This is a beautiful essay about the concept of "exploitation" in Marxism.
A question that consistently intrigues me is the role of middle management/managerial positions in "exploitation" in the Marxist sense. Many of these managers receive a wage (i.e. labour income) and have no capital ownership. They must be receiving a wage in exchange for their "labour-power", which presumably shouldn't be any different from workers at the bottom: after all, every human being needs the same sort of stuff in terms of food, housing etc. in order to possess "labour-power". But their wages are much higher than subsistence levels and they can afford luxuries that other workers cant.. Now, this might indicate that they are not only compensated for "necessary labour time" but also get an additional component of their own "surplus labour time".
But could that be true? I believe in David Graeber's analysis that most people in such roles are basically paper pushers, adding nothing of value: they are doing bullshit. Their "labour time" adds no value to the production process that is independent of the value added by living labour (just like the owners of capital add no value to the production process that is independent of labour). If that is the case, where does their remuneration come from?
I think it must come from the "surplus labour time" of those workers who generate value. In other words, the "labour income" of the superfluous managerial layers must also be derived from "exploitation", just like the owners of capital. So why don't the owners of capital just get rid of them and enhance their own share?
I suppose the answer must be that the managerial layers do serve a purpose, even if they don't "add value" to the production process in the conventional sense: they serve as the staunchest and most stalwart ideologues and defenders of the system of exploitation. Their remuneration is reward for ideological support. They are the graduates and the post graduates, the alumni of the schools of business management and so forth, the people who have consecrated their lives to imbibing dogmas. They aren't really exchanging "labour-power" for wages, they are exchanging "ideological obedience and support" for wages. And clearly, "ideological support", as a commodity, is worth much more than mere "labour-power".
A "manager" is an ideological advocate. No wonder most managers have a hard time trying to explain what they do in a sentence
You've made such an interesting point about managers and their role as ideologues. I was raised in capitalism but my mom grew up in socialism, and I remember when I was in my 20s, she told me that in socialism, the shop floor workers knew that the "admin" personnel (HR, accountants, managers) wages came from the surplus value created by the factory workers, and that blew my mind! Since I was growing up in capitalism, it never crossed my mind where wages came from, and especially not the managers' wages ! That was such a revealing conversation I had with her!
This is great. However, I feel like you might be a little light of discussion on the ‘extraction’ bit of the whole ‘extraction of surplus value’ thing. I take this to be the really crucial part of Marx’s view of exploitation (though what follows is definitely more of an analytic Marxist reading of the concept than an orthodox Marxist one).
It’s not just that someone who isn’t the worker is getting surplus value (gifting something you make to someone else in communist society won’t result in exploitation, even if the exchange results in their getting surplus value that you generated). It’s that this transfer of surplus value is coming about as a result of social relations of a certain kind. In the case Marx is interested in, what generates the exploitation is that the capitalist wage labour contracts get signed because of workers’ ‘doubly free’ condition (free to choose who to work for, free of any means of supporting themselves).
On this reading, the labour theory of value is not invoked by Marx because it’s essential to explaining what exploitation is; it’s invoked to explain why the Proudhonian critique of capitalism fails. In order to show that a critique of capitalism premised on unequal exchange fails, you need to show that even if labour is selling at its full value, there is something still objectionable about capitalist wage labour. The labour theory of value is a tool Marx uses to help construct a scenario where labour is selling at its full value so that he can show that there is still something objectionable about this scenario.
This is a thoughtful and important clarification. Thank you.
I agree that the “extraction” dimension cannot be reduced to the mere fact that someone other than the worker receives surplus value. As you suggest, the transfer of surplus in itself is not sufficient to constitute exploitation. One can imagine forms of voluntary transfer, gifting, collective redistribution, communal pooling, etc., that do not carry the same structural character.
The decisive issue, as you note, is the social relation under which the transfer occurs.
Marx’s formulation of the worker as “doubly free” is crucial here. The wage contract is formally voluntary, but it is entered into under conditions structured by prior dispossession. The “extraction” of surplus value is therefore not a simple interpersonal taking; it is mediated by a historically specific configuration of property relations.
Where I would perhaps nuance your point is on the role of the labor theory of value. I agree that Marx deploys it strategically against Proudhonian and other unequal-exchange critiques. Showing that exploitation persists even when equivalents exchange is essential to that polemic. But I would hesitate to say the labor theory of value is merely instrumental to that move.
