MIA > Archive > Fraina/Corey Archive > Decline of Am. Cap.
UNEMPLOYMENT is a normal aspect of capitalist production, which needs a labor reserve for the expansion of industry and to beat down wages. The amount and character of unemployment are closely associated with the development of capitalism.
In the earlier stages of industrialism, the displacement of labor by machinery tended to be absolute, because the productivity of labor generally rose more than production. There was the growth of a surplus population and increasing misery.
In the epoch of the upswing of capitalism the creation of a large surplus population was checked in the industrial countries. Production, particularly of capital goods, rose more than the productivity of labor. Displacement was relative, employment increased. Nevertheless, normal, technological, and cyclical unemployment was a constant and increasing torment to the workers. This was especially true in the United States after 1860, when a surplus population appeared for the first time. And the check in the growth of the surplus population in the industrial countries of Europe was mainly due to the exploitation of economically backward peoples, among whom there was an increase in the surplus population and increasing misery.
If, in the epoch of the upswing of capitalism, unemployment increased in spite of the fact that production rose more than the productivity of labor, it must increase still more in the epoch of decline, when the curve of production moves downward while technological efficiency and productivity move upward. The displacement of labor is absolute, unemployment tends to become permanent disemployment, and the surplus population grows. After the World War, under the impact of economic decline, normal unemployment was greatly augmented in most of the capitalist nations of Europe. It compelled adoption or extension of unemployment insurance and relief plans, which American businessmen considered the sad necessity or moral flabbiness of people not nourished on the traditions of “rugged individualism.” But during the same period, in spite of and because of prosperity, unemployment was increasing in the United States, although not as yet on the European scale. This was more than mere repetition of former experience. For the first time in American history there was an absolute displacement of labor in manufactures, transportation, and agriculture. It marked the coming to maturity of the elements of the decline of American capitalism.
The tremendous cyclical unemployment in 1930-34, nearly twice as great relatively as in the worst of former depressions, is an indication of what is to come. If and when production reaches the 1929 level, there will still be 6,000,000 to 8,000,000 unemployed workers. Nor can state capitalism or fascism check this development, for it is a result of economic decline, of the fact that production moves downward while technological efficiency and the productivity of labor move upward. Workers are thrown out of work both by lower production and higher productivity. Where formerly technological changes meant only a relative displacement of labor, now they mean an absolute displacement. The surplus population grows. It threatens capitalist profit, because permanent unemployment limits the production of surplus value. And it threatens capitalist domination, because mass disemployment is potential with the threat of revolution.
Underlying permanent unemployment is the unequal division of the proceeds of industry. For unemployment is essentially the result of the antagonism between production and consumption, of the fact that capitalism augments production and profits while it limits the income and consumption of the workers. A piling up of capital claims, profits, and interest occurs as the composition of capital becomes increasingly higher. This forces lower wages and displacement of labor. The unequal distribution of income and wealth tends to become more unequal. The increase in capital claims and unemployment are interlocked with each other; both are interlocked with the distribution of income and wealth, which responds sensitively to technical-economic and class changes.
Last updated on 3.9.2007