Russ Roberts

Elizabeth Anderson on Worker Rights and Private Government

EconTalk Episode with Elizabeth Anderson
Hosted by Russ Roberts
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Private%20Govt.png Philosopher Elizabeth Anderson of the University of Michigan and author of Private Government talks about her book with EconTalk host Russ Roberts. Anderson argues that employers have excessive power over employees that we would never accept from government authority. Topics discussed include the role of competition in potentially mitigating employer control, whether some worker rights should be inviolate, potential measures for empowering employees, and the costs and benefits over time of a relatively unregulated labor market.

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0:33

Intro. [Recording date: February 1, 2018.]

Russ Roberts: Before introducing today's guest, I want to share with you the results of the survey of your favorite episodes of 2017. I want to thank everybody who responded. A little over 2400 people filled out the survey. You come from all over the world. You live in 68 different countries, which is an EconTalk survey record. And I also want to tell you how much I enjoyed your feedback and comments, that were at the end of the survey. They inspire me; they make me want to make EconTalk better; and they touch me. So, I just truly thank you for taking the time to put your thoughts into words there. And, if I have a chance I'll respond in some place to some of the particular comments. Here are your favorite episodes from 2017, in reverse order. These are the episodes that were mentioned in people's top 5 most frequently.

And here are the top 5, now: and the Number 1 episode listed by 22% of you as a top 5 episode: And the last thing I want to say about the survey of today is that a number of people complain or observe--some people get angry about this--that when I list the episodes on the poll on the survey about this, they are in chronological order. I think that's helpful to help people think about when they occurred and what they thought about them. But it's a little bit unfair to the ones that fall earlier in the year. I will point out that the Sam Quinones episode, which was Number 1, did fall early in 2017. But of course that proves nothing. There still could be a bias. But I also want to point out there's biases against the episodes that are later in the year. They don't get as many listeners. Some people don't get around to them as much in time for the survey. So, it's not science, folks. It's not supposed to be. It's just a survey. But it's okay. It's just a way to give you a chance to tell me which episodes you liked and didn't care for so much. Again, I appreciate it; but I do want to respond to that somewhat-common complaint.

3:31

Russ Roberts: And now for today's guest. My guest today is philosopher and author Elizabeth Anderson.... Her latest book, Private Government, is the subject of today's episode....

Russ Roberts: Your book--and it's quite short; you might even call it a monograph, though it includes some responses from a diverse group of people in different disciplines, and then your response in turn--your book makes a seemingly crazy--it's a pretty outrageous claim when I first heard about it. But I actually found it quite provocative. And I encourage listeners who might think, 'Whaat?' to actually open your mind and consider the possibility that Elizabeth's onto something here. And, what you write about is the freedom available to modern workers in private corporations, private workplaces. And I want to start with a quote:

American public discourse is also mostly silent about the regulations employers impose on their workers. We have the language of fairness and distributive justice to talk about low wages and inadequate benefits. We know how to talk about the Fight for $15, whatever side of this issue we are on. But we don't have good ways to talk about the way bosses rule workers' lives.
Now, that's a very strong claim about--not that we don't have the language, but that bosses rule workers' lives. And later on you talk about the boss as a dictator. In fact, you call the boss in a modern workplace a communist dictator. So, I want you to start by trying to flesh out that descriptive claim.

Elizabeth Anderson: Right. So, first of all, let's just observe that any complex organization in order to fulfill its objectives needs some kind of internal governance structure. And, once we scale up, that inevitably involves a hierarchy of offices. So, we're going to have an internal governance structure. It's a little government. And then the question we can ask is: What is the constitution of that government? And the default constitution of the American workplace is a dictatorship. It's top down. The Chief Executive Officer, the Managers--they are not elected by the people who are governed within that organization. The people who are governed are the workers. They are the ones who have to take orders from their bosses. So, we have a dictatorship. And then the question is why do I call it a "communist dictatorship?" You are absolutely right--I'm being deliberately provocative here. It's because if you have a system of government in which the government owns the means of production, that's Communism. Heh, heh, heh. So, right? The corporation that owns the means of production, it's an internal government unto itself, with the form of a dictatorship. So that's why I'm calling bosses communistic dictators. Small-c communists. Not that they're members of the Communist Party. That would be big-C Communists.

