We express the matroid polytope $P_M$ of a matroid $M$ as a signed Minkowski sum of simplices, and obtain a formula for the volume of $P_M$. This gives a combinatorial expression for the degree of an arbitrary torus orbit closure in the Grassmannian $Gr_{k,n}$. We then derive analogous results for the independent set polytope and the associated flag matroid polytope of $M$. Our proofs are based on a natural extension of Postnikovs theory of generalized permutohedra.
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