[OPE-L:2944] Re: Value of labour power and real wage

Paul Cockshott (wpc@cs.strath.ac.uk)
Tue, 3 Sep 1996 06:06:39 -0700 (PDT)

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Paul Z wrote:
>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).

Paul C:
This is a teleological interpretation which confuses cause with effect.
The motivation of cost saving innovations ( saving direct or indirect
labour inputs ) is to be able to produce commodities at below the
prevailing market value. This increases the relative profits of the
inovators, but this increase need not involve any additional production
of surplus value. Consider the case of cost saving innovations in
the production of military goods.

The production of relative surplus value is an effect of this process
insofar as it occurs in the production of wage goods or basic
industries. But the production of relative surplus value is not
an attempt by some abstract entity 'capital' to do anything. It
is a side effect of cost saving innovations by individual firms.

>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".
I think that this basic mechanism has plausibility, in that 0ncreases
in profits versus 0ncreases in wages are likely to be a factor
entering into union negotiations. It is also possible that higher
profits encourage more accumulation with a consequent rise in the
demand for labour power. I suspect, however that these effects are
both relatively slow to operate, and are only relevant over the
long term ( several decades ).

Whether the rate of profit will be higher or lower depends upon
the overall rate of accumulation over the period. If the rate of
accumulation exceeds the rate of growth of the workforce, then,
it is likely to lead to a fall in the rate of profit, both because
this creates a bouyant labour market, and because it necessarily
implies a higher capital stock per worker.

It is however, futile to discuss this further without a theory of
the determinants of the rate of accumulation. What determines the
percentage of surplus value accumulated versus the percentage consumed?

Possible factors:
1. Long term interest rates.

2. Rates of profit relative to the above.

3. First derivatives of the above.

4. Rates of change of total money sales.

5. Polarisation of capital in rentier and entrepreneurial strata.

6. State unproductive expenditure levels.

7. Unproductive overheads of capital in the circulation process.
Paul Cockshott