Russ Roberts: And it's an accurate description in a certain dimension. I'm going to challenge some parts of it. But I think it's important to make the observation, which we've made many times on the program before, and I think some people on the libertarian side of things struggle to accept this: But, a corporation, a company, any time of workplace with multiple employees, is--it's a command-and-control environment. It's top down, as you say. This observation is made often by Coase in his classic work on "The Nature of the Firm," going back to 1938. It's essentially embedded in Hayek's work, because Hayek will say, people will say complaining to Hayek, 'Well, you're against planning.' And he says, 'No, I'm not against planning.' It's a question, as John Papola and I talked about in our rap videos: Who plans for whom? Who does the planning? And then, in a true Communist or Socialist state, the planning, the top-down planning, comes from a centralized set of government officials. But in a corporation or a company, it comes from the bosses--the CEO (Chief Executive Officer) or then others within that hierarchy--who boss people around--and this is the key point, or one of the key points--they boss them around without prices. It's not a market inside a firm. So, there's planning inside--there's islands of planning; and you and I plan all the time, for our lives. So, emergent order, which is a favorite topic here, it's not that, 'Oh, we just leave things alone; everything turns out great.' That's never been the claim. The claim is you leave things alone from a certain level of top down--that is, from the government--and you let these private enterprises plan accordingly to figure out what's best for each individual and for each organization; and the competition among them is what leads to outcomes that we who are in favor of free markets find attractive. So, what's wrong with that? So, I accept your nomenclature: it's a bit provocative but I think it's accurate, more or less. 'Dictatorship' is a bit strong; we'll talk about that. But what's wrong with this? So, there's top down, within certain parts of the economy.

Elizabeth Anderson: Right. And so, I want to stress that my objection is not the fact that the internal government of the workplace involves some hierarchical structure. I think once you scale up, there's no other way to enable a large organization to coordinate. So, there are going to have to be authority relations within the firm. What I object to is what I call private government, and by private I don't mean it's part of the private sector. What I mean is the bosses exercise nearly unaccountable power over those they govern. And my objection is basically that it leaves workers vulnerable to all kinds of abuse. So, one of the examples that I cite, although it's far from the only one, is the fact that workers in the poultry industry aren't even allowed to have bathroom breaks. They are told they've got to show up wearing diapers. They are mocked; if they don't have diapers they are urinating on themselves. It is just an appalling humiliation and abuse. Workers should at least be entitled to go to the bathroom. But we have many other cases. Ninety percent of restaurant workers suffer sexual harassment. Just, mountains of abuse. And the abuse exists because bosses have unaccountable power, and that's what I call private government.

10:53

Russ Roberts: Well, that 90% seems a little high to me, but you could argue it doesn't matter: if it's 10%, or 20%, or 30% it's still horrible. And of course we have laws against certain types of abuse by bosses. Obviously a boss who strikes a worker can go to jail for assault or other things. What I found most interesting, though, is the range of stuff that bosses can dictate to workers that are totally legal.

Elizabeth Anderson: Quite right. Yeah.

Russ Roberts: one example being lack of bathroom breaks. Again, I don't know how common that is, but even if it's just once, it's still pretty appalling. What else have you got for me?

Elizabeth Anderson: Well, we could take a look at white collar workers who are quite commonly pressured by their bosses to contribute money to favored political campaigns or political action committees. My own husband, who works actually at a non-profit health care organization has been pressured to contribute to their political action committee. And it's one of those things where--he resents that; he doesn't particularly care to advocate for what his employer's political causes are, especially since most health care organizations' primary interest is raking in more money and hiking prices; and he doesn't actually believe in that. But, you know, his donations are monitored by his boss. And he's resisted that. But a lot of workers may well think twice about whether they're really free to do that, especially if questions of promotion up the hierarchy of the firm are on the line.

Russ Roberts: You also point out the employer often has the ability to dictate what you do when you are not at work.

Elizabeth Anderson: Quite right. And this, I think, is even more objectionable. Normally we think that once you are off duty, you should be free from any kind of control or regulation by your boss. But, in the United States the default rule of employment is employment at will. And that entails that your boss can fire you for any or no reason at all, including things that the boss finds out about your off-duty activity. For instance, if one has a gay partner, in many states one isn't protected against discrimination on account of sexual orientation. Stuff that you might post on Facebook expressing perhaps controversial opinions can get one fired even if the Facebook posting isn't addressed to fellow workers or harassing them in any way, but just expressing an opinion that the boss disagrees with. Recreational use of drugs and alcohol over the weekend--seems to me none of the boss's business, what you are doing. Of course, you can be reasonably expected to show up sober on Monday. But, you know, recreational activities over the weekend, I don't think should be subject to the boss's control. But, in reality, people are fired for what they do over the weekend, and in their leisure time.

