investment.

For Krüger, this simple Goodwin model needs further specification. It focuses on the labour market and lacks any mediation with the goods markets. In Krüger’s more detailed version of the model costs, especially labour costs, rise towards the end of the boom. Profits decline and consequently so does the demand for investment.[11] The investment goods producing department (department I in Marx’s language) of the economy now faces overcapacities. These overcapacities trigger the lapse of the economy into recession.[12] The recession itself precipitates the lower turnaround of the cycle, because capitalists are now forced to invest in new machinery to raise labour productivity and to get out of the slump. These investments are “autonomous”, they do not depend on profits.[13] They are necessary to avoid a further financial deterioration of the firms.[14] These initial investments in machinery of a higher technological level, with a higher labour productivity, usually with labour-saving technical progress, occur on a mass scale during the period of capitalist crisis.[15] They determine the technological level for the next cycle. This level then limits the ability of firms to respond to higher costs by increasing labour productivity for the rest of the cycle. This is the reason why the ongoing boom, together with additional investment now on the same technological level, inevitably leads to costs squeezing profits. According to Krüger’s critique the Goodwin model, however, simply assumes that in some way at some stage rising costs terminate the boom.[16] To complete the description Krüger adds that the technological level implemented at the beginning of a cycle is the material basis for the length of the cycle, in Marx’s time about ten years.[17]

When overcapacities are already developing in the investment goods sector (Department I), consumption also begins to decline. Consumption is curbed, because towards the end of the boom prices rise, whereas part of consumption is financed out of pensioners’ or state employees’ incomes which are fixed by contracts. Now overcapacities also appear in the consumption goods sector (Department II).[18]

For Krüger Keynes’s theory of the business cycle has its faults, but does not contradict Marx’s scenario.[19] Keynes has two factors which cause his “marginal efficiency of capital”, the expected rate of profit,[20] to fluctuate cyclically. The first factor is overinvestment. Investment and the build-up of production capacities outpace consumption. Krüger does not see this as a theory of under-consumption. It is a phenomenon of the reproductive sphere of the economy.[21] It is true that with Keynes the marginal propensity to consume declines with rising income, but Krüger characterises this as an additional cause for the beginning of the recession. Decisive is that the capital stock outgrows demand, in Keynes’s words, the scarcity of capital declines.

This development inside the reproductive sphere influences the personal outlook of entrepreneurs and leads to a sudden breakdown of the marginal efficiency of capital. Keynes identifies this contradiction between consumption and production as crucial for capitalist economies.

The second factor in Keynes’s business cycle theory is the question of costs, particularly labour costs. These rise towards the end of a boom.[22] This is the contradiction between labour and capital, which is central to Marx’s theory. Again, this is not psychological, but a phenomenon of the reproductive sphere. Keynes would have been closer to the mark, Krüger claims, if he had mediated these two factors with each other. Krüger mentions two problems with Keynes’s explanation of the end of the boom. First, Keynes believes that the state can influence investment in such a way that the cyclical movement of the capitalist economy can be dampened or even avoided. This shows that for Keynes the cyclical movement is not really endogenous. In contrast to a Marxist explanation, it lacks any inherent logical necessity. Secondly, the concept of overinvestment with respect to consumption is too vague to give any indication about the length of the business cycle.

Long term tendencies

To increase the productivity of labour, which becomes necessary for the firms during the cyclical recessions in order to get out of the slump, living labour is replaced by machinery.[23] Hence, the structure of capital outlays shifts away from expenditure on wages, away from variable capital, towards expenditure on machinery, on constant capital. Krüger is confident that this rising organic composition of capital must result in a falling rate of profit. In crises, where the rate of profit is cyclically low, capitalists have no choice but to invest massively in machinery on a higher technological level. This will in all likelihood be labour-saving technical progress. From one business cycle to the next the organic composition of capital rises and the rate of profit declines. It is the short-term cycles, which enforce this long-term development. Countervailing tendencies can only slow this down.

The neo-Ricardian objections to the famous Okishio theorem do not apply for the simple reason that they presume steady-state equilibrium paths of the economy. In truth, however, with respect to the cyclical accumulation of capital no concept of equilibrium or of “dis-equilibrium”, in the sense of deviations from a theoretically determined equilibrium path[24], makes sense.[25] There is, however, a tendency toward the realisation of a general rate of profit. Capitalists tend to invest in those branches which have an above average rate of profit. This increases the supply in these branches in relation to demand and thus drives prices and the rate of profit down. Conversely, capitalists stop investing in branches with below average rates of profit. In those branches supply falls behind demand. Prices and the rate of profit rise.

