In political economy Political economy originally was the term for studying production, buying and selling, and their relations with law, custom, and government. Political economy originated in moral philosophy. It developed in the 18th century as the study of the economies of states—polities, hence political economy, economics Economics is the social science that studies the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek οἰκονομία from οἶκος (oikos, "house") + νόμος (nomos, "custom" or "law"), hence "rules of the house(hold)". Current economic, and sociology Sociology is the study of human societies. It is a social science that uses various methods of empirical investigation and critical analysis to develop and refine a body of knowledge and theory about human social activity, often with the goal of applying such knowledge to the pursuit of social welfare. Subject matter ranges from the micro level of, exploitation involves a persistent social relationship in which certain persons are being mistreated or unfairly used for the benefit of others. This corresponds to one ethical Ethics is a branch of philosophy which seeks to address questions about morality; that is, about concepts like good and bad, right and wrong, justice, virtue, etc conception of exploitation, that is, the treatment of human beings as mere means to an end—or as mere "objects". In different terms, "exploitation" refers to the use of people as a resource In economics, factors of production are the resources employed to produce goods and services. They facilitate production but do not become part of the product (as with raw materials) or are significantly transformed by the production process (as with fuel used to power machinery). To 19th century economists, the factors of production were land (, with little or no consideration of their well-being. This can take the following basic forms:

• Taking something off a person or group that rightfully belongs to them
• Short-changing people in trade
• Directly or indirectly forcing somebody to work
• Using somebody against his will, or without his consent or knowledge
• Imposing an arbitrary differential treatment of people to the advantage of some and the disadvantage of others (as in ascriptive discrimination Racial discrimination differentiates between individuals on the basis of real and perceived racial differences, and has been official government policy in several countries, such as South Africa in the apartheid era, and the USA. However, it does not appear to be entirely dead, yet, as evidenced by a rather recent news article on a website called)

Economics

Most often, the word exploitation is used to refer to economic exploitation; that is, the act of using another person's labor Labor economics seeks to understand the functioning and dynamics of the market for labour. Labour markets function through the interaction of workers and employers. Labour economics looks at the suppliers of labour services , the demanders of labour services (employers), and attempts to understand the resulting pattern of wages, employment, and without offering them an adequate compensation. There are two major perspectives on economic exploitation:

• Organizational or "micro-level" exploitation: in the broad tradition of liberal Liberalism is the belief in the importance of individual freedom. This belief is widely accepted today throughout the world, and was recognized as an important value by many philosophers throughout history. The Roman Emperor Marcus Aurelius wrote praising "the idea of a polity administered with regard to equal rights and equal freedom of economic thinking, most theories of exploitation center on the market power In economics, market power is the ability of a firm to alter the market price of a good or service. A firm with market power can raise prices without losing all customers to competitors of economic organizations within a market setting. Some neoclassical theory points to exploitation not based on market power.
• Structural or "macro-level" exploitation: "new liberal" theories focus on exploitation by large sections of society even (or especially) in the context of free markets A free market is a market without economic intervention and regulation by government except to regulate against force or fraud. This is the contemporary use of the terminology is used by economists and in popular culture; the term has had other uses historically. A free market requires protection of property rights, but no regulation, no. Marxist theory points to the entire capitalist class In sociology and political science, bourgeoisie describes a range of groups across history. In the Westren world, between the late medieval to early modern period, the bourgeoisie were a social class of people, characterized by their ownership of capital and their related culture. They were a part of the middle or merchant classes, and derived as an exploitative entity, and to capitalism Capitalism is an economic and social system in which capital, the non-labor factors of production , is privately owned;[citation needed] labor, goods and capital are traded in markets; and profits distributed to owners or invested in technologies and industries as a system based on exploitation.

