[OPE-L:4799] Re: the determination of real wages---- and a puzzle

Ajit Sinha (ecas@cc.newcastle.edu.au)
Wed, 16 Apr 1997 02:01:54 -0700 (PDT)

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At 06:02 AM 4/15/97 -0700, Paul Zarembka wrote:

>1.) What is "capital"? Remember the Cambridge/Garegnani position that
>there is no such thing. Do you mean "constant capital" or more machines
>or what? I have the same problem with your using "umemployment" as a
>substitute for reserve army of labor. Your concepts are reverting to
>neoclassical categories (without explaining why or that it is a
>temporary convenience or whatever).
>2.) IF you mean "rate of growth of the capital--wage-labor relation", then
>I don't understand your proposition. Suppose the rate of surplus value is
>"one" and all the surplus value is used to reproduce an expanded
>reproduction of capital. Employment can growth quite considerably and
>certainly greater than population growth (remember you were claiming that
>accumulation absorbs population growth, but not the "unemployment") with
>or without production of relative surplus value.

Okay, work with production of commodities by means of commodites and labor.
Assume that the technology remains same for the timebeing. Now, the maximum
growth of the economy will occur when all the surplus value is produced as
either means of production or wage goods in certain fixed proportion (von
Neumann golden growth path). This will give us the maximum rate of growth of
the demand for labor in our system, which would be equal to the rate of
profit. Now if we assume a technical change of the nature Marx assumed, less
labor needed per commodity input used, then the rate of growth of labor
demand would be even less *if we assume that the result of technical change
leaves the rate of profit the same or it even falls*. However, this is a big
assumption. You may wanna say that the technical change would most likely
increase the rate of profit (Okishio, Roemer position, which may be a
reasonable position to take). In that case, its effect on the rate of
increase in the demand for labor would be ambiguous, unless we know all the
parameters associated with all the variables. This may be your logical
position, but still your point that this rate of growth of the demand for
labor will generally be larger than the rate of growth of population remains
arbitrary, unless one establishes it theoretically-- a worthy theoretical
problem in my opinion. However, if your senario is that all the surplus
value are produced in the form of wage goods and capitalists consume all
their surplus in the form of unproductive labor service, then, of course, it
is not a case of accumulation at all. First time period it may give a large
increase in the demand for labor, but after that the increase in the demand
for labor would cease. Moreover, our independent variable, the rate of
growth of population, could be high or low, we should keep that in mind.

I have been using terms such as capital, unemployment etc. for convienience
sake, because it does not change the basic argument. Marx uses the ratio of
unemployed to employed, but this wont change my argument, actually would
stengthen it. Marx assumes that rate of profit is higher than the rate of
growth of population to cut off the Malthusian argument that immisseration
is caused by human nature itself. He wanted to work out an argument where
the cause of immisseration was the dynamics of capitalism itself. He did
believe that capitalism was going to produce a whole lot of povery. Don't
you agree?
Cheers, ajit sinha