Re: Marx and Keynes on Unemployment

[ECAS@xxxxxxxxxxxxxxxxxxx id <01HPVDF2U9FG8XG1O6@xxxxxxxxxxxxxxxxxxx>; Fri, 28 Apr 1995 12:01:07 +1000]

Steve Keen says:
Ajit Sinha recently posted the following on Marx's theory of unemployment:
(deleted)
I hate to partly contradict someone who later agrees with me in the same
post -:), but the following excerpt is from Capital Vol. 1,
Chapter 25, at the end of section 1 (pp. 580-581 in the Progress Press
edition):

"accumulation slackens in consequence of the rise in the price of
labor, because the stimulus of gain is blunted. The rate of
accumulation lessens; but with its lessening, the primary cause
of that lessening vanishes, i.e. the disproportion between
capital and exploitable labor power. The mechanism of the process
of capitalist production removes the very obstacles that it
temporarily creates. The price of labor falls again to a level
corresponding with the needs of the self-expansion of capital,
whether the level be below, the same as, or above the one which
was normal before the rise in wages took place... To put it
mathematically, the rate of accumulation is the independent, not
the dependent variable; the rate of wages the dependent, not the
independent variable." (Ibid., pp. 580-581.)
___________________________

But Steve, this is not a good quotation against my point because in this case
Marx is not even talking about technical change. What he is arguing about is
the inverse relation between wages and profit, which Ricardo had already argued
and Marx completely agreed with. With the fall in profit accumulation rate will
fall and so the excess demand for labor. Here again Marx is trying to argue
that without taking account of the Malthussian theory of population, one could
argue that wages could vary within a band and not beyound it. Again, a
quotationn well known to me and does not disprove my point.
_______________________
Steve says:
There is also no hint that wages had a downward secular trend here.
______________________

Of course not. But this is an argument made within a very limited parameters.
The evidence for a downward secular trend of wages in Marx's writing can be
found elsewhere.

I look forward to seeing you too, mate!

Cheers, ajit sinha