Exploitation is employment or enforcement of working conditions which are oppressive and degrading. Exploitation is a matter of degree: garden-variety exploitation by hiring someone for light work at low wages is to be distinguished from conditions that are the functional equivalent of slavery.
Exploitation is also sometimes seen in terms of one person taking or using the life energies or labour of another. This may not always be morally wrong: consider for example the case of someone caring for a family member who is injured or disabled. However, many socialists consider the taking by capitalists of a portion of the product created by their workers as being morally wrong.
Hiring children of school age and working them long hours was one of the defining characteristics of early capitalism and continues in countries where there is need for large numbers of unskilled workers.
In the early years of capitalism long hours, as many as 16 hours a day were common. As workers began to organize a campaign developed for an eight-hour day which, eventually, was partially successful.
Hiring workers for dangerous work or work which involves exposure to dangerous chemicals or other hazardous environmental conditions is exploitation. Work in a lead smelter, or other work with hazardous materials, without modern safety precautions is an example.
"Exploitation reflects and generates differences in power and advantage which have additional dimensions to the financial one. Differential power and advantage create individual and class variations across the whole range of life chances, which become generalised and establish future inequalities of opportunity."
Karl Marx saw a fundamental feature of exploitation as being the extraction of surplus value from the worker. The worker creates a product that is worth x amount more than the raw materials that went into making it, but receives less than x in wages. That difference is called the surplus value and it is kept by the capitalist, who, however, does no work.
The size of the surplus value is a measure of the degree of exploitation; and Marx defined the rate of exploitation (E) as being equal to the surplus value (S) divided by the wages (V).
E = S / V
Exploitation concept independent of L.T.V.
Karl Marx's theory of surplus value and exploitation is often attacked on the ground that the theory depends on the labour theory of value and that the labour theory of value is false. (The labour theory of value is that the value of a commodity is equal to the labour time required to produce that commodity, including the labour time required to produce any raw materials used in its production.) Whether either of these counter-premisses are true is debatable; however, the whole issue has been sidestepped by John Roemer, who has derived the results of Karl Marx's exploitation theory using an economic model that does not employ the labour theory of value. The following discussion is based on John's presentation in his book Free to Lose.
He begins by introducing a simple one-commodity, two-process model economy. The commodity is corn, and it may be produced by either the 'farm' method, in which 3 units of labour (the units could be hours or any other time measure) produce one unit of corn; or the 'factory' method, in which ½ unit of labour plus ½ unit of corn produce one unit of corn.
Farm method: 3L → 1C Factory method: ½C + ½L → 1C
Additional assumptions are that each producer (worker) requires one unit of corn per production cycle (eg., per year) as food; that each producer has an initial stock of ½ unit of corn; that she seeks to begin subsequent production cycles with at least that much stock; and that producers have subsistence preferences, meaning that the individual will work as much as necessary to be able to consume one unit of corn (and maintain her stock), but will not work more than that. The population consists entirely of producers, and we may assume that there are 1000 of them, although the number doesn't matter at this stage.
Taking a rational choice approach (which John Roemer, being a rational-choice Marxist, does) we reason that each producer will use tha factory method as much as she can, since it is less labour-intensive. Each producer, then, will use her entire ½C stock in the factory method, putting in ½L of labour there and obtaining 1 unit of corn, ½ of which must be set aside to replace the consumed stock, and ½ of which remains for her consumption. To obtain her remaining ½C of consumption-need she turns to the farm where she works 3/2L to obtain that amount. In total, then, she works 2L.
In this economy everybody is in exactly the same situation and there is no exploitation.
At this point we also want to obtain a figure for the socially necessary labour time, which is the average amount of time it takes in this society to produce 1 unit of corn (net). In this society it is simply 2L.
John Roemer's knock-out punch is to derive exploitation simply by altering the initial endowments of corn. No assumptions or utterances about 'value' have been made or will be made.
Suppose, not that all 1000 producers each get ½C initially, but that ten producers each have 50C initially and the other 990 producers none. Society's initial stock of corn is 500C, the same as before, but now it is distributed unequally.
What will happen in this society is that each wealthy individual will work up her entire 50C of stock by the factory method, hiring propertyless individuals to do the work and paying them with corn.
Wealthy individual's processing of corn: 50C + 50L → 100C (The 50L is hired.)
Since the propertyless workers can choose to stay away from the factory and obtain their 1C subsistence need by working 3L independently in the farm method, the would-be employer will have to pay a wage of at least 1/3 C per L to entice them to the factory. But Roemer says that she will have to pay only infinitismally more than that because in this society labor is abundant compared to the amount of stock that is available to be worked up. There is enough capital to employ at most 490 workers in the factory method, so at least 500 people will be doing at least some farm labour, which they would gladly trade for marginally higher-paid factory employment.
