Exploitation without Subsumption: The Scope and Limits of Proto-Industrial Exploitation (Thomas Weisskopf Festschrift Conference Paper)

Gilbert Skillman poses a question initially explored by Marx: do capitalists need to hire workers into their firms, and thereby directly control the labor process, in order for capitalists to be able to extract surplus value from these workers? As Skillman points out, Marx’s own writings focus on this process of “subsumption of labor under capital” as being central to the ability of capitalists to exploit labor. But Marx did also recognize cases in which capitalists are able to exploit workers and appropriate surplus value without directly controlling the production process, through purely contractual means of control. John Roemer explored this alternative further, demonstrating conditions in which, under conditions of perfect competition and frictionless contracting, labor can still be exploited by capital even when the workers are self-employed.

Skillman’s study examines what he terms an “analytic middle ground” in which neither direct capitalist control of production nor a scenario of ideal contracting is assumed to exist. In Skillman’s model, capitalists undertake productive activities under conditions of imperfect information, in which the workers’ effort level and other key variables are known only to the worker or unknown to both worker and capitalist. Drawing on the historical literature, Skillman uses the term “proto-industrial” production process to describe this middle ground. His model provides fresh insight on questions such as how such proto-industrial forms of organization have persisted throughout the capitalist era.

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