[OPE-L:4702] Re: real wages and the rate of surplus value

Gerald Lev (glevy@pratt.edu)
Wed, 9 Apr 1997 19:26:08 -0700 (PDT)

[ show plain text ]

Ajit wrote in [OPE-L:4678]:

> I'm not linking wages to productivity. My point is that without an increase
> in productivity if you let wages rise secularly then it will squeeze the
> profit out to zero and capitalism would collapse. However, in Marxist theory
> a collapse of capitalism does not come about due to rise in wages.
> Therefore, a secular rise in wages is only possible within the theory if
> productivity is rising as well.

Perhaps there is some room for common ground here. I certainly would not
question the proposition that there are social *limits* to which real
wages can increase (and natural and social limits to which real wages can
decrease). Yet, there is a *range* of real wage levels that are possible
within these limits. Thus real wages could rise, but only within the
limits mandated by the requirement that capital is capable of
reproduction. Do you agree?

> As I said, time and time again, for a time period of a business cycle or so,
> say long term, the real wage basket, on the average, is held constant.
> However, in the secular time period it has a downward tendency.

Since you have said this time and time again, I can only say that I
disagree. I think that it is legitimate to *assume* that real wages are
constant "for a period of a business cycle or so" -- yet, from my
perspective, real wages *can* vary during that shorter-run period. I also
question on both theoretical and empirical grounds the proposition that
real wages exhibit a downward tendency over the long-run. But, to avoid
repetition, I won't restate my explanation why at this time.

> >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.
> I don't understand what you are talking about. A fall in profit rate would
> reduce the rate of growth, which itself would reduce the rate of increase in
> the demand for labor on its own account. On the other hand the nature of
> tecnical change is also reducing the demand for labor per unit of capital.
> Given a rate of growth of population, shouldn't one expect the rate of
> unemployment to rise? What "scenario" you are talking about?

I was taking issue with the V1, Ch. 25 "scenario" of a secular-increasing
size of the industrial reserve army. The alternative "scenario" would be
one where the size of the IRA fluctuates alongside changes in the rate of
accumulation and the trade cycle.

> 'Law of value' works on adjusting supply of commodities to a given demand.
> No commodity produced in capitalism has a persistent excess supply.

That depends on your understanding of the term "commodity." (see
discussion on "value vs. potential value" thread).

> Normal does not mean "equilibrium".

OK, I accept that.

> Unemployment of labor in capitalism is
> not an equilibrium situation but it is quite normal.


> I'll try to respond to
> your remaining post may be tomorrow. I'm feeling very tired now.

Take your time (and get some sleep, which I need as well). No need to

> Just gave a seminar on 'Althusser-Sraffa Connection'.

Well ... when you have some time (again, no need to rush), I would really
like to hear what you have to say about that topic! (... especially since
I have my doubts about the methodological compatibility of linear
production theory with Althusserian concepts like overdetermination).

In solidarity, Jerry