Unemployment is an inevitable fellow traveler of the capitalist system

In March 2018, more than 2.5 crore people applied for 90,000 positions in Indian Railways. In February 2018, around 19 lakh candidates applied for a total of 9,500 posts of typists, stenographers and Village Administrative officers in Tamil Nadu. They included 992 Ph.D.’s and 23,000 post graduates. In 2017, over 65000 candidates applied for the post of 698 sub-inspectors in Kashmir. Two years ago, some 19000 applicants had responded for 114 posts of ‘safai karamchari’ in rural UP. Lakhs of rural youth participate in grueling army recruitment rallies; only a few get selected. This reflects the desperate situation confronting our youth, including those highly educated.

Groups of labourers standing in the “labour markets” in towns, waiting to be hired for a days hard labour; women and men queuing up for work in rural India looking for work at a pittance under the much touted MNREGA are common sights.

According to the Centre for Monitoring Indian Economy (CMIE), nearly 31 million people were actively seeking jobs at the end of February 2018. It is estimated that about 13 lakh people are added to the workforce every month. The prospect of unemployment and under employment remains a life-and-death issue for the vast masses of urban and rural workers, and the youth entering the work force.

This complete wastage of productive forces in society and the enforced idleness of millions of workers is an outcome of the operation of the laws of capitalism. It has very little to do with this or that government or its policies.

The capitalist mode of production needs, as well as creates, an army of workers — those who have no means of production of their own, and are forced to sell their labour power to the capitalists in order to live.

As capitalism develops, it ruins artisans and other small producers who cannot survive in the face of competition of cheaper products produced by large scale capitalist production. The same phenomenon takes place with the penetration of capitalism in agriculture and services.

Karl Marx explained in great detail in the first volume of Capital, how unemployment is a fellow traveler of the capitalist system. The development of capitalism is accompanied by the creation of what Marx called an “Industrial Reserve Army”, consisting of workers who are unemployed, or only partially employed. Marx emphasized the fact that this Reserve Army of unemployed was a creation of the capitalist mode of production, and in its service. It complements the active army of employed workers. This “Industrial Reserve Army” is a source of workers, whenever the capitalists need.

Marx explains that the reserve population of unemployed takes many forms. In particular, he highlights three types — floating, latent, and stagnant.

In the cities and industrial centres, there are always to be found a large number of workers with irregular jobs, or no jobs. Floating labour refers to workers who get hired on a seasonal basis or on contract. The garment industry is an example of a branch of industry which hires workers on a seasonal basis. Youth are a major portion of floating labour. Call centres, courier services, delivery services, all need youth. The capitalist system super-exploits young workers only to throw them out when they become older. This is because with constant advances in technology, the skills of older workers become redundant.

Marx refers to the second form of the reserve army of unemployed as the latent form. This refers to the crores of rural people who are facing ruin as a result of development of capitalist relations in agriculture. The steady migration of people from rural areas to the towns is an indication of this fact. Many more remain in the villages, eking out a bare living. They are waiting for any opportunity to get a job in industry or services. This is the latent form of the reserve army of unemployed, constituting a massive number in our country.

The third category of the relative surplus population, the stagnant, forms a part of the active labour army, but with extremely irregular employment. It provides capital an inexhaustible source of labour power. Older workers who lose their jobs, migrants from rural areas, as well as ruined artisans make up this stagnant section. Its conditions of life sink below the average normal level of the working class. It is characterised by maximum of working time, and the minimum of wages. This makes it the broad basis of special branches of capitalist exploitation, such as the construction industry in our country.

Marx then points out that the lowest sections of the industrial reserve army are the paupers. They are the product of capitalist development and grow alongside of capitalism. They include workers injured in factories and mines, orphan children, widows and older workers, and people who are cast to the streets. Marx describes Pauperism as “the hospital of the active labour-army and the dead weight of the industrial reserve army.

Capitalists hire workers to make maximum profits by extracting surplus value from their labour, and increase their capital. The process of capital accumulation is accompanied by increasing concentration of capital and periodic crisis of overproduction. Capitalism goes through cycles of expansion and contraction. During the expansion period, there is an increase in the demand for labour. During the contraction cycle there is a fall in the demand for labour.

Capitalist development is accompanied by advances in technology and productivity of labour. A smaller number of workers can produce a much larger quantity of commodities than before." The capital that a capitalist has to expend on the means of production keeps increasing (the constant capital), as compared to the capital deployed to hire labour (variable capital). The proportion of the two is called the organic composition of capital. The average of the composition of capitals across all branches of production gives us the composition of the total social capital of a country. Even though the total social capital increases with capitalist development, this is not accompanied by a corresponding increase in the number of workers employed. The new industries employ progressively less workers in relation to the capital deployed.

Advances in technology in any branch of production forces all capitalists in the branch to adopt the new technology, or perish. Lakhs of workers are thrown out of their jobs. This was the experience of the workers of the textile industry in the 1980's.

The more that capitalism develops, the larger the industrial reserve army of unemployed. Marx explains “The greater the social wealth, the functioning capital, the extent and energy of its growth, and, therefore, also the absolute mass of the proletariat and the productiveness of its labour, the greater is the industrial reserve army.”

Bourgeois economists carry on lying propaganda that capitalism development is leading to more jobs. They hide the truth that this very capitalist development is leading to the growth of the reserve army of unemployed.

Today, when capitalism is in its last stage of imperialism, wherein it has become parasitic, entire branches of industry and services are destroyed at one swoop. This can be seen in retail trade, with the advent of e-commerce companies. More and more small and medium-scale enterprises are being driven out of business. The new jobs created by the expansion of giant-sized monopoly corporations are less than the number of old jobs destroyed.

Capitalism is relentlessly destroying the productive forces, driving millions of workers into the reserve army. These millions who are unemployed are used to over exploit those who are working, making them work longer and longer hours. The reserve army of unemployed is being used to drive down the wages of those who are employed and keep them anxious about losing their jobs. It is being used to restrict the rights of labour won through years of struggle – the right to organize, the right to an 8-hour day, the right to secure employment.

In the words of Marx, “The condemnation of one part of the working class to enforced idleness by the over-work of the other part, and the converse, becomes a means of enriching the individual capitalists.

Schemes like MNREGA reveal the bankruptcy of the capitalist system. The more the ruling class whips up divisions amongst the people, especially the youth, by making them fight for caste based reservations for a handful of government jobs, the more it confirms that it is unfit to rule.

In order to open the door to progress for Indian society, the capitalist system needs to be overthrown and replaced with socialism. The working class must become the ruling class, take over the means of production from the hands of the bourgeoisie and place under them under social control. This will lead to the resolution of the fundamental contradiction of the capitalist system between the social character of production and the private ownership of the means of production. With the means of production under social control, the working class can and will organise social production in order to fulfill the growing material and cultural needs of the whole of society. Along with the capitalist system, unemployment, its fellow traveler, will be swept away. Everyone will be gainfully employed.

The bourgeoisie is developing its own grave digger, the proletariat. As Marx and Engels write in the Communist Manifesto, “Its fall and the victory of the proletariat are equally inevitable”.


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Industrial Reserve Army    Aug 1-15 2018    Voice of the Party    Rights     2018   

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