For Marx, the labor theory of value grounds the claim that living labor is the source of new value in the first place. Without that premise, the structural account of surplus extraction loses its analytic foundation. The point is that the very capacity of capital to expand depends on labor’s value-creating function.
That said, I think you are right to emphasize that exploitation hinges on social relations; specifically, on the separation of workers from the means of production and the compulsion embedded in that separation. Surplus value is not taken through force at the point of exchange; it is appropriated through a structure that renders wage labor the condition of survival.
If anything, your point underscores something I perhaps did not stress enough: extraction is a social relation sustained by property, law, and historical dispossession.
Yes, I spoke a bit loosely there: Marx believed in the labour theory of value and thought it was of theoretical significance beyond just setting the stage for critiquing Proudhon. I was just trying to emphasize that I take Marxian exploitation to have more to do with the extraction of surplus value than it does Marx’s answer to the question of what value is.
Wage labor is always the condition of survival unless you're going to import Martians and make them work for you. It is not capitalism that requires us to work but rather God or nature.
Anytime workers feel they are being exploited or aren't being paid enough or that owners are getting too much profit in a capitalist system they are 100% free to unionize and demand higher wages or to simply quit and start their own companies which explains why we have 50 million companies in America. Freedom makes Marxism seem really Preposterousand stupid.
This is a very clear and disciplined explanation of what Marx actually meant by exploitation. You do a good job separating the technical claim about surplus value from the everyday moral use of the word. That alone elevates the discussion.
Where I’d gently push back is on what follows from that clarification. Even if profit arises from surplus labor in a structural sense, it does not automatically follow that the relationship is exploitative in a normatively meaningful way. The concept depends heavily on the labor theory of value and on treating wage exchange as structurally coercive rather than mutually advantageous under specific institutional conditions.
In modern economies, productivity gains, capital deepening, and risk-bearing complicate the picture. Returns to capital are not simply siphoned labor-time but are often tied to coordination, innovation, and deferred consumption. Once we introduce heterogeneous capital, entrepreneurial uncertainty, and voluntary contracting under competitive constraints, the moral force of the term exploitation begins to weaken.
That said, I genuinely appreciate the clarity of your exposition. Even where I may bring another thought, I think this is exactly the kind of careful conceptual work that improves the quality of debate. I enjoy your publishings.
Wage labor is not a voluntary association with employment. It is an economically and culturally coercive state of dependence. One has to sell one’s labor power in order to eat, have shelter, have access to health services both for oneself and for one’s family. The alternatives are often unavailable to the overwhelming population of wage laborers. Individual small business success requires capital and statistically is equivalent to winning the lottery. Climbing the corporate ladder is even less likely.
Economic relations under capitalism are both structurally coercive and mutually beneficial.
I argue that this article actually misrepresents the Marxist normative case. It is neither a moral indictment of capitalists nor a claim that wage exploitation is somehow “objectively wrong”, but simple self-interest, like a monkey removing a tick.
(surplus value divided by total capital invested). As the OCC rises,
grows faster than
, causing the profit rate to decline relative to total investment, even if the absolute amount of profit increases.
Crises and Counteracting Factors: The falling profit rate triggers economic slumps, resulting in capital destruction (bankruptcies, devaluation of assets), which eventually resets the rate of profit. Other counteracting factors include depressing wages below value, cheapening constant capital, and exploiting foreign markets.
Turnover Time: Frequency of capital turnover affects profitability. More rapid cycles of production and circulation increase the annual rate of surplus value.
This is a very clarifying article and, like all the ones I've read from you, it gets straight to the point and lives up to the name of the publication, 'simplifying socialism.' And the thing is, simplifying isn't an easy task; it requires a deep understanding of the topics being simplified so they can be understood without losing their essence. Beyond the compliments, the concept of exploitation and the appropriation of surplus by the owner of the means of production, based on historical, legal, and political issues, resonates with the concept of struggle for the surplus distribution in Sraffa's theory of prices and distribution. Do you think that Piero Sraffa's take on surplus is compatible with Marx's concept of exploitation?
My apologies if it sounds weird, I have used Google translator from Spanish to write this comment.
En primer lugar, muchas gracias. He escrito esto en inglés y luego lo he traducido al español, por lo que pido disculpas por cualquier error.
