What did Karl Marx mean by 'exploitation' in a capitalist economic system?
What did Karl Marx mean by 'exploitation' in a capitalist economic system? Give contemporary examples of 'exploitation' and assess why it has not (yet) brought about the demise of capitalism?
Exploitation can be defined as to make use of someone, by playing on some venerability or weakness, for personal accomplishment. In terms of exploitation within a capitalist system, Marx explored the control and authority within this structure, and the relationship between those with the power towards those who were made to follow orders. In order to examine whether exploitation exists presently within the current system, the system of capitalism and exploitation have to be examined thoroughly. By doing so, it will be clear whether Marx's idea of the eventually collapse of capitalism, can be justified.
Capitalism was defined by Marx as a system where the fundamental principle is to increase exchange value of commodities, in order to gain profit. The main factors behind capitalism involve free enterprise and freedom to produce. Goods are produced in order to be exchanged for commodities, and their exchange value is measured in the form of money. Capitalists own the means of production, and the workers sell their labour to them.
Marx believed that the tendency and the result of the capitalist mode of production are steadily to increase the productivity of labour. Hence it also increases the mass of the means of production converted into products by the use of the same quantity of additional labour. This additional labour is then distributed progressively over a greater mass of products, thus reducing the price of each individual commodity and commodity prices in general. It follows from this that, with the development of capitalist production and the resultant reduction in prices, there must be an increase in the quantity of goods, in the number of articles that must be sold. That is to say, a constant expansion of the market becomes a necessity for capitalist production. (Karl Marx, 1867)
Having recognised that the economic system is the foundation on which the political superstructure is erected, Marx devoted most attention to the study of this economic system. Marx's principal work, Capital, is devoted to a study of the economic system of modern, i.e., capitalist, society.
Classical political economy, before Marx, evolved in England, the most developed of the capitalist countries. Adam Smith and David Ricardo, by their investigations of the economic system, laid the foundations of the labour theory of value. Marx continued their work. He rigidly proved and consistently developed this theory. He showed that the value of every commodity is determined by the quantity of socially necessary labour time spent on its production. (Giddens, 1983)
Where the bourgeois economists saw a relation of things (the exchange of one commodity for another), Marx revealed a relation of men. Marx believed that the exchange of commodities expresses the tie by which individual producers are bound through the market. (Poulantzas, 1985) Money signifies that this tie is becoming closer and closer, inseparably binding the entire economic life of the individual producers into one whole. Marx's work on Capital signifies a further development of this tie: man's labour power becomes a commodity. The wageworker sells labour power to the owner of the land, factories and instruments of labour. The worker uses one part of the labour day to cover the expense of maintaining himself and his family (wages), while the other part of the day the worker toils without remuneration, creating surplus value for the capitalist, the source of profit, the source of the wealth of the capitalist class.
The doctrine of surplus value is the cornerstone of Marx's economic theory. Capital, created by the labour of the worker, presses on the worker by ruining the small masters and creating an army of unemployed. In industry, the victory of large-scale production is at once apparent, but the same phenomenon can be observed in agriculture as well: the superiority of large-scale capitalist agriculture increases, the application of machinery grows, peasant economy falls into the noose of money-capital, it declines and sinks into ruin, burdened by its backward technique. In agriculture, the decline of small-scale production assumes different forms, but the decline itself is an indisputable fact.
Marx believed that by destroying small-scale production, capital leads to an increase in productivity of labour and to the creation of a monopoly position for the associations of big capitalists. Production itself becomes more social and millions of workers become bound together in a systematic economic organism; but the product of the collective labour is appropriated by a handful of capitalists.
While increasing the dependence of the workers on capital, the capitalist system creates the great power of united labour. Marx traced the development of capitalism from the first germs of commodity economy, from simple exchange, ...
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Marx believed that by destroying small-scale production, capital leads to an increase in productivity of labour and to the creation of a monopoly position for the associations of big capitalists. Production itself becomes more social and millions of workers become bound together in a systematic economic organism; but the product of the collective labour is appropriated by a handful of capitalists.
While increasing the dependence of the workers on capital, the capitalist system creates the great power of united labour. Marx traced the development of capitalism from the first germs of commodity economy, from simple exchange, to its highest forms, to large-scale production. The experience of all capitalist countries, old and new, is clearly demonstrating the truth of this Marxian doctrine to increasing numbers of workers every year.
Marx believed that Capitalism had triumphed all over the world, but this triumph was only the triumph of labour over capital, via exploitation.
In the light of Marxism, exploitation exists universally in the capitalist society. (Forman, 1973). Marx felt capitalists exploit workers by squeezing the surplus value of workers. The profit is in fact the surplus of value, which should belong to workers rather than capitalists. One of greatest findings of Karl Marx is the theory on surplus of value, which is said having found the secret how the capitalist exploit the worker. In his Capital, Marx made his analysis on theory of constant and variable capitals. Marx thought there were merely two different modes, the means of production on the one hand and labour-power on the other hand in existence. The value of the original capital assumed when being money it was transferred into the various factories of the labour-process.
