Only Socialism Can Put an End to Exploitation

Nicholas Vrousalis

The exploitation of workers is central to the functioning of capitalism. The socialist argument is simple: we can live in a world without such exploitation.

A lithograph of Gargantua by Honoré Daumier, December 16, 1831. (Wikimedia Commons)

Interview by
Nick French

At the core of the socialist critique of capitalism is the idea that the free market system is inherently exploitative. Marxists agree that capitalists use their ownership of the means of production to extract surplus value from workers, who actually produce goods and services. Where socialists have tended to disagree, however, is on how precisely to define exploitation and whether it makes sense to apply moral concepts such as justice and fairness to economic relations.

In his new book, Exploitation as Domination: What Makes Capitalism Unjust, the political philosopher Nicholas Vrousalis — a student of the late great G. A. Cohen — provides systematic answers to these questions and develops an alternative vision of economic and social relations beyond capitalism. Jacobin interviewed Vrousalis about his theory of exploitation, what a socialist economy might look like, and why the Left should engage seriously with questions around justice.

Nick French

In your book you defend a view of “exploitation as domination.” Could you outline your theory of exploitation?

Nicholas Vrousalis

Exploitation pervades human civilization. But what makes its pervasiveness so insidious is that exploitation is compatible with mutually beneficial transactions between consenting adults. Not all exploitation has these features — think of slavery, serfdom, or the patriarchy. But some exploitative relations do have these features. So what could possibly be wrong with allowing another person to make use of your powers, if that transaction is truly consensual and mutually beneficial?

The answer I give in Exploitation as Domination is that exploitation is a form of domination, namely self-enrichment through the domination of others. In a slogan, exploitation is a dividend of servitude: the dividend the powerful extract from the servitude of the vulnerable. Such extraction is compatible with consent, mutual benefit, or even an enhancement of autonomy. So the domination theory is attractive because it explains why precarious contracts, sex work, and sweatshops, to take only a few examples, are exploitative, even if they do have the “virtues” that economists sometimes ascribe to them.

The domination theory is also distinctive in that it does not just emphasize any form of power over others, but rather counterpurposive power. That is, power that usurps or disables your ability to set, pursue, and revise ends. Consider an example: if you buy the last bottle of milk at the supermarket, you are making it impossible for me to buy some milk — a specific end I have — but you are not thwarting my ability to set and pursue ends.

Contrast the milk case with a case where you buy all the food, only to resell it at extortionate prices. Or suppose you privatize the sidewalks, leaving me no non-private space to stand on when I’m trying to get to the pub. In both cases, you are thwarting my purposiveness, not any particular purpose I might have, as in the milk case. This is what it means for your power over me to be counterpurposive. Exploitation is the extraction of a benefit that results from such thwarting or usurpation of purposiveness.

Nick French

Why do you think this theory is superior to competitors?

Nicholas Vrousalis

Social scientists typically assume that exploitation is either about inefficiency — you have a monopoly, which allows you to extract rents from our interaction — or about maldistribution — you have an unfair share of resources. Both theories are wrong.

The inefficiency theory is widely affirmed by economists, who identify exploitation with failure to remunerate a “factor of production” — basically the use of land, capital, or labor — in proportion to its productivity. Profit, on this theory, is a reward for risk-taking, while wages are a reward for labor contribution. This theory is wrong because it assumes what needs to be proved: that capitalists are entitled to a reward for risk. For example, I may create wonders by stealing your coat, or by renting it out for profit, but I am not thereby entitled to what value I earn, add, or contribute to the coat. In other words, if capitalist private property is theft, then no reward legitimately accrues to it.

The maldistribution theory, on the other hand, is widely affirmed by liberals and socialists. It offers a better explanation for the injustice of exploitation than the inefficiency theory, but it still fails to capture important manifestations of exploitation. Suppose you are walking carelessly at the edge of a boat, find yourself in the ocean, and then need rescue. I say to you, “I’ll only rescue you if you pay me a million dollars,” knowing it’s your fault that you ended up there. My offer is extortionate, but it is forthcoming against a fair background in terms of distribution. Yet I still exploit you.