La teoría del excedente de Sraffa es compatible con el concepto de explotación de Marx en cuanto a sus resultados. Se puede utilizar a Sraffa para describir el mismo excedente cuantitativo que Marx, pero no puede explicar su origen como explotación, por lo que es formalmente compatible en cuanto al resultado, pero conceptualmente diferente en cuanto a la causa. Sin embargo, el modelo de Sraffa es técnicamente neutro; puede describir un sistema sin explotación, mientras que la teoría del excedente de Marx no puede describir el capitalismo sin la explotación de la fuerza de trabajo.
Thank You for the response. I agree with You that Sraffa's core theory assumes that the distribution of surplus is given and is determined by institutional, historical and political factors in each social formatiion. Anyway, exploitation take place whenever r (the profit rate) is not 0, i.e. the surplus is not fully received by the worker.
This makes a lot of sense and asks the crucial questions about the political choices of power distribution. From a human perspective, though, I can't help thinking that Marx's use of a morally loaded term to identify this structural position was deliberate however much he tries to intellectualise it. I am sure that if his intention was to avoid moral connotations it was not outside his powers to choose or construct a different term!
This is not to detract from his analysis which I agree with but the term was bound to excite those feeling exploited and offend those who were doing it. That being the case the question is who was he writing for?
Marx was a rhetorically sophisticated writer. If he wanted a completely scientific, and precise, vocabulary, he was more than capable of constructing one. That said, I believe there is a distinction worth preserving between moral resonance and moral foundation.
Marx consistently insists that exploitation arises even where exchange is formally equal and voluntary. In other words, he emphasizes the detachment of the concept from fraud, cheating, or overt injustice at the contractual level. In my view, that suggests that he did not want exploitation to rest primarily on moral condemnation; rather, he wanted it to describe a structural relation.
At the same time, he was writing in a context of intense social conflict, industrial upheaval, and class organization. It would be strange to imagine that he did not expect the concept to carry political force. Therefore, the structural analysis and moral resonance are neither identical nor entirely separable.
As for who he was writing for, I suspect the answer is layered. Capital is clearly written with an eye toward engaging political economists on their own terrain. In other words, Marx is a philosophical system builder and Capital is his construction of capitalism.
Thank you so much for explaining this in clear terms! I recently started studying the highschool Political Economy textbooks from the 1970 in Romania (former socialist state), and I'm absolutely mind blown - comparing it to the BS I had to read in the neoclassical economics 101 textbooks, it's absolutely wonderful!
To me, it never made sense what they taught us in economics about the wages coming from the marginal productivity of the last employed worker... Marx makes so much more sense when he talks about wages being the value of the means of subsistence for the worker.
But my problem is the following: there are so many instances where our wages do not even cover the cost of subsistence. I've read about nurses in the US having to live in their cars because they can't afford housing. In Romania for example, our minimum wage is ~500€/month but a person needs double that to cover a *decent* living. In other words, many wages today are not "living wages".
So my questions are:
1. Is the concept of a "living wage" (like in the UK) similar to Marx's idea of wages being the value of the means of subsistence?
2. If the majority of people on this planet are being paid less than the value of the means of subsistence, then capitalism is even worse than the description Marx gave, right?
Thank you for sharing this knowledge with us, your Substack is really helpful! ✊🚩🕊️
Marx thought back in the 19th century that capitalism would collapse owing to its own contradictions but the exact opposite happenEd. Capitalism spread around the world, making everyone rich and increasing the human life span, for example, from 32 years to 80 years. Indeed if Karl Marx was alive today, he would not be a Marxist.
If you had a Nazi socialist government forcing people into relationships at gunpoint then there would be exploitation because the relationships would undoubtedly be serving the interest of the Nazi socialist in some way or form.
Wonderful essay, echoing the other thoughts here. Are you planning (or have you written already) anything on the age-old debate around productive labor? Or alternatively “material vs immaterial”? I think a lot about this as a designer but am curious to hear your take.
This is a very clear and disciplined explanation of what Marx actually meant by exploitation. You do a good job separating the technical claim about surplus value from the everyday moral use of the word. That alone elevates the discussion.
Where I’d gently push back is on what follows from that clarification. Even if profit arises from surplus labor in a structural sense, it does not automatically follow that the relationship is exploitative in a normatively meaningful way. The concept depends heavily on the labor theory of value and on treating wage exchange as structurally coercive rather than mutually advantageous under specific institutional conditions.
