sts to arbitrarily raise the prices on commodities. The conditions must be favorable to such a rise or fall in prices. It is the Army of Unemployed men and women that force wages (or the price of labor-power) down when the cost of living falls. We were unable to find where low prices would benefit the working class.
In discussing prices in the last two lessons, we have not said much about wages, or the price of labor-power. Labor-power is a commodity just as 'stoves, coats or flour are commodities. And the value and price of labor-power are determined exactly as the price and value of all other commodities are determined.
Wage-workers are always trying to get higher wages, or a better price for their labor-power.
It is easy to understand that the gold miner who secures a raise in wages from $2.00 to $3.00 a day, leaves less surplus value for the mine-owner. He receives back more of his product. And the aim of Socialists or revolutionary workmen arid women is to become owners of their entire product.
Confused economists have repeatedly claimed that a rise in wages was no benefit to the proletariat. They insisted that the capitalists would raise prices on the necessities of life, so that the workers would be just where they were before.
But in Value, Price and Profit, chapter II., page 17, Marx says: "How could that rise of wages affect the prices of commodities? Only by affecting the actual proportion between the demand for, and the supply of, these commodities."
"It is perfectly true, that, considered as a whole, the working class spends, and must spend, its income upon necessaries. A general rise in the rate of wages would, therefore, produce a rise in the demand for, and consequently (temporarily) in the market prices of, necessaries.
"The capitalists who produce these necessaries would be compensated for the risen wages by the rising market prices of the commodities."
Note, Marx says that temporarily the prices on necessaries would probably rise, owing to the increased demand for food, clothing and better houses; not because the capitalists decided to raise prices. And then note what begins to follow immediately:
"What would be the position of those capitalists who do not produce necessaries? For the fall in the rate of profit, consequent upon the general rise in the price of wages, they could not compensate themselves by a rise in the price of their commodities, because the demand for their commodities would not have increased...
"Consequent upon this diminished demand, the prices of their commodities would fall. In these branches of industry, therefore, the rate of profit would fall....
"What would be the consequence of this difference in the rates of profit for capitals employed in the different branches of industry? Why, the consequences that generally obtains whenever, from whatever reason, the average rate of profit comes to differ in the different spheres of production.
"Capital and labor would be transferred from the less remunerative to the more remunerative branches; and this process of transfer would go on until the supply in the one department of industry would have risen proportionately to the increased demand, and would have sunk in the other departments according to the decreased demand.
"This change effected, the general rate of profit would again be equalized in the different branches. As the whole derangament originally arose from a mere change in the proportion of the demand for, and supply of, different commodities, the cause ceasing, the effect would cease and prices would return to their former level and equilibrium.
"The general rise in the rate of wages would, therefore, after a temporary disturbance of market prices, only result in a general fall in the rate of profit, without any permanent change in the prices Of commodities."
We will use a concrete illustration to explain Marx's point. In a mining camp the miners secured a gain of wages of from $2.00 to $3.00 a day. The man who ran the only restaurant in the camp thought he could raise the price of board from $4.00 to $5.00 a week. For a wee