Exploitation at the Top
Exploitation is a potent moral category: to engage in exploitation is, by definition, wrong. Not only that, but the very word is often taken as an argument-stopper: once a behaviour or activity has been labelled as exploitative, its wrongness is supposed to be self-evident, and no further ethical analysis is required. Classic examples of activities taken to be exploitative include things like sweatshop labour, buying a kidney from someone in desperate financial need, or tow-truck drivers demanding unusually high payment to rescue motorists stranded by a showstorm.
Exploitation can be defined roughly as taking unfair advantage of someone else’s vulnerability. It’s crucial to see that exploitation is different from extortion (which involves a threat to cause harm), and different from stealing from someone or enslaving them: in standard examples of exploitation, the person exploited voluntarily accepts the deal, because the deal being offered really does make them better off. The Mafia don makes you an offer you can’t refuse; the exploiter makes you an offer you don’t want to refuse.
If the person “exploited” doesn’t want to refuse, you might ask, then what’s the problem? The problem, in cases labelled as exploitation, is that the deal they accept doesn’t seem fair. The feeling is that no one should want to work in a sweatshop; no one should need to sell a kidney in order to put their kid through school.
Given that understanding of exploitation, consider this: doesn’t it seem reasonable to argue that at least some highly-paid CEOs and Wall Street traders are currently being exploited, in being publicly pressured to accept reduced bonuses?
(See, for example, the story of commodities trader Andrew J. Hall‘s $100 million bonus, and also this story. Back in the spring, there was the controversy over bonuses at AIG.)
Are these people being exploited? Well, they’re being asked to accept less money than they are owed. And, though not exactly helpless, they’re clearly vulnerable — vulnerable to the coercive power of the state, to start with, not to mention the death threats some of them have received. But exploitation usually involves not just disadvantage, but unfair disadvantage. True, and there are at least 2 possible sources of unfairness, here. One is breach of contract; the other is the fact that at least some (and, pending evidence to the contrary, maybe most) of the high-rollers under discussion are entirely blameless, and have done their jobs exceedingly well. Their paycheques may have more zeroes on them than is typical in cases labelled “exploitation”, but you could nonetheless argue that, structurally, there’s something very like exploitation going on here. If you think it’s not exploitation, then explain — by reference to the definition given above — why it’s not.
Now, just to be clear, I am not in any way suggesting that the lot of someone receiving a multi-million dollar bonus is in any way as bad as that of someone eking out a living by labouring in a sweatshop. Nor am I suggesting that highly paid CEOs and Wall Street traders are unique in being exploited in the midst of the current financial crisis. What I’m pointing out is that the structure of the situation some of them face lines up nicely with the definition of “exploitation.” So is the public pressure on these people exploitative, and hence immoral, or is the standard definition of exploitation problematic?
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(I benefited from discussions with fellow philosopher Matt Zwolinski as I wrote this, though Matt is not to blame for the results.)
The Business Ethics Blog 
Interesting!
But can I object, right at the start?
The moralized definition of “exploitation” seems wrong. Consider: in a boxing match with you, I will defeat you by exploiting my superior reach. In a chess match, I will exploit your lack of knowledge of quality defenses against the King’s pawn opening.
These seem like real cases of exploitation, but there’s nothing unfair going on.
I blame Zwolinski for leading you astray (despite your protestations to the contrary).
Terms like exploitation and vulnerability also carry connotations of lack of power, lack of capacity to defend oneself, the absence of resources to influence decision-makers. this is why the term is often used with regard to situations of children, the very poor, and to individuals without any social power. I would say that none of these qualities of exportation and vulnerability apply to the executives involved in this situation. And so I would say that exploitation is not I would describe the undeniable pressures that under to reflect on their personal situations.
Jeffrey:
I think that’s an entirely separate use of the same word, as in when we talk about “exploiting” mineral resources.
Mark:
But they do lack power, relative to the individuals & institutions making demands of them. I’d suggest they are in a very, very tough situation, and highly vulnerable. They’re not going to have trouble paying the rent, but still very much at a power disadvantage.
Chris.
It does not appear that the “highly paid” CEO’s being pressured to accept less pay constitutes exploitation by your own terms and definitions.
You define exploitation as “taking unfair advantage of someone else’s vulnerability.” You distinguish this from theft and extortion, however:
“It’s crucial to see that exploitation is different from extortion (which involves a threat to cause harm), and different from stealing from someone. . . .”
You also make the excellent point that the exploitive “deal being offered really does make them better off. The Mafia don makes you an offer you can’t refuse; the exploiter makes you an offer you don’t want to refuse.”
You then describe the situation thusly:
“some highly-paid CEOs and Wall Street traders are . . . being publicly pressured to accept reduced bonuses. . . .
. . . they’re being asked to accept less money than they are owed.
. . . they’re clearly vulnerable . . . to the coercive power of the state, to start with, not to mention the death threats some of them have received.”
Under your definitional framework, wouldn’t this sound more like extortion? Or garden-variety breach of contract, perhaps. At its most insidious, it reminds me of the situation described in Ayn Rand’s Atlas Shrugged, whereby the “looters” required their targets’ so-called consent in order to operate. (Interestingly, it is the withholding of consent that helps reveal the true character of the action proposed to be taken.)
Here, I do not see that this is a ‘deal that really does make the CEO’s better off’ – one of your hallmarks of exploitation – it’s more the ‘offer they can’t refuse’, rather than one they don’t want to refuse. . . .
S:
Thanks for your thoughtful comment.