In modern economies, productivity gains, capital deepening, and risk-bearing complicate the picture. Returns to capital are not simply siphoned labor-time but are often tied to coordination, innovation, and deferred consumption. Once we introduce heterogeneous capital, entrepreneurial uncertainty, and voluntary contracting under competitive constraints, the moral force of the term exploitation begins to weaken.
That said, I genuinely appreciate the clarity of your exposition. Even where I may bring another thought, I think this is exactly the kind of careful conceptual work that improves the quality of debate. I enjoy your publishings.
This is a beautiful essay about the concept of "exploitation" in Marxism.
A question that consistently intrigues me is the role of middle management/managerial positions in "exploitation" in the Marxist sense. Many of these managers receive a wage (i.e. labour income) and have no capital ownership. They must be receiving a wage in exchange for their "labour-power", which presumably shouldn't be any different from workers at the bottom: after all, every human being needs the same sort of stuff in terms of food, housing etc. in order to possess "labour-power". But their wages are much higher than subsistence levels and they can afford luxuries that other workers cant.. Now, this might indicate that they are not only compensated for "necessary labour time" but also get an additional component of their own "surplus labour time".
But could that be true? I believe in David Graeber's analysis that most people in such roles are basically paper pushers, adding nothing of value: they are doing bullshit. Their "labour time" adds no value to the production process that is independent of the value added by living labour (just like the owners of capital add no value to the production process that is independent of labour). If that is the case, where does their remuneration come from?
I think it must come from the "surplus labour time" of those workers who generate value. In other words, the "labour income" of the superfluous managerial layers must also be derived from "exploitation", just like the owners of capital. So why don't the owners of capital just get rid of them and enhance their own share?
I suppose the answer must be that the managerial layers do serve a purpose, even if they don't "add value" to the production process in the conventional sense: they serve as the staunchest and most stalwart ideologues and defenders of the system of exploitation. Their remuneration is reward for ideological support. They are the graduates and the post graduates, the alumni of the schools of business management and so forth, the people who have consecrated their lives to imbibing dogmas. They aren't really exchanging "labour-power" for wages, they are exchanging "ideological obedience and support" for wages. And clearly, "ideological support", as a commodity, is worth much more than mere "labour-power".
A "manager" is an ideological advocate. No wonder most managers have a hard time trying to explain what they do in a sentence
You've made such an interesting point about managers and their role as ideologues. I was raised in capitalism but my mom grew up in socialism, and I remember when I was in my 20s, she told me that in socialism, the shop floor workers knew that the "admin" personnel (HR, accountants, managers) wages came from the surplus value created by the factory workers, and that blew my mind! Since I was growing up in capitalism, it never crossed my mind where wages came from, and especially not the managers' wages ! That was such a revealing conversation I had with her!
Your mother was absolutely right!
This is great. However, I feel like you might be a little light of discussion on the ‘extraction’ bit of the whole ‘extraction of surplus value’ thing. I take this to be the really crucial part of Marx’s view of exploitation (though what follows is definitely more of an analytic Marxist reading of the concept than an orthodox Marxist one).
It’s not just that someone who isn’t the worker is getting surplus value (gifting something you make to someone else in communist society won’t result in exploitation, even if the exchange results in their getting surplus value that you generated). It’s that this transfer of surplus value is coming about as a result of social relations of a certain kind. In the case Marx is interested in, what generates the exploitation is that the capitalist wage labour contracts get signed because of workers’ ‘doubly free’ condition (free to choose who to work for, free of any means of supporting themselves).
On this reading, the labour theory of value is not invoked by Marx because it’s essential to explaining what exploitation is; it’s invoked to explain why the Proudhonian critique of capitalism fails. In order to show that a critique of capitalism premised on unequal exchange fails, you need to show that even if labour is selling at its full value, there is something still objectionable about capitalist wage labour. The labour theory of value is a tool Marx uses to help construct a scenario where labour is selling at its full value so that he can show that there is still something objectionable about this scenario.
This is a thoughtful and important clarification. Thank you.
I agree that the “extraction” dimension cannot be reduced to the mere fact that someone other than the worker receives surplus value. As you suggest, the transfer of surplus in itself is not sufficient to constitute exploitation. One can imagine forms of voluntary transfer, gifting, collective redistribution, communal pooling, etc., that do not carry the same structural character.
The decisive issue, as you note, is the social relation under which the transfer occurs.
