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Unemployment, capitalism's insoluble problem!

Unemployment, capitalism's insoluble problem!
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In our periodical surveys on the course of imperialism, we have shown how, since the 1975 economic crisis, each recession period involved a continued expulsion of labour force from the productive process, while each subsequent recovery managed to re-employ only a very small portion of workers. On the contrary, in the period between 1950 and 1974, unemployment in the main Western countries had remained at a comparatively low level.

In Capital, Marx exhaustively dealt with the causes of this phenomenon:
the growth of social wealth. They develop at a much quicker rate, because mere accumulation, the absolute increase of the total social capital, is accompanied by the centralisation of the individual capitals of which that total is made up; and because the change in the technological composition of the additional capital goes hand in hand with a similar change in the technological composition of the original capital With the advance of accumulation, therefore, the proportion of constant to variable capital changes. If it was originally say 1:1, it now becomes successively 2:1, 3:1, 4:1, 5:1, 7:1, etc., so that, as the capital increases, instead of 1/2 of its total value, only 1/3, 1/4, 1/5, 1/6, 1/8, etc., 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 into it, also does increase, but in a constantly diminishing proportion. The intermediate pauses are shortened, in which accumulation works as simple extension of production, on a given technical basis. It is not merely that an accelerated accumulation of total capital, accelerated in a constantly growing progression, is needed to absorb an additional number of labourers, or even, on account of the constant metamorphosis of old capital, to keep employed those already functioning. In its turn, this increasing accumulation and centralisation becomes a source of new changes in the composition of capital, of a more accelerated diminution of its variable, as compared with its constant constituent. This accelerated relative diminution of the variable constituent that goes along with the accelerated increase of the total capital, and moves more rapidly than this increase, takes the inverse form, at the other pole, of an apparently absolute increase of the labouring population, an increase always moving more rapidly than that of the variable capital or the means of employment 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 surpluspopulation» (1).

This long quotation from Capital is useful to show how unemployment does not originate from the employers' greed to extort plusvalue from their workers, but is an essential aspect of the capitalist mode of production, a congenital feature of its functioning.

In other words, the phenomenon of unemployment can assume different aspects in the various industrial branches: in general, the change in the organic composition of capital can bring bout increase, stationariness, or decrease in workers and wage-funds, independently from the single capitalist's will.

As Marx explains in Chapter XXIII of Volume I of «Capital» «The General Law of Capitalist Accumulation»), capitalism's tendency is in general towards an increase in the number of wage-earners as a consequence of accumulation. This is the tendency, but
This development is by no means continuous. When the excessive desire to invest surplus value in new enterprises has increased to the maximum the number of workers, goods become redundant As soon as their distribution becomes difficult, because they are no more in demand, so-called overproduction crises take place. Great masses of commodities stay unsold, capitalists stop or reduce their factories' activity and a great number of workers are laid off» (2).

Thus, Keynes's theories on population's growing welfare are shown to be - in the light of what Marx had already proved a century before - devoid of any scientific meaning. The bread crumbs which fell upon the working class in the imperialist countries during the post-WWII reconstruction period had fooled both the «modern» bourgeois economists and the «opportunist» economists (who remained quite below the theoretical level of Adam Smith and David Ricardo) as regards the soundness of their theories.

On the contrary, the whole economic course of the post-WWII period thoroughly attested the Marxist economic theory's scientific soundness and the validity of its laws from the point of view of employment as well. From the 1950s to mid-1975, a continuous enlargement of the productive basis took place, with an as -continuous absorption of labour-force (true, there were alternate periods in which workers were expelled from the factories, but they were soon employed again).