So the domination theory does not take exploitation to presuppose inefficiency or maldistribution. All it supposes is that someone benefits by treating you as their servant, that is, by exercising a counterpurposive power over you. It follows that different forms of exploitation across history, from serfdom to the patriarchy, are forms of subjection of agency — and, in fact, not any form of subjection of agency, but subjection of the capacity to work. One of the book’s aims is to restore the centrality of labor to the theory of exploitation, by showing that independent labor is the main way in which humans externalize their rightful relations with others into the world.

Nick French

Exploitation as Domination defends the classical Marxist claim that capitalism is inherently exploitative. What is your argument for that claim?

Nicholas Vrousalis

The cover of the book contains Honoré Daumier’s caricature Louis-Philippe as Gargantua, which represents the 1831 French monarchy as consuming its laboring subjects and shitting various religious edicts and judge nominations, while its bureaucrats and henchmen feed on falling breadcrumbs from the conveyor belt that carries the workers to their impending doom.

I picked this cover because it crisply represents capitalist production. You only need to imagine Elon Musk as Gargantua, consuming his laboring subjects and shitting rockets, while breadcrumbs feed his managers and various henchmen. This circular flow of capitalist consumption and production works as follows.

Capitalism is the concentrated, and therefore unequal, ownership of scarce productive assets, whose productive use is geared toward the maximization of profit. This unilateral control over scarce productive assets gives their owners control over the labor capacities of those who have only these capacities to sell in return for access to productive assets. And this, in turn, gives asset owners unilateral control over the material surplus and, by extension, over the exercise of the stock of labor capacities that constitutes surplus production. This is how workers come to produce their own subjection to capital — their “invisible chains.”

It follows from this that capital is not some intrinsic property of things, but rather a relational property, a monetized relation of power between capital and labor — “I give you the tools, you give me your labor capacity.” Capital, in other words, is a form of subsumed labor. The book studies the history of the process of capital’s appropriation of the conditions of labor, from generalized usury to manufacturing to mechanized industry, and argues that it implicates the material mode of production in a progressively more intense exploitation — and therefore domination — of the worker.

This theory also highlights parallels between capitalist and patriarchal exploitation. Capitalism is akin to some forms of patriarchy, in the sense that it is compatible with meaningful exit options for individual workers. But the availability of such options — through labor rights, the welfare state, or an unconditional basic income — does not suffice to emancipate the workers from the domination of capitalists, any more than the availability of divorce, or of meaningful exit options, suffices to emancipate women from the domination of men.

Here it might be worth adding a final note on globalization. It is a platitude that the development of human individuality presupposes human interdependence, which means a division of labor, which means globalized production. But capitalism only globalizes production by globalizing value-constituted domination. The book argues for an alternative form of global interdependence, one founded on working-class internationalism. As I see it, working-class internationalism is prior to national self-determination, such that any resort to the latter depends for its justification upon the former.

Nick French

You argue that there can be not only vertical relations of capitalist exploitation based around the wage labor–capital relation — capitalists exploiting their workers — but also horizontal relations of exploitation — wealthier firms exploiting poorer firms. Horizontal exploitation can occur even between worker-owned cooperatives, which leads you to argue that market socialism may be exploitative in much the same way capitalism is. Am I understanding you correctly here?

Nicholas Vrousalis

Yes. The book draws a distinction between exploitation at work and exploitation at the workplace. Vertical exploitation is garden-variety exploitation at the workplace — e.g., the exploitation of worker by capitalist. Horizontal exploitation obtains across workplaces or, more broadly, across economic units. Big capitalists can certainly exploit small capitalists — this is what the movie Dodgeball is all about. So if a big capitalist like Globo Gym can exploit a small capitalist like Average Joe’s Gym, then the former could also exploit the latter if they were democratic cooperatives.

Globo Gym and Average Joe’s Gym, from Dodgeball. (20th Century Fox)

Many resist this conclusion because they think that power is impossible in a market, especially if it is competitive. But this notion confuses market power with economic power. In a competitive market, it is true, there is no market power; everyone is a price-taker, as economists say. It does not follow that there is no economic power. Consider for example a perfectly competitive market for water. There is a large number of water sellers, who sell water at competitive prices. As it happens, there is also a large number of water buyers, some of whom cannot afford to buy water. In this case, there is no market power, but there is economic power — power enough to control the agency of the water buyers.

