Last night I
watched the last in the BBC's series
Masters Of Money
which has looked at the lives and ideas of three economists –
Keynes, Hayek, and Marx, and how they relate to current conditions.
It wasn't as bad as I thought it might have been, but, as was almost
inevitable, it failed to actually present us with Marx's ideas, and
his explanation of crises. Instead, as is almost equally as
inevitable, what we were given was just a Left Keynesian explanation
of crisis.
That
explanation given a veneer of Marxism by comments from Left
Keynesians like Martin Jacques of Marxism Today, hinges upon the
notion that crises are caused because of the limited ability of
workers to spend and consume. The answer then seems simple.
Increase workers wages, so they can spend more. But, the argument
then goes, Capitalists will not and cannot do that, because they are
forced by competition to reduce workers wages to the bare minimum
needed for them to survive. Of course, the attraction of this
explanation to Left Keynesians and reformists is fairly obvious.
Given their idealisation of the role of the State, it is not a big
step from here, to argue that the Capitalist State should do things
to redress this situation by introducing things like a Minimum Wage,
or redistributive taxation, or that the State should take over the
role of Capitalist etc.
Its not just
because Marxists do not share this idealisation and faith in the
State, particularly the Capitalist State, in resolving either workers
problems, or the contradictions of Capitalism, however, that they
disagree with this analysis. It is that it is simply wrong. Far
from Marx putting forward this idea about the cause of Capitalist
Crises, he specifically argued against it. The notion that Marx
believed that Capitalism forces wages down to a bare minimum of
subsistence is one that has been purveyed by enemies of Marxism for
most of the twentieth century. It was put forward by Stalinists, who
basing themselves on Lenin's statement that Capitalism was in decay,
closed their eyes to all reality, and tried by one convoluted method
or another to claim that workers living standards were really falling
even during the 1950's and 60's, when it was clear they were rising
sharply.
But, it has
also been put forward by his opponents on the Right, including some
of those in this programme, who point to this claim as proof that
Marx was completely wrong in his analysis. Some years ago, when I
was debating with a range of supporters of the Misean, Neo-Austrian
School I was repeatedly confronted with this claim confidently
asserted that Marx's “Iron Law of Wages”, had been massively
disproved. The problem is that Marx said no such thing. The Iron
Law of Wages, was put forward not by Marx, but by Ferdinand Lassalle,
and Marx dismantled it!
In his
critique of Lassalleans – whose Statism along with Fabianism is the
basis of the reformism of most of the Labour Movement (including most
of those that call themselves Marxists) – in the
Critique Of The Gotha Programme.
“Since
Lassalle's death, there has asserted itself in our party the
scientific understanding that wages are not what they appear to be --
namely, the value, or price,
of labour—but only a masked form for the
value, or price, of
labour power. Thereby, the whole bourgeois
conception of wages hitherto, as well as all the criticism hitherto
directed against this conception, was thrown overboard once and for
all. It was made clear that the wage worker has permission to work
for his own subsistence—that is, to live,
only insofar as he works for a certain time gratis for the capitalist
(and hence also for the latter's co-consumers of surplus value); that
the whole capitalist system of production turns on the increase of
this gratis labour by extending the working day, or by developing the
productivity—that is, increasing the intensity or labour power,
etc.; that, consequently, the system of wage labour is a system of
slavery, and indeed of a slavery which becomes more severe in
proportion as the social productive forces of labour develop, whether
the worker receives better or worse payment. And after this
understanding has gained more and more ground in our party, some
return to Lassalle's dogma although they must have known that
Lassalle did not know what wages were, but,
following in the wake of the bourgeois economists, took the
appearance for the essence of the matter.
It is as if, among slaves who have at last got
behind the secret of slavery and broken out in rebellion, a slave
still in thrall to obsolete notions were to inscribe on the program
of the rebellion: Slavery must be abolished because the feeding of
slaves in the system of slavery cannot exceed a certain low maximum!”
The
important phrase here is “and indeed of a slavery which becomes
more severe in proportion as the social productive forces of labour
develop, whether the worker receives better or worse payment.”
It
is not at all Marx's
argument that capital is forced to reduce wages to some bare
subsistence minimum. On the contrary, in Capital Volume I, Marx sets
out that wages are the price for labour-power as stated above.
Labour-power is a commodity like other commodities sold in the
market, and as such, Marx's assumption is that it is sold at its
Exchange Value, that is its current cost of reproduction. That is
comprised of all those things that the particular Labour-power
requires such as food, clothing, shelter, education, health
provision, entertainment etc. It is clear that all of these things
change over time, and Marx says that the Value of Labour-power,
necessarily contains within it, therefore, an historical or cultural
component. But, more than this. With every commodity, there are two
opposing forces at work.
