Why does exploitation exist

In reality, this amounts to an interest-free loan of labor-power by the worker to the capitalist. As Marx wrote, "In all cases, therefore, the worker advances the use-value of his labor-power to the capitalist. He lets the buyer consume it before he receives payment of the price.

Everywhere, the worker allows credit to the capitalist. In general, the wage--the price of labor-power--is, like all other commodities, determined by its cost of production, which is in turn regulated by struggles between workers and capitalists over the level of wages and benefits, and by competition between workers for jobs. As Marx wrote in Wage Labor and Capital , the cost of production of labor-power is "the cost required for the maintenance as the laborer In other words, the price of labor-power is determined by the cost of food, clothing, housing and education at a given standard of living.

Marx adds that "the cost of production of So in Marx's generalized analysis, the level of wages depends on what it takes to keep workers and their families who represent the next generation of workers alive and able to work--with their standard of living affected by the outcome of class struggles between workers and capitalists. The crucial point is that the cost of wages or labor-power depends on factors completely independent of the actual value produced by workers during the labor process.

This difference is the source of "surplus value," or profit. So let's compare the price of labor-power to the value, expressed in price, of the commodities that workers creates through their labor.

Marx called this "necessary labor," because it is the amount of labor required to replace the wages paid by the capitalist, and because if the worker labored independently and not for a capitalist, it would be "necessary" for them to work four hours to maintain their standard of living.

If it was a matter of "a fair day's pay for a fair day's work," workers ought to be able to go home after four hours of labor. But things don't work this way under capitalism. As Marx wrote in a pamphlet called Value, Price and Profit , "By buying the daily or weekly value of the laboring power of the [worker], the capitalist has, therefore, acquired the right to use or make that laboring power during the whole day or week.

Hence, the worker, in order to receive a wage equivalent to the value they produce in four hours, is forced by the capitalist to work longer--a total of, in our example, eight hours. The value created during the additional four hours, embodied in the products produced by the worker during that time, is what Marx called "surplus value. When this surplus product is sold, the capitalist pockets the proceeds--this, according to Marx, is the secret to the source of profits.

And it's not only industrial capitalists whose profits derive from surplus value, or unpaid labor. The "rentier" classes, such as finance capital and landlords, take their cut from the wealth extracted from the labor of workers in the form of interest on loans to the industrial capitalists and to others in society, rent for factories and homes, and so on. Exploitation forms the basis of all the profits shared among the entire capitalist class.

It is not simply the case that the wealthy have a lot while workers have little; capitalists accumulate wealth through a system of organized theft from the working class. To take a few examples although there are many more :. For Marx the exploited working class in capitalism is the collective agent that brings about the revolutionary transition to socialism--a society without class exploitation.

In addition to its explanatory role, exploitation is also a normative concept in Marxist theory. To describe a relationship, economic exchange, or institutional practice, as exploitative, is to morally criticize it.

Marx's very choice of the word "exploitation" to describe basic social and economic institutions is intentional and indicates that he accords the appropriation of surplus-labour with normative significance.

Marx did not have to describe the process through which the capitalist gains profits as exploitative: he could have called it capitalist appropriation, capitalist gain, or simply the process of capitalist accumulation, without also adding that it was exploitative.

But exploitation is an apt expression because for Marx such accumulation arises not through the use of material resources only, nor through the accumulator's own industry, but through the use of labor power of others. More specifically, capitalist's gains are in his view causally tied to workers' losses, where such losses involve impoverishment, deprivation, and harm to the worker. Furthermore, the other descriptive language that Marx uses in his characterizations of wage-labor exchanges and worker exploitation suggest that he understood those exchanges and that exploitation normatively.

He uses terms such as robbery, theft, and embezzlement in his descriptions of the wage-labor exchange between workers and capitalists in Capital , Vol. It is vital to recognize that Marx's normative account is not freestanding, but is embedded within his social and historical theory of capitalism and that exploitation is not episodic or contingent, but rooted in existing economic and political arrangements. Without the supposition that exploitation has normative content, Marx's social and historical account would not have the same structure or significance.

The term "exploitation" would not be warranted and the social relations involved would have to be characterized in terms of a struggle between two groups, one attempting to gain from the other and the other trying to resist. The working class has a privileged role in Marx's theory as the agent of historical change and the bearer of new and fundamentally different social relations than those existing within capitalism. It is difficult to see how the working class should have such a role in Marx's theory if its status as "exploited" lacked all normative significance.

