[lbo-talk] William Pfaff: The price of globalization

[Bill Bartlett]

At 9:53 PM -0800 12/1/04, joanna bujes wrote:
>Jim F quotes:
>
>"The iron law of wages is also simple and logical. It says that wages will
>tend to stabilize at or about subsistence level. That seemed inevitable
>to Ricardo, since while workers are necessary, and so have to be kept
>alive, they have no hope of any better treatment since they are
>infinitely available, replaceable, and generally interchangeable."
>
>...but at the point where the wage reaches a subsistence level, what 
>is it that will fuel an expansionary capitalist economy?

Sub-subsistence wages? ;-)

It is necessary to keep in mind that "subsistence" is necessarily 
relative. Subsistence wages are the minimum wages necessary to 
reproduce the supply of labourers. Furthermore, if the development of 
industry requires labourers with a minimum standard of education, 
then subsistence wages must be sufficient to sustain that. This has 
quite wide implication, it means for example that if industry as a 
whole requires a minimum level of economic and political stability 
and higher living standard to operate properly, as modern  industry 
certainly does, then it stands to reason that "subsistence wages" 
must be sufficient to sustain that.

Thus subsistence level wages shouldn't be interpreted narrowly as 
some absolute measure of the bare minimum cost of feeding a labourer, 
if the labourer requires a long education and a stable social 
environment to be able to perform the work properly, then subsistence 
wages are whatever it takes to make that happen.

Bill Bartlett
Bracknell Tas