[_carl_jung]

For what it's worth, the principle objection I have to the Marxist position on wage and profit is the redefinition of the term "exploitation".

It muddies the argument because it enables a circular argument whereby the transaction of employment can be labelled as exploitative, where it's easy to defend against the claim of exploitation if the original definition of the word is preserved.

In other words, profit generation as it comes from an employer/employee relationship is Exploitative but not exploitative.

[claudiawerner]

The definition of "exploitation" is a technical one; even those who argue against the Marxist claim actually take this in stride, for instance, there is an objection to the Marxist idea of exploitation that Marx's selection of labour-power as the exploited commodity is arbitrary, thus we can say that any commodity (such as steel, peanuts or shoes) is "exploited" - the Marxist reply to this isn't to say "well, exploitation doesn't mean that, exploitation is evil and you can't be evil toward inanimate objects".

In other words, I think the definiton used by Marxists is somewhere between the two. It not only means to use something up (to exploit resources) but also the Marxist idea that exploitation relates to workers being forced (by man-made historically arisen structures, that is) to sell their labour-power.

Nevertheless, newer schools of Marxism (such as the ones from the 80s which attempted to use neoclassical economic models) have axiomatic definitions of exploitation. For some simplified models of a commodity economy, researchers such as Veneziani and Yoshihara (and Roemer on different grounds) prove that the axiomatic definition of exploitation is satisfied. Defined axiomatically, we can escape the talk about morality. But you can easily rephrase Marx without the word "exploitation" - the claim is, rather simply, that there is some amount of labour that is unpaid, this labour forms the substance of surplus value, which is appropriated. No judgement, no morality, no right or wrong - that's just the fact, and of course it may well be a good thing(!) that workers are "exploited" - Marx certainly said as much, when writing that the capitalist's point of view, his idea of "fairness" is just as worhless as anyone else's.

[AnimalMuppet]

I could agree with almost everything in your last paragraph, but you're still using loaded words. "Appropriated", for instance. Even "unpaid" carries (perhaps just to me?) the implication that it should be paid.

I would describe the same thing like this: The workers plus tools (capital) create value. The workers don't get all the value produced; capital also gets a cut.

You can say that this is morally right. Or you can say that this is necessary, because the capital isn't invested out of the goodness of the capitalist's heart. We have to give them some payback if we want them to buy the tools. The alternative is to have only the tools that our in-house workers create, which is usually a sub-optimal situation.

Now, any given situation can still be exploitation of the workers (in the common rather than axiomatic sense), and still be morally wrong.

[ernst_klim]

>that there is some amount of labour that is unpaid

What is unpaid labor? If I employ a carpenter, and pay him $10 for a chair I later sell for $15, is this labor paid?

[claudiawerner]

The question is incomplete without knowing how the $15 and the $10 breaks down - if you paid, say $3 for the materials (C) and $10 for the labour (V), you'd sell at a $2 profit, Marx would say that assuming equivalent exchange of values on the market, neglecting the role of advertising and such, and assuming the chair is freely reproducible (i.e unencumbered by patents and trademarks, and not a one-of-a-kind item like a piece of artwork), the $2 is the monetary value of the surplus labour (S), also known as "unpaid" labour. This provides a rate of profit (or "rate of exploitation") r = S/(C+V) = 2/(3+10) = 0.153, the final product of course having a value of S+V+C, expressed, i.e 2+10+3 = $15.

[ernst_klim]

> the $2 is the monetary value of the surplus labour (S), also known as "unpaid" labour

What about risks and decision making, investing in the future products and potential failures? How much is "paid risk" and "unpaid labor", how to objectively evaluate that?

I would argue that $2 is paid risk, not unpaid labor, how to prove that that's not the case?

Also, if I paid you a salary, and than the product failed in the market, is it just according to marxists to ask your salary back, or, if the product was net loss, to ask you to pay for it as an employee?

[claudiawerner]

The proof follows from the labour theory of value (the proof of which is, I believe, more controversial, especially as Marx does the "proof"), which states that the magnitude of value of a commodity is objectively determined by labour-time, not by "risk", and I think that's shown in cases where many busniesses, no matter how risky (and it seems here you're only talking about the capitalist's risk, not that of the waged labourer), realize different rates of profit which don't align with what we consider to be the risk of production. More risky businesses, in general, simply don't generate more profit than non-risky ones. If it were the reward for decision making, the rate of profit would diminish the more you sell something the same way and in the same place, since there are fewer decisions to be made for each subsequent commodity. Investing in future products and protecting against potential failures are uses of the $2 profit, not explanations as to its origin.

Let's say that it is risk. The capitalist labours the monetary equivalent of $1, i.e he spends $1 on his labour power, producing a total of $2 worth of labour. When the product is sold he is still given $2, but not all of that is profit, only $1 is, since the $1 paid is now a cost, he only gets $1 "for free", not $2. Therefore it's clearly in the interest of every capitalist to minimize the amount of work he does himself and instead "exploit" a waged worker for it.

Marxists have never argued that the worker has a "right" to the surplus value, only that it would be, in the most non-moral sense possible, in the interests of labourers who have this surplus appropriated due to the structure of production to ensure it is no longer appropriated in this way - i.e. a socialist or communist society.

[ernst_klim]

> The proof follows from the labour theory of value

But I'm asking you about the proof of the labor theory of value in fact. I didn't thought that there exist people who take it seriously after marginal revolution.

> and I think that's shown in cases where many busniesses, no matter how risky

Business shows exactly the opposite, the most risky (volatile) domains have the highest gains and highest losses: pharma, construction, fintech.

> value of a commodity is objectively determined by labour-time, not by "risk"

So when the value of a bottle of wine inflates with time, somebody is working on it?

> no matter how risky

Did you ever run a business? When you pay for a snack, you pay not only for a snack, but also for a stolen snack. When you pay for a Intel x86 processor, you also pay for failed Intel iAPX 432 which never appeared in the market.

Risks are pretty material, and should be payed for. When you are starting a project, you never know in advance whether it would be successful or not. If it fails, the only way to pay the salaries and costs is through revenues of other projects.

> If it were the reward for decision making, the rate of profit would diminish the more you sell something the same way and in the same place, since there are fewer decisions to be made for each subsequent commodity.

Strange inference. Not the number of decisions matter but their impact. If you sell something many time, it means that the first one decision was very clever and rewarding. Not to mention that revenues are falling with time and it requires new strategies and decisions to make your company competitive and profitable again.

> The capitalist labours the monetary equivalent of $1, i.e he spends $1 on his labour power, producing a total of $2 worth of labour

Again, I see no evidence that labor creates any objective value on its own. Goods have value, labor has value as a good evaluated by an employer, but it does not "create value". If you make a chair, you apply labor, but if nobody values it and nobody buys it, it has no value, hence your labor has no value.

How did you evaluate that capitalist labors $1? Maybe his decisions and ability to take risks cost $100, and his workers are just freeriding him? How exactly did you infer that he spends exactly $1 of labor power? What is a labor power, how could you measure it objectively?

Forget about capitalists, here is a simple though experiment: there are two workers living in a commune and owning the means of production. They do chairs and sell it to the outer capitalist world. One worker is a carpenter who does the woodwork. Another one make nails. They sell chairs for $1, which share of this $1 each of than created? How to measure that objectively?

After that add a capitalist who start the business, takes risks, credits, make decisions and devise strategy. How to evaluate the "value" of his activity?