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Increasing Misery of the Proletariat: An Analysis of Marx's Wage and Employment Theory*

Published online by Cambridge University Press:  07 November 2014

Fred M. Gottheil
Fred M. Gottheil*
Affiliation:
University of Illinois
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Extract

The intent of this paper is to demonstrate (1) that Marx's analysis of the workers' fate under capitalism is not quite as scientific as he had professed, and (2) that, on the other hand, his analysis of wage and employment determination in a capitalist economy is not quite as misleading as many critics contend.

If Marx's theoretical contributions in this area have been unjustly discounted by “bourgeois economists,” much of the fault may be traced directly to Marx himself. For it was he who suggested that the veracity of his economic analysis could be measured by the accuracy of his economic predictions. Non-Marxists and neo-Marxists alike have faithfully followed his suggestion. Thus, since overwhelming evidence of rising standards of living in Western capitalist countries clearly discredits Marx's prediction concerning the increasing misery of the proletariat, we generally discard not only the prediction but also the theoretical apparatus whence it was allegedly derived.

To reject Marx in this matter on his own grounds, however, is to acknowledge logical consistency in his derivation of prediction from model. It is the consistency that is questioned here. And if Marx's prediction of misery is found not to derive from his wage and employment theory, then the Marxian theory of wages and employment may prove to be a more valid view of capitalism than is generally suspected.

Type
Articles
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 28 , Issue 1 , February 1962 , pp. 103 - 113
Copyright
Copyright © Canadian Political Science Association 1962

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Footnotes

*

I am indebted to C. B. Hoover, J. J. Spengler, and J. I. McDonald for discussion of this paper.

References

1 Marxian subsistence generally refers to that quantity of commodities necessary to reproduce the labourer and his family. For example, in the Communist Manifesto (Gateway, ed., Chicago, 1954)Google Scholar, Marx writes: “Hence, the cost of production of a workman is restricted, almost entirely, to the means of subsistence that he requires for his maintenance, and for the propagation of his race” (18). “The average price of wage-labor is the minimum wage, i.e., that quantum of the means of subsistence, which is absolutely requisite to keep the laborer in hare existence as a laborer.” (28). In Capital (Kerr, ed., Chicago, 1908)Google Scholar, Marx describes as minimum subsistence “the value of the commodities, without the daily supply of which the labourer cannot renew his vital energy … those means of subsistence that are physically indispensable” (I, 192). Occasionally Marx refers to cultural, technological, geographical, and psychological as well as the physiological elements of subsistence. Nevertheless, in working out the derivation of wage-labour under capitalism, Marx restricts the subsistence concept to its minimal components.

2 Capital, III, 1000–1.Google Scholar See also ibid., I, 218.

3 Ibid., I, 407 ff.

4 Ibid., I, 431, 440, 473, 516.

5 “Wages will now rise, now fall, according to the relation of supply and demand, according as competition shapes itself between the buyers of labor-power, the capitalists, and the sellers of labor-power, the workers.” Wage-Labor and Capital (New York, 1933), 26.Google Scholar

6 It should be stated here that Marx did not suggest that wages fell to subsistence with a positive industrial reserve army. In the system Marx set it down that the “degree” of unemployment determines wage movements–although he never clarified this position. Was there a critical value of unemployment beyond which wage movements occur? Did this value change?

7 Capital, I, 491.Google Scholar

8 Ibid., I, 677.

9 Ibid., I, 690–1. My italics.

10 If the rate of surplus-value (s/v) were constant, then obviously limits to profits, and hence capital accumulation emerge. While Marx did not hold s/v constant (ibid., III, chap, xrv) he none the less did set limits to its growth. But try as he may (and did), Marx could not logically incorporate this “hmitation factor” to s/v into his economic model. Indeed, in the analysis of Marxian profit theory, it can be shown that s/v not only increases, but may increase at an increasing rate. Thus, dealing solely with Marx's model and not with what Marx believed his model to incorporate, limitations to rate of surplus value disappear.

11 Ibid., I, 360–1.

12 Ibid., III, 731. It should be here stated that Marx did not quantify the displacement of money-lenders as z(Δ i). The symbol z can be any number, and of course can vary with the fall in the interest rate.

13 Wage-Labor and Capital, 47.

14 Communist Manifesto, 25. See also Capital, I, 482, 704, 707.Google Scholar

15 Capital, I, 709.Google Scholar

16 Ibid., I, 470–1.

17 Ibid., I, 434, 516,718.

18 Ibid., I, 436, 432.

19 Ibid., I, 434, 523.

20 Ibid., I, 722.

21 Ibid., I, 739.

22 Ibid., I, 717.

23 Ibid., I, 434.

24 Ibid., I, 509, 704.

25 Ibid., I, 722. Marx continues quoting from a health report (1864), “‘Improvements’ of towns, accompanyning the increase in wealth, by the demolition of badly built quarters, the erection of palaces for banks, warehouses, etc., the widening of streets for business traffic, for the carriages of luxury, and for the introduction of tramways, etc., drive away the poor into even worse and more crowded hiding places.” My italics.

26 Ibid., I, 740.

27 Ibid., I, 721. My italics.

28 Ibid., I, 739.

29 Ibid., I, 442 ff. Marx actually argues the reverse, i.e., working hours increase.

30 Most recently Sowell's, Thomas “Marx's ‘Increasing Misery’ Doctrine,” American Economic Review, 03, 1960, 111.Google Scholar

31 Capital, I, 708–9.Google Scholar