[OPE-L:4726] Re: real wages and the rate of surplus value

Ajit Sinh (ecas@cc.newcastle.edu.au)
Fri, 11 Apr 1997 00:49:50 -0700 (PDT)

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At 07:26 PM 4/9/97 -0700, Jerry Levy wrote:
>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?

Suppose technology is unchanging, and the rate of growth of population is
constant. Now, let us suppose that the rate of accumulation rises.
Unemployment falls and real wages rise. The rise in real wages would lower
the rate of profit, and thus the rate of accumulation. So the rate of growth
of the demand for labor would decline. Unemployment would rise, and the real
wages would fall. Thus, in a dynamic case, the balanced path would ensure
that real wages would remain constant and the rate of accumulation would be
equal to the rate of growth of population.
>> 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 agree! During the boom period there is a good chance that real wages may
rise, and during the slump there is a good chance that the real wages may
fall. The constant real wages I'm talking about are the gravitational points
around which the real wages during the business cycle fluctuates.

>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.

I don't understand the point very well. What role the rate of growth of
population play here?
>> '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).

It's not my understanding of commodity. It's Marx's understanding of
commodity ;).
Cheers, ajit sinha