Theories of exploitation

The focus of most assertions about the existence of exploitation towards human beings is the socio-economic Socioeconomics or socio-economics is the study of the relationship between economic activity and social life. The field is often considered multidisciplinary, using theories and methods from sociology, economics, history, psychology, and many others. It has emerged as a separate field of study in the late twentieth century. In many cases, however, phenomenon where people trade their labor or allegiance to a powerful entity, such as the state A sovereign state, commonly simply referred to as a state, is a political association with effective internal and external sovereignty over a geographic area and population which is not dependent on, or subject to any other power or state. While in abstract terms a sovereign state can exist without being recognised by other sovereign states,, a corporation A corporation is an institution that is granted a charter recognizing it as a separate legal entity having its own rights, privileges, and liabilities distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business or any other private company The term privately held company or close corporation refers to the ownership of a business company in two different ways: first, referring to ownership by non-governmental organizations; and second, referring to ownership of the company's stock by a relatively small number of holders who do not trade the stock publicly on the stock market. Less. Some theories of exploitation (Marxist, new liberal) are structural, while others are organizational (neoclassical).

Marxist theory

"The world is hungry but lacks the money to buy food; and paradoxically, in the underdeveloped world, in the world of the hungry, possible ways of expanding food production are discouraged in order to keep prices up, in order to be able to eat. This is the inexorable law of the philosophy of plunder, which must cease to be the rule in relations between peoples." — Che Guevara Ernesto "Che" Guevara commonly known as Che Guevara, El Che (meaning "The Che"), or simply Che, was an Argentine Marxist revolutionary, physician, author, intellectual, guerrilla leader, diplomat, military theorist, and major figure of the Cuban Revolution. Since his death, his stylized visage has become a ubiquitous, Marxist Marxism is a particular political philosophy, economic and sociological worldview based upon a materialist interpretation of history, a Marxist analysis of capitalism, a theory of social change, and an atheist view of human liberation derived from the work of Karl Marx and Friedrich Engels. The three primary aspects of Marxism are: revolutionary ^[1]

In Marxian economics Marxian economics are economic theories based on the works of Karl Marx. Adherents of Marxian economics, particularly in academia, distinguish it from Marxism as a political ideology, arguing that Marx's approach to understanding the economy is intellectually independent of his advocacy of revolutionary socialism or his belief in the proletarian, exploitation refers to the subjection of producers (the proletariat) to work for passive owners (bourgeoisie) for less compensation than is equivalent to the actual amount of work done. The proletarian is forced to sell his or her labour power, rather than a set quantity of labour, in order to receive a wage in order to survive, while the capitalist exploits the work performed by the proletarian by accumulating the surplus value of their labour. Therefore, the capitalist makes his/her living by passively owning the means of production and generating a profit, which is really the product of the labor which is entitled to all it produces.

The kinds of exploitation described by other theories (see further below) are usually called "super-exploitation"—exploitation that goes beyond the normal standards of exploitation prevalent in capitalist Capitalism is an economic and social system in which capital, the non-labor factors of production , is privately owned;[citation needed] labor, goods and capital are traded in markets; and profits distributed to owners or invested in technologies and industries society. While other theories emphasize the exploitation of one individual by an organization (or vice versa), the Marxist theory is primarily concerned with the exploitation of an entire segment or class Social classes are the hierarchical arrangements of people in society as economic or cultural groups. Class is an essential object of analysis for sociologists, anthropologists, political economists and social historians. In the social sciences, social class is often discussed in terms of 'social stratification' of society by another. This kind of exploitation is seen as being an inherent feature and key element of capitalism and free markets. In fact, in Das Kapital Das Kapital: Kritik der politischen Ökonomie (Capital, in the English translation) is an extensive treatise on political economy written in German by Karl Marx and edited in part by Friedrich Engels. The book is a critical analysis of capitalism. Its first volume was published in 1867, Karl Marx Karl Heinrich Marx was a German philosopher, political economist, historian, political theorist, sociologist, communist, and revolutionary, whose ideas are credited as the foundation of modern communism. Marx summarized his approach in the first line of chapter one of The Communist Manifesto, published in 1848: "The history of all hitherto typically assumed the existence of purely competitive markets. In general, it is argued that the greater the "freedom" of the market, the greater the power of capital, and the greater the scale of exploitation. The perceived problem is with the structural context in which free markets operate (detailed below). The proposed solution is the abolition of capitalism and its replacement by a better, non-exploitative, system of production and distribution (first socialism Socialism refers to the various theories of economic organization advocating public or direct worker ownership and administration of the means of production and allocation of resources, and a society characterized by equal access to resources for all individuals with a method of compensation based on the amount of labor expended, and then, after a certain period of time, communism Communism is a social structure in which classes are abolished and property is commonly controlled, as well as an ideology and social movement that advocates and aims to create such a society. Karl Marx, the father of communist thought, posited that communism would be the final stage in society, which would be achieved through a proletarian).

