The Hedgehog Review

The Hedgehog Review: Vol. 19 No. 3 (Fall 2017)

Bosses Rule

Private Government: How Employers Rule Our Lives (and Why We Don’t Talk about It)

Elizabeth Anderson

Princeton, NJ: Princeton University Press, 2017.

The Hedgehog Review

The Hedgehog Review: Fall 2017

(Volume 19 | Issue 3)

Work can go wrong in many ways. Ship breakers in Bangladesh routinely die as they try to dismantle abandoned vessels with acetylene torches. Meat cutters in Iowa suffer repetitive stress injuries during twelve-hour shifts on carcass-filled assembly lines. Truckers can endure a modern-day version of indentured servitude, forced to pay for the very vehicles they use to do their job. Retail bosses pressure sales staff to accept lower pay so their beleaguered brick-and-mortar stores can keep up with Amazon—which maintains its own competitive edge with a workplace culture reminiscent of Glengarry Glen Ross. The upper echelons of other tech workplaces are no Elysian Fields of job satisfaction, either: An avalanche of sexual harassment claims is overwhelming Silicon Valley, and burnout is endemic at struggling startups.

It might seem odd to discuss all these problems together—for example, Amazon developers appear to have little in common with day laborers. But good social theory aims to illuminate unexpected connections. Elizabeth Anderson’s bold Private Government is a firm foundation for twenty-first-century civic education in workplace democracy. Anderson exposes the inevitably political dimensions of work. And she leaves us in no doubt that for employees the workplace is tyrannical, ruled by the whims of exploitative and mercurial bosses.

In legal circles, the term private government is most commonly associated with Robert Lee Hale. “There is government,” he wrote, “whenever one person or group can tell others what they must do and when those others have to obey or suffer a penalty.” His 1952 book Freedom through Law called for “public control of private governing power.” Hale’s work was an inspiration for many regulatory initiatives aimed at taming the worst business practices. However, in the workplace, the US government’s initiatives have been fitful and partial, always vulnerable to sudden reversals by bureaucrats or courts hostile to labor.

The rule of law has, with variable success, tamed the worst abuses of democratic governments. And even where it has manifestly failed, the rule of law as an ideal has given us a language to contest arbitrary and excessive state authority. Anderson’s project is to pave the way for something like the rule of law in the workplace, beginning with a challenge to the dominant economic theories of the firm.

The standard story of the firm is a variation on Albert O. Hirschman’s dichotomy of exit and voice. In the United States, firms may not give workers much say in how they are governed. But the exit option is always available. Hence, as many prominent economists have argued, work cannot be coercive. To Anderson, however, to say “that wherever individuals are free to exit a relationship, authority cannot exist within it…is like saying that Mussolini was not a dictator, because Italians could emigrate.”

Of course, emigrating from a nation-state is very difficult and often impossible for those who most want to do so. Switching jobs is a lot easier. But Anderson’s brash framing helpfully invigorates the debate over power in the workplace, thanks to the complacency on the other side. A high percentage of Americans lives paycheck to paycheck, and quitting a job even in the best of circumstances can mean missing rent, falling behind on credit card payments, or worse. And thanks to another disciplinary mechanism—credit scoring—even small lapses in bill paying can haunt “deadbeats” for years.

As surveillance technology improves, Anderson observes, employers’ demands become more extreme. In invasive “wellness programs,” employers can hire vendors to closely monitor workers’ waist sizes and exercise habits, all in the name of reducing health-care costs. An emerging “happiness industry” now tracks employees’ moods, feelings, and voice levels, both to promote productivity and to ensure maximal emotional engagement with customers and clients. But even greater indignities have been documented in the American workplace. For instance, even the most intimate details of workers’ lives come under scrutiny—their bathroom breaks can be limited, and they can be forced to submit urine for drug testing. Court after court has characterized “consent” to the employment contract as a universal solvent for all manner of norms of decent treatment.

Why do so many judges and economists ignore the actual experience of workers when they evaluate the workplace? Why characterize labor’s frequent desperation as “consent,” and shrink from calling capital’s constraints “coercion”? In one of several responses to Anderson printed along with Private Government, celebrity thought leader Tyler Cowen concludes that “work isn’t so bad after all,” and actually wonders “whether workers might not enjoy ‘too much’ tolerance and freedom in the workplace.” Ignoring all the power dynamics detailed by Anderson, Cowen’s account is textbook “economism” (to use James Y. Kwak’s evocative term for simplistic perspectives from the dismal science). Cowen also worries that while cash wages are taxed, “perks” are not, so employers will be tempted to oversupply the latter at the expense of the former (or, even more troublingly to neoclassical diehards, at the expense of shareholders).

