Mario Balotelli's transfer to AC Milan highlights the Marxian critique of capitalism.
How can Man City get £19m for a player who is so obviously flawed? The answer's simple. It's because their great wealth means they did not need to sell him, and so could drive a hard bargain. The party in the strongest bargaining position gets most of the surplus from any trade.
As the old saying goes, "money begets money." Wealth - or what amounts to the same thing, cheap and easy access to capital - can be used to get the better end of deals. For example:
- Being cash-rich gives you the chance to profit from fire sales and desperate fund-raisings, as when Warren Buffett lent to Goldmans in 2008.
- Companies that are cash-rich or have a low cost of capital can use this to engage in roll-ups and multiple arbitrage and so profit from taking over businesses even if they do not manage them much better.
- Banks can "hoover up pennies" - make low-profit quasi-arbitrage trades - if their cost of capital is low enough. This is why they are so opposed to Volcker rules and the ending of "too big to fail" subsidies; they raise capital costs and thus render a lot of their activities unprofitable.
- If you have access to easy money, you can profit by lending this at high rates to desperate borrowers, or by selling low-value insurance (pet insurance, extended warranties etc) to the cash-poor.
All this should be trivial. Marxists, however, add to this list the capital-labour relationship. In most cases - top footballers being an exception - physical capital is scarce and labour abundant. And this means capital can extract most of the surplus generated from the trade between capital and labour. Sure, workers are better off working than not. But their poor bargaining position means they are not much so. And this begets exploitation. Exploitation, says John Roemer, is "the distributional consequence of an unjust inequality in the distribution of productive assets and resources."
That word "unjust" is doing some work. Buffett's trade with Goldmans was good for him and bad for them, but we wouldn't really call it exploitative because the inequality that begat it was not unjust.
So, is the inequality between worker and capitalist unjust? You can certainly tell just-so stories in which it isn't. But Marxists take a historical perspective. Marx devoted a large part of Capital vol I to describing "primitive accumulation", the process whereby capital came into the world as a result of theft, slavery and conquest: "capital comes dripping from head to foot, from every pore, with blood and dirt." This is, of course, no mere history: how did Russian oligarchs get rich?
An overlooked difference between Marxists and their opponents is that Marxists think this matters.