One of the 100 mile an hour dancers played last Saturday at the stoke nighter. Another great night. My only complaint is that a number of DJ's starting with Kev Roberts had so much bass on everything that it drowned out the actual music to a dull thud. That apart great night, some great dancing, and my new dancing shoes were brilliant.
Saturday, 26 July 2014
Friday, 25 July 2014
With the simple circulation of commodities, C – M – C, the money form of these commodities is only transient. C assumes the form of M only as part of this exchange, prior to being consumed, just as M is only a means towards the purchase of C, to complete the metamorphosis.
The assumption of the money form is a necessary part of that process. In the same way, under capitalist production, a portion of the capital must always be in the money form, prior to the purchase of productive-capital. Similarly, a portion of surplus-value must always be in the money form, whether it is waiting to be used to buy additional productive-capital, or individual items of consumption for the capitalist.
“Apart from this, the circuit of money — that is, the return of money to its point of departure — being a phase of the turnover of capital, is a phenomenon entirely different from, and even the opposite of, the currency of money, which expresses its steady departure from the starting-point by changing hands again and again. Nevertheless, an accelerated turnover implies eo ipso an accelerated currency.” (p 346)
In other words, we have seen that the circuit of money capital proceeds, M – C … P … C' – M'. But, the currency of money involves money spent by A passing to B, who passes it to C and so on. However, if capital turns over more quickly, by its nature, this means that money is also circulated faster. Instead of a capitalist keeping £5,000 of money-capital on hand, they may require only £1,000, releasing £4,000 to circulate. The £1,000 returns five times faster, and is thereby put back into circulation that much sooner, and more often.
This applies whether it is a more rapid turnover of either the constant or the variable capital, the same sum of money being used to purchase an increased value of commodities. Similarly, the faster the turnover, the more often the surplus value is realised, and, therefore, this amount of money being thrown back into circulation to buy additional productive capital or items of individual consumption.
The opposite does not necessarily apply. An increase in the velocity of money does not imply an increase in the rate of turnover of capital. But, it might. If it is brought about because of an improvement in the payment systems, then this might mean that the circulation time falls, because payment for goods sold is faster, making that money available to purchase productive-capital sooner.
Capitalist production, based on wage labour, assumes a sufficient money hoard to enable the payment of wages.
“This is the historical premise, although it is not to be taken to mean that first a sufficient hoard is formed and then capitalist production begins. It develops simultaneously with the development of the conditions necessary for it, and one of these conditions is a sufficient supply of precious metals. Hence the increased supply of precious metals since the sixteenth century is an essential element in the history of the development of capitalist production. But so far as the necessary further supply of money material on the basis of capitalist production is concerned, we see surplus-value incorporated in products thrown into circulation without the money required for their conversion into money, on the one hand, and on the other surplus-value in the form of gold without previous transformation of products into money.
The additional commodities to be converted into money find the necessary amount of money at hand, because on the other side additional gold (and silver) intended for conversion into commodities is thrown into circulation, not by means of exchange, but by production itself.” (p 348)
Thursday, 24 July 2014
Although behind the crisis of overproduction resides the four sources of crisis, set out by Marx, and so it can be explained in the abstract by this theory, no two crises are the same. Each will have their own particular spark, each will arise under different conditions of production, competition, credit and of the world market and so on. For any theory of crisis to be meaningful, therefore, it must be concrete. As Marx put it,
“... the further development of the potential crisis has to be traced—the real crisis can only be educed from the real movement of capitalist production, competition and credit—in so far as crisis arises out of the special aspects of capital which are peculiar to it as capital, and not merely comprised in its existence as commodity and money.”
For that reason, Marx and Engels produced theories which both bridged the gap between the abstract and the concrete, for example, the description in Chapter 15 of how a crisis of overproduction can unfold as exuberance leads to over-accumulation of capital, wages and input prices pushed up etc. as well as the explanation in Capital III, Chapter 6 and 11 of how such rises in material prices and wages can cause such an effect.
But, they also detail and explain the actual crises of 1847, 1857 and 1865 etc. They also, in Capital III, in examining the role of credit, explain how these crises of overproduction can be sparked in the realm of circulation, including as a result of fraud.
