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Tuesday, March 15, 2016

Marx’s Views on the Effectiveness of Trade Unions

Marx’s views are expressed well in Value, Price and Profit, which was a series of lectures he delivered in 1865, even though it was first published in 1898:
“These few hints will suffice to show that the very development of modern industry must progressively turn the scale in favour of the capitalist against the working man, and that consequently the general tendency of capitalistic production is not to raise, but to sink the average standard of wages, or to push the value of labor more or less to its minimum limit. Such being the tendency of things in this system, is this saying that the working class ought to renounce their resistance against the encroachments of capital, and abandon their attempts at making the best of the occasional chances for their temporary improvement? If they did, they would be degraded to one level mass of broken wretches past salvation. I think I have shown that their struggles for the standard of wages are incidents inseparable from the whole wages system, that in 99 cases out of 100 their efforts at raising wages are only efforts at maintaining the given value of labor, and that the necessity of debating their price with the capitalist is inherent to their condition of having to sell themselves as commodities. By cowardly giving way in their every-day conflict with capital, they would certainly disqualify themselves for the initiating of any large movement.

At the same time, and quite apart from the general servitude involved in the wages system, the working class ought not to exaggerate to themselves the ultimate working of these every-day struggles. They ought not to forget that they are fighting with effects, but not with the causes of those effects; that they are retarding the downward movement, but not changing its direction; that they are applying palliatives, not curing the malady. They ought, therefore, not to be exclusively absorbed in these unavoidable guerilla fights incessantly springing up from the ever-ceasing encroachments of capital or changes of the market.” (Marx 1913: 124–126).
This is quite clear: Marx thought the working class trade union struggles could not raise wages in a continuous, effective and successful way.

Organised labour can only retard the “downward movement” but not change its direction. Marx was wrong on this. He was also wrong about the tendency of real wages in capitalism, since even in the 19th century before organised labour became powerful the real wages soared from the 1840s to the 1900s.

In volume 1 of Capital we get much the same view: wages tend towards the value of maintenance and reproduction of labour-power, and, even if supply and demand might drive wages above this level, there are powerful forces driving the real wage back to the subsistence level, because:
(1) capitalists try to reduce the real wage to and even below subsidence level;

(2) capitalists reduce the price of basic commodities required for subsistence and so reduce the necessary part of the working day and hence the value of the maintenance and reproduction of labour (see Chapter 12 of volume 1 of Capital);

(3) continuous technological unemployment produces a large and growing reserve army of labour (see Chapter 25 of volume 1 of Capital), and this reserve army keeps the real wage in check and keeps wages down.
An important point to add to this is that Marx did reject the orthodox Classical “iron law of wages” since he rejected Malthusian population theory, but still thought wages would tend towards the value of maintenance and reproduction of labour (sometimes with a moral and historical element).

Cottrell and Darity (1988) demonstrate, against Baumol (1983), that Marx’s Value, Price and Profit (1865; first published in 1898) does say that wages tend towards a minimum (the value of maintenance and reproduction of labour) and that Capital does not contradict nor repudiate that view (Cottrell and Darity 1988: 181).

My analysis of Value, Price and Profit here and chapter 6 of volume 1 of Capital here shows this is true.

Finally, Marx’s Critique of the Gotha Program, based on a letter he wrote in 1875 and published in 1891, gives us a nice summary of what he thought about wages.

We have the following discussion of wages here:
“Since Lassalle’s death the scientific knowledge has made way in our party that wages are not what they seem, namely, the value or price of labor, but only a disguised form for the value of price of labor-power.

Thereby the whole capitalist theory of wages, hitherto prevailing, together with all the criticism hitherto directed against it, was once and for all overthrown, and the fact clearly established that the laborer is only permitted to work for his living, i.e., to live, so long as he works a certain time gratis for the capitalist (hence also for those who share the surplus-value with the latter); that the pivot around which the entire capitalist system of production turns, is to increase this unpaid labor either by lengthening the working day, or by developing the productive powers of labor, or by straining the laborer to more intense exertion, etc., etc.; that, therefore, the system of wage-labor is a system of slavery, and indeed slavery, which, moreover, grows harder in proportion as the productive powers of labor are developed in society, no matter whether the laborer’s pay is better or worse.” (Marx 1922 [1891]: 40–41).
So here Marx can even refer to his theory of wages as the view that “the laborer is only permitted to work for his living, i.e., to live.”