In the Marxist view, "normal" exploitation is based in three structural characteristics of capitalist society:

1. the ownership of the means of production Means of production , refers to physical, non-human, inputs used in production including factories, machines, and tools; along with both infrastructural capital and natural capital. This includes the classical factors of production minus financial capital and minus human capital. They include two broad categories of objects: instruments of labour ( by a small minority in society, the capitalists;
2. the inability of non-property-owners (the workers, proletarians) to survive without selling their labor-power to the capitalists (in other words, without being employed as wage laborers);
3. the state A sovereign state, commonly simply referred to as a state, is a political association with effective internal and external sovereignty over a geographic area and population which is not dependent on, or subject to any other power or state. While in abstract terms a sovereign state can exist without being recognised by other sovereign states,, 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 Surplus value is a concept used famously by Karl Marx in his critique of political economy, although he did not himself invent the concept. It refers roughly to that part of the new value created by production which is claimed by enterprises as "generic gross profit". Marx argues its ultimate source is unpaid surplus labor performed by (profits, interest, and rent) in exchange for their survival. They enter the realm of production, where they produce commodities A commodity is some good for which there is demand, but which is supplied without qualitative differentiation across a market. It is a product that is the same no matter who produces it, such as petroleum, notebook paper, or milk. In other words, copper is copper. The price of copper is universal, and fluctuates daily based on global supply and, which allow their employers to realize that surplus-value as profit In neoclassical economics, economic profit, or profit, is the difference between a firm's total revenue and its opportunity costs. In classical economics profit is the return to the employer of capital stock in any productive pursuit involving labor. These two definitions are actually the same. In both instances economic profit is the return to an. They are always threatened by the "reserve army of the unemployed Unemployment occurs when a person is available and willing to work but currently without work. The prevalence of unemployment is usually measured using the unemployment rate, which is defined as the percentage of those in the labor force who are unemployed. The unemployment rate is also used in economic studies and economic indices such as the". In brief, the profit gained by the capitalist is the difference between the value of the product made by the worker and the actual wage that the worker receives; in other words, capitalism functions on the basis of paying workers less than the full value product of their labor. For more on this view, see the discussion of the labor theory of value The labour theories of value are economic theories of value according to which the values of commodities are related to the labour needed to produce them.

Some Marxian theories of imperialism Imperialism is considered the control by one state of other territories. Through political or more often military means , the imperial power may take over the government of a particular territory, or through economic processes (indirect imperialism), in which the concerned region is officially self-governing but linked to the imperial power by ( extend this kind of structural theory of exploitation further, positing exploitation of poor countries by rich capitalist ones (or by transnational corporations). Some Marxist-feminists Marxist feminism is a sub-type of feminist theory which focuses on the dismantling of capitalism as a way to liberate women. Marxist feminism states that private property, which gives rise to economic inequality, dependence, political confusion and ultimately unhealthy social relations between men and women, is the root of women's oppression in use a Marxian-style theory to understand relations of exploitation under patriarchy Patriarchy is a social system in which the father is head of the household, having authority over women and children. Patriarchy also refers to a system of government by males, and to the dominance of men in social or cultural systems. It may also include title being traced through the male line, while others see a kind of exploitation analogous to the Marxian sort as existing under institutional racism Institutional racism is any form of racism occurring specifically within institutions such as public government bodies, private business corporations, and universities (public and private). Institutional racism is one of three forms of racism: (i) Personally-mediated, (ii) internalized, and (iii) institutional. The term institutional racism was.

