Let us assume that the utility of personal wealth is logarithmic, which is intuitive enough: 10k$ matter a lot more to you if you are broke than if your net worth is 1M$.
Then by your definition of exploitation, every transaction where a poor person pays a rich person and enhances their personal wealth in the process is exploitive. The worker surely needs the rent money more than the landlord, so the landlord should cut the rent to the point where he does not make a profit. Likewise the physician providing aid to the poor, or the CEO selling smartphones to the middle class.
Classifying most of capitalism as “exploitive” (per se) is of course not helpful. You can add epicycles to your definition by considering money rather than its subjective utilitarian value, but under that definition all financial transactions would be ‘fair’: the poor person values 1k$ more than his kidney, while the rich person values the kidney more than 1k$, so they trade and everyone is better off (even though we would likely consider this trade exploitative).
More generally, to have a definition of fairness, we need some unit of inter-personal utility. Consider the Ultimatum game. If both participants are of similar wealth and with similar needs and have worked a similar amount for the gains, then a 50:50 split seems fair. But if we don’t have a common frame of utility, perhaps because one of them is a peasant and the other is a feudal king, then objectively determining what is a fair split seems impossible.
A gap in the proposed definition of exploitation is that it assumes some natural starting point of negotiation, and only evaluates divergence from that natural starting point.
In the landlord case, fair-market value of rent is a natural starting point, and landlords don’t have enough of a superior negotiating position to force rent upwards. (If they did by means of supply scarcity, then that higher point would definitionally be the new FMV.) Ergo, no exploitation.
On the other hand, if the landlord tried to increase the rent on a renewing tenant much more than is typical precisely because they know the tenant has circumstances (e.g.: physical injury) that make moving out much harder than normal, then that would be exploitative per this definition.
Let us assume that the utility of personal wealth is logarithmic, which is intuitive enough: 10k$ matter a lot more to you if you are broke than if your net worth is 1M$.
Then by your definition of exploitation, every transaction where a poor person pays a rich person and enhances their personal wealth in the process is exploitive. The worker surely needs the rent money more than the landlord, so the landlord should cut the rent to the point where he does not make a profit. Likewise the physician providing aid to the poor, or the CEO selling smartphones to the middle class.
Classifying most of capitalism as “exploitive” (per se) is of course not helpful. You can add epicycles to your definition by considering money rather than its subjective utilitarian value, but under that definition all financial transactions would be ‘fair’: the poor person values 1k$ more than his kidney, while the rich person values the kidney more than 1k$, so they trade and everyone is better off (even though we would likely consider this trade exploitative).
More generally, to have a definition of fairness, we need some unit of inter-personal utility. Consider the Ultimatum game. If both participants are of similar wealth and with similar needs and have worked a similar amount for the gains, then a 50:50 split seems fair. But if we don’t have a common frame of utility, perhaps because one of them is a peasant and the other is a feudal king, then objectively determining what is a fair split seems impossible.
A gap in the proposed definition of exploitation is that it assumes some natural starting point of negotiation, and only evaluates divergence from that natural starting point.
In the landlord case, fair-market value of rent is a natural starting point, and landlords don’t have enough of a superior negotiating position to force rent upwards. (If they did by means of supply scarcity, then that higher point would definitionally be the new FMV.) Ergo, no exploitation.
On the other hand, if the landlord tried to increase the rent on a renewing tenant much more than is typical precisely because they know the tenant has circumstances (e.g.: physical injury) that make moving out much harder than normal, then that would be exploitative per this definition.