Consequently Marx concluded that surplus value is the source of capitalist profit. In other words, the capitalist grabs the surplus value, which should belong to the workers as his own profit: it is the exploitation.
Exploitation of labour in today's capitalist system still exists on a large basis. Nowadays, there are clearly more watchdogs that ensure that such abuse is kept to a minimal, but many recent reports have indicated that exploitation and Marx's ideas on it are still very much in existence. Exploitation can take many different forms, and is not limited to simply underpaying workers or treating them badly. Effectively all profit making organisations are actually exploiting their workforce, because the wealth should be spread evenly among the workers due to surplus value being taken. (Ballinger & Olsson, 1997) There are those who argue, that exploitation of the worker has been reduced in recent times, due to increases in wages and lifestyle. But exploitation is not simply to do with wages, and actually delves much further than that. One example of exploitation in today's society is that of Richard Branson, and his 'Virgin' empire. Clearly, he has worked extensively in building up his corporation and organising it into such a vast trademark, and therefore disserves to be paid highly. However, the wealth he is renowned to be worth is far greater and incomparable to anyone else within the workforce under his product label. Clearly he cannot be solely responsible for the success of his company's achievement, and therefore his actions could be construed as exploitative.
A modern aspect of exploitation is due to the recent rise in globalisation and the growth of trans national corporations in the last thirty years. These global corporations have grown in size and influence while the worldwide trade union movement remains unable to deliver any meaningful protection to workers in corrupt countries where the rule of law is not respected. These companies have focused much emphasis upon the lowered labour costs of the lower economically developed countries, and have taken advantage of a desperate situation. These companies can provide some small amounts of money, and the struggling nations have little power to reject such offers, due to such situations where any amount of money and investment is an advantage.
Sports shoe companies such as Nike have come under much widespread criticism that the manufacturing of their product involves much exploitation. Companies such as Nike do not actually produce the shoes, they simply design them, and they market them. But the manufacturing is contracted out to suppliers, usually Korean, Taiwanese or Hong Kong companies located in cheap labour countries like Indonesia, the Philippines, Thailand or China. Investigations by various organisations of these factories in Asia making sports shoes has revealed a common pattern of working conditions which leaves much to be desired. The overworking and underpaying of workers, neglect of health and safety, physical abuse of workers and the persecution of those involved in organising workers are common features in all of these plants.
While conditions in the sports shoe industry are by no means the worst to be found in Asia, they do nevertheless involve widespread exploitation of workers and abuse of their basic rights. Because of their commercial power, the brand name merchandising companies have great influence over the suppliers and are in a good position to do something positive about these labour conditions. In the face of negative publicity over these conditions and consumer pressure, several companies, including Reebok and Nike, have already taken steps in this direction, by establishing codes of practice on labour standards, which they expect their suppliers to adhere to. Unfortunately these codes are not as strong as they should be, and the monitoring of compliance is not adequate. (Ballinger & Olsson, 1997)
Other recent examples of contemporary exploitation are clothing manufacturing companies. Recently, major U.S. clothing manufacturers and retailers including Levi Strauss & Company, Calvin Klein, Inc., Brooks Brothers, Inc., Abercrombie & Fitch Co., The Talbots Inc. and Woolrich Inc. are currently subject to a class action lawsuit, alleging sweatshop conditions on Saipan, a U.S. Commonwealth in the Western Pacific. The retailers along with additional Saipan garment factory owners are being added to a pending class action that is the first-ever attempt to hold U.S. retailers accountable for mistreatment of workers in foreign-owned factories operating on U.S. soil. According to the complaint, more than 13,000 garment workers in Saipan regularly work 12-hour days, seven days a week, often times "off the clock" without receiving any pay or overtime. These companies are accused of violating federal law by allegedly participating in a "racketeering conspiracy" through which garment workers, predominantly young women sign "shadow contracts" waiving their basic human rights. These conditions are alleged to have created a status with similar conditions to servitude on the island, which is illegal in the United States. (Economist, 2001)
These two examples of exploitation, both deal with exploitation of labour within poor working conditions, and an unfair pay structure, in relation to hours that labourers put in. However modern examples of exploitation also include the misuse of natural resources. One example of such action is by fruit production companies such as Del Monte and Chiquita who have exploited much of the banana plantations in developing countries, which often provide subsistence food and lively hood of many locals. Originally Costa Rica was 99.8% covered by forests, these forests now cover less than one third of Costa Rica (Gottfried et al., 1994). Throughout the world, habitats are being lost, degraded, destroyed, and natural biodiversity is in danger of being overexploited by the ever increasing demands placed upon them by our expanding and resource hungry population (Goss- Custard and Sutherland, 1993). Deforestation in the tropics, which has converted vast tracks of forest to agricultural lands, has caused a marked reduction in biodiversity (Rivera and Aide, 1998). Costa Rica, like many other developing countries, utilizes a heavy government interventionist approach to the management of its forest resources, but this can do little to stop the money hungry multi national corporations, who divulge natural land for profit maximisation.
