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UNIVERSITY INSTITUTE OF LEGAL STUDIES,

PANJAB UNIVERSITY, CHANDIGARH

LABOUR AND INDUSTRIAL LAWS PROJECT

TOPIC- “PATTERNS OF LABOUR EXPLOITATION ”

SUBMITTED TO- SUBMITTED BY-

PROF. VIRENDER NEGI KHUSHMITA RANA

B.A.LLB (HONS.)

SECTION-A

SEMESTER-9

ROLL.NO-53/19
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ACKNOWLEDGEMENT

I would like to thank my professor, PROF. VIRENDER NEGI, for giving me the opportunity to
make a project report on the topic, “PATTERNS OF LABOUR EXPLOITATION ”, which has
helped me learn more about this topic and make an in- depth study in this area. I would like to
thank my parents, without whose cooperation and motivation, I couldn’t have completed this
project. I am also very grateful to my friends for their help and support and constant
encouragement.
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INDEX

S.NO TOPIC PAGE NO.

1 INTRODUCTION 4

2 KARL MARX’S VIEW ON 5-6

EXPLOITATION

3 EXPLOITATION IN THE 7-8

BEGINNING OF
INDUSTRIALIZATION

4 PATTERNS OF 9-11
EXPLOITATION

5 CONCLUSION 12

6 REFERENCES 13
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INTRODUCTION:

Labour is an important segment of the general community. Being a ‘human factor’ labour is
different from other factors of production.

History begins when men produce their means of production; at a minimum this involves a
production of food and shelter.

Marx argues that “the first historical act is therefore the production of material life.”

Production requires co-operation thus men work together to produce the goods and services
necessary for life.

At the dawn of human history, since each member of the society produced for him and for the
society as a whole, there were no conflicts of interests between individuals and groups. However
with the introduction of private ownership and private property, fundamental contradictions of the
human society were created. The minority is able to control, command, and enjoy the fruits of
production, and a conflict of interest exists in which the majority performs the productive labour.

The labour was in a better situation during the ancient and agrarian times but in the middle ages,
due to emergence of feudal system, the condition of labour deteriorated. Most of the agricultural
land was owned by the feudal lords. Landless labourers know as ‘serfs’ were forced to work for the
land owning nobility in order to earn a means of livelihood.

A feudal structure prevailed in many economies of the world including India in the medieval
period thus these economies were characterized by specific forms of exploitation of the peasants,
artisans, etc.

Exploitation of labour is the act of using power to systematically extract more value from workers
than is given to them. It is a social relationship based on an asymmetry
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of power between workers and their employers.

KARL MARX’S VIEW OF EXPLOITATION:

Karl Marx is considered the most classical and influential theorist of exploitation. In analyzing
exploitation, economists are split on the explanation of the exploitation of labour given by Marx
and Adam Smith. Smith did not see exploitation as an inherent systematic phenomenon in certain
economic systems as Marx did, but rather as an optional moral injustice.

Between 1861 and 1863, Karl Marx wrote the theory of surplus value, which is central to his
exposition of exploitation in capitalist production. This was based on an engagement with
classical political economy.

1Meenu Paul, Labour and Industrial Laws, p.no.2

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Marx's exploitation theory is one of the major elements analyzed in Marxianeconomics and some
social theorists consider it to be a cornerstone in Marxist thought. In his Critique of the Gotha
Program, Marx set principles that were to govern the distribution of welfare under socialism and
communism- these principles saw distribution to each person according to their work and needs.
Exploitation is when these two principles are not met, when the agents are not receiving according
to their work or needs. This process of exploitation is a part of the redistribution of labour,
occurring during the process of separate agents exchanging their current productive labour for
social labour set in goods received. The labour put forth toward production is embodied in the
goods and exploitation occurs when someone purchases a good, with their revenue or wages, for an
amount unequal to the total labour he or she has put forth. This labour performed by a population
over a certain time period is equal to the labour embodied to the goods that make up the netnational
product (NNP). The NNP is then parceled out to the members of the population in some way and
this is what creates the two groups, or agents, involved in the exchange of goods: exploiters and
exploited.