But I don’t think your analysis is quite right. I don’t think the situation I’m discussing involves extortion: the party asking execs to accept reduced bonuses is not threatening use of force — but they’re taking advantage of the execs’ weakened situation, faced as they are by significant social pressures (which do involve a threat of force, but not from the government).
It’s also not breach of contract: it’s a request, not a unilateral act (at least not the cases I’m talking about).
The deal the execs are getting is still a pretty great deal — a $50 million bonus is still pretty awesome, just not as great as $100 million.
Chris.
Jeff’s probably right. I tend to corrupt people who spend enough time around me without their even noticing it. But I agree with Chris’s response to his more substantive point. 😉
I also think S makes a very nice point. It’s often difficult to tell the difference between extortion and exploitation when the state is the actor. Theoretically, the difference is that with exploitation someone takes unfair advantage of a bad situation that you are already in, independent of their agency. In extortion, the person takes advantage of a bad situation that you are in precisely because of their agency – of what they are doing or threatening to do.
Now, when the state says “Boy you guys sure are unpopular. Maybe you should consider taking a pay cut,” how exactly should we understand this? Is it a helpful offer to a person already in an independently bad situation – like throwing a rope to someone in quicksand? Or is it a veiled threat – “Nice army base you have here, colonel – be a shame if something were to happen to it!”? If the latter – if, that is, the government was threatening to do nasty things to the execs if they didn’t ‘voluntarily’ take a pay cut – then it looks a lot like extortion after all.
And of course, lingering in the background of all this is the question of just how useful the moral category of exploitation actually is. Presumably what really matters (except maybe to Prosecutors) is not whether behaviour X is an instance of exploitation rather than extortion is whether the elements of behaviour X are themselves morally blameworthy.
As I noted above, the very word “exploitation” is too often an argument-stopper. I often find myself asking people, “Sure, ok, I know you think this practice is exploitative, but what do you think is wrong about it?
Chris.
Thanks for a thought provoking post. I agree with your latest comment that exploitation will not be a useful moral category if people do not first explain what is wrong with it. But even your rough definition of exploitation as ‘taking unfair advantage of someone else’s vulnerability’ will miss some disagreements over what exploitation is and why it is wrong. If by ‘unfair’ you mean a wrongful distribution of the social surplus generated by the interaction (as most who use ‘unfair’ in the context of exploitation mean), then you’ll miss some competing accounts of exploitation. Ruth Sample, for example, argues for several other senses of exploitation and argues against a purely distributional account.
Personally, I’m happy to accommodate multiple senses of exploitation, so long as we’re willing carefully to define the term. So, I think you’re right that the CEOs in your case might be wrongfully exploited, but this would be an entirely different kind of exploitation (with a different underlying kind of moral wrong) than that which sweatshop workers face. That is, the difference between the CEOs and sweatshop workers would be one of kind, not just of degree.
I really don’t see this “big bad state exploiting the poor defenseless CEOs”. It relies upon a monolithic notion of The State which is absurd. The state is every bit as much a coalition of individuals as are corporations. If anything, the middle class is exploiting the upper class; but in those terms, it sounds very much like just desert, repayment for massive amounts of past exploitation in the opposite direction. (Also, the poor seem to be mostly left out of this exchange, as usual.)
On a personal level, it’s unclear to me who exactly has the power here; each middle-class voter pressuring for the pay cuts has a small amount of influence in the overall state, and each upper-class CEO suffering from the pay cuts has a comparable amount of influence. Everyone is trying to serve their own interests, but each person has only a small fraction of the overall power.
Really, if anything, the responsible CEOs should be angry at the irresponsible CEOs who put the economy in this state to begin with. They should be doing everything within their power to bring these people to justice. Also, if the punishment for irresponsibility is monetary (as it no doubt should be, at least in part), that frees up extra money to repay the responsible CEOs.
They are asked to accept less money… Really? poor guys, I can’t believe it, how this government dares to do such an unfair thing?.
They should be asked to leave the offices and have a few days in court to explain their passed activities. That people ruined the lives of thousands out of pure straight greediness, they should be in jail with no money and all their assets frozen. I wish the same laws that apply to them could apply to me.
Ricardo:
Your sarcasm would make more sense if you told us who you’re talking about.
I didn’t say I was talking about anyone who had done anything wrong.
Chris.
I do feel the CEO’s catch the heat for the pay they have earned. Why were they hired in the first place. They were hired to make money for thier respective employers. I have no qualms with what they make. The ones who do raise a ruckus would love to earn the money they do but they do not want the responsibility. I would say go to the gusto.
Hey Chris,
It occurs to me that it might be something to consider the margins involved, and any contextual information, to determine whether any instance of exploitation is also immoral. So it might be something to look at contingencies rather than to shoe-horn a spectrum of exploitation into a single definition.
After all, exploiting someone who has so much less to fall back on could be worse. Likewise exploiting someone for the heck of it would be different from exploiting someone to save a drowning child. Kind of like how progressive taxes are acceptable so long as they go towards public works rather than enriching public servants.
Nurglitch:
Yes, sure. I avoided here any analysis of just how wrongful the exploitation is. Exploitation is by definition unethical, but that probably does admit of degrees. All I was doing above is pointing out that a case can be made that the situation described seems to fit the formal definition of “exploitation.”
Regards,
Chris.
[…] highways during snowstorms, offering to rescue stranded motorists at exaggerated prices. I’ve blogged before about exploitation, and in particular about how hard it is to define. The big problem is that, generally, situations […]
Oh, I think you’ve made your point. That words such as “exploitation” should not be enough to shut down debate.
In the years since you wrote this article, it seems that many have started to grow weary with those that shut others down by shouting “rascist”, “sexist” or whatever.
A single word, without context should never be enough.