Production with a Surplus — Wage Above Subsistence

Abstract

By no longer restricting the wage to a given subsistence level, but permitting it to share in the surplus, I am immediately faced with the following question: does the wage contain a subsistence component? If so, it is necessary to divide the wage into subsistence and surplus components. For ease of exposition, I adopt Sraffa’s expedients of treating the whole of the wage as variable and paid at the end of the production period.¹ In so doing, it is possible that commodities entering the wage basket, hitherto basic, can become non-basic simply because they no longer appear as means of production. I avoid this problem by assuming that wheat plays a dual role, as means of production and consumption, though now it is basic simply because of the former.