[OPE-L:1648] Re: Re: Re: Re: Re: technical change and real wages

Subject: [OPE-L:1648] Re: Re: Re: Re: Re: technical change and real wages
From: Ajit Sinha (ajitsinha@lbsnaa.ernet.in)
Date: Mon Nov 08 1999 - 03:16:18 EST

michael a. lebowitz wrote:

> At 04:52 PM 11/2/1999 +0530, Ajit wrote:
> >
> >But Mike, you are assuming that money wages remain constant when the
> prices of wage
> >goods fall. But this assumption is what i'm questioning.
> Why?


It is because the real issue here is a theory of wages in Marx. As you had suggested
earlier, your starting point was given by the wages equal to the value of
labor-power. In other words, you accepted Marx's proposition that real wages are
determined by the amount of goods and services it takes to reproduce the worker so
that s/he is able to come to work from one day to another, and has enough to raise
children to replace their parents. The strict requirement of this does not only
depend on the minimum physical subsistence but also an historical and moral element
is added to it. In this reasoning the real wages has no relation to the productivity
of labor or the technology being used. But in your second proposition, you say that a
rise in labor productivity due to change in technology will automatically lead to a
rise in the real wages. My point is that your second proposition is negating the
first one. If labor productivity explains the real wages then it should have
explained it in the first place too. There is something missing here. And I think the
missing element is your implicit assumption that real wages is a positive function of
labor productivity. Though it is okay for the neo-classical model, Marx actually
explicitly denied any such relationship.

> Why cannot a technical change
> >be associated with either a fall in money wages such that the real wages
> remain
> >constant or a general monetary inflation, which keeps the real wages
> constant at the
> >given money wages?
> As I had suggested in ope-l #1628, first we should clarify the case where
> productivity increases drop from the sky--- ie., there is no displacement
> of workers. So, in this case, why exactly do you think money wages can not
> be assumed constant when the money prices of wage goods fall?


Simply because Marx's theory of wages work in real terms and not nominal terms. Since
real wages were determined by the requirement of the reproduction of labor-power, and
since nothing has changed on that account due to this fall of new technology from
sky, there is no reason to think that the real wages would change in his theoretical
model. Cheers, ajit sinha

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