Steve McKenzie (Unite Community member – Lewisham, Greenwich, Bexley) answers this question using a Marxist classic – Wages Prices and Profit – that can be read here.
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Capitalist commentators are still relentlessly promoting the myth, that wage rises cause inflation.
Wages, Prices and Profit (also known as Value, Prices and Profit) written by Karl Marx in 1865, was a comprehensive rebuff to a very naive proposition but forward by one comrade, John Weston, that trade unions fighting for a wage rise was pointless. Weston, a member of the International Workingmen’s Association (the First International – 1864-76), claimed that if they were successful, this would force up prices, eating away any gains that had been made.
However, Marx proved that the cost of a commodity would not be affected by a wage rise, as the laws of capitalist competition would continue to dictate its cost. Putting up the cost of a commodity to compensate for an increase in wages would make the commodity uncompetitive on the market. It is true that any increase in wages would decrease profitability, and vice versa, however the cost of the commodity would not be affected.
Marx also showed how capitalism always strove to suppress wages, through any means possible. They can use new machinery and technology to increase productivity and supress relative wage costs to increase profitability, for example. Alternatively they can use the cruder methods of simply attacking wages and conditions, increasing the length of the working day and so on. The tendency for the employers to drive down the workers share is always there.
Slaves of capitalism
If the workers do not at least organise themselves collectively, to push in the other direction, they will be nothing but absolute slaves of capitalism.
However, taking the essential first step, organising collectively at an industrial level, in a union, is clearly only the beginning of attempts to fight back effectively. Marx pointed out that only battling to ensure that the workers get a fairer share of the cake is wholly inadequate in and of itself. It is not a fundamental challenge to capitalism, the system that creates wage slavery in the first place.
Digressing slightly, it should also be said, bearing in mind the development of the political wing of the Labour movement since the 19th century, that even at its best, the Labour Party has been no more than the political voice of organised “wage slavery” in Parliament. Clearly the leadership of the Labour party at this moment in time, and at the majority of times in its history are not even that good!
The Starmer/Evans clique are a continuation of the old New Labour of the Blair and Brown years. In fact that is very little different to the Macdonald/Snowden years in the 1920’s, when Liberals wearing a Labour badge, acted on behalf of big business and the establishment, finally ending up stabbing the movement in the back by joining a National Government with the Tories in 1931. It is clear that the battle for socialist ideas has to be fought in the unions and the Labour party.
Marx’s Wages, Prices and Profit proved, back in the 1860’s, that wage rises did not cause inflation. Today, 150 years later and capitalism’s apologists, in the guise of economists, politicians and broadcasting propagandists, still peddle the lie that wage rises create inflation. It was nonsense then and it is nonsense now, the only difference being that comrade Weston was making a genuine mistake.
