[OPE-L:2955] Re: Value of labour power and real wage

Gerald Lev (glevy@pratt.edu)
Wed, 4 Sep 1996 05:53:18 -0700 (PDT)

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Hans wrote in [OPE-L:2862]:

> If the capitalists introduce
> new machinery, so that the workers see that they are producing more,
> and at the same time real wages are not rising, then this will be
> taken as such an affront by the workers that they will simply not go
> for it. Just as they would not go for slavery. No unions are
> necessary, no organization is necessary, they will oppose this *as
> one man*.

I responded, in part, thusly in [OPE-L:2872]:

> Atomized individual workers (especially assuming that the relative
> surplus population > 0), do not automatically demand higher wages
> following increases in productivity.

Hans responded, in part, in [OPE-L:2954] as follows:

> By "relative surplus population" you apparently mean the unemployed.
> Your argument seems to be: there is already downward pressure on wages
> because of unemployment, which the workers can only resist because
> nominal wages are sticky; but they can certainly not move wages up.
> In other words, you refute my argument that the workers' sense of
> equity is an economic force by citing a case in which there is another
> economic force, unemployment, counteracting it. <snip>

I think you missed my basic point -- which did NOT concern the presence of
unemployment. The basic point I was trying to make is that there is no
reason to suppose that "atomized individual workers" will "automatically
demand higher wages following following increases in productivity."
Workers' demands will certainly be _affected_ by the presence of
unemployment, but the specific nature of those demands and responses will
depend more critically on: a) whether there is trade union organization;
b) the nature of the trade union "leadership" (and, therefore, the
relation between the ranks and the "leadership"); c) the history of
workers' struggles in a particular region or country. Consequently, one
can not predict workers' responses independently of a class analysis which
examines the specific history and nature of workers' struggles in
particular regions, industries, and countries.

> (a) What is the story behind downward sticky nominal wages? Although
> this is Keynes and not Marx, the story seems to be the same again that
> a nominal wage decrease will trigger the concerted and concentrated
> resistance of all workers, will cause all workers to act
> *as one person*, something a cut in real wages due to
> inflation cannot. And I am not aware that anybody argued that nominal
> wages are sticky downward only if the workers are unionized.

The "story" above, like so many other stories by economists, rests on
certain "stylized facts" -- in this case concerning wages. If nominal wages
go down, will this cause workers to act "*as one person*" in opposition to
the wage decrease? Not necessarily. I think that the "story" assumes a
level of unity and solidarity that may or may not exist.

> (b) And under the gold standard, in which increases in productivity
> lead to falling prices, workers would have the sticky wages on their
> side? Would you go so far with your argument?

No. Also, I was not the one who raised the question of "sticky wages."

> [...] , and Marx says in the accumulation chapter
> that unemployment may lead to more investment, a possibility which
> modern economics students can no longer entertain because of the
> stock-flow hoax that is being perpetrated on them.

Could you please explain how the "stock-flow hoax" prevents "modern
economics students" from understanding this possibility?

> The concrete interaction between the workers' sense of equity and
> unemployment can be seen in labor actions.

Here we are in agreement. Yet, the "concrete interaction" re "equity
and unemployment" varies internationally.

> I know that when Chrysler started making
> money again after its near-bankruptcy the workers whose sacrifices had
> helped Chrysler survive expected higher wages and were very angry that
> they did not get them.

Yes, that's true *because* they accepted (with a fair amount of
resistance!) the claim by Chrysler, the UAW, and the government that they
needed to make sacrifices to help Chrysler (it was a predecessor of the
"we're all in the same boat" perspective that became generalized in the
80's with the "concessions movement"). When Chrysler became profitable
again, workers demanded higher wages *but* this response has to be
understood by examining the specific history of workers' struggles at
Chrysler and how those struggles were affected by workers elsewhere (and
the specific nature of the trade union "leadership" in the UAW and the

> Fear alone is a very bad motivator; it may work in the short run, but
> it breeds resentment and resistance in the long run. Modern business
> management methods are very aware of this. Workers in capitalism are
> oppressed by much more than fear. The school system is designed to
> convince them that they are stupid and do not deserve better. And it
> is the task of the economists to tell them that they are paid what
> they produce, that there is not more to go around.

Fear is not the *only* "motivator" -- yet, nonetheless, it is a very real
force which affects workers' responses and can in certain circumstances be
a *very effective* "motivator." Of course, as you say, there are other
"motivators" at work as well.

If you don't think fear can be an effective "motivator", how do you
explain the fact that speed-up (an increase in the intensity of work)
and a decrease in workers' grievances often follows an increase in

> I would hope that class struggles would lead them to the recognition
> that there is no link between wages and productivity, but that the
> bosses hog most of the surplus product and that the workers through
> their fights can force the bosses to give up a part of their booty.

I share that hope, but the result can not be *assumed*.

> The
> correct consciousness does not have to wait for technical progress in
> order to demand more of the product. <snip>


In OPE-L Solidarity,