Re: [OPE-L] Theoretical issues concerning variable capital

From: Jerry Levy (Gerald_A_Levy@MSN.COM)
Date: Fri Oct 06 2006 - 10:38:20 EDT

> Marx's simple story works this way: Historically real
> wages are determined around what prevailed as the real
> income of the class that largely became proletariat in
> the historical transformation of any given society.
> Thus historically wages in different societies could
> start from different levels. For example, it started
> at higher level in the United States than say England.
> However, the population principle of capitalism, which
> is given by labor saving technical changes, creates
> downward pressure on wages over time and thus wages
> have a tendency to fall towards what in different
> societies will be considered subsistence level.

Hi Ajit:

Yes, but let's not substitute the 'simple story' for the full
one.  The 'story' that you present is a Volume I  story
--  i.e. only part of  one-eighteenth (or less) of the story.

Some other parts of the story become clearer when you
also consider what was written in the "Resultate des
unmittelbaren Produktionsprozesses" and the _Grundrisse_.

The Volume I story, furthermore, has to be modified to
take into account the character of capitalist cycles in which
the size of the relative surplus population grows and declines
in relation to those cycles.

Furthermore, the Volume I simple story has to be put in the
context of wage-laborers being able to within limits raise their
customary standard of living their own self-activity.

Furthermore, the Volume I story has to be put in the context
of how the state can intervene to change at least part of that

While you are right to suggest that Marx understood that
there were different customary standards of living in different
social formations which were, in large part, a consequence
of the different histories of class struggle in different nations,
he also grasped I believe that wages in individual nations
could change through the process of  foreign trade and the
creation and generalization of  the world capitalist market.

In other words, the simple story is best flushed out within
the context of thinking about capitalism in which capital
as a whole (rather than only capitalist production in isolation
from capitalist circulation), class action (including trade
union activity, alluded to in the "Resultate"), state policy,
foreign trade, and the world market and crisis are all
grasped and shown to be inter-related.  [side note:
the role of landowners has to also be grasped in relation
to workers' real wages since rent imposed on the
working-class  can alter the standard of living of
workers.  This is an argument for not only studying
landowners as a class but also studying the inter-relation
between landowners and wage-workers in the study of

In any event -- and here I agree with Jurriaan -- if we
are to grasp the underlying theoretical issues in a more
complex and mediated form, then we must move beyond
thinking of  'Marx's story' and instead think of a story
which is most consistent with the dynamic and historical
realities of capitalism and to do that we need to study
the empirical data and in so doing 'test'  and  then modify
_our own_  simple stories about the subject matter.  In a way,
I think  you are supporting such an effort since you are at least
posing the issue of whether a story is contradicted by
the historical and empirical evidence.  That's a potential area
of agreement.

The above does not necessarily contradict what you were
saying in your previous post, but rather points a way
forward out of the dilemma which you pose.  You suggest
other ways forward (in the section below) but don't explain
the relative merits of each.  What do you think they are?

In solidarity, Jerry

> Now
> this prediction has come out to be wrong. The whole
> idea that Marx argued that 'relative' wages would
> fall, i.e., relative to profits, and not absolute
> wages, flies in the face of all evidence and
> arguments. To the best of my knowledge, no body has
> shown how a long term trend in the fall of 'relative'
> wages in relation to profits can be maintained
> simultaneously with the notion of a long term trend in
> the rate of profits to fall. Any way, one needs to
> come up with some theoretical arguments of how this
> could happen? One could argue that actually the rate
> of growth of the economy has been faster than the rate
> of labor displacement and a positive rate of growth of
> population could only be maintained through higher
> real wages (this is the case of Adam Smith). Or one
> could argue that rise in labor productivity somehow
> increases the bargaining strength of labor. Now if
> Marx's argument is taken to be correct that the
> dynamism of capitalism is to increase the rate of
> unemployment over time, then the question becomes how
> would labor's bargaining strength increase in this
> scenario? This is where the notion of norms and
> conventions, which allows us to bring in a host of
> complex political and sociological factors into play,
> could be of help. Sraffa's notion of rate of profits
> as conventionally given allows real wages to rise with
> rise in productivity irrespective of the rate of
> unemployment. Of course, it is not a complete theory
> yet, but it allows us to build a much richer theory.
> The point is that the rate of unemployment may be an
> important factor in determining the real wages or its
> trend but perhaps it is not the only factor. As I had
> suggested earlier on Mike L's lecture: its theoretical
> foundation is weak but its basic idea is good.

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