Marx’s formulation of the worker as “doubly free” is crucial here. The wage contract is formally voluntary, but it is entered into under conditions structured by prior dispossession. The “extraction” of surplus value is therefore not a simple interpersonal taking; it is mediated by a historically specific configuration of property relations.
Where I would perhaps nuance your point is on the role of the labor theory of value. I agree that Marx deploys it strategically against Proudhonian and other unequal-exchange critiques. Showing that exploitation persists even when equivalents exchange is essential to that polemic. But I would hesitate to say the labor theory of value is merely instrumental to that move.
For Marx, the labor theory of value grounds the claim that living labor is the source of new value in the first place. Without that premise, the structural account of surplus extraction loses its analytic foundation. The point is that the very capacity of capital to expand depends on labor’s value-creating function.
That said, I think you are right to emphasize that exploitation hinges on social relations; specifically, on the separation of workers from the means of production and the compulsion embedded in that separation. Surplus value is not taken through force at the point of exchange; it is appropriated through a structure that renders wage labor the condition of survival.
If anything, your point underscores something I perhaps did not stress enough: extraction is a social relation sustained by property, law, and historical dispossession.
I appreciate you raising this.
Yes, I spoke a bit loosely there: Marx believed in the labour theory of value and thought it was of theoretical significance beyond just setting the stage for critiquing Proudhon. I was just trying to emphasize that I take Marxian exploitation to have more to do with the extraction of surplus value than it does Marx’s answer to the question of what value is.
Wage labor is always the condition of survival unless you're going to import Martians and make them work for you. It is not capitalism that requires us to work but rather God or nature.
Anytime workers feel they are being exploited or aren't being paid enough or that owners are getting too much profit in a capitalist system they are 100% free to unionize and demand higher wages or to simply quit and start their own companies which explains why we have 50 million companies in America. Freedom makes Marxism seem really Preposterousand stupid.
This is a very clear and disciplined explanation of what Marx actually meant by exploitation. You do a good job separating the technical claim about surplus value from the everyday moral use of the word. That alone elevates the discussion.
Where I’d gently push back is on what follows from that clarification. Even if profit arises from surplus labor in a structural sense, it does not automatically follow that the relationship is exploitative in a normatively meaningful way. The concept depends heavily on the labor theory of value and on treating wage exchange as structurally coercive rather than mutually advantageous under specific institutional conditions.
In modern economies, productivity gains, capital deepening, and risk-bearing complicate the picture. Returns to capital are not simply siphoned labor-time but are often tied to coordination, innovation, and deferred consumption. Once we introduce heterogeneous capital, entrepreneurial uncertainty, and voluntary contracting under competitive constraints, the moral force of the term exploitation begins to weaken.
That said, I genuinely appreciate the clarity of your exposition. Even where I may bring another thought, I think this is exactly the kind of careful conceptual work that improves the quality of debate. I enjoy your publishings.
Wage labor is not a voluntary association with employment. It is an economically and culturally coercive state of dependence. One has to sell one’s labor power in order to eat, have shelter, have access to health services both for oneself and for one’s family. The alternatives are often unavailable to the overwhelming population of wage laborers. Individual small business success requires capital and statistically is equivalent to winning the lottery. Climbing the corporate ladder is even less likely.
Economic relations under capitalism are both structurally coercive and mutually beneficial.
I argue that this article actually misrepresents the Marxist normative case. It is neither a moral indictment of capitalists nor a claim that wage exploitation is somehow “objectively wrong”, but simple self-interest, like a monkey removing a tick.
https://acidcommunistac.substack.com/p/value-and-wage-labor-in-marxism-a?utm_source=share&utm_medium=android&r=4b6d0b
Key Concepts in Marxist Analysis of Return on Capital:
Surplus Value as Source of Profit: Marx argued that only labor-power (variable capital,
) creates new value, while machinery and raw materials (constant capital,
) only transfer their own value. Profit is the unpaid portion of labor, termed "surplus value" (
).
