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

From: glevy@PRATT.EDU
Date: Sat Nov 15 2003 - 06:45:51 EST

Ajit: the following was written before your latest round
of posts and before the thread on 'Hume' developed.  Some
of those posts have helped to clarify your position (although
I'm still not confident that I comprehend it fully).

> First of all, it is not true that money wages are
> always constant. Many wage contracts may be indexed to
> changes in cpi. Workers and capitalists do annually or
> biannually renegotiate their wage contracts. But in
> any case, if real wages change or may change over a
> long period of time, it must imply that there must be
> some changes in the short period of time. Long periods
> don't suddenly fall from heaven, they are made up of
> short periods only. So the long period point is that a
> perceptible or large enough change that would vitiate
> the predictions of the theory does not happen in a
> short periods of time. Taking real wages as given also
> mean that it is abstracting from market period
> fluctuations in it--nobody is denying that on daily
> basis economic variables could fluctuate due to
> infinite causes.

To begin, I'll make some methodological comments (some
of which you might agree with):

We -- obviously --  agree that long periods don't fall from
heaven.  A methodological issue, though, remains in terms
of how theory is developed which takes into account
differing time periods without doing an injustice to the subject

The problem with only focusing on the long-run is the
appearance that trends asserted for the long-run fall from the
sky or by assumption only.   One can not assume that
what is true over the long-term,or is taken to be true as an
axiom, is true over the short-term or medium-term.  For
want of a better expression, I'll call that the *temporal
fallacy of division*.    If the subject matter that one is
attempting to explain (capitalism) is itself dynamic then the
theory that attempts to explain that subject must itself
be dynamic and must not commit either the temporal fallacy
of division or the temporal fallacy of composition.

If  cycles of accumulation and de-accumulation aren't
accidental and merely historically contingent phenomena,
then the theory must explain what happens in those cycles
and how the long-term trends that emerge are causally
connected to the most important cyclical variables.  This
is necessary regardless of what one believes the trend has
been in real wages in the long-term: i.e. a proposition re the
long-term movement of real wages *even if it is assumed at
one stage of the analysis* must be explained in a richer and
deeper way at a later stage of the analysis if it is going to be
held as a theoretical *result*.

Now for the 'details' (i.e. a response to some of your other
comments above):

a) Of course, it's true that money wages are not always constant
during the cycle or during an inflationary period.

b) Wage Indexation

i)  "Many" wage contracts are not indexed to changes in the cpi,
but some are.

ii) The percentage of wage contracts where there is  a cost-of-living
adjustment has been declining for decades and even at its peak there
were only a minority of wage contracts which had a COLA.

iii) Where workers have contracts with COLAs, it is a consequence
of union struggle.  Yet, most workers, both in the USA and the world
capitalist economy, are not represented by trade unions.

iv.) Even where there are COLAs, there is a lag in adjustment of nominal
wages to changes in the consumer price level.  This tends to mean that
during inflationary periods where workers have COLAs, nominal wages
increase but there is often a (usually incremental) decrease in real

c)  It is true that many unions renegotiate workers' wages every year or
two (or three or four), but this doesn't mean that they will succeed
in negotiating an increase in wages such that real wages remain constant
or go up.  Indeed, there might be entire historical periods where real
wages have gone down (to explain why would most probably entail a
spatial and/or conjunctural analysis).

In solidarity, Jerry

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