[OPE-L:3450] RE: Assumptions, Assumptions, etc.

Gerald Lev (glevy@pratt.edu)
Wed, 16 Oct 1996 06:27:58 -0700 (PDT)

[ show plain text ]

To expand upon what I wrote in [OPE-L:3448]:

> In the one-commodity corn model case, technological change in corn
> production would imply reductions in corn prices, ceteris paribus. As
> corn is the means of subsistence that workers purchase, real wages would
> increase, ceteris paribus. <snip>

We would not see this result in the case where v = 0 since workers would
be living on air rather than corn. This is a _qualitatively_ different
result. Further, if v was "very, very, very" small, this would imply one
of two things. Either (a) wages are significantly below the value of
labour-power, or (b) the employed population (as a percentage of the total
labor force) is "very, very, very" small. If (b) were the case, we would
expect the IRA to be "very, very, very" large. If the IRA was very, very,
very large we would expect wages to decrease very, very, very much,
ceteris paribus. Again, we see _qualitatively_ different results.

In Solidarity,