The Workplace Is a Dictatorship? - ft. Elizabeth Anderson

Capitalisn't

The episode explores the concept of 'private government,' where corporations function as unaccountable dictatorships over employees' lives.

Key takeaways

• Elizabeth Anderson describes modern corporations as 'communist dictatorships' due to their lack of worker accountability.
• The co-determination model in Europe is presented as a way to involve workers in firm management through works councils.

Main topics

• Private Government
• Work Ethic History

Notable quotes

The workplace... its constitution is a dictatorship.

Conclusion

The discussion highlights that true market freedom requires competitio

Transcript preview

Speaker 2 (0:00) Work has to be a kind of drudgery, right? Because it's taking up virtually every moment of your life. You know, you get to rest on Sunday, but only to recharge your batteries, not because leisure has any value at all. Speaker 1 (0:15) I'm Bethany McLean. Did you ever have a moment of doubt about capitalism and whether greed's a good idea? And Speaker 4 (0:22) I'm Luigi Zingales. We have socialism for the very rich, rugged individualism for the poor. Speaker 3 (0:28) And this is Capital Isn't, a podcast about what is working in capitalism. Speaker 4 (0:32) First of all, tell me, is there some society you know that doesn't run on greed? And most importantly, what isn't? We ought to do better by the people that get left behind. I don't think we should have killed the capital system in the process. Speaker 3 (0:45) Anderson calls the modern corporation a communist dictatorship with a small c. It owns the means of production and management can issue orders to workers who have remarkably few constitutional rights against their employer. It's actually quite a reversal from how we've all been taught to think, which is that there's the government and there's the free market. Or to put it differently, what if the supposedly free market governs us more than the government does? Speaker 4 (1:08) She knows that Walmart calls its employees associates. Even Amazon does that. Even Jeff Bezos is supposedly an associate. What about Laura Sanchez? Is she an associate too? Speaker 3 (1:22) Anderson says that that's capitalism's version of calling everybody comrade. And I guess per the Jeff Bezos and Lauren Sanchez point, wasn't it comrade Stalin and comrade Lenin? The language pretends equality where the power structure plainly does not. Speaker 4 (1:38) The economist Tyler Cohen, who has been one of the harshest critics, thinks that the book provides a too bleak a view of the world, that workers can live, firms compete for them, and autonomy, flexibility, and higher wages involve real trade-offs. To paraphrase his words, most people would be happy to trade fewer perks for more pay. Speaker 3 (2:02) Anderson's answer to that is that leaving one private dictatorship for another, assuming you can actually leave the first one given issues like the transferability of health care and monopsony, non-competes, is not exactly freedom. And that maybe the perks don't cost anything and there doesn't have to be a perk for pay trade. And that Cohen's unusually privileged academic workplace may color some of his optimism. Speaker 4 (2:25) Yeah, there is one line in a private government book that I particularly love. And this line is, the fact that Italians could emigrate in the 30s does not make Mussolini not being a dictator, which I thought that was very apropos. I Speaker 3 (2:43) understand why that jumped out at you. Speaker 4 (2:46) But a more recent book, Hijack, how neoliberalists turn the work ethic against workers and how workers can take it back, takes the argument deeper. She says that the word ethic itself was born out of religion, but always had two faces. To steal awards, the word ethics contained the seeds of its own corruption. Speaker 3 (3:08) Let's talk about your first book before we get to hijacked. That book is called Private Government. How employers rule our lives and why we don't talk about it. So how do they rule our lives and why don't we talk about it? The typical Speaker 2 (3:22) form of the workplace in the United States, its constitution is a dictatorship. That's what I worry about. Not that there's authority relations within the firm, but that the relations are unaccountable. to the workers themselves. So unless they're unionized, they really don't have a voice. And really, the workers have no recourse other than quitting, but that doesn't necessarily mean that another job they take will get them in any better situation. There isn't really viable competition among employers with respect to the form of the government. It's dictatorship, you know, wherever you go, for the most part. Speaker 4 (4:05) So the crucial element, if I understand correctly, is really the accountability because there are a lot of power relationships. My wife told me to empty the dishwasher, and if I don't do it, she doesn't cook dinner. So by your definition, she gives me orders and there is a sanction. Is that right? Speaker 2 (4:23) Absolutely, that is correct. Yes. I mean, look, you're in a relationship, right? You have your own sanctioning ability. The workers can't really sanction the employer. Right. He'll just fire them. If your wife had the unilateral ability to expel you from the house and you had no recourse, that would be closer. But you have all kinds of recourse in a marriage relationship. You can have arguments. You can have discussions. You're entitled. Speaker 4 (4:52) So what are your recipes to moderate these abuses of private government? Speaker 2 (4:58) Well, I think, number one, workers need a voice. The model that I advance is most viable. It would take a lot of reforms to make it possible in the United States. Legal reforms is co-determination on the European model. So with co-determination, the government of the firm is jointly operated by workers and shareholders at the board level. Another important feature of co-determination is that the shop floor is also jointly managed. Workers are on works councils. with managers and they work out solutions together. Is Speaker 4 (5:37) it that obvious that there is an alternative or you need to give some authority to somebody? And then, of course, you can make it more accountable. But isn't that a necessary condition that when you have that scale of production? You