Friday, October 26, 2012

Marx's claim that profit equals exploitation of the proletariat

To: Francis M.
From: Geoffrey Klempner
Subject: Marx's claim that profit equals exploitation of the proletariat

Dear Frank,

Thank you for your email of 13 October, with your essay from the University of London Politics paper, in response to the question, 'Does Marx show that the source of all profit under capitalism is the exploitation of the proletariat?'

Starting an exam essay with one word, 'No' (or, for that matter, 'Yes') will not fail you, but examiners have seen it all before so it will probably raise a yawn - which is something you don't want to do.

Leaving aside the Marx's antediluvian terminology, the issue as you have correctly perceived, boils down to the question whether workers are exploited by the mere fact that the products of their labour are sold for a profit. Whatever money is raised by selling the things produced by the workers -- the value of the product as determined by the current state of the market -- should go to them and not to someone else who didn't work to produce them.

This seems so obviously nuts, that it is hard to imagine why anyone could have believed this. As you point out, capitalism is an inherently risky affair. To be a successful entrepreneur requires not a little skill. If anyone could be a successful capitalist, we would all be rich. The capitalist is a 'worker' too, and according to the skill scale, deserves more for his time than a factory worker or cotton picker, don't they?

And yet, it is also very obviously the case that we all recognize the concept of 'exploitation' in a broadly Marxian sense. The American philosopher Robert Nozick in 'Anarchy, State and Utopia' argues that any arrangement freely entered into cannot result in an 'unjust' outcome. Despite Nozick's defence of radical libertarianism, most people would accept that if no-one will employ you because you are disabled, or black, or a woman, and I offer you a pittance which because of your economic circumstances you have no choice but to accept, then that is exploitation. It is unfair and unjust, and something should be legislated for.

In the reality of today's global capitalism, there are plenty of such 'injustices', but the activities of companies are limited not only by government regulation (for example, minimum wage legislation) but also increasing consumer awareness.

But this is all besides the point; the question says, 'all profit'. A fair employer who gives a decent wage is as much an exploiter as a sweatshop owner, so far as Marx's point of principle goes.

It is not going to cut any ice in response to point out that workers now share profits, through company schemes and profits from their insurance policies. It doesn't matter how much distance you go towards increasing worker involvement and compensation, at the end of the day, labour is treated as something to be bought and sold. What *is* so bad about that?

Marx's strongest argument -- and what underlies all the dubious economic arguments, and from which they derive any force they may have had -- is the one he first put forward in the Manuscripts of 1844. Work should express our creativity and connect us with our fellow man. You can't 'sell' your work. That's prostitution. As soon as money comes into the equation, we all become prostitutes.

This is extreme, and yet it is not so extreme that we cannot readily find echoes in our own experience, and in copious novels and literature written around the subject. When Marx talks about 'the worker' he has his own work as a model: the fulfilling life of a writer and thinker.

The key element, as you have pointed out, is that of gameplay and risk. That is the essence of the market, and the thing that Marx hates. In the market, there are winners and losers. You get the best deal you can, which in the prevailing conditions may be a very poor deal. It is no use pointing out how well the system 'works' (despite the current financial crisis) and how badly the alternative has fared, every time and every place that it has been attempted. That merely shows we should try harder to make the alternative succeed.

If you take gameplay and risk out of the equation, then all that remains is the socialist's, 'From each according to his ability, to each according to his needs.' We all need to work and we all need to eat. Work should be its own reward; the amount and quality of the food you receive in return shouldn't be dependent on mere 'economic' considerations. That is, to a large extent, how things are in a happy family. It does seem amazing that Marx thought that we could all live happily as 'brothers' and 'sisters'; perhaps less so when you compare this with a certain view of Christianity (which makes Marx's remark about the 'opiate of the people' particularly ironic).

I have written something that glances on this point: see my article 'The Business Arena' in issue 5 of Philosophy for Business There, I write:

'It would be possible -- and this was the young Marx's vision of a communist society where everyone lives by the rule of brotherly and sisterly love, just as Christ preached -- to abolish business, trade and money altogether. Just because an activity is natural, inevitable does not mean that human cultural creativity and ingenuity cannot find a way to eliminate it. Should we wish to? To me, that's a meaningless question. Because (contrary to what the older Marx of Capital thought and generations of Socialist governments have taken on trust) we have not the slightest clue how that end state would be achieved. We have no conception of the price that would have to be paid in permanently altering human culture and behaviour in order to reach that idyllic end state.'

I agree with you, profit is not equivalent to exploitation. Yet we live in a world which is rife with exploitation, and many of the evils in it have to be laid at the door of capitalism. Which only goes to show that either we need a new model, or we need to do what we do a lot better than we have been doing up to now.

All the best,