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04/05/2006:

"Marx's reserve army of labour is about to go global"

The eruption of the Indian and Chinese economies could shift the balance of power sharply in favour of capital in the rich world.

A piece of conventional wisdom about the world dear to economists is that the share of national income going to workers stays pretty stable. Karl Marx disagreed; he argued that labour-saving capital investment would limit demand for labour, while also bankrupting small-scale producers, in agriculture for example. They would swell the labour supply, creating a permanent "reserve army of labour" that would prevent real wages growing as fast as labour productivity. Workers would thus spend an increasing proportion of working time producing profits for capitalists - a falling share for labour or a rising rate of exploitation, in Marx's terminology.
guardian.co.uk