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Persistent Inequalities
Wage Disparity under Capitalist Competition
Series: - Historical Materialism Book Series, Volume: 152
Author:
Economists generally assume that wage differentials among similar workers will only endure when competition in the capital and/or labor market is restricted. In contrast, Howard Botwinick uses a classical Marxist analysis of real capitalist competition to show that substantial patterns of wage disparity can persist despite high levels of competition. Indeed, the author provocatively argues that competition and technical change often militate against wage equalization. In addition to providing the basis for a more unified analysis of race and gender inequality within labor markets, Botwinickâs work has important implications for contemporary union strategies. Going against mainstream proponents of labor-management cooperation, the author calls for militant union organization that can once again take wages and working conditions out of capitalist competition.
This revised edition was originally published under the same title in 1993 by Princeton University Press.
This revised edition was originally published under the same title in 1993 by Princeton University Press.
Howard Botwinick, Ph.D. (1985) New School for Social Research, is Associate Professor of Economics at SUNY Cortland. He has been active in several unions and was a founding member of the U.S. Labor Party in the 1990s.
Reviews of the original published in 1993 by Princeton Unversity Press:
âPersistent Inequalities makes a major contribution to economic theory, bringing together a number of existing analytical elements and forging them into a coherent, logical analysis. Further, it includes important innovations. The analytical strength of the book lies in its use of competition as the explanatory mechanism for wage differential [â¦] It offers an exciting and stimulating explanation of a real-world phenomenon and its social implications.â
John Weeks, University of London, Center for Development Studies, School of Oriental and African Studies
âToday employers cite âcompetitivenessâ as the reason for cutting wages and benefits and imposing new forms of speed-up. Good jobs are replaced by technology, on the one hand, and subcontracted, substandard jobs, on the other, as capital rushes to cut labor costs. The result is both a general decline in U.S. real wages, now below their 1973 level, and greater inequalities among workers. Persistent Inequalities gives us a contemporary Marxist analysis of wage and income differentials in the labor force â one that is based on the actual dynamics of capitalist competition. Because of this, economist Howard Botwinick, particularly in his conception of the âregulating capital,â has given us a prism through which to craft strategies to end the very decline and inequality he explains.â
Kim Moody, author of An Injury to All: The Decline of American Unionism and US Labor in Trouble and Transition
âBotwinickâs scholarship is first-rate. His main objective is to reconstruct the explanation for interindustry and intraindustry wage differentials on the basis of the perspective of classical political economy and classical Marxism, rather than orthodox (neoclassical) economics. An important thrust of the book is the argument that the orthodox perspective, particularly in its human capital variant, fails to explain not only differences in earnings across occupations but also differences between persons who may differ ascriptively by race or by gender. The failure is due to the orthodox theoryâs invalid characterization of competition. The author demonstrates that the classical perspective can be utilized to provide a much richer and persuasive theory of wage differences [â¦] This work is certainly a significant contribution both to the theory of income distribution and to the theory of industrial organization in economics. In addition, the author explains difficult technical issues in an accessible fashion.â
William, Darity, Jr, University of North Carolina
âLabor organizer turned economist, Howard Botwinick, has written a seminal book in labor economics. Drawing upon the theoretical work of his teacher, Anwar Shaikh of the New School for Social Research, Botwinick in Persistent Inequalities has built what has eluded radical economists, namely, a fully determinate model of labor markets [â¦] The beauty of Botwinickâs analysis is that, while class struggle enters into wage determination, wage rates are not completely indeterminate. There are concrete limits to wage increases [â¦] Botwinickâs work has important implications for the labor movement. At any given time, there will be excellent organizing opportunities. Many of our service industries today are likely to be regulating capitals, and, therefore, good targets for unionization [â¦] So are low-wage workers in highly capitalized industries [â¦]â
Michael Yates, author of Why Unions Matter, in Monthly Review, February 1996
âPersistent Inequalities makes a major contribution to economic theory, bringing together a number of existing analytical elements and forging them into a coherent, logical analysis. Further, it includes important innovations. The analytical strength of the book lies in its use of competition as the explanatory mechanism for wage differential [â¦] It offers an exciting and stimulating explanation of a real-world phenomenon and its social implications.â
John Weeks, University of London, Center for Development Studies, School of Oriental and African Studies
âToday employers cite âcompetitivenessâ as the reason for cutting wages and benefits and imposing new forms of speed-up. Good jobs are replaced by technology, on the one hand, and subcontracted, substandard jobs, on the other, as capital rushes to cut labor costs. The result is both a general decline in U.S. real wages, now below their 1973 level, and greater inequalities among workers. Persistent Inequalities gives us a contemporary Marxist analysis of wage and income differentials in the labor force â one that is based on the actual dynamics of capitalist competition. Because of this, economist Howard Botwinick, particularly in his conception of the âregulating capital,â has given us a prism through which to craft strategies to end the very decline and inequality he explains.â
