Why Marx regarded capitalism as an exploitative system

Introduction

For Marx, capitalism is a historical stage of production in which a class that owns capital lives on the labour of a class that does not. The question asks for reasons why he called this relationship exploitative. The reasons are economic (surplus value), structural (class division), human (alienation) and political (the state).

Capitalism in the sequence of modes of production

In Marx's historical materialism, the capitalist mode of production succeeds feudalism: technological change creates a mismatch between forces and relations of production, which is resolved by revolution, and society divides into the bourgeoisie, who own the means of production, and the proletariat, who sell their labour for a meagre wage. Production is for profit, not for consumption, and the desire to maximise profit lowers wages and lengthens hours.

Surplus value: why capitalism is exploitative

The Marxist argument on exploitation rests on the labour theory of value, taken over from the classical economists: the value of a commodity is fixed by the labour put into it. The worker sells labour power as a commodity for a wage, which under the pressure of competition tends to a subsistence wage, enough only to keep the labour force alive and available. Labour is unique among the factors of production because it creates more value than its own upkeep requires. The difference between the value the worker creates and the wage paid is surplus value, and it is the capitalist's profit: if a weaver's labour adds ₹60,000 of value to a month's output and the wage is ₹24,000, the other ₹36,000 is surplus value and becomes the owner's profit.

Hence Marx regarded exploitation as built into the system and not as an abuse by bad employers. Where classical economists praised profit as the source of capital accumulation and growth, Marx saw in it the unpaid labour of the working class. Competition forces capitalists to lower wages and lengthen working hours, which sharpens class struggle and prepares the proletarian revolution, until the workers are left with nothing to lose but their chains.

The theory of alienation from the 1844 Manuscripts supplies the human side of the argument: under capitalism the worker is estranged from the product and the work process, from nature, from other human beings and from himself, and even the capitalist is a slave of money.

Reasons in summary

Marx called capitalism exploitative because (1) the worker creates more value than is paid, and the difference is appropriated by the owner; (2) the worker has no alternative but to sell labour, having no means of production; (3) competition drives wages towards subsistence level; (4) the system estranges the worker from product, nature, other people and self; (5) the state supports the owning class and uses force to suppress workers' resistance.

Class struggle and revolution

For Marx the history of all hitherto existing society is the history of class struggle. Except in primitive communism, every epoch has been marked by the antagonism between a dominant class that owns the means of production and a dependent class that carries out production but sees its product taken away, with just enough returned for survival: master and slave, feudal lord and peasant, bourgeoisie and proletariat. Because the interests of the contending classes are irreconcilable, the contradiction is resolved only by the annihilation of the exploiting class.

Class struggle is long and imperceptible; revolution is short, swift and violent, and it is what delivers each new social order. Each epoch-making change has been brought about by a revolution: the feudal revolution ended slavery, the bourgeois revolution ended feudalism, and the proletarian revolution will end capitalism. It occurs when the forces of production have matured and no longer fit the relations of production; no stage can be skipped.

Conclusion

Marx's judgment follows from his theory of value: if labour is the source of value and the wage is less than the value created, the profit of the capitalist is unpaid labour. Critics point out that the workers' condition has not deteriorated as Marx predicted, and classical economists defended profit as the spur to investment and growth. But the argument still keeps Marxism alive as a check on the rigours of the capitalist system.