Labor Market Theory as a Tautology or Theoretical Construct? Toward a Marxist Labor Market Theory

Labor market theory often functions as a descriptive framework, subordinated to other theoretical models, failing to explain the capitalist nature and internal logic of the labor market. The crisis of neoliberal capitalism and its reaction, paradoxically, highlights the importance of the labor market, which has been long neglected and overshadowed by Marxist labor studies. To remedy this, we propose integrating labor market theory within the Marxist tradition, unveiling its capitalist logic and underlying economic forces. Central to this inquiry is the historical formation of the labor market, the commodification of labor intermediation, and the fabrication of labor power into the labor process. We contend that the labor market has now entered a new stage – the ‘indebted labor market’, in which labor is deeply intertwined with debt and financialization, reflecting a shift from a simple wage-for-labor exchange to a system where debt mechanisms and financial instruments are integral to labor relations.