Since workers are not paid enough to buy back the goods and services they produce, Marx noted, there is always the problem of a disparity between mass production and aggregate demand. If demand slackens, owners cut back on production and investment. Even when there is ample demand, they are tempted to downsize the workforce and intensify the rate of exploitation of the remaining employees, seizing any opportunity to reduce benefits and wages. The ensuing drop in the workforce’s buying power leads to a further decline in demand and to business recessions that inflict the greatest pain on those
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Marx notes that capitalism has a tendency towards recession. Other economists of the day didn't recognize that boom-and-bust cycles were inherent to the system.
