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From exploit; the act of exploiting. a. To make use of or productively utilize. b. To make use of in an unjust, cruel or selfish manner for one's own advantage. It is the latter which is discussed below.

In political economy, economics, and sociology, exploitation usually does not include simple theft, since the latter is not a persistent economic or social relationship, as when a pimp "exploits" his prostitute. Rather, exploitation involves some persistent aspect of the socioeconomic system, an institution. This corresponds to one ethical conception of exploitation, that is, the treatment of human beings as mere means to an end — or as mere "objects".

Overview

In general, "exploitation" refers to the use of people as a resource, with little or no consideration of their well-being. The focus of this article is the socio-economic phenomenon where people are trade their labor or allegiance to a powerful entity, such as the state, a corporation, or a trade union.

Perspectives on exploitation and markets

There are two primary viewpoints on the reality of exploitation in free markets:

• exploitation can coexist with free markets.
• exploitation cannot exist in a free market (absent criminal use of force).

On the theoretical level, these different viewpoints are diametrically opposed, and irreconcilable, so much of this article reflects that, with a "on the one hand, some see this as black, but others see it as white" format. Since many people see "free markets" as existing in some parts of the world economy but not others, in practice both viewpoints may be valid in different places at different times.

The first view will be termed the "anti-market" theory while the second view will be termed the "pro-market" theory, though this obviously involves over-simplification.

"Exploitation can coexist with free markets."

The anti-market school, e.g., progressives, populists, anarchists, and Marxists, argue that — even in the absence of physical compulsion to work (slavery) — there are inherent power imbalances between some or all employers, on the one hand, and some or all workers, on the other. This tradition goes back at least as far as Adam Smith's Wealth of Nations. He wrote:

"The masters , being fewer in number, can combine much more easily; and the law, besides, authorises, or at least does not prohibit their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work; but many against combining to raise it. In all such disputes the masters can hold out much longer. A landlord, a farmer, a master manufacturer, or merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long-run the workman may be as necessary to his master as his master is to him, but the necessity is not so immediate. (volume I, ch. 8, paragraph 12)

The use of the word "exploitation" goes far beyond Smith. It is a characterisation of the work for pay system (wage labor), when it is applied with cruelty, or with compulsion, or on terms that are disagreeable to the employee.

"Exploitation cannot coexist with free markets."

The pro-market school, e.g., conservatives, classical liberals, libertarians, and anarcho-capitalists. argues that — absent physical compulsion — the only way that an employer may hire a worker is by offering a basket of goods (wages, working conditions, and benefits) sufficient to "bribe" him or her away from existing work options and leisure, and that therefore any employment relation that does not involve physical force or threats is – ipso facto – not exploitative. No-one can lose from voluntary exchange.

Exploitation in different economic regions

Exploitation in Developing nations?

The anti-market viewpoint argues that a common example of corporate exploitation are clothing corporations such as Nike, and The Gap, which are alleged by some to use child labor and sweatshops in developing nations to manufacture their products for salaries lower than those that prevail in . This, it is argued, is insufficient for the local cost of living if working hours common in the first world are observed, meaning that working hours much longer than the first world are necessary. This viewpoint also argues that work conditions in these developing-world factories are much less safe than in the first world.

The pro-market faction and also corporate spokespeople argue that, absent compulsion, the only way that corporations are able to secure adequate supplies of labor is to offer a basket of goods superior to preexisting options, and that the presence of workers in corporate factories indicates that the factories present options which are seen as better - by the workers themselves - than other options (see principle of revealed preference).

The anti-market viewpoint responds that this is disingenuous, as the companies are in fact exploiting people by the terms of unequal human standards. Furthermore, the argument goes, if people choose to work for low wages and in unsafe conditions because it is their only alternative to starvation or scavenging from garbage dumps. Therefore, it cannot be seen as any kind of "free choice" on their part. This viewpoint also argues that if a company intends to sell its products in the first world, it should pay its workers by first world standards.

The pro-market viewpoint responds that the workers do have other options besides starving: all of the options that existed before the corporations arrived, and which continue to exist (e.g. if workers feel exploited soldering motherboards, or sewing jackets in a factory, at given levels of salary, safety, etc., they are free to return to farming, fishing, or other traditional occupations). (This ignores, of course, the way in which the commercialization of agriculture has led to the expulsion of much labor from the farming sector.)