https://www.google.com/search?q=Organic+Composition+of+Capital&rlz=1C1GCEA_enUS1169US1169&oq=marxist+analysis+of+return+on+capital&gs_lcrp=EgZjaHJvbWUyBggAEEUYOTIHCAEQIRigATIHCAIQIRigATIHCAMQIRifBTIHCAQQIRiPAjIHCAUQIRiPAtIBCjE5NjMzajBqMTWoAgiwAgHxBRPg8MZ7Hmlp&sourceid=chrome&ie=UTF-8&mstk=AUtExfA1JoGUdDFDXzqZdfyPV7Vn9Z95IVQHB2kkE3-OpVcOwkIqvRYTl1G8JWwh8BuAxPmiX96OeNxXRThdtA3vQ1tvxQa2toTmXRDRZk6yG9iUianCRFYf4xXMnQQnM0NNXmoDT6qa856ytX4seKEItDdPCDKnklcmBY3KOVt7BxK_-BQ&csui=3&ved=2ahUKEwjugPvHofiSAxUiLzQIHastA3sQgK4QegQIAxAF (OCC): Capitalists invest more in technology and less in labor over time to outcompete rivals (
). This rising ratio (
) is the OCC.
https://www.google.com/search?q=The+Law+of+the+Tendency+of+the+Rate+of+Profit+to+Fall&rlz=1C1GCEA_enUS1169US1169&oq=marxist+analysis+of+return+on+capital&gs_lcrp=EgZjaHJvbWUyBggAEEUYOTIHCAEQIRigATIHCAIQIRigATIHCAMQIRifBTIHCAQQIRiPAjIHCAUQIRiPAtIBCjE5NjMzajBqMTWoAgiwAgHxBRPg8MZ7Hmlp&sourceid=chrome&ie=UTF-8&mstk=AUtExfA1JoGUdDFDXzqZdfyPV7Vn9Z95IVQHB2kkE3-OpVcOwkIqvRYTl1G8JWwh8BuAxPmiX96OeNxXRThdtA3vQ1tvxQa2toTmXRDRZk6yG9iUianCRFYf4xXMnQQnM0NNXmoDT6qa856ytX4seKEItDdPCDKnklcmBY3KOVt7BxK_-BQ&csui=3&ved=2ahUKEwjugPvHofiSAxUiLzQIHastA3sQgK4QegQIAxAJ: The rate of profit is defined as
(surplus value divided by total capital invested). As the OCC rises,
grows faster than
, causing the profit rate to decline relative to total investment, even if the absolute amount of profit increases.
Crises and Counteracting Factors: The falling profit rate triggers economic slumps, resulting in capital destruction (bankruptcies, devaluation of assets), which eventually resets the rate of profit. Other counteracting factors include depressing wages below value, cheapening constant capital, and exploiting foreign markets.
Turnover Time: Frequency of capital turnover affects profitability. More rapid cycles of production and circulation increase the annual rate of surplus value.
This is a very clarifying article and, like all the ones I've read from you, it gets straight to the point and lives up to the name of the publication, 'simplifying socialism.' And the thing is, simplifying isn't an easy task; it requires a deep understanding of the topics being simplified so they can be understood without losing their essence. Beyond the compliments, the concept of exploitation and the appropriation of surplus by the owner of the means of production, based on historical, legal, and political issues, resonates with the concept of struggle for the surplus distribution in Sraffa's theory of prices and distribution. Do you think that Piero Sraffa's take on surplus is compatible with Marx's concept of exploitation?
My apologies if it sounds weird, I have used Google translator from Spanish to write this comment.
En primer lugar, muchas gracias. He escrito esto en inglés y luego lo he traducido al español, por lo que pido disculpas por cualquier error.
La teoría del excedente de Sraffa es compatible con el concepto de explotación de Marx en cuanto a sus resultados. Se puede utilizar a Sraffa para describir el mismo excedente cuantitativo que Marx, pero no puede explicar su origen como explotación, por lo que es formalmente compatible en cuanto al resultado, pero conceptualmente diferente en cuanto a la causa. Sin embargo, el modelo de Sraffa es técnicamente neutro; puede describir un sistema sin explotación, mientras que la teoría del excedente de Marx no puede describir el capitalismo sin la explotación de la fuerza de trabajo.
Thank You for the response. I agree with You that Sraffa's core theory assumes that the distribution of surplus is given and is determined by institutional, historical and political factors in each social formatiion. Anyway, exploitation take place whenever r (the profit rate) is not 0, i.e. the surplus is not fully received by the worker.
This makes a lot of sense and asks the crucial questions about the political choices of power distribution. From a human perspective, though, I can't help thinking that Marx's use of a morally loaded term to identify this structural position was deliberate however much he tries to intellectualise it. I am sure that if his intention was to avoid moral connotations it was not outside his powers to choose or construct a different term!
