In
Marxian economics
Marxian economics, or the Marxian school of economics, is a Heterodox economics, heterodox school of political economic thought. Its foundations can be traced back to Karl Marx, Karl Marx's Critique of political economy#Marx's critique of politic ...
, the rate of exploitation is the ratio of the total amount of unpaid labor done (
surplus-value
In Marxian economics, surplus value is the difference between the amount raised through a sale of a product and the amount it cost to the owner of that product to manufacture it: i.e. the amount raised through sale of the product minus the cost ...
) to the total amount of wages paid (the value of
labour power
Labour power (in german: Arbeitskraft; in french: force de travail) is a key concept used by Karl Marx in his critique of capitalist political economy. Marx distinguished between the capacity to do work, labour power, from the physical act of w ...
). The rate of exploitation is often also called the rate of surplus-value.
Divergence of the two rates
Marx did not regard the rate of surplus value and the rate of exploitation as necessarily identical, ''insofar'' as there was a divergence between surplus value ''realised'' and surplus value ''produced''. Thus, the quantity of
surplus labour
Surplus labour (German: ''Mehrarbeit'') is a concept used by Karl Marx in his critique of political economy. It means labour performed in excess of the labour necessary to produce the means of livelihood of the worker ("necessary labour"). The "su ...
performed by workers in an enterprise might correspond to a value higher or lower than the surplus value actually ''realised'' as profit income upon sales of output. The implication is that if the gross profit volume was related to wage costs to establish the rate of surplus value, this might overstate or understate the real rate of labor-exploitation. Although this is a subtle point, it has sometimes played an important role in wage bargaining negotiations by
trade union
A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits ( ...
s. For an extreme example, workers might work extremely hard in an enterprise which nevertheless operates at a loss. For another extreme example, workers might work less hard, knowing that their product will sell like hotcakes in a sellers market at sharply inflated prices, yielding profits disproportionate to labour input. The divergence between surplus value ''realised'' and surplus value ''produced'' becomes even more marked if surplus value is viewed in terms of the net incomes of
social classes
A social class is a grouping of people into a set of hierarchical social categories, the most common being the upper, middle and lower classes. Membership in a social class can for example be dependent on education, wealth, occupation, inco ...
, i.e. net labor income and net property income. Marx identified five different formulae for the rate of surplus value (see
surplus value
In Marxian economics, surplus value is the difference between the amount raised through a sale of a product and the amount it cost to the owner of that product to manufacture it: i.e. the amount raised through sale of the product minus the cost ...
).
See also
*
Exploitation of labour
Exploitation of labour (also known as labor) is a concept defined as, in its broadest sense, one agent taking unfair advantage of another agent. It denotes an unjust social relationship based on an asymmetry of power or unequal exchange of value be ...
*
Marginal product of labor
In economics, the marginal product of labor (MPL) is the change in output that results from employing an added unit of labor. It is a feature of the production function, and depends on the amounts of physical capital and labor already in use.
Defi ...
*
Rate of profit
In economics and finance, the profit rate is the relative profitability of an investment project, a capitalist enterprise or a whole capitalist economy. It is similar to the concept of rate of return on investment.
Historical cost ''vs.'' market ...
*
Technological unemployment
Technological unemployment is the loss of jobs caused by technological change. It is a key type of structural unemployment.
Technological change typically includes the introduction of labour-saving "mechanical-muscle" machines or more efficie ...
References
{{reflist, 30em
Marxian economics
Rates