From: gerald_a_levy (gerald_a_levy@MSN.COM)
Date: Tue Nov 11 2003 - 08:50:44 EST
Rakesh wrote previously: > Since wage > contracts are in money terms and productivity is presumably rising > faster on the commodity side than the money side of the exchange > equation, a constant money wage will result in a higher real wage. > Again the assumption here is a commodity theory of money. What > happens with fiat money is not clear. I responded, in part: > >Even with commodity money, a constant money wage could result > >in a _lower_ real wage. This was typically the case during inflationary > >periods. <snip> Rakesh then replied: > the increase in money wage could just lag behind the increase in the > general price level; the real wage would increase as would the rate > of exploitation. > not quite sure what you are getting at. I was responding to the possibilities you suggested above. My point was that, _whether we are talking about a commodity money or fiat money system_, where you have a constant money wage and simultaneously an increase in labor productivity this does not necessarily "result in a higher real wage." Indeed, one can see during an inflationary period that a given money wage will "result in" a _lower_ real wage. > capitalism has been been marked by long bouts in which there has been > a secular increase in the real wage. Are you denying this? No, I don't deny that -- although explaing why that has tended to be the case is complicated (as Ajit suggests). Yet, capitalism has _also_ been marked by periods bouts in which there have been declining real wages. To fill in some of the 'blanks' from my previous post: _even if_ the real wage is, as Ajit asserts, "a long term phenomenon for Marx" (NB: this is an 'even if' comment so I am not necessarily in agreement with that perspective on Marx by Ajit), the fact is that _real wages do change over the course of the trade cycle_ and any *dynamic* analysis of changes in money, prices and wages during the course of the cycle must account for that. I was simply noting, in that context, that the "result of" a constant money wage will be different depending on whether the macroeconomy is in the expansionary phase of the cycle, which has historically been associated with inflation or the contractionary phase of the cycle which has historically (up until the 1950's) been associated with deflation. This phenomenon is at a more abstract level of analysis than the more concrete possibility of workers' collective action resulting in a changed real wage, so I think it should be addressed first. In solidarity, Jerry
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