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Realism in the Balance is a 1938 essay by Georg Lukács in which he defends "traditional" realism of authors like Thomas Mann in the face of rising Modernist movements, such as Expressionism, Surrealism, and Naturalism. Practitioners of these movements, such as James Joyce, placed an emphasis on displaying the discord and disenchantment of modern life through techniques that highlight individualism and individual consciousness, such as stream of consciousness. In his essay, Lukács presents a complex, nuanced view of these movements and their relation to what he feels is "true" realism: On the one hand, Lukács feels that such movements are a historical necessity, but he also strongly expresses the sentiment that these new artistic movements lack revolutionary power.

The New Movements in Context
Lukács felt that the new movements were evidence that capitalism was being stretched to the breaking point. As he writes:
 * Economic reality as a totality is itself subject to historical change … the decisive role of the bourgeoisie in history is to develop the world market, thanks to which the economy of the whole world becomes an objectively unified totality. … As a result of the objective structure of the economic system, the surface of capitalism appears to ‘disintegrate’ into a series of elements all driven towards independence. Obviously this must be reflected in the consciousness of the men who live in this society, and hence too in the consciousness of poets and thinkers.

That is to say, the focus on individual isolation in these artistic movements is correlated directly with the wholesale integration of capitalist system. This forms one of Lukács' primary arguments against the revolutionary potential of modernism, namely, that these movements portray individual life as disconnected at a time in which capitalism ensures that people's lives are actually more intertwined than ever.

Social Totality
Lukács belived strongly that literature could yield effects on society at large. Indeed, Realism in the Balance begins with a quote from Georgi Dimitrov on the importance of Don Quixote to the bourgeoisie in their battle against feudalism. And it was traditional realism that Lukács believed could lead to Marxist revolution.

Lukács takes the Marxist stance that the proletariat is a restless force, full of potential but lacking direction. It is the duty of the author, then, to make evident to the proletariat the true nature of social relations. To Lukács, then, the struggle over the nature of "realism" was not an obscure theoretical squabble but a debate of importance that had phenomenal potential to change society. As he writes:
 * If literature is a particular form by means of which objective reality is reflected, then it becomes of crucial importance for it to grasp that reality as it truly is, and not merely to confine itself to reproducing whatever manifests itself immediately and on the surface.

"Whatever manifests itself immediately and on the surface" here is a clear jab at the techniques and perspectives of the Modernist schools.

Realism and Great Literature
Lukács believed that those authors wiling to try and capture this social totality produced better works, both in aesthetics and in revolutionary potential, than the writers of the Modernist schools. Cleverly paralleling the dialectical developments of larger society, Lukács writes that the "monotony" of Modernist works proceeds inexorably from the decision to abandon any attempt to mirror objective reality ... this approach permits no creative composition, no rise and fall, no growth from within to emerge from the true nature of the subject-matter.

In particular, Lukács expresses his support for the German author Thomas Mann. Citing the title character of Mann's work Tonio Kröger, Lukács writes that:


 * when Thomas Mann refers to Tonio Kröger as a ‘bourgeois who has lost his way’, he does not rest content with that: he shows how and why he is still a bourgeois, for all his hostility to the bourgeoisie, his homelessness within bourgeois society, and his exclusion from the life of the bourgeois. Because he does all this, Mann towers as a creative artist and in his grasp of the nature of society.

But Lukács did not only prize the work of leftists. He felt that any author, regardless of political affiliation, would be better served by displaying the "real" nature of social totality. This explains Lukács' support of the works of Balzac, who, as a royalist, was diametrically opposed to Lukács' anarcho-syndicalist beliefs.

Historical Materialism
Lukács refuses to grant any revolutionary potential to the new Modernist schools, but in doing so, he is forced to defend his thesis in a controversial way. Marxist thought holds that each new advance in society merely hastens the eventual revolution. But cetainly the Modernist schools are a new advance, and so they must have some revolutionary potential. Lukács is therefore forced to either declare that Modernism is not historically necessary, or to debate the Marxist concept of inevitability. Since he has already incorporated the development of Modernist movements into his thesis of social totality, he must take the latter position. As he writes:
 * For Marxism the acknowledgement of a historical necessity neither implies a justification of what actually exists (not even during the period when it exists), nor does it express a fatalistic belief in the necessity of historical events … Even less would it occur to a Marxist to see thereby any fatalistic necessity in the development from capitalism to socialism.

Lukács' position here is in clear opposition to the Marxist conception of historical materialism.