Conversely, Marx would maintain that a moral-philosophical critique not anchored in a proper understanding the dynamics of historical change and the contours of the social structure, would lack practical import. Thus, the normative and explanatory aspects of Marx's conception of exploitation are mutually supportive given the objectives of his theory of history.

Today many aspects of Marx's positive theory seem unsustainable. The theory of exploitation's exclusive focus on workers' exploitation is excessively narrow in light of other salient forms of oppression and injustice. It also appears to be misguided because the working class has failed in its role as the revolutionary agent of socialism. But even if Marx's theory cannot sustain the kind of grand ambitions he had for it, it is still useful as an ingredient of contemporary social philosophy.

A more modest version of Marx's theory of exploitation in which the normative aspects are more fully developed and in which the explanatory pretensions of the concept of exploitation are somewhat deflated, is the sort of theory that socialists philosophers should focus on. A normative theory of exploitation grounded in a positive social theory remains a desirable goal and would be a corrective to the currently dominate liberal theories of justice that largely ignore exploitation.

As noted earlier, in his descriptions of the relationship between workers and the owners of the means of production in Capital , Vol. I, Marx frequently refers to that relation as involving theft, robbery, and embezzlement, thus connecting exploitation with the notions injustice and rightful entitlement.

Approximately But there is nothing else. In Europe, migrant workers are amongst the most exploited and criminalised, and nowhere is this more apparent than in sex work, where scores of women and children are victims of trafficking. As one sex worker told journalist Linda A. All they do is increase violence against us. They leave us without tools to defend ourselves. The aforementioned stories are just some of the examples of the extreme exploitation facing workers around the world today.

As individual workers and as conscious consumers, we have to play our part to ensure its eradication. A migrant domestic worker from Ethiopia holds a placard during a march demanding basic labour rights in Beirut, Lebanon, on 3 May There are more than , migrant domestic workers in Lebanon, mostly women from Asia and Africa, and the recent case of Lensa Lelisa has highlighted the terrible abuse that many of them face.

No matter how many times one hears about the abuse and exploitation of migrant domestic workers in the Middle East, the stories do not become any less shocking, as the harrowing case of Lensa Lelisa proves.

And how, if at all, are facts about the history of the agents involved or the background conditions against which they operate relevant to assessing charges of exploitation? Those themes include the notion of justice and injustice in economic exchange, the role of labor in the creation of value, and the justification and abuse of private property, especially in capital and land.

Concerns about exploitation often take the form of unfair economic exchange. Attempts to specify the principles that render an exchange fair or unfair can be traced back at least as far as Aristotle, who argued that a just exchange will embody a kind of reciprocity such that the values of the goods exchanged are proportional Nicomachean Ethics , Book V, Part V. But while the notion of proportionality is intuitively appealing, it is somewhat unclear precisely what Aristotle had in mind by it, or what the most defensible explication of the idea would be.

In the writings of St. Thomas Aquinas, we find the beginnings of a much more sophisticated and promising approach to questions such as this. And the just price, according to Aquinas, appears to have been simply the prevailing market price Summa Theologiae , part 2, second part, question 77; see also de Roover and Friedman Thus, a seller who takes advantage of fraud, or a temporary monopoly, to charge an excessive price for an item would be acting unjustly, insofar as his price is in excess of the price at which similar goods typically sell in the relevant market.

But Aquinas saw nothing inherently sinful in selling a good for more than one paid for it, or with charging enough to earn a profit, or to compensate for risks involved in the productive process. Later Scholastics would devote considerable attention to developing and refining the notion of the just price.

Of special concern was the price attached to the lending of money, or interest. Much of the concern regarding usury seems to have been driven by the idea that the charging of interest involves an inequitable exchange—lenders give something to borrowers, but demand back more than they have given.

But Aquinas seems to have been particularly concerned that borrowers would often be driven to take out loans out of necessity, and thus that their consent to the exchange is not fully voluntary Summa Theologiae , part 2, second part, question The much later natural law theorist John Locke also took up questions regarding just and unjust prices, not in either of his well-known treatises on government but in a lesser known tract titled, Venditio.

The relativity of the just price to the particular market in which the transaction takes place is important. For Locke argued that if two ships sailed laden with corn, one to Dunkirk where there is a near famine taking place, and the other to Ostend where normal conditions obtain, it would not be unjust for the merchant to sell at a significantly higher price in the former location than in the latter so long as the higher price is one that the buyers can afford.

