es; 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 week 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 