[OPE-L:1388] Re: international value

patrick l mason (PMASON@cms.cc.wayne.edu)
Fri, 8 Mar 1996 16:55:16 -0800

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I'd like to comment on a short discussion between Paul Cockshott and
Gerry Levy from about a week ago. But first, I'd reproduce the conversation
between Paul and Gerry.

>Paul C. wrote in [1259]
> Location takes such samples. The collection of producers in
> Paris and the collection of producers in Lisbon will contain
> different proportions of high productivity and low productivity
> enterprises. Thus the average socially necessary labour
> time contributed by an hour's labour in Paris and Lisbon
> will not be the same. Thus cities can differ in their
> in wages at the same rate of exploitation. If wages are higher
> in some cities than others, this is not because the employers
> are more soft hearted, but because they can afford to pay
> higher wages to more productive workers.
Gerry then asked:
<(1) Shouldn't the international market establish a single SNLT for a
<particular branch of production? While wages and productivity would vary
<between producers in Paris and Lisbon, how would that impact SNLT?

Paul responded:
>To the extent that the socially necessary labour time is defined to
<be the average labour time over all producers, then it exists
<abstractly anyway. The question is to what extent market competition
<will cause convergence on this socially neccessary time by individual
<producers, or, on the contrary, can wide divergences from the
<socially necessary time be stable under competition.

<The rate of value production per-capita in Lisbon is under half
<that in Paris, if recent EU figures are to be believed. This reflects
<their comparative mean levels of productivity. Since wages in
<Lisbon are lower than in Paris, it is however, cost effective for
<a capitalist producer to use more labour intensive techniques
<in Lisbon, and still be able to compete with a more efficient
<producer in Paris. Thus within individual branches of production,
<there is no very strong pressure to ensure that the same amount
<of labour is used in high and low wage areas. This is one of the
<fundamental limitations of capitalism, the law of value can only
<assert itself via the intermediary of wages, which are a highly
<variable measure of labour.

Gerry further queries:
<(2) As for the last sentence, aren't you assuming that wage determination
<depends on firm profitability? This leaves little or no room for the
<ability of workers to raise the customary wage within a particular region
<through collective action.

Paul Responds:
<I think it is certainly possible for workers within a particular
<trade to raise their wages through collective action. It is also
<possible, between cities within different jurisdictions with different
<trades union laws for differences in collective strength to be translated
<to differences in the local rate of exploitation, But these as measured
<by the share of wages in turnover etc, are small relative to the
<differences between regional wage rates within the EU. Thus although
<differences in union organisation etc may have an effect, I reckon
<that this is small relative to the effect of differences in productivity.

Me (Pat Mason)
I agree with Paul's conclusions, but disagree slightly with his
reasoning. First, I would argue that SNLT is not determined by the
average over all producers. Rather, it is defined by the average
among firms using the best generally available means of production,
i.e., regulating capitals. (It is precisely this condition which
allows for the possibility of differential rent).

Second, within each industry, it is the
profitability of regulating capitals which determine capital entry
and exit. Third, the regulating capitals of a particular industry
may be located predominately in one country (Paris) or one region
of a country (say the Midwest in the US) while subdominant capitals,
i.e., firms that are not using the best generally available techniques,
are located predominately in a separate country (Lisbon) or a separate
region of the same country (say the South in the US).
Within a particular industry, international (inter-regional)
differences in the combination of regulating and subdominant capitals
will raise or lower the potential basis for wage differentials. Or, to
the say the same thing, there will be differential sources of downward
pressure on wage rates. However, international (inter-regional)
differences in the bargaining power of workers will determine the
actual basis of wage differentials.

Hence, wages will likely vary for otherwise identical workers because
of differences in the characteristics of jobs. Of course, this does
not rule out wage differences because of differences in the labor
quality and because some firms are growing above or below their planned
rate of growth.

Further, just as wages may differ because of the bargaining power of
workers and the competitive structure of firms, it is also the case
that working conditions and the extent of workplace democracy may very
for precisely the same reasons.

peace, patrick l mason