Capitalism and Full Employment: Impossible?

[Ritzy Cat]

I'm trying to completely comprehend the reasons why capitalism requires a certain number of unemployed people(industrial reserve army), and a thorough answer at that, as well as where in Marx's readings I can get into the specifics.

[swims with the fishes]

capitalism needs a pool of unemployed so in periods of accumulation there is a ready supply of labour to be drafted into the growing economy. it also regulates wages, people fear unemployment so will take low wages and submit to labour discipline. pretty simple, not much more to it really.

[Luís Henrique]

I'm trying to completely comprehend the reasons why capitalism requires a certain number of unemployed people(industrial reserve army), and a thorough answer at that, as well as where in Marx's readings I can get into the specifics.

The Capital, Volume I, Chapter Twenty-Five, Section 3:

Section 3. Progressive Production of a Relative surplus population or Industrial Reserve Army (https://www.marxists.org/archive/marx/works/1867-c1/ch25.htm#S3)


With the magnitude of social capital already functioning, and the degree of its increase, with the extension of the scale of production, and the mass of the labourers set in motion, with the development of the productiveness of their labour, with the greater breadth and fulness of all sources of wealth, there is also an extension of the scale on which greater attraction of labourers by capital is accompanied by their greater repulsion; the rapidity of the change in the organic composition of capital, and in its technical form increases, and an increasing number of spheres of production becomes involved in this change, now simultaneously, now alternately. The labouring population therefore produces, along with the accumulation of capital produced by it, the means by which it itself is made relatively superfluous, is turned into a relative surplus population; and it does this to an always increasing extent.

Hope this helps.

Luís Henrique

[Rudolf]

Was planning on posting in this thread all day and when i get home what do i see? Someone's already done so pointing to Capital:glare:


A surplus of the labouring population is a result of capital accumulation and its effects on the composition of capital. With the accumulation of capital the proportion of constant capital (MoP) to variable capital (labour) changes.


If it was originally say 1:1, it now becomes successively 2:1, 3:1, 4:1, 5:1, 7:1, &c., so that, as the capital increases, instead of ½ of its total value, only 1/3, 1/4, 1/5, 1/6, 1/8, &c., is transformed into labour-power, and, on the other hand, 2/3, 3/4, 4/5, 5/6, 7/8 into means of production. Since the demand for labour is determined not by the amount of capital as a whole, but by its variable constituent alone, that demand falls progressively with the increase of the total capital, instead of, as previously assumed, rising in proportion to it. It falls relatively to the magnitude of the total capital, and at an accelerated rate, as this magnitude increases. With the growth of the total capital, its variable constituent or the labour incorporated in it, also does increase, but in a constantly diminishing proportion.... But in fact, it is capitalistic accumulation itself that constantly produces, and produces in the direct ratio of its own energy and extent, a relatively redundant population of labourers, i.e., a population of greater extent than suffices for the average needs of the self-expansion of capital, and therefore a surplus population.


Ofc while being a result of capital accumulationa surplus population is also a necessity for capital accumulation.

It creates a mass of the population always ready to be exploited which eases accumulation


The mass of social wealth, overflowing with the advance of accumulation, and transformable into additional capital, thrusts itself frantically into old branches of production, whose market suddenly expands, or into newly formed branches, such as railways, &c., the need for which grows out of the development of the old ones. In all such cases, there must be the possibility of throwing great masses of men suddenly on the decisive points without injury to the scale of production in other spheres. Overpopulation supplies these masses.

and further, the reserve army of labour acts as a check on the active army of labour



The industrial reserve army, during the periods of stagnation and average prosperity, weighs down the active labour-army; during the periods of over-production and paroxysm, it holds its pretensions in check. Relative surplus population is therefore the pivot upon which the law of demand and supply of labour works. It confines the field of action of this law within the limits absolutely convenient to the activity of exploitation and to the domination of capital.

[Ritzy Cat]

Thanks for the answers guys, I think I'm understanding it more, but please review my points to ensure I absorbed this all correctly:

1. Over time, the ratio of capital to labour power is increasing, so that the overall demand for labour decreases.
2. Over time, the percentage of capital that is made of labour power decreases (so this also accounts for automation of jobs too w/ machines?)
3. Unemployed population can place pressure on active workers
4. Unemployed population exists so they can be quickly drafted to new spheres of the economy if/when they arise

Although some clarification on this quote would be appreciated:


But in fact, it is capitalistic accumulation itself that constantly produces, and produces in the direct ratio of its own energy and extent, a relatively redundant population of labourers, i.e., a population of greater extent than suffices for the average needs of the self-expansion of capital, and therefore a surplus population.

[Rudolf]

Thanks for the answers guys, I think I'm understanding it more, but please review my points to ensure I absorbed this all correctly:

1. Over time, the ratio of capital to labour power is increasing, so that the overall demand for labour decreases.
2. Over time, the percentage of capital that is made of labour power decreases (so this also accounts for automation of jobs too w/ machines?)

Gotta be careful here as an increase in total capital does have an increase in the total labour incorporated in it but in a diminishing proportion.



3. Unemployed population can place pressure on active workers
4. Unemployed population exists so they can be quickly drafted to new spheres of the economy if/when they arise pretty much but emphasis on the 4th that it reduces disruption to other spheres of industry.



Although some clarification on this quote would be appreciated:

"But in fact, it is capitalistic accumulation itself that constantly produces, and produces in the direct ratio of its own energy and extent, a relatively redundant population of labourers, i.e., a population of greater extent than suffices for the average needs of the self-expansion of capital, and therefore a surplus population."



Yeah that's just Marx saying that capital accumulation produces a population that's surplus to the requirements of capital accumulation.