[5] Of Lithuanian Jewish descent, Dunayevskaya was born Raya Shpigel in the Podolia Governorate of the Russian Empire (present-day Ukraine) and emigrated to the United States in 1922 (her name changed to Rae Spiegel) and joined the revolutionary movement in her childhood.
By the following year she found a group of independent Trotskyists in Boston, led by Antoinette Buchholz Konikow, an advocate of birth control and legal abortion.
[7][9] Having returned to Chicago in 1938 after the deaths of her father and brother, she broke with Trotsky in 1939 when he continued to maintain that the Soviet Union was a "workers' state" even after the Molotov–Ribbentrop Pact.
[10] Her simultaneous study of the Russian economy and of Marx's early writings (later known as the Economic and Philosophical Manuscripts of 1844), led to her theory that not only was the U.S.S.R. a "state capitalist" society, but that 'state capitalism' was a new world stage.
After more than a decade of developing the theory of state capitalism, Dunayevskaya continued her study of the Hegelian dialectic by taking on a task the Johnson–Forest Tendency had set itself: exploring Hegel's Phanomenologie Des Geistes.
In 1954 she initiated a decades long correspondence with the critical theorist Herbert Marcuse, in which the necessity and freedom dialectic in Hegel and Marx became a focal point of contention.
[11] Raya Dunayevskaya's speeches, letters, publications, notes, recordings and other items are located in the Walter P. Reuther Library at Wayne State University in Detroit.