This also has to be distinguished from those purely financial crises, which originate solely in the realm of fictitious capital, a a consequence of speculative activity. Such was the case with the Tulipmania, the South Sea Bubble, John Law's Mississippi Scheme, and the Railway Mania. But, such also was the 1929 Stock Market Crash, the 1987 Stock Market Crash, 2000 Stock Market Crash, and the Financial Crisis of 2008. Such too have been the various property market bubbles and busts, such as that of 1990 in Britain, and those of 2009 in the US, Ireland, and Spain.
Such bubbles and busts can occur whether the real economy is healthy or not. The Railway Mania occurred during a period of boom, as did the 2008 financial crisis, whereas the 1987 stock market crash occurred in a period of stagnation. The general characteristic is that bubbles tend to be blown up during periods when interest rates are low, and bust when they begin to rise. That is why there seems to be a thirteen year cycle of such crashes, around the time of the long wave conjunctures.
Marx and Engels' theory of crisis provides the framework for understanding the cause of crises of overproduction. Like all other aspects of their method, and theories it is not intended to simply provide us with a ready made explanation of any particular crisis. Their intention was not to allow us to simply sit back and claim the basis of crises is the Law of the Tendency for the Rate of Profit to Fall, or any other such mechanistic approach. It was to provide us with the tools to analyse the world in which we live, and thereby understand each such phenomenon in its specificity as it arises.
Wednesday, 23 July 2014
Where money and trade lead, politics follows. The main EU leaders this week seem to have shown that they are not as gullible as US politicians hoped. The drive to impose more and more sanctions on Russia, will only hurt Europe. That is what the US hopes for, just as its policy of fermenting chaos in the Middle East and North Africa has been geared to meet its interests as against those of the EU, and its other main strategic competitors, Russia and China.
Nobody knows what happened with the Malaysian airliner that crashed in Ukraine. It is the same kind of Boeing 777 that Malaysian Airlines lost several months ago in the Indian Ocean, and no one is suggesting that Ukrainian separatists, or Vladimir Putin had anything to do with its loss. The same kind of speculation and conspiracy theory about MH17, could easily be extended to suggest that the two crashes were in fact, linked in some way. For example, could it be a fault in the aircraft, that is being covered up? Very unlikely, I'd suggest, but, without any actual facts, to base an analysis on – let alone impartial facts, as all the “evidence” so far has come from either the Ukrainian Government, or hypotheses from western politicians - it is just as valid a possibility.
Yet, despite the lack of any facts or evidence, western politicians have continued to speak and act, as though Vladimir Putin himself shot down the plane! I have absolutely no time for Putin, or his gangster regime, which is the heir to the gangster regime established by Yeltsin, with the help of imperialism, but opposition to Putin is no reason to play the part of “useful idiot” to US imperialism either. On CNBC on Tuesday, one financial analyst, Roger Nightingale, made what I thought was a sensible point against the line being given by former Labour Minister Mark Malloch Brown. Nightingale said, why were sanctions being proposed against Russia rather than against Ukraine?
In the past, he pointed out, the west has supported calls for self-determination by minority groups, and yet here the call for such independence by people in Eastern Ukraine had been met, by large scale violence by the Ukrainian state. Hundreds of East Ukrainians have died in the violence unleashed on them by the regime in Kiev, and many more have been injured, as well as being left homeless. Even if the separatists did shoot down the jet liner – and given the fact that responsibility for the shootings in the Maidan were probably organised by some of the leaders of that protest, in a false flag operation, that has been used several times, in the past, by the CIA – no one is suggesting that it was done by them deliberately. If they did shoot it down, they did so, because they mistook it for one of the regime's own war planes that has been bombing their homes, for the past months, without one word of condemnation from the west about such flagrant war crimes, against a civilian population.
In fact, the Youtube video that was supposed to show the BUK missiles being driven back towards Russia, has been shown to have been filmed in a part of eastern Ukraine that is under the control of the regime, not the separatists!
The loss of life of the people on the Malaysian airline is terrible, but the use of that loss of life for political purposes by western, and in particular US politicians, is truly sickening. It is completely hypocritical when compared with their own justification of “collateral damage” when it happens as a result of their supposedly smart weapons. The number of civilians killed on this airliner is relatively small compared to the number of civilians killed by US drone strikes, let alone from their air strikes. It is thoroughly hypocritical compared to their lack of comment about the deaths of Ukrainian civilians at the hands of the Kiev regime, or the more than 500 civilians killed in the last week in Gaza, by the US proxy in Israel.
