[OPE-L:4652] Re: real wages and the rate of surplus value

Gerald Lev (glevy@pratt.edu)
Thu, 3 Apr 1997 06:14:00 -0800 (PST)

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Ajit wrote in [OPE-L:4651]:

> [...] 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.[...]

Yes, but Marx goes on to write in the _Critique of a Gotha Programme_
about Lasssalle's "dogmas" re wages and that L "*did not know* what wages
were, but following in the wake of the bourgeois economists took the
appearance for the essence of the matter." He writes shortly afterwards
re the iron law of wages: "In place of the existing class struggle appears
a newspaper scribbler's phrase: 'the social question' ...."

An important explanation of the concept of subsistence wages and the role
of TRADE UNIONS appears in the "Results of the Immediate Process of
Production (Vol. 1, Penguin ed, pp. 1068-71). For example, he writes:
"wages enter into his calculations as a *given value*. On the other hand,
the *value of labour-power* constitutes the conscious and explicit
foundation of the *trade unions*, whose importance for the English working
class can scarcely be overestimated. The *trade unions* aim at nothing
less than to prevent the *reduction of wages* below the level that is
traditionally maintained in the various branches of industry. That is to
say, they wish to prevent the *price* of labour-power from falling below
its *value." Shortly afterwards he writes, "The workers *combine* in
order to achieve *equality* of a sort with the capitalist in their
*contract concerning the sale of their labour*. This is the *rationale*
(the logical basis) of the *trade unions*" and "For this reason the unions
never allow their members to work for *less* than this minimum. They are
the insurance societies formed by the workers themselves."

Although the importance of trade unions for the English working-class "can
scarcely be overestimated", where is this subject developed further in

> 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.

Wages *can* change slowly, yet -- during certain periods -- they can *also*
change rapidly. Similarly, the "environmental, cultural, and historical
factors" can change rapidly (as we, in some ways, have seen in our own
lives, e.g. the role of the womens' movement). What is important, I
believe, is that there is room in the theory for the self-activity of
workers to shape, re-shape, and alter (within limits) the "factors."

> [...] 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.

This argument _might_ be able to be maintained if we consider the rate of
growth of the industrial reserve army on a global level ( ... but, I have
my doubts ...). Yet, as Marx makes clear in his drafts of a reply to Vera
Zasulich, he was referring to the historical experience of "*the countries
of Western Europe*" when referring to the "historical inevitability" of
the expropriation of the agricultural producer.

Has the relative surplus population in these countries of Western Europe
exhibited a secular trend upwards in the XX century? Has there been a
secular trend for real wages to decrease in these countries during this
century? I think not.

Marx may have expected otherwise (as in the Vol. 1, Ch. 25 "scenario").
Yet, it hasn't quite worked out like that, has it?

> 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.

This is probably true _ordinarily_. Yet, have we not seen periods in our
lives when what we consider a "life style" *has* changed on a yearly or
multi-yearly basis?

> So what? They also take the form of commodity capital. What is your
> point here?

My point is that v, c, and s must all necessarily take a monetary form due
to the nature of capitalist production and reproduction.

> 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?

The value of money can change, but these "objective things" must take a
monetary form for capitalist production to continue.

> 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
> thing.

I used quote marks ["..."] around the "first transformation problem" for a
purpose, i.e. to differentiate it from what has become known as the
"transformation problem." I was referring to the subject of Ch. 24: "The
Transformation of Surplus-Value into Capital" (although, the subject of
Ch. 19 might be claimed to be the "first transformation problem"). The
"problem" has a couple of dimensions: (1) for this transformation to
occur, the potential value embodied within the potential commodities
must be actualized through exchange, i.e. a precondition of accumulation
is that capitalists must sell their potential commodities on the market in
exchange for *money* since they then need this money to purchase c + v.
(Of course, within the context of Ch. 24 this does not seem to be a
problem since it is assumed that commodity values will be realized. Yet,
this is a logical pre-condition for accumulation); (2) capitalists then
advance *money-capital* for the purchase of c + v in advance (or, if you
prefer, at the start of) the next period of production (pace Paul C).
Thus, the commodity-form itself mandates that c + v take a monetary form
for s to be converted into capital. Capitalist consumption, thus, can
affect the *future* production of value and s since any amount of
unproductive consumption of s by capitalists means that less will be left
over for productive investment [in c + v]. That is, at the end of any
period after realization, capitalists have a certain quantum of money
that can be used for individual consumption by capitalists and/or
productive investment [in c + v]. Unless money-capital is advanced on an
expanded scale for increased c + v, how can accumulation take place? To
coin a phrase: money mastters.

In solidarity, Jerry