EXPLOITATION
How capitalism works

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 off 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 back-breaking 70 hour week while its president Phil Knight is worth $6 billion. People hear about things like this and they say "That's exploitative - it's taking the piss."

But 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. Is that true?

Karl Marx said no. He was the first to analyse how the capitalist system works in depth, and how exploitation was central to it. That was what made him different from many anti-capitalist thinkers who have followed him. 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 trainers - take the form of commodities. Commodities are produced to be bought and sold before they are used.

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 is important. Does it taste good, look good, sound good, keep you warm, 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.

But 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.

But the money value given to differing commodities is not arbitrary. A Big Mac is not worth as much as a pair of Nike trainers. But each commodity's value rests on something that is common to them all. So what do a hamburger and a pair of trainers - and the vast range of goods and services on sale - have in common which allows them be compared with each other and exchanged with each other?

Marx looked for the answer in labour - mental and manual work. But every individual's labour, 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 labour, let alone for the products of that labour. What the worker sells is a special commodity - the ability to work, what Marx calls labour 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? Whatever it costs to get bring the worker to work, day after day, able to do the work which the employer wants done. 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 labour 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. Labour 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 ma-chines be worth unless labour power set them all going? Answer: the same as the capitalist paid for them. Only labour power can increase their value.

But workers are not paid the whole value that they create in production. They are only paid the amount needed to reproduce their labour power.

The extra value that workers create is effectively stolen by the buyer of labour power, the owners of the workplace - the capitalist. 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 - the capitalists accumulate in their hands the entire vast means of production and distribution - the factories, offices, supermarkets, land, banking. We built it, 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 a 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 them back into the business to build more factories, better machines, create new products. And so competition drives development and further industrialisation and expands its capacity therefore 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 high street and to maximise profits.

This competitive drive to accumulate, to make profits is absolutely opposed to the interests of the worker. 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 us work harder and faster. The second way to boost profits is to reduce wages - by cutting workers' wage packets, or sacking some of the workforce or moving production to a country where labour 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 be made without their labour. 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 labour. Out of the need to resist the capitalists' remorseless hunger for surplus value comes the need for a collective fightback. Out of capitalist exploitation comes THE CLASS STRUGGLE.

BACK TO THE TOP

The brith of capitalism

Capitalism

What we mean by communism

Socialism: a thing of the past

Exploitation

You've got class

Marxism or Anarchism

Russia: what went wrong?

Imperialism