The US attitude to the EU was set out plainly some time ago, when their ambassador to Ukraine said “Fuck the EU”. What the US fears is that the large amount of trade between the EU, particularly its main economies, and even more particularly Germany, will necessarily lead to a growing political closeness and allegiance with Russia, and a drawing away from the US. That is undoubtedly why the US has been engaged in large scale spying and phone tapping of European political leaders, like Angela Merkel. Wherever, money and trade flows, political allegiances are sure to follow. The establishment of every nation state, and of the EU itself, is evidence of that fact.
Russia is the third biggest trading partner of the EU, and the EU is Russia's largest trading partner. Within that the role of Germany is again pre-eminent, whereas the UK has a much smaller trading relation with Russia. Similarly, US trade with Russia is small. So its no wonder that the US and UK are some of the more vociferous in calling for increased sanctions. Throughout, the 19th century, as repeated attempts were made to unify Europe, Britain intervened, realising that a large European state, on similar lines to the US, would quickly reduce the importance of the UK as a global power. Britain's role in WWI, and WWII, should be seen as merely a continuation of that role, and Britain's eurosceptic position ever since should be seen as simply a continuation of that mindset amongst some sections of the ruling elite, especially those that continue to look towards the US rather than the EU.
The US was happy with the development of the EU so long as it acted as a buffer against the USSR, and provided the US with a huge aircraft carrier on which to base its nuclear weapons, during the Cold War, but now, the economic logic is for the EU to expand eastwards, and southwards. Russia is forming a closer and closer relation with the world's largest economy in China, and aiming towards the development of a Eurasian economic zone. It would be crazy for the EU to cut itself off from that development, in favour of a continuing relation with a relatively declining US economy.
The obvious development, as Trotsky and the Comintern argued, back in the 1920's, is for the development of a United States of Europe that would include Russia. Lenin believed that the economic rationale for that was undeniable too, but thought it was politically unachievable when the idea was first raised. Even if such a development is not possible, it would make the same kind of economic sense for the EU to foster a close relation with any developing Eurasian economic zone including Russia, China and the Central Asian republics. But, in just the same way that a unified Europe threatened Britain in the 19th and early 20th century, so such a development would threaten the global hegemony of the US today. That is what it really fears. That is why it is trying to drive a wedge between the EU and Russia.
Similarly, over the last 20 years, the EU has been developing increasing economic ties with its southern periphery in the Middle East and North Africa. It had established a number of trade agreements with these countries, drawing them closer towards becoming at some point associate states similar to the way states in central and eastern Europe had been drawn in. In fact, it was the economic development that resulted from these arrangements that created the material basis for the “Arab Spring”, particularly in Egypt and Tunisia. But, with China increasingly becoming the dominant economic power in the rapidly developing sub-Saharan economies, such developments increasingly threatened another area of the globe over which US hegemony would not run.
The role of the US's agents in the Gulf States, in providing jihadists with the resources to create chaos in those states, has brought any such development to a halt. Chaos may not directly benefit the US, but to the extent that it removes any state from a position where it, or some related state may exert control, it indirectly benefits the US. For the last century, the US has been happy to settle for creating chaos in regimes it could not control. It has usually been able to find “useful idiots” to enable it to achieve that function.
Often the UK, as a very junior partner to US imperialism has fulfilled that role. But, there are always aggrieved parties that will be prepared to sell their services to the US, in order to gain what they hope might be future favours. In the 19th century, Marx and Engels describe how small central and eastern European states sold their services to Russian Tsarism in that way, in the hope of obtaining its favour. Ultimately, it was those kinds of relations that led to the Balkan Wars, and then to WWI.
Today, some of those same countries and nationalities, having suffered under the heel of Tsarism and then Stalinism, are happy to sell their services to the US, and its agents such as the UK, in the hope of obtaining favours, if only the hope of setting up a large military barrier on the border with Russia. In many ways, these are very similar conditions to those that led to the Balkan Wars, and World War I.
The US, for its own global strategic reasons is trying to drive a wedge between the EU and Russia. It has already created the conditions in the Middle East and North Africa, where chaos and instability reigns, and where the EU now has to devote increasing resources to tightening its borders, and warding off the threat off jihadism. The US encouraged similar movements in the 1990's in central Asia, first with its arming and provisioning of Bin Laden and the Mujaheddin in Afghanistan, and then with its relations with assorted central Asian dictators. It has created chaos in Libya and Syria, and Iraq.
Marxists have no reason to support any of the bourgeois forces involved in these global strategic chess games. But, we do have every reason to oppose such manoeuvres aimed at creating divisions between workers, especially when such manoeuvres have the potential of leading the world increasingly towards war, and the destruction of mankind.
