RE: [OPE] Mastering Marxian Economics

Date: Sun Jul 27 2008 - 08:53:59 EDT

> Well, is the income tax etc paid by workers a deduction from surplus> value. Do the capitalist ultimately have to cough up?
Hi Phil:
The following employs exactly the type of reasoning which I have objected
to so strongly over the years on this list.  It takes a very abstract 
proposition and assumption (in this case, wages equal the value of labour-power)
and then attempts to make deductions about much more concrete issues
based on applying  *ATEMPORALLY and ASPATIALLY* that abstract concept.
Let's try to think this question through.
Suppose that taxes paid by workers increases.  
This cause the after-tax wages of workers to decrease. That represents, ceteris
paribus,  a decrease in the living standards of workers.
One can conceive of this conceptually in a couple of ways:
1. there is a reduction of wages below their value.  This becomes a possibility
once one recognizes that there can be temporal and spatial divergences between 
wages and the VLP.  This is a "counteracting factor" to the law of the tendency
for the general rate of profit to decline. Viewed strategically, it is a way that
the capitalist class and the state can shift more of the burdens of an economic 
crisis onto the working class.
2. over a longer period of time, the VLP can change.  Overall, one tends to see
an _increase_ in the VLP over time as a consequence of  class struggle and changing
needs.  But, it is possible in a given capitalist social formation for there to be
a _decrease_ in the VLP itself over time.  
The presumption seems to be that if workers' taxation increases, then capitalists
will eventually have to increase workers' wages in compensation. Balderdash!
There is no automatic mechanism which causes capitalists to increase wages such
that the living standards of workers won't decrease following a tax increase. If 
wages increase or not will be determined by the class struggle.  It's very bad 
politics and theory to presume that workers will automatically be successful in exerting
sufficient pressure on capitalists for wages to increase and/or to prevent a fall
over time in the VLP. It's also very bad politics and theory to suggest that increased taxation 
of workers can not hurt the working class (and it also shows how out-of-touch some
Marxists are with the working class).  Try telling that to workers! They KNOW better.
It's also very bad politics and theory to presume that capital and the state will take
action to ensure that wages once again equal the VLP.  More that that, it's simply
These are not entirely abstract issues since there is at least one Marxian economist
who has asserted that in the current economic crisis, additional state spending and
inflation will necessarily cause nominal wages to increase so that the real
wage doesn't fall. And this was very explicitly rationalized with reference to the 
presumption that wages = VLP.  This represents, in my view, the very worst form
of ahistorical and aspatial reductionism.  It also is an example, in my view, of how rigid 
applications of abstract theory to concrete questions can lead to illegitimate conclusions
about those concrete questions and issues.
In solidarity, Jerry
> > On Sat, 2008-07-26 at 16:55 -0400, quoted the SPGB:> > Taxes not a burden on the working class > > Before the First World War, the Socialist Party had to spend much time> > arguing that it followed from the labour theory of value that taxes> > were not a burden on the working class but on the surplus value> > already extracted from them by the capitalist class. > > > > When workers leave their workplace they have already been exploited> > for everything over and above the value of their labour power; nothing> > more can be extracted from them without reducing what they have to> > live on below the value of their labour power. Workers do sometimes> > physically pay taxes in the sense of handing over money from their> > wages to the tax-collecting authority. But to the extent that this> > becomes generalised it becomes part of the cost of production of> > labour power, so that wages are going to have to increase to> > compensate for it if the employers are to get the same quality labour> > power as before. Workers may pay taxes, but taxation does not fall on> > the working class as a class. In the end, it falls on surplus value.

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