Previously on this blog, I wrote a post about how a universal basic income may be used to rectify the problem posed by Marxist exploitation. I have come to doubt that this is true. I believe in writing that post I severely underestimated and misunderstood the concept of exploitation as defended by various Marxists. In this post, I seek to hopefully rectify mistakes I made previously and provide a more in-depth exploration of contemporary arguments regarding exploitation as espoused by Roemer and Cohen.

In my previous post, I advocated for a universal basic income as a solution to exploitation. This idea arose as a reply to the capitalist rebuttal that workers cannot be exploited as they are freely entering into the wage labour arrangement. This was then further objected to as workers are not freely entering due to their reliance on some level of income in order to subsist and avoid death. Then, as a reply to this, I offered the idea that a universal basic income of a sufficiently high level could nullify this form of coercion, as workers would not need to enter into the wage labour contract. While I do believe a universal basic income does some work in regards to rectifying exploitation, it does not necessarily correct the problem.

Exploitation is commonly understood as the extraction of surplus value created by workers by their capitalist overlords. While I plan to sketch this argument in a bit more detail later, I offer a brief exposition of my previous error here; despite receiving a universal basic income, it is not necessarily the case that the income received by workers from the combination of their universal basic income and wage, assuming they do enter into the work force, will be sufficiently high that they are no longer exploited, that is, receive equal value (income) to the value they create (product value). As a result, workers may be exploited less (a smaller gap between their income and the value they create), but they will not necessarily (and I think not likely) receive a total income equivalent to the value they create.

Before proceeding any further, it is necessary to make some terminological distinctions. Capitalist is to refer to a non-productive member of the economy who extracts surplus value from their workers without actually producing anything themselves. An example of this is what is commonly referred to as a venture capitalist – they provide money to a business in exchange for an equity stake in the business. The venture capitalists do not produce anything themselves (their sole contribution is their investment), call this capitalist qua capitalist. This is to be distinguished from a capitalist qua producer; a capitalist qua producer is one who may appear to be a capitalist in the former sense (and in all likelihood is) but also engages in productive activity. Consider a CEO of a business who engages in product design or some other area directly related to production – when the CEO is actively engaging in product design they are a capitalist qua producer, and in labouring (by designing products) they create value. This value is distinguished from the non-productive value they reap simply from being a capitalist. For the purposes of this post, when the term capitalist is deployed, it should be taken to refer to a capitalist qua capitalist.

One last preliminary note, related to the previous terminological discussion, is that capitalists qua capitalists may be said to produce value – perhaps the investment risks they undertake potentially are valuable – I plan to discuss this later on.

Jerry Cohen, in his article, The Labor Theory of Value and the Concept of Exploitation, provides an extremely clear argument for exploitation that diverges slightly from traditional Marxist exploitation, but seems to be stronger (or so Cohen thinks). The argument is as follows:

The laborer is the only person who creates the product, that which has value The capitalist receives some of the value of the product Therefore, the laborer receives less value than the value of what they create The capitalist receives some of the value of what the laborer creates Therefore, the laborer is exploited by the capitalist

Both 3 and 5 are conclusions, 3 following from the conjunction of 1 and 2 and 5 following from 4 and the definition of exploitation. Premises 2 and 4 seem to be clearly true, so objecting to them would not be fruitful. Premise 1 also appears correct – if we assume that the capitalist is acting qua capitalist and not qua producer, the laborer is the only person creating the product. As well, considering that the product is that which is sold and generates value (in terms of monetary worth), premise 1 appears to also be correct. How or where could Cohen have gone wrong and where could someone object?

As noted earlier, the most plausible objection seems to be that the capitalist provides some value by taking on risk and providing capital. While it may be true that the laborer is ultimately the one who creates the product that has value, the creation of this product would not be possible without the contributions of the capitalist, that is, their risk-bearing and capital investment. If risk-bearing and capital investment provide value, then it would seem that the capitalist is not exploiting the laborer as they are simply getting their share of the value created in accordance with their contribution.

Beginning with value created from capital, it would seem that it needs to be the case that the entitlements to the capital (whether it be machines, money, etc.) need to first be valid. In his chapter, Self-ownership, world-ownership and equality from his book Self-Ownership, Freedom and Equality, Cohen expresses doubts these entitlements could be justified as he sees a Lockean/Nozickean method for acquiring property to be valid. Why should we accept what essentially boils down to ‘first come, first serve’ with regards to removing things from the commons? I have previously expressed reservations about this sort of justification of private property. Cohen, in fleshing out Nozick’s criteria for appropriation of property formulates it as “anyone has the right to appropriate private property when that makes nobody worse off, and appropriation of private property in general makes everyone better off.” The latter requirement is obviously an extraordinarily hard criterion to satisfy – there will almost always be someone who is made worse-off from the appropriation of a piece of property, even if in general private property would make everyone better off.