Russ Roberts: And what's the--I can do it, but I'd like to hear you try and do it--what would be the standard libertarian response to these kind of concerns? Why do people like me tend not to worry about this until we read your book?

Elizabeth Anderson: Because there's always the exit option.

Russ Roberts: Correct.

Elizabeth Anderson: There's a formal symmetry between the right of the boss to fire you for any or no reason and the right of the worker to quit for any or no reason.

Russ Roberts: One of the things I liked about your book, Elizabeth, is that you did a very fair job talking about the people who don't agree with you, which is rare. Which I appreciate. You didn't straw man or take cheap shots or [?] at the arguments of, say, Adam Smith that we're going to get to in a minute. I thought you did a very nice job. But that would have been my response if somebody had mentioned this stuff, and I'd say, 'This is silly. You can always quit and go work somewhere else.' So what's wrong with that argument?

Elizabeth Anderson: Well, one of the difficulties is that for the vast majority of workers, their only other options are to get employment with another dictator. So, I point out that libertarians wouldn't be so happy if workers and citizens behind the Iron Curtain could have freely migrated to any other Communist country. That's not a really great set of options, and I don't think it would have made them free just if they could have moved from Hungary to Czechoslovakia before the fall of the Eastern Bloc. And I don't think we should be happy with the set of options that workers face today in the United States.

Russ Roberts: Of course, one different option instead of working for another dictator is working for yourself. And there's a lot of good humor on the web making fun of the fact that you replace a monstrous boss when you work for an employer and then you become self-employed and you work for a different monstrous boss--who pushes you, drives you, makes you work 20 hours a day: it's yourself. And being self-employed is not a bed of roses, either. So, but what do you think of that option, though--self-employment?

Elizabeth Anderson: Well, I think for some people it is really great. And indeed, what I argue in my book is that historically, that was the libertarian dream: everybody be their own boss and then it's up to them how hard they are going to work. They reap all the fruits of their labor. They are totally free from other people's authority. That was the original libertarian dream. It is true that some self-employed people tend to be very hard, self-driving people. But I think there's a lot to be said for autonomy.

Russ Roberts: I agree.

Elizabeth Anderson: I, myself, tend toward the workaholic. I'm very highly motivated by work, and so I drive myself pretty high. And, in a way, as a tenured professor, it's pretty much up to me how hard I work.

Russ Roberts: Shhhh. Don't tell anybody. We recently had Bryan Caplan on; he's already pulled the curtain back. So, all our listeners know about this. Go ahead.

Elizabeth Anderson: Yeah. I mean, in reality, one of the things that tenure is selecting for is very hard, self-driving people. But, I feel a lot better that I'm choosing this for myself than if somebody was dictating to me that I had to work this hard.

18:25

Russ Roberts: I think it's more--when you think about my argument on these issues or the way I would generally frame it, it's not so much that you have the choices to work for a different dictator. It's that the fact that there are different choices usually mitigates the level at which a dictator will take advantage of the power they have available to them, because they don't have a monopoly. If you go to Silicon Valley and you spend any time at all at, say, Facebook or Google, as I have, wandering around meeting folks now and then, it looks more like a summer camp than it does a Communist dictatorship. It's a very pleasant place to work, more or less. There are unpleasant things; we've talked about some of the challenges that maybe Google has with political diversity or ideological diversity, and there's a little bit of groupthink. And other things going on there. But, on many, many dimensions, it's an enormous improvement. Now, not every company in America looks like that. Not every worker is able to find a job at such a place where there's all the free food and other delights--ping pong tables, the huge things that matter in America that are scattered around those kind of places. But, the argument would be that yes, the boss has that potential; but the boss pays a price. And, a firm that abuses its workers is going to struggle to attract workers. Now, I always found that to be a pretty compelling argument, or at least empirical argument. What your book forces me to do is consider the possibility that the fact that it's maybe rare is not sufficient to reject your argument of abuse. The fact that these abuses do take place does raise a flag for me that even though competition may reduce them, it's still an issue to take seriously. But, how do you feel about that--just on the empirical side and the relative costs and benefits? Do you think competition is sometimes at least an effective protector of the worker?

