EXPLOITATION



Exploitation



Table of Content

Overview1

Composition1

Introduction2

Research Purpose4

Review Of The Literature4

Theoretical And Conceptual Organization Of The Subject Matter12

Discussion Of The Study Findings17

Conclusions23

References24

Exploitation

OVERVIEW

Marx used the labor theory of value primarily as a tool to develop the concepts of surplus and exploitation. The mathematics and technicalities of that labor theory of value will not concern us here. Our concern is with Marx's broad conceptualization of production as being divided into two parts: the cost of production, (Bose 2001: 298) which was the labor time spent on producing the good, and the surplus value, which was the difference between the good's price and its cost of production.

COMPOSITION

Marx's discussion of value contains an objective part that puts certain aspects of the economy into perspective, but it also explicitly includes an element of ideology. Stripped of ideological overtones, Marx's message is simply that any economy will produce more goods and services than are needed to pay all the real social costs of production. (Elster 2005:721)Thus, subtracting from total yearly output in the United States all the real costs that must be paid to produce that output would yield a residual, which could be called surplus value. These real costs would include both labor costs and capital costs. Marx's surplus value is thus similar to the physiocrats' concept of net product. How surpluses are divided up is a complicated question that involves issues of philosophy and legal structure. At the time that Marx wrote, these issues were very much on people's minds. The Industrial Revolution had brought about large increases in the yearly surplus value created in the world. Marx raised a legitimate question: What is an equitable way to distribute this socially produced surplus among participants in the society?

INTRODUCTION

Most modern economists have given up the labor theory of value, but the concepts of surplus and exploitation are still used often in discussions and in the popular press. For example, workers in developing countries are often described as being exploited by global companies because they are paid lower wages than U.S. workers. Similarly, large profits are considered a surplus that is taken from workers. (Feser 2003:12)

There are legitimate questions in economics about the equitable distribution of income, and viewing aspects of income as a surplus may be useful in answering these questions. We are less clear about whether the concept of exploitation is useful. To call something "exploitation" requires a set of judgments that go far beyond economics, and what may be exploitation in one economy may be a good job in another. Most workers in developing countries feel they are better off working for a global corporation than they would be if the global corporation were not there providing jobs for them.

Marx used the terms surplus and exploitation in a pejorative sense. He strongly believed that the income distribution at the time was unfair and that the institutions that led to this unfairness deserved to be called exploitative. Most modern economists see such judgments as going beyond the role of economists as ...