But, contrary to what neo-Ricardians assume with their steady-state models and their comparative-static analysis, “the general rate of profit appears as a vanishing shape of mist compared to the definite rate of interest, which … faces all borrowers as a fixed fact, …”.[26] What capitalists experience is that, if they want to survive in the competitive struggle and to defend their market share, they must raise labour productivity by investing in labour-saving technical progress.[27] That this results in a lower average of the rate of profit is beyond their control and often beyond their immediate interest.[28]

With Krüger the tendencies of the organic composition of capital to rise and of the rate of profit to fall do not cause the business cycle. On the contrary, they are the result of it. But these long-term developments react back on the business cycle.[29] At first, in the period of “accelerated accumulation”, the rise of the organic composition of capital, the value of fixed investment in relation to productive employment, can in its effect on the mass of profits be more than offset by the rising rate of surplus value. The accumulation is “accelerated”, that is, capital is accumulated in terms of value but even more so in terms of use-values. The rising productivity of labour means more use-values are produced per unit of labour time, whereas the necessary labour time in production determines the quantity of value produced.[30] Mathematically, from a certain point onwards, if these tendencies hold, even the absolute mass of profits must decline. This is the period of “structural over-accumulation”. New investments can only take place by crowding out older ones.[31]

The falling rate of profit has long-term consequences. The replacement of productive labour, labour employed in the productive sectors (manufacturing, transport and communication), by machines implies a tendency for unemployment to rise. This shifts the balance of power against the working class in favour of the capitalist class.[32] This gives rise to what Krüger calls a “socialism of shortages within the working class”. By this stage during crises wage levels cannot be defended and no longer serve as stabilisers of demand. Due to this there is no quick rebound after a crisis, the business cycles become more protracted.

Due to the structural over-accumulation financial investors do not find enough investment opportunities with reproductive capital (industry plus commerce). They divert into high risk projects which might fail and are thus, so to speak, involuntary consumption. Or they finance private consumption or public expenditures through debt. This is then observed by commentators as the “hypertrophy of finance capital”, because on the one side financial assets and on the other side financial liabilities outpace the accumulation of reproductive capital. This goes along with growing indebtedness of countries, whose imports are larger than their exports, whereas exporting countries like Germany or China build up a “positive net investment position”. This is then discussed by commentators as “international imbalances”.

A feature of the long-term trend is that productive employment falls behind the accumulation of capital. Its rate of growth declines, ultimately it could even shrink. To avoid shrinking employment, with Marx a cause for revolution[33], jobs must be created in the unproductive parts of the economy. It is up to the left to fight for reasonable jobs, in the social sphere.[34]

Keynes, with his famous “In the long run we are all dead”, did not provide his own elaborate theory of long-term capitalist development. But Krüger believes that there are enough statements by Keynes from which such a theory can be deduced. This can then be compared with Marx’s account of the long-term development of capitalism.[35]

Krüger claims that basically the Keynesian explanations for the short- and long-term crises are the same[36] (whereas Krüger himself, as described above, explains the short term with a Goodwin model and the long term with the tendency of the rate of profit to fall). There is a minor contradiction here. Krüger’s description of the Keynesian explanation of the short term emphasised that the boom comes to an end, because investment tends to outpace demand for consumption. Now, with the long term, Krüger does not shy away from Keynes’s psychological law, according to which it is consumption that does not keep up with growing income.[37] The gap between possible supply on the one hand and demand for consumption on the other must be closed by demand for investment. But because the ultimate destination of all production is final consumption[38], the slowdown of the growth of consumption also limits the demand for investment.[39] The marginal efficiency of capital falls in the long run because of the oversupply of capital in comparison with the demand for consumption. This again is Keynes’s basic contradiction between production and consumption.[40]

In Krüger’s view, again, with a Keynesian explanation the origin of the long-term contradictions of capitalism is located within the sphere of the reproduction process of capital.[41] A “bastard-Keynesianism” (Joan Robinson)[42], which just raises demand, will not suffice to overcome the contradictions of capitalism. The contradiction between consumption and production, as Keynes perceives it, calls for a “somewhat comprehensive” intervention by society.[43]

The corresponding scenario according to Marx is that with the rising organic composition of capital productive employment falls behind the accumulation of capital. This is the reason why the mass of the consumption of the workers falls behind the growth of the capital stock. Because value creation in production, but also creation of demand in terms of value, is limited by the amount of productive employment, with Marx a “bastard-Keynesian” solution of increasing public spending will, of course, not overcome the structural over-accumulation of capital either.

A short history of capitalism

According to Krüger, modern capitalism has, up to now, seen two eras.[44] The first with Great Britain, initially, as the “demiurge of the bourgeois cosmos” [45] began in the early 19th century and lasted till the Second World War. The period of “accelerated accumulation” was followed by “structural over-accumulation” during the interwar years. The tendency of the rate of profit to fall ending in structural over-accumulation finally undermined the position of the “demiurge”. With the First World War the US was not yet the demiurge, but became the hegemon inside a polycentric regime. This First Era of modern capitalism ended with the First Great Crisis of 1929 and the following world war.[46]

The Second Era began with the Second World War with the United States now as the new demiurge. After the Second World War gold as money commodity played a minor role and finally the gold standard was abandoned in the early 1970s. This allowed for a flexible monetary policy by the central banks. They could not abolish the business cycle, but by avoiding deflationary periods they were able to weaken the slumps, thereby bolstering long-term growth.[47] This regime of accelerated accumulation of the Second Era became known as “Fordism”[48] or as Thomas Piketty’s Trente Glorieuses[49]. Eventually, the phase of accelerated accumulation turned again into structural over-accumulation around the late 70s,[50] and finally culminated in the Second Great Crisis of capitalism[51], which began in 2007 in the US.

