Re: Marx and Keynes on Unemployment

["Eric Nilsson" <enilsson@xxxxxxxxxxxxxxx>]

Would Marx have agreed that a rise in wages can lead to a
substitution of labor for capital?

>From p. 791 of Vintage edition of Vol. 1 of Capital:
"Between 1849 and 1859 a rise of wages. . .[that] was
the result of an unusual exodus of agricultural surplus
population . . .and by the vast extension of railways,
factories, mines, etc.. . . .  What did the farmers do now?
. . . . They introduced more machinery, and in a moment the
labourers were 'redundant' again to a degree satisfactory
even to the farmers."

On page 516 Marx makes a similar claim: "the fall of wages
below the value of labour-power impedes the use of
machinery."

In any case, while neoclassical theorists place relative
prices at the center of their analysis, it would be
reductionist to claim that all relative price arguments
are neoclassical.


Eric Nilsson
Department of Economics
California State University
San Bernardino, CA 92407
enilsson@xxxxxxxxxxxxxxx