From: Gerald A. Levy (Gerald_A_Levy@MSN.COM)
Date: Thu Sep 02 2004 - 10:25:37 EDT
----- Original Message ----- From: "Dave Zachariah" <davez@kth.se> Sent: Thursday, September 02, 2004 9:47 AM Subject: OPE-L:_Wage_share Dear members of OPE-L, I'm a frequent (non-economist) visitor of the OPE-L archive who has a question and comment regarding the wage share in capitalist economies. *Why is the wage share relatively stable for many countries and across time? *And why is this share in the order of 50% (instead of, say, 15% or 85%)? Farjoun and Machover showed that if 1.Both the profit to capital ratio and the wages to capital ratio are gamma distributions. 2.The profit to wage ratio (rate of surplus value) is degenerate. Then it follows that the national income is split 50/50 between wages and profits. This division is also reproduced in Ian Wright's remarkable computer model in "The Social Architecture of Capitalism". Paul Cockshott, argued in a OPE-L post Dec 10 2003, that "any deviations of the wage ratio from 50/50 imply a certain non-degeneracy of the PDF for the rate of surplus value. It would appear that the more the wage share deviates from 50% the greater should be the coefficient of variation of the rate of surplus value." Based on i/o data for Sweden for years 1995-2001 (for productive sectors) I found: (1) (2) 0.4519 0.3493 0.4555 0.3630 0.4653 0.3369 0.4709 0.3516 0.4714 0.3182 0.4719 0.3312 0.4897 0.3056 where (1) aggregate share of surplus value S/(S+V) and (2) coefficient of variation of the distribution of this variable. It is not enough data to draw any real conclusions, but the coefficient of variation does seem to drop as the share of surplus value approaches 50%. Perhaps Ian Wright's computer model could produce some answers. Thanks, /Dave Z
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