Marxian theory of unemployment Unemployment

karl marx, theorien über den mehrwert, 1956

it in nature of capitalist mode of production overwork workers while keeping rest reserve army of unemployed paupers.

marxists share keynesian viewpoint of relationship between economic demand , employment, caveat market system s propensity slash wages , reduce labor participation on enterprise level causes requisite decrease in aggregate demand in economy whole, causing crises of unemployment , periods of low economic activity before capital accumulation (investment) phase of economic growth can continue.

according karl marx, unemployment inherent within unstable capitalist system , periodic crises of mass unemployment expected. function of proletariat within capitalist system provide reserve army of labour creates downward pressure on wages. accomplished dividing proletariat surplus labour (employees) , under-employment (unemployed). reserve army of labour fight among scarce jobs @ lower , lower wages.

at first glance, unemployment seems inefficient since unemployed workers not increase profits, unemployment profitable within global capitalist system because unemployment lowers wages costs perspective of owners. perspective low wages benefit system reducing economic rents. yet, not benefit workers. capitalist systems unfairly manipulate market labour perpetuating unemployment lowers laborers demands fair wages. workers pitted against 1 @ service of increasing profits owners.

according marx, way permanently eliminate unemployment abolish capitalism , system of forced competition wages , shift socialist or communist economic system. contemporary marxists, existence of persistent unemployment proof of inability of capitalism ensure full employment.