As the author of the definitive Communist Manifesto, Marx was arguably one of the most influential of 19th century economists, and certainly one of the most influential of the revolutionaries of the era. Because of the overwhelming influence which he had on the political and philosophical history of the world, it is understandable that he has a great and even fundamentalist following. However, there remains a great deal of debate about what, precisely, constitutes "Marx's Marxism," as Kliman (1997) would call it. One of the difficulties in pinpointing authentic Marxism is the fact that Marx was hardly consistent in his writings throughout his lifetime, but continued to think and evolve as time progressed. (Kliman, 1997; Howard, 1990) If one were to compare Marx's "Alienated Labor" (1994) and Capital (1961/1967), for example, one would see a definite change in his perspective on the way in which capitalism works upon the laboring class. However, one central idea remains relatively consistent through his writings -- a firm belief in the capitalist's exploitation of the working class stemming from the inherent inequality between the worker's wage and the selling price of his produce which became the profit of the capitalist.
At the risk of oversimplification, one might say that Marx saw all of world history and economics as a being driven by various forms of class exploitation, in sometimes better and sometimes worse contexts. Older forms of blatant exploitation, such as feudalism, gave way to modern capitalism, which was worse not only because it did not have the same sense of mutual responsibility between classes, but also because it was dishonest about its basic exploitative nature. (Marx, 2003) Capitalism is exploitative because, in short, the owners of the modes of production (e.g. The capitalists) who themselves do no labor end up reaping the profits of production while those workers who actually produce are left at worst impoverished or at best comparatively disadvantaged. This exploitation is powered by the "inner essence and inner structure" of capitalism, though it may not be evident immediately in the "outer appearance," (Marx, 1967: 168). When Marx speaks of the ideal capitalist system, then, he is referring not to a perfect system, but rather one in which the inner structure may be seen and analyzed in the outer appearance, and thus critiqued. Hence, in an ideal capitalist system, all production is commodity production, which is far easier to gauge than the production of intangibles.
Commodity production, somewhat predictably, is the act of producing commodities or "useful things" (Marx, 1967: 36) which may be exchanged for a specified value. Marx refers to this also as the production of "depositories of exchange-value," (Marx, 1967: 36). The real value of a commodity can be defined by the amount of labor and supplies normally required to produce such a thing. In a perfect society, there would be "equivalent exchanged for equivalent," (Marx, 1967: 194) and the prices of things directly related to the difficulty of producing them. Labor itself may be considered a sort of commodity which can be produced by individuals with the mind to do so, for "the value of labor-power is determined, as in the case of every other commodity, by the labor-time necessary for the production, and consequently the reproduction, of this special article." (Marx, 1967: 171) However, unlike most other commodities (other than modes of production such as machinery which are arguably also exploited!), the commodity of labor is capable of increasing value and creating new commodities. With money, a capitalist buys modes of production and buys labor at the going exchange-value (which is whatever is necessary to secure this labor). During the day, the worker creates new commodities which the capitalist may sell. If equivalent values were exchanged, the worker would only work long enough to create products of a value equal to the wage he received. However, workers are generally purchased not based on the exchange-price of what they will produce but based on a going exchange-price for labor. The worker does not merely work until he has created equivalent value, but continues to work for the full day, finally creating commodities valued more highly than the sum of his labor and the commodities consumed in production. The difference between the cost of production (includes wages) and the profit of production is what Marx called the surplus-value, and what is generally considered the rate of exploitation.
The rate of exploitation is figured by considering the exchange value of the commodities produced, minus the costs of production which are not wage related (such as machinery and parts), and then dividing that by wage. This rate shows what percentage of profits goes to the workers in terms of wages, and what percentage goes to the capitalist. This can be formulated as a division between the percentage of the day during which a worker labors to create sufficient profit to earn his (or her) wage and the percentage of the day during which the laborer works to gain profit for his (or her) boss. (Marx 1961/1967, 1994; Lee 1993) It is essential to the nature of capitalism that it makes profits by investing upfront for all the modes of production, from machines to laborers to raw materials, and by then selling the produce for more than the cost of this investment. Today, with capitalism so engrained in daily life, this seems to be a very obvious thing. However, it is vital to understanding Marx to realize that this very relationship, in which the capitalist owns all the means of production (including the time of workers), was viewed as essentially alienating to the laborer who was working for the profit of another and also exploitative because it allowed those who did no labor to reap the rewards of the work of others. While to many it may seem self-evident that the investment of money merits returns, this is not necessarily the only rational response, for is not hard labor somehow more viscerally deserving of profit than mere desk-side speculation? That is the central question of Marx's theories.
While all of Marx's work deals with these issues of exploitation, one would be seriously amiss to think that he spoke of exploitation quite consistently throughout his work. As mentioned above, there are significant deviations between his early theories of exploitation and his later claims regarding it. These appear to have been somewhat confusing to some, but are actually both reconcilable and representative of reasonable shifts in thought.
In his earlier work regarding "Alienated Labour," Marx (1994) takes a very dim view of the state of the worker under this exploitation, saying that "the worker is diminished to the point of starvation" (Marx, 1994: 61). No doubt this was inspired by the rather severe state of workers in the developing cities of the time, and one would not necessarily say that it was unreasonable. It is generally known by those with an interest in the history of the period that cities like London during this period had very severe issues with overcrowding and poverty in all its worst manifestations. The drastic demographic shift from a rural society to an urban society meant that capitalists had a nearly unlimited supply of workers, and this lower the minimum wage which could be offered by managers without a resulting lack in willing job applicants. It was in this context that Marx wrote that the appearance of labor "marvels for the wealthy but it produces deprivation for the worker... so much does the realization of labour appear as decrease [to] the worker" (Marx, 1994: 61). This obviously relates back to the rate of exploitation and the idea of labor as a commodity. The real value of a commodity is the cost of producing it (though its cost is generally that value plus the cost of profits rendered to the capitalist). The cost of labor (e.g. wages), is the cost of producing workers from the masses. If the only way to produce workers is to support the basic needs of one's workers so that they can naturally reproduce, then the price of labor must be a living wage. Likewise, if workers must be wooed away from other industries or from self-supporting lifestyles, wages must be high. However, if there is an influx of unemployed desperate workers, the cost of hiring one can be considerably lower and even below living wage. This would, at least in the short run, increase the profits and productivity of the capitalists. Marx wrote that as capitalism increases in power, the number of ready workers will also increase (as capitalism forces self-supporters out of rural living, artisanship and smalltime merchantry, and so forth, and into the working class), and so the plight of workers will grow steadily worse into starvation. (Marx, 1994; Marx, 2003)
However, this point has apparently (Howard 1988, 1997; Lee 1993) caused some confusion among many dedicated fundamentalist Marxists who are trying to understand why Marx would both suggest that there is growing misery among workers (Marx,…