Elizabeth Anderson: I think competition is helpful for highly skilled workers in whom the corporation ends up having to invest a lot to get the most out of them. Then it's a big cost for them if a worker quits in disgust about the climate in which they have to work. For lots of other workers, especially low paid, unskilled workers, it's not at all clear that the exit option puts sufficient pressure on employers to make conditions decent. So we do observe quite a lot of employers who tolerate extraordinarily high turnover rates, because if they're unskilled, it's not that costly just to hire new people. For instance, Amazon warehouse workers, there's enormous churn probably because the job has high accident rates and it's totally exhausting. Few people can actually bear up under the physical stresses for all that long. And, Amazon seems to be really content to tolerate extraordinarily high turnover rates without improving the conditions at work. I would also point out that competition depends a lot both on where we are in the business cycle--so, now we're in a favorable condition with very low unemployment. But, we've had--the last two recessions, we've had extraordinarily protracted periods of high unemployment. And there, the exit option isn't really much of a threat to employers, and it's really difficult for workers to quit in a high unemployment environment. And finally, we should also pay attention to the fact that the extent of competition for workers is geographically extremely uneven. So, recent research has found that especially in rural areas and small towns as well, the number of employers who are competing for people in a particular occupation might only be one or two or three; and under those cases, it's very easy--you have essentially monopsony conditions arising. And that may be a cause of why even in an economic boom that's lasted for many quarters, wages haven't increased and conditions of work would naturally also not improve under monopsony.

Russ Roberts: I don't know how common that is. I'm a little bit skeptical about that. And I think it's a little more complicated in general. I often think about my cleaning crew--I have people who come to clean my house once a week. I'm fortunate enough to be able to afford a cleaning crew. We pay them $100, roughly $100 for the hour or so that they're here. It's usually three or four people, so they make roughly $25 an hour at a job that is somewhat unpleasant. But they have very little education; they don't speak English particularly well, some hardly at all. The head of the crew--now, I'm not sure what she pays them, so I'm not sure it's split evenly; I'm sure she takes a little bit more; it's her car that drives them around, and I suspect she provides the vacuum cleaner and other tools that they use. But that's kind of a shocking thing, that they make $25 an hour, on average at least--which is 2 and a half times or so--I don't know what the exact Maryland minimum wage is, but it's well above it; it's certainly well above the Federal minimum wage. And the answer--the question is why do I do that? Why do I pay them so much money? And the answer of course is, if I don't, they won't come. They'll go to somebody else's house. Now, there's a lot of competition, in that sense, that there's a lot of houses that want to be cleaned in my neighborhood, where people are busy and would rather pay for cleaning than do it themselves. But it's kind of striking to me that, at least in that case, competition does protect at least on the monetary dimension. There are also--of course, they are not my employees. They are self-employed. So, maybe that makes a difference, too.

Elizabeth Anderson: Sometimes self-employment helps. I think--I would be very skeptical if the workers under the supervisor are making anything close to $25 an hour. Of course, it might depend on where you live, too. In urban areas workers' wages tend to be higher.

Russ Roberts: Yes, they do.

Elizabeth Anderson: But I'd also like to point out that there's been an increase in various kinds of precarious employment, temporary employment; and so, in many cases, there might only be one temp agency, and with a scarcity of full-time or permanent employment. So, I should note, for instance, that in the recovery from the recent recession, most of the jobs that have been created have been temporary. So, people are hired out by a temp agency. And those workers, a huge chunk of their wages are taken by the temp agency, and they're living under very precarious conditions and it severely weakens any kind of bargaining power they have--power to resist whatever abuses they face when they are appointed to work for a particular firm.

