[OPE-L:1923] Re: Re: productivity increases and rising real wages

michael a. lebowitz (mlebowit@sfu.ca)
Tue, 14 Dec 1999 14:03:16 -0800

At 06:40 PM 12/11/1999 -0500, Patrick wrote:
>First, I'm glad you responded. I thought my postings had fallen into
>bottomless pit of nonresponse. I don't think we have any major

        For the most part, I agree, and certainly this is true in relation to the
discussion of real wages and class struggle. To some extent, the
differences are those between someone doing empirical work (" you gotta
work with whatever data is available until you get better data") and
someone imagining nice datasets. However, I still am concerned about your
incorporation of productivity in "ability to pay", which in turn becomes a
determinant of real wage levels.

I wrote:

>>What concerns me here is the place assigned to productivity in the
>>determination of the real wage (di). If we grant that an increase in
>>productivity raises the upper bound for wages, *why assume a link between
>>(the limit to) what capital is able to pay and what it does pay*? Isn't the
>>willingness of capital to grant increased wages already captured by the
>>variable for class struggle? Linking the wage to what capital is able to
>>pay as you do would seem to be a way by which the neoclassical nexus
>>between productivity and the wage slips in--- an alien intrusion that Ajit
>>has been particularly concerned to warn against. In short, I would argue
>>that a Marxian version (once we leave Capital's fiction of the given real
>>wage) of the determination of that standard of necessity depends only on
>>class struggle (current and past); and indeed in your own numerical example
>>it is only the "sufficient bargaining power" of workers which permits them
>>to secure increased real wages as the unit values of wage goods fall.

You responded:

>My argument is simple. During a given time period, say during a given
>business cycle of 8 - 10 years, technological change and productivity
>growth may have no impact on the composition of average consumption bundle.
>But, within an 8 - 10 year period it is entirely possible that
>technological change will lower the labor content of several components of
>the consumption bundle. This is not neoclassical in the least.
> In the
>neoclassical analysis productivity changes automatically raises wages. I'm
>not ascertaining that at all, only that technological lowers the value of
>labor power.

        I agree that this case of the unit value of a given real wage falling is
not neoclassical. However, as I understood your argument, productivity
increases *also* increase the ability of capital to pay and this is a
factor in rising real wages--- which I do think corresponds to the
neoclassical argument. Have I misinterpreted you?

> Over a longer time period, say a generation, technological
>changes alters the consumption bundle because it alters the socially
>required commodities. For example, I once had the extreme displeasure of
>trying to search for a job without owning a telephone or even having a
>neighbor who had a telephone. This severely hurt my job search. Telephones
>in modern america are socially necessary.

        This raises another matter, but I worry about this statement because it
appears to suggest that the worker's consumption bundle over time rises
because of increased burdens; socially determined subsistence in this
respect functions much as physiologically determined subsistence in
classical political economy-- increased "costs" require increased real
wages. It appears to exclude the case where that consumption bundle expands
because workers, through their struggles, are successful in turning what
were previously luxuries into necessities.

        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
        Fax (604) 872-0485
Lasqueti Island: (250) 333-8810

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