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Ria Stone

The Problem of Wages and Prices

There Is Only One Real Solution – Socialism!

(February 1943)

From Labor Action, Vol. 7 No. 8, 22 February 1943, p. 3.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Next time you go into a restaurant and pay its pre-1929 prices, ask the owner why. Nine times out of ten, he’ll mention not only the rising cost of food, but also the wages he has to pay his help to keep them. And if you look like you have a profession or belong to the middle class, he’ll add a dig at the unions.

Next time you read in the newspapers about a demand for higher wages in industry, or make such a demand yourself, notice the threat of the bosses, implied or explicit, to raise prices if the increased wages are granted. For example, in the needle trades strike of a month ago the manufacturers refused the increase on the ground that there was ceiling price on dresses. And, more recently, businesses ordered on a forty-eight-hour basis by presidential decree have threatened a rise in prices because of overtime wages.

Government Based on Profit System

The average worker (not to speak of labor leaders who don’t want to encroach on the profit system) senses the bosses’ predicament. And, unable to see any alternative to the profit system, he is often willing to see the boss get higher prices for the goods which he, the worker, has produced. For example, a needle trades worker was explaining to me the other day how the workers in her shop had no grievance against their boss because he had already signed with the local to grant the wage increase – provided Washington punctured the ceiling on clothing prices. She has to do alterations and dressmaking in her home after hours in order to support her family, but she doesn’t connect this with her boss and the profit system which he represents.

Nor does she realize that she and workers like her would take an indirect wage cut through the higher prices her boss gets. Like the boss, but with less Justification, she takes for granted the profit system, and only hopes that the wages she receives under the system will enable her to give reasonably nutritious and adequate food to her family and keep reasonably warm and fashionable clothing on their backs. The government obviously takes for granted the profit system, and has no intention of jeopardizing it. For example, Prentiss Brown, head of the OP A, has stated that “in some cases where the forty-eight-hour week might force higher prices [due to overtime], he would be inclined to discuss with the War Manpower Commission the feasibility of exempting the employers from the order rather than permitting the higher prices.” (New York Times, February 16)

Superficially, this sounds like an attempt to protect the consumer from higher prices. Actually, however, it is clear that Prentiss Brown, like the rest of the Administration, will go to any lengths to keep the gap between wages and prices which is the source of profit. But to maintain this gap he will lower or maintain wages at their present low level, rather than “permit” prices to rise. Why? Because prices on the whole cannot be altered simply by decree or arbitrary will. They depend upon the value of the commodities produced, and this in turn is in the long run determined by labor productivity and technological conditions beyond the control of either the capitalist or his government representative.

Thus, for example, price rises in consumer goods today are due to decreasing labor productivity caused by such factors as enormous labor turnover, depreciation of machinery with difficulties in replacement, overtaxing of labor from long hours, etc. The restaurant man, who could once fix an icebox leak simply by calling in a plumber, uses a head waiter to do it. The government, far from being able to decrease or put a ceiling price on these goods, acts to raise them by lengthening hours and decreasing labor efficiency, withdrawing experienced workers into the Army or defense industries; and curtailing machine production for consumer goods. “Legitimate” price increases due to increased costs therefore occur. When these are supplemented by the sheer cheating and gouging of the consumer because the latter must buy at whatever prices, we have both the profit system and “profiteering” – revealing the capitalist system at its rottenest.

The Problem Will Be Solved by Socialism

Once the socialist solution to the problem of wages and prices is recognized, how criminal, rather than pathetic, appears the plight of the “poor boss who can’t make a profit if wages go up and prices don’t rise proportionately.” Under capitalism or the profit system, it is necessary to maintain and, if possible, increase the gap between wages (or what it costs in labor power to produce goods) and price (or the exchange-value which those goods have on the market). This gap exists because the worker only receives the price of his labor power and no share in the values he creates.

Under socialism, there will be no wages at all – in the sense of remuneration to the worker only to replace the labor power or energy he has expended. There will be no prices or market values in the sense of goods obtainable only on the basis of paying for them at their value. Under socialism, men will receive a share of what has been produced by the common social labor. They will receive it on the basis of having participated in that social labor (in one way or another), and not, as in capitalism, on the basis of the amount of expended energy which must be replenished. (The latter is the way THE WORKER receives his “share” under capitalism; the capitalist receives his “share” because he owns the means of production and can buy the worker’s labor power.)

Under capitalism, the worker, on Saturday or at the end of his work week, receives wages which simply go to refurbish him for another Monday. Sunday is the day of rest (if you’re lucky and don’t have to work on Sundays, too), when you try to feel as strong and able to work as you did the Monday before. And so it goes on for the worker under capitalism – a continuous but tapering spiral (broken only by unemployment), with the worker never quite catching up to his strength of the week before, but always forced to go to work on Monday, anyway (if it isn’t depression time and he has a job).

Under socialism, all this is changed. Goods are produced for the use of men and NOT for the profits which they bring in to bosses. Labor power is no longer regarded as a commodity to be bought and sold. It is not purchased at all, let alone purchased at the lowest possible price to keep it alive and able to produce more value. Men, under socialism, will work and produce useful goods. But they will produce these for their mutual needs and for their mutual development. The sufficiency of goods which men and machines can create will be given to men to develop their bodies so that their minds can grow rich in the wealth of human knowledge, esthetic appreciation and artistic creation. From day to day, from week to week, and from year to year, the spiral of possible individual activity will widen rather than taper, as human productive and intellectual achievements increase.

Men, no longer fettered by the necessity of working not only for their own material maintenance, but for the bosses’ even more material profits, will be freed to live more fully. The time that each must work will be small, yet the goods produced for all to enjoy will be plentiful.

Then, surely, will he who even thinks of “reasonable profit” be jeered at as a barbarian out of the past dark ages. He who talks about prices chasing wages will be talking gibberish, for men who have been freed from the capitalist system will also have been freed from wage labor, price and profit.

That is why, instead of the conservative motto, “A fair day’s wage for a fair day’s work,” workers must inscribe on their banner the REVOLUTIONARY watchword: “Abolition of the wage system!” Socialism is the ONLY answer!

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