Monday, January 23, 2006

 

Marxian unemployment (oh dear)

First of all, Wikipedia is awesome--their links can keep me busy for hours. One link from the "minimum wage" page took me to "Marxian unemployment", which has this to say:

"...some unemployment — the reserve army of the unemployed — is normally needed in order to maintain work discipline in jobs, keep wages down, and protect business profitability. If profitability suffers a sustained depression, capitalists can and will punish people by imposing a recession via their control over investment decisions (a capital strike)."

Do they mean capitalists intentionally make bad investments (not profitable ones) in order to cause an economy-wide recession that will keep wages down, just to cause low wages and pay less? Are you kidding me? That seems to break a host of simple rules, one of which is Occam's Razor. Did the Marxians ever consider that the "sustained depression" of profitability caused the recession, with no malice towards workers and especially no conscious attempt by "capitalists" to cause a recession?

Plus they would need to show that recessions help profitability, which is in the ballpark of absurd. In general, I'm not sure how I feel about the Marxian approach, besides simply amazed that people still buy into it.

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