Name: Tanvi Godiwala

PRN: 19010125467
Division E- B.A. LL.B. – 1st Year
Semester 1
Sociology Internal Assessment-I
 Karl Marx and Capitalism

Karl Marx is one of the most controversial economists in history. His writings are widely
studied and debated by scholars and researchers everywhere. He studied capitalism extensively
and much of his writings focus on the problems with capitalism and specifically on the
exploitation of the worker. By analysing the origination of capitalism and the Marxist critique
of capitalism, we can gain a better understanding of Marx's viewpoints and appreciate his
stance on capitalism better.

In his book, Das Kapital, Karl Marx developed his critique of capitalism by analysing its
characteristics and its development throughout history. Although it was written in 1850s, its
principles still hold value and purpose in the globalized world and remains extremely relevant
in the twenty-first century.

Marx fundamentally, believed, that Capitalism had evil effects on society.1 He also believed,
that Capitalism, accompanied by its own social logic, would result in its own collapse, just as
prior socio-economic systems had also grown and had eventually gone on to collapse in on
themselves throughout the course of history. As an economist who was extremely discontented
with the capitalist mode of production and economy, Marx had a countless number of
objections to countless evils that he felt were very much characteristic of Capitalism. However,
the most crucial critique and most relevant to Capitalism in today’s sense itself, is particularly
Marx's concept of Exploitation.

Karl Marx thought, workers’ labour under capitalism is neither truly voluntary nor entirely for
the benefit of the workers themselves. It is not truly voluntary because workers are forced, by
their lack of ownership of the means of production, to sell their labour power or working
abilities to capitalists or else starve without a means of earning an income.2 And the workers
are not labouring entirely for their own benefit because capitalists use their position of privilege
and power to dominate and exploit the workers, appropriating for themselves some of the value
created by workers’ labour, by paying them lesser in lieu of profits.

Exploitation, in the Marxian expression, was the process by which a worker is forced to sell
their labour power (a portion of their life which they agree to dedicate to production) to a
capitalist for less than it is worth. This happens as a result of the worker's living labour,

1
2, KARL MARX, CAPITAL (German Edition 1, translated)
2
Zwolinski,et al., Exploitation, The Stanford Encyclopedia of Philosophy (2017), STANFORD UNIVERSITY,
https://plato.stanford.edu/archives/sum2017/entries/exploitation/
producing surplus value for the capitalist, while the worker is only paid a disproportionately
low wage. Essentially, “exploitation” is the act of procuring a profit in accumulated labour as
a result of the purchase of living labour. In Karl Marx’s opinion the Capitalist exploitation is
class exploitation, reinforced by the pre-existing conditions of the capitalist system.

A single act of exploitation is by no means drastically problematic, but a situation in which the
entire working class or proletariat can only maintain its survival by allowing itself to be
exploited on a class-scale, for Marx, it is an unforgivable evil. Exploitation itself also has a
fundamentally isolating effect, which is a result of the treatment of a worker at par with a
machine: just as the capitalist profits from his machines, paying only for their maintenance and
raw material, he does the same with the worker. Exploitation is when two basic concepts are
not met, when the workers do not receive wages according to their work or do not receive
wages according to their needs.3 This process of exploitation is a part of the redistribution of
labour, occurring during the process of individuals exchanging their current productive labour
for social labour set in goods received4. The labour put forth toward production is embodied in
the goods and exploitation occurs when someone purchases a good, with their revenue or
wages, for an amount unequal to the total labour he or she has put forth.5 This labour performed
by a population over a certain time period is equal to the labour embodied to the goods that
make up the net national product (NNP). The NNP is then allocated to the members of the
population in some way and this is what creates the two groups, or agents, involved in the
exchange of goods: exploiters and exploited.6

The exploiters are the agents who are able to control the goods, with revenue from their wages.
These agents often have class status and ownership of productive (and often expensive) assets
that aid the entire cycle of exploitation. The exploiters would typically be the bourgeoisie or
the elite capitalist wealthy class. Meanwhile, the exploited are those people who receive less
than the average product that he or she produces. If workers receive an amount equivalent to
their average product, there is no revenue left over and therefore these workers cannot enjoy
the fruits of their own labour and the difference between what is made and what they can

3
Jon Elster, Exploring Exploitation, Vol. 15, No. 1, 3 THE JOURNAL OF PEACE RESEARCH, 3-17
4
John E. Roemer, Should Marxists be Interested in Exploitation, Vol. 14, No. 1, 30 PHILOSOPHY & PUBLIC
AFFAIRS, 30-65 (1985)
5
John E. Roemer, Origins of Exploitation and Class: Value Theory of Pre-Capitalist Economy, Vol. 50, No. 1,
163 ECONOMETRICA, 163-192 (1982)
6
John E. Roemer, Should Marxists be Interested in Exploitation, Vol. 14, No. 1, 30 PHILOSOPHY & PUBLIC
AFFAIRS, 30-65 (1985)
purchase cannot be justified by redistribution according to need.7 The exploited are always the
proletariat.

