Objectivist versus Subjectivist Approaches to the Marxian Theory of Exploitation

This paper analyses two central issues in exploitation theory. First, the appropriate definition of individual and aggregate measures of exploitation is discussed. Second, the relation between profits and exploitation (the so-called Fundamental Marxian Theorem) is analysed. A general framework for the analysis of exploitation in the context of convex cone economies is proposed and various alternative equilibrium concepts are discussed. The limits of subjectivist approaches to exploitation, which crucially depend on agents' preferences, are shown. An objectivist approach to exploitation, which is related to the socalled 'New Interpretation' (Dumenil, 1980; Foley, 1982) is proposed. It is argued that it captures the core intuitions of exploitation theory and that it provides appropriate indices of individual and aggregate exploitation. Further, it is shown that it preserves the Fundamental Marxian Theorem in general economies.