I asked this question to David Schweickart, marxist philosophy professor at Loyola University, Chicago:
Unemployment was close to zero during the golden age days of capitalism after WW2, while capitalism was doing well. Isn't that a fact that contradicts your marxist claim that capitalism needs unemployment to work?
Marx himself claimed that there are periods when the entire reserve army of labor are put to work. (Capital II, page 361 in the swedish edition.)
I did get this answer:
It’s true that in the aftermath of WWII, unemployment was quite low. I was recently rereading Joan Robinson’s Economic Philosophy (1962), where she mentioned that unemployment in Britain was only 2% and had been for some time. Even the right-wing, she said, was calling for “full employmenrt,” since Marx’s claim (and mine) seem to have been refuted.
I think we can see now that the effect was temporary, due to surging investment after WWII—to rebuild Europe and Japan, to expand the military-industrial complex as the Cold War heated up, to build the interstate highway system in the US, the largest governmental project ever undertaken anywhere, the suburbanization of America that the automobile made possible, etc.
But the good times didn’t last. I would argue that they couldn’t. By the seventies labor was strong, but investment opportunities of such a scale were shrinking—so we got stagflation. Workers had the power to demand—and get—higher wages, which were passed onto consumers, resulting in higher prices. As we know, the capitalist class hates inflation, since it favors borrowers over lenders and capitalists are mostly lenders. We got stagflation, and then Thatcher-Reagan and an all-out assault, largely successful, on organized labor, which included a deliberately engineered recession, the worse since the Great Depression. Discipline reestablished.
