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

From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Sat Oct 07 2006 - 15:20:05 EDT

--- Rakesh Bhandari <bhandari@BERKELEY.EDU> wrote:

> >
> >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.

When did I say he did not? Of course, even the bare
physiological subsistence will differ because of
difference in environment. Need for survival in cold
environment is greater than in warm environment. But
this is not all, As Adam Smith had noted there is
always a cultural aspect involved in the definition of
subsistence--it may be much cheaper to survive on
mainly a diet based on potato but still for a Bengali
worker you will need to define subsistence in terms of
rise and fish diet. Adam Smith actually went further
by arguing that if wages stay higher than subsistence
for a long time due to long period of growth of the
economy, the high consumption may become culturally
ingrained and become part of the socially accepted
> 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."

This idea can work only if you assume that workers
wages are never high enough that the working class as
a whole could go on making positive savings. Because
if that was possible than it cannot be denied that the
working class as a whole after a few generations might
not acquire enough capital that it puts the whole
system into crisis. This is another example that gives
credence to my point that Marx did not expect a rising
trend in real wages (however, it would be interesting
to develop a relationship between consumerism and high
wages in advanced capitalist society from this point
of view of the necessity of the system to perpetuate
itself). Most of my books are in India and I'm in
Paris, so I cannot check the context of your quote
right now but statements like "better or worse" is
generally thrown to cover one's back against real
developments going against one's expectations. But
here the context of better or worse could be cross
sectional--that is comparative wages across different
economies. In that case the statement is perfectly
> In what way does slavery become more severe? How
> does it not matter
> whether the worker receives better or worse payment?
It could mean that capitalism encroches into all other
forms of economic activities and therefore the
possibility of getting out of the system becomes
> What is the difference between Marx's "allotment"
> theory of the wage
> and Sraffa's distributional theory of the wage?
Sraffa's system is not concerned with a long term
tragectory of the capitalist system but Marx's is, so
I would think the difference would essentially lie
> >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.
> 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.
Of course, one implication of my argument is that s/v
would 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
> >scenario?
> 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 provison of services for the
> rich, withdrawal
> from the labor market, etc.
Okay call it reserve army of labor, if that makes you
> >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?
Marx's argument is that high wages still keeps the
workers wage laborers. The point I have made above is
that high enough wage could generate enough savings by
the workers to put the capitalist relations of
production in crisis. It appears that Marx did not
think through this issue--may be he thought that the
tragectory of capitalism was in opposite direction and
so he did not think much about it. Cheers, ajit sinha

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