Rate of exploitation

In Marxian economics, the rate of exploitation is the divergence between labor productivity and the wage rate. In Marx's analysis of capitalist development, technological progress yields a higher ratio of constant capital (non-labor inputs) to variable capital (labor inputs), which lowers the demand for labor relative to capital inputs. This causes unemployment that services to exert a downward pressure on wages while productivity per worker rises, thus increasing the rate of surplus value extraction.^[1]

See also

• Exploitation of labour
• Marginal product of labor
• Marxian economics
• Rate of profit
• Surplus value
• Technological unemployment

References

1. Grossmann, Volker (January 26, 2001). Inequality, Economic Growth, and Technological Change: New Aspects in an Old Debate. Physica. p. 15. ISBN 978-3790813647. As labor productivity rises but wages remain fixed (Marx called the gap between labor productivity and the wage rate the ‘rate of exploitation’), the ‘surplus value’ increases.