A simpler way to understand "exploitation"
The Marxist concept of "exploitation" can be more easily understood in terms of distributional conflict. From this, the goal of Marxism and socialism as political movements makes more sense.
The term “exploitation” is frequently used in pro-labour, left-leaning rhetorics. Despite this, the term itself is vague and often reflects more of people’s understanding of the term rather than the actual meanings of the term itself. However, as far as I understand it, exploitation has two different meanings in the way they are used.
The first, and most common, usage simply refers to a situation of “bad jobs” or unfavourable employment relations. This may include jobs with low pay, unacceptable workloads or dangerous working conditions, jobs that violate labour laws or regulations, or the more extreme case of “modern slavery” such as the migrant construction jobs in the Gulf states. In short, this meaning entails a normative judgment about the qualities of a job and whether they violate some notion of justice or what is seen as right. Particularly so when such bad jobs are contrasted with the good working conditions, pay, or living standards enjoyed by the managers or employers that people work for. As if they are benefiting from employing people in those bad jobs. This is more or less the dictionary definition of exploitation which, according to the Cambridge Dictionary, means “the use of something in order to get an advantage from it” and “the act of using someone or something unfairly for your own advantage”.
The second, and less common, usage refers exclusively to the notion of exploitation attributed to Marx and other Marxist theorists. There are long and highly-charged debates even among Marxists about what exactly constitutes exploitation as understood by Marx. But my own understanding of it goes something like this: exploitation is the appropriation of surplus labour or surplus value by the exploiting class, defined mainly as the extra labour-time expended that are surplus to the requirements for subsistence of the direct producers or the exploited class, as measured by the socially necessary labour-time. Socially necessary labour-time is roughly defined as the average labour-time needed to produce a particular unit of goods or services of average quantity and quality, i.e. the average labour productivity.
Marxists might rightly be angry at me for not doing justice about the definition. But here I am attempting to provide a rudimentary definition. The main point is that, unlike the common meaning of exploitation, the Marxist notion is seen as not some “subjective” or normative judgement about the qualities of a job but rather as an “objective” or descriptive statement about how production and the economy is organised in society. Because, for Marxists, the qualities of a job do not affect whether exploitation occurs or not. Even if someone is working in a good, fulfilling, high-paying job offering lots of work autonomy, leisure time, and paid leave, exploitation can still occur.
Others might take issue with the Marxist notion of exploitation. The problem is that the Marxist (labour) theory of value that underpins the Marxist theory of exploitation is unfalsifiable or philosophical in nature. In Economic Philosophy, the economist Joan Robinson argue that there is no straightforward ways to measure a unit of “value” according to Marxist theory of value to determine anything from the price of goods or services, or even the “proper” income distribution (as compensation for labour, according to the socially necessary labour-time), and even *gasps* the rate of exploitation. Many attempts to empirically and statistically validate the Marxian theory of value seems to be a fraught endeavour. As she harshly wrote: “it does not measure what the measurers are interested in […] Value will not help. It has no operational content. It is just a word.”
Because the Marxist theory of value is viewed as untenable, then so does the Marxist understanding of exploitation. Many people such as Unlearning Economics even argue that we should abandon the convoluted Marxist hogwash and instead refer to the first meaning of exploitation as simply a normative judgement about work.
I personally think that the Marxist concept of exploitation is useful and aptly describes a real social process and phenomenon, one that can be investigated and shown empirically. Still, as someone who is active in a few leftist and Marxist circles myself, I also find the explanations about exploitation tends to be highly confusing or unsatisfying, especially for those who are unfamiliar with Marxist jargons.
For the reminder of this post, I intend to provide my own alternative and highly simplified understanding about the Marxist concept of exploitation. Understanding exploitation, in my view, is important because it can points to the goal of Marxism and socialism as political movements.
