Communist Party of Australia

We acknowledge the Sovereignty of the First Nations’ Peoples.


The Guardian

Current Issue

PDF Archive

Web Archive


Press Fund


About Us

Why you should ...

CPA introduction

CPA Policies

CPA statements

Contact Us

facebook, twitter

Major Issues





Climate Change



What's On







Issue #1893      November 6, 2019

Exploitation and Marx’s theory of surplus value

For most workers, it is intuitively simple to grasp the meaning of “exploitation” from a moral standpoint. Capitalist society in practice is full of examples of overt ill-treatment of workers, unfair contracts, poor conditions, wage theft, and open disdain for the dignity and independence of the working class amongst much of the wealthy elite. The apologists for capitalism are all too happy to write off each and every such example as an isolated incident, due only to the moral failings of the individuals involved, not a symptom of any systemic problem. But investigating the underlying structure of our society reveals a deeper cause and a deeper and even more pervasive system of exploitation.

One of the scientific breakthroughs that established Marx as the foremost thinker of the workers’ movement was the discovery of the secret of surplus value production. Ever since the earliest theorists of capitalist political economy (such as Adam Smith, David Ricardo) developed an understanding of capitalist economy as a system based on equal exchanges of commodities, a question arose to which no satisfactory answer could be found – if all the exchanges of commodities that make up the capitalist economy are supposed to be equal, how is any value ever added overall?

These early theorists generally acknowledged that the creation of value is tied to the application of labour; however none could give a consistent theoretical explanation as to where exactly this extra value appears in the system of equal commodity exchanges. Marx answered this question by showing how value in a commodity economy has a twofold character, and so too does labour: the concrete action of specific types of labour produces specific use-values of different and incomparable qualities (for instance baking produces bread, tailoring produces coats, etc), while abstract labour-time produces exchange-value, identical in quality but distinguished by quantity, ultimately represented by price. When we say “value,” we are typically referring to this exchange-value.

In the process of the development of capitalism, labour itself is transformed into a commodity and its concrete nature as transformer of the material world takes a backseat to its abstract capacity as producer of exchange-value. What exactly is being produced and how it is used is largely irrelevant to the capitalist proprietor or investor who only cares about how much profit can be made from its sale. This commodity form of labour is properly termed labour-power, and its units are the hours, weeks, and years of the worker’s life and creative capacity sold to capitalists to be used as the latter see fit.

As a commodity like any other, the exchange-value of labour-power is determined by nothing but the mass of socially necessary labour-power that goes to produce it. On a social scale, this means the general level of wages represents the total necessary for the production and reproduction of the working class. But note that this value, which ultimately determines the level of wages, has nothing whatsoever to do with the specific commodities being produced.

On the other hand, labour-power is a commodity quite unlike any other: it has the unique characteristic of being both a commodity and the measure of value of commodities. Herein lies the secret of surplus-value production: the concept of the “value of labour” obscures the distinction between the two sides of the nature of value and commodities, and labour as a commodity in particular. When a business employs a worker, they exchange the commodity money for the commodity labour-power, its value being determined by the average cost of maintaining the worker and their family according to the prevailing working hours and living conditions. By the laws of the market, this is an “equal” trade.

However when the worker is put to work, the application of their labour to the production process adds more value to the commodities produced than was accounted for by their wages. The surplus value thus produced is entirely appropriated by the capitalist. The working class, without sufficient capital of their own, are forced to sell their labour-power to the capitalists, but in doing so are deprived of their claim to its products. This continuous system of exploitation by the capitalists leads to the ceaseless accumulation of wealth in a small number of hands, and the perpetuation of the poverty of the working class.

In Capital, Marx writes:

“That which comes directly face to face with the possessor of money on the market, is in fact not labour, but the labourer. What the latter sells is his labour-power. As soon as his labour actually begins, it has already ceased to belong to him; it can therefore no longer be sold by him. Labour is the substance, and the immanent measure of value, but has itself no value. In the expression ‘value of labour,’ the idea of value is not only completely obliterated, but actually reversed. It is an expression as imaginary as the value of the earth. These imaginary expressions arise, however, from the relations of production themselves. They are categories for the phenomenal forms of essential relations.”

Marx’s theory of political economy demonstrates how even if the prevailing conceptions of fairness and legality were followed perfectly, they would still result in exploitation of the masses of workers by the minority capitalist class. These prevailing conceptions are not in fact eternal, impartial laws of nature, but arose at a particular stage of historical development, and ultimately represent the interests of the ruling class alone. This is why when we see the rampant examples of obvious unfairness dealt out to workers such as the epidemic of outright wage theft, we cannot even demand ‘a fair wage,’ we must ask, ‘whose idea of fair?’ Engels wrote in 1881: “A fair day’s wages for a fair day’s work? But what is a fair day’s wages, and what is a fair day’s work? How are they determined by the laws under which modern society exists and develops itself? For an answer to this we must not apply to the science of morals or of law and equity, nor to any sentimental feeling of humanity, justice, or even charity. What is morally fair, what is even fair in law, may be far from being socially fair. Social fairness or unfairness is decided by one science alone – the science which deals with the material facts of production and exchange, the science of political economy.”

Marx’s contributions to political economy prove that the economic laws inherent to capitalism lead society into a blind alley of exploitation, alienation, poverty, environmental destruction and war. The existing standards of fairness are artefacts of an unfair system and are themselves unfair. The only fix is to change the system.

Next article – Student debt and neoliberal discontent in the Chilean Spring

Back to index page

Go to What's On Go to Shop at CPA Go to Australian Marxist Review Go to Join the CPA Go to Subscribe to the Guardian Go to the CPA Maritime Branch website Go to the Resources section of our web site Go to the PDF of the Hot Earth booklet go to the World Federation of Trade Unions web site go to the Solidnet  web site Go to Find out more about the CPA