This is not to detract from his analysis which I agree with but the term was bound to excite those feeling exploited and offend those who were doing it. That being the case the question is who was he writing for?
Marx was a rhetorically sophisticated writer. If he wanted a completely scientific, and precise, vocabulary, he was more than capable of constructing one. That said, I believe there is a distinction worth preserving between moral resonance and moral foundation.
Marx consistently insists that exploitation arises even where exchange is formally equal and voluntary. In other words, he emphasizes the detachment of the concept from fraud, cheating, or overt injustice at the contractual level. In my view, that suggests that he did not want exploitation to rest primarily on moral condemnation; rather, he wanted it to describe a structural relation.
At the same time, he was writing in a context of intense social conflict, industrial upheaval, and class organization. It would be strange to imagine that he did not expect the concept to carry political force. Therefore, the structural analysis and moral resonance are neither identical nor entirely separable.
As for who he was writing for, I suspect the answer is layered. Capital is clearly written with an eye toward engaging political economists on their own terrain. In other words, Marx is a philosophical system builder and Capital is his construction of capitalism.
Thank you so much for explaining this in clear terms! I recently started studying the highschool Political Economy textbooks from the 1970 in Romania (former socialist state), and I'm absolutely mind blown - comparing it to the BS I had to read in the neoclassical economics 101 textbooks, it's absolutely wonderful!
To me, it never made sense what they taught us in economics about the wages coming from the marginal productivity of the last employed worker... Marx makes so much more sense when he talks about wages being the value of the means of subsistence for the worker.
But my problem is the following: there are so many instances where our wages do not even cover the cost of subsistence. I've read about nurses in the US having to live in their cars because they can't afford housing. In Romania for example, our minimum wage is ~500€/month but a person needs double that to cover a *decent* living. In other words, many wages today are not "living wages".
So my questions are:
1. Is the concept of a "living wage" (like in the UK) similar to Marx's idea of wages being the value of the means of subsistence?
2. If the majority of people on this planet are being paid less than the value of the means of subsistence, then capitalism is even worse than the description Marx gave, right?
Thank you for sharing this knowledge with us, your Substack is really helpful! ✊🚩🕊️
Recently had a discussion with someone about this concept. Good piece.
This is a video that touches on the same subject https://www.youtube.com/watch?v=Y3NqSbUQWOs
Thanks for this crystal clear explanation of Marx's understanding of exploited labor as the source of profit.
I appreciate the kind words. Glad you found it clear!
Marx thought back in the 19th century that capitalism would collapse owing to its own contradictions but the exact opposite happenEd. Capitalism spread around the world, making everyone rich and increasing the human life span, for example, from 32 years to 80 years. Indeed if Karl Marx was alive today, he would not be a Marxist.
If you had a Nazi socialist government forcing people into relationships at gunpoint then there would be exploitation because the relationships would undoubtedly be serving the interest of the Nazi socialist in some way or form.
When two people freely become friends there is no exploitation and when two people freely enter into a economic relationship there is no exploitation
Without profit there is no reason to invest in a business and we would all be dead because there would be no businesses.
Wonderful essay, echoing the other thoughts here. Are you planning (or have you written already) anything on the age-old debate around productive labor? Or alternatively “material vs immaterial”? I think a lot about this as a designer but am curious to hear your take.
This is a very clear and disciplined explanation of what Marx actually meant by exploitation. You do a good job separating the technical claim about surplus value from the everyday moral use of the word. That alone elevates the discussion.
Where I’d gently push back is on what follows from that clarification. Even if profit arises from surplus labor in a structural sense, it does not automatically follow that the relationship is exploitative in a normatively meaningful way. The concept depends heavily on the labor theory of value and on treating wage exchange as structurally coercive rather than mutually advantageous under specific institutional conditions.
In modern economies, productivity gains, capital deepening, and risk-bearing complicate the picture. Returns to capital are not simply siphoned labor-time but are often tied to coordination, innovation, and deferred consumption. Once we introduce heterogeneous capital, entrepreneurial uncertainty, and voluntary contracting under competitive constraints, the moral force of the term exploitation begins to weaken.
That said, I genuinely appreciate the clarity of your exposition. Even where I may bring another thought, I think this is exactly the kind of careful conceptual work that improves the quality of debate. I enjoy your publishings.