BIBLIOGRAPHY
Baumol, William J. 1983. “Marx and the Iron Law of Wages,” The American Economic Review 73.2: 303–308.

Cottrell, Allin and William A. Darity. 1988. “Marx, Malthus, and Wages,” History of Political Economy 20.2: 173–190.

Marx, Karl. 1913. Value, Price and Profit (ed. by Eleanor Marx Aveling). Charles H. Kerr & Company, Chicago.

Marx, Karl. 1922. “Critique of the Gotha Programme,” in Marx and Daniel de Leon, Critique of the Gotha Programme and Did Marx Err?. National Executive Committee, Socialist Labor Party, New York.

16 comments:

  1. I've seen you make this argument before but, now as then, you still have avoided addressing those points where Marx and Engels specifically and emphatically repudiate the view you attribute (because even back then people made the same error: confusing a ceteris paribus condition with a necessary outcome).

    Additionally, I can go point by point through what you've presented here (when I have more time), if you need the point made more explicitly, though I would think just being aware of the shift in context should be sufficient to connect the dots.

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  2. You sound like the same stupid anonymous who cited Baumol 1983 on this point, even though Cottrell and Darity 1988 carefully refute Baumol, showing how he misunderstands Marx, ignores contrary evidence, and takes passages out of context. The only point on which Baumol is correct is that Marx rejected orthodox Malthusian population theory and so did indeed reject the strict Classical “iron law of wages” based on the former. But I already admitted this above and showed how this doesn't refute me.

    As for Engels, his position is perfectly clear in Herr Eugen Dühring’s Revolution in Science (1894; first published in 1878), where he argued that industrial capitalism, partly by means of automation and use of machines, drove workers’ wages down to a subsistence level and tended to keep them there:

    “Thus it comes about that the excessive labour of some becomes the necessary condition for the lack of employment of others, and that large-scale industry, which hunts all over the world for new consumers, restricts the consumption of the masses at home to a famine minimum and thereby undermines its own internal market.” (Engels [1894]: 308).

    I bet we are now going to hear that Engels never meant this to applied to the real world at all! It was just an abstract model never meant to taken as an actual empirical description of anything. You're just another bloody idiot.

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  3. I happen to have in my hands the C&D paper you you're citing against Baumol and I am calling your bluff. They don't allege anything on the level you assert, but merely state that his findings, while accurate, are not necessarily inconsistent with the "general tendency" Marx describes. This is furthermore consistent with everything I've been saying. Don't burden your readers with your own misconstrual of what "tendency" denotes.

    Moreover, C&D directly contradict the thrust of your own post, agreeing with Baumol that Marx did *not* believe union struggles as futile. They argue also that "Hollander [who shares your position] goes too far in ascribing to Marx the consistent position that wages must be driven downward. Further, Marx's concept of the "immiserization" of the proletariat need not be linked to a secular decline in real wages." Maybe you missed that part.

    They conclude that "Capital does not contain a determinate theory of wages under mature capitalism." Your propagandist's pen turns that into "nothing contradicts the subsistence-wage reading," of course. (Except for M&E themselves, a number of times, but we can ignore that for your comfort.)

    From this it is clear: Not only has your virulent anticommunist ideology rendered you incapable of reading Marx honestly, but you can't even read people reading Marx without adulteration.

    Ridiculous, but hardly unexpected at this point.

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  4. (1) “but merely state that his findings, while accurate,”

    Cottrell and Darity (1988) do not say Baumol’s finding are accurate. You are an outrageous liar.

    On p. 174ff. Cottrell and Darity expose Baumol’s inaccurate and out-of-context readings of Marx. Did you miss that, idiot?