Recently, Krüger speculated on a nascent new regime of production or Betriebsweise[52], which he dubs a “network-based market regime” or “industry 3.0”, after industry 1.0, the regime following the industrial revolution, and industry 2.0, which is Fordism and Taylorism. For what is now called “industry 4.0” in Germany he prefers the term “3.1”, because the digitalisation of the economy is just a further development of the network-based regime.[53]

Krüger identifies ten cycles before the world wars, the first one lasting from 1827 to 1842/1843. For the USA the three inter-war cycles spanned the years 1922 to 1927, 1928 to 1933 and 1934 to 1938, and for Great Britain and Germany the years 1924 to 1926, 1927 to 1932 and 1933 to 1938. By now world capitalism is in its XIth post-war cycle, cycle I lasted in the Federal Republic of Germany from 1949[54] till 1953, and cycle XI, still continuing, started in 2010. Cycle VII 1976 to 1982 is the one with the lowest period-average rate of profit in Germany and probably in the world as a whole. After that this rate recovered slightly[55], but far from enough for a return to a phase of accelerated accumulation. Without a major change of the economic regime this can happen, Krüger believes, only by a “thorough capital devaluation and destruction with catastrophic tendencies”.[56] One aspect of such a catastrophe could be a collapse of the international financial system and a return to gold as the international money commodity. From gold, Krüger believes following Marx, capitalism has never really been able to emancipate itself.[57]

Krüger’s politics

Economic situation

In the present period of structural over-accumulation the low rates of profit are not much above the rates of interest, which are even lower. Although the gap between profits and interest has widened somewhat in recent decades, it is still by no means big enough to evoke a return to a new phase of accelerated accumulation. “Secular stagnation” has set in. This is the challenge to be solved by economic policy. Capitalism was able to overcome its First Great Crisis with the following Trente Glorieuses after the Second World War by making concessions to the labour movement. The welfare state went along with a partial decommodification of labour.[58] Krüger believes that only another such concession, now a turn to some early stage of socialism, can provide another regime of growth for the world economy. This new regime will be a market socialism.[59]

The subjects of change

However, the times for “storming the Winter Palace” are over.[60] The road to market socialism is via a piecemeal approach.[61] The subjects to bring this about are a “coalition of progressives”[62]. This consists, first of all, of left parties, in Germany the SPD, the Green party and the left party DIE LINKE[63], secondly, the trade unions, and finally the social movements, such as Attac, a non-government organisation critical of capitalism. In a lengthy Gramscian “war of position” for hegemony[64] these three coalition partners must fend off any counterattacks from backward forces, be they capitalists or “reactionary-romantic” groups or parties[65]. They must, step by step, push back elements of capitalist society in order to come closer to market socialism. A first step for a transition to a more socialist society would be a “minimal consensus”, which would simply be a traditional social-democratic policy worthy of the name.[66]

These efforts of “the progressives” have as their basis the state of mind of the working class. The consciousness of the workers (male and female) is “contradictory”. On the one hand, neoliberalism is in the process of creating a new individualism and sense of “self-responsibility” alien to any forms of collective action.[67] On the other hand, this “self-empowerment” is not just ideology. Workers can gain self-confidence by caring for themselves in a hostile neoliberal competitive environment. This may result, Krüger hopes, in the workers’, as Marx put it, “…recognition of the products as [their] own [of their “living labour capacity”], and the judgement that [their] separation from the conditions of [their] realisation is improper – forcibly imposed – … an enormous awareness, itself the product of the mode of production resting on capital, and as much the knell to its doom ...”[68]. The Great Crisis with its ongoing rescue operations by the state and the central banks (as part of the state) in favour of private enterprises also shakes the ideology of capital.[69]

What to do

For Krüger the failure of the “so-called actually existing socialism”[70], of countries around the Soviet Union[71], shows a fundamental problem with the idea that markets must be replaced by an all-comprehensive central plan, that money can be abolished.[72] Krüger’s reasoning is that as long as the needs of society surpass production capacities, rationing is necessary.[73] The information necessary for such rationing, information about costs and demand, can be provided more effectively, if not only, by a market mechanism.[74] But even in the more distant future, where due to the development of the productive forces most products can be provided for free, societies will still not be able to cope with the dynamics of technologies of production, on the one hand, and those of needs, on the other, without any market mechanism .[75]

On the other hand, already in present-day capitalist societies, there are many institutions, which can be modified, enlarged, relocated in order to be useful inside a market-socialism. Krüger builds on proposals presented by people like Fritz Naphtali or Rudolf Hilferding in the 1920s or by Viktor Agartz in the late 1940s[76] or by Ota Šik in the late 60s. One could add here the social democrat Carl Landauer, who had to emigrate from Germany to the United States. His “Theory of National Economic Planning” was published in two editions in the United States, in 1944 and 1947.

