What is exploitation in capitalism?

Research and Sense-Making
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Leading on from my presentation and going back to Marx - his idea of exploitation is (in my opinion) one of his weakest points. But, is this concept of exploitation in capitalism correct at all? What does it imply? Is the problem of exploitation not solved by competition? Yeah, would love to hear if anyone’s got anything to say on the topic

The concept of exploitation seems closely related to the concept of opportunity or arbitrage. It exists only in a time-limited window and is addressing a certain weakness or inefficiency. Let’s say - I find something mis-priced on eBay and using “Buy it now” option - I end up buying it well below its market price. Is that exploitation?

If you drill deeper into it - the inability of the seller to price it correctly is a certain lack of capacity that creates an asymmetry. Is that exploitation?

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The recent work by Luke Kemp, Goliath’s Curse is a good starting point for theorizing on such matters, informed by recent empirical research.

Kemp traces the origin of key elements of “capitalism” to the Bronze Age. Such elements include private property, enforceable contracts, wage labor, markets with responsive prices, and government support for market models, which can all be found in a multinational Bronze Age network running from Malta to the Indus valley. Exploitation in cruder forms (conquest and enslavement) dates from several millennia prior that. Marx lacked high quality archeological research for this era, so let’s take his stage theory ideas about Asiatic despotism and so forth with a considerable grain of salt. The modern capitalist system centered on early modern Europe (Wallerstein’s modern world system) intensified classic capitalist elements, but qualitatively it all had more in common with ancient exploitation models than we are typically led to believe.

Kemp generally follows Peter Turchin in tracing a macro-history of hunter-gather societies light on hierarchy, followed by oscillating episodes of fusion-fission in which hierarchy arose and collapsed in a variety of locations. The Goliath story really reaches its apex in utterly bloodthirsty empires like Assyria. The macro story after that involves a secular trend toward leveling out, punctuated by periodic empire building cycles followed by collapse of each of these empires.

So what’s all that to us today? For one thing, all of our inherited cultures were forged in the context of one Goliath or another. We need to sort all that. If there is such a thing as human nature (our instincts close the bone), they are likely more about hunter-gather egalitarianism than anything hierarchical. In Kemp’s view, hierarchy was a function of 1) loot that could be seized, 2) weapons that could be monopolized, and 3) closed land to keep people from just walking away. Also, it needed psychopathic “dark triad” personality types to ruthlessly exploit the opportunities for domination. There is the Kemp-based exploitation theory in a nutshell.

IMO, capitalism has always been the handmaiden of elite status seeking, but the essential core of domination, as the late chairman Mao well understood, “flows from the barrel of a gun”. If you say you want a revolution, love ain’t all you need. Marx was confused on this point, which is why the events of 1789 did not just spontaneously happen again say, in 1914. Instead, it took a Lenin to do the political calculus it takes to make “Marxist” revolution really stick. Notice, however, that the most explicitly Marx-Leninist state left on the planet, the PRC, seems quite friendly with own statist sort of capitalism. When it comes to “exploitation”, it seems to me capitalism is a bit of a red herring. It strikes me as more accurate that power hierarchs use capitalism as one tool in their kits, but hardly the only tool, and not even close to the most lethal ones.

Kemp’s anti-Goliath strategy is summed in his final chapter section called “Becoming a David”. But I think I’ll save all that for some future post …

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For Marx, exploitation is paying workers less than the value they create. This relies on a specific theory of the ‘value they create’ (aka the labour theory of value) which hardly anyone still agrees with. As you suggest the modern economic idea is that economic value is equivalent to the equilibrium price under competition.

I’m currently interested in the school of thought known as ‘analytical marxism’ which sought to reformulate Marx using more up to date economic concepts. John Roemer (e.g. in A General Theory of Exploitation and Class) for example defines exploitation as the advantage gained by one group because another group lacks access to the means of production. In short, most people are forced to accept the market price for their labour, while those with more wealth (often due to an arbitrary initial distribution), can earn the same amount by investing rather than working. According to analytical Marxism, then, most people are exploited by the wealthy in this sense.

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You would have given Freud a heart attack with this.

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Thanks Jonah. I’ll look it up.

https://www.youtube.com/watch?v=Eb1R3mjyZqc

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Kojin Karatani is another neo-Marxian theorist I admire. Among Karatani’s key moves is to migrate from “means of production” to “mode of exchange” as a foundation stone. Also, Karatani notes that Marx failed to theorize the State, which Karatani theorizes quite a bit. I’ll refer back again to Luke Kemp as the latest and the greatest when it comes to summarizing all the relevant empirical research, but it seems to me Kemp and Karatani are viewing macro history through generally similar lenses.

These two - plus Graeber and Wengrow, and Peter Turchin, and any number of archeologists and anthropologists - generally agree that the paleolithic human baseline was hunter-gathers who shared a lot, did not accumulate wealth, and did not much like bullies in their midst. (We are quite unlike our cousins the chimps and the gorillas in this regard). That’s Karatani’s Mode A. For Mode B, Karatani goes to brute force seizure for goods, followed by the rises of the State as essentially a protection racket. Kemp echos that perspective almost verbatim. Mode C - commodity exchange - proto-capitialism, came in around the Bronze Age.

If I do get around to reading Roemer, the key question to be asked is, does Roemer address the state? Kidnapping, extortion, threats of imprisonment, show trials, judicial murder, taxation, etc. seem like pretty obvious means of exploitation, not to mention chattel slavery, laws tying peasants to the land, corvee labor, military draft and any number of other exploitation techniques deployed by violence. Marxists tie themselves up into all sorts of theoretical knots when they imagine capitalism as the root cause of any of that sort of thing. Capitalism has always taken advantage of such exploitation, but it can also live without it if wage labor is sufficiently available.

The key to all this is historical and logical sequence. Kemp shows show hierarchy of force (Goliath) got built in the first place. Capitalism and trade came later, mostly as a means for elites to swap luxuries with each other and compete in status seeking. So exploiters exploited capitalism too. The great irony of history is that humans acted against their own best interests in erecting Goliaths. But they also realized that pyramids for emperors who needed thousands of sacrificial victims to accompany them at end of life might not in fact be the best sort of society, and thus people have been nipping at Goliath’s heels ever since.

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Quite possibly. The irony in this is that Kojin Karatani (who I align with Luke Kemp in my reply to @JonahW above) symbolizes our primal egalitarian impulses with Freud’s “return of the repressed”. To me that is sheer genius. Let’s layer all this together …

We spent millennia in merry bands hunting mastodon and whatnot. All of our genetic propensities are for that. The Holocene dawned, the ice melted, and tasty grains were easy picking on the hilly flanks of the Fertile Crescent. A little too easy. Grain can be stored, which means it can be looted. Also, fields can’t just get up and walk away from bullies the way the hunting bands can. Add elite scarce weapons to the mix (bronze, iron, chariots, etc), and we have what Kemp calls “Goliath fuel”. Early Goliaths got pulled down time and again because people hated them, but eventually Goliaths like Sumer figured out how to corner the market for land, labor, and weapons. From then on, it’s been nothing but Civilization and its Discontents.

Katatani imagines a better day coming - return to the reciprocal in what he calls Mode D - something like hunter/gather collaboration at global scale. Kemp likewise proposes a variety of anti-Goliath leveling measures. Freud may have been pessimistic about the healthy integration of the id without an overweening superego to stand guard, but having lived through far more hedonistic times than Freud’s Vienna, I’m pretty sure our physical impulses are not really the enemy here.

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Love the video, reminds me of this:

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