Exploitation

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.

Child labour
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.

Long hours
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.

Dangerous work
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 ramifies
"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."

Theory
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.
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 Marx's exploitation theory using an economic model that does not employ the labour theory of value.

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 &frac12; unit of labour plus &frac12; 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 Roemer, being a rational-choice Marxist, does) we reason that each producer will use the 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 used up 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 3/2 L to obtain it. 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.

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 proprtyless 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.

Roemer 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.

Roemer, 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 analagous results: unequal resource endowment leads to exploitation.

[The above follows Roemer's account in Free to Lose, a book he wrote to present his theory to the lay reader.]