Krüger expects the future market socialism to have three sectors.[77] The biggest sector will still be a market economy. Enterprises - private, cooperative, and state owned - will mainly to be located here. The decisions of the enterprises will be guided by expected profits, but market data will be influenced by state policy. Control in enterprises will be exerted by the owners, that means by boards which consist of members representing different parts of civil society.[78] As Keynes suggested: “…all manner of compromises and of devices by which public authority will co-operate with private initiative”.[79] In spite of their present faults, Krüger sees in private-public partnerships or in the Greater London Enterprise Board (GLEB) of the 1980s examples for such collaborations consisting of different forms of ownership.[80]

The second sector is the “social economy” (Gemeinwirtschaft). This sector provides infrastructure and social and cultural services at cost, or occasionally at below-cost, prices. The third sector is the state. It will be controlled by parliaments on the local, regional, national, and, in the future, European and world level.[81] This sector provides the services of the executive, legislative, and judicial branch (still separate powers in Krüger’s socialism[82]).

Co-ownership by public institutions and co-determination by employee representatives, together with traditional forms of labour market policies, will serve to decommodify labour - a crucial feature of any market socialism. Profits will, on the one hand, serve as incentives for the firms to increase efficiency, and, on the other hand, as a lever to be influenced by democratically controlled public authorities, via taxes and subsidies. In addition, the central bank will control interest rates to help implement the social goals determined by the parliaments.

All this, finally, is to be established within a framework of macroeconomic “guidance”. Again, present-day capitalism already provides an array of short-, mid- and long-term “projections”. Up to now, however, these have been subject to the superordinate goal of profit maximisation. Through these institutions, which already exist and will be further developed in the future, employment and working hours and thus possible production will be forecast[83], and also wage guide-lines will be established. The latter should really only be suggestions. Krüger is aware of the sensibilities of German trade unions, which abhor any interference in “autonomous collective wage bargaining” (Tarifautonomie).

“Macroeconomic Guidance” will be realised mainly by structural policies, structural policy being in addition to the decommodification of labour another crucial feature of market socialism.[84] Structural policies will complement monetary and fiscal policies. They are, so to speak, the socialist counterpart of “structural reforms”, which under neoliberalism are also thought to complement monetary and fiscal policies, but as part of a repressive social policy. As with contemporary structural policy (to be distinguished from the “structural reforms” just mentioned), but in the future as instruments of a socialist society, structural policy will serve to overcome inequalities between regions and branches[85] and to prepare sustainable technological progress compatible with the protection of the environment.

Krüger is aware that it will not be enough to simply develop forms of proto-socialism further inside German or European capitalism. In recent years many neoliberal features like the so-called debt brake have been introduced, not the least on German initiative. Socialist governments will have to remove all this, reregulate financial markets, for example, and abolish the “Agenda 2010” in Germany and similar austerity policies in other countries.

The European and international level

Krüger sees the European Union, with all its faults, as a progressive achievement, which socialists should not oppose.[86] He refers approvingly to Trotsky and Bucharin as critics of Stalin’s policy of “socialism in one country”. He himself, however, for now advocates a market socialism in one continent. If the model of market socialism could be introduced in Germany, this would help to spread it throughout Europe, because Germany is the hegemon.[87] For this market-socialist Europe Krüger, following Keynesian suggestions, advocates “self-sufficiency”. Europe would export, as now, high-tech machinery and know-how and import food and raw materials.[88] On the world level, again following ideas of Keynes[89], the International Monetary Fund would be developed to become an international Clearing Union and, in fact, to become the future world central bank or even the economic government.[90]

The Keynesian heritage

Krüger’s political concepts owe much to Keynes.[91] Keynes is, Krüger affirms, the only economist of bourgeois provenance, whose theory can be integrated into a Marxist analysis of the capitalist mode of production and into a modern conception of socialism.[92] Keynes is the theoretician of a capitalism, which is by now characterised by a regime of - potential - plenty, a capitalism, in which buyer’s markets[93] dominate instead of seller’s markets, in which overproduction has become a general tendency.[94] Maybe the fact that Keynes is held in high esteem by many on the left plays a role for Krüger because an, albeit critical, reception of Keynes’s theory by Marxists might help to reach a wider audience within the broader left.

Communist perspectives

Krüger provides a sketch of a more distant future communist society, which would be another quantum leap with respect to the foregoing socialist market economy. He believes that such a society would still use money for accounting purposes in distribution and production. In this sense, banks will still be with us. Consumption goods will be free, but the sphere of production still needs bookkeeping based on monetary units.

A complete central plan still will not be advisable. Decentralised decision-making will still be important. Production and distribution of the communist society will work on the basis of buffer stocks of the production and distribution units, which will base their decisions on the observed reduction or build-ups of inventories. Labour will now be completely decommodified, so wages will no longer exist, neither as income nor as a part of costs. Labour has become travail attractif.[95] Distribution units will provide consumption goods free. They will pay the production units, which produce consumption and investment goods via monetary transfers. The income of the production units will be channelled back to the distribution units to close the financial circle. These monetary and commodity flows will be controlled by democratically legitimised agencies.

