> 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.
This is obviously true; one must also keep in mind that capitalism has a long-term tendency to "deskill" all kinds of occupations, partly in order to reduce the need for expensive education and training of workers. But the underlying motive force is always to keep the capital accumulation process going -- selling the commodities produced at something like the expected prices and re-investing the profits to expand the production process.
"When we look at the accumulation process as a whole we see, first, that 'the maintenance and reproduction of the working class is, and must ever be, a necessary condition to the reproduction of capital' (_Capital_, vol. 1, p. 572). Capital must itself limit its own 'boundless thirst after riches' to the extent that it destroys the capacity to reproduce labour power of a given quality. But we also notice that capitalists pay out wages, which they receive back as payment for the commodities they produce. Distribution here functions as a mediating link between production and consumption, or, as Marx prefers it, between the creation of value in production and the realization of value in exchange. The capitalist must, after all, produce *social* use values -- commodities that someone can afford and that someone wants or needs. Individual capitalists cannot reasonably expect to diminish the wages of their own employees while preserving an expanding market for the commodities they produce." (David Harvey, _The Limits to Capital_ (1982 paperback ed., p. 56)
Keeping all this in mind (as well as the need to constantly expand the range and qualities of consumer commodities -- from horses and buggies to SUVs and Hummers, and from early radios to flat-screen TV "home theaters" -- and thus to pay workers enough to be able to buy them), it's clear that capitalism needs to pay workers a lot more than the "physiological minimum subsistence." So Ricardo is clearly not the 19th-century economic theorist one should go back to. I wonder if Pfaff actually knows anything about Marx, or whether he was using Ricardo as a politically safe stand-in, so he could get the piece published in the International Herald Tribute. If the latter, he certainly didn't advance his readers' understanding of the subject any.
Jon Johanning // jjohanning at igc.org __________________________________ "In an ideal world, people would be preoccupied with reading and writing poetry and having love affairs, as people were in the Japanese court in the 11th century, as described in 'The Tale of Genji.' If people were involved in that type of life, maybe there would be no war." -- Wallace Shawn