Profit within Capitalism is a result of the exploitation of the workers

Pro offers no definition of exploitation. In the context of the debate, the Stanford Dictionary of Philosophy offers "To exploit others is to take unfair advantage of them." http://plato.stanford.edu... "fair" is "Being in accordance with relative merit or significance." http://www.answers.com... Pro's theory is that the only things that have value are raw materials and labor, and that therefore anything earned as profit must come from a valueless contribution, and hence must be a product of exploitation. Pro's argument is incorrect because value is also derived from (1) the time value of money, (2) the assumption of risk, and what I will call (3) creative genius. Profits are merited from one or more of these sources of value and therefore are fully deserved. Separately, I will argue that there is no way to put a fair value on labor other than by supply and demand in a free market, therefore any value earned beyond labor costs is cannot be exploitation. 1. Time Value of Money The time value of money, also known as the cost of capital, is not an invention of capitalism. It is an immutable law of nature that no society has ever diminished in the slightest. It means that money made available now is more valuable than money repaid later, and therefore it is fair to charge interest in return for the loan of the money. Anyone who does not agree with this assertion should send me all of their money right now, and I'll require that my estate repay it without interest. The offer is ridiculous precisely because the time value of money is self-evident. "The time value of money is related to another concept called opportunity cost. The cost of any decision includes the cost of the best forgone opportunity. If you pay $10.00 for a movie ticket, your cost of attending the movie is not just the ticket price, but also the time and cost of what else you might have enjoyed doing instead of the movie." http://www.econedlink.org... 2. Assumption of Risk Profit only comes at the risk of lost. If there is no risk of loss, then what we are not talking about profit, but a scam of some sort. The risk may be low, but there is never a guarantee the enterprise will not fail for unforeseen reasons. For example, thirty years ago stock in General Motors might have been considered a virtually risk-free investment. Investors put in their money and received the profits of General Motors. As it turned out, there was substantial risk in the long run. Investors who held on for the long run lost all of the value of a stock. Small businesses, which supply half of the jobs in America, involve substantial risk. http://www.smallbusinessnotes.com... More than two-thirds fail within seven years. http://www.score.org... Even if the small business is incorporated, lenders generally demand personal liability from owners for money they put into the business. Few employees want to assume a share of the risks in return for a share of the profits. Those who do become partners in the enterprise, and deserve whatever profits there are in return for the risk they have assumed. 3. Creative genius "Creative genius" is defined for the purposes of this debate as the value of a good idea independent of the labor it takes to implement the idea. Suppose I come up with a great idea for a computer game, and using my own time and money develop in into a product. In the beginning, I distribute the product myself. It catches on, and starts to bring in large sums of money. Since the labor is all mine, Pro's theory that all value lies in labor dictates that my labor is then worth quite a bit, lets say $500 per hour. I then incorporate and hire a low-wage worker to help package and distribute the disks. Under Pro's theory, nothing should count but the labor and materials in the product. Therefore, the profits ought to be equally distributed between me and the guy packaging the disks. That is manifestly unfair, because most of the value of the product came from my creative genius. One could bend Pro's theory of only labor counting and suppose that I ought to get paid a little more for my previous investment in time learning how to program video games. That still would not compensate for the value of the good idea. So what is the fair valuation of a good idea? It is exactly what the market is willing to pay for it, no more and no less. An alleged "work of genius" might benefit from a silly fad, or something else beyond my control. No matter, the low wage guy putting product into envelopes would not have a job were it not for the good idea. He doesn't deserve the profits, I do. I also took the risk, and deserve the profits for that reason as well. If we do not reward creative genius, people will not supply their skills and take the associated risks. Society is better off if they do. =============== There is genuine exploitation of labor in the world. It happens whenever people are forced to work at less than the free market would pay for their labor. That happens in North Korea, China, and Vietnam, for example. However, in free market countries like the United States, anyone who believes that they are exploited can quit and start their own business. Of course, with that decision come not only the profits, but all of the costs and substantial risks. They also might not have what they consider to be a good idea for a business. In Pro's concept of profit, there is nothing but profit; there are no capital costs, risks, and ideas worthy of compensation. Thus if Pro's conception were true, everyone in a free country would have a financial incentive to start their own business, with no financial downside. Everyone knows that conception is false. Most employees favor being employees of their own choice. They know that profits are justly earned. There is no reasonable definition of "exploitation" other than forcing someone to work for less than the free market would pay. Thus the resolution can only be supported by adopting an unreasonable definition. Essential "exploitation" must somehow be defined as "profit." That can only succeed by ignoring the reality of capital costs, risk, and valuable ideas. The resolution is negated.