Kim Moody, author of An Injury to All: The Decline of American Unionism and US Labor in Trouble and Transition
âBotwinickâs scholarship is first-rate. His main objective is to reconstruct the explanation for interindustry and intraindustry wage differentials on the basis of the perspective of classical political economy and classical Marxism, rather than orthodox (neoclassical) economics. An important thrust of the book is the argument that the orthodox perspective, particularly in its human capital variant, fails to explain not only differences in earnings across occupations but also differences between persons who may differ ascriptively by race or by gender. The failure is due to the orthodox theoryâs invalid characterization of competition. The author demonstrates that the classical perspective can be utilized to provide a much richer and persuasive theory of wage differences [â¦] This work is certainly a significant contribution both to the theory of income distribution and to the theory of industrial organization in economics. In addition, the author explains difficult technical issues in an accessible fashion.â
William, Darity, Jr, University of North Carolina
âLabor organizer turned economist, Howard Botwinick, has written a seminal book in labor economics. Drawing upon the theoretical work of his teacher, Anwar Shaikh of the New School for Social Research, Botwinick in Persistent Inequalities has built what has eluded radical economists, namely, a fully determinate model of labor markets [â¦] The beauty of Botwinickâs analysis is that, while class struggle enters into wage determination, wage rates are not completely indeterminate. There are concrete limits to wage increases [â¦] Botwinickâs work has important implications for the labor movement. At any given time, there will be excellent organizing opportunities. Many of our service industries today are likely to be regulating capitals, and, therefore, good targets for unionization [â¦] So are low-wage workers in highly capitalized industries [â¦]â
Michael Yates, author of Why Unions Matter, in Monthly Review, February 1996
New Preface (2017 Edition)
Preface and Acknowledgements (1993 Edition)
List of Figures
List of Tables
1 Introduction
âBreaking the Impasse
âToward a Theoretical Alternative
âImplications for the Analysis of Discrimination
âOn Heterogeneous Labour
âComparing Our Results to Orthodox and Radical Economics
âSolving Some Anomalies
âOutline of the Argument
2 Continuing Attempts to Square the Circle (Or, Competitive Theory Confronts Differential Wage Rates)
âEarly Neoclassical Wage Theory
âThe Theory of Perfect Competition: Abstraction as Idealisation
âThe Inevitable Schism between Theory and Practice
âThe Theory of Imperfect Competition â Godsend or Albatross?
âPostwar Institutionalists: An Initial Attempt at Alternative Theory
âThe Ascent of Human Capital Theory
âThe Real World Strikes Back
âThe New Institutionalists: The Dual Economy and Dual Labour Markets
âLabour Market Segmentation and Monopoly Capital
âThe Initial Response to Segmentation Theory
âThe Second Wave of Segmentation Arguments
âThe Continuing Search for a Radical Alternative
âEfficiency Wage Theory: The Latest Attempt to Square the Circle
3 Capitalist Accumulation and the Aggregate Labour Market
âMarx versus Neoclassical Economics
âThe Special Commodity Labour Power
âPrimitive Accumulation and the âDoubly Freeâ Labourer
âThe Unique Logic of Labour Supply
âCapitalist Accumulation and the Reserve Army of Labour
âMarxâs Reserve Army within the Modern Period
âOn the Necessity of Worker Resistance
âCapitalist Accumulation and the Limits to Rising Wage Rates
âEmpirical Evidence for Limits to Rising Wage Rates
4 Wage Differentials and the Aggregate Labour Market
âCapitalismâs Active and Reserve Armies: Differentiation and âSegmentationâ in Their Most Basic Forms
âThe Role of Workers in the Segmentation Process
âA Dynamic Analysis of Labour Mobility and Wage Differentiation Under Conditions of Permanent Underemployment
âUneven Technical Change, Competition, and the Reserve Army: A Brief Glimpse of Marxâs Theory of Wage Differentials
âOn the Incompleteness of Marxâs Work
5 Capitalist Competition and Differential Profit Rates
âCompetition within Industries
âCompetition between Industries
âMarxâs Concept of Regulating Capitals
âEmpirical Evidence of Monopoly
âChapter Summary
âAppendix to Chapter 5
6 Capitalist Competition and Differential Wage Rates (I): The Analysis of Regulating Capitals
âOverview of the Dynamic Adjustment to Changing Wage Rates
âDeriving Determinate Limits to Rising Wage Rates
âLimit One: The Immediate Profitability of Regulating Capitals
âLimit Two: The Unit Costs of Subdominant Capitals
âFurther Implications for Inter- and Intraindustry Wage Patterns
âLimit Three: The Differential Costs of Obstructing Wage Increases
âAnalysing the Effects of Uneven Worker Organisation
âA Final Note on Workersâ Power and the Costs of Obstruction
âThe General Laws of Capitalist Accumulation
7 Capitalist Competition and Differential Wage Rates (II): Non-regulating Capitals and Differential Profit Rates
âThe Case of Less Efficient Capitals
âShort-Term Effects of Rising Wage Rates
âThe Case of More Efficient Capitals
âImplications of the Dynamic Equalisation of Profit Rates
Conclusion
âCapitalist Competition and Differential Wage Rates: Abundant Possibilities for Sustained Inequality
âCapitalist Accumulation and the Aggregate Labour Market: Further Sources of Wage Variation
âComparing Our Results to Neoclassical Economics
âComparing Our Results to Radical Economics
âImplications for Empirical Research
âImplications for the Contemporary Labour Movement
Afterword: The Past 20 Years Have Not Been Pretty
âWhere Do We Go from Here? Lessons from the 1930s
âBut Hasnât Accelerated Globalisation Made the Old CIO Strategies Obsolete?
