[OPE-L:4910] Re: determination of real wages

Michael_A._Lebowitz (mlebowit@sfu.ca)
Mon, 5 May 1997 00:41:05 -0700 (PDT)

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In message Fri, 25 Apr 1997 12:43:45 -0700 (PDT),
dkf2@columbia.edu (Duncan K. Foley) writes:

> In reply to Michael L.'s OPE-L:4852:
>> The question is *how* to reconcile them. Both (b) and (c) relate
>> directly to the determination of market wages (which are affected by the
>> characteristics of supply and demand, which includes class struggle).
>> How do we move, however, from this determination of market wages to the
>> standard of necessity? The argument I made before to Ajit (and in my
>> book) is that the level of necessary needs (which underlies the value
>> of labour-power) adjusts--- as the needs which people are able to
>> satisfy as the result of increases or decreases in market wages change.
>> Ie., the historical or social element entering into the reproduction
>> requirements of workers (a) --- assumed given in Capital---expands or
>> contracts. Do you see any other way to reconcile those 3 theories?
> To tell you the truth this is an issue that I'm quite uncertain about, but
> want to think about and discuss more. The mechanism you propose makes a
> lot of sense, but it seems to presuppose a rise in market wages above the
> value of labor-power in the sense of an accepted workers' standard of
> living. I think Smith has something like this in mind in his discussion
> of wages. Does this lead in formal terms to viewing the value of
> labor-power as a kind of lagged average of past realized market wage
> rates?


This conception seems quite reasonable--- but not if we think of this as
an "extrinsic" average; rather, the process would be one in which the
mediation between market wage rates and the value of labour-power is the
change in the *quality* of the worker produced as the result of the changed
inputs into her production due to the increased/decreased market wages.
Eg., Marx talked about the "brutalization" of workers, the tendency to
"degrade" the worker to the level of the Irish as wages are driven down;
similarly, he noted that when wages rise, workers are able to widen their
sphere of pleasures and to participate in civilization. (I discuss this
question in Ch. 5 of my book.) In this respect, we would not expect the
value of labour-power to be affected by windfall gains but only with changes
in "permanent income".

> Isn't there also an upward pressure on wages in some periods from workers'
> political and union movements?

Yes, and downward as capital succeeds in weakening unions and increasing the
separation among workers.

in solidarity,
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
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