[OPE-L] empirical measurement of changes in the value of labour-power

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Sat Dec 15 2007 - 08:25:56 EST

Some short quotes from Cap. Vol. 1 ch. 6 also help elucidate the concept of the VLP:

"When we speak of capacity for labour, we do not abstract from the necessary means of subsistence. On the contrary, their value is expressed in its value."

"in a given country, at a given period, the average quantity of the means of subsistence necessary for the labourer is practically known." 

"Its value, like that of every other commodity, is already fixed before it goes into circulation, since a definite quantity of social labour has been spent upon it."

The empirically measurable components (whether in labour-time, or in money) of the VLP comprise according to Marx 4 types of costs:

- things that satisfy "natural wants" such as food, clothing, housing and fuel (measured by household expenditure surveys)
- "creature comforts" and supports, that are a "moral-historical" element (measure by household expenditure surveys, and social security data)
- the cost of raising children (measured by childraising budget data)
- education and training costs (measured by education statistics)

Marx very clearly viewed the VLP as an "average total cost-of-living calculated over a year", and indeed he provides a mathematical equation for it:

"But in whatever way the sum total of these outlays may be spread over the year, they must be covered by the average income, taking one day with another. If the total of the commodities required daily for the production of labour-power = A, and those required weekly = B, and those required quarterly = C, and so on, the daily average of these commodities = 365A + 52B + 4C + &c / 365."

The theoretically important point to understand is, that this average cost-of-living, or living standard, is established INDEPENDENTLY of wage fluctuations. It is an aggregate result of the functioning of the economy as a whole. That is precisely why Marx says that the VLP is "fixed" already before any buying and selling of labour-power occurs.

So it is not that a fall in the average real wage directly means a fall in the VLP, but that a durable fall in the average real wage erodes the previously attained average living standard, and that this will in due course reduce the VLP, since the effect will be that the average standard of living declines longterm. Typically, the quantity of social labour materialised in products which is claimed by Capital increases, and the quantity of social labour materialised in products which is claimed by Labour itself decreases.

This distinction is important, insofar as a fall in average wages could hypothetically COMBINE with cheaper costs for the 4 types of items cited above, indeed hypothetically the real wage could fall, while physical consumption increases, because total living expenses have fallen even further. In that case, the VLP falls, while physical consumption expands. However, empirically this exceptional situation, if it occurs, never lasts for very long. The extension of additional credit can of course prop up living standards in the short term, but not in the long term.

Conversely, if the average cost-of-living for workers' households increases structurally and enduringly, this reduces the VLP if the wage stays constant longterm, because it reduces the standard of living. This is what I had in mind when saying that a structural increase in food prices lowers the VLP.

This interpretation, I should add, assumes that all living requirements of the worker are commodities. In reality, however, this is often not the case. "Natural wants" can also be satisfied by non-market methods, education and training may be provided by the state, etc. 

The complaint of Marx's critics is that the concept of the VLP is "too vague" and "indefinite" or "ambiguous", but it aims to theorise coherently a complex reality in which the total living standard of concern to workers can be affected by a multitude of variables. Although Marx's concept of the VLP is often rejected, in practice the people who reject it do assume it, just as people who reject value-theory (in favour of talk about prices) in practice assume value-theory anyhow. They reject Marx's concept, but accept a national accounting concept without even knowing what it means. The "complexity" is partly also due to the fact that wage remuneration itself can take many different forms. Marx writes:

"Wages themselves again take many forms, a fact not recognizable in the ordinary economic treatises which, exclusively interested in the material side of the question, neglect every difference of form. An exposition of all these forms however, belongs to the special study of wage labour, not therefore to this work." http://www.marxists.org/archive/marx/works/1867-c1/ch20.htm

Marx focuses mainly on the essential economic relationship of concern for the accumulation of capital, regardless of the contractual forms it may take. Geoff Hodgson for example argues that workers do not sell their labour-power, but hire out their labour. This however confuses contractual forms with the essential economic relationship, in which living costs exchange for employment.


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