So the means of production will still have the value-form. Krüger sees the value-form as transhistorical. Since it already existed in pre-capitalist modes of production, so it can continue to exist in post-capitalist societies without itself threatening their socialist or communist character.[96]

Population growth will be around zero, Krüger speculates, but due to increasing labour productivity the supply of goods will increase, mainly in quality. The state will finally “wither away”. For Krüger the privatisations which are already taking place now show that the state, albeit at present still in perverse ways, can be replaced by direct action of civil society.[97]

Summary and evaluation

Roughly, one could claim for the present situation of capitalism four possible outcomes. A first possibility is that central banks keep interest rates low or negative in line with the low rates of profit, which ensue from structural over-accumulation. This is the present strategy of capital with the hope that eventually everything will turn out well. A more hard-line approach, implying in Krüger’s view “catastrophic dimensions”, would be to raise interest rates, force out weak capitals and hope that the remaining parts of capital will be able to return to a regime of accelerated accumulation. The third possibility is what Krüger calls a minimal consensus. This is in line with what traditional left parties demand, namely strict regulation of the financial markets, environmental policies, co-determination of workers in corporations, enlargement of the welfare state, and strong intervention by the state to mitigate crises.

This should proceed to the final outcome, market socialism, featuring comprehensive socialisation of investments and strong, if not yet complete, decommodification of labour. Whereas flexible handling of changes in demand or supply will still need the ongoing existence of markets, these include, in addition to private companies, cooperatives and other enterprises which are, at least partially, under public control. On markets profits will still have a role to play, but structural policies and a democratic guidance will now be crucial in order to guarantee the socialist character of the economy. All this will be under the guidance of parliamentary parties supported by progressive trade unions and social movements.

Needless to say, there are numerous problems still to be solved. Krüger himself mentions, amongst other things, the attitude of the existing bureaucracies. On the other hand, he hopes that, combined with the, in his view, progressive achievements of the bourgeois era such as independent central banks or the separation of the executive, legislative and judicial powers, the numerous “socialist” elements already existing in present capitalism are a good basis for socialists to build on. It is true that some of them appear nowadays in neoliberal forms such as private-public partnerships or privatisations. But the hard school of neoliberalism will, Krüger hopes, enhance individual competence in economic matters.

Krüger’s suggestions for overcoming capitalism compete with other approaches, which at least at first sight seem to be more bottom-up. Michael Albert’s “Parecon” or, along more traditional socialist lines, Alex Callinicos’s “Anti-Capitalist Manifesto” spring to mind. Whether enough “progressives” will be found to rally around Krüger’s proposals, which, after all, appear to be rather technocratic or bureaucratic, is open to question. Although Krüger mentions the labour movement here and there, its role is not clear. He mentions, for instance, that in Venezuela Hugo Chavez was elected with 56 % of the votes, but he does not mention the social struggles which brought Chavez to power. Similarly, despite all his discussion of Lenin’s New Economic Policy or of the Yugoslavian model of workers' self-management, readers learn nothing about the previous actual revolutions or international and social confrontations.

This leads to some minor points. Although not a few on the German left respect Krüger’s voluminous work, they nevertheless doubt whether his sometimes old-fashioned turgid language can reach a wider audience. This high-brow language stands in contrast to some negligence of academic standards.[98] Often his graphs have as source only “computations by author” and the name of a major institution. Also his - laudably - numerous and extensive data presented in terms of Marxist concepts could benefit from some more intersubjective verifiability. In this sense his criticism of Sahra Wagenknecht for “autism” backfires.

An age, in which Marxism has lost its monopoly on theoretical crisis explanation, needs workable practical alternatives. Krüger demonstrates how complicated capitalist economies have meanwhile become and that this makes the task of overcoming them no easier. In this sense Krüger’s opus is a valuable contribution to the political discussion of the German left. One can laud Krüger’s effort to avoid utopia and instead to link up with existing and already working institutions to achieve socialism. If this, however, is not itself to be perceived as utopian, it needs - and deserves - wider discussion to become useful for the more ordinary political struggle.


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Krüger, Stephan, 2007 Konjunkturzyklus und Überakkumulation, Wert, Wertgesetz und Wertrechnung für die Bundesrepublik Deutschland, Hamburg: VSA-Verlag

Krüger, Stephan 2010 Allgemeine Theorie der Kapitalakkumulation, Konjunkturzyklus und langfristige Entwicklungstendenzen, Kritik der Politischen Ökonomie und Kapitalismusanalyse, Band 1, Hamburg: VSA-Verlag,

Krüger,Stephan 2012a Politische Ökonomie des Geldes, Gold, Währung, Zentralbankpolitik, und Preise, Kritik der Politischen Ökonomie und Kapitalismusanalyse, Band 2, Hamburg: VSA-Verlag,

Krüger, Stephan 2012b Keynes & Marx, Darstellung und Kritik der “General Theory”, Bewertung keynesianischer Wirtschaftspolitik, Linker Keynesianismus und Sozialismus, Kritik der Politischen Ökonomie und Kapitalismusanalyse, Band 4, Hamburg: VSA-Verlag,

Krüger, Stephan, 2015a Entwicklung des deutschen Kapitalismus 1950-2013, Beschäftigung, Zyklus, Mehrwert, Profitrate, Kredit, Weltmarkt, Hamburg: VSA-Verlag,

Krüger, Stephan 2015b: ‘Die Probleme der Marxisten mit dem Geld und die begriffslosen Anleihen der Keynesianer bei Schumpeter – Zur Debatte um Geld und Zentralbanken in “prokla” und “Z”’, Z. Zeitschrift für Marxistische Erneuerung 104/2015:86-99.