Neoclassical Neoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand, often as mediated through a hypothesized maximization of income-constrained utility by individuals and of cost-constrained profits of firms employing available theories

In neoclassical economics Neoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand, often as mediated through a hypothesized maximization of income-constrained utility by individuals and of cost-constrained profits of firms employing available, exploitation is organizational, explained using microeconomic theory Microeconomics (from prefix "micr-" meaning "small" + "economics") is a branch of economics that studies how households and firms make decisions to allocate limited resources, typically in markets where goods or services are being bought and sold. Microeconomics examines how these decisions and behaviours affect the. It is a kind of market failure In economics, a market failure exists when the production or use of goods and services by the market is not efficient. That is, there exists another outcome where market participants' overall gains from the new outcome outweigh their losses . Market failures can be viewed as scenarios where individuals' pursuit of pure self-interest leads to, a deviation from the abstraction of perfect competition In neoclassical economics and microeconomics, perfect competition describes a market in which there are many small firms, all producing homogeneous goods. In the short term, such markets are productively inefficient as output will not occur where marginal cost is equal to average cost, but allocatively efficient, as output under perfect. The most common scenario is a monopsony In economics, a monopsony (from Ancient Greek μόνος "single" + ὀψωνία (opsōnia) "purchase") is a market form in which only one buyer faces many sellers. It is an example of imperfect competition, similar to a monopoly, in which only one seller faces many buyers. As the only purchaser of a good or service, the " or a monopoly In economics, a monopoly (from Greek monos / μονος + polein / πωλειν (to sell)) exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.[clarification needed] Monopolies are thus characterized by. These exploiters have bargaining power Bargaining power is a concept related to the relative abilities of parties in a situation to exert influence over each other. If both parties are on an equal footing in a debate, then they will have equal bargaining power, such as in a perfectly competitive market, or between an evenly matched monopoly and monopsony. This kind of exploitation is supposed to be abolished by the spread of competition and markets.

Other neoclassical theories go beyond simple organizational exploitation. First, another type of exploiter is the hired "agent" (employee) who takes advantage of the "principal" (employer) who hires him or her, under conditions of asymmetric information (see the principal-agent problem In political science and economics, the principal–agent problem or agency dilemma treats the difficulties that arise under conditions of incomplete and asymmetric information when a principal hires an agent, such as the problem that the two may not have the same interests, while the principal is, presumably, hiring the agent to pursue the). For example, a clerk may be able to "shirk" on the job, secretly violating the labor contract. Similarly, an executive may embezzle funds, which is also contrary to the interests of the stockholders. This kind of exploitation is beyond the scope of markets, within corporate or governmental bureaucratic Bureaucracy is the collective organizational structure, procedures, protocols, and set of regulations in place to manage activity, usually in large organizations and government. As opposed to adhocracy, it is represented by standardized procedure that guides the execution of most or all processes within the body; formal division of powers; organizations. It is often extremely hard to solve using competition and markets but is instead addressed using monitoring of employees and management, risk Risk concerns the expected value of one or more results of one or more future events. Technically, the value of those results may be positive or negative. However, general usage tends focus only on potential harm that may arise from a future event, which may accrue either from incurring a cost or by failing to attain some benefit ("upside-sharing agreements, bonding, and the like.

A final type of neoclassical exploiter is the free rider In economics, collective bargaining, psychology, and political science, "free riders" are those who consume more than their fair share of a public resource, or shoulder less than a fair share of the costs of its production. Free riding is usually considered to be an economic "problem" only when it leads to the non-production or who unfairly uses a public good or resource. Since taxes are typically used to pay for the maintenance of public lands or resources, a person who benefits from the public good but does not pay taxes for it might be considered a free rider. Such exploitation of public goods or resources is known as the Tragedy of the Commons. The tragedy of the commons refers to a dilemma described in an influential article by that name written by Garrett Hardin and first published in the journal Science in 1968. The article describes a situation in which multiple individuals, acting independently, and solely and rationally consulting their own self-interest, will ultimately deplete a Many neoclassical economists believe that where possible the introduction of private property rights would allieviate the overconsumption, i.e., exploitation. [1] [2] [3]

New liberal theories

For others, i.e., a number of "new liberals", exploitation naturally coexists with free markets. As in the Marxist theory, the problem is structural rather than organizational: given its 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 (non-working owners of financial wealth) as fitting this picture. The first receive land-rent while the second receive interest, even though, according to the proponents of this theory, they contribute nothing to society. They merely own a certain asset and have the ability to make money from that asset without actually doing any work themselves. While George argued for a "single tax" on land-rent to solve this problem, Keynes hoped that interest rates could be driven to zero.

