[OPE-L:7392] [OPE-L:923] Re: Exploitation?

Michael Williams (michael@mwilliam.u-net.com)
Mon, 26 Apr 1999 19:03:00 +0100

As ever short of time, I would nevertheless like to offer the following
comments on the 3 well-known justifications of 'profit' that re-surface in
Dr Knowmore (but perhaps not 'Knowbetter'?)'s message.

> Marxist "exploitation theory;" i.e., capitalist profit arises from paying
> worker less than the full value of his productivity.

This 'traditional' 'quantitative' theory of exploitation is, imo, not
necessary to the logic of Marx's account of capitalism. Politically, I would
argue that he criticised it in his 'Critique of the [German Social
Democrat's] Gotha Programme' in terms which clearly recognise the universal
imperative for all forms of economy to throw up an answer to the question
that can be summarised in modern terminology as the social choice between
allocation of resources to production for consumption now and that to
investment in productive capacity for expanded consumption later. The point
is not (pace the Utopian Socialists) that the workers do not enjoy the full
fruits of their labours, but that they have little or no systematic control
over the deployment of any surplus. In a sense, neither do the capitalist,
they too are more or less constrained by the imperative to valorise.

Then the
> > three arguments that capitalist income is not exploitative:

Can each be dealt with with little necessary recourse to any labour theory
of value, let alone an 'embodied labour' one
> >
> >a) The capitalist benefits workers by paying for their hours of labor
> >their products have been sold. If it were not for the capitalist,
> >would have to wait until the end of the production period to obtain
> >for hours worked. In effect, there is an "interest discount": workers
> "pay"
> >receive income before the end of the period of production and
> >(Eugen von Boehm Bawerk)

But the point is that the systemic driving force is not to maintain, let
alone enhance, worker's consumption (nor even, except incidently as a
trapping of power, capitalist's consumption either). Consequently one may
legitimately enquire whether there are not other forms of production credit,
that are under the control of the associated workers, and which are not
dominated by the value-form.
> >
> >b) Profit rewards the entrepreneurial capitalist for assuming economic
> risk.
> > Under any economic system, there is always the risk that production was
> >efficient: in the market, this is reflected by an inability to sell the
> >commodity at a price that covers the costs of production. The
> >however, pays the workers for each hour of labor they have expended,
> >regardless of whether the commodity is sold or not. The entrepreneur
> >absorbs the loss, and it is only morally and economically right that he
> make
> >a profit when he has correctly understood or forecast market demand. One
> can
> >thus regard "profit" as payment for the very productive activity of
> analysing
> >the market under conditions of uncertainty.

The lie is given to this common bit of apologetics as we move into th era of
the 'entrepreneurial' or 'portfolio' worker, following on the increasingly
widespread use of 'casualised' labour. In such a context the work force
bears much of the entrepreneurial risk and none of the reward.
> >
> >c) Interest, the return on capital, is the reward for sacrificing
> >consumption during the
> >investment period. It is a way of making "extraction of surplus product"
> >voluntary. For example, suppose that a worker receives "full value" for
> >productivity (income = value added). Instead of expending it on
> consumption,
> >he invests it himself or lends it to another. This is a capitalist
> activity,
> >and he deserves a capitalist reward. There are many cases, in fact, in
> which
> >an American immigrant family save their earnings and then open a small
> shop.

First, there must be some doubt as to whether small scale non-publically
quoted companies are the norm, or that they exist in anything other than a
subordinate position. Second, they too are subject to the imperative to
valorise. Third, once again, non-capitalist credit institutions that might
pre-figure escape from the dominance of the value-form need investigation.

Each of the three criticisms of 'exploitation' then illustrates a different
aspect of a systematic blindness to the systemic sources of social power.
Capitalists wield power because they own the means of production and thus
the surplus product. But more to the point, all agents under capitalism are
subordinate to the value-form - even if for big capital it is a gilded cage.


"Work is of two kinds:
first, altering the position of matter at or near the earth's surface
relatively to other such matter;
second, telling other people to do so.
The first is unpleasant and ill-paid; the second is pleasant and highly
[Bertrand Russell, cited in The Oxford Book of Work, edited by Keith Thomas,
OUP, 1999]