Just as in the first part of this discussion I proceeded on the assumption that the capitalist always attains his end, i.e. gains the surplus-value, just so I have also been speaking as if the workman always sold his labor. Let us look now at the case of the man who does not succeed in selling it. In order that a contract be entered into between capitalist and workman it is necessary that labor be desired and offered. If the workman for his part cannot deliver the labor contracted for, or not enough of it, whether from sickness or from weakness, it is perhaps but a question of exchange, and the workman is abandoned to his fate. Capitalism rests upon this fact that there is a class of men, much more numerous than any other, who are deprived of everything and consequently are forced to sell their labor; otherwise no workman would care to close a contract.
Let us look at the other side of the question, when the supply of labor exceeds the demand. Those who do not succeed in selling their labor are then equally abandoned to their own resources. From what causes in the capitalistic method of production does it happen that the supply of labor is in excess of the demand? Are these causes to be found in too great an increase in the population, or in the method of production itself?
It has been shown above that the composition of capital changes incessantly. Machinery becomes more and more developed and a great part of capital is composed of machines. The introduction of machines has taken place because they economize labor. Thus a certain number of workmen find themselves without occupation. It is true that there is a mitigating circumstance, namely that there is an increased demand for labor in other branches (manufacture of machines), but this demand can never be as great as the amount of labor rendered superfluous by machinery, for otherwise machines would never have been introduced. However short the apprenticeship required by modern industry, it is nevertheless impossible for a [[262]]workman to change from one branch to another at short notice. Thus the consequences for workmen thrown out of employment continue to be serious notwithstanding the increased demand in another branch. The only case in which the introduction of machines will occasion no unemployment will be when the demand for commodities increases extraordinarily, as, for example, when a new market is opened up.
However there are still other causes of forced unemployment. Such are the introduction of the labor of women and children, the migration of rural workers to the cities, immigration from backward countries, and the supplanting of small businesses, by which members of the lower middle class are forced down into the proletariat.
The causes of overpopulation are found, then, in the system of production itself, and not in a too great increase of the population; a conclusion to be drawn also from the fact that as far as actual productivity of labor is concerned each produces more than enough for his needs. There are, then, always a number of persons who desire to work but cannot find employment. In periods of crisis the number of these increases enormously. The so-called “reserve army of labor” is a condition indispensable to capitalism. Without it sudden development in periods of prosperity would be impossible. Without it also the power of organized labor would become so great that the surplus-value would run serious danger. It is just because the supply of labor exceeds the demand that the power of the capitalists over the workmen is so great, and also that it happens so often that the interests of the workmen are thwarted.
We come now to the end of my exposition. For our subject it is unnecessary to continue it further. I should like, however, to draw attention to two more points. The continually increasing concentration of capital has as a consequence that the conduct of the business under the direction of the capitalist himself more and more gives place to the stock company, which combines the capital of numerous persons, and gives the direction to a salaried employe. Following this, concentration drives the owners in one branch of industry to combine for the purpose of eliminating competition, and thus of increasing profits; in this way the “trusts” come into being. Competition, the fundamental principle of capitalism, is changed into its opposite, monopoly. [[263]]