In a message dated 97-02-05 13:00:53 EST, [EMAIL PROTECTED] (Laurence Shute) writes: << >>>"Karl Marx argued that capitalism needs a 'reserve army' of unemployed >>>labor to restrain wage demands and safeguard profits. Most economic >>>policy makers still think the same way, but recent experience in the U.S. >>>and Britain suggests the army might need fewer troops than it used to." > >> A propos of the above and how utterly misunderstood the "Black Moor" is: Randall Forsyth writing in this week's Barron's that the current labor force participation rate of 67.2% is a cyclical peak. He claims that tight labor markets are attracting new entrants: "So this supply-side response may be halping to keep inflation in check. Thats the inverse of the conventional wisdom that adheres to Karl Marx's thesis that capitalism requires an army of unemployed to hold down inflation. I suppose the need to restrain wage demands above a "subsistence" is on Greenspan's list of things ro do. However, I doubt that the "conventional wisdom" ever made any policyconnection to Marx. Moreover, Marx's theory of inflation was not very developed and was usually in the context of his discussion of money, not labor markets. jason H
