Exploitation of labour facts for kids

Workers making clothes in a factory in Thailand.

Exploitation of labour happens when one person or group takes unfair advantage of another, especially in the workplace. It's about an unfair relationship where one side has more power than the other. This often means workers don't get a fair deal for their work compared to their employers. When we talk about exploitation, it usually means someone is being taken advantage of because they are in a weaker position, giving the powerful person an unfair edge.

Understanding Labour Exploitation

Many thinkers have tried to explain why and how labour exploitation happens. Two famous economists, Karl Marx and Adam Smith, had different ideas about it. Smith thought exploitation was a moral problem, meaning it was wrong but not built into the system. Marx, however, believed it was a basic part of certain economic systems, like capitalism.

Marx's View on Exploitation

Karl Marx's ideas about exploitation are a big part of his economic theories. He believed that exploitation happens when people don't receive a fair share for their work or to meet their needs. This unfairness occurs when workers produce goods but are paid less than the true value of their work.

Marx said that in a capitalist society, there are two main groups:

• Exploiters: These are usually the owners of businesses (the bourgeoisie). They get more value from the goods produced than the amount of work they put in themselves. They use their power and ownership to gain more.
• Exploited: These are the workers (the proletariat). They receive less than the actual value of what they produce. This means they don't fully enjoy the results of their own hard work.

Marx believed that exploitation has existed in all societies based on different social classes, not just capitalism.

Surplus Labour and Value

Marx explained exploitation using two main ideas:

• Surplus labour: This is the extra work a person does beyond what's needed for them to live and be able to work again. For example, if a worker needs to work 4 hours to earn enough for their basic needs, but they work 8 hours, the extra 4 hours are "surplus labour."
• Labour theory of value: Marx believed that the value of any product comes from the amount of work put into making it.

In a capitalist system, business owners buy the workers' ability to work (their "labour power"). They pay the workers a wage, but this wage is often less than the total value the workers create. The difference between what the worker produces and what they are paid is called "surplus value." This surplus value becomes the business owner's profit. Marx saw this profit as a clear sign of how much workers were being exploited. This profit is then used to grow the business, which can lead to even more exploitation.

Criticisms of Marx's Theory

Many people have disagreed with Marx's ideas about exploitation.

• Some critics say Marx didn't give enough credit to business owners for their risks and management efforts. They argue that owners also contribute to production and deserve a fair profit.
• Others point out that value can come from things other than just labour. For example, when grapes turn into wine, the value increases significantly during fermentation, but no extra labour is added during that time. This suggests that value can come from capital (like equipment or ingredients) too, not just human work.
• Economists like Eugen Böhm von Bawerk argued that capitalists actually help workers by paying them wages *before* the products are sold. He believed that workers are paid the present value of their future output, so they aren't being exploited.

Other Ways to See Exploitation

Liberal Ideas on Exploitation

Some thinkers who believe in liberalism also discuss exploitation. They focus on individual rights and choices. One idea is that exploitation is different from theft. In exploitation, both sides agree to the exchange, but it's still unfair because the value exchanged is unequal. It's like a voluntary trade, but one person gets a much better deal than the other because of their stronger position.

These thinkers often look at how social rules and institutions can lead to exploitation. They argue that if certain rules allow for unfair transfers of value, then exploitation can happen. For example, if property rights are not fair, it can lead to some people being exploited.

Adam Smith, a famous classical liberal, also talked about how business owners might work together to pay workers as little as possible. He noted that workers want higher wages, and owners want lower wages, leading to a conflict of interest.

Modern Economic Views

Most modern economists, called neoclassical economists, see exploitation differently. They often define it as when workers are paid less than their "marginal product." This means if a worker adds a certain amount of value to a product, but their wage is lower than that added value, then exploitation is happening.

They believe that exploitation mostly occurs in markets that aren't perfectly competitive. For example, if one company has a monopoly (controls the entire market) or a monopsony (is the only major buyer of labour), they can pay workers less than they are truly worth. So, for these economists, fixing exploitation means making markets more competitive.

Exploitation in Developing Countries

Many discussions about exploitation focus on developing nations, often called Third World countries, especially in the global economy.

• Concerns about foreign companies: Critics say that large companies, like Nike or Gap, sometimes use child labour or sweatshops in developing countries. They pay very low wages, much less than in richer countries where the products are sold. These wages might not be enough for workers to live on, forcing them to work extremely long hours in unsafe and unhealthy conditions. For example, some factories have locked doors, preventing workers from escaping during fires, similar to the tragic Triangle Shirtwaist Factory fire of 1911.

• Arguments for the companies: Others argue that these companies provide jobs that are better than any other options available to the workers. They say that if workers choose to work in these factories, it's because it's the best choice they have, even if the conditions seem bad to people in richer countries.

• The "free choice" debate: A common response to this is that it's not a truly "free choice" if the only other options are starvation or living in extreme poverty. People argue that if a company sells its products in wealthy countries, it should pay its workers by similar standards.

Some people in countries like the United States suggest that their government should require foreign businesses to follow the same labour, environmental, and safety rules as in the United States. They believe this would improve life in less developed nations. However, others, like economist Milton Friedman, argue that such rules would discourage companies from investing in these countries, leading to job losses.

Groups fighting against global exploitation also point to other issues, like rich countries selling cheap, subsidized crops to developing nations. This can force local farmers off their land, making them move to cities or other countries to survive. Many call for international rules for large global companies to ensure fair labour standards.

The fair trade movement is one effort to make sure producers and workers get a fairer deal, helping to reduce exploitation in developing countries.

Wage Labour and Its Critics

The idea of wage labour, where people work for a wage, has also been criticized, especially by socialists and anarchists. They sometimes use the term "wage slavery" to describe it. They believe that treating a person's work as just another product to be bought and sold can lead to economic exploitation.

Thinkers like Wilhelm von Humboldt argued that work done under external control, without free choice, doesn't truly come from a person's inner self. It becomes mechanical, and while the work might be admired, the person doing it might not be.

Marxists believe that the idea of labour as a commodity (something to be bought and sold) is a major problem with capitalism. They argue that it reduces workers to a slave-like condition, where their work is controlled by the capitalist.