[OPE-L:2921] Re: Value of labour power and real wage

Paul Zarembka (ecopaulz@ubvms.cc.buffalo.edu)
Thu, 29 Aug 1996 10:55:41 -0700 (PDT)

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Gil, rather than answer point by point, let me say what I see going on.
Prod. of relative surplus value is an attempt by capital to increase its
surplus value by decreasing the value of labor power. The resulting
technological developments affect the value composition of capital
(organic composition, if you will).

Workers don't simply sit back and take their own devaluation but organize
and struggle to raise v (by fighting to increase real wages). To extent
they are successful s/v may be restored to what it was before, but at the
higher level of real wages. But is the rate of profit where it was
before? The law of the falling tendency answers "no".

Since I priorize class struggle, not technological changes, in my reading
of Marx, it would find discussion of the fight over s/v more interesting
than discussion of r, but discussion of r has its role.

When I used the word "general equilibrium" I did not really mean Arrow-
Debreu but rather the idea of having everything recognized as to be
influencing everything else. While this discussion of ours is NOT
dealing with MANY, MANY other things, I believe you are approaching
Marx's economic reasoning with that kind of idea in mind.

Marx does take s/v as constant in his initial discussion of a falling
tendency for r. Is he simply making a mistake? I say "no", but that
"no" is conditioned on a certain reading of Marx, not a one-line quote
from Capital I can throw back.

Is this a bit clearer? even if you disagree.

Paul Z.

On Thu, 29 Aug 1996, Gil Skillman wrote:

> In response to the following,
> >> My concern is more than just empirical, Paul, it has to do with the logical
> >> coherence of the associated theory. To hold s/v constant while allowing c/v
> >> to vary is to assert that these terms are independent of each other. But
> >> this is far from obvious. Marx specifies in Vol. I that the specific
> >> implication of real subsumption is that it promotes relative surplus value,
> >> i.e. raises s as it lowers v. Thus the engine that drives rising organic
> >> composition of capital must also be expected, in the absence of explicit
> >> argument, to drive a rising rate of surplus value, so that it is
> >> theoretically suspect at best to hold the latter constant while allowing the
> >> former to increase.
> >> Whatever else it is worth, the Okishio theorem provides a plausible
> >> illustration of this problem.
> Paul Z. writes:
> >My reply to Jerry addressed this, I believe. You are using a kind of
> >general equilibrium approach, or a kind of "reduced form", while I am
> >interpreting Marx to be "abstracting from changing s/v" for the
> >discussion of the falling tendency.
> What? General equilibrium has absolutely nothing to do with it. I'm
> pointing out that by *Marx's own analysis*, the engine which generates
> rising organic composition of capital (creation of relative surplus value
> via advancing real subsumption of labor under capital) must also be expected
> to increase the rate of surplus value, in or out of "equilibrium". Thus it
> is at best irrelevant to hold s/v constant as c/v is allowed to rise; as an
> economic category this scenario is an empty box--again, by Marx's own
> analysis in Volume I. "Abstracting from changing s/v" is equivalent to
> "abstracting from economic relevance."
> > You are correct that Okishio
> >approaches problem similarly to yourself.
> This is doubly inaccurate. First, I didn't say that "Okishio approaches
> problem similarly to [my]self"; I said that the Okishio theorem provides a
> plausible illustration of the problem discussed above. Second, since my
> "approach to [the] problem" in this discussion is Marx's in Volume I, you're
> suggesting that Okishio and Marx approach the microeconomics of the problem
> in the same way. This is of course not true.
> In solidarity, Gil