On
the one hand, the perpetual increase in productivity means that the
labour-time required for production falls, and so the Value of every
commodity falls over-time. That may not mean that its Exchange Value
or price falls, because Exchange Value reflects how much one
commodity exchanges for another. It is a relation of the Value of
one commodity to the Value of another. If the labour-time required
for the production of apples and oranges falls by the same amount,
the Value of both apples and oranges falls, but the Exchange Value of
one measured in the other remains constant. The same is true with
Labour-power. As productivity rises, the labour-time required to
produce all of the wage goods the worker needs for their reproduction
falls, and with it the Value of Labour-Power, and, therefore wages
also falls.
At
the same time, and this is particularly true of modern Capitalism,
one of the ways in which Capitalists can persuade consumers to part
with their money, especially to buy their commodities rather than
someone else's, is to offer something new, something, better, a
higher quality. So competition, drives producers to improve the
quality of products, and to produce new kinds of commodities. These
new commodities, these better versions of existing commodities, may
well require more not less labour-time for their production, and so
their Exchange Value, their price is increased. The same is true
with labour-power. A worker who can produce a more valuable
commodity, that a capitalist can sell at a higher price, is worth
more to a capitalist than is a run of the mill worker, who can only
do unskilled work. The capitalist can both pay the former a higher
wage, and at the same time extract more surplus value from their
labour than from that of the latter.
As
capitalism develops machine industry from handicraft industry, it
needs more skilled workers to produce the machines. It may require
more educated workers even to be able to use the machines, because
they may need at least to be able to read, to understand basic maths
etc. So, capital's own needs mean that the kind of labour-power it
requires changes, and so the basic things needed to reproduce this
labour-power, and consequently the cost of reproducing it, the Value
of Labour Power rises. As with every commodity there is a continual
battle going on between the rising cost of production due to
improvements in quality, and falling costs due to rises in
productivity. But, the overall effect is that in terms of real
wages, the standard of living of workers rises. On the one hand,
the costs of producing the wage goods they need falls, on the other
the range and quality of those wage goods available to them,
increases.
So,
Marx's theory is far from saying that workers have to be immiserated,
or that some “Iron Law of Wages” forces them down to some bare
subsistence minimum. What Marx actually argues is that, again as
with all other commodities, although the market price can vary above
or below the Exchange Value (or later Price of Production) of the
particular commodity, due to temporary imbalances of Demand and
Supply, wages will be equal to the Value of Labour Power. That Value
may be high or low, workers might have good conditions or bad
conditions, high wages or low wages, depending upon what is required
for the reproduction of labour-power, but whatever it is will
determine the level of wages. Even if wages are high, and workers
conditions good by historical standards, or compared with other
countries, if those wages are below the Value of Labour Power i.e. do
not meet the level required to produce sufficient workers, of
sufficient quality, to meet the needs of Capital, then an
insufficient number of workers will be produced, and the basic law of
supply and demand will push wages even higher, until they do reach
the Value of Labour Power.
That
can perhaps be seen in the US at the moment. One of the fastest
growing, most profitable sectors has been in high value, high-tech
production, in Silicon Valley, for example. But, the US education
system is quite poor. It has a range of very expensive, select
Universities such as Harvard, which charge exorbitant fees, and pump
out a number of students each year who earn huge salaries. But, the
rest of its schools and colleges fail to produce enough high quality
workers to meet the needs of US capitalism for well educated, highly
skilled workers. It was a fact that Alan Greenspan referred to many
times in his Congressional testimonies. So, despite high wages for
such workers, wages for them, are perhaps still not high enough to
create the conditions that bring forward sufficient supply to meet
that demand. |
| Capital has an incentive to introduce machines like surgical robots to replace, high value, high wage labour power. |
In short, Marx does not argue that Capitalism is forced to reduce
wages to a subsistence level. He argues the opposite, that the
continual growth of productivity, the growth of an increasing range
and quality of Use Values, which it seeks to sell to workers, its
changing needs for labour-power lead rather to a steady rise over
time of workers living standards, what he calls the Civilising
Mission Of Capitalism, which he saw as necessary for workers
developing sufficiently to become the new ruling class. All of this
happens at the same time, however, as the amount of time that workers
have to hand over free to Capital, as Surplus Value, grows even more
in proportion, thereby enslaving the worker even more.
“that, consequently, the system of wage labour is a system of
slavery, and indeed of a slavery which becomes more severe in
proportion as the social productive forces of labour develop, whether
the worker receives better or worse payment.”
Forward To Part 2
Forward To Part 2
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