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Rick Kuhn wins Deutscher Memorial Prize

By Passy 25 October 2008 12

On November 7, Canberra’s own Dr Rick Kuhn will be awarded the Isaac and Tamara Deutscher Memorial Prize in London for his book Henryk Grossman and the Recovery of Marxism (University of Illinois Press). This prestigious prize is awarded annually for a book “which exemplifies the best and most innovative new writing in or about the Marxist tradition.”

A reader in Political Science at the Australian National University, Dr Kuhn is a long-standing political activist, member of Socialist Alternative and contributer to the magazine Socialist Alternative (

His book tells the story of the Polish Marxist economist Henryk Grossman, whose life unfolded against the backdrop of key events of the 20th century – world wars, the rise of Stalinism and Nazism and the Cold War. While best known today for the theories of economic crises he developed at the Frankfurt Institute of Social Science, Grossman began his political life as an activist. He was a key participant in Jewish workers’ strikes and demonstrations and in the development of the socialist movement in Poland. After World War I he was often arrested and jailed as a member of the illegal Polish Communist Party, eventually leaving Poland.

As Dr Kuhn says: “Today, as the world economy dives into recession because of the stagnant rate of profit in developed countries, Grossman’s experiences and work are more relevant than ever,”  He added that workers need to fight to defend living standards and jobs now more than ever, and in the long run build a party that expresses their interests.  Dr Kuhn said: “It is no good only analysing the world; the point is to change it.”

 Henryk Grossman and the Recovery of Marxism is available from Socialist Alternative. (See or email

The Canberra branch of Socialist Alternative meets every Thursday night at 6 pm in room G 52 of the Haydon Allen Building  at the ANU.  The meeting on Thursday 30 October will discuss Race, Class and Struggle in the US today, and the meeting on Thursday 6 November will talk about the new imperialist scramble for Africa. (see or email

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Rick Kuhn wins Deutscher Memorial Prize
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imhotep 10:09 pm 27 Oct 08

Thanks for the detailed and thoughtful reply Passy.

The question is, does Rick run his classes to ‘inspire’ and encourage thoughtful debate, as you did, or does he run his classes to promote his strongly held political views amongst a generally soft audience of first year undergrads. I suspect the latter, based on what I saw, and the experience of others I knew who completed his course, (two of whom say they made formal complaints.)

I suspect the latter, but I’m happy to agree to disagree with you on that one.

P Large 8:56 am 27 Oct 08

Passy surely war is a product of having large groupings of people (i.e. nations) and not the economic system they run under. If there were any form of effective global government, regardless of what economic system it was running it would enable the possibility of an end to war. The only difference between capitalism and socialism in this sense is the explicit desire to global government in socialism.

Passy 8:19 am 27 Oct 08


All lecturers are partisan. Ever done an economics course or unit? Neo-liberalism rules. Whether it should in the light of its crisis of credibility as a consequence of its economic crisis is another question. But nevertheless there are whole faculties devoted to maintaining the status quo. Rick is a voice at the moment more or less in the wilderness.

The problem appears to me to be that we live in a society that accepts as natural certain matters – eg profit, the rule of capital and so forth. So that those who promulgate those views are putting forward what is seemingly “natural and unbiased” while those of us who question such views are partisan.

It was ever thus. To be shocked, as you say you were, by alternative views (eg Rick’s) is a worry, to me at least. Why should alternative ideas shock someone at University hopefully seeking a range of views to challenge and excite them intellectually.

I would suggest that in fact some of Rick’s ideas might now be part of some of mainstream thinking – the wars in Iraq and Afghanistan are lost (and represent imperialism at its worst), that war is hot wired into capitalism, that there is a tendency for the rate of profit to fall (and more generally that Marx’s analysis of capitalism is worth having a look at), that the defeat of imperialism is a step forward for humanity (maybe slightly less mainstream, that one).

I think you do young adults a disservice. 19 and 20 year olds aren’t gullible recipients of the “truth” from all powerful lecturers. Otherwise socialist alternative would have hundreds of student members on campus.

Rick doesn’t tape his lectures because he wants students to attend and participate in the discussion. It’s hardly as if he is hiding his views. Many on campus know his views and you can read his articles and books for them too.

When I taught at the ANU most students were quite capable of challenging my ideas and did so. And many of those challenges were quite sophisticated. In that case I had done my job as a teacher – to inspire students to think and rationalise. To search for their own truth, if you like.

imhotep 9:10 pm 26 Oct 08

Passy said :

‘Einstein (another socialist) said words to the effect that an idea, too fantastic for the moment, cannot be a success until it is rejected out of hand.Maybe someone else can give me the correct quote.

I prefer the quote that says ‘if you are not a socialist at 20, you have no heart. If you are still a socialist at 40, you have no brain.’

Passy said :

‘In fact University should be about the challenge of new or different ideas’. .

I hear he’s a nice guy, but in my view Rick is far too partisan to be giving lectures to impressionable undergrads. They often don’t have the experience, wit or plain courage to challenge their lecturer’s views, either in class or in their own minds

Like Nick, I attended some of Rick’s lectures, (Money Power War?) and was shocked at some of the things he was telling these 19-20 year olds. He is/was one of the few lecturer’s who won’t allow his lectures to be recorded, and I’m not surprised.


Passy 8:39 pm 26 Oct 08


You say:

“This doesn’t mean there’s any problem with the demand for high returns per-se though, the same demand for high returns does quite well allocating resources efficiently in the *real* economy after-all.”

