[PEN-L:27186] RE: Re: LTV and income disparity

["Devine, James" <jdevine@xxxxxxx>]

Title: RE: [PEN-L:27183] Re: LTV and income disparity

Nancy, to reconcile what Gil says below with what I said: we really don't disagree (on this point). But he's referring to an absolute definition of poverty, whereas I was referring to both absolute and relative definitions of poverty (with emphasis on the latter). Also, I pointed to Marx's view that capitalism tends to increase people's needs over time (which makes sense to me, even if Marx hadn't posited it), which makes the relative definition of poverty more relevant.

Here's a good quote which explains what I'm talking about concerning the latter: "The goods and services that made it possible to live on $15 a week during the Depression were no longer available to a family with the same "real" income (i.e., $40 a week) in 1964. Eating habits had changed, and many cheap foods had disappeared from the stores. Most people had enough money to buy an automobile, so public transportation had atrophied, and families without automobiles were much worse off than during the Depression. The labor market had also changed, and a person without a telephone could not get or keep many jobs. A home without a telephone was more cut off socially than when few people had telephones and more people 'dropped by.' Housing arrangements had changed, too. During the Depression, many people could not afford indoor plumbing and 'got by' with a privy. By the 1960s, privies were illegal in most places. Those who could not afford an indoor toilet ened up in buildings with broken toilets. For this they paid more than their parents had paid for privies.

"Examples of this kind suggest that the 'cost of living' is not the cost of buying some fixed set of goods and services. It is the cost of participating in a social system. The cost of participation in large part depends on how other people habitually spend to participate. Those who fall far below the norm, whatever it may be, are excluded. It follows that raising the incomes of the poor will not eliminate poverty if the income of other Americans rise even faster..." (Christopher Jencks, _et al_, INEQUALITY, Harper, 1972.)

Though the relative definition of poverty does not follow from Marx's law of value (a.k.a., the labor theory of value), it comes from pretty much the same source, i.e., the rejection of a totally individualistic vision of society.

Jim Devine jdevine@xxxxxxx &  http://bellarmine.lmu.edu/~jdevine

-----Original Message-----
From: Gil Skillman [mailto:gskillman@xxxxxxxxxxxxxxxxx]
Sent: Tuesday, June 25, 2002 11:06 AM
To: pen-l@xxxxxxxxxxxxxxxxxxx
Subject: [PEN-L:27183] Re: LTV and income disparity

Hi, Nancy.  To get right to the point, the labor theory of value does not of itself imply a zero-sum conflict in the distribution of social income.  The reason for this is that, even if the total potential labor expenditure in an economy is fixed, the total product of that labor--and thus the total social income--need not be fixed, so that there's potentially more for all.  A fixed labor expenditure can translate into progressively higher levels of total output due to, for example, technical progress. This growth in labor productivity would be reflected in a lower average quantity of labor embodied in each commodity.  A corollary of this is that richer rich does not of itself imply poorer poor.  Of course the latter outcome may happen in any case, but not for reasons that have specifically to do with the operation of Marx's theory of value.