The question of capitalism’s inevitable collapse from within had been the center of controversy in socialist circles, ever since Eduard Bernstein’s articles in Die Neue Zeit in the 1890’s had raised empirical objections to the prophecy of increasing proletarian pauperization. During the next three decades, Rosa Luxemburg, Heinrich Cunow, Otto Bauer, M. J. Tugan-Baranovski, Rudolf Hilferding, and others wrestled with the issue-from a theoretical as well as an empirical vantage point. Fritz Sternberg’s Der Imperialismus, which modified in a more pessimistic direction the Luxemburg thesis that imperialism was only a delaying factor in capitalism’s demise, was the last major contribution before Grossmann’s. The Law of Accumulation and Collapse begins with an excellent analysis of the previous literature on the question. Then, following an exposition of Marx’s own views culled from his various writings, Grossmann attempted to build on Otto Bauer’s mathematical models a deductive system to prove the correctness of Marx’s predictions. The pauperization he pointed to was not that of the proletariat, but that of the capitalists, whose tendency to overaccumulation would produce an unavoidable decline in the profit rate over a certain fixed period of time. Although admitting countertendencies such as the more efficient use of capital, Grossmann confidently asserted that they might mitigate but not forestall the terminal crisis of the capitalist system. The full ramifications of his argument, whose predictions have obviously failed to come true, need not detain us here.51 Let it be said, however, that the essentially quietistic implications of his thesis, similar to those of all Marxist interpretations that stress objective forces over subjective revolutionary praxis, were not lost on some of his contemporaries.52
Pollock, the other leading economist in the Institut, was quick to challenge Grossmann on other grounds. Stressing the inadequacy of Marx’s concept of productive labor because of its neglect of non-manual labor, Pollock pointed to the service industries,53 which were becoming increasingly important in the twentieth century. Surplus value might be extracted from workers in these industries as well as from those producing commodities, he argued, which would prolong the life of the system. Grossmann’s stand continued basically unchanged, however, and he and Pollock remained at odds on economic questions until Grossmann left the Institut after the Second World War. Carefully read between the lines, Pollock’s Experiments in Economic Planning in the Soviet Union (1917–1927),54 the second volume of the Institut’s Schriften, gives further evidence of the dispute.
Pollock was invited to the Soviet Union during its tenth anniversary celebrations by David Ryazanov, who had spent some time in Frankfurt in the early 1920’s and who continued his relationship by contributing an occasional article to the Grünberg Archiv.55 In the Soviet Union, although admired for his scholarly work as director of the Marx-Engels Institute, Ryazanov was regarded politically as a rather eccentric throwback to the days of pre-Bolshevik social democracy. Despite his frequent criticism of party policy,56 he survived until Stalin sent him into exile with the Volga Germans a few years after Pollock’s visit, a move that has been facetiously described as Stalin’s only real “contribution” to Marxist scholarship. Through Ryazanov’s friendship, Pollock was able to speak with members of the dwindling opposition within the Bolshevik Party during his trip, in addition to his actual field studies of Soviet planning. The impressions he brought back to Frankfurt after several months were thus not entirely favorable. His book carefully avoided commenting on the political consequences of the Revolution and the forced collectivizations of the 1920’s. On the central question he treated—the transition from a market to a planned economy—Pollock was less the enthusiastic supporter than the detached and prudent analyst unwilling to pass judgments prematurely. Here, too, he and Grossmann had cause for disagreement.
Nevertheless, it would be wrong to characterize the general attitude of Institut members in 1927 towards the Soviet experiment as closer to Pollock’s skepticism than to Grossmann’s enthusiasm. Wittfogel remained as firm as ever in his support, Borkenau had not yet reached his decision to repudiate the Party, and even Horkheimer retained an optimistic hope that humanist socialism might yet be realized in post-Lenin Russia. One of the aphorisms published in Dämmerung a few years later expresses Horkheimer’s feelings during this period:
He who has eyes for the meaningless injustice of the imperialist world, which in no way is to be explained by technical impotence, will regard the events in Russia as the progressive, painful attempt to overcome this injustice, or he will at least question with a beating heart whether this attempt still persists. If appearances speak against it, he clings to the hope the way a cancer victim does to the questionable news that a cure for cancer has probably been found.57
Heated sub rosa discussions of Pollock’s findings did take place, but never broke into print. In fact, after his book was published in 1929, the Institut maintained an almost complete official silence about events in the USSR, broken only by an occasional survey of recent literature by Rudolf Schlesinger, who had been one of Grünberg’s students in the twenties.58 It was really not until a decade later, after the Moscow purge trials, that Horkheimer and the others, with the sole exception of the obdurate Grossmann, completely abandoned their hope for the Soviet Union. Even then, preoccupied with problems that will be discussed later, they never focused the attention of Critical Theory on the left-wing authoritarianism of Stalin’s Russia. The lack of available data certainly was one reason, but one ought not to ignore the difficulties involved in a Marxist analysis, however heterodox, of communism’s failures.
After all this is said, however, it should also be stressed that Critical Theory as it was articulated by certain members of the Institut contained important, implicit criticisms of the Soviet ideological justification for its actions. Although most of the figures in the Institut’s early history already mentioned—Grünberg, Weil, Sorge, Borkenau, Wittfogel, and Grossmann—were unconcerned with the reexamination of the foundations of Marxism to which Horkheimer was becoming increasingly devoted, he was not entirely without allies. Pollock, although primarily interested in economics, had studied philosophy with Cornelius and shared his friend’s rejection of orthodox Marxism. Increasingly caught up in the administrative affairs of the Institut after Grünberg suffered a stroke in late 1927, Pollock was nevertheless able to add his voice to Horkheimer’s in the Institut’s seminars. In the late 1920’s he was joined by two younger intellectuals who were to have an increasingly important influence in subsequent years, Leo Lowenthal and Theodor Wiesengrund-Adorno (who was known solely by his mother’s name, Adorno, after the emigration).
Lowenthal, born the son of a Jewish doctor in 1900 in Frankfurt, served like the others in the war before embarking on an academic career. At Frankfurt, Heidelberg, and Giessen, he studied literature, history, philosophy, and sociology, receiving his doctorate in philosophy with a thesis on Franz von Baader at Frankfurt in 1923. At the university, he moved in the same radical student circles as Horkheimer, Pollock, and Weil, who had been a friend in secondary school. He had ties as well to the group of Jewish intellectuals surrounding the charismatic Rabbi Nehemiah A. Nobel,59 which included such figures as Martin Buber, Franz Rosenzweig, Siegfried Kracauer, and Ernst Simon. It was as a member of this latter group, which gave rise to the famed Freies Jüdisches Lehrhaus (Free Jewish House of Learning) in 1920, that Lowenthal came in contact again with a friend from his student days, Erich Fromm, who was later to join the Institut. Lowenthal’s own entrance into Institut affairs occurred in 1926, although outside interests limited his involvement. He continued to teach in the Prussian secondary school system and served as artistic adviser to the Volksbühne (People’s Stage), a large left-wing and liberal organization. Throughout the late 1920’s he wrote critical articles on aesthetic and cultural matters for a number of journals, most prominently the Volksbühne’s, and continued to contribute historical pieces on the Jewish philosophy of religion to a variety of periodicals. In addition, he acquired editorial experience that proved useful when the Zeitschrift für Sozialforschung replaced Grünbergs Archiv as the Institut’s organ.
It was as a sociologist of literature and student of popular culture that Lowenthal contributed most to the Institut after he became a full-time member in 1930 (his official title was initially Hauptassistent—first assistant—which only Grossmann shared). If it can be said that in the early