[OPE-L:4669] Re: real wages and the rate of surplus value

Gerald Lev (glevy@pratt.edu)
Tue, 8 Apr 1997 07:51:24 -0700 (PDT)

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Ajit wrote in [OPE-L:4666]:

> >I have a very simple question for you: [irrespective of what Marx did or
> >did not write so that we don't get into a long exchange of Marx quotes]:
> >can trade union struggles succeed in raising real wages over time?
> If productivity is rising, then answer is yes.

Is the "key" productivity? I'm not so sure. No doubt, if you look at
actual changes in wages, then both firms and unions engaged in
"labor-management cooperation" have tried during the post-WW2 period to
link wage increases with productivity increases.

Yet, more fundamentally, the key to increasing the *possibility* of real
wage increases would be changes in the mass and rate of profit. I.e. if
aggregate profitability is increasing then firms are more likely to agree
to wage increases, particularly if they obtain something for that
agreement such as an agreement by unions not to resist firm attempts to
increase relative surplus value and/or the intensity of work.

Yet, this abstract possibility can only become real as a result of class
struggle. I.e. we would not expect firms to agree to increasing nominal or
real wages unless they were forced into it by the self-activity and
organized actions of workers.

> >If you answer "yes", then I have a couple of follow-up questions:
> >(1) where was this subject developed more concretely in _Capital_?

> Nowhere. For simple reason. In Marx's scheme of things, wages were not
> supposed to rise but fall.

So, your interpretation is that Marx held that real wages were constant
over time?

> You should keep in mind that Marx also believed
> in falling rate of profit over time. So accumulation, on the one hand, was
> supposed to "set labour free" at an increasing rate, and on the other hand,
> reduce the rate of profit meaning the rate of growth of the system. Thus in
> Marx's scheme the nature of capitalist development was such that there would
> be a downward pressure on wages. Trade unions could fight and resist this
> downward trend but they could not turn the historical tendency around.

The above would only be the case if you believe that the industrial
reserve army would grown continuously with the advance of capitalist
accumulation. If one believes instead that the size of the IRA and
the demand for labour-power fluctuates alongside changes in the rate of
accumulation and the trade cycle, then a different "scenario" emerges.

> But
> this does not mean that Marx's theory is hopeless in the face of rising real
> wages. Because, both his conclusions were based on faulty notion of increase
> in organic composition of capital and its relation with the rate of surplus
> value. Thus the results are not the logical necessity of the basic
> theoretical structure. [...]

While the question of Marx's interpretation of an increasing occ, its
relation to an [increasing] rate of surplus value, and the "law of the
tendency for the general rate of profit to decline" [LTGRPD] is certainly
an important question, I will not deal with it here since -- as you know
-- it has been a topic of intense controversy in the literature for a
verrrry looooong time and, to the extent that listmembers what to discuss
it, I think it should be discussed separately.

> [...] For Marx's own theoretical perspective, it was important to have
> real wages or rather the wage basket given from outside the market for
> commodities. If the
> value/prices of production of labour-power was determined according to the
> 'law of value', then he could not hold the proposition that the 'reserve
> army of labour' is a persistent and structural aspect of capitalis

Could you explain the last sentence more?

> I think it is quite unsafe to try and develop a theory of historical
> changes. Historical changes to a great extent depend on chance factors--a
> throw of dice. I would rather shy away from developing a theory about
> 'abnormality' that may develop in the future.

I certainly would not quarrel with the proposition that "chance factors"
play _some_ role in explaining concrete historical changes. Yet, I would
say that all modes of production have a certain logic that can be
identified. In terms of conceptualizing capitalism as a _dynamic_ system,
I think that it is very misleading to refer only to the "normal" since
that seems to imply a certain ahistorical static equilibrium framework
which is incapable of expressing the changes that occur within that mode
of production over time.

I, for one, could not tell you what is "normal" for capitalism or how often
that mode of production is in a "normal" vs. an "abnormal" state of
affairs. For instance, from my perspective, if one can identify a "normal"
equilibrium situation, this does not by itself tell you whether the system
is in equilibrium normally, or if it is in equilibrium whether it will stay
in equilibrium, or if it is in disequilibrium whether it will head
towards equilibrium or get to equilibrium. I would say, rather, that the
'normal" equilibrium situation is only an abstract latent possibility.

But ... the above are rather controversial points, as you are I'm sure
well aware.

> But they can also be expressed as labor magnitudes, independent of money.

At the risk of being repetitive, let my again suggest that these "labor
magnitudes" must necessarily within the bourgeois mode of production come
to be expressed as money magnitudes.

But, I guess, a fuller discussion of that topic would get us back into a
discussion of the "single-system" vs. "dual system" interpretations.

> Now, when you measure them in money a descripancy between the two measures
> arises. The question is why should the money-measure be preferred over the
> labor-measure?

I don't think it's a question of preferring one "measure" over another.
Rather, [socially-necessary!] labor-time is the substance of value which
must necessarily come to be expressed as money due to the nature of the
value and commodity forms.

> As far
> parameters of the system, the competitive forces of the system would
> ensure realization of values at that prices. That's all we need for the
> limited proposition we are making.

It's one thing to assume that commodity values are realized (or rather
ideal values become real/actual values) or to identify the conditions
under which this might happen. It's quite another thing to assert that
"the competitive forces of the system would ensure realization of values
at that prices." I see nothing that would "ensure" this possibility.

In solidarity, Jerry