Value and wages

glevy at glevy at
Sun Aug 6 09:28:59 MDT 1995

Chris B's posts have stimulated me to address another question: Marx's
understanding of value and wages.

Marx initially (as a first approximation) assumes that commodities (in
general) exchange at their values.

What determines the value of a commodity? Marx initially answers this
question by saying that the value of a commodity is determined by the
socially-necessary-labor-time that is embodied in the production of a
commodity. (see my previous post for qualifications on this expression).

Marx goes go to argue that labour power, a commodity, also exchanges at
its value, ceteris paribus. This was both a simplifying assumption and a
mirror of an actual historical process, according to Marx.

What is the use value of the commodity labour power? It is its ability to
create value (and its potential ability to create surplus value and profit).

How are we to understand the value of the commodity labour power? Marx
answered this question initially by saying that the value of the
commodity labour power is determined by the costs to produce and
reproduce that commodity. The meaning of that expression has given rise
to many (!) debates within the Marxist tradition.

Marx goes on to argue that the exchange value of the commodity labour
power is equal to the wage, ceteris paribus. But, as I have discussed in
previous posts on the meaning of the ceteris paribus (other things being
equal) assumption in Marx, this does *not* mean, in this case, that the
wage is equal to the value of the production and reproduction of labour
power. It is instead a first approximation which Marx then goes on to
modify at other levels of abstraction.

So, what -- additionally -- determines (modifies) wages?

The task of analyzing wages was one of the uncompleted tasks of Marx. He
wrote about some factors that also shape actual wages, but he was unable
to complete his investigation of this subject prior to his death.

Two factors that modified wages that Marx did initially discuss were:

1) the skills of the laborers. How we understand how skills modify wages
is also a subject of some (!) debate both within the Marxist tradition
and outside of it (e.g. the so-called "reduction problem" was a source of
attack by Bohm-Bawerk against Marx).

2) the size of the industrial reserve army. It is important, though, to
remember that when Marx addressed this topic in Book 1, Ch. 25, he did so
at the level of analysis of "Capitalist Production." No doubt, he
intended to modify his understanding of the IRA at a further, more
concrete, level of abstraction when he discussed "Capitalist Production
as a Whole."

So, what additional factors, modify the wage?

These include:

1) the accumulation process;

2) the internationalization of capital and the attending global
concentration and centralization of capital;

3) trade cycles;

4) capitalist crises;

5) the state;

6) foreign trade;

7) the class struggle, including the level of trade union organization
and trade union and class consciousness; and, I would add;

8) discrimination and what is sometimes referred to as segmented labor

In addition, when we address the very specific question of why an
individual worker receives a particular wage, we must also (in my
opinion) leave room for understanding the personal interrelationship
between an individual worker and an individual capitalist.

The study of wages was, as I said before, one of Marx's unfinished tasks.
More  generally, I would say that the two major tasks that Marx left
unfinished were the tasks of completing his analysis of capitalism
and of participating in the task of *overthrowing* that mode of production
and replacing it with another social system. While Marx initially thought
that he  could be able to accomplish the first task, only the working
class (the  "gravedigger" of capital) could accomplish the second, and
more historic, task.


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