The argument that first-world wages should be paid is rebutted by pointing out that if first world wages were mandated, the corporations in question would have no incentives to export factories to the developing world, and would keep the factories in the developed world, which would deny developing nation workers one employment choice.

The anti-market viewpoint argues that corporate wealth can be a strong incentive in governments with weak human standards and rampant corruption, to persuade such governments to give various privileges to various corporations. Thus, the case is often made that a corporation shares complicity in human rights abuses, when it enters into a working partnership with a tyrannical and abusive political government, to exploit the people for their labor. This partnership has involved the suppression of independent labor unions, the military suppression of strikes, and the torture of union activists.

Exploitation in Developed nations?

Many in the pro-market faction argue that exploitation does occur, but only in non-free markets. They point to labor markets that are dominated by unions using the threat of union violence to coerce either management to grant undue perks or excess pay raises, or to coerce reluctant workers into adopting the union position. They see this kind of exploitation as being allowed, or even encouraged by the state.

Others (often those in the anti-market camp) argue that labor unions are a response to the abuse of corporate power, such as those with monopsony, and the need by workers to express opinions concerning decisions that affect them as a group in a democratic way (if possible) rather than giving in to the dictations of the corporate management. (The cost to an individual worker of leaving a bad job and seeking a good one can be excessive — and may not solve a collective problem.) While there are cases of labor-union abuse, these occur rarely in the current era, since labor unions have lost most of their power and the institution of the sweatshop has become more common, at least in the United States.

Theory

Marxian theory

In Marxian theory, the corporate exploitation described above is usually called "superexploitation," exploitation that goes beyond the normal standards of exploitation prevalent in capitalist society. While the theories discussed above emphasize the exploitation of one individual by an organization, the Marxian theory concerns the exploitation of one entire segment or class of society by another.

In the Marxian view, "normal" exploitation is based in three structural characteristics of that kind of society: (1) the monopoly of the ownership of the means of production by a small minority in society, the capitalists; (2) the inability of non-property-owners (the workers, proletarians) to survive without selling their labor-time to the capitalists; and (3) the state, which uses its strength to protect the unequal distribution of power and property in society. Because of these human-made institutions, workers have little or no choice but to pay the capitalists surplus-value (profits, interest, and rent) in exchange for their survival. They enter the realm of production, where they produce commodities, which allow their bosses to realize that surplus-value as profit. They are always threatened by the "reserve army of the unemployed." For more on this theory, see the discussion of Marx's labor theory of value.

Some Marxian theories of imperialism extend this kind of structural theory of exploitation further, positing exploitation of poor countries by rich capitalist ones. Some Marxist-feminists use a Marxian-style theory to understand relations of exploitation under patriarchy, while others see a kind of exploitation analogous to the Marxian sort as existing under institutional racism.

Neoclassical theories

In neoclassical economics, exploitation is a kind of market failure, a deviation from an ideal vision of capitalism. The most common neoclassical exploiter is a monopsony or a monopoly. These exploiters have bargaining power.

Another exploiter is the agent who takes advantage of the principal who hires her, under conditions of asymmetric information (see the principal-agent problem). A third exploiter is the free rider who takes advantage of others who pay for the production of public goods.

New liberal theories

For others, exploitation coexists with perfect markets: given a special position in society (controlling an important asset), an interest group can shift the distribution of income in its direction, impoverishing the rest, even though their role serves no reasonable purpose. While Henry George pointed to land-owners, John Maynard Keynes saw rentiers as fitting this picture. In some ways, these theories are similar to the Marxian one discussed above. However, they represent the power and influence of special interests in society (and within the capitalist class) rather than representing a structural difference in class position of the Marxian sort.

Pro-market theories

The pro-market school argues that because only criminals and states arrogate to themselves the use of force as a tool of coercion, that only criminals, governments, and states are exploitative.

In this view, a state is a monopoly run by a special interest group, regularly interfering with markets and other civil society processes, acting as a parasite.

This latter view is shared by anarchists and Marxists who see the state as operated either for the capitalist class or in coalition with it. Both view the capitalists as a special interest group.

See also

corporate abuse, slavery, child labor, child sexual exploitation, human exploitation, animal abuse, Class warfare, exploitation of natural resources, exploitation film, globalisation, free trade, fair trade