need somebody to organize it. Oh, Speaker 2 (5:52) absolutely. There's no question that as an organization scales up, you can't run it by participatory democracy. That's true. You need a hierarchy of offices. But it doesn't mean that the people at the top are completely unaccountable. I mean, workers' cooperatives, like in Mondragon, famously, in Spain, the workers have a say in electing the managers. So there's accountability there. If they're really tyrannical bosses, right, they won't get... reelected. Their terms will expire and they'll be kicked out, right? They'll get better bosses. I mean, we run democracies this way, right? You know, the president's accountable to the people ultimately through election and to a certain degree through the courts, although in America, maybe that's been suspended. But, right, there's accountability in a democracy that's consistent with a hierarchy of offices. Speaker 4 (6:44) So I've recently gone to Ireland for the first time, and I was shocked by how much the British are still hated in Ireland. Absolutely. So many years later. And I think that your book Hijacker gave me a good explanation for why that's the case. So can you tell our listeners how horrendous they were and how that is an experiment of how... sort of many versions of austerities are really cruel? Yes. Speaker 2 (7:15) So, yes. So in my book, Hijacked, I talk about the split in the work ethic between a pro-worker version of the work ethic and a conservative version that favored the rich and the property. Before the Industrial Revolution, there was a much narrower gap between property owners and manual workers. So you had that union of manual labor and a proprietary interest in the enterprise. Those two functions were divided in the Industrial Revolution and created a radical difference of interest, where manual workers just became wage workers, lost all voice in the work process, working conditions. And so they become precarious. And then the owners... They might be completely passive, just like the landlords, right? They just own shares and they're getting returns without much effort. But then you also had like the managers, the industrialists of the Industrial Revolution. And they were the carriers of the business version, the conservative version of the work ethic. And they credited themselves with all of the amazing productivity gains. of the factory system, which were immense. Now, I would argue that they're not entitled to all that credit. And it's not as if the workers weren't working hard, but they're hardly rewarded for that. And it's really the combined efforts of everybody in the division of labor within the firm and even outside the firm that accounts for the high productivity and profitability of the factories in the Industrial Revolution. And of course, the same is true today. So by the 19th century, You know, Ireland was producing about 40 % of all the stuff that the English were consuming. The food, the food. They were immensely productive agriculturally. But the typical Irish peasant was living off potatoes. Right, that was it. Like, it's the most boring diet imaginable. But when the potato blight came, that's when you see, I think, the work ethic at its cruelest. They started getting very skeptical. What are these lazy Irish? Why can't they get themselves out of their own problems? They become extremely skimpy with food relief. Famine relief was run out of the British treasury by somebody who's just assumed that the Irish must be lazy, even though before the famine, they were producing massive agricultural surpluses that the English needed to survive. These negative stereotypes about lazy, improvident Irish just completely dominated their imagination. And they thought that providing them with a little bit of gruel for free would make them lazy. Now, of course, if you don't get energy inputs, you cannot exert energy outputs, right? I mean, it makes you less capable of working. I mean, these people are being reduced to skeletons. They have no muscles left, right? You know, you would have the relief workers in Ireland talking about a man who can't lift any weight anymore, can't do manual labor because he's so lacking in energy and about to expire. And a letter would be sent by, you know, a ship over to London from Ireland. And it takes a long time. And then somebody in the British Treasury who has no personal knowledge sees people saying, oh, you're being too generous. We don't believe this. Reject the application for relief for this individual. And the letter slowly comes back. And this person now has lost more weight. And another letter said, no, we really mean it. And so you just had massive, massive starvation. Speaker 3 (11:09) So, Maltus argued that relief for the poor encouraged dependency, improvidence, excessive fertility, while exposure to hunger would force better behavior. How much of modern welfare policy, work requirements, drug tests, endless demonstrations of deservingness is still Maltusian? And why are the poor required to prove virtue before receiving help, while owners and rentiers rarely face an equivalent moral test? We don't ask. billionaires to justify their billions. Totally. Speaker 2 (11:34) I think that's right. So I don't think there's a single new thought in conservative critiques of welfare since Malthus. He told the story and it's just been repeated endlessly. You know, Adam Smith was right here. He said, if you want the workers to work really hard and well and efficiently. Pay them more, right? This is econ 101. You work better with higher wages, not with starvation wages. You know, if you're kept in a state of precarity, why would you even invest in the firm? By Speaker 4 (12:07) the way, it's not just conservatives, because there was the, I think, minister, the Dutch minister of finance, Jasper Boom, at some point said in the Social Democratic, said, oh, we believe in solidarity. But we don't believe in solidarity with Southern Europeans who spend all their money drinking and having sex. So I'm a patron of Malthus and he's a social democrat. So imagine the rest. But actually, I was fascinated by reading your book, Hijack, and noticing how super smart people, because all the people you describe are super smart, they develop a very coherent body of work. all based on some behavioral assumption that are completely untested. Correct. So all the theory is about how the