Tuesday, 22 July 2014
On all the grounds set out in Part 5, therefore, it can be seen that what is in some ways only a superficial political division between Democrats and Republicans, is at the same time based on real underlying class interests. And it is these underlying class interests that are decisive in looking at what comes after Obama, and what position Marxists in the US should adopt.
The first question is what attitude should Marxists adopt to the Democrats? In reality, it is the same question as what attitude should Marxists adopt towards Labour in the UK, the SPD in Germany and so on. The answer is to “stick with the workers”.
“As the experiences of the Russian Revolution teach us – remember this in England and America! – the most important thing of all is to stay in the midst of the masses of workers. You will often go wrong with them, but never leave the mass organisations of the working class, however reactionary they may be at any given moment” (emphasis added).
(Zinoviev’s closing speech at the 15th Session of the Second Congress of the Comintern)
Close to the end of his life, Engels, writing to US socialists, Made this same point, and he related that he and Marx had joined the German Democrats, an openly bourgeois party, because it was the means of gaining the ear of the workers.
“When we returned to Germany, in spring 1848, we joined the Democratic Party as the only possible means of getting the ear of the working class; we were the most advanced wing of that party, but still a wing of it. When Marx founded the International, he drew up the General Rules in such a way that all working-class socialists of that period could join it -- Proudhonists, Pierre Lerouxists and even the more advanced section of the English Trades Unions; and it was only through this latitude that the International became what it was, the means of gradually dissolving and absorbing all these minor sects, with the exception of the Anarchists, whose sudden appearance in various countries was but the effect of the violent bourgeois reaction after the Commune and could therefore safely be left by us to die out of itself, as it did. Had we from 1864, to 1873 insisted on working together only with those who openly adopted our platform where should we be to-day? I think that all our practice has shown that it is possible to work along with the general movement of the working class at every one of its stages without giving up or hiding our own distinct position and even organisation, and I am afraid that if the German Americans choose a different line they will commit a great mistake.”
London, January 27, 1887
Engels made the same point to Eleanor Marx, to ignore the various British sects such as the SDF and the ILP, and to go directly to where the workers were in the trades unions and in the Liberal Clubs.
But, of course, that did not mean fetishising those organisations. The Marxists activity within them must always be geared to developing the working-class, and thereby to developing the praxis of these organisations, so as better to reflect the needs and interests of the workers. At certain points, this very process, must involve the fracturing of these organisations. Where this happens naturally, with the British workers decisively moving beyond the limits of the Liberal Party, it would be lunacy to oppose this movement, as, for example, the Fabians did, and thereby to fetishise existing structures.
But, it is also lunacy to believe, as some do today, that groups of a few hundred, or a few thousand – usually petit-bourgeois – members of revolutionary sects, can substitute for the real movement of the working-class, and simply proclaim the establishment of a new Workers Party, even if that party is intended to be only a replica of some old workers party.
More difficult is the condition that Lenin and Trotsky found themselves in in 1914-20, when the old mass workers parties were dividing, and the possibility of developing new revolutionary mass workers' parties existed at a time when global socialist revolution appeared to be unfolding. As it turned out, that division of the working class movement, was catastrophic, and created the weakness we have today, but it would have been near impossible to have seen that at the time.
It would be much better to have a workers' party in the US that was more like the social-democratic parties in Europe, but we have to deal with the reality we have. In reality, the US Democrats are not greatly different to European social-democratic parties, which if anything are moving closer to their US counterpart, and that is because they are all built upon that same bourgeois, social-democratic ideology of a compromise between the interests of big industrial capital and the working-class.
The former is based on the more progressive forms of capital – in fact, it is based upon what Marx calls, in Capital III, one of the transitional forms of property between capitalism and socialism.
“The capitalist stock companies, as much as the co-operative factories, should be considered as transitional forms from the capitalist mode of production to the associated one, with the only distinction that the antagonism is resolved negatively in the one and positively in the other.”
It is based on a socialised form of capital, represented by the joint stock company, and its modern form, the corporation and public limited company. As Engels describes in his Critique of the Erfurt Programme, these forms of capital have not only gone beyond private capitalist production, but they have also gone beyond that “planlessness”, that characterised the early forms of capital.
