Persistent Inequalities: Wage Disparity under Capitalist Competition

by Howard Botwinick

Overview

Economists generally assume that wage differentials among similar workers will only endure when competition in the capital and/or labor market is restricted. However, using a classical Marxist anaysis of real capitalist competition, Botwinick shows 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, Botwinick’s 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 UniversityPress.

Product Details

ISBN-13:	9781608460199
Publisher:	Haymarket Books
Publication date:	12/11/2018
Series:	Historical Materialism , #152
Pages:	390
Product dimensions:	6.00(w) x 8.90(h) x 0.90(d)

About the Author

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.

Table of Contents

New Preface (2017 Edition)
Preface and Acknowledgements (1993 Edition)
List of Figures
List of Tables
1 Introduction
 Breaking the Impasse
 Toward a Theoretical Alternative
 Implications for the Analysis of Discrimination
 On Heterogeneous Labour
 Comparing Our Results to Orthodox and Radical Economics
 Solving Some Anomalies
 Outline of the Argument
2 Continuing Attempts to Square the Circle (Or, Competitive Theory Confronts Differential Wage Rates)
 Early Neoclassical Wage Theory
 The Theory of Perfect Competition: Abstraction as Idealisation
 The Inevitable Schism between Theory and Practice
 The Theory of Imperfect Competition – Godsend or Albatross?
 Postwar Institutionalists: An Initial Attempt at Alternative Theory
 The Ascent of Human Capital Theory
 The Real World Strikes Back
 The New Institutionalists: The Dual Economy and Dual Labour Markets
 Labour Market Segmentation and Monopoly Capital
 The Initial Response to Segmentation Theory
 The Second Wave of Segmentation Arguments
 The Continuing Search for a Radical Alternative
 Efficiency Wage Theory: The Latest Attempt to Square the Circle
3 Capitalist Accumulation and the Aggregate Labour Market
 Marx versus Neoclassical Economics
 The Special Commodity Labour Power
 Primitive Accumulation and the ‘Doubly Free’ Labourer
 The Unique Logic of Labour Supply
 Capitalist Accumulation and the Reserve Army of Labour
 Marx’s Reserve Army within the Modern Period
 On the Necessity of Worker Resistance
 Capitalist Accumulation and the Limits to Rising Wage Rates
 Empirical Evidence for Limits to Rising Wage Rates
4 Wage Differentials and the Aggregate Labour Market
 Capitalism’s Active and Reserve Armies: Differentiation and ‘Segmentation’ in Their Most Basic Forms
 The Role of Workers in the Segmentation Process
 A Dynamic Analysis of Labour Mobility and Wage Differentiation Under Conditions of Permanent Underemployment
 Uneven Technical Change, Competition, and the Reserve Army: A Brief Glimpse of Marx’s Theory of Wage Differentials
 On the Incompleteness of Marx’s Work
5 Capitalist Competition and Differential Profit Rates
 Competition within Industries
 Competition between Industries
 Marx’s Concept of Regulating Capitals
 Empirical Evidence of Monopoly
 Chapter Summary
 Appendix to Chapter 5
6 Capitalist Competition and Differential Wage Rates (I): The Analysis of Regulating Capitals
 Overview of the Dynamic Adjustment to Changing Wage Rates
 Deriving Determinate Limits to Rising Wage Rates
 Limit One: The Immediate Profitability of Regulating Capitals
 Limit Two: The Unit Costs of Subdominant Capitals
 Further Implications for Inter- and Intraindustry Wage Patterns
 Limit Three: The Differential Costs of Obstructing Wage Increases
 Analysing the Effects of Uneven Worker Organisation
 A Final Note on Workers’ Power and the Costs of Obstruction
 The General Laws of Capitalist Accumulation
7 Capitalist Competition and Differential Wage Rates (II): Non-regulating Capitals and Differential Profit Rates
 The Case of Less Efficient Capitals
 Short-Term Effects of Rising Wage Rates
 The Case of More Efficient Capitals
 Implications of the Dynamic Equalisation of Profit Rates
Conclusion
 Capitalist Competition and Differential Wage Rates: Abundant Possibilities for Sustained Inequality
 Capitalist Accumulation and the Aggregate Labour Market: Further Sources of Wage Variation
 Comparing Our Results to Neoclassical Economics
 Comparing Our Results to Radical Economics
 Implications for Empirical Research
 Implications for the Contemporary Labour Movement
Afterword: The Past 20 Years Have Not Been Pretty
 Where Do We Go from Here? Lessons from the 1930s
 But Hasn’t Accelerated Globalisation Made the Old CIO Strategies Obsolete?
 Given the Dismal State of the Left, How Can We Get There from Here? A Final Lesson from the 1930s
References
Index

Editorial Reviews

“Persistent 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 […] It offers an exciting and stimulating explanation of a real-world phenomenon and its social implications.”
—John Weeks, University of London, Center for Development Studies, School of Oriental and African Studies
“Today employers cite ‘competitiveness’ 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 – one that is based on the actual dynamics of capitalist competition. Because of this, economist Howard Botwinick, particularly in his conception of the ‘regulating capital,’ has given us a prism through which to craft strategies to end the very decline and inequality he explains.”
—Kim Moody, author of An Injury to All: The Decline of American Unionism and US Labor in Trouble and Transition
“Botwinick’s 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 theory’s 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 […] 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.”
—William, Darity, Jr, University of North Carolina
“Labor 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 […] The beauty of Botwinick’s analysis is that, while class struggle enters into wage determination, wage rates are not completely indeterminate. There are concrete limits to wage increases […] Botwinick’s 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 […] So are low-wage workers in highly capitalized industries […]”
—Michael Yates, author of Why Unions Matter, in Monthly Review, February 1996

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