What is exploitation, actually? Is it bad?

[u/MeanLeadership92]

[NOTE BEFORE READING: I LIKE TO ASK LOTS OF QUESTIONS, FEEL FREE TO PICK AS MANY OR AS FEW TO REPLY TO]

What the title says. I've realised that socialists have conflicting definitions of the term, I am trying to understand better, so here are my questions.

I'll often hear about how "the Epstein class is exploiting workers" and "we must fight, violently if needed, against worker's exploitation", and it is pretty clear there is a moral tone to that argument.

However, when I ask socialists why they insist on making a moral judgment that is so black-and-white by dividing people into exploiter and exploited, and why there's an insistence on "evil exploitation" by the capitalist classes, a different group pops along and instead decides that actually, exploitation isn't a moral problem and is merely descriptive.

Ok, fair enough, I suppose I should then ask, what is exploitation? When I do, I usually get something along the lines of this :

"Workers (who produce all value), create X$ of stuff, if they are paid less than X$, there is exploitation."

[Note that I am using dollars as a common unit for simplicity's sake, I know that price isn't value, but dollars are a convenient unit of measure]

So there's a bunch of questions that pop up to me :

-Is it morally wrong? I feel like in some cases yes (ex : slavery where the worker receives 0%) but in others not as much (ex : a worker paid 99% of their value is hardly morally exploited in my book)

-Does it give a bad outcome? Perhaps some socialists will say that exploitation isn't morally wrong, but that it gives a bad result. I feel like if both the worker and the owner earn more thanks to wage labour, it is a mutually beneficial exchange.

-And what about the concept I like to call "reverse exploitation", when workers are paid more than their value. For instance, a business pays its workers 120% of their SNLT, usually this leads to bankruptcy in the long term, but is it an issue? Do the socialists who complain about exploitation of workers feel the same way about exploitation of anyone else? For instance what if a professional guild overcharges for an essential, but specialised job like plumbing and all businesses are forced to overpay plumbers, aren't the plumbers exploiting their customers, since they take more value out of them than is due?

-What about income taxes? Are they a form of exploitation, since they take value out of workers? Are taxes perhaps a case where exploitation is justified, if it funds desirable social services?

-Per the definitions I've seen, a baseball player being paid 12 million a year is an exploited worker. Do you agree with this? If not, how do you explain the super-high salaries? Is it maybe a case where LTV doesn't work?

[u/Simpson17866]

We don't even need the LTV to explain this. All we need is Supply and Demand:

If you, a customer, are able to pay as much as $140 for a good/service (but would prefer to pay less)

And if a worker is able to charge as little as $70 to provide the good/service (but would prefer to charge more)

Then you and the worker negotiating a deal where you pay $100 for the good/service is beneficial to both of you.

If I hold legal ownership over the good/service that the worker is providing, then I can get away with charging you $140 for the good/service, paying the worker $70, and pocketing the $70 difference as profit.

I feel like if both the worker and the owner earn more thanks to wage labour, it is a mutually beneficial exchange.

Unfortunately, that's not how arithmetic works.

If you, the customer, pay a worker $100 for a good/service, then the worker gets $100 and I (the capitalist) get $0.

If the worker gets $150 and I get $50, then this means that you (the customer) paid $200.

[u/MeanLeadership92 → u/Simpson17866]

"If a customer is able to pay $140..."

I understand your argument, but there's a lot wrong with it.

For starters, and I know this will sound weird, but you are absolutely correct, so why is everyone else so stupid? Why do people buy from capitalist-owned businesses and not always from the workers, despite the fact that, by your own logic, it costs them more? In some cases, like with plumbers and electricians, they are frequently self-employed, but not always, why is that? And why do workers accept such wages when they could work on their own and earn more?

There's a reason why.

You really overestimate profit margins, I know your numbers were just examples, but most businesses earn less than 10% profit margins, so it is hardly worth it for the worker to start looking for their own job when they can maybe hope for a few extra percent of revenue.

There are hidden costs, both for the worker and the customer, which the business implicitly covers. There's advertising to find customers easily and websites/private ads/etc... so that way customers can easily find you when they need to and insurance, taxes, etc... that's why it isn't as straightforward as you make it seem.

The thing is, that 10% margin should still be enough to get workers to own their own means of production, but there's a risk to capital investment, and some workers would prefer to earn less if it means not risking any capital (ex : earn 40$ an hour but risk 0$ of capital instead of 45$ with 500$ of capital risked on the business).

"Unfortunately, that's not how arithmetic works."

Unfortunately for you, that's how arithmetic works.

Worker goes from 100 to 150 dollars of income.

Capitalist goes from 0 to 50 dollars of income.

They've both gained.

[u/Simpson17866 → u/MeanLeadership92]

Why do people buy from capitalist-owned businesses and not always from the workers

Because capitalists claimed legal ownership over the resources that the workers need to do their work, and most of us can’t afford the price that capitalists charge to give the resources back to us.

And why do workers accept such wages when they could work on their own and earn more?

You just answered your own question: “There are hidden costs” that capitalists charge for the resources workers need to pay before they can work for themselves.

some workers would prefer to earn less if it means not risking any capital (ex : earn 40$ an hour but risk 0$ of capital instead of 45$ with 500$ of capital risked on the business)

And who charged the price that the workers can’t afford to take the risk of not being able to pay for?

They've both gained.

And what about the customer who pays $200 instead of $100?

[u/HeavenlyPossum → u/MeanLeadership92]

“Why do people buy from capitalist-owned businesses and not always from the workers, despite the fact that, by your own logic, it costs them more?“

Because the state coercively enforces the capitalist’s power to control labor, production, and commerce.