In some ways, these theories are similar to the Marxist one discussed above. However, they deal with the power and influence of special interests in society (and within the capitalist class) rather than dealing with a structural difference in class position of the Marxian sort. Further, while Marx saw exploitation as raising the total amount of production in capitalist society, in these theories exploitation represents a form of waste or inefficiency, hurting growth under capitalism. Therefore, according to this view, abolishing rent or interest would make everyone ultimately better off.

Exploitation in developing nations

Developing nations (commonly called "third world countries" or "poor countries") are the focus of much debate over the issue of exploitation, particularly in the context of the global economy.

Critics of foreign companies allege, for instance, that firms such as Nike and Gap Inc. resort to child labor and sweatshops in developing nations, paying their workers wages far lower than those that prevail in developed nations (where the products are sold). This, it is argued, is insufficient to allow workers to attain the local subsistence standard of living if working hours common in the first world are observed, so that working hours much longer than in the first world are necessary. It is also argued that work conditions in these developing-world factories are much less safe and much more unhealthy than in the first world. For example, observers point to cases where employees were unable to escape factories burning down—and thus dying—because of locked doors, a common signal that sweatshop conditions exist. The Triangle Shirtwaist Factory fire of 1911 was another example, but it occurred in the US, so the first world of then is the equivalent of the third world of today.

Others argue that, in the absence of compulsion, the only way that corporations are able to secure adequate supplies of labor is to offer wages and benefits 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 the other options available to them (see principle of revealed preference).

A common response is that this is disingenuous, as the companies are in fact exploiting people by the terms of unequal human standards (applying lower standards to their third world workers than to their first world ones). 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 (the "preexisting options"), this cannot be seen as any kind of "free choice" on their part. It also argued that if a company intends to sell its products in the first world, it should pay its workers by first world standards.

Following such a view, some in the United States propose that the U.S. government should mandate that businesses in foreign countries adhere to the same labor, environmental, health, and safety standards as the U.S. before they are allowed to trade with businesses in the U.S. (this has been advocated by Howard Dean, for example). They believe that such standards would improve the quality of life in less developed nations. According to others, however, this would harm the economies of less developed nations by discouraging the U.S. from trading with them. Milton Friedman is an economist who thinks that such a policy would have that effect. [4]

However, the common response to the argument that corporations exploit poor laborers by lowering working standards, wages, etc. is that the corporation only has an incentive to do business in these nations if there is this alleged "exploitation." If activists were to achieve their goal of raising work standards, it is likely that the corporation would no longer have a profit incentive to invest in that nation. The result would probably the corporation pulling back to its developed nation, leaving their former workers out of the job.

Groups who see themselves as fighting against global exploitation also point to secondary effects such as the dumping of government-subsidized corn on developing world markets which forces subsistence farmers off of their lands, sending them into the cities or across borders in order to survive. More generally, some sort of international regulation of transnational corporations is called for, such as the enforcement of the International Labour Organization's labor standards.

Forms of human exploitation

• Artist exploitation
• Blaxploitation
• Capital accumulation
• Child labor
• Child sexual exploitation
• Corporate abuse
• Cruelty to animals
• Exploitation of natural resources
• Fair trade
• Free trade
• Globalization
• Indentured servant
• Labor theory of value
• Marx's theory of alienation
• Rate of exploitation
• Sharecropping
• Slavery
• Social criticism
• Surplus labour
• Surplus product
• Surplus value
• Sweatshop
• Trafficking in human beings
• Unequal exchange
• Wage labour
• Wage slavery
• Working poor

See also

• Cruelty to animals animal exploitation
• Exploitation of natural resources
• Exploitation film
• Institute for Trafficked, Exploited, and Missing Persons

References

1. ^ "On Development" Speech delivered by Che Guevara at the plenary session of the United Nations Conference on Trade and Development in Geneva, Switzerland on March 25, 1964

External links

• Stanford Encyclopedia of Philosophy entry on exploitation
• Encyclopedia of Marxism entry on exploitation
• New Deal Exploitation
• UN.GIFT - Global Initiative to Fight Human Trafficking

Categories: Socioeconomics | Social sciences | Marxist theory | Economic problems

See Also:

• Exploitation

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