So does a democratic Globo Gym necessarily exploit a democratic Average Joe’s? I think here we must distinguish between exploitation and superior efficiency. If a democratic Globo Gym is just much better at its job than a democratic Average Joe’s, then it draws an efficiency exemption: labor and nonlabor resources are being wasted at Average Joe’s and may have better uses elsewhere. This objection, so often raised by economists, should be taken seriously. My view is that, insofar as Globo Gym’s superior market performance is not due to higher productivity per worker but solely due to greater control over productive assets, Globo’s power over Average Joe’s is exploitative.

In sum, the possibility of horizontal exploitation is the possibility of pure market-mediated exploitative relations. Now, there are many varieties of market socialism. The form of market socialism most vulnerable to horizontal exploitation is one where control over capital assets is entirely determined by profitability. This is the form of market socialism favored by some anarchists, who advocate strong, worker-controlled firms but a weak, not highly redistributive state. Although this system leaves little or no room for vertical exploitation — because workers only control other workers — it makes a lot of room for the accumulation of inequality across firms and therefore for horizontal exploitation.

The moral of the story is that a nonexploitative workplace does not guarantee a nonexploitative economy.

Nick French

Do you think this means market socialism, like capitalism, is inherently unjust? I suspect that some sympathetic readers will find that surprising. Or is it possible that a market socialist society could be just?

Nicholas Vrousalis

A defensible form of market socialism would make room for a strong state presence, in order to protect the rule of law in the name of all but also in order to provide public services with a strong predistributive component. Predistribution is contrasted with redistribution, in that the former intervenes at the point of production, not after, through publicly funded health and education, demogrants, and possibly collective ownership of the major means of production.

So that’s democratic socialism: a system of competitive markets, whose economic units compete for profit but are largely under worker control and which operate under a strongly predistributive form of public ownership. The book explains what exactly this means, with the help of basic economics and economic sociology.

Nick French

The final section of the book is devoted to drawing out implications of your view for possible postcapitalist futures. You advocate a form of democratic socialism that you describe as a hybrid of property-owning democracy and workplace democracy. What, in a nutshell, are the main institutional features of this model?

Nicholas Vrousalis

The short answer is: equal coupons ownership plus worker control.

The first component, coupons ownership, is an idea I owe to John Roemer. It gives every citizen an equal and tradeable share in the beneficial ownership of the means of production. So Amazon, Google, and Shell are socialized, and their stocks are equally distributed and converted into coupons, which are traded in a coupon stock market. The crucial innovation here is that these coupons are not bequeathable or exchangeable for money. Every year, each citizen receives a money dividend from her share of coupons, worth several thousands of dollars, as a matter of social right. This system preserves the efficiency of markets but immunizes them from capitalist inequality.

There is a problem with limiting socialism to equal coupons ownership. In the book I discuss this under the name of the “labor epistocracy.” The labor epistocracy is a class of workers who, by dint of monetizable skills and talents, can subjugate the labor of those who lack them. The labor epistocracy includes the “supermanagers” discussed by Thomas Piketty but also the talented self-employed, whose extraction of scarcity rents in the market — think LeBron James and J. K. Rowling — enables them to unilaterally control the labor capacities of subordinate market agents.

This is where the second component, worker control, comes in. Instead of turning the workplace into a dictatorship of experts, one might ensure that knowledge, especially skills and tacit knowledge, is shared as equally as possible through democratically elected managers, optional job rotation and training, and the full panoply of constitutional protections afforded by pro-worker labor law. These policies are likely to compress epistocratic inequalities within firms and inject an ethos of solidarity into the economy.

Bringing coupons and worker control together: the idea is that coupon ownership deals with horizontal, capitalist exploitation, while worker control deals with vertical, epistocratic exploitation. This model of democratic socialism therefore removes both forms of exploitation.

