[OPE-L:4733] Re: the determination of real wages---- and a puzzle

Paul Zarembk (zarembka@acsu.buffalo.edu)
Fri, 11 Apr 1997 07:39:22 -0700 (PDT)

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On Fri, 11 Apr 1997, Ajit Sinha wrote:

> The question is this: did Marx think that the trade union struggles would
> lead to a rising real wages in the future? Michael Lebowitz's position is
> that yes, Marx did think that, but did not discuss this issue in his
> published or even his unpublished writings because he had planned to write a
> whole book on this issue, which he never got around to writing. My position
> is that Marx did not think so. Because he expected the rate of unemployment
> to slowly rise due to the nature of technical change and the the falling
> rate of profit.

You forget the accumulation of capital. Accumulation of capital draws in
workers expelled from results of technological change. Under your
approach, produced VALUE is diminishing as unemployment rises. Yet,
capitalists in fact have a drive for VALUE and SURPLUS VALUE.

On the "falling rate of profit", you collapse Marx into a simplistic point
of view. First, he wrote concerning a falling TENDENCY of the rate of
profit. Second, you ignore all discussion of COUNTER-TENDENCIES Marx
wrote about.

> Given that the rate of unemployment would be rising, the
> trade unions would not be able to turn the tide around, and could only
> resist but not succeed in stoping the downward trend in real wages. Now,
> Marx's theory of technical change and falling rate of profit are not
> logically water tight. So his general prediction about rising rate of
> unemployment is not a logical necessity either. I argue that classical
> economists as well as Marx believed that the empirical secular trend of both
> the rate of profit and the real wages were downward-- one towards zero, and
> the other towards subsistence.

Keynes thought the direction of the rate of profit is to zero. For
Marx it would take surplus value falling to zero or the composition of
capital rising to infinity. The first possibility is not worth
discussing. The second forgets that constant capital is defined on labor
time and there are major technological improvements in the production of
constant capital.

On wages, yes, there is a struggle by capital to reduce variable capital.
But capital is only one of two major social classes and the other is not
simply a set of mules.

> All these theorists were coming up with their
> theories that would account for these trends. And so did Marx. He simply
> tried to place his theoretical variables in such order that the two trends
> would come out as a result. The arbitraryness of this is quite clear in his
> discussion on the falling rate of profit. On the real wages there is no
> doubt that Marx expected a downward trend in the real wages as an empirical
> fact. He devotes 68 pages in total (in Capital I, the whole of section 5 of
> chapter 25) to documenting a falling trend of wages in England for the
> period 1846-66 as well as for Ireland. The thing here to look out for, which
> I think Allin Cottrell and others missed, is the quality of housing for all
> sections of workers. Money spent for housing constitutes a good chunck of
> real wages for workers. If its quality is deteriorating, then it means
> workers are losing out big! Cheers, ajit sinha

Finally, I do not read Chapter 25 as you do. You read it very linearly.
I read it as analyzing the contradictory nature of the capitalist mode of

Paul Z.