Re: (OPE-L) indirect labor, the real wage, and the production of surplus value

From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Tue Nov 11 2003 - 18:24:26 EST

Ajit wrote:

>I think workers' militancy may have something to do
>with it, but not a lot. It is a serious question for
>history and a rich historical description is needed.
>Post second world war rise of the welfare state, the
>rise of mega corporations, the cold war, and the
>independence movements in the thirld world all must go
>into its explanation. It, of course, is true that a
>sustained rise in real wages cannot be obtained
>without a sustained rise in labor productivity and
>accumulation of capital. But a simple relationship
>between these variables cannot be established.
>I think if you look at the long term data you will
>find that both money wages and general price levels
>are going up. So the money wages in the long term are
>not fixed and prices, in spite of large increases in
>productivities, do not show a long term decline. In my
>opinion the real wages takes longer time to change
>than the money wages.

Why aren't both changing 'equally'?
one element of the cost push inflation of the 1970s that seems
often to be neglected is the extent to which workers were pushing for
higher money wages in order to maintain their tax home real wage as
taxes (perhaps most of all payroll) rose. The wage squeeze explanations
for crisis tend to forget that rising money wages may only in the end
indicate the cost of the state, e.g. social security, medicaid,
military expenditures. Regressive tax relief and slow
growth meant that more of the pre tax wage had to be used
to maintain social entitlements even as those entitlements
became stingier. Then there were cries for tax relief which
Reagan promised, but it seems that what Reagan did in the name
of tax relief was raise the payroll tax while disallowing wages from
rising commensurately. Bush II has worked the US into a position that
payroll taxes will probably have to be increased over and above
the temporary income tax relief that he has granted even as social
expenditures are again cut.As foreigners began to withdraw from the US,
the tax burden on the working class will only increase.
The upcoming squeeze on the working class may
well radicalize it but attempts to maintain the real wage
through higher money wages will either be directly stymied or inflated away.
The only path over which the brush is
not now settled is a kind of social Darwinist imperialism, and there
is no reason that a good number of Americans
(especially the so called NASCAR dads) will not rally behind it

>I think the role of the government to redistribute
>some income through tax and expenditure policies is
>under serious attack for sometime, say 1975 onwards.

Anwar Shaikh reprises his critique of the social wage thesis in the
latest Social Research.

>This has come about because of fall in the rate of
>profits and growth in the first world, slow growth in
>productivity could be a cause. I expect the real wages
>to stagnate or even decline in the first world. I
>think labor has lost its ideology.

the ideology of American labor is now anti globalization as new kinds of
service like intermediate inputs are outsourced.

>  What we need is a
>serious analysis of the history of the welfare state
>to develop future ideology for labor to rally around.
>Right now the left is nothing but a bunch of confused
>people. Cheers, ajit sinha
>Do you Yahoo!?
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