[OPE-L:4710] Re: the determination of real wages---- and a puzzle

Ajit Sinh (ecas@cc.newcastle.edu.au)
Thu, 10 Apr 1997 02:50:25 -0700 (PDT)

[ show plain text ]

At 01:35 AM 4/9/97 -0700, Mike Lebowitz wrote:
> Trying to convince Ajit that real wages in Marx are determined by class
>struggle and that Marx intended to relax his assumption that the standard of
>necessity is given when it came to his special study of wage-labour is
>clearly no simple task. It doesn't seem to be possible by providing the
>appropriate quotations because Ajit always seems to have an interpretation
>which, to me at least, seems off the wall.

;) I doubt that that's how it appears to most of the other folks.
> So, I conclude from this, quotations are not going to sway Ajit on this
>question. Maybe it's possible, then, to engage him and others in a bit of
> In 4666, Ajit responded to Jerry's question, "can trade union struggles
>succeed in raising real wages over time" by stating "if productivity is
>rising then [the] answer is yes." ... However, it is too late-- Ajit has
let the cat
>out of the bag by acknowledging that real wages can rise if productivity is

There is no question of letting the cat out of the bag. Since there was no
cat in the bag to begin with. I have consistently maintained that a
theoretical possibility of a rise in real wages if productivity is
increasing exists in Marx's theory. I acknowledged that during the pen-l
debate as well as here in response to you. The point I'm debating with you
is the position about the historical trend Marx takes in his writings-- A
history of economic thought problem. And on that I maintain I'm on pretty
firm footing.
> So, here is the question/puzzle--- if we no longer treat real wages as
>fixed *by definition* (ie., if we acknowledge, as Marx said, that "the level
>of the necessaries of life whose total value constitutes the value of
>labour-power can itself rise or fall"-- Vol. I, Vintage,1068-9), then what
>exactly happens to real wages as productivity increases? Eg., if
>productivity in the production of goods entering into workers' consumption
>doubles, this is equivalent to a fall of 50 0n the value of those
>commodities. Then--- excluding the unlikely case in which workers are paid
>directly in kind, ie. in use-values, why will real wages not in this case
>double (ie., increase at the same rate as productivity)?

Marx considered linking wages to productivity, as you are doing above, to be
an absurd deduction. To quote Marx, since you like quotations so much, "In
an essay on the rate of wages, one of his first economic writings, H. Carey
tries to prove that differences in national wage-levels are directly
proportional to the degree of productivity of the working day of each
DEDUCTION WOULD BE ABSURD..." (CAPITAL i, p. 705, emphasis added).

If you follow your own logic, would you say that real wages would fall
proportionately if the productivity declined? In a response to Jerry, I gave
the evidence from India, where money wages have risen considerably over the
last few years but not the real wages. Money wages have a tendency to adjust
to real wages rather than real wages adjusting to some *given* money
wages--at least not in any long term sense.

The workers ability to raise real wages crucially, at least in Marx's
opinion, depends upon the unemployment situation. If the tendency of the
rate of unemployment is to rise, then workers won't be able to raise real
wages even if the rate of surplus value is rising. Thus, one has to put the
problem in a dynamic context, where the three main variables one needs to
look at are the rate of growth, the nature and the speed of technical
change, and the rate of growth of population; now a days the policy of the
welfare state should also be added to the equation.
> In short, what *exactly* is the mechanism that governs the determination
>of real wages? In particular, what is the mechanism that will generate a
>constant real wage (ie., that money wages will also fall by 50%)? Finally,
>does the story of relative surplus value have to be modified once real wages
>are no longer fixed by definition? I know Ajit will have answers for this
>but I hope that others will help to clear this matter up for me.

I hope they do. Cheers, ajit sinha

> in solidarity,
> mike
>Michael A. Lebowitz
>Economics Department, Simon Fraser University
>Burnaby, B.C. Canada V5A 1S6
>Office (604) 291-4669; Office fax: (604) 291-5944
>Home: (604) 872-0494; Home fax (with warning): (604) 872-0485
>Lasqueti Island (250) 333-8810