The Geometry of Distribution: The Wage Curve in the Open Economy

This paper extends the classical surplus approach to value and distribution to an open economy framework with an arbitrary number of commodities and explicitly allowing for persistent profit rate differentials across countries. The analysis builds upon Sraffa’s price equations, incorporating inter-industry linkages between two trading nations. We derive the wage curve for an open economy, demonstrating that while the closed-economy wage-profit relation is a one-dimensional curve, its open-economy counterpart forms a higher dimensional surface with additional degrees of freedom. This structural difference implies that distributive closures play a more significant role in open economies, as profit and wage rates in one country are no longer uniquely tied together. Our results highlight the geopolitical dimension of class struggle, showing that domestic wage and profit rate adjustments can have significant spillover effects on the global distribution of surplus.