If the merchant did not charge a higher price, Locke argued, then two problems would result. What would be unjust would be for the merchant to sell an item to a particular individual for a price higher than the general market rate as might happen, for instance, if that individual is in particular distress. Thus, Locke holds, if anchors typically sell for a certain price, say pounds, then it would be unjust exploitative to charge the captain of a distressed ship pounds for an anchor, simply because one knows he will be compelled to pay it.

The just price is the going market rate, where that rate is determined by the general features of supply and demand, and not the particular needs or vulnerabilities of any particular buyer or seller.

Interest in exploitation as a feature of economic exchange is thus almost as old as philosophy itself. It was not until the 19 th century, however, that exploitation as a feature of employment relationships came to be a subject of philosophical and political concern. In a sense, of course, the employment relationship is simply another instance of economic exchange, with the laborer selling his or her work in exchange for money in the form of wages. But two ideas led many people to think that there was something special about labor.

The first was a belief that labor is the ultimate source of all economic value. The second was the belief that labor morally entitles the laborer to the full value of that which he or she has produced.

The second idea, and its connection to the idea of labor exploitation, is perhaps best illustrated by the theory put forth by the 19 th century liberal Thomas Hodgskin. For Hodgskin, as for Locke from whose ideas he drew heavily, the right of private property is a natural, pre-political right. That right consists in. Hodgkin But while the natural right of property is based on labor, there is also an artificial right of property that is based on nothing more than legislative force.

That artificial right cements in place, through the machinery of government, property claims that had their origins not in labor but in violence, conquest, and theft. And it thereby enables capitalists to profit without labor, simply by virtue of their illegitimate control of the means of production Reeve b. For Hodgskin, capitalists exploit workers in precisely the same way that landlords exploit their tenants.

In both cases, one person is entitled to a stream of revenue simply by virtue of their legal claim of ownership Hodgskin The money the landlord earns as rent comes from the wages the tenant earns as a laborer, just as the money the capitalist earns as profit comes from the sale of products produced by his laborers. In both cases, one person is able to live as a parasite off the productive activities of others, all because the state actively suppresses the natural right of laborers to the full product of their labor, in favor of the artificial right of property established by violence.

Even before Marx, then, we see in the 19 th century a tight connection between theories of exploitation and theories of class and of class conflict. For members of that school, the two great classes into which society was divided were productive laborers and unproductive social parasites. The class of productive laborers was understood broadly to encompass not only those who exerted physical labor to create tangible goods and services, but anyone who worked to make goods more useful than they would otherwise be—so laborers, yes, but also entrepreneurs, arbitrageurs , and even capitalists in their role as managers and overseers of investments.

The unproductive classes, in contrast, consisted of those who consume value but do not produce it, such as the army, the government, and the state-supported clergy Raico According to Industrialists such as Charles Comte and Jean-Baptiste Say, the unproductive classes are able to maintain themselves by using the coercive power of government to forcibly extract resources from the productive.

But not all theorists of the 19 th century saw things this way. For Ricardian Socialists such as John Bray, ending exploitation would require ensuring that all persons have equal access to the means of production, and thereby guaranteeing a system of equal exchange based on the labor theory of value Bray While Hodgskin and the Industrialists sought to purify capitalism from statist interference, Bray and his fellow socialists sought to eliminate it altogether.

By far the most influential theory of exploitation ever set forth is that of Karl Marx, who held that workers in a capitalist society are exploited insofar as they are forced to sell their labor power to capitalists for less than the full value of the commodities they produce with their labor.

For Marx, however, exploitation was a phenomenon that characterized all class-based societies, not only capitalism. Indeed, it is feudal society, not capitalism, where the exploitative nature of class relations is clearest.

In contrast, under slavery workers appear to work entirely for the benefit of their masters though in reality a part of their labor goes toward providing for their own subsistence. And under capitalism workers appear to work entirely for the benefit of themselves, selling their labor to capitalists as free independent contractors Cohen —3.

It is not truly voluntary because workers are forced by their lack of ownership of the means of production to sell their labor power to capitalists or else starve. And because Marx subscribed to a labor theory of value, this means that just like any other commodity such as butter or corn, the price or wage of labor power is determined by its cost of production—specifically, by the quantity of socially necessary labor required to produce it.

In other words, Marx thought that workers under capitalism will therefore be paid just enough to cover the bare necessities of living. They will be paid subsistence wages. But while labor power is just like any other commodity in terms of how its price is determined, it is unique in one very importance respect. Labor, and labor alone, according to Marx, has the capacity to produce value beyond that which is necessary for its own reproduction. In other words, the value that goes into the commodities that sustain a worker for a twelve-hour work day is less than the value of the commodities that worker can produce during those twelve hours.

