Exploitation

Exploitation is the forced appropriation of the surplus value of workers. It takes different forms under different class systems and continues to exist in lower stages of Socialism. It disappears only in communist society.

In Capitalist Society

Under capitalism, what value the proletariat brings to the business, the bourgeoisie can only pay a fraction of that value. The wage that is paid represents the cost of living for the wage worker and the rest of the value goes to the bourgeoisie as profit. Proletarians are also exploited when buying commodities which will likely be priced higher than the cost of its production.

In Socialist Society

Socialism as the transitional stage between capitalism and communism will inherit many elements of capitalism. Exploitation will still persist but will generally be lower in quantity than exploitation under capitalist society. In a state enterprise, workers may be paid a fraction of the value brought to the enterprise but compared to a capitalist enterprise, more of the extracted surplus value may circulate as funding for public services and so the extracted surplus value eventually comes back to the worker. Cooperatives also have potential to exploit non-members through commodity exchange or through externalities such as the creation of pollution.

Theory

Exploitation is the appropriation (taking) of the surplus product by the individual or class which controls the means of production.

Surplus product is the product a society or individual produces in excess of their survival needs. Surplus product enables a society to grow and to advance technically and culturally, and it opens up the possibility of increased leisure. However, surplus product is also the basis of economic inequality: if all members of society are just surviving then all are essentially equal; but once a surplus exists some may receive part of the surplus and others not. Class society has developed on the basis of unequal sharing of the surplus product, first as slaveholding society in which the slaveowners live off of the surplus product of the slaves; then as feudal society in which the lords live off the surplus product of the serfs, now as capitalist society in which the capitalists live off the surplus product of the working class. The common thread running through history since slaveholding societies began is that a dominant class controls the means of production and lives by exploiting the labor of the subordinate class which are the great majority of the population. This exploitation has always required that the dominant class employ a system of techniques for coercing people to work. Extraeconomic constraint (undisguised violence) typified the slaveholding and feudal societies, whereas capitalism developed a system that relied on the economic compulsion to work.

The degree of exploitation is measured by the ratio of the surplus product to the product necessary for survival (the necessary product); stated another way, it is the ratio of surplus labor to necessary labor. Under capitalism, in which product and labor can be expressed in terms of value, the degree of exploitation can also be stated as the ratio of surplus value to wages:

E = S / V

Where:

E = rate of exploitation (also called rate of surplus value)
S = surplus value
V = wages (Karl Marx called wages 'variable capital')

Under feudalism, exploitation was based on the feudal lords’ ownership of the land and partial ownership of labor power. The surplus product created by the labor of peasant serfs was appropriated without remuneration by the feudal lords and assumed the form of feudal land rent. Feudal exploitation passed through two main stages: the corvée economy and the quitrent economy. In the corvée economy, the peasant worked part of the time on the feudal lord’s land and part on the parcel of land allotted to him. Necessary and surplus labor were separate from one another in time and in space. Under the quitrent system, all labor was expended on the peasant’s farm. In the corvée economy, surplus labor assumed the form of labor rent; in the quitrent economy, rent was paid in produce or in cash.

The appropriation of surplus in the capitalist mode arises from the specific character of its production process, especially the manner in which it is linked to the process of exchange. Capitalists appropriate a surplus because capitalists buy workers' labor-power at a wage equal to its value but, being in control of production, extract labour greater than the equivalent of that wage. Marx differed from the classical political economists, who saw exploitation as arising from the unequal exchange of labour for the wage. For Marx, the distinction between labour and labour power allowed the latter to be sold at its value while the former created the surplus. Thus exploitation occurs in the capitalist mode of production behind the backs of the participants, hidden by the facade of free and equal exchange (see commodity fetishism).

The sphere of circulation or commodity exchange, within whose boundaries the sale and purchase of labour-power goes on, is in fact a very Eden of the innate rights of man. [But if we ] . . . in company with the owner of money and the owner of labour-power, leave this noisy sphere, where everything takes place on the surface and in full view of everyone, and follow them into the hidden abode of production, on whose threshold there hangs the notice 'No admittance except on business', here we shall see, not only how capital produces, but how capital is itself produced. The secret of profit making must at last be laid bare!

— Capital I, ch. 6

But 'profit-making' is just capitalist exploitation. Its secret gave rise to the study of political economy; and since Marx disclosed it orthodox economics has been devoted to covering it up again. No previous mode of production required such intellectual labour to unearth, display, and re-bury its method of exploitation, for in previous societies the forms of exploitation were transparent: so many days of labour given, or so much corn claimed by representatives of the ruling class. Capitalism is unique in hiding its method of exploitation behind the process of exchange, thus making the study of the economic process of society a requirement for its transcendence. Exploitation is obscured too by the way the surplus is measured in the capitalist mode of production. The rate of profit (s/(c+v)) calculates surplus value as a proportion of the total capital advanced, constant and variable, the ratio of interest to individual capitals, for it is according to the quantity of total capital advanced that shares of surplus value are appropriated. But as capital expands the rate of profit may fall, concealing a simultaneous rise in the rate of exploitation defined as the ratio of surplus to necessary labour, the rate of surplus value, s/v (see falling rate of profit).

The exploitation of one class by another causes relations between the classes to be antagonistic and gives rise to class struggle.

The establishment of social ownership of the means of production eliminates the exploiting classes and ends class exploitation.

Other works

• Academy of Sciences of the USSR, . Great Soviet Encyclopedia, "Exploitation". Available at The Free Dictionary and Fandom wiki farm
• Collins Dictionary of Sociology, 3rd ed., 2000. "Exploitation and appropiation" (HarperCollins). Accessed via The Free Dictionary
• Susan Himmelweit, 1991. "Exploitation," in Tom Bottomore, ed. A Dictionary of Marxist Thought (Blackwell)