Krüger, Stephan 2015c: ‘Profitrate und Kapitalakkumulation in Deutschland - Was folgt aus ihrem langfristigen Abwärtstrend?’, Sozialismus 10/2015:60-63.

Krüger, Stephan, 2016a Wirtschaftspolitik und Sozialismus - Vom politökonomischen Minimalkonsens zur Überwindung des Kapitalismus, Kritik der Politischen Ökonomie und Kapitalismusanalyse, Band 3, Hamburg: VSA-Verlag

Krüger, Stephan 2016b: ‘Industrie 4.0 - Einordnung und Erfolgsbedingungen der neuen Produktivkräfte gesellschaftlicher Arbeit’, Sozialismus 4/2016:38-43.

Krüger, Stephan, 2017 (forthcoming) Private Vermögensbildung vs. Sozialstaatliche Umverteilung - Kapitalakkumulation und Sozialstruktur im Finanzmarktkapitalismus der Bundesrepublik Deutschland, Kritik der Politischen Ökonomie und Kapitalismusanalyse, Band 5, Hamburg: VSA-Verla

Krüger, Stephan and Christoph Lieber 2016: ‘Freiheit statt Feudalismus - Gegen Sahra Wagenknechts Autismus in der linken Strategiediskussion’, Sozialismus 6/2016:33-40.

Lukacs, Georg 1972, Prolegomena. Zur Ontologie des gesellschaftlichen Seins, 1. Halbband, ed. by Frank Benseler, Darmstadt, Neuwied.

Nachtwey, Oliver 2016, Abstiegsgesellschaft - Über das Aufbegehren in der regressiven Moderne, Frankfurt: Suhrkamp.

Shaikh, Anwar 2016, Capitalism – Competition, Conflict, Crises, New York: Oxford University Press

Sherman, Howard J. 1991, The Business Cycle: Growth and Crisis under Capitalism, Princeton, N.J.: Princeton University Press

Sotiris, Panagiotis 2015, ’Rethinking Structure and Conjuncture in Althusser’, Historical Materialism, 22,3/4: 5-51.

ten Brink, Tobias 2013, Chinas Kapitalismus, Entstehung, Verlauf, Paradoxien, Frankfurt/New York: Campus

Wagenknecht, Sahra 2016, Reichtum ohne Gier – wie wir uns vor dem  Kapitalismus retten, Frankfurt/New York: Campus

Weiß, T. 2015a, ’Sachkapitalrenditen im historischen Vergleich – Deutschland im Abwärtstrend?’, WSI-Mitteilungen, 68,4: 280-289.

Weiß, T. 2015b, ‘The rate of return on capital in Germany - an empirical study‘, presentation at the 19th FMM Conference, “The Spectre of Stagnation? Europe in the World Economy” Berlin Steglitz, 22-24 October 2015 (http://www.boeckler.de/pdf/v_2015_10_24_weiss.pdf).


                  Krüger 2012a.

                  Not everybody seems to be listening. Krüger and Lieber 2016 accuse Sahra Wagenknecht, a leading politician of DIE LINKE in Germany, of “autism”. Although her political recommendations are not that distant from those of Krüger and Sozialismus (see Wagenknecht 2016), she is, according to the accusation, not prepared to enter into a dialogue.

                  For a more critical view on the NIPA, see Shaikh 2016, pp. 208, 835.

                  Krüger’s recent volumes on these issues are Krüger 2010, mainly about Marx’s economic theory, comprising 1000 pages; 2012a, 620 pages, about the financial sphere; 2012b, 420 pages, about Marx and Keynes; 2015, 140 pages, about German capitalism since the Second World War; and 2016a with 570 pages about socialist politics.

                  Krüger 2010, pp. 377-81, 2012b, pp. 239-41.

                  The Goodwin model and its variants are discussed by Sherman 1991, pp. 248-266, Shaikh 2016, pp. 638-76. For a discussion of the role of “fluctuations in the industrial reserve army“ see Callinicos 2014, p. 251.

                  Krüger 2010, pp. 362, 373.

                  Shaikh 2016, p. 642.

                  For the US see wikipedia graph https://commons.wikimedia.org/wiki/File:Goodwin2_fredgraph.png, https://fred.stlouisfed.org/graph/?graph_id=316391&category_id=

                  Krüger 2010, p. 354.

                  Krüger 2012b, p. 238, see Carchedi 1991, pp. 140-1, 193.

