Sunday, October 24, 2021

Does economic growth cause unemployment? — Sandwichman

Usually, a question in the title of an article is a teaser and the answer is almost always "no." Not in this case. The standard argument is that economic growth is necessary to create jobs and that unemployment results from the slowing or interruption of growth.

Even advocates of degrowth or a steady-state economy assume a positive connection between growth and employment. Advocates prescribe reduction of working time as a means to mitigate job losses that would otherwise result from productivity gains.

In chapter 25 of Capital, volume one, however, Marx claimed that the same factors that spur economic growth also stimulate an expansion of the population supplying labour power and the "industrial reserve army." He proclaimed the growth of the surplus population relative to employed labour to be, "the absolute general law of capitalist accumulation."

That, of course, was just an assertion. Defenders of the conventional view argue that Marx either didn't explain a mechanism for his "absolute general law" or if he did it was either wrong or incoherent.

I don't want to pretend expertise on whether Marx's theory stands up to rigorous critique. I sort of suspect every economic theory has a crack in it. That's how the light gets in.

What I want to do instead is suggest that there was a more compact version of Marx's surplus population argument in the Grundrisse that hasn't been refuted because it has mostly gone unnoticed....
Does economic growth cause unemployment?

1 comment:

Matt Franko said...

“ That, of course, was just an assertion. ”

lol all dialogic theses are just assertions..,