[OPE-L:221] Re: Duncan Foley/ wages

glevy@acnet.pratt.edu (glevy@acnet.pratt.edu)
Sun, 8 Oct 1995 21:31:28 -0700

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Duncan Foley asked:
"I'd like to know from a Marxist/Classical point of view why the real
wage in capitalist economies tends to rise roughly at the same rate as
the productivity of labor, so that the labor share remains roughly constant."

A few points:

1. This is clearly a digression for us, but since others have had
something to say, I'll add my "2 cents" as well.

2. First, one must ask empirically whether this has been the case. Even
if one can demonstrate that it has been, that doesn't indicate the cause
or causes.

3. I don't think I like the idea of conflating the "Classical" view with
the Marxist view on this, or other, questions. There are far more issues
involved than labor's "share."

4. So, how would one go about answering such a question?

One might ask initially: what are the factors that determine changes in
*both* nominal and real wages?

Some factors might include:

-- the reproduction costs of labor power and how those costs change

-- the changing structure of needs on the part of workers as consumers;

-- changing skill and educational levels of workers;

-- changes in the bargaining power of workers as a consequence of

-- the pattern of labor-management cooperation which has frequently tied
wage increases to productivity increases (as in the Annual Improvement
Factor in auto contracts in the US) in the post-WW2 period (the so-called
"labor accord").

-- the changing gender and racial composition of the workforce;

-- the process of inflation;

-- the role of the state in mediating labor-management relations and the
increase in state employment;

-- the affect of international trade and transnational corporations on
wage levels in the advanced capitalist nations;

-- the relation of international transfers of surplus value on the
prospect for wage changes;

-- the affect of changing levels of the industrial reserve army and
cyclical changes in the economy, including the possibility of "long waves."

-- in Western Europe, the political clout of Social Democratic Parties
and/or the militancy of trade unions and working class political
organizations might be factors as well.

I'm sure that I must have left out some factors above. In any event,
Duncan raised an essentially concrete question that can not be answered
simply. Doesn't one have to go about answering such a question in stages
through a consideration of all of the processes, theoretical and
historical, that enter into the determination of these events?

In OPE-L Solidarity,