Under slavery, exploitation is naked and obvious to exploiter and exploited alike. According
to the International Labour Organization, 40.3 million people are victims of modern slavery
globally, while 24.9 million people are affected by forced labour8. 28th July marks the World
Day Against Trafficking in Persons, of which 71 per cent of victims are women and girls 9.
These horrifying statistics should be enough to demonstrate the scale of the problem, and
unfortunately this is only the apparent and obviously visible part of the problem but the side
we don’t see is the one that harms us the most. The unacknowledged part of exploitation can
be seen in all the billions of dollars given as bonuses to the Wall Street bankers, every dividend
paid to the shareholders of industrial corporations, every rupee collected by landlords, every
commodity that is available on “sale” at a throwaway price- all of this is the result of the
uncompensated labour of working-class people.

7
Jon Elster, Exploring Exploitation, Vol. 15, No. 1, 3 THE JOURNAL OF PEACE RESEARCH, 3-17
8
International Labour Organisation, Forced labour, modern slavery and human trafficking, INTERNATIONAL
LABOUR ORGANISATION , https://www.ilo.org/global/topics/forced-labour/lang--en/index.htm
9
International Labour Organisation, Global Estimates of Modern Slavery, ILO & WALK FREE FOUNDATION,
https://www.ilo.org/wcmsp5/groups/public/---dgreports/--- dcomm/documents/publication/wcms_575479.pdf
The following image10 shows Marx’s theory of exploitation being apparent in the United States
of America, one of the world’s largest Capitalist Economies:

The chart shows that Americans aren’t paid what they’re worth — their incomes have flatlined
for half a century, but their productivity, which is roughly the profit that they earn for
capitalists, has skyrocketed.11 This essentially means that the average American cannot afford
the goods they create or services they provide on the salary they receive. American economists
call it “the productivity-wage gap”, which in its essence is the very concept of exploitation as
established by Marx.

Exploitation in America seems to have become a way of life. Exploitation in the most basic
form of the word means to use another person’s vulnerabilities for one’s own benefit. With
reference to that meaning who are the exploited in America, the world’s largest economy? The
better question is: who isn’t? 80% percent of Americans live pay check to pay check, 70% find

10
Josh Bivens et al., Raising America’s Pay: Why It’s Our Central Economic Policy Challenge, ECONOMIC
POLICY INSTITUTE, (June 4, 2014), https://www.epi.org/publication/raising-americas-pay/
11
Josh Bivens et al., Raising America’s Pay: Why It’s Our Central Economic Policy Challenge, ECONOMIC
POLICY INSTITUTE, (June 4, 2014), https://www.epi.org/publication/raising-americas-pay/
it close to impossible to be able to raise $1000 for an emergency12, kids perform “active shooter
drills”, abuse is rife in almost each and every industry, sick or unwell people have to crowdfund
basic medicines, and really sick people have to choose between chemotherapy and paying their
mortgage, students pay higher interest rates on education loans than hedge funds, the very same
hedge funds that looted their parents’ savings which led them to having to take loans in the first
place. Exploitation isn’t the exception in America — it’s the rule, it’s the way of life.
Exploitation is so routine, so normal in America that it’s an everyday, commonplace affair,
which people are quite invisible to, people don’t even regard it as exploitation anymore. And
that is because capitalism’s foundational belief, which it has been long taught, maybe even
indoctrinated, into Americans, is that if they each exploit everyone that they can, beginning
with themselves, as ruthlessly and mercilessly as possible, then everyone will be better off, not
just the capitalists.

Exploitation has a trickle-down effect, which can be illustrated very simply with the example
of Amazon. Jeff Bezos is one of the richest men in the world. And yet the immense wealth that
he owns and enjoys isn’t even close to created by him alone, but rather by the employees of
Amazon. Jeff Bezos earns billions. The managers under him, probably millions. Those under
them, hundreds of thousands. And at the bottom of the food chain are the vast majority of
Amazon employees, struggling to eke out a basic living, just about surviving pay check to pay
check. Exploitation trickles down, so that wealth can trickle up. The person at the bottom has
contributed in a very real, and very significant way, to the billions that Bezos has amassed. And
this is not because the job done is very large or specific to the person, it is because they are
barely paid enough to subsist upon. Instead, the surplus value of their labour, just as Marx
predicted, is taken, and distributed upwards higher up the chain of command, first to their
managers, and then their managers, and so on. And the job of most of those managers is
therefore to maximize profits and minimize costs. But wages are costs, too, as are benefits and
thus, the work that is really being done is to manage exploitation, which is how Capitalism
leads us to ending up with one billionaire, and thousands of people at the poverty line,
struggling to make ends meet.

His holiness, Dalai Lama has weighed in on Capitalist exploitation and said: “Between
socialism and capitalism, I’m socialist, and furthermore, I always describe myself as a
Marxist…. But not a Leninist. In my mind, Marxism is the only economic theory that expresses

12
Umair Haque, How Capitalism Taught Americans Exploitation Was Good for Them, MEDIUM (Sep 19, 2018),
https://eand.co/how-capitalism-taught-americans-to-love-exploitation-5db12d3a6e93
a sense of concern about equal distribution. That’s a moral thing. Whereas capitalism…. Is
about “how to make a profit,” only that. And in order to get more profit, there is no hesitation
to exploit.”13

13
Jonathan Haidt, Three Stories about Capitalism, THE RIGHTEOUS MIND, (July 20, 2014),
https://righteousmind.com/three-stories-about-capitalism/