Within Capital, written by one Karl Marx, he argues that capitalism, in all of it’s forms, create a cycle of exploitation from which the system itself cannot be separated from. This exploitation, as described by Marx, will lead to the downfall of the nation or state itself, even despite the numerous regulations.
The Marxian definition regarding the “exploitation” faced by the working class is outlined, quite simply, as selling their labor to the ruling class for less than it is worth. This happens through the worker's living labor producing surplus value for the ruling capitalist, while the worker is often paid a disproportionately low wage compared to the earnings. Capitalist exploitation is indeed class exploitation reinforced by the pre-existing conditions of the capitalist system. Despite any limits imposed on this form of capitalism, the exploitation of the working class is concurrent to the existence of the capitalistic society itself. Capitalists have a blind drive to acquire as much surplus as possible, disregarding the regulations and rules set to ensure this form of exploitation does not take place, with little to no regard of what the working man or woman is left with. As a result, the product dominates the worker: it is in the service of the object, as Marx puts it, ‘that he receives work… [and] means of subsistence,’ it is not the activity of the worker that shapes the product, but the demands of the product that shape the worker's activity. The surplus value produced by the laborers is ultimately what causes the driving force behind capitalism and capitalistic tendencies, making the everyday capitalist aspire to gain more surplus, with little regard of overworking the laborers that they have hired.
Provided that the workers are unhappy with the conditions they are working in, their pay, etc., they are often apt to complain to the capitalist, themselves. However, this introduces the cyclical tendencies of capitalism; given that if these laborers choose to complain or to leave their jobs completely, the capitalist will find someone who will work in these conditions from the “reserve industrial army” created by those who are unemployed or in even worse conditions. Once the worker is replaced by someone from this reserve, they become a part of the reserve, willing to work in these conditions in order to have any sort of income to begin with. According to Marx in Capital,
The industrial reserve army, during the periods of stagnation and average prosperity, weighs down the active labour-army; during the periods of over-production and paroxysm, it holds its pretensions in check. Relative surplus population is therefore the pivot upon which the law of demand and supply of labour works. It confines the field of action of this law within the limits absolutely convenient to the activity of exploitation and to the domination of capital.
As long as the industrial reserve army exists, there will always be someone willing to work in abhorrent conditions, therefore increasing the capitalist’s own gains at little to no expense. Capitalism, under these circumstances is completely recurring: there is no way to rid the world of it so long as the army of laborers exist and are ready to take jobs if one is unwilling to perform their duties.
Another driving force behind Capitalism and why workers choose to labor for small wages comes from Marx’s theory of Alienation. This being that the “fruits” of the worker’s labor are consistently foreign to the worker themselves, yet often, the laborer owns a sense of pride in the job they have done as well as feels the product has their own “essence” within it. This is especially true for handmade products. The creation of the commodities and other objects produced do not always lead to alienation and can, indeed, be highly satisfying: one pours one's subjectivity into an object and one can even gain enjoyment from the fact that another in turn gains enjoyment from their own work.
However, many people disagree with Karl Marx’s theory of exploitation as described in Capital. One notable case of critique comes from Eugen Bohm von Bawerk. In his writing, History and Critique of Interest Theories, he argues that capitalists do not exploit their workers as they actually help employees by providing them with an income well in advance of the revenue from the goods they produced, stating: “Labor cannot increase its share at the expense of capital”. He argues at length that the theory of exploitation ignores the dimension of time in production. From this criticism, it follows that according to Bohm von Bawerk, the whole value of a product is not produced by the worker, but that labour can only be paid at the present value of any foreseeable output.
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