John Ernst writes:
>> 1. If rising real wages cause capitalists to introduce
>> labor-saving and capital-using technologies, will
>> falling real wages give them cause to switch back
>> to the old techniques? Are there examples of this?
To which, Duncan responds:
>I think this is an extremely important question. It is at the heart of the
>debate over the neoclassical production function vs a Cambridge
>fixed-coefficients approach with technical change, since the neoclassicals
>presumably believe that falling real wages would take one back along the
>isoquant, whereas the Cambridge view would disagree.
Doesn't this make Marx a neoclassical?
I've always understood technological change in Marx's economics to be driven
by the competition of capitals and the desire to increase relative surplus
value. Specifically, if we take the length of the workday, the intensity of
labor, and the wage rate as fixed there is still a powerful incentive to
increase technological improvements as a means of reducing unit cost. The
costs of higher levels of fixed capital investment are recouped by a firm's
increased market share, which it obtains by having lower unit lower cost due
to its technological advantage.