From: GERALD LEVY (gerald_a_levy@MSN.COM)
Date: Sun Dec 16 2007 - 09:40:24 EST
> In what you say I think you efface both what Marx argues and the whole controversy among economic historians about the concept. < Hi Jurriaan: Yes, I think that's good (and standard) Net practice: to efface (erase, delete, wipe-out) all sections of a post to which you are NOT replying. You will recall that I did say that I was taking a few small bites .... [snip, i.e. efface] > It is true that variations in wage costs will feed into the average cost-of-living for all workers sooner or later, but since they are only one component of capital costs, the average cost-of-living can rise or fall independently of wage levels. The average cost of living is not simply "determined" by wage levels. < Agreed, but the costs to capital of wage-labor enter into the costs of all commodities. It is true that other variables can impact that cost structure, e.g. changes in the use and cost of circulating capital by fixed capital, new more efficient and less costly means of production, etc. If you consider, though, the long-run causes for changes in the VLP as a historical process, one can not ignore how wage changes can alter what is considered in a given society to be the customary standard of living. [snip] > Indeed, the average cost-of-living can vary independently of variations in the balance of power between social classes, since nobody has any control over how the average cost-of-living for all workers may evolve, although they can partially influence it. The state can influence it with taxation, benefits, incomes policy, (un)employment policy, trade policy and monetary policy; the employers can influence it by hiring policies, the exploitation rate of labour and the prices of their output; and workers can influence it through struggling for better wages & conditions, and labour mobility. < If the state can influence the average cost of living of workers, it can not also be said that "the average cost-of-living can vary independently of variations in the balance of power between social classes" unless you think that state policies are developed independently of the balance of power among social classes. Even if you believe that the state has some "relative autonomy", it nonetheless is the case that the balance of power among the major classes helps to shape state policies. [snip] > As Marx himself acknowledges, he did not provide a theory of the labour market, and Michael Lebowitz does not provide such a theory either (Ben Fine attempts to do so in Labour Market Theory: A Constructive Reassessment. Routledge, London, 1998). In my opinion, Lebowitz in fact evades all the important unsolved theoretical questions involved here. We can all agree that workers have needs, that the VLP can rise, etc. but this does not explain the dynamics of the labour market, why wage contracts take the form they do, or why working conditions evolve in the way they do. < A response might be that this too narrowly conceives of the purpose behind Mike L's writings, i.e. he did not want to limit himself to simply explaining labor market theory. Unfortunately, he can't reply on OPE-L because he's no longer here .... [snip] > I am very suspicious of references to "levels of abstraction and concretisation". < Yes, I have heard that suspicion expressed before. I have just the opposite concern: i.e. I am wary of having theoretical discussions those who do not recognize or wish to discuss the level of abstraction of the topic they are discussing or the implications thereof. The difference, though, is not based on mere suspicions: rather, it reflects different methodologies being employed. > Either you are able to theorise something, or you are not. Evading the issue, by saying that a particular problem is not relevant at a certain level of abstraction, is to invoke a tyranny of concepts which are asserted without proof of their applicability. Marx's argument is that "in a given country, at a given period, the average quantity of the means of subsistence necessary for the worker is practically known." That is something you can test. In reality, the monetary equivalent of that quantity is stipulated or implicit in legal regulations. < I don't agree. If what you say were true, then we could take the "minimum wage" to be the "known" monetary equivalent of the means of subsistence necessary for workers in the US. But, this is not at all the case. To begin with, the VLP concerns the customary standard-of-living of workers and is hence an average rather than a *minimum*. Also, what is considered to be the "minimum wage" is a reflection more of the influence of corporations and unions on state legislation than an "average quantity of the means of subsistence necessary for the worker". Maybe there's an indicator which is more "testable" which can be derived from EU legislation: I don't know. I (and unions and workers generally in the US), though, do not recognize the minimum wage in the US as the monetary equivalent of the "average quantity of the means of subsistence necessary for the worker". This topic sometimes comes-up more concretely in classes I teach on urban economics: as an exercise, we often start by multiplying the minimum wage X 40 (the workweek for most workers here) and then deducting rent, essential transportation costs, basic necessities including food and clothing, etc. The result, we all agree, is that one can not live on one's own in NYC if one has a minimum wage job. Of course, rents and some other costs are higher than average in NYC (and transportation costs are often less since NYC is one of the few cities in this country where one doesn't need a car) than in other cities and regions, but the point is that the wage stipulated by legal regulations as the minimum is really _below_ the standard in this society for what are considered to be the customary costs of living. In solidarity, Jerry
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