As I understand it, variable capital is the *money* paid by the capitalist class *as a whole* for the use of labor power in the production of surplus value (I accept here the monetary-macro interpretation of Fred Moseley). That money sum cannot be gotten at through the national accounts without major reworking--this is the point of the new quantitative marxism. But I will leave that aside right now.
For our immediate purposes, we cannot determine whether that *money* laid out as variable capital is sufficient for wages to be at the value of labor power without determining 1. what the value of labor power is (including the historico-moral element that enters into that value) and 2 how much total labor time is being purchased with that sum of money as variable capital (this could be increased by the hiring of new workers, overtime or intensification). It's an open question whether the variable capital that has been allotted in the form of money wages, which itself is the price form of the value of labor power, indeed allows capital to pay for the labor power it hires at value.
Marx simply so assumes that the wage is so adequate in his analysis but recognizes that this is hardly necessarily so in the real world of capitalist dynamics.
If capital tries to spread that variable capital too thin, then the wages will fall below labor power's value (and there's that hoary concept again): there will be too little v per worker for the worker to purchase the use values required to reproduce herself at society's customary standard (that same hoary concept). It is possible however for the capitalist class to reduce v per worker, which is the same thing as a rise in the rate of exploitation, while the use values workers can consume out of that reduced relative wage increases as well (this being due to the reduction in the unit values of the commodities that enter the workers' consumption).
Jim, you and I are all agreed on that. This however will only increase the social misery or relative standing of the worker without necessarily pushing the wage below the value of labor power. However, it is possible that the v will be spread so wide or so unequally within the working class that for many workers the wage will indeed fall below the value of labor power (which is not the same thing as a physiological minimum), thereby increasing the physical misery of the working class which can no longer meet the needs that have arisen in the course of the accumulation process. This is an especially live threat if the labor process is being intensified at the same time: real wages then would not be increasing commensurately with the effort that is being expended under the lash of capital.
I beli eve that capital has been able to spread that v quite wide because it has employed at home and abroad foreign labor power the value of which, as historico-morally determined, is substantially lower in use value terms than the value of labor in the first world: the value of labor power varies over time and place (why the value of labor power is lower in, say, Mexico than the US is well explained by Alejandro Valle Baeza, "National Differences in Average Wages" International Journal of POlical Economy, Winter 1997-98). This allows capital to achieve a higher rate of exploitation (less v used per worker without the wage thereby falling below the value of labor power) and thus defer the breakdown tendency.
Previously workers abroad were not healthy or educated enough to operate the machines but now enough skills have been built into machines through microelectronics that they are moved and used more easily now (the expansion of education in the NIEs was crucial as well). The effect of this globalisation has been to sink millions in the first world into the surplus population presently housed in the growing prison system which is preparing itself for massive new enrollments once the artifical stimulus of the stock market is removed.
I tend to think Adrian Wood and Robt Feenstra have been correct about the impact of third world imports on declining labor demand for unskilled labor within the North. But this is hotly contested by people as different as Robt Lawrence and the late David Gordon. I think James Galbraith is now fudging about important this impact has been because he thinks since good macroeconomic policy (lower dollar, lower interest rates, redistributive govt spending) can counteract the effects, so there is no reason to pinpoint trade (but at one point he was more favorable towards Wood).
I think this is quite true:
>Capital as a class, and to a lesser extent individual capitalists, must
>take some
>cognisance of the need for the reproduction of labor in such a way or in
>such a
>form that will not substantially harm future productivity.
Yours, Rakesh