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Jonathan Schlefer's article reminds me that among progressive economists there has long been debate over the real nature of labor markets under capitalism. The British economist Joan Robinson, for instance argued that labor markets, like markets for manufactured goods, were imperfectly competitive at best,. While rejecting Karl Marx's reliance upon the labor theory of value, she and A.C. Pigou had suggested that under conditions of imperfect competition labor may be exploited in the sense of it receiving less than its marginal product. Robinson accept this analysis and elaborated on it. For Robinson workers could be said to be exploited if their wages were less than the marginal physical product that they are producing. She also emphasized the distinction between exploitation resulting from monopolists or oligopolists being able to overcharge consumers because of a lack of competition and monopsonistic exploitation where employers are able to underpay their workers because workers have only a limited number of employers to choose from, which gives employers the power to pay workers less than their marginal productivity. Joan Robinson in her book, An Essay on Marxian Economics, made some attempt to relate this neoclassical theory of exploitation with Marx's. In that book, Robinson made clear her rejection of the labor theory of value. But she thought that Marx was still right about a great many things and so she sought ways to reformulate Marx's ideas so that they would be compelling to economists like herself who had been trained in the neoclassical tradition. So she included in An Essay on Marxian Economics a chapter on imperfect competition, and in the following chapter applied that to wages. She argued that under capitalism labor markets are typically monopsonistic in nature, so that workers are indeed exploited in the neoclassical sense. This also meant that she therefore found that wages are not determined by the free market equilibrating them with the marginal productivity of labor but are, instead, determined by the bargaining power of labor versus capital. In other words they are determined through class struggle as Marx had asserted. This view of wages, in Robinson's view, was implicit in Adam Smith's The Wealth of Nations, where Smith had observed " Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate. To violate this combination is everywhere a most unpopular action, and a sort of reproach to a master among his neighbours and equals." While not directly asserting that Marx's notions of exploitation could be restated in terms of the neoclassical theory of exploitation that she and Pigou had pioneered, she did seem to suggest that it could do much of the same work that had been done in Marx's writings where exploitation was explicated in terms of the labor theory of value. However Marxist exploitation cannot really be the same as Pigou-Robinson exploitation since most Marxists would, I think, be unwilling to suggest that there would be no exploitation under a capitalism where perfect competition existed. Paul Flatau puts it: "The presumption that under perfect competition workers cannot be exploited is a central tenet of neoclassical thought on the issue. Lange (1934-1935), in referring to the Pigou and Robinson analyses of exploitation, was quick to point out that for the Socialist the worker is exploited even if he gets the full value of the marginal product. This is because there still remains, in the competitive market, a flow of income to the owners of capital. As Lange puts it : The Marxian definition of exploitation is derived from contrasting the personal distribution of income in a capitalist economy (irrespective of whether monopolistic or competitive) with that in an einfache Warenproduktion in which the worker owns his means of production. See Elster (1978) for a more detailed discussion of the distinction between the (classical) Marxian approach to exploitation and the neoclassical." (http://www.hetsa.org.au/pdf/33-A-1.pdf Jim Farmelant http://independent.academia.edu/JimFarmelant http://www.foxymath.com Learn or Review Basic Math ____________________________________________________________ Kaiser Permanente® FEHB A Leader in Quality Care With the Lowest Cost HMO Plan. Learn More! http://thirdpartyoffers.juno.com/TGL3141/543bb745b64ba37456e4dst04vuc ________________________________________________ Send list submissions to: Marxism@lists.csbs.utah.edu Set your options at: http://lists.csbs.utah.edu/options/marxism/archive%40mail-archive.com
