Exploitation in capitalist systems

Exploitation is seen as an inevitable result of the profit- motivation of production under the capitalist system and of the private ownership of property. These two factors create an artificial non-productive class, the bourgeoisie, whose wealth is created or sustained by the work of wage-earners. The absolute disparity between the income of the wage-earners and that of the property-owners increases as the owners engage in investment and speculative ventures, particularly abroad; and as machines are developed to replace manual production, thereby reducing labour's per-capita income, particularly by causing the loss of jobs. Exploitation is conspicuous in those techniques of speculative activity which create artificial scarcity or which, by other means, raise prices in order to secure profit, as this undermines the economic stability of the community or nation and may cause widespread unemployment and hardship. While the propertied class exploits the proletarian or working class on a national level, it also expands to exploit other countries, particularly the developing ones, in its quest for access to raw materials and labour at the lowest cost. Investments by rich countries impose heavy obligations on the poor ones, and much of the benefit and revenue is returned to the bourgeois in the 'donor' country.

In 19th century Marxist terms, the first phase of capitalism after the Industrial Revolution could be described as feudal, with wages, working hours and conditions subject to the whims of ownership. In the second half of the 20th century, free market economies exist with totally different social conditions. In addition to having an improved standard of living, well beyond that achieved under socialist systems, wage earners and their labour unions are now investors and consequently share in the benefits and risks of ownership. Labour union funds may be one of the important sources of investment capital needed to create or sustain jobs. Foreign investment means that as much as 80% of the cost of goods produced is expended in the host country, creating hundreds or thousands of jobs and stimulating the local economy, in addition to transferring technology.