Extending these ideas to international relations is straightforward in principle, although it would take a titanic act of transnational solidarity and political will to implement in practice. But there are precedents: the European Organization for Nuclear Research (CERN), for example, was founded by intergovernmental agreement, under the joint ownership and control of twelve countries.

Nick French

Exploitation as Domination is a work of what philosophers call normative theory: it advances claims about what exploitation is and why it is unjust, and then draws out implications for how we should think about moral objections to capitalism and what a just postcapitalist alternative would look like.

There is a long tradition on the Left, with roots in Karl Marx and Friedrich Engels’s writing, that looks with suspicion or outright contempt on this kind of moral theorizing. What would you say to this sort of criticism?

Nicholas Vrousalis

Socialists of Marx’s vintage, which includes the Marxists of the Second and Third Internationals, thought that the victory of socialism was inevitable. They thought this both because they affirmed an inherent tendency of capitalism to collapse and because the extension of the franchise to all workers would, they believed, make perpetual socialist government inevitable. They inferred that moralistic arguments for socialism are redundant at best, or ideological at worst.

Today we know that both the classical Marxists’ premise (that capitalism is doomed to collapse; that socialism is inevitable) and their inference (that you need not argue for socialism on grounds of justice) are false. The premise is false because capitalism has no inherent tendency to collapse: there is no long-run tendency of the profit rate to fall, and capitalism may yet adapt to environmental crises. Sure, there are recurring recessions, waste, unemployment, and massive inequality; sure, these may lead to barbarism. But none of it means that socialism is inevitable.

The inference — from inevitability to redundancy of justification — is also false, because we need to know what we are fighting for and whether we have reason to continue to do so. It might be inevitable, given my chocolate addiction, that I’ll eat that candy, but that does not make eating it ok or something I should welcome.

Now, classical Marxists saw their own mission as “lessening the birth pangs” to the socialist fetus. But even that obstetric metaphor presupposes that the fetus is not a teratogenesis — that socialism is a well-defined and worthwhile idea. So normative theorizing is not only desirable; it is a presupposition of everything the Left does and stands for.

Nick French

So why exactly do you think leftists need to be armed with a moral theory of exploitation or a critique of capitalism on grounds of justice?

Nicholas Vrousalis

There are at least four reasons why a theory of the injustice of capitalism is indispensable. In increasing order of importance, they pertain to revolutionary motivation, ideology, efficiency, and the epistemology of value. The last reason tells us something important about the entitlement to hope in dark times.

First, consider motivational reasons. You cannot fight for something you think is unjust, at least not with the same fervor or conviction as when you think you are fighting for justice. This latter thought already suggests that there must be true and false beliefs about justice.

Second, consider ideological reasons. You cannot refute the TINA (there-is-no-alternative-to-capitalism) mantra without drawing up “recipes for the cookshops of the future.” Given the disastrous failures that were all attempts to institute socialism in the twentieth century, the danger of producing yet another totalitarian cake is reason enough to draw up more socialist recipes.

Third, consider efficiency reasons. G. A. Cohen used to say that, even if the ideal of socialism is infeasible now, knowing what it is can help us better identify and pursue it when it becomes feasible. If you don’t know what the ideal circle looks like, you won’t be able to pick better, though still defective, circles when they become available.

Finally, there are epistemological reasons. Why even consider socialism if there is no universal truth as to its desirability? Slavery is unjust everywhere and everywhen. So is exploitation and, by implication, capitalist exploitation. Are we seriously to think that the truth of the assertion that slavery is unjust is society-relative? That suggestion is literally unbelievable — despite what Michel Foucault, Richard Rorty, or any other postmodernist would have you believe.

But there is a deeper point here, which is about the relationship between the objectivity of moral value and the Enlightenment idea of an entitlement to hope. Suppose you want to get to the camping site, where all are free and equal, but have no way to get there — you don’t even know what it would take to get there. An entitlement to hope here means: given that justice is unconditionally good as such — not our beliefs about justice, but justice itself — and given that it is superior to other ends (e.g., neoliberal capitalism, welfare-state capitalism, and so on), just because it is so good, we must each try to reach it. When enough of us do, there is no stopping us.

So we are entitled to believing that eventually we will help each other get there.