                  For an apparently similar description see Dunayevskaya 2000, pp. 142-3: “The crisis … is not caused by a shortage of ‘effective demand’. On the contrary, it is the crisis that causes a shortage of ‘effective demand’. A crisis occurs not because there has been a scarcity of markets. As we saw in theory, and as 1929 showed in practice, the market is largest just before the crisis. From the capitalist point of view, however, there is occurring an unsatisfactory distribution of ‘income’ between the recipients of wages and those of surplus value or profits. The capitalist decreases his investments and the resulting stagnation of production appears as overproduction. Of course, there is a contradiction between production and consumption. Of course there is [an] ‘inability to sell’. But the inability to sell manifests itself as such because of the antecedent decline in the rate of profit [Krüger would say “share of profit”] which has nothing whatever to do with the inability to sell.”

                  Krüger 2010, pp. 342, 357, 424-5, see Carchedi 1991, p. 189. Krüger mentions that these investments can be financed due to a comparatively stable demand for consumption, which bolsters profits during the crisis, and due to the build-up of financial resources as a result of cutbacks in inventories.

                  Krüger 2010, pp. 343-4, 398, 404, 2012b, p. 117.

                  Krüger 2010, p. 339.

                  Krüger 2010, p. 350.

                  Krüger 2012b, pp. 241-2.

                  Krüger 2010 pp. 372-3, 375, 2012b p. 238.

                  Krüger 2010, pp. 321-2, fn. 1, 2012b, p. 246.

                  Callinicos 2014, p. 261, fn. 36. Sherman 1991, p. 249.

                  Krüger 2012b, pp. 235-6.


                  Krüger 2010, p. 97, 2012b, p. 252.

                  Examples of this are Flaschel 2010 and Flaschel and Luchtenberg 2012.

                  Krüger 2016a, pp. 317-8. For a more philosophical discussion of equilibrium vs. disequilibrium see Sotiris 2015.

                  For the German quote: http://www.deutschestextarchiv.de/book/view/marx_kapital0301_1894?p=388; the English quote: “These are some of the reasons, why the general rate of profit appears as a vanishing shape of mist compared to the definite rate of interest, which, while fluctuating in its magnitude, yet faces all borrowers as a fixed fact, because it varies uniformly for all of them.” Vol. III, V.XXII.26 (http://www.econlib.org/library/YPDBooks/Marx/mrxCpC22.html#Part V, Chapter 22). See Carchedi 1991, pp. 87- 91, Shaikh 2016, p. 336. For Georg Lukacs this tendency towards equalisation of the rates of profit between branches or the tendency towards realisation of a general rate of profit was a presupposition for the law of the tendency of the rate of profit to fall; Lukacs 1972, p. 153. Shaikh argues that capitalists do not care about their immediate rate of profit, but increase the input of fixed capital (the organic composition of capital rises) to reduce their unit labour costs (the rate of surplus rises) and so to force competitors out of the market. He goes on to show that as a result in a neo-Ricardian model with constant real wages the rate of profit also falls. Shaikh 2016, pp. 313-26.

                  Krüger 2010, p. 424-6.

                  This is a critique of the agnostic view of the German Marxist Michael Heinrich on Marx’s law, see Heinrich 2013. Cf. Callinicos 2014, p. 169, fn. 47. Callinicos puts his defence of the law into some perspective, stating: “Understanding the tendency of the rate of profit to fall as expressed cyclically is not inconsistent with the idea that capitalism may undergo prolonged periods of relatively high or low profitability.” One can distinguish between Marxists such as Krüger or Shaikh, who differentiate between explanations for the long and short term, and those, such as Carchedi or Callinicos, who see Marx’s law of the falling rate of profit causing the short- and long-term developments. For others, such as Sherman or Flaschel, this law does not play a role in their explanations of the business cycle.

                  Krüger 2010, pp. 326-7.

                  Krüger 2012b, pp. 254-6.

                  Krüger 2010, pp. 99, 139, Fn. 100, pp. 144-5., 152, 155, 2012b, p. 258, 2016a. pp. 116, 424.

                  Krüger 2016a, pp. 142-3, 174.

                  Karl Marx in Capital, vol. III: “A development of the productive forces which would diminish the absolute number of labourers, that is, which would enable the entire nation to accomplish its total production in a shorter time, would cause a revolution, because it would put the majority of the population upon the shelf.” Capital III.XV.62, http://www.econlib.org/library/YPDBooks/Marx/mrxCpC15.html#Part III, Chapter 15

                  Instead of what David Graeber calls “bullshit-jobs”, one might add.

                  Krüger 2012b, p. 262.

                  Krüger 2012b, p. 266.

                  Krüger 2012b, p. 263.

                  Krüger 2012b, p. 235.

                  Krüger 2010, p. 331.

                  Krüger 2012b, p. 267.

                  Keynes 2012b, p. 266.

                  Harman 2009, p. 162.

                  Keynes 1973, pp. 320, 378, Krüger 2012b, pp. 288-9.

                   Krüger 2016a, p. 113.

                  Marx on England as demiurge: http://www.mlwerke.de/me/me07/me07_421.htm

                  Krüger 2016, p.525.

                  Krüger 2012a, p. 255.

                  Krüger 2016, pp. 519-20.

                  Krüger 2016, pp. 515, 519.