This difference between the value a worker produces in a given period of time and the value of the consumption goods necessary to sustain the worker for that period is what Marx called surplus value.

During the first part, the laborer works for himself, producing commodities the value of which is equal to the value of the wages he receives.

During the second part, the laborer works for the capitalist, producing surplus value for the capitalist for which he receives no equivalent wages.

Capitalist exploitation thus consists in the forced appropriation by capitalists of the surplus value produced by workers. Workers under capitalism are compelled by their lack of ownership of the means of production to sell their labor power to capitalists for less than the full value of the goods they produce.

Capitalists, in turn, need not produce anything themselves but are able to live instead off the productive energies of workers. In the first volume of Capital , Marx presents a series of formulas representing a tight relationship between labor, exploitation, and capitalist profit. Of course, different industries will employ different mixes of labor and other factors of production—of variable and constant capital.

But since capitalist profit is generated by the exploitation of labor, it seems to follow that industries that employ a greater proportion of labor of variable over constant capital should therefore earn a higher rate of profit. Marx himself recognized this fact, and sought to address it in the third volume of Capital by dropping the assumption of volume 1 that value and price are equivalent, and showing instead how value can be transformed into price through some more complicated process.

But the labor theory of value to which Marx and early classical economists subscribed is subject to a number of apparently insurmountable difficulties, and has largely been abandoned by economists in the wake of the marginalist revolution of the s.

The most obvious difficulty stems from the fact that labor is heterogeneous. Some labor is skilled, some labor is unskilled, and there does not appear to be any satisfactory way of reducing the former to the latter and thereby establishing a single standard of measure for the value of commodities. Moreover, the labor theory of value appears to be unable to account for the economic value of commodities such as land and raw materials that are not and could not be produced by any human labor.

But the labor theory of value holds that the value of an object is a function of the labor that would be currently required to produce it, regardless of how much labor actually went into producing it.

Paradoxical as it may seem, the labor theory of value is incompatible with the claim that labor alone creates value. It is, rather, that capitalists appropriate some of the value of the products that are created by labor.

Labor may not produce value, but it is the only thing that produces what has value, and this is all Marx needs to get his account of exploitation off the ground Cohen And there are at least two respects in which this commitment is problematic.

First, it is unclear whether exploitation necessarily involves the forced transfer of surplus value. If someone chooses to work in order to earn discretionary income, it still seems possible that they could be exploited by a capitalist who appropriates some of the value of the product the laborer creates Kymlicka A laborer can be exploited, we might think, by being paid an unfair wage even if that laborer is not forced to work.

Second, it is unclear whether all cases involving the forced transfer of surplus value are necessarily exploitative, at least in the ordinary sense of involving a moral wrong. Suppose that governments tax workers and use some of the proceeds to provide support for children or the infirm. If it is exploitative for capitalists to appropriate some of the value of the objects produced by workers, is it not also exploitative for government to do so through the mechanism of taxation?

Some libertarians have argued that this is precisely how we should understand the coercive power of government. Taking unfair advantage, in turn, can be understood in two ways.

First, it can refer to some dimension of the outcome of the exploitative act or transaction. In this case, we say that the transaction is substantively unfair. Second, to say that A takes unfair advantage of B may imply that there is some sort of defect in the process by which the unfair outcome has come about, for example, that A has coerced B or defrauded B or has manipulated B. In this case, we say that the transaction is procedurally unfair.

This section examines several elements or possible elements of transactional exploitation: the benefit that exploitative transactions confer upon A , the harm they cause to B , various notions of substantive and procedural unfairness, and the unjust background conditions against which exploitative transactions may take place.

When A exploits B , A gains some benefit from interacting with B. There was a period in American history in which many women became public school teachers because they were denied the opportunity to enter other professions such as law and medicine.

To the extent that society benefitted in one way from the pool of highly qualified public school teachers, the discrimination may have been exploitative, even if unintentionally so.

Consider abuse. It has been alleged that medical students are frequently abused by verbal insults and denigration and that this abuse may leave long-lasting emotional scars. It is also sometimes claimed that medical interns are exploited, that they work long hours for low pay. The contrast is just right. There is no reason to think that anyone gains in any normal sense from abuse, but it is at least plausible to think that the hospitals or patients gain from the exploitation of interns.

If A gains from the oppressive relationship, as when A enslaves B , then A may both oppress and exploit B.