These examples emphasise that a capitalist system, which Marx suggested, is definitely still in existence. Marx did not predict, however, that capitalism would be around up until now and he believed that capitalism would eventually collapse into a new form of socialism.
One recognized test of any scientific theory is the ability to make valid predictions by use of its logic. Marx did not hesitate to apply his theory in this way. The natural laws of capitalist development, Marx believed, would continue to lead, as so far they did seem to be leading, to the elimination of neutrals in the class struggle, so that a relatively few capitalists on one hand would confront a property less working class, or ''proletariat,'' on the other. The proletariat would comprise all but a tiny minority of the population (Hughes, Martin, Sharrock, 1998). He alleged it could come into power either by exercising democratic rights to vote where such rights were universal and not subject to corruption, or by violent struggle where the ruling class managed to thwart the will of the majority. Marx did not have much faith in the peaceful surrender of the owners, though he admitted the possibility that it might occur in nations like Britain and the United States.
He believed the division of the people into two opposing forces would come about through the spread of industry and big business, which would gradually absorb farmers from the land, take away the occupations of handicraftsmen and small tradesmen, and concentrate the ownership of capital among fewer and fewer persons (Marshall, 1950). Farming, he thought, would itself become industrialized and subject to concentrated ownership. Another prediction by Marx was that the working class would be subject to increasing misery as the development of capitalism approached its climax. Capitalism would be obliged, he thought, to keep wages low and hours long. If capitalism could not find markets for the output of its steadily increasing productive capacity, it would extract the utmost possible surplus value from the workers in order to keep from going bankrupt.
He believed that in the end capitalism would falter and collapse as a solvent system from its own ''internal contradictions.'' It could maintain itself only by continual extension into new sectors of production in the countries where it was strongest, and into new areas of the world. Eventually it would have spread its affliction so widely that there would be no more territory for it to conquer and exploit. In the meantime it would be subject to more and more severe periodic crises, caused by glutting of markets and accompanied by general unemployment. (Johnston, 1986)
Though Marx claimed that capitalism had reached its optimum, it did not fall. Because the future is indeterminate, he could not foresee that efforts might produce the opposite of intentions, ushering in a new form of society significantly different from the old. Capitalism has changed from the form that Marx experienced. With the emergence of the stock market, capital is held by an anonymous all. Of course subjugation of the masses continues, particularly in "developing" nations.
He believed that the wages of the working class could never rise far above subsistence level. This idea, as applied to the west, is wrong. Most people are now better off (in terms of wealth) than they were in Marx's day. At the same time, increasing numbers of people from lower incomes were becoming landowners and shareowners. Some 25% of the population own shares and 75% are said to be homeowners. We are said to be living in the age of consumerism, and increased disposable income has made this possible. Even workers in the 'old professions' that could be associated with the proletariat are a part of this consumerism, far from living on the subsistence levels as described by Marx. If we take Marx's definition of Bourgeoisie, it is fair to say that the majority of the population of the west are in fact just that.
One of the other most significant changes, which the past one hundred and fifty years have brought about, is that the new society can be seen in its embryonic form before our eyes. Marx could only speculate about how free associations of workers could build a world in which people live cooperatively free from the domination of their own products. Voluntary association is actually on the increase, not decline. At the same time, within capitalist enterprises, rather than being directed like puppets, workers are being obliged, in the interests of capital, to organise their own labour.
In conclusion therefore, the world has not seen a proletariat revolution, like that described
by Karl Marx. There have been occasions where small-scale Marxist revolutions have taken place but not to the global extent that Marx described. Often Marx's analysis is criticised. The major criticisms centre on the changing structure of western society that has eliminated the proletariat (Dahrendorf, 1969). Other arguments include the belief that citizenship has given workers less need to partake in a revolution and that Marx underestimated what it would take to organise the proletariat into a single organised group.
It may be that Marx's predictions were wrong in timing rather than in substance. Perhaps a catastrophic collapse of capitalism lies somewhere in the future. Yet if it were as sinister and inflexible an order as it seemed to Marx at the time, it could scarcely have yielded all the benefits that have been extracted from it during the past century. However, Marx's analysis is highly regarded by many scholars, even if they do not agree with his every word. Some people have even suggested that, in modern times, Marx's work is still valid, most notably applied to the underclass in western societies and the poverty stricken workers from developing countries, where exploitation is still very much in existence, due to the growth of capitalism.
Bibliography
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* Hughes, Martin, Sharrock, (1998), Understanding Classical Sociology
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* Economist, (2001)
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