Rudolf Hilferding Essay ⋆ Political Science Essay Examples ⋆ EssayEmpire

Rudolf Hilferding (1877–1941) was a leading Austro-Marxist theorist and political figure in the German Social Democratic Party (SPD). Author of Finance Capital: A Study of the Latest Phase of Capitalist Development (1910), classical Marxism’s most important political economy work after Marx’s Capital (1867), Hilferding introduced the term organized capitalism. He served twice as finance minister in SPD-led coalition governments in the Weimar Republic and was the leading theorist and key advocate of the Republic in the SPD.

Hilferding was born in Vienna, Austria-Hungary, on August 10, 1877, into a liberal-Jewish bourgeois family. He studied medicine at the University of Vienna, leaving with a doctorate in 1901 to become a general practitioner. By the early 1890s, he had become radicalized and joined with like-minded others into a reading and study group that later became the nucleus of the school of Austro-Marxism. The iconoclasm of Austro-Marxism—blending historical analysis, neo-Kantian philosophy, the Marxian critique of political economy, and contemporary developments in sociology and economics— influenced his thinking for the rest of his life.

After receiving an invitation from August Bebel, founding leader of the SPD, and Karl Kautsky, the party’s leading theorist, Hilferding moved to Berlin in 1906. He was initially a leading voice against Eduard Bernstein’s revisionism and he defended revolutionary politics in the debate on the mass strike.

Hilferding’s Finance Capital begins by examining the financial market and its institutions, money, and banks, and makes the case for a new phase and type of capitalism. This new capitalism becomes organized into cartels dependent on and led by finance capital (the banking sector) and is ultimately incapable of a final economic breakdown. However, the new capitalism is also intrinsically linked to a political compromise between old (aristocratic) and new (bourgeois) order and includes imperialism as the necessary outcome. The work thereby stands both analytically and politically in stark contrast to Bernstein’s The Preconditions of Socialism (1899); it also highly influenced Nikolay Ivanovich Bukharin and Lenin’s theory of imperialism. The antirevisionist stance is even more apparent in Hilferding’s formulation of organized capitalism in response to Germany’s World War I (1914–1918) political economy. Under this system, the state organizes and dominates capitalism but does so in the service of war (war economy) and thus precludes democratic reforms through parliamentary means.

Hilferding never quite associated himself with the radical left that converged around Rosa Luxemburg, however. He also kept his distance, despite an initial political friendship with Leon Trotsky, from the Russian radical left (Bolshevists), and opted for democratic socialism instead. Although Hilferding was openly critical of the SPD’s embrace of World War I and eventually became the leader of the antiwar Independent Social Democrats, he had a rather pragmatic-realist view of the German Revolution of 1918 to 1919. To aid the Weimar Republic, Hilferding radically reformulated his concept of organized capitalism into a kind of parliamentary welfare state regime, a precursor to neo-Marxism’s capitalist democracy, to substantiate and legitimize SPD support and actions in the Republic.

When Adolf Hitler came to power, Hilferding fled Germany. His last political intervention was the exiled SPD’s radical Prague Program in 1934, which called upon the German working class to rise up against the dictatorship. His final, unfinished work, The Historical Problem (1940–1941), presents his departure from classical Marxism. In it Hilferding anticipates the idea of the relative autonomy of the state and a move from “class” to the concept of “social groups.” He also asserts the importance of psychology in understanding social phenomena. Hilferding was arrested in Marseille, Vichy France, extradited, and died in Paris on February 10, 1941, after being tortured by the Gestapo.

Bibliography:

Hilferding, Rudolf. Finance Capital: A Study of the Latest Phase of Capitalist Development. Edited and with a preface by Tom Bottomore.Translated by Morris Watnick and Sam Gordon. London: Routledge and Kegan Paul, 1981.
Zwischen den Stühlen: Oder über die Unvereinbarkeit von Theorie und Praxis: Schriften Rudolf Hilferdings, 1904–1940. Edited by Cora Stephan. Bonn, Germany: Dietz, 1982.
Smaldone,William. Rudolf Hilferding: The Tragedy of a German Social Democrat. DeKalb: Northern Illinois University Press, 1998.
Wagner, F. Peter. Rudolf Hilferding: Theory and Politics of Democratic Socialism. Atlantic Highlands, N.J.: Humanities Press, 1996.
Zoninsein, Jonas. Monopoly Capital: Hilferding and 20th Century Capitalism. New York: Greenwood Press, 1990.

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