[OPE-L:2848] Re: Value of labour power and real wage

Paul Zarembka (ecopaulz@ubvms.cc.buffalo.edu)
Mon, 26 Aug 1996 11:23:14 -0700 (PDT)

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On Mon, 26 Aug 1996, Duncan K Foley wrote:

> To my mind this is the nub of the issue. I think, though I couldn't prove
> it, that Marx realized analytically that important results depended on the
> constancy of the value of labor-power, but was reluctant to emphasize this
> point because it allowed for a rise in the real wage and Marx had invested
> an enormous amount politically in the thesis of the immiserisation of the
> proletariat and a falling real wage. (I think he adopted this point of
> view under Engels' influence in the 1840s, when in fact there was
> considerable reason to think that industrial capitalism had lowered real
> wages, and then was faced with a combined historical and theoretical
> dilemma in the 1850s when the real wage rose and he began to work out his
> economic analysis in detail.) I think this political inhibition against
> discussing rising real wages lies behind a number of the difficult and
> puzzling problems in understanding Marx's economic analysis, including the
> transformation problem, the theory of the falling rate of profit, and the
> theory of wages.
> Duncan

These remarks of Duncan are consistent with my own understanding, i.e.,
it is very important to take the rate of surplus value as fixed in
analyzing the falling tendency of the rate of profit. In the context of
production of relative surplus value it does indeed mean rising real
wages. The falling tendency is then an expression of the technological
bias in capitalism toward cheapening goods consumed by workers (reducing
the value of labor power--e.g. the famous textile revolution) which class
struggle can redress to stabilize the portion of the working day
returned to workers. Assuming s/v fixed is assuming a stabilized (in some
sense) relation of capital to labor.

I always find it useful to write the rate of profit r from s/(c+v) to
s/v divided by c/v+1 and rewriting the divisor to

c v + s c
------- ------- + 1 = ----- [1 + s/v] + 1
v + s v v + s

Thus, with s/v fixed, the movement in the rate of profit depends upon
movements in c/(v+s), the technical value composition of capital, the
ratio of labor time in fixed capital to the living labor time working with
it (rising implying falling r).

I believe this formulation is first used by Elmar Wolfstetter, but am not
sure if he doesn't have a predecessor.

Paul Zarembka