With a competitively determined equilibrium wage of 1/3 C per L, then, we find that each capitalist, employing 50C and 50L, obtains 100C, of which 50C goes to replacing stock and 50/3 C, or 16-and-2/3 C, goes to wages. She retains 33-and-1/3 C, which she may eat if she desires. She does no work. The propertyless individuals each work 3L, either at the factory or the farm – they are indifferent as to which at this wage rate – and obtain 1C. The situation obviously embodies significant inequality.
John R. offers the following formal definition of exploitation: if a person works more than the time socially necessary to produce the commodities she receives, she is exploited; if she works less than the time socially necessary to obtain them, she is an exploiter. The socially necessary labour time to produce 1C in this society is 2.25L (330 + 990 units corn are produced by 990x3 units labour). The propertyless individuals, who work 3L and receive 1C, are therefore exploited. The wealthy individuals work 0L, receive 33C, and are therefore exploiters.
John R., who is a mathematician by training, continues his analysis by using matrix algebra to generalise this simple one-commodity, two-process case into an n-commodity, n-process model, obtaining analogous results: unequal resource endowment leads to exploitation.
The "John Roemer and Eric Olin Wright model"
The above section discussed John Roemer's work mainly with respect to its usefulness as a means of getting around the LTV dispute. This section describes his theory more generally.
John Roemer has taken two approaches to exploitation: the labour-transfer approach and the game-theory approach. In both approaches, exploitation is viewed as resulting from unequal distribution of productive assets among the members of society. Those who have more assets are able to use that advantage to exploit those who have less.
The labour-transfer approach looks directly at transfers of labour, from one set of actors to another, that result from their different initial asset endowments. Set one exploits set two if it is a net recipient of labour. The discussion in the section preceding this one used the labour-transfer approach.
The game-theory approach treats a given set of production relations as a game between actors with various kinds and amounts of productive assets. Whether there is exploitation is determined by imagining that some coalition (S) of actors withdraws from the game according to some withdrawl rule, and seeing how this would affect the wellbeings of S and of the remaining actors (S' the complement of S). S' is said to be exploiting S if all of the following conditions are true:
- After the hypothetical withdrawl, S' would be worse off.
- After the hypothetical withdrawl, S would be better off.
- S' prevents S from withdrawing.
The third condition is the domination condition and is necessary to eliminate various cases (eg., subsidies to the disabled) which are not normally thought of as exploitation.
Different withdrawl rules can be specified and therefore there are different types of exploitation, each corresponding to a different withdrawl rule. On this basis, four types of exploitation have been identified. Eric Olin Wright, who uses a slightly modified Romerian model in his investigations of social class, gives the four types as feudal exploitation, capitalist exploitation, organization-asset exploitation, and skills-based exploitation. Each is associated with inequality in the ownership or control of one of the four forces of production; and each is defined by the withdrawl, of those who are under-endowed with that factor of production, from the game, taking with them their `fair share' of the asset. The model is summarised in the table below.
|Type of exploitation||Unequally-distributed asset||Withdrawl rule||Mode of production in which this type of exploitation is typical|
|feudal||labour-power||Serfs withdraw with their per-capita share (1 unit each) of labour-power.||feudalism|
|capitalist||means of production||Proletarians withdraw with their per-capita share of the means of production.||capitalism|
|organisation asset||technical organisation||Non-managers withdraw with their per-capita share of organisational control (or equivalently, organisational control is democratised).||statist socialism|
|skills-based||skill||The unskilled withdraw with their per-capita share of skill (physically impossible, but equivalent to distribution of the product according to need).||democratic socialism|
Social change which effectively implements one of the withdrawl rules characterises the transformation from one mode of production to the next. For example, the gaining by serfs of full control over their own labour-power characterises the transition from feudalism to capitalism. The whole transition from feudalism to communism is seen as a progressive elimination of types of exploitation. Although a particular type of exploitation dominates in each mode, it may be comingled with other types. For example, in feudalism, control of serf's labour-power by direct aristocratic coercion is the dominant basis of exploitation, but inequalities in the endowments of skill, organisation assets, and means of production also exist.
Skill-based and organisation-asset exploitation, being, to some degree, innovations in Marxist theory, may need some additional comment. The following passage is from Eric Olin Wright, Classes, pp 79-80:
As both Adam Smith and Karl Marx noted, the technical division of labour among producers was itself a source of productivity. The way the process of production is organised is a productive resource distinct from the expenditure of labour power, the use of means of production or the skills of the producer. Of course there is an inter-relationship between organisation and these other assets, just as there is an interdependence between means of production and skills. But organisation – the conditions of coordinated cooperation among producers in a complex division of labour – is a productive resource in its own right.
How is this asset distributed in different kinds of societies? In contemporary capitalism, organisation assets are generally controlled by managers and capitalists: managers control the organisation assets within specific firms under constraints imposed by the ownership of the capital assets by capitalists. Entrepreneurial capitalists directly own both kinds of assets (and probably skill assets as well); pure rentier capitalists (coupon-clippers) only own capital assets. Because of the anarchy of the capitalist market, no set of actors controls the technical division of labour across firms.
