[OPE-L:4651] Re: real wages and the rate of surplus value

Ajit Sinh (ecas@cc.newcastle.edu.au)
Thu, 3 Apr 1997 00:33:20 -0800 (PST)

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At 05:56 AM 4/2/97 -0800, Jerry Levy wrote:
>Ajit wrote in [OPE-L:4638]:
>> I think given real wages in Marx is very important.
>I don't recall any place where Marx stated that he believed that _actual_
>real wages were given. I.e. even where he _assumed_ constant real wages,
>this can not be taken as evidence that he accepted the _very strong_
>assertion that real wages are in fact constant. Let's recall that he
>explicitly rejected the Lassallean "Iron Law of Wages" and left room for
>a "cultural and moral" component to alter *both* nominal and real wages.

Jerry, I have no idea what you are talking about. My position on wages in
Marx was made quite clear, I think, recently in the debate between Mike L.
and I. There is no point in repeating myself, you could easily check up
those recent postings. However, I'll say something about your "Lassallean
'Iron Law of Wages'" thing, because I think many Marxists are pretty happy
with believing in rumurs. The famous critique is presented in 'The Critique
of Gotha Program'. Here Marx says that there is nothing Lassallean about the
'Iron Law of Wages' except the word 'Iron' which he borrows from Goethe.
Marx calls it a code word through which Lassalleans recognize each other.
What this code word is for? For a belief in Malthussian theory of
population. That's what the Marx's critique says. I have never said that
Marx believed in Malthussian theory of population. Hollander actually wrote
an interesting paper where he claimed that Marx's absolute immiseration
thesis crucially depended on Malthusian type of population theory. I
presented a paper at the last ASSA critiquing Hollander. Our own Allin
Cottrell and William Darity Jr. wrote a pretty solid paper on this issue in
HOPE some years ago.
>But, putting aside for the moment what Marx did or did not write, what
>would be the _logical_ reason(s) for believing in given real wages? Do you
>view this as a simplifying assumption appropriate for a particular level
>of abstraction or a reflection of an actual historical process? If the
>former, then at what level of analysis would this simplifying assumption
>be dropped? If the latter, could you explain what are the social forces
>which bring about and maintain a given real wage?

It is not an "assumption" as we understand "assumptions" in economics
generally, like ceterus paribus etc. What we have to keep in mind is that
complex theories like Marx's deal with a notion of plurality of time (a
concept with Hegel will have serious problems with). History is not played
out against one universal time horizon. Different variables have different
time horizons. Wages, and here by wage I mean a life style (a standard of
living) for a working family, is determined by a host of enviorenmental,
cultural, and historical factors. These factors do change--as every thing in
the universe does-- but they change very slowly and can be taken as given or
stable when considering prices and profits etc., which are not as stable. To
give you a few example from Marx: He talks about why US wages are generally
much higher than British. The reason he gives for it is that when the US
proletariat came into being, land was still plentyful and a worker could
easily become an independent farmer and maintain a decent life style. Thus
the capitalists were forced to pay high wages from the beginning, which
became a norm. Similarly in his 1865 lecture he talks about how wages in two
districts of Britian are quite unequal because the peasants of the two
districts had very different standard of living before they became
proletariats. Marx's general theoretical position on wages in CAPITAL is
this: wages do fluctuate up and down over a business cycle, but this
fluctuation is around the given standard of living which is the
gravitational point for wages. There is a general secular downward trend of
the standard of living though. This happens because of the nature of
capitalist accumulation, which keeps increasing the ratio of unemployed to
employed of the working population. There is always a great resistence when
peoples standard of living is pushed down. We become quite used to our life
style. It cannot be changes on daily or yearly basis, otherwise we won't be
able to call it a life style.
>> His rate of exploitation is an objective measure and not a
>> monetary measure.
>Marx's *rate of surplus value* (s/v), is the ratio of surplus value to
>variable capital. Don't both s and v _necessarily_ take the _form_ of
>money under capitalism?

So what? They also take the form of commodity capital. What is your point
here? The question is: can money measure objective things in principle like
how much of work you do for yourself and how much for others consistently?
>It seems to me that by claiming that the rate of exploitation is not a
>"monetary measure", you are abstracting from the commodity-form itself.
>How can one abstract from the commodity-form if the subject of analysis is
>the bourgeois mode of production where workers are paid in *money* and
>where surplus value (and c) must necessarily take a *monetary form* for
>there to be the reproduction of capital? Isn't this evident when we
>consider the "first transformation problem", i.e. the transformation of
>surplus value into capital?

A few years ago India decided to 'libralize' and devalue its currency. What
happened? Money wages went up many folds. I'm surprised to see how much
money people make now, when I go home. Have peoples standard of living
improved considerably? Not really. Money wages have to keep up with the
given standard of living rather than the other way round.

I have no idea what this first transformation problem is about. In the
prices of production system: prices and rate of profit are determined
simultaneously, ie. it is one and the same movement that brings about both
the determinations. Of course, with the aid of standard commodity you could
know the rate of profit without knowing the prices, but that's a different

Cheers, ajit sinha