Simply put, I understand exploitation primarily as “appropriation” which (forgive me for using the Cambridge dictionary definition again) means “the act of taking something for your own use, usually without permission”.1 What is the “something” being taken here? The surplus, output, social products, or income being generated from economic activities.
In other words, the Marxist theory of exploitation can be more easily understood as a theory of distribution. More specifically, it tells us about the conflict over how the surplus or social products generated by economic activities are distributed between social classes.2
Exploitation as appropriation
The Marxist notion of “exploitation” actually means class exploitation. For Marxists, class is defined as a social relationship between social groups competing over the ownership and control of production and the surplus or social product generated from production. Thus, class exploitation is a relationship between social groups and not between individuals: an individual exploits another individual does not class exploitation make.
The classes in class societies from a Marxist point of view are composed primarily of two different classes. On the one hand is the exploiting class or those who own and control (i.e., appropriate) the surplus or social product that results from production. On the other hand is the exploited class or the direct producers who are involved in the production of the surplus or social product but neither own nor control them. To quote E.P. Thompson, class in a Marxist sense always means class relations: as social relationships between classes that govern how production and economic activities are organised and the resulting distribution of the surplus or social product.
Thus, class exploitation can be simply defined as: when the surplus or social products that are produced by the class of direct producers are appropriated (i.e. owned and controlled) by the other, exploiting, class. Class societies developed historically because, at some point in time and for varying reasons, some social groups increasingly started to own and control for themselves the surplus or social products that are produced by the direct producers.
Under capitalism, the two primary classes are known as capital (capitalists) and labour (workers). The former is defined by their ownership of capital or productive assets (e.g. land, machines, and factories)—what Marx called as “the means of production”—while the latter is defined by their lack of ownership of such assets. Under this situation, workers have no other choice but to sell their labour to capitalists in exchange for wages to secure their subsistence. Meanwhile, capitalists have the power to command over workers in the production process: they can unilaterally set the terms of work, job tasks, their behaviour during work, and shares of the social product in the form of wages.
Thus, under capitalism, the workers become the exploited class and the capitalists become the exploiting class. On the one hand, the workers generate the surplus or social products through their involvement in the production and labour process but possess no ownership or control over both the production process as well as the resulting surplus or social product. On the other hand, the capitalists, who own the means of production, not only have power to command over labour and production but also over the distribution of the resulting surplus or social product.
Because exploitation entails struggle over the ownership and control of the social product generated in production activities by different social groups involved in the production process, it is inherently an antagonistic social relationship. Increasing the power or control of one group over production and the resulting surplus or social product necessarily entails the diminishing of the power or control of the other. Class struggle is a process in which both classes are attempting to modify the ownership and control over the production and distribution of surplus or social product to their favour. Consequently, class struggle by the labouring class aims to reduce (or eliminate entirely) the share of capitalists’ claim to the income or social product in the economy while increasing the share of workers’ claim.3
However, Marx himself noted that production in our modern capitalist economy had increasingly taken a collective and social form as social production involving hundreds of workers within a given firm and millions of workers, households, and firms across the whole economy. The increasingly complex social and technical division of labour as well as the interdependence of economic activities means that activities carried out by other workers, in other firms, in other sectors of the economy can directly influence the production and distribution of surplus and social products for another worker, in another firm, and in another sector. In fact, as the Social Reproduction Theory tells us, even individuals not engaging in “productive” activities can also engage in “reproductive” activities that directly or indirectly contribute to production activities—and therefore, the generation of surplus and social product.
As a result, it becomes even more difficult to disentangle the contribution of one social group or one individual in society with another in the process of producing the surplus or social product. The entirety of society, in one way or another, contributes to the production of surplus or social products. Consequently, exploitation can be defined simply as: when the surplus or social products that are produced socially are not socially owned and controlled.
