Tuesday 10 October 2023

Nominal Wages - Part 1 of 4


Nominal, or money wages are, as the name suggests, the amount of money paid to the worker in exchange for the purchase of their labour-power, for a given period of time. This is what is most commonly quoted in the financial media, and economic reports as hourly wages. However, as Marx describes, although wages are presented, in orthodox, bourgeois economic theory, as the price of labour, i.e. the value of a given amount of labour, say 10 hours, expressed in money, this is false. The value of 10 hours labour is 10 hours labour, and, if the worker were paid the equivalent amount of value of this 10 hours labour, in money, say £10, as wages, they would have produced no surplus value, in that 10 hours, and so there would be no profit for the capitalist, and so no reason for them to have employed the worker.

What the worker is paid, in wages, is an amount of money equal, not to the value of their labour for the given amount of time, i.e. the price of labour, but to the value of their labour-power, i.e. their ability to perform labour. These are, clearly, two different things, and, if they were not, Man could never have risen above a bare level of subsistence. A labourer, be they a member of a primitive commune, a slave, an independent peasant producer, or an industrial labourer in a large factory, requires a given quantity of food, clothing, shelter and so on, to live, and to reproduce their labour-power, both, as with a machine, to replace its daily wear and tear, and energy requirements, and ultimately, to replace it with a new machine/labourer, when it is worn out.

These various things, required to reproduce the labourer, and so, reproduce their labour-power, themselves have a value, i.e. they require a given amount of labour-time for their own production. As a use-value, labour-power is no different to any other use-value. Its value is determined by the labour-time required for its production. If we take a machine, its value comprises the value of the metal and other materials used in its construction, along with the wear and tear of the machines and other fixed capital used in its production, and finally the labour used in assembling all of those materials and components into the machine itself.

The value of labour-power is the same. The labourer constitutes the machine, and their labour-power is its ability to do work. The labour-power cannot be divorced from the labourer, any more than the action of a lathe in turning materials can be separated from the lathe itself. To have a day's labour, of say, 10 hours, it is necessary to reproduce a day's labour-power, for 10 hours. But, this second value, the value of 10 hours labour-power, need not, at all, be the same as 10 hours of labour, indeed, for the reasons set out above, it cannot be the same.

If we consider a tribe of hunter gatherers, each of which requires 2000 calories of food, each day, in the form of meat and fish, from animals they catch, and from the plants they collect, all provided free by Nature, it might take them 4 hours per day, to undertake this necessary labour, required to reproduce their labour-power, but is this the total amount of labour they can undertake each day? Clearly not. They could continue hunting and gathering for say, 8 hours, each day, and so performing 4 hours of surplus labour, over and above what is required to reproduce their labour power for that day.

The same is true for the wage labourer, except this is hidden by the fact that they are paid money wages, equal to the value of their labour-power, rather than being paid directly in the food, clothing, shelter and so on, required for the reproduction of their labour-power. The money wage they are paid, is simply intended to be the equivalent of the value of all of these necessaries (wage goods) required for the reproduction of labour-power, for the given period. Wages are the specific name given to this price of labour-power, and as Marx describes, price is just the name given to the exchange value of a commodity measured in money, i.e. against a money commodity such as gold or silver, or against a standard of prices, such as a £, $, € and so on.


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