[OPE-L:1643] Re: wages, cycles, and crises

Subject: [OPE-L:1643] Re: wages, cycles, and crises
From: Gerald Levy (glevy@pratt.edu)
Date: Sun Nov 07 1999 - 08:05:37 EST

Re Jurriaan's [OPE-L:1642]:

In order to avoid repetition on my part, I will only respond to points
that we haven't discussed recently.
> The best theoretical developments in this regard that I personally came
> across in my studies in 1985-90 were by the Uno/Itoh school in Japan,
> Mandel/Durand school in Europe,


> and A. Shaikh/F. Moseley school in the USA.

[Digression: I don't recall anyone else referring to a "school" that
includes both Anu and Fred. I guess there are similarities (e.g. in the
methodology used in their empirical studies), but there are also very
significant differences (e.g. Fred's interpretation of "givens" in
Marx's theory). Are you referring to the empirical work of both when you
use the expression "school" or are you using the term in some other (or
additional) sense?]

> As I mentioned in a previous post, we can build a "model" of capitalist
> crises to analyse the different forces at work, and indicate the steps for
> analysis and orient research. But in the real world, the same forces
> identified by the model may interact in different ways, in different
> periods of history, and in different countries.

Right, but the purpose of such a "model" is not predictive. Rather, it is
to isolate, explain, and show the inter-relationship of all the most
important variables.
> Marx's real research programme in regard to
> crises is indicated in a quote from TSV 2, p. 510: "The world trade crises
> must be regarded as the real concentration and forcible adjustment of all
> the contradictions of bourgeois economy. The individual factors which are
> condensed in these crises must therefore emerge and must be described in
> each sphere of the bourgeois economy and the further we advance in our
> examination of the latter, the more aspects of this conflict must be traced
> on the one hand, and on the other hand it must be shown that its more
> abstract forms are recurring and are contained in the more concrete forms".

It is interesting to compare the above quote to the following from the
_Grundrisse_ (that I reproduced in a recent post):

         "the world market the conclusion, in which production is posited
          as a totality together with all its moments, but within which,
          at the same time, all contradictions come into play. The world
          market then, again, forms the presupposition of the whole as
          well as its substratum. Crises are then the general intimation
          which points beyond the presupposition, and the urge which
          drives towards the adoption of a new historic form"
          (_Grundrisse_, Penguin ed., pp. 227-228)

Perhaps (being a student of Mandel) you will also found the following at
the beginning of Volume 3, Ch. 6 ("The Effect of Changes in Price"), Part
2 ("Revaluation and Devaluation of Capital: Release and Tying-Up of
Capital) to be of interest:

         "The phenomena under investigation in this chapter assume for
          their full development the credit system and competition on
          the world market, the later being the very basis and living
          atmosphere of the capitalist mode of production. These concrete
          forms of capitalist production, however, can be comprehensively
          depicted only after the general nature of capital is understood;
          it is therefore outside of the scope of this work to present
          them - they belong to a possible continuation. Yet the
          phenomena listed in the title to this section can still be
          discussed here in broad lines" (Penguin ed., p. 205)

> As regards your question about wages falling below the value of
> labour-power and hence raising the rate of profit, this would for Marx
> be a special case of a rise in the rate of surplus-value. I think Marx
> assumed in his analysis that in a "normally functioning", developed
> capitalist economy wages cannot usually be driven below the value of
> labour power, certainly not for any length of time, because of the
> consequences that has for social stability, productivity of labour,
> class conflict and effective demand.

One doesn't have to assert, though, that wages will be driven below the
value of labour-power for any protracted length of time. Rather, one
simply has to suggest that wages change cyclically over the course of the
business cycle. Thus, during the crisis there is an increase in the size
of the industrial reserve army and one might anticipate that wages would
(a more accurate word to employ here instead of "would" would be
"might") be driven below the value of labour power. This, then, helps to
restore the conditions for increased profitability (by, as you say,
increasing the rate of surplus value). Then, as the economy grows during
the expansionary period, the size of the IRA contracts, the bargaining
power of workers increases, and wages rise above the value of
labour-power. In other words, if we abstracted from the cycle, then we
could say that wages on average would equal the value of labour-power
(although the value of labour-power itself might change over a period of
time - typically longer than a single cycle). If we consider the cycle,
it could be suggested instead that during some moments in the cycle wages
rise above the value of LP and at other moments (during the crisis) wages
fall below the value of LP.

> But of course this phenomenon does happen in several obvious
> cases: always at least as a marginal phenomenon in any capitalist
> society; in the
> case of super-exploitation in the so-called underdeveloped countries;

Putting aside the use of the term "super-exploitation", one could
certainly argue that the VLP is different in different nations - a point
Marx was well aware of:

         "The actual value of his labour-power diverges from this physical
          minimum; it differs according to climate [?!, JL] and the level
          of social development; it depends not only on physical needs
          but also on historically developed social needs, which become
          second nature. In each country, however, this governing average
          wage is a given quantity at a given time" (_Capital_, Volume 3,
          Penguin ed., p. 999)

And, of course, when we consider the international disparity in wages and
the effect of this on different segments of workers and capitalists, then
we would both have to agree that this is NOT a "marginal phenomenon".

> in
> the case of fascist economy;

This, I think, is different. In this case, more than wages are decreased.
The VLP itself can be decreased in special cases if the "historically
developed social needs" can be diminished.
> and (currently) in the slow but steady
> formation of a "dual society" within the imperialist countries themselves
> (splitting the working class).

If there is discrimination (by gender, race, etc.), one might be able to
suggest that the labor which is being discriminated against systematically
receives wages below the value of LP whereas workers who are not
discriminated against might be said to receive -- on average -- wages
above the value of LP. Of course, this question deserves a fuller -- and
better -- answer, but I do not have time for that this morning. Indeed, I
have yet to even drink my morning cup of coffee!

In solidarity, Jerry

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