The goal of socialism: ending exploitation
Using this simplified definition of exploitation, the goal of socialism or Marxism as a political movement becomes clearer: the abolition of class exploitation through social ownership and control over the production and distribution of the surplus or social product generated from production or economic activities. If the surplus and social product are socially produced (i.e., by the whole society), then the ownership and control over its production and distribution should also be the prerogative of the whole society and not exclusive for particular individuals or social classes—especially those who just happens to privately own the means of production. Thus, because society collectively decide for themselves who owns and gets what, decisions made on matters governing the production and distribution of surplus or social products are not (and should not) based on some “natural” laws but rather on political, moral, and distributional concerns.
How do you go on about achieving that then? As explained by Matt Bruenig and Henry Hansman, there are different ways to structure social or collective ownership of economic organisations. But, conceptually, social ownership can take at least three basic forms.
First, is through worker ownership or co-operatives. Under this form, workers who work in a particular firm have direct ownership over the firm. They not only have control and total claim of surplus or social product generated by the firm but also can directly control its operations. They can collectively elect their own management and functionaries, set their own terms of work and production processes, and choose what to do with the resulting surplus or output they produced.4
Second, is state or public ownership. This can take the form of state-owned enterprises (SOEs) or agencies and municipal or community ownership, such as community land trust. Here, the owners are not the workers who directly work in the firm per se but the whole public or relevant constituents—whether at the national, municipal, or local level—as represented by an elected and democratic government or governing body. The public elects a government or a governing body of their choosing who in turn manages the relevant SOEs or public agencies and the resulting surplus or social product on behalf of the public or relevant constituents.
Lastly, is through a social wealth fund or what can be called as fund socialism. In contrast to the other forms, this form of socialisation presupposes a market economy because it aims to establish social ownership through the capital and financial market. This can take the form of a publicly- or collectively-owned fund that buys and owns the capital stocks or shares of corporations, thereby securing a direct ownership and control over their income or output by collective means.5
Is this a good or accurate understanding of the concept of “exploitation” and socialism? Who knows. But who cares. This is, in my opinion, a much more useful way to think about it. I certainly prefer to use this explanation whenever anyone asks me about it, instead of forcing people to read Capital by themselves.
It is also interesting that 20th century Indonesian communists often translated “exploitation” into the Indonesian language as “penghisapan” (literally “sucking” or “siphoning”).
This is more or less the definition of political economy according to classical economists such as John Stuart Mill or David Ricardo. Moreover, I use the terms “social product”, “output”, or “income” more or less interchangeably as referring to both the output or goods/services produced by economic activities and the claims over the distribution and consumption of the output between individuals in society.
Or to put it in simple terms: Y = I + C = W + P (output = investment + consumption = wage + profit)
For example, when workers form a union and successfully win their demands for higher wages, it means some income that would’ve been distributed to the pocket of capitalists (in the form of capital income or profits) would instead be distributed to the workers (in the form of labour income or wages). When workers demand higher taxes and welfare spending, it means that income that would’ve distributed to individual workers and capitalists as personal income instead go for collective public consumption (e.g. public education, healthcare, infrastructure, or housing) or as social transfer (e.g. pension, social assistance programs, or child benefits) that disproportionately benefits workers as a whole.
Worker co-operatives can also be distinguished from consumer and producer co-operatives. In the former, instead of workers in the firm, it is the consumers that exercise ownership and control over the firms. In the latter, rather than exercising some form of collective ownership, individual producers pool resources to achieve particular goals that benefit each member (such as buying new machines, expanding market access, or raising bargaining power when negotiating with suppliers or buyers). Because producer co-operatives are often widespread among agricultural producers, they are also known as agricultural collectives or cooperatives. For a brief explainer on types of cooperatives see this article.
Examples of such fund socialism are the government-owned social wealth fund or sovereign wealth fund (SWF), such as the Norwegian or Alaskan government’s SWF, or a worker-owned fund such as the union-controlled wage-earner fund proposed by Swedish socialist economist Rudolf Meidner or the inclusive ownership fund (IOF) proposed by the British Labour Party politician John McDonnell.