XIII – Main Cases At Attempts of Raising Wages or Resisting Their Fall
The value of labour-power is determined by the value of the commodities required to reproduce that labour-power, i.e. to reproduce the worker. Wages are the market price of that labour-power, and like every market price fluctuate above or below that value, as a result of changes in supply and demand, but always gravitate towards it, as a result of competition between buyers and sellers. Sellers cannot, at least for long, arbitrarily raise prices, because other sellers will grab their share of the market. Only if the value of the commodity itself rises, in the terms of orthodox economics, a shift of the supply curve to the left, will sellers be able to sustainably raise prices to compensate for that change in its value. Similarly, a fall in its value – shift of the supply curve to the right – will result in a fall in its market price, as a result of competition between sellers.
If the working-day is 12 hours, equal to six shillings (£0.30), and the value of labour-power/wages is six hours, or 3 shillings (£0.15) then profit is also £0.15, and rate of surplus value/profit is 100%. But, as with any other commodity, if a fall in productivity, say in food production, causes the value of labour-power to rise to 8 hours (£0.20), then only 4 hours of the working-day is available as surplus value/profit, or £0.10, so that the rate of surplus value/profit falls to 50%. (Remember, here, that Marx has set the value of constant capital to zero, so that rate of profit and rate of surplus value are the same).
“But now suppose that, consequent upon a decrease of productivity, more labour should be wanted to produce, say, the same amount of agricultural produce, so that the price of the average daily necessaries should rise from three to four shillings. In that case the value of labour would rise by one third, or 33 1/3 percent. Eight hours of the working day would be required to produce an equivalent for the daily maintenance of the labourer, according to his old standard of living. The surplus labour would therefore sink from six hours to four, and the rate of profit from 100 to 50 percent. But in insisting upon a rise of wages, the labourer would only insist upon getting the increased value of his labour, like every other seller of a commodity, who, the costs of his commodities having increased, tries to get its increased value paid. If wages did not rise, or not sufficiently rise, to compensate for the increased values of necessaries, the price of labour would sink below the value of labour, and the labourer's standard of life would deteriorate.” (p 75-6)
As set out earlier, at times of great excess supply of labour, capital may get away with this deterioration, simply using up the excess supply more wastefully, as workers die earlier, or leave the workforce due to ill-health, to be rapidly replaced by others from the dole queue etc. But, there are objective limits. A deteriorated workforce, provides deteriorated labour-power, just as a poorly maintained machine breaks down more frequently, reducing its productivity. Workers may simply resort to passive resistance, or may emigrate. As seen in the 1980's, they may leave the workforce to become inefficient, petty-bourgeois producers, self-employed artisans or traders, window cleaners and gardener etc. Or they may resort to that epitome of individualism and self employment, petty criminal activity, drug-dealing, smuggling and so on.
“But a change might also take place in an opposite direction. By virtue of the increased productivity of labour, the same amount of the average daily necessaries might sink from three to two shillings, or only four hours out of the working day, instead of six, be wanted to reproduce an equivalent for the value of the daily necessaries. The working man would now be able to buy with two shillings as many necessaries as he did before with three shillings. Indeed, the value of labour would have sunk, but diminished value would command the same amount of commodities as before. Then profits would rise from three to four shillings, and the rate of profit from 100 to 200 percent.” (p 76)
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