“What is capitalist private production? Production by separate entrepreneurs, which is increasingly becoming an exception. Capitalist production by joint-stock companies is no longer private production but production on behalf of many associated people. And when we pass on from joint-stock companies to trusts, which dominate and monopolise whole branches of industry, this puts an end not only to private production but also to planlessness.””
As Marx describes in Capital III, this form of capital necessarily comes into conflict with the less mature forms, as it “expropriates the expropriators”, i.e. the small and medium capitalists.
"The capital, which in itself rests on a social mode of production and presupposes a social concentration of means of production and labour-power, is here directly endowed with the form of social capital (capital of directly associated individuals) as distinct from private capital, and its undertakings assume the form of social undertakings as distinct from private undertakings. It is the abolition of capital as private property within the framework of capitalist production itself.
There is antagonism against the old form in the stock companies, in which social means of production appear as private property;...
Success and failure both lead here to a centralisation of capital, and thus to expropriation on the most enormous scale. Expropriation extends here from the direct producers to the smaller and the medium-sized capitalists themselves. It is the point of departure for the capitalist mode of production; its accomplishment is the goal of this production. In the last instance, it aims at the expropriation of the means of production from all individuals. With the development of social production the means of production cease to be means of private production and products of private production, and can thereafter be only means of production in the hands of associated producers, i.e., the latter's social property, much as they are their social products."
This is at root, the material basis of the class antagonism reflected in the division between conservative and social-democratic parties.
Monday, 21 July 2014
Fall In the Value Of The Variable Capital (9)As Marx sets out in Capital I, there are two ways in which the introduction of new technology and techniques result in a rise in relative surplus value. Firstly, for an individual capital, if it introduces such new methods, ahead of others, it sells into the market at prices below the market price but above its own individual price of production. It thereby obtains an additional surplus value. It is as though the value of the product of an hour of its workers' labour represents more than the product of an hour of the labour of its competitors' workers, i.e. it is as if this labour stood in the same relation as does complex to simple labour. As Marx points out, this applies also when comparing the capital of a developed and developing economy. This is a point important for further discussion.
The second way that relative surplus value is produced is that the value of wage goods is reduced, by the rise in productivity, so the value of labour-power falls, leaving a greater portion of the working day available as surplus labour. It is this process which reduces the value of commodities in general and which also reduces the quantity of surplus value in each individual commodity, whilst increasing the mass of surplus value.
“Everything that promotes the production of relative surplus-value by mere improvement in methods, as in agriculture, without altering the magnitude of the invested capital, has the same effect. The constant capital, it is true, does not, in such cases, increase in relation to the variable, inasmuch as we regard the variable capital as an index of the amount of labour-power employed, but the mass of the product does increase in proportion to the labour-power employed. The same occurs, if the productiveness of labour (no matter, whether its product goes into the labourer's consumption or into the elements of constant capital) is freed from hindrances in communications, from arbitrary or other restrictions which have become obstacles in the course of time; from fetters of all kinds, without directly affecting the ratio of variable to constant capital.” (Capital III, Chapter 14, p 233)
In other words, these means raise the rate of surplus value without requiring that more fixed capital is employed to raise productivity or resulting in more materials being processed by a given quantity of labour. The clearer example that Marx gives is the repeal of the Corn Laws. By removing such restrictions, the price of food was reduced, which, in turn, reduced the value of labour power, which meant the rate of exploitation could rise. The same amount of labour continued to process the same amount of material as before, but the surplus value was higher resulting in a higher rate of profit.
Anything such as the creation of the EU, or removal of other barriers, which improve free trade, and thereby reduce the cost of wage goods, equally act to raise the rate of surplus value and of profit. As Marx pointed out, with the repeal of the Corn Laws, a lot of other tariffs were abolished , which reduced the prices of other imported materials that constituted constant capital.
“The rise in the rate of surplus-value is a factor which determines the mass of surplus-value, and hence also the rate of profit, for it takes place especially under conditions, in which, as we have previously seen, the constant capital is either not increased at all, or not proportionately increased, in relation to the variable capital. This factor does not abolish the general law. But it causes that law to act rather as a tendency, i.e., as a law whose absolute action is checked, retarded, and weakened, by counteracting circumstances. But since the same influences which raise the rate of surplus-value (even a lengthening of the working-time is a result of large-scale industry) tend to decrease the labour-power employed by a certain capital, it follows that they also tend to reduce the rate of profit and to retard this reduction.” (Capital III, Chapter 14, p 234-5)
The mass of surplus value always tends to rise because the number of workers employed always tends to rise absolutely, even if it declines relative to the total capital, and also because even with a constant number of workers, the rate of surplus value tends to rise. But, whether this rising mass of surplus value results in a rising rate of profit depends upon its relation to the total capital employed.