The exploiters are the agents able to command goods, with revenue from their wages that are
embodied with more labour than the exploiters themselves have put forthbased on the exploitative
social relations of capitalist production. These agents often have class status and ownership of
productive assets that aid the optimization of exploitation. The exploiters would typically be the
bourgeoisie. Meanwhile, the exploited are those who receive less than the average product he or she
produces. If workers receive an amount equivalent to their average product, there is no revenue left
over and therefore these workers cannot enjoy the fruits of their own labours and the difference
between what is made and what that can purchase cannot be justified by redistribution according to
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need. The exploited are the proletariat.

Marxist Theory:

In Marx's major work Das Kapital, the concept of exploitation is not a moral concept. Marx did not
claim to make value judgments when he claimed that the capitalist exploits the worker. In the
preface to the first edition of the first volume, he explicitly wrote that he did not want to make the
individual “responsible for conditions of which he remains the social creature.”In the context of
factory legislation, Marx explicitly stated that the capitalist had to exploit the worker as much as
possible in order to maintain himself as a capitalist in competition, and that this was not due to the
bad will of the capitalist.

Marx did not intend an idealistic critique that measured bourgeois relations against the idea of
justice. The fact that the capitalist exploits the worker is not an injustice. According to Marx, it
does not violate the law of value of commodity exchange.
Marx was also later very skeptical about the idea that in a communist society based on co-operative
production, the worker should simply receive his entire labour product. In “Critique of the Gotha
Programme” he criticized bourgeois as well as socialist ideas of fair distribution. This concerned
above all Ferdinand Lassalle'sdemand for an unabridged labour yield.

Furthermore, Marx did not think that exploitation always had to mean that the exploited had a low
wage or standard of living. This could rise in times of increased demand for labour.

As a central concept of Marx's critique of political economy and Marxist theory ofhistory and
society, exploitation refers to a class relationship or the unremunerated appropriation of other
people's labour power and other people's labour products, which goes beyond the work necessary to
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maintain labour power. Exploitation is therefore the appropriation of surplus labour and the
resulting surplus product. If, for example, 6 hours of labour are necessary daily to maintain the
worker and his labour power, but he works 8 hours, he has done 2 hours of extra labour. If the
product of this surplus labour is extorted from another person, the worker has been exploited in this
sense.

In class societies, the members of the exploiting class have the labour power of the exploited and
the essential social means of production. In order for a class to form whose members can
permanently and securely appropriate the surplus product of another class, a certain social
productive power of labour must have been achieved; otherwise the existence of the exploited is
endangered. Depending on the social mode of production, the relations of production through which
the surplus product is appropriated differ from "direct forced labour" as in slavery to "mediated
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forced labour" as in wage labour.

EXPLOITATION OF WORKERS IN THE BEGINNING OF

THEINDUSTRIALZATION:

Exploitation of the workers in the beginning of industrialization may be summarized under the
following heads:

i. Loss of freedom to work independently ii.

Indifferent attitude of the employer
iii. Unfair contract of employment

iv. Inhumane conditions at the workplace

• Loss of freedom to work independently:

A great historic event that took place in Great Britain in 18 th century was
advent of the ‘industrial revolution.’
It soon spread to its neighboring states and by the end of 19 th century covered
most of the globe. Newly invented machines caused mass production of
goods in short period of time and provided mankind with material comforts
and brought within its wake a number of problems for the workers.
The independence of a labourer was lost as soon as the tool in his hand was
replaced by the machine; it was as if he was tied to it and became little
more than a cog in a big machine of production. The worker lost his tool
and was now tied to a machine and to the owner of the machine.

