What does Exploitation Mean?
When people complain that they are being “exploited” at work, they usually mean that they are being treated unfairly or being ripped off.
For instance, Burger King used to make workers clock out when it wasn’t busy, though they had to stay at work. One young worker made less than the price of a burger in an 8-hour shift. Pizza Hut offered a young Spanish woman a job – but the first 2 weeks would be without pay, to “help” her improve her English! Some places make staff work unpaid overtime. Nike pays Chinese workers just 16 cents an hour for a backbreaking 70-hour week while its president, Phil Knight, is worth $6 billion. People hear about things like this and they say, “That’s exploitative.”
Nevertheless, if we want to understand what makes capitalism tick, we need to go further than this simple idea of unfairness – it naturally implies that there can be a fair wage, a job where we aren’t exploited, but is that even possible?
Karl Marx said, no. He was the first to analyze how the capitalist system worked in depth and how exploitation was central to it. This was what made him different essentially from his many anti-capitalist followers. Simple theories of exploitation say capitalism can be made fair by making the worst capitalists behave. The Marxist theory of exploitation means that society can be made fair only by overthrowing the capitalists and getting rid of their system.
So how does the Marxist theory work?
Capitalists invest money in factories, materials, and hiring workers to produce goods for sale. When goods are sold, they make a profit. The capitalists’ money, repeatedly invested in production and recouped in the form of profits, is called capital. It grows constantly by going through this cycle.
Marx set out to discover where this expansion of capital came from. To do this, he looked at the basic unit of all things produced – the commodity.
Capitalism is a system where almost everything we produce and use – from a Big Mac to a pair of Nike sneakers – takes the form of commodities. Commodities are produced for purchase and sale before they are used or consumed.
Every commodity has two essential aspects to it. On the one hand, it must be useful – it must satisfy a need. Here its physical qualities are what’s important. Does it taste good, look good, sound good, keep you warm, and keep you clean?
This is what Marx calls its “use value.” It is a necessary element of a commodity, since without it, the final buyer, the consumer, won’t need it and won’t buy it.
However, having a use-value is not sufficient to make something into a commodity. For this it must possess another kind of value – one which can be compared with all the many and varied kinds of commodities. Only in this way can it be exchanged through the medium of money with other goods on the market. This value, which enables us to compare, is what Marx calls “exchange value.” It is what lies behind the commodity’s price.
Nevertheless, the money-value given to differing commodities is not arbitrary. A Big Mac is not worth as much as a pair of Nike’s, but each commodity’s value rests on something that is common to them all. So, what does a hamburger and sneakers – along with the vast range of goods and services on sale – have in common which allows them to be compared and exchanged with each other?
Marx looked for the answer in labor – mental and manual work. But every individual’s labor, every craft, and skill, differs from every other. What can be measured is the average amount of time an average worker spends on a particular piece of work.
So where’s the exploitation? It lies in the fact that the worker is not paid for his or her actual labor, let alone for the products of that labor. What the worker sells is a special commodity – the ability to work, what Marx calls labor-power. The capitalist uses this to transform all the other inputs into production – raw materials, power, machinery, etc. – into a number of commodities. When these are sold, it is revealed that the capitalists’ original investment has grown substantially. Where did this increase come from?
The ability to work has a price like all other commodities; it is called a wage. What decides its basic level – the level below which it cannot fall? Simply put, it is whatever it costs to bring the worker back to work day after day able to complete an employer’s task.
On the other hand, wages cannot be so high that the worker escapes from the daily, weekly, monthly necessity to sell this commodity. In short, wages are determined by the amount needed to produce and reproduce labor-power.
To the individual worker, only if wages begin to fall below the level of what is needed to live normally, does this begin to look like “exploitation.” Otherwise, it seems like a “fair day’s work for a fair day’s pay.”
But all is not as it seems. Labor-power is unique amongst all the endless variety of commodities: It alone has the ability to create extra value out of all the other inputs. It creates this value in the very process of being used up, put to work.
This sounds very mystical, but when you think about it, it becomes obvious. What would a fridge full of raw hamburgers, jars of pickle, and stacks of sesame buns be worth without workers there to cook, package, and serve them? What would an idle factory with palettes laden with labels, cloth and thread, and motionless sewing machines be worth unless labor-power set them all going? Answer: the same as the capitalist paid for them. Only labor-power can increase their value.
But workers are not paid the whole value of what they create in production. They are only paid the amount needed to reproduce their labor-power.
The buyer of labor-power, the owner of the workplace – the capitalist – effectively steals the extra value that workers create. This “surplus value” is the sole source of wealth for the capitalists. It is the secret behind the constant growth of capital, behind the capitalists’ profits.
Whereas a worker at best “accumulates” some personal and household possessions – some savings, a retirement pension, etc. – the capitalists accumulate in their hands the entire vast means of production and distribution – the factories, offices, supermarkets, land, banking. We built it and they own it.
The capitalists don’t do this because they are good or bad. They invest capital and make a profit neither out of their goodwill to “provide jobs” or “get the economy going” (as they always claim) nor out of some wicked desire to exploit people. It’s more than just greed. The individual capitalist is compelled to extract the maximum surplus value from his or her workforce because of competition with other capitalists. The weak get swallowed up. The strong get bigger.
That means not just taking the profits and spending it all on yachts and banquets in posh houses. It means ploughing some of it back into the business to build more factories, better machines, and create new products. Therefore, competition drives development and further industrialization and expands its capacity to produce even more capital.
That is why Marx’s criticism of capitalism as a system is not a moral or ethical one. These are just the natural dynamics of it as an economic system based on private ownership of the means of production and market competition.
Anita Roddick, who owns the chain of Body Shops, may sponsor the non-violent direct action group, the Ruckus Society, and avoid animal testing, may or may not be a “nicer” person than Phil Knight, who owns Nike, but both share a drive to have their commodities on sale on every street and to maximize profits.
This competitive drive to accumulate, to make profits, is opposed to the interests of workers. The capitalist can increase surplus value only at his or her expense. This can be done in two ways. One is by getting more work out of us for the same wage – by increasing the length of the working day (overtime), or by making people work harder and faster. The second way to boost profits is to reduce wages – by cutting workers’ wage packets, firing some of the workforce, or moving production to a country where labor-power can be bought more cheaply.
In this ceaseless struggle, workers have only one resource – the fact that no surplus value will accumulate, no profits will be made without their labor. If the individual worker is powerless, the workforce united is powerful. When bosses push workers too far, they strike and remove the source of profit – their labor. Out of the need to resist capital’s remorseless hunger for surplus value comes the need for collective resistance. Out of capitalist exploitation comes class struggle.