If we were to abandon a Nozickean view of private property based in self-ownership and appeal to a utilitarian one, this would give rise to unstable property rights. While the institution of private property may be justified insofar as it makes everyone better off, individual property rights may be entirely unstable as an individual will be justified in appropriating another’s private property insofar as it would be more beneficial for them to do so.

We have many reasons for objecting to this sort of justification. If private property rights are this weak, they bear little resemblance to what we mean when we say ‘private property’. Private property is typically taken to be some thing that I am justified in excluding others from. Given a utilitarian justification, I will often not be justified in excluding others from my property. At best, I am justified in excluding some from my property and will indeed by obligated to offer my property up to whomever is best positioned to make use of it.

Another weakness of a utilitarian justification is that such unstable property rights will likely not be better for everyone. Rather, such tenuous property rights will give rise to a society that is, as Hobbes put it, nasty and brutish, as individuals will quarrel over property that they feel that will better be able to utilize and the existing owners will be hesitant to release their claims.

A possible recourse here is to ground private property rights in a rule, rather than act utilitarianism. However, this gives rise to a problem I have previously discussed as to what exactly grounds rule utilitarianism in situations where it is simply better to disobey the rule. Perhaps my incompetent brother has a property right over some means of production that I am certain would be better employed in my hands – while society in general may be better if I respect property rights, given that in this instance I know that my seizing of the property will be more beneficial to society, why should I not seize it?

Returning now to our original question, that is, whether capital investment provides a value that then justifies the surplus value that is seized by capitalists. Given that any legitimate grounding of property rights (at least of means of production) seems unlikely, it seems that from the un-justifiability of one’s ownership of means of production, it follows that one is similarly unjustified in extracting surplus value on the basis of capital investment.

As well, if we divert our discussion from theory to praxis, it seems obviously true that many private property holdings are unjustified today. Given Nozick’s own requirements for an entitlement (either just acquisition or just transfer) and granting that his formula for just acquisition is sound, it is simply not the case that this formula has been followed throughout history. Instead, most of the vast amounts of wealth today concentrated in the hands of the so-called 1% are built on the back of slavery and theft, be it colonialism or war.

The value provided by risk-taking seems to be easier to deal with. The fact that an individual needs to bear the risk for investments is largely a structure of a capitalist society. If we re-structure society such that all members bear the cost of poor investments (some sort of corporate welfare system that is largely already practiced in capitalist societies with the large amount of bailouts that exist in times of crisis), it would seem that there is no longer any individual value provided by risk-taking. The risk-taking is then transferred to all members of a society and thus no individual has a claim to surplus value on the basis of risk-taking.

The argument thus far may be unsatisfactory to some – if we assume that private property as an institution is justifiable in some Nozickean/Lockean way, are claims of exploitation still valid? In praxis, as I stated earlier, the answer seems to be clearly no. Theoretically however, assuming that all entitlements held are just, it seems possible that exploitation claims are simply invalid. However, it appears to be a fool’s errand to operate on this assumption – granting a Nozickean acquistion story seems to give rise to injustice intergenerationally. Maybe initially it is the case that acquisitions are just, but why ought children to be benefitted or burdened by things that they had no control over? Perhaps Tom works harder than Jim and acquires a vast set of holdings. Tom’s son, Todd, then inherits these holdings. Conversely, Jim’s daughter, Jane, inherits her father’s much smaller holdings. How are we to justify the massive inequalities that come into being over subsequent generations when the holdings one receives are in no way connected to anything the individual their self has done? It seems wholly arbitrary that Jane is worse-off than Todd – she was simply born to a poorer father. This leaves many problems that still need to be solved if we are to accept some private property acquistion principle a la Nozick.

One further question may be whether an unexploitatative economy is possible – if no matter what set of economic arrangements we choose, some will be exploited, what reason do we have for choosing one over another? The answer seems to clearly be that we ought to choose the one that is the least exploitative. While there may be exploitation in socialist economies (see: Roemer’s General Theory of Exploitation and Class), it may be the case that there is simply less exploitation here. So, we ought to choose the least exploitative economy we can. How do we know which types of economies are viable options for us to choose from? Perhaps trial and error – something along the lines of Axel Honneth’s historial experimentalism (see his book, The Idea of Socialism) may be appropriate. We ought to become as socialist as possible without collapsing into chaos.

This is largely the crux of historical materialism – certain productive forces are suited to certain production relations (this is a messy definition and one is best served seeking some secondary sources to flesh it out, but generally production relations are the relations between individuals and the means of production [such who owns what, is it wage labor or feudalism?]) so we can only alter our production relations insofar as they are still compatible with our productive forces. Given our uncertainty of what is possible, adopting Honneth’s historical experimentalism dictates that we do as much as possible to bring about a fair, socialist economy given our current productive forces. While we may not be able to entirely eliminate exploitation, given that it is unjust, it is our imperative to do all that we can to alleviate it.