In statist societies (or, perhaps, `state socialist' societies) organisation assets assume a much greater importance. Control of the technical division of labour – the coordination of productive activities within and across labour processes – becomes a societal task organised at the centre. Control over organisation assets is no longer simply the task of firm-level managers, but extends into the central organs of planning within the state. When it is said that exploitation in such societies is based on bureaucratic power what is meant is that the control over organization assets defines the material basis for class relations and exploitation.
The argument behind skills-based exploitation is that people with scarce skills receive incomes which exceed unskilled people's incomes by more than the costs of producing those skills (such costs might include, for instance, tuition fees, study effort, and foregone income). In other words, their skills enable them to collect a sort of economic rent based on scarcity. Wright points to two things which may perpetuate this scarcity (i.e. prevent others from obtaining the skill). One is natural talent. Differences in natural talent may make it so that some people cannot obtain the skill at reasonable cost. The other is artificial barriers to skill acquisition. Possessors of skills have an interest in raising barriers to its acquisition by other people and thus protecting their partial monopoly. Requirements for a credential (a degree, a certificate, a license to practice, etc.) in order to exercise the skill may reinforce such barriers. Some people may be blocked from obtaining skills or credentials by prohibitive initial cost of training or accreditation, or by class, gender, racial, or other types of discrimination.
Eric believes that skill-based exploitation in a democratic socialist society would be relatively weak compared to the dominant forms of exploitation in each of the earlier types of society, because the entire proletariat – skilled and unskilled – has politicl control in democratic socialism. Thus the exploiting group (skilled workers) would not also be the ruling group. This contrasts with all of the preceeding social forms, where the group exercising the principal type of exploitation is also dominant politically.
John Roemer's and Eric Olin Wright's models of exploitation focus on exploitation that is rooted in control over the productive forces. In this they are consistent with the classical Marxist focus on production-relations based exploitation.
However, there are other kinds of exploitation, in which some group obtains more than its share of the social product based on domination outside of the production relations. For example, churches may exploit their believers, and military forces may exploit (eg. by appropriating the loser's assets). In some cases, other categories of exploitation overlap with production-relations based exploitation. For example, men exploit women both inside and outside of production relations (male control over female domestic labour could be regarded as part of the production relations); and racial exploitation, if it takes the form of slavery, is clearly part of the production relations – but there are non-production based kinds of racial exploitation such as non-access to pools, restaurants, social enjoyments, etc.
The prioritization of production-relations based exploitation by Marxists has, unfortunately, sometimes exerted an alienating tendency between Marxism and other liberatory movements. For example, many women feel more seriously discriminated against because of their gender than because of their socio-economic class, and feel that Marxism, with its class preoccupations, inadequately ministers to their worst injuries.
Eric Olin Wright has given two justifications of Marxism's prioritization of production-relations based exploitation over other kinds of exploitation. First he thinks it is more important in explaining historical change: `it can be argued that whatever directionality historical development has is the result of the development of the productive forces. If we grant this, then the effective control over the productive forces and the exploitation which such control generates has a particularly imnportant strategic significance in the theory of history. Second, he says that `production relations are a distinctive basis for exploitation because of the way they are systemmatically implicated in the basic subsistence of the exploited. Property relations [in production] not only determine mechanisms by which surplus is appropriated; they simultaneosly determine mechanisms by which the exploited gain access to subsistence, to their means of existence. Other mechanisms of exploitation are essentially redistributive of a social product already produced within a set of property relations; property-based exploitation is directly bound up with the social production of that product in the first place. We are justified, therefore, in considering production-based exploitation a distinct category from non-production exploitations because of the specific type of interdependency it creates between the exploited and the exploiter. It is outside the competence of the present Communpedia contributor to say whether these justifications are adequate.
- John Roemer,
- Free to Lose.
- General Theory of Exploitation and Class.
- Eric Olin Wright, 1985, Classes. Verso (New Left Books); London, England.
- Brian Burkitt, Radical Political Economy. Brighton, Sussex, England, 1984, p 3.
- Karl Marx called wages 'variable capital' (V).
- Each working 1.02L at a wage of 0.98 C/L, for a total wage bill of 490C for 500L of labour performed.
- The corresponding types in Roemer are `feudal', `capitalist', `status', and `socialist', respectively. (Eric Olin Wright, Classes, p 69.)
- Eric Olin Wright, p 70.
- Eric Olin Wright, Classes, p 85.
- I should note that in Eric's view, in addition to John's withdrawl test, a situation should also demonstrably involve a transfer of labour in order to be called exploitation. Wright's logic on this point seems to me to be muddled, but perhaps I am missing something. -- Communpedia ed.
- Eric Olin Wright, Classes, p 97.
- Eric Olin Wright, Classes, p 98.