[OPE-L:1589] technical change and real wages

michael a. lebowitz (mlebowit@sfu.ca)
Mon, 25 Oct 1999 12:21:52 -0700

        Nice to hear from you, Ajit. I was wondering earlier what your silence in
not responding to Lapides' comments on you indicated and now recognise it
was your wisdom.

At 05:42 PM 10/25/1999 +0530 in 1586 , Ajit wrote:
>michael a. lebowitz wrote:

>> then raised a number of questions about the implications of no longer
>> assuming a fixed standard of necessity. One (which members of the list may
>> wish to think about) was that "productivity increases in the production of
>> necessaries in themselves will not lead to a reduction in necessary labor
>> and the value of labor-power. Instead, the effect of the falling value of
>> necessaries will be to increase what workers can purchase with their
>> money-wages and, thus, the level of the necessaries of life which become
>> second nature to them" (70)


> But on your above question, I would say this:
>A rise in the real wages must imply that the bargaining strength of the
working class
>has improved. Now, you would need to explain why and how the nature of
>change in capitalism improves the position of the working class vis-a-vis
>capitalist class. My think that Marx's general position was that the
nature of
>technical change in capitalism was labor saving and unemployment
generating. Thus in a
>long-term or secular time period the workers bargaining strength becomes
weaker and
>weaker vis-a-vis the capitalists. That is why the tendency for the real
wage is to
>fall to the bare subsistence rather than rise. Your argument seems to rely
too much on
>the assumption of steaky money wages. I don't think Marx made this
so-called Keynesian
>assumption. And in any case, such an assumption for a long term
perspective would be
>extremely dubious. What do you say? Cheers, ajit sinha

        I would propose that a rise in real wages implies neither an increase in
the bargaining strength of the working class nor an improvement in its
position vv the capitalist class. Rather, only a rise in the *relative*
wage or a fall in the rate of surplus value implies these.
        My reasoning is as follows. Yes, tech change in Marx is as you describe
it--- it displaces workers and tends to drive down money wages. However,
tech change is two-sided in its effect--- it also reduces values. In Wage
Labour and Capital (and the Manifesto), Marx only considers the former, but
by the time of Capital he is clear that money wages may be falling and yet
real wages can rise precisely because of the rise in productivity. See his
discussion in Vol. I, Ch. 17, where when the relative position of
capitalists and workers is unchanging and the price of labour-power (money
wage) is unchanged, a doubling of productivity means that the money wage
would represent twice as many use-values as before (Penguin/Vintage, p.
659). However, workers remain in the same relative position only if money
wages are constant, and this is a condition that might hold if productivity
increases drop from the sky but not if it occurs via labour-displacing
        Effectively, you ask-- wouldn't money wages, however, be driven down by
the situation in the labour market to the point where all the gains from
productivity increases are captured by capital (and in the limiting case to
the level of bare subsistence)? This is what I take your point about
"sticky wages" to mean. I would be interested in your description of the
mechanism by which this might occur. I think your argument might hold if we
retain the assumption of a fixed set of necessaries but not otherwise.
        In the case where that assumption has been removed, my own argument is
that... it depends. Ie., it depends upon the degree of separation among
workers. If workers are unorganised and that degree of separation is
complete (eg., it approaches 1, and its inverse, the degree of unity,
approaches zero), then yes the real wage will be driven toward the
physiological minimum and the working day to its physiological maximum. On
the other hand, if workers do organise, they can as Marx said succeed in
capturing "a certain quantitative participation in the general growth of
wealth" (cf. Beyond Capital, pp. 73-4). On the assumption that the degree
of separation is constant (ie., that the position of the working class vv
capitalists is given), then real wages would rise with productivity (that
"golden age" condition); however, even if the displacement of workers by
machinery does increase the degree of separation, there remains the
possibility of real wage increases.

        in solidarity,
Michael A. Lebowitz
Economics Department
Simon Fraser University
Burnaby, B.C., Canada V5A 1S6
Office: Phone (604) 291-4669
        Fax (604) 291-5944
Home: Phone (604) 872-0494
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