[OPE-L:1856] real wages in Marx

Subject: [OPE-L:1856] real wages in Marx
From: Gerald Levy (glevy@PRATT.EDU)
Date: Wed Dec 08 1999 - 06:00:28 EST

In [OPE-L:1855], Ajit wrote:

> The fact of the matter
> is that nowhere he tries to explain the simple fact that the technical
> change, which according to him, creates a possibility or causes the rise
> in real wages also causes an increase in unemployment. How come a
> rising rate of unemployment be accompanied with a rise in real wages
> within a Marxist framework?

Without reference to Lapides, I want to respond to this issue.

Marx attempted to show in _Capital_ that capitalism was capable of both
expansion (growth) and decline (crisis). Actually, "capable" is too weak a
word above. Rather, he wanted to show that the accumulation of capital
*of necessity* led to crisis. The underlying mechanism behind
both growth and crisis was an increase in the social productivity of
labor that came about as a result of technical change (and the pursuit of
relative surplus value).

If we look at this subject in terms of different moments in the trade
cycle, we can see that during the expansionary period of the cycle, the
size of the industrial reserve army is declining and the rate of profit
and the demand for labour-power are increasing. All of these conditions
create the possibility (although, not the necessity) of increasing real
wages. During the decline that follows (the "glut", the "crisis" or, to
use a more modern term, the "depression"), what occurs?

Well, to begin with - from Marx's perspective - the same mechanism
(technical change) that brings about growth also brings about crisis. As
the rate of profit falls, the demand for labour-power decreases and the
size of the IRA increases, and this increases the likelihood that the real
wage will diminish.

What happens *during the crisis* to allow for the possibility of continued
expansion is another subject. While Marx notes that a "reduction of wages
below their value" is a way that the fall in the rate of profit can be
stemmed, there are other ways as well (see Vol 3, Ch. 14). Additionally,
there is the whole question of what happens to constant fixed capital
during the crisis (the forcible destruction of capital values) and how this
helps to create the conditions for the expansion (and the subsequent

You probably don't agree with the above logic, but you probably also
recognize that one can find sections of Marx's writings in _Capital_ and
elsewhere where he asserted the above.

In solidarity, Jerry

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