[OPE-L:2859] Re: Value of LP // Real Wage

Michael Perelman (michael@ecst.csuchico.edu)
Mon, 26 Aug 1996 14:21:11 -0700 (PDT)

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Duncan K Foley wrote:
> On Mon, 26 Aug 1996, John Ernst wrote:
> (in part)
> >
> > 1. If rising real wages cause capitalists to introduce
> > labor-saving and capital-using technologies, will
> > falling real wages give them cause to switch back
> > to the old techniques? Are there examples of this?

No. Rising wages make old techniques less profitable, but the increase
has to be enough to make scrapping profitable. Real wages are not falling
enough to throw away tractors and go back to animal traction. It will merely
slow down the impetus for technical change.

Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 916-898-5321 E-Mail michael@ecst.csuchico.edu