From: Francisco Paulo Cipolla (cipolla@UFPR.BR)
Date: Fri Oct 06 2006 - 17:00:04 EDT
Rakesh wrote: To the best of my knowledge, no body has > shown how a long term trend in the fall of 'relative' > wages in relation to profits can be maintained > simultaneously with the notion of a long term trend in > the rate of profits to fall. Wasn´t this done by the device of the falling maximum rate of profit used by several authors such as Shaikh, Okishio (Palgrave)...? Paulo Jerry Levy wrote: > > Marx's simple story works this way: Historically real > > wages are determined around what prevailed as the real > > income of the class that largely became proletariat in > > the historical transformation of any given society. > > Thus historically wages in different societies could > > start from different levels. For example, it started > > at higher level in the United States than say England. > > However, the population principle of capitalism, which > > is given by labor saving technical changes, creates > > downward pressure on wages over time and thus wages > > have a tendency to fall towards what in different > > societies will be considered subsistence level. > > Hi Ajit: > > Yes, but let's not substitute the 'simple story' for the full > one. The 'story' that you present is a Volume I story > -- i.e. only part of one-eighteenth (or less) of the story. > > Some other parts of the story become clearer when you > also consider what was written in the "Resultate des > unmittelbaren Produktionsprozesses" and the _Grundrisse_. > > The Volume I story, furthermore, has to be modified to > take into account the character of capitalist cycles in which > the size of the relative surplus population grows and declines > in relation to those cycles. > > Furthermore, the Volume I simple story has to be put in the > context of wage-laborers being able to within limits raise their > customary standard of living their own self-activity. > > Furthermore, the Volume I story has to be put in the context > of how the state can intervene to change at least part of that > story. > > While you are right to suggest that Marx understood that > there were different customary standards of living in different > social formations which were, in large part, a consequence > of the different histories of class struggle in different nations, > he also grasped I believe that wages in individual nations > could change through the process of foreign trade and the > creation and generalization of the world capitalist market. > > In other words, the simple story is best flushed out within > the context of thinking about capitalism in which capital > as a whole (rather than only capitalist production in isolation > from capitalist circulation), class action (including trade > union activity, alluded to in the "Resultate"), state policy, > foreign trade, and the world market and crisis are all > grasped and shown to be inter-related. [side note: > the role of landowners has to also be grasped in relation > to workers' real wages since rent imposed on the > working-class can alter the standard of living of > workers. This is an argument for not only studying > landowners as a class but also studying the inter-relation > between landowners and wage-workers in the study of > wage-labor.] > > In any event -- and here I agree with Jurriaan -- if we > are to grasp the underlying theoretical issues in a more > complex and mediated form, then we must move beyond > thinking of 'Marx's story' and instead think of a story > which is most consistent with the dynamic and historical > realities of capitalism and to do that we need to study > the empirical data and in so doing 'test' and then modify > _our own_ simple stories about the subject matter. In a way, > I think you are supporting such an effort since you are at least > posing the issue of whether a story is contradicted by > the historical and empirical evidence. That's a potential area > of agreement. > > The above does not necessarily contradict what you were > saying in your previous post, but rather points a way > forward out of the dilemma which you pose. You suggest > other ways forward (in the section below) but don't explain > the relative merits of each. What do you think they are? > > In solidarity, Jerry > > > Now > > this prediction has come out to be wrong. The whole > > idea that Marx argued that 'relative' wages would > > fall, i.e., relative to profits, and not absolute > > wages, flies in the face of all evidence and > > arguments. To the best of my knowledge, no body has > > shown how a long term trend in the fall of 'relative' > > wages in relation to profits can be maintained > > simultaneously with the notion of a long term trend in > > the rate of profits to fall. Any way, one needs to > > come up with some theoretical arguments of how this > > could happen? One could argue that actually the rate > > of growth of the economy has been faster than the rate > > of labor displacement and a positive rate of growth of > > population could only be maintained through higher > > real wages (this is the case of Adam Smith). Or one > > could argue that rise in labor productivity somehow > > increases the bargaining strength of labor. Now if > > Marx's argument is taken to be correct that the > > dynamism of capitalism is to increase the rate of > > unemployment over time, then the question becomes how > > would labor's bargaining strength increase in this > > scenario? This is where the notion of norms and > > conventions, which allows us to bring in a host of > > complex political and sociological factors into play, > > could be of help. Sraffa's notion of rate of profits > > as conventionally given allows real wages to rise with > > rise in productivity irrespective of the rate of > > unemployment. Of course, it is not a complete theory > > yet, but it allows us to build a much richer theory. > > The point is that the rate of unemployment may be an > > important factor in determining the real wages or its > > trend but perhaps it is not the only factor. As I had > > suggested earlier on Mike L's lecture: its theoretical > > foundation is weak but its basic idea is good.
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