Does Capitalism Exploit Workers?


Today, many define “exploitation” as taking unfair advantage of others’ vulnerability. Based on this definition, many suspect that capitalism exploits workers. Professor Matt Zwolinski examines whether this is accurate and finds two points against it:

1. Capitalists may not want to pay workers close to the value of what they produce, but they do because competition requires it.

2. Exchanges in free markets are voluntary. This means that even when “exploitative” transactions take place, the institutions of a free market ensure they are mutually beneficial.

Markets may not be perfect, but what’s the alternative? Many believe that to prevent exploitation we need more political regulation and control, but Professor Zwolinski explains the problems with this solution. Bureaucrats, lobbyists, and elected officials are tempted to exploit citizens for the benefit of the politically well connected. Transactions between people and the state aren’t voluntary, so they may not be mutually beneficial either. When politics is involved, one party’s gain usually comes at someone else’s expense.


  1. Pyrphoros

    Well, govt technicly could exploit workers more then companies do(by raising taxes to like 90% I guess? Though the govt and therefore everyone is paying for bail outs, they usually don’t affect the average Joe too much, it’s the unstable market that does it by raising prices), however in a functioning democracy the ruling parties are punished by the public e.g. by voting for other parties on the next election. Therefore, if a party is interested in getting reelected – which is one of the strongest incentives – they will be very careful with brib- er… commissions. By making for example all commissions to parties or politicians public, that effect can be increased.

  2. supersonicsixteen

    After living in a city named after Karl Marx in Russia, I think it clear where his value lies:  In the grave.

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