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

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Fri Oct 06 2006 - 11:51:22 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 diferent
>societies will be considered subsistence level. Now
>this prediction has come out to be wrong.

But. Ajit,  I don't agree that this is what Marx is saying. In
Capital I, Marx explicitly allows for national differences in wages
and average rates of surplus value.

Also, I think we need to make sense of why Marx would write in the
Critique of the Gotha Programme: "
that, consequently, the system of wage labor is a system of slavery,
and indeed of a slavery which becomes more severe in proportion as
the social productive forces of labor develop, whether the worker
receives better or worse payment."

In what way does slavery become more severe? How does it not matter
whether the worker receives better or worse payment?

What is the difference between Marx's "allotment" theory of the wage
and Sraffa's distributional theory of the wage?

>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

Of course depends on how variable capital is understood. But many
have argued that there is at least a weak tendency for s/v to rise.

>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

No  Marx's argument is that the surplus population increases in
absolute terms over time. This is not the same as the rate of
unemployment. Moreover, unemployment is easily disguised--prisons,
poverty wages for the provision of services for the rich, withdrawal
from the labor market, etc.

>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.

Yet Marx argues that workers remain enslaved whether the pay be high
or low. Is this just a rhetorical flourish? Or is there a theoretical
argument here?


>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. Cheers,
>ajit sinha
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