Conclusion

In conclusion, let us indicate more explicitly the implications for economics of the present view of how the economic system operates.

It provides a theory of discrimination that goes beyond viewing discrimination as a matter of "taste" or considering an attribute like skin color as a signalling device. In fact such discrimination is a part of the theory of social stratification contained in our analysis. 

Economic theory has had essentially a "milk" theory of social stratification: the cream rises to the top, payment being a function of productivity/creaminess. And sometimes economists have felt that people had a "taste" for status, though it seems fair to say not much of consequence has come from this assumption, except perhaps the conclusion that envy can mean that an increase in goods will not bring an increase in welfare. By contrast, our theory holds that social stratification arises as a consequence of exploitation. As indicated, exploitation is often highly profitable and if free entry to this sector is allowed the consequences can bring about changes in the society and exploitative sector. Stratification in our theory arises as the result of this process of exclusion, a process that is rational both for the exploitative sector and for the people already well placed in the system. This gives a much more central role in the economic system to discrimination and social stratification than does standard economics, where Becker's "pioneering" work on the subject was published in 1957 and where social stratification is not a classification in the JEL and thus an article on the subject would probably be classified under discrimination, rather than the reverse.

Standard economics has a number of assumptions/assertions about consumption that are called into question by our approach. It holds that the consumption decision is essentially separate from the income decision, in that income once earned can be spent on anything according to the taste of the consumer. Moreover, the goods have utility in themselves; consumption is a final, and not an intermediate good. By contrast the view presented here is that a substantial element of consumption is undertaken to increase or defend one's position in the exploitative structure. While of course this is chosen, the choice is not determined by one's unfettered tastes in goods as an indifference map would suggest but rather on a strategy for getting ahead or, perhaps more typically, merely trying to keep up. Unlike standard analysis, the output of goods can actually increase without anybody being better off. The result does not depend on the envy of anyone, but rather on the fact that such intermediate, position‑oriented consumption activities are capable of indefinite increase, an increase which is naturally brought about by competition. 

Economic theory essentially holds that payment is according to marginal productivity‑the higher the productivity, the higher the payment. Our view differs in holding that exploitation receives a payment through it is not productive, which must mean that the payment is a deduction from that available to, and generated by, the productive sector. Thus payment does not imply productivity, nor productivity, payment. In fact to the extent that it is true that exploitation is a more profitable activity than production this would imply that payment is inversely related to productivity: those that doesn't produce receive higher income than those that do. Standard economics sees the world of payments and thinks that they measure productive relations. We hold that moving from the world of payments to the underlying relations of production is a transformation problem of the greatest complexity.

Human capital theory suggests that people invest in themselves, obtain a return thereby, and in the process increase output. Our theory differs in denying that the process would necessarily increase output, as the acquisition of characteristics useful in the exploitative sector would obtain a return for the individual but would not lead to an increase in output. We would thus question the extent to which many things, including education, represent true investment.

The essential theory of government that arises from standard economic analysis is that of a provider of government goods, while for us, government undertakes, often simultaneously, exploitative and counter‑exploitative activity. While these two views are not always in conflict, (an activity can be both a counter‑exploitative one, and a government good) they do refer to different aspects of reality. The exploitative and counter‑exploitative function of government need to be brought out more explicitly, which is not possible within the current framework. Other differences could be mentioned. One important one, which forms the subject of another paper, is the impact of exploitative economic systems on economic development. But enough has been said to show that economics with exploitation is different than economics without.

The important question is: which view of the world best explains reality. As this question is too complex for any statistical test it must be left to our judgment, both individual and collective, in our role as economists, and as human beings. We have attempted to assist in this process by providing what we believe to be a simple yet essentially correct analysis of exploitation and its consequences that takes as its point of departure the conceptual framework of standard economics.

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