Karl Marx: Capitalism produces unemployment

In Capital, Karl Marx wrote about the laws of capitalism and the ruthless capitalist competition for greater profits. In the drive to increase profits, capitalists try to reduce their costs by increasing productivity through the replacement of labor with machinery, new technology, robotics. This, in turn, creates an “artificial surplus population” of the unemployed:

“The fall in prices and the competitive struggle would have driven every capitalist to lower the individual value of his total product below its general value by means of new machines, new and improved working methods, new combinations, i.e., to increase the productivity of a given quantity of labor, to lower the proportion of variable to constant capital, and thereby to release some laborers; in short, to create an artificial overpopulation. …

“The circumstances which increased the productiveness of labor, augmented the mass of produced commodities, expanded markets, accelerated accumulation of capital both in terms of its mass and its value, and lowered the rate of profit – these same circumstances have also created, and continuously create, a relative overpopulation, an overpopulation of laborers not employed by the surplus-capital owing to the low degree of exploitation at which alone they could be employed, or at least owing to the low rate of profit which they would yield at the given degree of exploitation.” (Capital, Volume III, Chapter 15)

The technology itself does not lead to unemployment. Instead, as Marx indicates, it is the use of technology under capitalism, implemented in an anarchic and unplanned way for the sole purpose of increasing profit, that leads to mass unemployment and places pressure on those still working to accept lower wages, as competition for the remaining jobs increases.