• Indifferent attitude of the employer:

The worker also had to suffer through the indifferent attitude of employer
who as the owner of the industry, was more concerned about profits rather
than labour welfare. Through industrialization, new class of employers
emerged whose main interests were to maximize their profits. The employer
belonging to the new class was different from the traditional employer.
Working under a traditional employer meant a traditional servant master
relationship between the worker and employer, but under the new employer,
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the worker who worked in the industry seldom saw his employer for whom
he toiled day and night. Between the workers and the employers there stood
the supervisory managers who were appointed by the owner of the industry to
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watch the work done by the workers.

• Unfair contract of employment:

To maximize profits, the workers were forced to work for unduly long hours
without any interval, without any rest, and for extremely low wages. The
working conditions were also extremely unhygienic. It was as if the workers
were reduced to the status of a lifeless machine which had no fixed working
hours and functioned non-stop without any demand for wages. To make the
matters worse, the laissez-faire doctrine that prevailed in the state in the
beginning of the modern industrialization, advocated the non interference of
the State in the economic affairs of the state. This enabled the employers to
employ the workers on such terms of employment which favoured the
employers more than the workers. Thus the employers were free to draft
contracts of employment at their whims and fancies without any check from
the State. Therefore the workers could either accept these terms or starve to
death.

• Inhumane conditions at workplace:

The newly emerged class of employers, were only concerned about their
profits in the competitive market and completely ignored the value of the
human factor in the production of goods. The workers were suffering injuries
which were very damaging for example in the mines leading to an endless
toll of deaths.
Accidents at workplace without any insurance cover or compensation to the
worker from the employer added to the misery of the workers. In order to
recover insurance he had to prove that the accident occurred to employer’s
negligence rather than his own or a fellow worker’s. Child labouring was also
prevalent as they provided for cheap labour but were too young and
defenseless therefore would not raise their voice against their exploiters.They
worked for long hours, in bad conditions, and not even provided with
food until they returned back home. In this chain of industrialization the
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worker lost his dignity as a human being.

2Meenu Paul, Labour and Industrial Laws, p.no.4-6

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PATTERNS OF EXPLOITATION OF WORKERS:

The factors that weaved the pattern of exploitation of the industrial worker may be
summarized under the following heads-

1. Doctrine of laissez-faire

2. Freedom of contract and Doctrine of hire and fire

3. Doctrine of Conspiracy and Combination Acts

• Doctrine of laissez-faire:
th
Modern industrialization occurred in the 18 century, the time when this doctrine was
prevailed in the State. According to this doctrine the State has to perform only primary
function, i.e., protection of its citizens from external aggression and internal disturbances and
maintain the law and order in the society and not to interfere in the economic or other private
affairs of its citizens. The relation between the industrial workers and their employers was
considered to be a private economic affair. Due to the policy of non intervention by state
because of this doctrine, the industrialists as employers were free to employ the workers on
any terms of employment without any interference by the state. This allowed the employers
to draft any kind of contract between the workers and them. This freedom of contract was
between two unequal parties, one being wealthy and powerful industrialists who employed
without any legislation or checks upon their undue freedom, and on the other hand poor
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workers whose livelihood depended upon such work. Industrial law in the 18 century was
not created by the State; rather it was created by the individual industrialist as an employer in
regard to his industry. Thus industrial law differed from industry to industry. Another factor
that had an influence on the contracts was the competitive market, which never allowed even
the kindest of the employers to draft fair contracts which were not as harsh towards the
workers.
Thus the doctrine of laissez-faire caused exploitation of the industrial workers in the
beginning of the modern industrialization as unrestricted market economy helped the rich
industrialists to become richer and the workers to suffer in utter poverty. However, it lost its
th
significance in the 20 century with emergence of welfare state which strives to achieve
economic and social justice in the society and also protects its citizens and maintain the law.
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• Freedom of contract and Doctrine of hire and fire:

Due to the prevalence of the Doctrine of laissez-faire, the employers who were
the owner of the newly set up industries were driven by the urge to maximize
their profits and thus totally disregarded the interests of the workers.
Succumbing to their interest to maximize profits, the workers were employed
in those industries at extremely low wages with long working hours, and
without any intervals to rest.