                  Krüger 2010, p. 143, fn. 108.

                  Krüger 2016, p. 515.

                  Marx’s gesellschaftliche Betriebsweise is translated as “industrial methods” in: https://www.marxists.org/archive/marx/works/1867-c1/ch15.htm#S8e. Produktionsweise, however, is usually translated as “mode of production”.

                  Krüger 2016a, p. 119, 2016b.

                  Krüger 2016, p. 286.

                  Krüger 2010, p. 464, Weiß 2015a, 2015b, Krämer 2015, p. 91, Shaikh, 2016, p. 66.

                  Krüger 2016b, p. 42, 2016a, p. 423.

                  Krüger 2015b, against Michael Heinrich, for whom capitalism no longer needs a money commodity such as gold. See Heinrich 2012, section 3.7.

                  Krüger 2016a, pp. 174, 181, 223, 392, 414, 417, 520. See Callinicos 2014, pp. 231-2. Nachtwey 2016, pp. 19, 81, 102.

                  Krüger 2016a, p. 425.

                  Krüger 2016a, p. 528. See for comparison Cornelius Castoriadis: “Revolution does not mean torrents of blood, the taking of the Winter Palace, and so on. Revolution means a radical transformation of society's institutions. In this sense, I certainly am a revolutionary.” http://www.azquotes.com/quote/703623

                  Krüger 2010, p. 882, 2016a, pp. 21, 224. Krüger does not mention Popper’s advice for piecemeal politics, see Karl Popper 1945, The Open Society and its Enemies, Routledge.

                  Krüger 2016a, p. 532.

                  Krüger does not address the problem that a party, which wants to become a member of the national government must be prepared to accept military interventions and of course must not meddle with the secret services. So far it seems DIE LINKE is not prepared to do this.

                  Krüger 2016a, p. 528.

                  Krüger 2010, p. 456, 2016a, pp. 50-1, 543.

                  Krüger 2016a, pp. 225-31, 496. Krüger sees no place for a basic income for the foreseeable future, as do Krämer 2015, p. 239, and Wagenknecht 2016, p. 178.

                  See Nachtwey 2016, p. 84, 106.

                  Krüger 2016a, p. 522. See Grundrisse, chapter 9, https://www.marxists.org/archive/marx/works/1857/grundrisse/ch09.htm

                  Krüger 2016a, pp. 522.

                  Krüger 2016a, p. 524.

                  The socialist character of these countries is in dispute, for China see ten Brink 2013. Krüger himself clarifies that “self-evidently” due to inherent faults the socialist market economy of the People’s Republic of China cannot serve as a model for “highly developed metropolitan capitalist states”. Krüger and Lieber 2016, p. 39, fn. 13.

                  Krüger 2016a, p. 255. Krüger explicitly mentions the French Marxist Charles Bettelheim as one originator of these ideas.

                  Krüger does not mention Friedrich Hayek’s claim that for reasons of principle plans cannot replace markets, see Hayek 1945 “The Use of Knowledge in Society”. The American Economic Review.

                  Krüger 2016a, pp. 317-8.

                  Krüger 2016a, p. 321.

                  Krüger 2016a, p. 478, footnote 12.

                  Krüger 2016a, p. 469.

                  Krüger 2016a, p. 466.

                  Krüger 2012b, pp. 246-7, 377, 2016a, p. 411, fn. 46, see Keynes 1973, p. 378, “I conceive, therefore, that a somewhat comprehensive socialisation of investment will prove the only means of securing an approximation to full employment; though this need not exclude all manner of compromises and of devices by which public authority will co-operate with private initiative.”

                  Krüger 2012b, p. 377 and fn. 30, p. 378.

                  Krüger 2016a, pp. 56, 412, 459, 470, 494, Krüger and Lieber 2016, p. 40.

                  Krüger 2016a, p. 250.

                  Krüger 2016a, p. 429.

                  Krüger 2016a, p. 416.

                  The realisation of a general rate of profit in the market sector will no longer be the result of a spontaneous process, but will be controlled by structural policy interventions.

                  Krüger 2016a, pp. 77, 453. Krüger and Lieber 2016, p. 38. Krüger certainly would have supported “Remain” in June 2016.

                  Krüger 2016a, pp. 453, 456.

                  Krüger 2012b, pp. 298-300, 2016a, pp. 78, 458, 461. For a similar reasoning see Wagenknecht 2016, p. 27.

                  Krüger 2012a, p. 527-9.

                  Krüger 2012b, p. 304, 2016, p. 160.

                  For a brief Marxist critical evaluation of Keynes see Harman 2009, pp. 161-8.

                  Krüger 2012b, back cover, 2016a, p. 377, fn. 1.

                  Krüger 2016a, p. 470.

                  Krüger 2012b, p. 356.

                  Krüger 2016a, pp. 245, 445.

                  Krüger 2012b, p. 364.

                  Krüger 2016, p. 449, fn. 9.

                  Krüger betrays occasional weakness in dealing with Latin conjugations. The plural of homo oeconomicus is homines oeconomici, not homini oeconomici, of punctum saliens it is puncta salientia, not puncti saliendi.