Reserve army of labour
Topic: Schools of Economic Thought and Economic Laws · NCERT: Beyond NCERT
Meaning
The reserve army of labour is Marx's term for the unemployed and underemployed under capitalism. Marx argued this pool of people waiting for work is a built-in feature of capitalism, not an accident. Its presence keeps wages down. Any worker who demands more can be replaced from the waiting pool, and this helps capitalists keep the surplus value workers produce.
Example
A factory advertises 100 jobs and 5,000 people apply. The employer can offer low wages, because if current workers push for a raise, many others are ready to take their place.
Don't confuse with
- Involuntary unemployment (Keynes): people willing to work at the going wage who cannot find jobs because of low effective demand. Keynes saw it as a fixable demand shortage. Marx saw the reserve army as a permanent feature that keeps wages down.
Related concepts
- Marxian economics
- Historical materialism
- Class struggle
- Surplus value
- Fabian socialism
- Democratic socialism
- Market socialism
- State capitalism