PAPER: "What is exploitation?" by Roberto Veneziani (Queen Mary University of London) and Naoki Yoshihara (Hitotsubashi University)

ABSTRACT

What is exploitation? In his seminal contributions, John Roemer suggested that the concept of exploitation incorporates a fundamental normative concern, but then argued that the key insights of the concept of exploitation are best captured by liberal egalitarian doctrines. According to Roemer, the notion of exploitation should be abandoned, and the focus should be on inequality in the distribution of assets.

This paper provides a thorough and rigorous formal analysis of Roemer's general theory of exploitation and classes in a dynamic context. It is argued that the notion of exploitation does capture important normative insights and that it does not reduce to notions of inequality common in liberal political philosophy, although it has some theoretical links with the latter.
Formally, an intertemporal generalisation of Roemer’s (1982, 1988) economies is set up. Roemer’s main results are extended to the intertemporal context and the theoretical similarities and differences between Roemer’s concept of exploitation and the more traditional notion of welfare inequality are shown.

However, it is argued that absent time preference, differential ownership of scarce productive assets and classes are an inherent equilibrium feature of a capitalist economy, while exploitation tends to disappear in the long run. This suggests that per se asset inequalities are a normatively secondary wrong and that the emphasis should be placed on their being a causally primary wrong. Moreover, the paper highlights the importance of capital scarcity – and the conditions for its persistence - for any theory of exploitation. Finally, it is argued that these results raise some doubts about the possibility of providing robust micro-foundations to Marxian concepts by means of Walrasian general equilibrium models.