Is capitalism compatible with decent living standards for the worst off*? This old Marxian question is outside the Overton window, but it's the one raised by Ed Miliband's promise to raise the minimum wage to £8 by 2020.

First, the maths. This implies a rise of 4.2% per year; the NMW will be £6.50 from next month. However, as the NMW rises, workers' incomes don't rise one-for-one, because tax credits get withdrawn. Assuming an average deduction rate of 50% (it varies depending on whether workers have children - see chart 5.8 in this pdf), this implies a rise of 2.1% per year. However, if the OBR's forecasts are correct, CPI inflation will average 2% over 2015-20.

Miliband's promise, therefore, amounts to little better than a pledge that the incomes of the low paid won't fall in real terms - and not even that much, to the extent that inflation might exceed target.

Now, in fairness, Labour might well do more to help the low-paid by, say, increasing the generosity of in-work benefits. But promising to do this before the election would merely run into the question from dickhead journalists: "where will the money come from?" So it's best for Labour to under-promise.

Nevertheless, the raises the issue: what would serious policies to help the low-paid entail? I suspect they would require:

- Macroeconomic policies to boost employment. If you ensure a high demand for labour, you might eventually raise its price.

- A serious jobs guarantee; this would help give work to the less skilled, who might not benefit so much from higher aggregate demand alone.

- Policies to strengthen the bargaining power of low-paid workers. These could include stronger trades unions (pdf), but I'd add a citizens' basic income, which would give workers a guaranteed outside income, and so empower them to reject exploitative jobs.

This brings me to my opening question. Are these policies compatible with capitalism? On the one hand, yes - because higher aggregate demand would raise the mass of profits. But on the other hand, no**. For one thing, as Kalecki famously pointed out, macro policies to increase employment would weaken capitalists' political power by making business confidence less important for growth. And for another thing, more bargaining power for workers means less for capitalists. It's moot.

But this is precisely the debate we should be having. It could be that, whilst the constraints imposed by capitalism are tight, Labour might be over-estimating their tightness, and so will under-deliver for the low-paid.

* Note for rightists: As Adam Smith said, the notion of what's decent rises as incomes rise. And the fact that capitalism has massively improved workers' living standards in the past does not guarantee it will do so in future. As Marx said, a mode of production which increases productive powers can eventually restrain them. And as Bertrand Russell pointed out, inductive reasoning can go badly wrong.

** Simple maths might clarify. The profit rate, P/K can be expressed thus: P/K = Y/K x P/Y. Expansionary macro policy - especially in an environment of wage-led growth - would raise Y/K. But stronger workers' bargaining power would cut P/Y.