Question: Marx’s surplus value theory says that the core of capitalism is exploitation. The value of the product produced by labor is greater than the actual price of labor as paid out in wages. The difference between the two (surplus value) is confiscated by the bourgeois (the owner of the company). This theory seems very reasonable. Because of this exploitation, capitalist society must be full of thieves (bourgeois or capitalists). It must be full of initiation of force.
Individualism—not a false bourgeois/proletariat dichotomy—is at the heart of the Objectivist ethics.
The problem with the Marxist exploitation theory is that it rests on false premises.
Marx often tried to blur the difference between economic and political power, to argue that those who command large fortunes have an authority that is qualitatively very similar to those who command armies. But the initiation of force refers specifically to actual, physical force—not, for instance, refusing to provide someone with a job or a roof over his head. Ayn Rand dramatically states this point in Francisco D’Anconia’s money speech from Atlas Shrugged: “The rotter who simpers that he sees no difference between the power of the dollar and the power of the whip, ought to learn the difference on his own hide—as, I think, he will” (p. 391, paperback edition).
Objectivism acknowledges that people are individuals, and do not fit easily into arbitrary categories like “bourgeois” and “proletariat.” They can even—at least in a free society—move from one category or social station to another, and often do. It is only under capitalism, and not the various forms of collectivism and statism, that an individual is freed from the power of the whims of bureaucrats or the random chance of his family name to determine how far he can go and how much he can achieve.
In a laissez-faire society, each man succeeds to the degree that he thinks. True, we are all limited in some way by our natural faculties and talents. Nevertheless, the development of the abilities necessary for success in a capitalist system—the degree to which we benefit from these inborn strengths—is a matter of one’s personal choices: to apply oneself in school or to drift through it aimlessly; to labor diligently at work or perform only the bare minimum; in essence, to think or to evade.
Individualism—not a false bourgeois/proletariat dichotomy—is at the heart of the Objectivist ethics and of the government of freedom and laissez-faire capitalism which is its logical consequence.