Capitalist conservative here! Just wanted to ask a few questions.

If you make widgets for $5 and sell them for $10, you make a $5 profit for each widget you sell. This $5 profit is the marginal utility made from the labor of turning the widget-parts into a widget.

You're limited in manpower making widgets yourself, so you open up a factory and employ more workers. You give them $2 for each widget they make, and they think, "Great, now I don't have to beg on the streets or go start my own widget factory" to use examples you've given in your responses.

Now you make less profit for each widget, only $3 instead of $5, but you can produce and sell astronomically more, and better yet, it doesn't take any labor on your part, so you can focus your labor on other tasks, like education and expanding your widget business.

Why would anyone work in the widget factory when they could make a ton more money opening their own? Because widget factories aren't free, they require capital. Maybe a widget factory costs $10,000 to build, which is a lot of money for someone earning $2 a widget, especially considering they can't put all their money into savings, they have to eat, and have somewhere to sleep, and maybe have a family to provide the same for.

The crux of the matter is that someone who already has access to capital is at an extreme advantage to someone who doesn't. People in different classes have different access to capital based on their family history and social position. A poor person cannot use their nonexistent family wealth, nor go to a bank and ask for a loan for their widget factory. The only option for someone without capital is to instead sell their labor to someone who does have it.

And when the laborer does sell their labor, they lose a portion of the marginal utility their labor produces to the capitalist. In the widget example the labor they were doing was worth $5, but they only keep a fraction of that. This is what Marx defined as exploitation. I'd still recommend you read primary sources like /u/ascasco suggested, but your clearly speaking past a lot of the commentators here because you lack an understanding of a lot of the terms they are using.

/r/Socialism_101 Thread Parent