 It's one possibility is that the real wage falls. That is, the use values purchased by the workers falls. So the workers receiving the same wages, paying higher prices, the only way they can maintain this balance is to lower their consumption. That's what this is, lowering their consumption of consumer goods. And that, of course, would create a problem for those firms trying to produce and sell as they get a paradox, which is make push them more to advertising and manipulation and so forth. Secondly, it's possible that the workers could try and ask for higher wages to balance this. It's possible that the workers might go into debt, add something to the left hand side of the equation so that they could help finance this. It's possible that workers, that everybody in the family, could go to work to get extra wages over here. So everyone in family might work to add to the, if this was the male, to add to the male's labor power, the spouses or the females' labor power, or other people within the family as well, to afford this. So all these are possibilities here. I just want to examine for a moment this one, since it's important in US history. So I'd like to just talk about increase in wages. Suppose the workers had strong unions. Let's go back in time. Let me set this up historically. Suppose this is the 1950s, 60s into the 70s, that 30 year period. And suppose the unions in the United States were strong, and they had a good deal of monopoly power. And so what you had is the monopoly power on the side of unions, who are trying to set a price for the labor power, because that's what the workers are selling, higher than the value of labor power, whilst at the same time, you had the individuals, the corporations that were buying the labor power, they had power in the product market. That is, they could set a price, like I just did, for the consumer goods higher than the unit value. Suppose you had the juxtaposition of these two different kinds of monopolies. And let's see what might happen. So workers, let's start with the workers. Workers would try and get a price of labor power greater than the little v. Remember, that's the value per unit. Suppose they were successful. Suppose the workers were able to get a new subsume class revenue from the capitalist in the means of production industry. So that would be the price of labor power times all the workers times the hours they work. Suppose the union then, the union representing the workers bargained with the capitalist. And what they bargained for was a higher real wage. That is, they took into account that the workers had to pay higher prices for the consumer goods. So when the contract ran out, they sat down with the corporations and they said, look, we want a higher money wage to compensate the workers for the higher prices that they have to pay. So in effect, the unions are bargaining for a higher real wage, so they want a higher price, higher than the unit value of those workers, and not at the compensate for the higher prices. And suppose they were successful. Well, if they were successful, then the workers, all the workers, would get a value of labor power plus the subsume class revenue, and then they could go out and indeed pay these higher prices. And so they might be able to maintain their standard of living to what it was before their real wage, because now they're asking for this subsume class revenue, this extra, to balance the higher prices that they have to pay for the goods and services. So in effect, they want this subsume class revenue to kind of match the higher prices on these goods. That's what the union will bargain for, to get an extra revenue for the workers, to balance the higher prices that the workers have to pay for those goods. So what the workers have is monopoly power via the union to try and shift up the price in the labor power market. When an effect is happening, a supply of labor power, a demand for labor power, what an effect is happening here is that the union is trying to set a higher price of labor power, higher than the unit value of labor power, to take into account, let's say, I mean to take into account lots of things, but in this big example, to take into account the higher prices the workers have to pay for their consumer goods. And again, suppose the workers are successful on this. By the way, just to complete this, I suppose I should add in here, this would be a union dues, because the workers would have to pay some dues to support their monopoly position. OK, so let me get rid of this. And let's go back to see what's going on with the capitalist. The capitalists get a surplus, then they get this non-class revenue, class exploitation here and monopoly position here. And they have a subsumed class payments that they make to secure the conditions of existence of surplus value. But then now they have a new problem. Now they have to make a new subsumed class payment to the union, that is to the workers, because of the workers' union. Plus they have the advertising that I talked about, the advertising to secure this. Here, the workers getting a higher price for their labor power force the capitalist to pay a higher price for that labor power. So it is as if the capitalist have to pay an access fee to get access to labor power, that's what this is. So the subsumed class revenue for the workers is exactly equal to the subsumed class payment by the capitalist. So the workers get a higher price for their labor power, that's precisely what the capitalist have to pay. And it comes out of their surplus. So the question is, so this is the monopoly payment to workers. So the question is now, OK, which is bigger. We have the monopoly power on the output side that the capitalist enjoy. Then we have a monopoly payment to the workers that the workers enjoy and that the capitalist have an extra cost involved. So this is the benefit to the capitalist by getting a monopoly on the selling side. This is the cost to the capitalist by facing a monopoly on their input side. This is the cost to the capitalist of facing a monopoly on the input side. This is the benefit to the capitalist of having a monopoly on the output side and what they're selling. And the question is, which way does the inequality go? Suppose, to make a long story short and to finish this story, suppose the workers are able to get a higher subsumed class payment, which is their revenue, from the capitalist to offset the higher prices that they have to pay. And that forces the capitalist to charge higher prices on the goods that they're trying to sell to offset this new cost. In other words, this plus over here forces the capitalist to charge even higher prices, which in turn forces the workers to get a higher price of labor power to offset that, which forces the capitalist to charge higher prices. Let me do one more, which forces this, which forces well, what do we have here? What we have is what was called in the 1960s and 70s a wage price spiral. We have inflation. So what we're done here is a class analysis of how inflation may occur in the society. That is the higher prices over here stimulate higher price of labor power. This is the higher prices of output. And so the monopolies struggling with one another force up prices. And then you end up with a general inflation. Then the question there would be, OK, what does the federal government do when these inflationary conditions arise? And one of the things that people argued at the time was that what the Federal Reserve Board did, who had control over the money supply, was just pump up the money supply to match the increased demand for money supply and basically help to finance this inflation. In other words, to go back to what we did a long time ago, the demand for money, if you recall, was the value of, there's a little bit of problem. Minus D and I have been using V for the value of labor power. So let me write this out. This is the value of goods and services in the economy. That's in labor times. And if you recall, this was over the value of gold. But suppose we don't have gold. We just have the Fed controlling the money supply here. So it's a non-commodity money. It's just the Fed pumping up the money supply. So basically we have here dollars divided by hours. This is equal to the summation of market prices. So if the market prices rise because of inflation, so that's what we've done. If the market price is rising because of inflation on the input-output side, so the demand for money will rise. And then if the Fed just pumps up the money supply like it can, what happens if there's no change in the value of goods and services? Basically, this falls. In effect, what's happened is the conversion factor between value and this non-commodity money changes because the hours remain the same. But by pumping up more money supply, the dollars per unit hours falls. And that's what the Fed has done. And that continued until a new, I can't remember his name, someone came along who said, no, this won't happen. And reduced the money supply, raised interest rates, and basically caused the recession to squeeze out the inflation in the economy. That may have been under President Reagan. I don't recollect. So that's this analysis over here. The next question, which is also interesting, I think, is what happens if there's monopoly in the capital-good industry, the Department 1 industry? So let me erase this. And suppose we had monopoly in this other industry. And I don't have to do this in such detail. I think you can get the idea. Here we have a few capitalists who, again, because of competition or other reasons, gain monopoly power in a capital-good industry. And they're able to charge a price higher than the unit value. So once again, we have the C plus V plus S, except now it's in a capital-good industry. So this is a C-good industry. The previous one was a V-good industry. And they can sell their product for a price, a monopoly price, greater than the value of producing that. So in this particular case, in contrast to the other case, they're selling this particular commodity because it's a raw material or a machine. They're selling it to other capitalists. And hence, those other capitalists have a surplus by definition. And so they take a cut. These are now the buying capitalists. They take a cut of the surplus. And they, in effect, make a new subsume class payment to these sellers of a monopoly capital commodity. Let me take the case of oil.