Introduction

In this chapter I draw freely on the Economic Manuscripts to ascertain Marx's position in the early 1860s on labor-market trends. Our first substantive section establishes Marx's rejection, following Thomas Hodgskin, of the “advances” conception of wages in favor of “synchronized” activity involving circular flow. This must be kept in mind throughout since the analysis of aggregate labor demand may give an initial impression of an “advances” orientation. Section C concerns labor demand, allowance made for ongoing technical change. Our texts point to a growth process entailing net expansion of aggregate labor demand account taken of the longer term effects of technical change and not merely the initial displacement effect. Here the sources of increased labor supply emerge tangentially, particularly the role of population growth. This issue is dealt with more closely in Section D. The main outcome is that the so-called Reserve Army of Unemployed serves as a source of labor supply for exceptional contingencies of a cyclical order; the secular path is one requiring expanded population. Section E considers the mechanics of population growth; and problems relating to the posited downward trend in the real wage.