For wages to stay at the subsistence
level, Karl Marx held that workers must be in a weak bargaining position in relation to their employers. A worker’s source of bargaining power is his
or her ability to leave the employer and to go get a new job with someone
else. To Marx, under capitalism, the
weak bargaining position of the workers would be maintained by a large supply
of unemployed workers. Workers would
have to “obey” their employers because they would know that there were many
other workers willing to take their jobs. And they could not quit their jobs
because their chances of getting other jobs would be low. This supply of unemployed workers was called “the reserve army of the unemployed”.
Three forces, according to
Marx, would maintain this reserve army of the unemployed. One was the high rate of population growth of the
working classes, as noted above. Another was what
has been called “technological unemployment”. When times are good and demand is increasing,
companies desire to hire more workers.
This desire would tend to bid up wages.
In response to the higher wages, companies develop machines to replace
people. Those who are displaced by the
machines become part of the reserve army. (See Part 7 below.) A third force to maintain the reserve army was that, under
capitalism, there is a persistent tendency for large companies to out-compete
small companies. The owners
of the small companies (called the petit bourgeoisie)
are then forced to become workers, swelling the numbers of people seeking employment.
While Marx did not mention it, modern
Marxists consider another factor that reduced the bargaining power of the
workers. This is called “deskilling”. Capitalists reduced the need
for the skills of the craftsperson.
Instead, they created machines and job processes that required a low
level of skill on the part of the workers.
One worker becomes interchangeable with another, losing any power that
could be achieved by withdrawing labor from the employer.
In Marx’s analysis of capitalism, this
point may be the most relevant. In the United States since
the end of World War II, there have been only a dozen or so years of “full
employment”. When unemployment rates
fall, the stock market typically declines!
Does capitalism indeed require a significant number of unemployed
people?
For more on Karl Marx and Marxism:
Marx's Dialectical Approach and Materialist Interpretation of History
Marx's Class Struggle
Marx on alienation and freedom
Marx's Value and Surplus Value theory
Marx's Law of Increasing Concentration of Capital
Marx on Contradictions of Capitalism
Marx on the Crises of Capitalism
Marx on the state
Marx on Imperialism
Marx on the Proletarian Revolution
Marx on the dictatorship of the Proletariat -
Summary of the Communist Manifesto
Summary of The German Ideology
Marx's Class Struggle
Marx on alienation and freedom
Marx's Value and Surplus Value theory
Marx's Law of Increasing Concentration of Capital
Marx on Contradictions of Capitalism
Marx on the Crises of Capitalism
Marx on the state
Marx on Imperialism
Marx on the Proletarian Revolution
Marx on the dictatorship of the Proletariat -
Summary of the Communist Manifesto
Summary of The German Ideology