Rate of exploitation
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Template:Marxist theory The rate of exploitation is a concept in Marxian political economy. It refers to the ratio of the hours of necessary labour performed by workers and the hours of surplus labour worked by them. This is an economic relationship between quantities of hours worked, which is inferred from the amount of income workers actually get out of the total value of the output they produce. The rate of exploitation is often also equated with the rate of surplus-value, but this is strictly speaking incorrect since the concept of the rate of exploitation can be applied to any type of class society in which workers perform surplus-labour for their masters in any form. The concept of the rate of surplus value assumes a cash economy.
Divergence of the two rates
Technically speaking, in the finer points of his theory, 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 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 it is a subtle point, it has sometimes played an important role in wage bargaining negotiations by trade unions. 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, i.e. net labor income and net property income.
Field of application
The rate of exploitation was, in Marx view, a concept which could be applied to any class-based labor process in history, since it expressed only the relationship between necessary labour and surplus labour. By contrast, the rate of surplus value was specifically the way the rate of exploitation manifested itself in the capitalist mode of production.
Different formulae
Marx identified five different formulae for the rate of surplus value (see surplus value).