Reserve Army of the Unemployed

Definition

The term “Reserve Army of the Unemployed” refers to a concept in Marxist theory which posits that a surplus labor force (the unemployed or underemployed) exists under capitalism to ensure that wages do not rise above a certain level. This reserve labor force essentially serves as a pressure valve to keep the working class suppressed and prevent wage inflation, thus maintaining the power dynamics in a capitalist society.

Examples

Industrial Revolution: During the Industrial Revolution, many laborers left rural areas to seek employment in growing urban centers. Despite the increased demand for labor in factories, the vast influx of workers meant that a significant portion of the labor force remained unemployed or underemployed, keeping wages low.
Great Depression (1930s): The massive unemployment rates during the Great Depression provided a stark illustration of the reserve army of labor. With so many individuals out of work, those who were employed had little power to demand higher wages or better conditions.
Modern Gig Economy: In contemporary times, the gig economy, characterized by temporary, flexible jobs, is another manifestation of the reserve army of labor. The oversupply of workers willing to take gig jobs often results in lower wages and fewer benefits for these workers.

Frequently Asked Questions

What is the significance of the Reserve Army of the Unemployed in Marxist theory?

The reserve army of the unemployed is crucial in Marxist theory as it explains the persistent inequality and power imbalance between capitalists and laborers. This labor reserve keeps workers in a perpetual state of competition, ensuring that wages remain low and capital accumulation continues for the ruling class.

How does the Reserve Army of the Unemployed affect wage levels?

The existence of a large unemployed population creates a condition where employers can offer lower wages, knowing that many desperate individuals are willing to work for less. This competition among workers ensures that wages do not rise significantly, regardless of the profitability of businesses.

Is the Reserve Army of the Unemployed relevant today?

Yes, the concept remains relevant, particularly in discussions about labor markets, job security, and wage stagnation. Factors such as automation, globalization, and economic policies continue to create conditions where surplus labor is abundant.

Who coined the term “Reserve Army of the Unemployed”?

The term was coined by Karl Marx, a German philosopher, economist, and socialist revolutionary, in his analysis of capitalism and its inherent flaws.

How can economies reduce the Reserve Army of the Unemployed?

Policies aimed at full employment, higher minimum wages, stronger labor unions, education and retraining programs, and social safety nets can help reduce the reserve army of labor by providing better job security and higher wages for workers.

Surplus Value: The difference between the value produced by labor and the actual wage paid to the laborer, which in Marxist theory is seen as the profit extracted by capitalists.
Proletariat: The working class, who sell their labor power for wages and do not own the means of production.
Bourgeoisie: The capitalist class that owns the means of production and employs wage laborers.
Capital Accumulation: The process of generating wealth through the production and reinvestment of surplus value.
Labor Market: The supply and demand dynamics concerning employment and wages.

Online References

Suggested Books for Further Studies

Karl Marx, “Capital: Critique of Political Economy”
E.P. Thompson, “The Making of the English Working Class”
David Harvey, “The Limits to Capital”
Erik Olin Wright, “Understanding Class”

Fundamentals of Reserve Army of the Unemployed: Economics Basics Quiz

### What is the primary function of the Reserve Army of the Unemployed in Marxist theory? - [ ] To build a stronger workforce - [x] To keep wages low - [ ] To increase productivity - [ ] To promote job security > **Explanation:** In Marxist theory, the primary function of the Reserve Army of the Unemployed is to keep wages low by maintaining a surplus labor force that employers can draw upon. ### Who is attributed with coining the term "Reserve Army of the Unemployed"? - [ ] Adam Smith - [x] Karl Marx - [ ] John Maynard Keynes - [ ] David Ricardo > **Explanation:** The term "Reserve Army of the Unemployed" was coined by Karl Marx in his critique of capitalist economies. ### How does the Reserve Army of the Unemployed help capitalists maintain control over workers? - [ ] By increasing employment opportunities - [ ] By improving working conditions - [x] By fostering competition among workers - [ ] By offering generous benefits > **Explanation:** The Reserve Army of the Unemployed fosters competition among the employed and unemployed, which helps employers suppress wage demands and maintain control. ### According to Marxist theory, why do wages remain low in the presence of a large reserve army of unemployed? - [ ] Due to economic growth - [ ] Due to high worker productivity - [x] Due to the surplus labor available - [ ] Due to union activities > **Explanation:** Wages remain low when there is a large reserve army of unemployed because the surplus labor force reduces workers' bargaining power, leading to suppressed wages. ### In which historical period was the concept of the Reserve Army of the Unemployed notably evident? - [ ] The Renaissance - [ ] The Enlightenment - [x] The Industrial Revolution - [ ] The Information Age > **Explanation:** The concept of the Reserve Army of the Unemployed was notably evident during the Industrial Revolution, where many laborers competed for limited job opportunities, keeping wages low. ### Which modern labor market phenomenon illustrates the Reserve Army of the Unemployed? - [ ] Long-term contracts - [ ] Employee stock ownership plans - [x] The gig economy - [ ] Pension schemes > **Explanation:** The gig economy illustrates the Reserve Army of the Unemployed as short-term, flexible jobs often come with lower wages and fewer benefits due to abundant labor supply. ### What measures can be taken to reduce the Reserve Army of the Unemployed? - [x] Full employment policies - [ ] Lowering minimum wage - [ ] Reducing labor unions - [ ] Cutting education programs > **Explanation:** Policies aimed at full employment, increasing wages, and providing job security can reduce the Reserve Army of the Unemployed. ### Why does the Reserve Army of the Unemployed create a power imbalance in capitalist societies? - [ ] It leads to economic growth - [ ] It ensures high productivity - [x] It weakens workers' collective bargaining - [ ] It promotes job security > **Explanation:** The Reserve Army of the Unemployed weakens workers' collective bargaining power, creating a power imbalance that favors capitalists. ### Which class benefits the most from the existence of the Reserve Army of the Unemployed? - [x] The capitalists (bourgeoisie) - [ ] The middle class - [ ] The working class (proletariat) - [ ] The unemployed > **Explanation:** The capitalist class benefits the most from the Reserve Army of the Unemployed, as it allows them to keep wages low and maintain high profit margins. ### How do social safety nets impact the Reserve Army of the Unemployed? - [ ] They increase the Reserve Army - [x] They reduce the exploitation of workers - [ ] They eliminate unemployment - [ ] They make wages irrelevant > **Explanation:** Social safety nets reduce the exploitation of workers by providing a basic level of economic security, which can alleviate the pressure to accept low wages.

Thank you for exploring the intricate concept of the Reserve Army of the Unemployed and engaging with our comprehensive quiz. Capitalism, as viewed through a Marxist lens, remains a crucial topic for understanding modern labor dynamics.