k or two the miners paid the advanced price, but the third week a new restaurant was opened by a man who heard of the "prosperity" in this, particular camp, and inside of two months there were four restaurants competing for trade in Golden Gulch. This competition among the restaurant keepers forced board down to $3.00 a week. Some of them moved away until board fell to the average rate of board in that state.
As long as prices were better there new investors came to Golden Gulch, and when they fell below the average price for board investors went away.
Marx says that when workmen and women get higher wages, they spend this increase in better food, better homes and better clothing. This stimulates the demand for food, clothing and houses. More capitalists begin to invest in food production, in houses and in the manufacture of clothing. The competition among capitalists often brings the prices on these things below the rates charged before the workers received their increase, until these capitalists find they can make more money in other fields, when they invest in other industries and prices fall to what they were before the rise in wages.
On the very last page of Value, Price and Profit, Marx says again:
"A general rise in the rate of wages would result in a fall of the general rate of profit, but, broadly speaking, not affect the prices of commodities."
If you were getting three dollars a day for digging gold out of a mine and you secured $4.00 by striking, would there be as much surplus value left for your Boss as before?
On what do wage-workers usually spend their money? On luxuries?
If the working CLASS is able to force up wages two dollars a week for every man and woman, will they spend the increase on automobiles, trips to Europe, or upon more and better clothing and food? What happens when there is a sudden increased demand for a commodity? Does the price of this commodity rise or fall (temporarily)? If the capitalist producing this commodity, for which there is a suddenly increased demand, is able to get higher prices for it, will this attract other capitalists into the same field of production in the hope of securing bigger profits?
What happens when several big capitalists fight for a field of production where prices are high? Do prices fall?
Do these capitalists remain producing a commodity after its price falls so low that they cannot make the average rate of profit?
When they go into another sphere of production do pricer an this commodity fall to normal again?
Why cannot a capitalist raise prices at his own will? Suppose a wealthy ranch owner has a splendid stock of horses when the U. S. troops are sent down to the Mexican borderline. Horses are very scarce, since automobiles have won favor with the leisure class. He sells these horses at an enormous price. There is still talk of war. What does every other ranchman in the country plan to do when he hears of the profits of the lucky owner of the horses? Do they an go into the COAL BUSINESS?
EVEN if there is still war, or rumor of war, will the price on horses be as high in a few years as it is now? Why not?
In Lesson VII. we discussed a general increase in wages, and how and why they would benefit the working class. We discovered that a general increase in wages mould ultimately result in a fall in the average rate of profit, but would not affect prices in general.
But now that we have seen the desirability of higher wages, how may we secure them?
It is true that the working class, as a class, has never been sufficiently well organized to demand a universally higher price for its labor power–a larger portion of the value of its product from the capitalist class.
It is equally true that when they shall have become sufficiently organized and class conscious to do so, they will not stop with asking higher wages, but will abolish the whole wage system itself.
But Capital makes continual war upon the workers. It reduces wages to the bare cost of living and lowers the standard of living whenever and wherever possible. It prolongs the hours of labor as far as the p