Increasing Misery of the Proletariat: An Analysis of Marx's Wage and Employment Theory

Abstract

The intent of this paper is to demonstrate (1) that Marx's analysis of the workers' fate under capitalism is not quite as scientific as he had professed, and (2) that, on the other hand, his analysis of wage and employment determination in a capitalist economy is not quite as misleading as many critics contend.If Marx's theoretical contributions in this area have been unjustly discounted by “bourgeois economists,” much of the fault may be traced directly to Marx himself. For it was he who suggested that the veracity of his economic analysis could be measured by the accuracy of his economic predictions. Non-Marxists and neo-Marxists alike have faithfully followed his suggestion. Thus, since overwhelming evidence of rising standards of living in Western capitalist countries clearly discredits Marx's prediction concerning the increasing misery of the proletariat, we generally discard not only the prediction but also the theoretical apparatus whence it was allegedly derived.To reject Marx in this matter on his own grounds, however, is to acknowledge logical consistency in his derivation of prediction from model. It is the consistency that is questioned here. And if Marx's prediction of misery is found not to derive from his wage and employment theory, then the Marxian theory of wages and employment may prove to be a more valid view of capitalism than is generally suspected.