Sunday, 20 July 2014
Marx goes on to deal with this argument, that had been raised by the Owenite, Weston, within the ranks of the First International. The more extended argument, detailing that debate is given in Value, Price and Profit .
Marx continues, considering the argument about higher wages. Those proposing this argument say,
“This causes a greater demand for commodities on the part of the labourers. This, in turn, leads to a rise in the price of commodities.—Or it is said: If wages rise, the capitalists raise the prices of their commodities.—In either case, the general rise in wages causes a rise in commodity prices. Hence a greater amount of money is needed for the circulation of the commodities, no matter how the rise in prices is explained.” (p 344)
Marx easily dismisses this argument. Higher wages will mean workers demand more necessities, and might demand new commodities, and this may cause their price to rise, in the short-term. But, the fall in surplus-value means capitalists have less money to spend on luxuries. The fall in their demand causes their prices to fall. Profits for producing necessities rises, and for producing luxuries fall. That means more capital will move to producing necessities and less to producing luxuries. This continues until the rate of profit is equalised in both sectors again. The consequence is that the supply of necessaries rises, and so their prices fall back to the original level, and the supply of luxuries falls, pushing the prices of luxuries back up to their original level.
The overall price level has not changed, but more social labour-time is now devoted to producing necessities, and less to luxuries.
Alternatively, workers themselves may spend some of their higher wages on luxuries. In that case, they exert less pressure on the demand for necessities, and simply replace the demand for luxuries that previously came from capitalists.
“More luxuries than before are consumed by labourers, and relatively fewer by capitalists. Voilà tout. After some oscillations the value of the mass of circulating commodities is the same as before. As for the momentary fluctuations, they will not have any other effect than to throw unemployed money-capital into domestic circulation, capital which hitherto sought employment in speculative deals on the stock-exchange or in foreign countries.” (p 344)
Part of the argument, of those who believe that wages determine prices, is that price is comprised of the costs of production – primarily here wages – plus an amount of profit. So, if wages rise, prices rise as a result. But, again, this is not true as Marx shows.
Firstly, if capitalists could simply increase prices at will, in that way, they would do so whether wages had risen or not. But, capitalists cannot simply raise prices. Conversely, wages would never rise when commodity prices fell, and
“The capitalist class would never resist the trades’ unions, if it could always and under all circumstances do what it is now doing by way of exception, under definite, special, so to say local, circumstances, to wit, avail itself of every rise in wages in order to raise prices of commodities much higher yet and thus pocket greater profits.” (p 344)
The argument that higher wages cause inflation, “is a bugbear set up by the capitalists and their economic sycophants.” (p 344)
The basis of the argument rests on three foundations. Firstly, the money put in circulation is determined by the total value of commodities to be circulated. If more commodities are to be circulated, or if the same number of commodities are circulated, but their value has risen, then more money has to be thrown into circulation. The latter would be the case if productivity had fallen, or if, for example, there had been a bad harvest, pushing up food and raw material prices. This increase in money would then mean that all prices, including wages, might rise.
“The effect is then confused with the cause. Wages rise (although the rise is rare, and proportional only in exceptional cases) with the rising prices of the necessities of life. Wage advances are the consequence, not the cause, of advances in the prices of commodities.” (p 345)
Secondly, a rise in some wages might cause a rise in some prices. Whether or not this is possible depends on a number of factors, such as the price elasticity of demand of the products concerned. Products that are inelastic can enjoy a rise in price without a damaging fall in demand, and vice versa. Whether a product has inelastic demand or not depends on a range of factors such as whether its a necessity, if it has substitutes, how much competition there is between suppliers, and so on. But, also, for some products, wages comprise a small element of costs, so a wage rise might be easily absorbed. Later, in Capital III, Marx demonstrates why it is that, in fact, a general rise in wages will cause the prices of commodities that have a higher than average organic composition of capital, to fall rather than rise.
But, in any case, the consequence of a rise in some prices here is a fall in the prices of other goods, as effective demand rises for one and falls for the other. Finally,
“In the case of a general rise in wages the price of the produced commodities rises in branches of industry where the variable capital preponderates, but falls on the other hand in branches where the constant, or fixed, capital preponderates.” (p 346)