Yes, labor hours reduction will lead to a fall in wages: But so what?

by Jehu

Several Marxists who oppose my argument, and even some who support it, express the concern that reducing hours of labor stock_chartwill reduce profits. While they have no objection to this in and of itself, they point out the capitalists will respond to such a fall in profits by trying to slash the wages of the working class. The reasoning behind this objection seems to be mostly political: the working class might be strong enough to impose a reduction of hours on the owners of capital, yet unable to defend its material living standards from a capitalist offensive.

Although this reasoning seems a bit far-fetched to me, we can ignore it for now because the opponents are correct even if their reasoning is not: once hours of labor fall, money wages will fall as well.

If this is true, why does a reduction of hours of labor still recommend itself to radical activists? First, because we intend to drive wages to zero.  How is it possible for Marxists to think wage labor can be abolished while wages remain? Getting rid of wages is simply another way of saying we aim to abolish wage labor. When we declare our intention to abolish wage labor, this means we also intend to abolish money wages too, not just wage labor. Moreover, since a reduction of hours of labor also involves a reduction of money wages, and since as labor time goes to zero so does wages, the benefit of reducing hours of labor cannot have anything to do with the worthless paper fiat with which the working class is paid its wages.

When total hours of labor are falling, the prices of all commodities — including labor power — will also be falling as well. It will take less labor to produce each commodity and the value of the commodities must fall. In Capital, Marx explains why this must be true.

The intensity of labor is inverse to its duration

In chapter 15 of Capital, volume 1, Marx made great use of the available empirical evidence of his time to illustrate the impact of reduced hours of labor on capital. Marx makes three arguments that were probably the first of their kind made in political economy:

First, he argued, reducing hours of labor increased the efficiency of labor. What was lost by shortening the day, was gained back by increasing the efficiency and energy of the labor. This was not only true where labor was mostly accomplished by hand, even when labor was subordinated to the rhythms of the machine, the empirical evidence demonstrated more was produced in less time. And the workers did not simply work more diligently and with greater attention, a shorter day reduced the cost of other production inputs, like coal. Again, Marx did not imagine this impact, he directly quoted industrialists and state bureaucrats of his day in support of his argument.

Second, Marx discovered that once there was a limit imposed on the length of the working day, the capitalists were forced to introduce improved machinery to further intensify labor. This was accomplished two ways: speeding up the machinery and giving the worker more machines to tend. Because the capitalist was under greater pressure to increase profits, he would be forced “to exercise the strictest watch over the cost of production.” Improved machinery would be necessary to take advantage of the increased capacity of the worker to labor in shorter bursts. Innovation was spurred by improvements in machines, including piston speed, energy efficiency, material consumption, transmission, etc. The improvement, while reducing the size of the machines, also increase their speed and efficiency, size, sophistication, etc. The empirical evidence available to Marx at the time demonstrated that rate of increase of output jumped five-fold when compared to before limits were imposed on hours of labor. From 1838 to 1850, output increased by 32% (about 2.7% per year); while from 1850 to 1856 output grew by 86% (about 14.3%).

Third, there is no way to escape the conclusion based on the then available evidence that imposing limits on hours of labor not only freed the workers to enjoy greater disposable time, it also accelerated industrial production. Moreover, as Marx argues, the reduction of hours of labor would have such a profound impact on the productive forces — spurring the replacement of living labor by machines — that further reduction of hours of labor eventually would be necessary. Reducing hours of labor accelerated the development of the productive forces and thus accelerated the abolition of wage labor itself: “machinery not only acts as a competitor who gets the better of the workman, [it] is constantly on the point of making him superfluous.”

All of this points to the conclusion that, given a reduction of hours of labor, more commodities would be produced by less labor than before and, therefore, at greatly reduced prices of production. If followed to its logical conclusion, of course, money wages should be falling as less labor was required per unit of output. But this is offset by the tendency for production price of commodities to fall along with wages. Thus, with reduction of hours of labor, both money wages (which is just the price of labor power) and prices of other commodities should decline together toward zero, without in any way implying a lower level of subsistence for the producers.

Labor time reduction, inflation and superfluous labor

Marx’s observations in the middle of the 19th century assumed all labor is productively employed, however many Marxists in the post-war period point to an ever increasing volume of labor time that is not being employed productively, i.e., for the purpose of production of surplus value. Here the question is not the impact of a limit on the productive working day, but what happens when the total working day is not reduced but remains unchanged for decades on end. The focus of attention has been on the emergence of what has been popularly called, “unproductive labor”. According to Harman, the writers Shaikh and Tonak have found that between 1948-1989 unproductive labor grew from 43% to 64% of total hours of labor. Using different assumptions, Mohun estimates that between 1964 and 2000 unproductive labor grew from 35% to 50% of total hours of labor. Kidron estimates the during the 1970 60% of all labor was wasted.

While the reduction of hours of labor has been shown to spur more efficient employment of labor and other inputs as well as improvement in machinery, technology, organization of production and science, logic suggests the expansion of unproductive labor implies the reverse. If indeed there has been a growing accumulation of unproductive labor, David Harvie has argued we should expect to see a significant divergence of price of commodities from their values. The argument Harvie makes here is roughly the inverse of Marx: a growing mass of unproductive labor in the world market implies a secular inflationary spiral of prices.

And indeed Harvie appears to be correct in this assertion: since World War II, the world market has been in the grip of a secular inflationary spiral whose cause both economists and some Marxists have blamed on loose monetary policy, not the expansion of unnecessary labor. Paradoxically, this has led to the fear among radical activists that prices will continue to spiral once hours of labor are reduced, leading to a fall in the material subsistence of the working class. These fears are unfounded; inflation is produced by the stubborn insistence that hours of labor must never be reduced. The cost of hours unnecessary labor adds to the cost of production without any corresponding increase in real output. Loose monetary policy rather than being the cause of inflation is itself, along with inflation of commodity prices, produced by refusal to reduce hours of labor.

I will show why this must be true in a future post.