Well, actually it does. Viewed for the perspective of an individual company or capitalist, what you say is true. But because capitalism is unplanned and undemocratic a seemingly profitable area (or even a real profitable area) attracts more and more investment, (ie there is over-investment) and so the profit rate falls. Marx was the first to identify the business cycle.

But even then, your suggestion doesn’t address the overall question of the tendency of the rate of profit to fall. This over investment drags down the high profit areas to the general rate of profit, and the tendency for the rate of profit to fall in turn drags down the general rate (assuming countervailing tendencies like cutting wages or destroying capital do not improve profit rates.)

Passy 8:29 pm 26 Oct 08

Thanks NickD. I wonder why you thought Marx outdated. As Rick would argue the downfall of stalinism actually verified Marx’s analysis. Certainly the current crisis begs for an alternative explanation adn Marxism seems to do good job (to my mind anyway) in explaining the problems.

In fact University should be about the challenge of new or different ideas. Einstein (another socialist) said words to the effect that an idea, too fantastic for the moment, cannot be a success until it is rejected out of hand.

Maybe someone else can give me the correct quote.

NickD 5:31 pm 26 Oct 08

I changed subjects after one lecture from Dr Kuhn. I’m sure that he knows his stuff, but Marxism seemed pretty outdated in 2000 and I didn’t see much value in sitting through a subject taught with a Marxist slant.

Tetranitrate 10:33 pm 25 Oct 08

But the actual problem isn’t the demand for higher returns so much as it’s the gross miss-pricing of risk. (It’s almost the equivalent of a get rich quick scheme really).
After-all, the only way you could possibly make money off of buying those houses was if the price kept going up and you were able to sell later. As I’m sure you’re aware lending to people who were dependent on the same process in order to service or restructure the loans isn’t really any different. This was insane. I can only use the term mass delusion.
The problem was that the risk was miss-priced horribly – people were content to assume that house prices could keep going up indefinitely, regardless of fundamentals.
This doesn’t mean there’s any problem with the demand for high returns per-se though, the same demand for high returns does quite well allocating resources efficiently in the *real* economy after-all.

Passy 9:18 pm 25 Oct 08


It’s a good point. I make the distinction because I think the general rate of profit in places like China and India is higher than in the developed West. But the problem is that the world is awash with capital looking for profitable areas to invest. Chinese sovereign funds and Middle East sovereign wealth funds have so much capital (much of it made from dealings with the US) that they cannot invest only in China or India. There appears to me to be a limit to where this “extra” capital can invest. As well not everyone else (even disregarding Chinese Government restrictions on investment in Chinese firms) can invest in China or India.

So capital looks for comparable high returns in the developed West. But productive investment in the real economy there isn’t that profitable. So the sovereign funds and others invest in higher risk areas like securitised sub-prime loans.

he demand for high returns will not go away. Not everyone can invest in China. So I think there will be investors looking again for other profitable ares to invest assuming the real economy doesn’t collapse completely in the meantime.

Tetranitrate 8:56 pm 25 Oct 08

But speculative housing bubbles are not a new thing.
The very fact that they are to a point self sustaining means they’re always going to be ‘profitable’.
Irrational exuberance, mass delusion, we can call it whatever we want.
People chose to be willfully ignorant of what was bound to occur.
It isn’t necessarily due to low rates of return in developed nations though.

With globalization companies can and do invest overseas (ironically that was also the case with this most recent disaster – British banks in particular). If risk adjusted returns in developed countries are low relative to risk adjusted returns elsewhere capital will go to less developed countries.
Because of that I really can’t see how stupid people investing in inflated assets in the hope they’ll inflate further (or making loans that rely on that happening to be viable) is due to low returns in developed countries.

For this much money to end up in these loans (which it did) there has to be more at work – risk adjusted returns would have to be higher then anywhere, not just in developed countries. (and obviously risk in this case was catastrophically miss-priced).
That explanation makes far more sense, I really don’t see why there’s a need to distinguish between developed/undeveloped countries for the purpose of where global capital will go.

If the pricing of risky investments is made up of a basic real return and a premium to compensate for risk, a lower level of return on the risk free assets is definitely going to mean a lower return on risky assets.

Passy 1:42 pm 25 Oct 08


I think the stagnant profit rate in the developed world does explain the housing bubble, along with other factors.

Capital seeks to find the best reward for its investment. Because the general rate of profit is low, and the world is awash with capital (eg petro-dollars and Asian sovereign wealth funds) they looked to somewhere to plonk their money that earned higher rates than putting it in productive investment.

Sub-prime loans were riskier, hence paying higher returns, but were based on a risk pricing model that assumed housing process would continue to rise. Greenspan kept rates low or lowered them in the early 2000s to stimulate the economy (which was going through a slump, as part of the business cycle process Marx identified.) Easy borrowing money, high returns – over investment. When interest rates started to rise, sub-prime loans began to collapse – forcing down housing prices and destroying the investment in these securitised loans.

My fear is that given the inherent drive for more and higher returns, there will be more sub-prime loan crises rather than less, but in some new guise.

And the simple fact appears to me to be that the rate of return in riskier investments is ultimately dependent on the general rate of profit, and if that is low, so must the real pricing of riskier investments be.

Tetranitrate 12:12 pm 25 Oct 08

“Today, as the world economy dives into recession because of the stagnant rate of profit in developed countries”

Because that whole speculative housing bubble certainly had nothing to do with it and neither did oil prices.

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