Capitalist exploitation

Next, let’s turn to how Popper attempts to refute Marx’s theory of exploitation (of the creation of surplus value through the exploitation by the capitalists of the wage-labor of the proletarians) and to show how this theory, too, is “essentialist or metaphysical” and is insufficient without, less important than, and dependent upon the mechanism of supply and demand (see Popper, p. 174). It is not really possible here to discuss everything that is wrong with Popper’s argument in this case. Suffice it to say that here, as elsewhere, Popper does not understand, and/or deliberately misrepresents, Marx’s analysis. To cite just one aspect of this, Marx amply shows how the mechanism of supply and demand, while it can explain the “ups and downs” in the prices of things, does not, and cannot, determine the value of things. This is why, for example, supply and demand may influence the price of a candy bar, on the one hand, and an airplane on the other hand, but no variation in supply and demand is likely to make the prices of a candy bar and an airplane the same, for the basic reason that the actual value of each is, as Marx demonstrates, determined by something other than supply and demand—it is determined by the total amount of socially necessary labor time that goes into the production of each. Thus, Popper has stood reality on its head: the mechanism of supply and demand is subordinate to and less important than the theory of value and surplus value developed by Marx, which explains how particular items have the value that they do, and also explains how capitalists accumulate profit (surplus value) through the exploitation of the wage-labor of the proletarians—through paying the workers an amount equal to the socially necessary labor time that is involved in producing the requirements of life of the workers, while in fact the workers, in the course of their working hours, produce value beyond that which is equivalent to the value embodied in their requirements of life, extra value which goes to the capitalist. And, as Marx also demonstrated, commodities and commodity exchange existed well before and independently of capitalism, and it is not merely the production and exchange of things as commodities that is the distinguishing feature of capitalism, and the secret of its accumulation process, but rather the conversion of labor power itself (the ability to work in general) into a commodity, a commodity with the particular quality of being able to produce more wealth through its use (its employment, in one form or another, in the production process under capitalism). As explained in the book America in Decline, in a discussion of the basic principles of Marxist political economy:

“Capital is value which generates surplus value. Capital is both a social relation and a process whose essence is the domination of labor power by alien, antagonistic interests, a social relation and a process whose inner dynamic is to constantly reproduce and extend itself.” (Raymond Lotta, with Frank Shannon, America in Decline, An Analysis of the Developments Toward War and Revolution, in the U.S. and Worldwide in the 1980s [Chicago: Banner Press, 1984], p. 44, emphasis in original)