In political economy, economics, and sociology, 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 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, with little or no consideration of their well-being. This can take the following basic forms:
Most often, the word exploitation is used to refer to economic exploitation; that is, the act of using another person's labor without offering them an adequate compensation. There are two major perspectives on economic exploitation:
The act of using, or taking advantage of, a thing or things.The focus of most assertions about the existence of exploitation towards human beings is the socio-economic phenomenon where people trade their labor or allegiance to a powerful entity, such as the state, a corporation or any other private company. Some theories of exploitation (Marxist, new liberal) are structural, while others are organizational (neoclassical).
In Marxism, 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 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 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, Karl Marx 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, and then, after a certain period of time, communism).
In the Marxist view, "normal" exploitation is based in three structural characteristics of capitalist society:
Because of these human-made institutions, workers have little or no choice but to pay the capitalists surplus-value (profits, interest, and rent) in exchange for their survival. They enter the realm of production, where they produce commodities, which allow their employers to realize that surplus-value as profit. They are always threatened by the "reserve army of the unemployed". 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.
Some Marxian theories of imperialism 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 use a Marxian-style theory to understand relations of exploitation under patriarchy, while others see a kind of exploitation analogous to the Marxian sort as existing under institutional racism.
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). 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 organizations. It is often extremely hard to solve using competition and markets but is instead addressed using monitoring of employees and management, risk-sharing agreements, bonding, and the like.
A final type of neoclassical exploiter is the free rider 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. Many neoclassical economists believe that where possible the introduction of private property rights would allieviate the overconsumption, i.e., exploitation.
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
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). If the "exploitation" were to be stopped, the "victims" would be much worse off.
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. This viewpoint also argues 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.
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.