In response, Anderson admonishes Cowen not to “trivialize basic requirements of human dignity and well-being, such as freedom to use the bathroom, as mere ‘perks.’” She also critiques the state’s “very heavy thumb on the scales against worker autonomy, standing, and dignity, through its legal establishment of dictatorship as the default constitution of workplace governance.” The very corporations that libertarians like Cowen are so quick to defend from government regulation are themselves creatures of government, and dependent on a favorable framework of laws to persist and grow.

With inversions like this, Anderson successfully exposes a mystification at the core of corporate power. The corporation has been called a mere “nexus of contracts,” and the employment relationship just one of the many deals it strikes. And perhaps in a Jeffersonian world dominated by small business, we could imagine deals over wages and work conditions struck between parties of roughly equal power. But in a society where about half the business employment is in enterprises with more than 500 employees, Hamiltonian models of consolidation and industrial power give the upper hand in negotiations to capital. Even when it comes to small businesses, the American bourgeois class of small business owners is, by and large, more financially secure than the precariat it tends to employ.

Nor is the future much brighter. The “gig economy” exacerbates workers’ sense of powerlessness, dooming them to a reverse auction in which they are constantly pressured to reduce their wage demands in order to outcompete rivals. It is hard to imagine successful collective action among independent contractors to demand better terms, when eagle-eyed federal agencies are ready to pounce on such efforts as potential violations of antitrust law.

The traditional legal-economic model of employment is a contract legitimated by consent. But why are contracts a good thing? Two justifications are common. The first is essentially narrative and procedural: The contract represents not so much an imposition from above as it does the good-faith bargaining of two parties trying to find a mutually beneficial arrangement. That version of events would hold up in the case of, say, a local hardware store contracting with a builder to deliver lumber each day to a construction site. The parties (or their lawyers) could haggle and request modifications if conditions or their preferences changed. Compare this relationship to the sheaf of “sign away your rights” documents the average employee at a large firm confronts on the first day of work. Do you really dare bargain over the terms of employment? And if a boss deviates from these terms, what are the relative costs and benefits of insisting on your rights? In short, many employment contracts are simply imposed, the way a city might impose ordinances on its residents—but without the forms of democratic control that legitimate how a public government functions.

Another strand of economic thought insists that we accept the unaccountable private government that employment at will creates, because this regime generates more social welfare than other ways of regulating the workplace. While such utilitarianism may be attractive as a bare-bones economic model of regulation as a cost, this generalization withers in the face of empirical evidence. It is by no means clear that the higher per capita GDP prevailing in the United States really indicates a better life for its citizens—especially its workers—than the more nuanced regimes of workplace governance prevailing in much of Europe.

So what do we do about the imbalance of power between bosses and workers, capital and labor? Anderson does not provide an agenda for reform, but that is not her goal with this book. Rather, she helps us model the problem of the workplace in a new way. Consent does not legitimate many employment relationships. Nor can we comfortably assume that the pressure and precariousness suffered by many workers “wash out” in the consumer paradise too many apologists presume they enjoy in their off-hours. Anderson, a scholar of both philosophy and women’s studies, takes us beyond economic models to a political understanding of the workplace—as, all too often, a matryoshka doll of nested tyrannies of capital over a board of directors, board over management, and management over labor.

That’s a valuable contribution because, as Mike Konczal has pointed out, in politics, a successful framing of the problem is critically important. Konczal, who writes on the economy and financial reform, explains in his blog, Rortybomb:

Policy wonks and journalists tend to think in terms of solutions. Who will do what, how?… [And] what are the trade-offs at the margin?… But for most other people, policy is about articulating problems. What has gone wrong and why? What is at the core of the problem, and what is only tangential to it? Can we fix it, ameliorate it, or just live with it?

Our dominant progressive discourse around work gives a somewhat shallow set of answers to those questions in the context of employment. In this framework, many employees are underpaid and overstressed. So giving workers more sick days, increasing overtime pay, and mandating more reliable schedules are on many liberals’ agenda. A far shallower approach is to adopt the Trumpist “race to the bottom”: deregulating the workplace further, to enable the creation of more (if worse) jobs.

Anderson identifies a much deeper set of problems. She believes that work has gone wrong because of deep power differentials between workers, managers, and the capital owners whom managers must satisfy. The core issue, for Anderson, is not overtime pay or days off at the margin—rather, it is how we govern the places where most Americans spend one-third of their adult lives. One cannot finish Private Government without the strong sense that we must bring more elements of democracy to the contemporary workplace—lest its pathological patterns of tyranny and servility further infect the political realm meant to temper them.

Frank Pasquale is a law professor at the University of Maryland, and author of The Black Box Society (Harvard University Press).

Reprinted from The Hedgehog Review 19.3 (Fall 2017). This essay may not be resold, reprinted, or redistributed for compensation of any kind without prior written permission. Please contact The Hedgehog Review for further details.

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Published three times a year by the Institute for Advanced Studies in Culture, The Hedgehog Review offers critical reflections on contemporary culture—how we shape it, and how it shapes us.

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