    (2) “Moreover, C&D directly contradict the thrust of your own post, agreeing with Baumol that Marx did *not* believe union struggles as futile.”

    I did not say that Marx thought that union struggles are totally “futile”: as Marx says, they can maintain the subsistence wage and should be attempted. What I said is: “Marx thought the working class trade union struggles could not raise wages in a continuous, effective and successful way.” That is correct, because if he did think that, then the whole bloody theory of exploitation based on increasing theft of surplus labour value would utterly implode.

    (3) “They conclude that "Capital does not contain a determinate theory of wages under mature capitalism.”

    You deliberately lie about this article.

    In fact on p. 181 Cottrell and Darity state clearly that Marx in Value, Price and Profit says *explicitly* that “a tendency of real wages to fall towards a ‘physically determined’ minimum” (p. 181). They then state explicitly that in Marx’s mature writings Marx *never disavows nor contradicts that statement* (p. 181). Thus they rightly reject Baumol’s reading – that Marx thought the real wage would not tend to a subsistence wage – as wrong.

    It is true Marx did not explicitly restate his view in Value, Price and Profit directly in Capital in a passage of the same explicit words, but he clearly did not repudiate it, and if you read p. 189 you will see the point is: it is **implicitly** there by implication, to anyone who gives weight to the various relevant passages in Capital.

    You do, however, have one point that I concede: on p. 181, Cottrell and Darity state that Capital could be in their view construed as theoretically “open” or “indeterminate” because of the lack of an explicit statement of the type that Marx does give in Value, Price and Profit. But actually once we add the evidence of (4) and (5) below, that view of Cottrell and Darity – that one lifeline that might have supported you – is totally demolished.

    (4) and if we add the evidence from Marx’s Critique of the Gotha Program which was written in 1875 (which Cottrell and Darity miss), then we have very strong evidence indeed that this is what Marx believed at the end of his life:

    “Thereby the whole capitalist theory of wages, hitherto prevailing, together with all the criticism hitherto directed against it, was once and for all overthrown, and the fact clearly established that the laborer is only permitted to work for his living, i.e., to live,”

    This is damning for your case. That is Marx’s life in the 1870s not that long before his death.

    (5) And then we have Engels in writing in 1878 in Herr Eugen Dühring’s Revolution in Science:

    “Thus it comes about that the excessive labour of some becomes the necessary condition for the lack of employment of others, and that large-scale industry, which hunts all over the world for new consumers, restricts the consumption of the masses at home to a famine minimum and thereby undermines its own internal market.” (Engels [1894]: 308).

    Again, totally damning to your case, and both of these passages are also totally damning to Cottrell and Darity’s silly deserve to interpret Capital as possibly theoretically “open”.

    So how do explain (4) and (5)? lol.

    Give up.

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  5. Nope, you're doing it again. This is why I say you're untrustworthy.

    Far from your account of C&D chiding Baumol's academic ineptitude, they find much to agree with in the latter's account ("In each of the citations which Baumol brings forward, some insight is gained into Marx's views on wages and the value of labor power"). They summarize their dissent with exactly what I said: "None of these points, however, is inconsistent with a continuing acceptance on Marx's part [of a general tendency of downward pressure on wages internal to capitalism]."

    And yes, of course, capitalism does indeed contain such a structural tendency, which is explained to result from the process of capital accumulation. It is not, as some would have it, the exclusive causal factor, and as we have seen historically it can be thwarted (through labor organization or by disproportionately exploiting the third world, etc), but never eliminated.

    (As an aside, the page numbers you're referring to must have come from a different printing, as they don't match mine.)

    Your (4) reveals your continuing allergy to context. Here's the quote, plus the remainder of the clause you leave off:

    "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)"

    Anyone with a basic reading comprehension can see how this changes the meaning. But for your benefit, I'll spell it out: it's not "workers can do no more than subsist"; it's "workers can't subsist without performing some unpaid labor."

