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Published on Apr 5, 2011
Moral Foundations of Politics (PLSC 118)
Exploitation is an important technical--not normative--concept in the theory of Karl Marx. Although we are dealing with voluntary Pareto transactions, under capitalism, exploitation occurs whether or not an individual is better off. Capitalism is destined to fail, says Marx, because of (1) the possibility for liquidity crises, (2) the nature of capitalist competition inducing declining marginal profit on the industry-wide level, (3) the fact that capitalist competition eliminates competitors and promotes monopolies, (4) weak demand, as workers could not pool their money and buy all that they produce, and (5) the fact that "workers will come to realize that they have nothing to lose but their chains." However, communism (that distribution should be "to each according to his needs") can only arise from socialism ("to each according to his work"), which in turn can only arise from superabundance created by capitalism. However, scarcity is very much a reality, which makes superabundance impossible; this, Professor Shapiro points out, is the major weakness in Marx's theory.
00:00 - Chapter 1. Relative and Absolute Surplus Value and Rate of Exploitation 07:08 - Chapter 2. Five Sources of Crisis in Capitalist Systems 23:36 - Chapter 3. Features of Socialism and Capitalism