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Law of Wages

Prohibition

 We are not opposed to the Prohibition— of swipes and adulterated water. Nor do we, like the brewer and his friends, pretend that Prohibition is a matter of vital concern to the workers. There is a Socialist view on this matter, but, like our views on all questions, it is in conflict with those of the reformer. The brewer endeavours to convince us that drinking is a noble and commendable act, for the same reason that the Nonconformist cocoa manufacturer boasts of the food value of his product and supports the Temperance movement. Profit greed determines what they think good for the dear worker, and the Temperance reformer with the anti-Prohibitionist reflect their interests.

Must Wages Come Down?

A most deadly weapon in the armoury of the politicians who defend the interests of the employing class is the assertion that wages must come down because the present rates of pay are “more than industry will bear.” It is put forward by Liberals and Tories, and has been supported by the expert advisers called in to help the Labour Government. It is accepted by large numbers of workers, and is more than half-believed by the Labour leaders themselves. It is not true.

How Capitalism Works (5): Keynes and Capitalism

AN ENTERPRISE'S RATE OF PROFIT is the ratio of the amount of profits it makes, say in a year, to the money-value of its assets at the beginning of that year. The average rate of profit of the whole economy is the ratio of total profit to total capital. The rate of profit would tend to fall if over time the amount of the total capital tended to increase at a faster rate than the total amount of profits.

This fall tends to happen as a result of the increasing amount of old wealth that must be used as fixed equipment in producing new wealth (or, what amounts to more or less the same thing, to the increasing size of the means of production in relation to the amount of human labour needed to operate them). Because there are so many offsetting factors, this tendency for the average rate of profit to fall only becomes evident in the very long run and so could not explain the onset of a much shorter term occurrence like a slump.

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