    And 5 is a general point about the contradiction between the ruling class's need for workers to, simultaneously, make less and spend more. Obviously he did not believe that all capitalist nations were permanently on the brink of famine, and he himself was very clear that "the laws governing wages are very complex, [such] that, according to circumstances, now this law, now that, holds sway, that they are therefore ... exceedingly elastic, and that the subject really cannot be dismissed in a few words."

    I swear, you'll believe any ridiculous thing, so long as it reflects poorly on someone you hate.

    So... "Give up."

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  6. (1) "Far from your account of C&D chiding Baumol's academic ineptitude, they find much to agree with in the latter's account"

    No, they fundamentally disagree: Baumol, they say, misinterprets Marx and is wrong to argue that Marx thought the real wage would not *tend* towards a subsistence wage. You are simply a pathological liar.

    (2) ""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)"

    The words in bold do not change the sense of the passage: wages tend towards a subsistence level, because, yes, Marx's theory is that workers will have their surplus value stolen and be subject to an increasing theft of surplus value by increasing the working day, decreasing the value of the maintenance and reproduction of labour, and increasing intensity of work.

    You are so militantly stupid you actually refuse to acknowledge what Marx plainly says: in his theory workers will tend to work for their "living", a subsistence wage.

    (3) "Obviously he did not believe that all capitalist nations were permanently on the brink of famine, "

    No, the theory is that their wages **tend** towards the subsistence wage. This is obviously a shorthand way of referring to it.

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  7. Finally, you quote from a private letter from Engels' letter to Bebel:

    "Thirdly, our people have allowed themselves to be saddled with the Lassallean “iron law of wages” which is based on a completely outmoded economic view, namely that on average the workers receive only the minimum wage because, according to the Malthusian theory of population, there are always too many workers (such was Lassalle’s reasoning). Now in Capital Marx has amply demonstrated that the laws governing wages are very complex, that, according to circumstances, now this law, now that, holds sway, that they are therefore by no means iron but are, on the contrary, exceedingly elastic, and that the subject really cannot be dismissed in a few words, as Lassalle imagined. Malthus’ argument, upon which the law Lassalle derived from him and Ricardo (whom he misinterpreted) is based, as that argument appears, for instance, on p. 5 of the Arbeiterlesebuch, where it is quoted from another pamphlet of Lassalle’s, is exhaustively refuted by Marx in the section on “Accumulation of Capital.”"
    Engels to August Bebel, March 18-28, 1875.

    The main issue here is that Marx disagreed with Lassalle's Malthusian population theory and Engels is trying to ram home that point, but the words in bold just stink of dishonesty: this is Engels' exaggerating the differences between Lassalle and Marx for rhetorical effect, when in fact Marx DID argue in Capital that wages tend towards the value of maintenance and reproduction of labour, even if supply and demand factors drive wages upwards sometimes.

    If Marx didn't believe this, as perfectly clear to any sensible reader, his whole theory of exploitation based on increasing extraction of surplus value falls apart.

    Apart from which, it blatantly contradicts what Engels himself wrote only a few years later:

    “Thus it comes about that the excessive labour of some becomes the necessary condition for the lack of employment of others, and that large-scale industry, which hunts all over the world for new consumers, restricts the consumption of the masses at home to a famine minimum and thereby undermines its own internal market.” (Engels [1894]: 308).

    Your problem is you are so stupid you think Engels could never lie privately or exaggerate in a letter for polemical purposes.

    You are also forced to bizarrely stupid misreadings of plain texts Marx and Engels published publicly right in front of your eyes.

    Marx says in Capital:

    (1) capitalists try to reduce the real wage to and even below subsidence level;

    (2) capitalists reduce the price of basic commodities required for subsistence and so reduce the necessary part of the working day and hence the value of the maintenance and reproduction of labour (see Chapter 12 of volume 1 of Capital);

    (3) continuous technological unemployment produces a large and growing reserve army of labour (see Chapter 25 of volume 1 of Capital), and this reserve army keeps the real wage in check and keeps wages down.
    --------
    All these factors keep the wage tending downwards to subsistence, even if they rise temporally.

    Once again, if he did not think this, his whole theory implodes, because his theory of surplus value depends on workers tending to be paid a wage towards the subsistence level.