In the name of freedom of contract these industrialists always reserved their

right to dismiss or discharger their workers at any time they liked and they
exercised this right without giving the workers any reason or any opportunity
to be heard. In the absence of social justice, even the law favoured the
employers because the employers claimed that they are exercising their rights
in accordance to the terms of the contract which the workers have entered into
with them, willingly. These contracts were traps for the workers which bound
them legally and thus the Courts were also bound to give effect to the terms of
these contracts.

However the situation now is very different because in a welfare State,the freedom of an
employer is curtailed by a number of legislations enacted by the State to protect the interests
of the socially and economically weak workers. For example, The Factories Act, 1948 of
India fixes the daily as well as weekly working hours, intervals for adults, children and
adolescents. Any term of contract which imposes working hours more than what is prescribed
under Factories Act, 1948 is unlawful and is liable to be struck down by the Court.

Thus the greatest loss that the industrial worker suffered in the name of freedom of contract in
the beginning of the modern industrialization period was the ‘security of his job.’ In the name
of freedom of contract, the industrialists as employers employed the workers in their
industries on such terms and conditions of employment which suited them best, i.e., they
always reserved their right to dismiss or discharge the workmen they employed and
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they exercise it as freely as they could. Because of this the only two options availed to the
suffering worker was either to accept the harsh terms of the contract and work, or to starve to
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death without any work.

• Doctrine of conspiracy (Combination Acts):

The condition of the industrial workers worsened further in the early phase of
industrialization, when doctrine of conspiracy started regulating the newly
emerged industrial relations.
According to the doctrine of conspiracy, two or more persons could not combine to do
what they could legally do as individuals.

Upholding this doctrine, King’s Bench in Rex v. Journeymen Tailors of Cambridge case, in
which Journeymen Tailor were indicted for conspiracy to
raise wages, held:
“a conspiracy of any kind is illegal although the matter about
which they conspired might have been lawful, or any of them to
do, if they had not conspired to do it.”

Similarly in 1786, five bookbinders were convicted of conspiracy leading to a strike to reduce
the hours of labour from twelve to eleven. Scared by the French Revolution the governing
class of Great Britain prohibited the working class combinations in the textile industries and
mining areas rigidly by passing the Combination Acts, 1799 and 1800. These Acts forbade
the formation of unions.

Despite all the prohibitions the workmen formed unions and took collective action.
Eventually in 1824 with the efforts of Francis Place and Joseph Hume, these discriminatory
Combination Acts of 1799 and 1800 were repealed by the Combination Act, 1824 which
legitimized the combinationof employees. However this Act was repealed by the
Combination Act, 1825which imposed some restrictions on the liberties provided to the
workmen in the previous Act. It legalized union of workers but made such strikes illegal
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which were done in order to oppress the employer.

3Meenu Paul, Labour and Industrial Laws, p.no.9-10

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CONCLUSION:

We can find various accounts and instances of labour exploitation since the beginning of
history and we can still find them in today’s times. However the road of transition from the
prevalence of doctrine of laissez-faire State to welfare State was a long and very significant
one. It showed us the power that the workmen in the society hold and that without them and
their inputs the society and especially the production systems and industry cannot function
efficiently.

The doctrine of laissez-faire does not find any place in the Welfare State. The doctrine of
laissez-faire gave rise to an unrestrained economy as the State did not interfere in the
private affairs of the states. This only benefitted the rich and made them richer and was of
extreme disadvantage to the poor workers.

However a welfare State performs all the functions that a State should perform. This
includes not only maintaining the law and order in the society and protecting its citizens
from external aggression and internal disturbances, but also to ensure welfare of its citizens.
This includes taking care of health, education of its citizensand functioning in order to
achieve economic and social justice in the society.

4Meenu Paul, Labour and Industrial Laws, p.no.11