[OPE-L:5345] RE: Luxury goods and profit rate

Ajit Sinha (ecas@cc.newcastle.edu.au)
Tue, 15 Jul 1997 23:52:07 -0700 (PDT)

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To my question:
>>Why you don't want to go back to 'embodied labor' in workers consumption
>>idea? What are your fundamental problems with it?

Duncan wrote:
>I always looked at the value of labor-power at the point where capitalists
>buy labor-power from workers for money. At this point what the workers
>spend the money on is unknown, and in fact different workers may spend on
>very different baskets of commodities, with different embodied labor. I'm
>not opposed, however, to the idea that a socially and historically
>determined standard of living may be an important _determinant_ of the
>level of wage.

Just to get the ball rolling. Let me say that, as I see it, the idea of
exchange between *a* worker and *a* capitalist is not important in the
context of Marx's theory of wages and the transformation problem. I think
the idea of 'exchange' between the *working class* and the *capitalist
class* is the relevant idea here. Given that your own interpretation of the
transformation problem is more 'macro accounting' oriented, I hope you would
agree on the point that the wages question is eaaentially about the
'exchange' between the two classes, and not individual exchanges as such.
Now, when we take the class oriented position, then the relevant information
we need to know to determine the real wages is how much of various goods and
services are consumed by the working class as a whole. This information can
be gathered without any reference to individual workers' subjectivities an
choices. Once we know the aggregate consumption of the working class and the
total numbers of workers employed/labor-time spent in the production
process, we can easily determine the 'average' real wages per worker/unit of
time. Thus, I think the problem of different workers might be having a
slightly different basket of consumption is irrelevant. What we are after is
the aggregate and the average derived from it. What would be your main
problem with this approach?

Cheers, ajit sinha
>Duncan K. Foley
>Department of Economics
>Barnard College
>New York, NY 10027
>fax: (212)-854-8947
>e-mail: dkf2@columbia.edu