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  8. Where in volume 1 of Capital does Marx say words to the effect: wages in capitalism can may well soar above subsistence and keep increasing in the long run? Nowhere, idiot.

    This is *precisely* the point of Cottrell and Darity's article: what Marx said plainly in Value, Price and Profit is there in Capital by implication.

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    1. Keep digging yourself deeper, LK. Wouldn't miss this spectacle for the world.

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    2. In other words, you can't answer the question:

      "Where in volume 1 of Capital does Marx say words to the effect: wages in capitalism can may well soar above subsistence and keep increasing in the long run?"

      The fact that you can't answer it drives you into a rage, and your only response, no doubt, is to live in a fantasy world where Marx was infallable, nothing Marx wrote was wrong even though his metallism was spectacularly wrong, and none of Marx's predictions failed (even though they failed spectacularly).

      Do you enjoy the Marxist lunatic asylum live in Hedlund? lol.

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    3. By the way, you've also effectively admitted that Marx's theory of exploitation in the developed capitalist West has failed, if you think his theory is that real wages can and will rise and soar above subsistence level and keep rising, as we see here and here.

      Are you foaming at the mouth yet, Comrade Hedcase?

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    4. Marx's theory of exploitation doesn't depend on wages being forced down to an absolute minimum. Real wages can rise and there can still be exploitation. Marx defines exploitation as a situation in which people use their power over others to extract unpaid labour from them, in order to benefit at their expense. The capitalist class has power over the working class because they control the means of production, and they use this power to exploit the workers.

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  9. LK,

    I think you misinterpreted that sentence in Critique of the Gotha Program:

    "the laborer is only permitted to work for his living, i.e., to live, so long as he works a certain time gratis for the capitalist"

    What he means is, because workers don't own means of production, they can only work and therefore live, if they work for a capitalist, which means doing unpaid labour for the capitalist.

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    1. No, that is a silly reading given everything Marx says in Capital and given Engels' statement:

      “Thus it comes about that the excessive labour of some becomes the necessary condition for the lack of employment of others, and that large-scale industry, which hunts all over the world for new consumers, restricts the consumption of the masses at home to a famine minimum and thereby undermines its own internal market.” (Engels [1894]: 308).

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    2. No, it's not a silly reading at all. You might be right that Marx and Engels argued that worker's wages will be pushed down to subsistence level under capitalism. But that's not what this particular sentence from The Critique of the Gotha Program is saying. The point is workers don't own means of production or have access to the means of life (food, shelter, etc). As such they are forced to work for capitalists in order to live.

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  10. Maybe I missed some point here. But does one (logically) need to acknowledge any trend toward low wages to describe capitalism as intrinsically exploitive ?
    I think not. If you consider all the stuff produced (including services like healthcare etc.) and all the grown up healthy skilled people who bring them about you can notice that some get an extraordinary large part of those stuff in exchange for not specially usefull work (top executives) or for no work at all (shareholders). Socially they tend to form the upper class of socity. Here you have exploitation : access to large amounts of wealth in exchange for nothing. You also have the link between exploitation and class power : when one possesses capital is entitled to extract wealth from the very process of producing wealth (or even of NOT producing wealth when it comes to finance), which in turn enables him to "invest" that is to decide what will be produced and to claim a share over it, thus getting richer and richer.
    Meanwhile, through technical progress the lot of the common man might still get better than before. It doesn't mean that people owning and / or controlling the means of production don't get an increasing share. (The more so with open borders and the possibility to hire workers with almost no rights to defend themselves in third world)
    Very broadly construed, if you divide the total product between ordinary consumption, investment goods (new machines etc.) and luxe, you can say that the result of exploitation is embodied by luxe consumption. I think it was the way Kalecki used marxian reproduction schemas to understand the dynamics of economies.
    You can always kill a sheep with a magic spell provided you add some arsenic to it, Voltaire said. Joan Robinson once compared marxian theory (theories?) of value to the spell and the exploitation theory to the poison.
    Dear LK, where do you think these two notorious postkeynesian authors erred ?

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