In that period, average unemployment (in percentage of the labour-force, estimated according to the OCSE definition) was rather low. In the main countries, such percentages were rather low, if confronted with subsequent periods, when the trend was opposite:

United States

1961-73: 4.9%

1974-80: 6.9%

1981-90: 7.1%

1992: 7.2%


1961-73: 1%

1974-80: 4%

1981-90: 8.2%

1993, 8% in Western Germany
15.3% in the former Eastern Germany


1961-73: 1.1%

1974-80: 4.19%

1981-90: 9.3%

1993: 11.7%
1995: 12.4%


1961-73: 1.3%

1974-80: 1.9%

1981 -90: 2.5%

1993: 2.5%

Great Britain

1961-73: 2.1%

1974-80: 4.5%

1981 -90: 9.6%

1992: 10.6%


1961-73: 5.3%

1974-80: 6.8%

1981-90: 10.6%

1993: 12.5%

As to the active population (in millions), figures are:





United States
















Great Britain








This summary wholly confirms the law of population in the capitalist epoch: i.e., the progression of accumulation produces in general an increase in the number of wage-earners (as is clear from the active-population chart, a population which, in this post-WWII period, kept growing). But in the periods of enlargement of the productive basis and in the periods of increase of the organic composition of capital, with the introduction of new productive techniques and of new machinery, with the aim of increasing productivity, the workers who are being absorbed in an ever growing number are then roughly laid off.

The increase in unemployment (both absolute and in percentage of active population) is continuous even in these early 1990s. It now reaches figures never seen before in this post-WWII period and getting ever more rapidly nearer and nearer to those of the Great Depression. It is enough simply to run our eye over the bourgeois newspapers to realise how dramatic the unemployment issue is becoming in all the industrialised countries and how powerless the various governments are in trying to cope with it. In fact, it is becoming a most severe factor of social instability.

In France, Italy, Germany, United States, Spain, the «powers that be» would like to remedy it, but they ignore where to start from. The only thing that they know for sure is that the price of recession must be paid by the working class, in the form of an increased job precariousness, of skyrocketing unemployment, of loss of «benefits» (often paid in advance, through decades and decades of hard work), of intensified exploitation on the job, etc. The Spanish case is particularly dramatic: in 1993, with unemployment at 21.7% (i.e., 3.4 millions), the «socialist government proposed a «social agreement», which asked for a few things on part of the employers and for many things on part of the employees. The employers should have reduced the distribution of dividends, reinvested profits, and tried to avoid lay-offs as much as possible (!). On their part, workers should have accepted: a) a 5-point reduction of the wages' purchasing power, 2) an adjustment of the pensions to the estimated (and not to the actual) inflation, with an increase in the number of the years of paying-in, 3) a tougher control and a restriction of the qualifications needed to obtain unemployment benefits!

From the point of view of employment, the forecasts for the world working class are strongly negative. The clogging of the world market, the saturation of almost all productive branches (the most advanced ones included: computing, telematics, chemistry, air-space technology), are producing deep techno-productive reconversions. And these will imply a considerable expulsion of labour, at a world level. Such labour will not be subsequently re-employed, because the investment plans of all firms, beside introducing new and more efficient machinery, call for a reduction of production (and this is true for the Japanese firms as well). The number of new plants and machinery to be produced won't thus be enough to re-absorb the laid-off labour.

How should workers cope with this situation? The working class must Oppose this objective trend in the capitalist mode of production, by refusing to accept any talk of local or national «compatibilities» (i.e., to limit one s own requests, according to the needs and the economic situation of the firm or nation). For the world working class, it is a matter of defending its own working and living conditions, its jobs and wages, and to do it in an uncompromising way: by renewing that class unity which goes beyond the boundaries of firm, economic sector, and nationality and which capitalism [sorry, the text in the journal is ending here.]

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  1. Karl Marx, «Capital», Volume I, Chapter XXIII: «The General Law of Capitalist Accumulation» (Section 3: «Progressive production of a relative surplus-population or industrial reserve army») (Chicago: Charles H. Kerr Co., 1926), pp 689-691). [back]
  2. «Elementi dell'economia marxista» (Milano, Edizioni Il programma comunista, 1991). p. 70. [back]

Source: «Internationalist Papers», Nr.4, June 1995

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