Page - 110 - in Otto Bauer (1881–1938) - Thinker and Politician

110 chapter 3 This reasoningwasbasedontwoarguments, the firstofwhichwaspurespec- ulationandwasnotbackedbyanyevidence: if, for instance,cartelsco-operate insettingmonopolyprices,thisamountstoregulatingthemovementofprices. The second argumentwas essentially the samemisguidedpremise that also misledHilferding:moneyoriginatesintheactofexchange,thepercentagerate beingtheresultof thesupplyofmoneycapitalanddemandfor it.Fromthis it follows thatbankssetmoneysupplyandpercentagesarbitrarily. In thisman- ner, theyalsocontrol andregulateproduction levels.Alas,Bauer’s judgement wasincorrect. 3.2 StructuralCrisisandWaysofOvercomingIt Bauerpaidparticularly strongattention toanalysing thecrises thatoccurred in Austria from 1921–33. Alluding to the additional crisis that Engels distin- guishedinhiswork–alsoknownastransitionalcrisis–heconcludedthattwo types of crises hadoccurred inhis country: conjunctural and structural. The latter, according toBauer, resulted fromthe specific conditions and relations as capitalist production is superimposeduponwidespreadproduction foruseandnon- capitalist, artisanal commodity production intended for a localmarket, the full impact of crises is felt onlyby thecapitalist superstructure.Theyaffectbranchesofproduction wheresalesmaybebroughtalmost toastandstillbecausethecirculationwhich isabso- lutely indispensable for the turnover of goods in society is providedbyhandicraft pro- ductionorbydomestic production…Ascapitalist productiondevelopshandicraft and domesticproductionarelargelydestroyed.Theimpactofacrisisisnowfeltbyasystemof production, thecontractionofwhichis limitedbythenecessityofsatisfyingsocialneeds onamuchlargerscale,bothabsolutelyandrelatively…Changesinthecharacterofcrises arealsoboundto followtheadvanceofcapitalist concentration.Theabilityofanenter- prisetosurviveincreaseswithitssize…Alongwiththeconcentrationoffirmsthescaleon whichproductioncanbemaintainedalsoincreases’–Hilferding1981,pp.289–90.Kautsky andLuxemburgtookanopposingviewtothatofHilferdingandBauer,claimingthat the effectofthemonopolies,whichaimfortotaldominationofallbranchesofproductionby eliminatingcompetition,intensifiestheanarchyofthecapitalisteconomyandaccelerates thecrisis.SeeKautsky1899,pp. 146–7;compareLuxemburg2004,pp. 137–8.Thepractical conclusionsthatBauerdrewfromthisanalysisshouldalsobementionedinpassing.From hispointofview,abalancebetweenthesupplyanddemandofcommoditieswasanideal situationfortheworkingclass(and,accordingtohim,Germanyhadachievedsuchcondi- tions).However,thefactthatdemanddependsonthesupplyoflabourpowershouldhave ledhimtothefollowingconclusion:adisproportionbetweentheextentofaccumulation andthenumberofworkersresultsinlabouremigration(Russia,Austria-Hungary),which divides theproletariat.A stateofbalance is themostbeneficial for theworkingclass: it hasfewerreasonstorebel, so itsorganisation,unification,andconsciousness-raisingcan proceedsmoothly.