Marx's theory of exploitation holds that a worker's labor produces value exceeding what is returned as wages, with the surplus accruing to the capitalist even though the wage transaction is voluntary and mutually beneficial (Pareto superior); exploitation is thus defined as an objective, technical relation—not coercion or an unequal exchange—arising from the distinction between necessary labor time and surplus labor time, and it increases as capitalists raise relative surplus value through labor-saving technological innovation rather than absolute surplus value through lengthening the working day. At the macro level, this micro-theory of exploitation underpins a theory of recurring capitalist crisis (monetary hoarding, a tendency of the rate of profit to decline as the organic composition of capital rises, competitive elimination of firms, and insufficient aggregate demand), and grounds a distributive theory contrasting socialism's "to each according to his work" with communism's "to each according to his needs," situating the analysis within Marxian political economy and distributive justice theory.
Marx's theory of exploitation holds that a worker's labor produces value exceeding what is returned as wages, with the surplus accruing to the capitalist even though the wage transaction is voluntary…