The account of the ‘employment cycle’ is worth thinking about. Marx’s theory is that the Industrial Reserve Army of the Unemployed is essential to the functioning of capitalism. It acts as a ‘dead-weight’ to the aspirations of those in employment. Their wages will always be held down for as long as others want their jobs. In ‘boom’ times, the Industrial Reserve Army becomes depleted, and wages can rise above their values. But the good times cannot last, and mechanisms exist, as we have seen, to bring wages back down.

This analysis is enormously significant. First, it involves the claim that capitalism, as part of its natural functioning, involves an employment cycle. There is no tendency to equilibrium, either in the short term or long term. Rather the economy has to be understood in dynamic terms, as going through regular cycles. Consequently the politician’s Holy Grail of permanent full employment is a mirage. As we have seen, on Marx’s analysis anything close to full employment will be a short-term phenomenon. Defences against rising wages see to that.