âGiven the Dismal State of the Left, How Can We Get There from Here? A Final Lesson from the 1930s
References
Index
Preface and Acknowledgements (1993 Edition)
List of Figures
List of Tables
1 Introduction
âBreaking the Impasse
âToward a Theoretical Alternative
âImplications for the Analysis of Discrimination
âOn Heterogeneous Labour
âComparing Our Results to Orthodox and Radical Economics
âSolving Some Anomalies
âOutline of the Argument
2 Continuing Attempts to Square the Circle (Or, Competitive Theory Confronts Differential Wage Rates)
âEarly Neoclassical Wage Theory
âThe Theory of Perfect Competition: Abstraction as Idealisation
âThe Inevitable Schism between Theory and Practice
âThe Theory of Imperfect Competition â Godsend or Albatross?
âPostwar Institutionalists: An Initial Attempt at Alternative Theory
âThe Ascent of Human Capital Theory
âThe Real World Strikes Back
âThe New Institutionalists: The Dual Economy and Dual Labour Markets
âLabour Market Segmentation and Monopoly Capital
âThe Initial Response to Segmentation Theory
âThe Second Wave of Segmentation Arguments
âThe Continuing Search for a Radical Alternative
âEfficiency Wage Theory: The Latest Attempt to Square the Circle
3 Capitalist Accumulation and the Aggregate Labour Market
âMarx versus Neoclassical Economics
âThe Special Commodity Labour Power
âPrimitive Accumulation and the âDoubly Freeâ Labourer
âThe Unique Logic of Labour Supply
âCapitalist Accumulation and the Reserve Army of Labour
âMarxâs Reserve Army within the Modern Period
âOn the Necessity of Worker Resistance
âCapitalist Accumulation and the Limits to Rising Wage Rates
âEmpirical Evidence for Limits to Rising Wage Rates
4 Wage Differentials and the Aggregate Labour Market
âCapitalismâs Active and Reserve Armies: Differentiation and âSegmentationâ in Their Most Basic Forms
âThe Role of Workers in the Segmentation Process
âA Dynamic Analysis of Labour Mobility and Wage Differentiation Under Conditions of Permanent Underemployment
âUneven Technical Change, Competition, and the Reserve Army: A Brief Glimpse of Marxâs Theory of Wage Differentials
âOn the Incompleteness of Marxâs Work
5 Capitalist Competition and Differential Profit Rates
âCompetition within Industries
âCompetition between Industries
âMarxâs Concept of Regulating Capitals
âEmpirical Evidence of Monopoly
âChapter Summary
âAppendix to Chapter 5
6 Capitalist Competition and Differential Wage Rates (I): The Analysis of Regulating Capitals
âOverview of the Dynamic Adjustment to Changing Wage Rates
âDeriving Determinate Limits to Rising Wage Rates
âLimit One: The Immediate Profitability of Regulating Capitals
âLimit Two: The Unit Costs of Subdominant Capitals
âFurther Implications for Inter- and Intraindustry Wage Patterns
âLimit Three: The Differential Costs of Obstructing Wage Increases
âAnalysing the Effects of Uneven Worker Organisation
âA Final Note on Workersâ Power and the Costs of Obstruction
âThe General Laws of Capitalist Accumulation
7 Capitalist Competition and Differential Wage Rates (II): Non-regulating Capitals and Differential Profit Rates
âThe Case of Less Efficient Capitals
âShort-Term Effects of Rising Wage Rates
âThe Case of More Efficient Capitals
âImplications of the Dynamic Equalisation of Profit Rates
Conclusion
âCapitalist Competition and Differential Wage Rates: Abundant Possibilities for Sustained Inequality
âCapitalist Accumulation and the Aggregate Labour Market: Further Sources of Wage Variation
âComparing Our Results to Neoclassical Economics
âComparing Our Results to Radical Economics
âImplications for Empirical Research
âImplications for the Contemporary Labour Movement
Afterword: The Past 20 Years Have Not Been Pretty
âWhere Do We Go from Here? Lessons from the 1930s
âBut Hasnât Accelerated Globalisation Made the Old CIO Strategies Obsolete?
âGiven the Dismal State of the Left, How Can We Get There from Here? A Final Lesson from the 1930s
References
Index
Labor activists, undergraduate and grad students interested in labor economics, wage theory, Marxist political economy, labor management relations, and theories of discrimination and wage inequality. Academic libraries, Labor Institutes.