I thought it would be a nice idea to try and explain this phrase, and by extension explain from where profit is extracted, since both seem like easy concepts which can be understood more easily if simple examples are provided. I do not have a degree on Marxism so I may miss something, but I hope I’m doing my best to help you understand them in a more interesting way.
This phrase, which you will probably heard being spouted by the left faction within the liberals, either on the internet or in the form it has taken as the national bourgeoisie in your country, or also by anarchists and other forms of idealists, makes sense only if analyzed through the lenses of Marxism.
So, then, why do we say ethical production, and by antonomasia, consumption, is impossible within a capitalist society? Are these cruelty free products that you are buying worthless? Well, it all comes down to profit.
To understand how capital accumulation happens, and how wage theft is carried out, we need to understand from where profit is extracted. I will try to provide an easy example, taken out of all the abstraction and complexities of our society so that it will be easier for comprehension.
Let’s say you have a carpenter, they are the owner of their hammer and their saw, with these tools they are charged by some small company in their village to build tables, simple, block shaped tables. They need to buy 1$ worth of nails for every table they produce, and they charge 9$ per hour for the production of such table. The final price they will sell this table, to this merchant person who is owner of this small company, is that of 10$. He will then resell the aforementioned table at a value of 15$ at his company. This 5$ that seem to have appeared out of nowhere is what we Marxist call “Surplus Value”.
Remember this example is astonishingly simplistic, but this is the core reality of what factory workers go through when producing goods, only there are at least a thousand other factors and different levels of exploitation in the process of creating the final product.
This is reason behind ethical consumption is impossible, because the core principles upon which production is based in a capitalist society are those of exploitation, there’s no conceivable labour where wage theft does not occur. It’s not that trying to be vegan, or not hurting animals in the process, or using renewable sources for their materials is pointless. But rather these are all forms that the capitalist superstructure synthesizes into so that it can amass a bigger profit, a grosser capital. These practices should be praised, and are needed, but under a different system, practices such as these will never bring a meaningful change, only Marxist thought and the political and scientific implementation of it in the material world can do so.
This is a good topic to discuss.
I’ll add observation. I’ll try to keep the example simple, but I do want to add a few more details (I’ll still leave out some of the subtleties).
The $5 that the merchant makes when they sell the table for $15 is value created by the carpenter.
So although it seems as though the carpenter added only $9 of value (this is what they got paid for their labour) they in fact added $14 of value to the $1 materials. The table embodies the full $15.
(Even worse, the workers who made the nails, felled, cut, and treated the timber would have been paid significantly less than $9/hour, but their work is equally crucial to the production of simple tables. If the same capitalist owns the nail and timber factories (probably situated in other countries) there’s another detail to consider: some of the surplus value created by the global south workers may be given to the global north carpenter to keep the carpenter happy, quiet, and opposed to increasing the wages of workers in the global south.)
This is what we mean when we say workers in capitalism do not receive the full value of their labour. This is because workers do not sell their labour, but their ‘labour power’.
The surplus value is (very roughly) the difference between the cost of the raw materials, tools, and labour, and the final sale price. (The reality is more nuanced.)
This exploitation was more obvious in the corvée system and in slavery. The serf knew that when they worked on the lord’s land, the lord got the benefit of that labour. The slave knew that everything they produced belonged to the master. The same thing happens to the wage labourer, but they do not know it.
The wage labourer is tricked into thinking that they receive a wage equivalent to the value they create. But if that were true, there would be nothing left for the capitalist because there would be no surplus, no profit.