[OPE-L:4714] Re: the determination of real wages---- and a

patrick l maso (patrick.l.mason.20@nd.edu)
Thu, 10 Apr 1997 09:38:24 -0700 (PDT)

[ show plain text ]

On real wages and Marx question.

1. As a pure history of thought question, Ajit may well be correct that Marx
thought real wages were following.

2. Nevertheless, real wages in nearly every capitalist country have
increased from the late 1880s through the mid-1970s.
Hence, the important question is, "Does Marx's theory allow for the
possibility of rising real wages." Clearly, it does.

3. Under what conditions then might real wages show a secular increase? Mike
L. is right here. A necessary but not sufficient condition for a secular
rise in real wages (without lowering the average rate of profit) is for the
average level of productivity to increase. (I am assuming here that the
intensity of labor has not increased, the length of the working day has not
increased, and capitalist are have not been forced to accept a lower
rate of profit).

4. Since 1973, the average US real wage has declined -- more or less
steadily. Hence, we have a secular decrease in the real wage. Perhaps
Marx was observing the same thing in England. I don't know. Worst, the
average level of productivity in the US today is most certainly higher
than the average level of productivity in 1973. So, the rate of surplus
value has increased as well. Again, this may be similar to what Marx
observed in England during the mid-1880s.

5. Hence, a necessary and sufficient condition for the real wage rate to
rise is for the average level of productivity to increase and for worker
bargaining power to increase. The "ability to make pay" must rise with the
"ability to pay" if workers are to get a higher real wage.

6. A rising real wage does not contradict a rising rate of exploitation. For
example, if the rate of productivity increases by 4% but workers real
wages only rise by 2%, then both profitability and worker pay may rise.

7. I haven't followed all of the postings on this issue, but during a pen-l
debate quite some time ago (in which both Mike and I were participates
in) I tried to argue that the really incomplete aspect of Marx's work on
wages had to do with wage differentials. I've published some on this
issue relating to the issue of racial discrimination and, of course, Howard
Botwinick wrote a very interesting book on the issue. And, then, there is
also Mike's work. Anyway, I've found a great deal of statistical evidence
which is consistent with the basic Marxist explanation of wage differentials.

8. I would like to know if Ajit or some others on the list have anything
they wish to say on the issue of wage differentials.

peace, patrick l mason

At 02:50 AM 4/10/97 -0700, you wrote:
>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