26:21

Russ Roberts: Yeah, the temp agency thing is extremely interesting to me. I know it's not well understood by most economists; certainly not well understood by me. And I've looked at it a little bit. I know--and those out there who are listening who are econ grad students, I encourage you to think about this as a dissertation topic. It's true what you said--those agencies take a large chunk of the worker's salary. They also charge an enormous amount. And it raises the puzzle as to why employers are willing to pay such a premium to hire workers through that agency. And it has, I think, to do with the regulatory environment, the legal environment. But I don't think--I haven't seen anybody look at it very carefully. And it's also--calling them temp agencies--in some settings, I'm sure that's accurate, but in many other settings--I know people who run factories who deal with this--they're not really temporary. They just work through the agency. They actually work for years and years in this strange relationship where the employment is paying a premium over and above what they would pay if they hired them directly. And, unfortunately, tragically, I think it's an issue of insulating the employer from legal issues related to--illegal immigration, sometimes. Could be to threats of lawsuits of other kinds. So, companies are paying an enormous premium right now. And that does hurt workers, but it's not as--it's a little bit misleading to say that they take a large share. It's true that they take a large share; but it's a large share of a very large number; and what the worker is left with is still enough to get them to be willing to work there. The puzzle is why workers don't contract themselves out more directly at times, and why employers don't. Why this middleman of the agency is an economically viable institution in today's world is a very interesting question, and I'd like to see--maybe somebody's worked on it that I don't know about. So, if anybody out there knows, I'd really like to see it. But when you say there's only one or two agencies--so, start one. You are suggesting there's a profit opportunity. Why wouldn't you expect someone to come along and do a better job?

Elizabeth Anderson: Well, the workers themselves [?] don't have either the management skills or the credit to borrow money to start their own. And the people who do are mainly interested in taking the biggest cut they can from the workers they employ. So, I don't think you can count on competition here really helping the workers very much.

Russ Roberts: You are suggesting that you could make--you, not a worker starting their own firm--you, Elizabeth Anderson starting your own firm. You could make a lot of money. You could start a firm that pays the workers 20% more maybe, 10% more, a decent amount more; and you'd get a bunch of them, and you'd still be able to make a lot of money if you could sell those workers' time to employers.

Elizabeth Anderson: Right. And so, the question is whether there's that much room--what is the advantage to the new temp agency in offering higher wages. It's not clear to me what the advantage is to them.

Russ Roberts: You'd make money. That would be the claim.

Elizabeth Anderson: But you'd make less money.

Russ Roberts: Well, you'd make less money than the existing firms, but you are claiming the existing firms are exploiting the current workers. So, there'd still be, in theory room for a new agency or a new employer to come along--it's always the issue here in these kind of competitive situations, right? If Amazon treats its workers badly, people with low skills in theory should be able to find a workplace where they are not abused. What you are suggesting is that they are all being abused. Or that it's frequent. Or that it's common, because of the lack of skills that these workers have and the market power that these employers have over them. And, I disagree with you about the frequency of it; but I don't disagree about the existence of it. And I want to come back to the point I made earlier, which is: You could argue that the existence alone is sufficient. And let me make the argument against me as strongly as I can. If someone says to me, 'We need to require seatbelts because seatbelts save lives,' I always say, 'Yeah, but it treats people like children.' And I don't do any kind of cost-benefit analysis when I think about liberty. I'm a classical liberal or a libertarian and I think people should be responsible for their own lives. Yes, there's an issue about externalities and being able to control the car if you're not wearing a seatbelt and hurting someone else. Put that to the side. Just this issue of--just take the nanny state claim. I don't like the nanny state, and the fact that the nanny state might save lives by banning trans fats, and taking into account that trans fats might be good for you, even. I have no idea. But the fact that the nanny state makes mistakes--even if it didn't make mistakes, it would bother me, because I don't like the idea of being infantilized by the power of the government. And the point you are making which I think is very powerful is that: If I accept that point in the case of public government--what we would call, normally, public government, why do I accept it in the case of private government? Why do we do a cost benefit analysis there, when it comes down to freedom? And I think that's a very compelling point.

Elizabeth Anderson: Yes. Exactly. But I also want to make the additional point that the constitution of workplace government is itself a creature of state regulation. It's the state that creates the infrastructure of employment law. And it's already handed all the authority cards over to management. And so, in that context, management doesn't really have any incentive, or rarely has an incentive to deal any of those authority cards back to workers. And that's one of the reasons why workers have so little liberty, on the job and even in many cases off the job.

Russ Roberts: I don't know. One of the challenges of your worldview, at least some pieces of it, is it seems hard for it to explain the enormous transformation of the workplace over the last hundred years. I would argue it has very little to do with government regulation. It has to do with market forces that have raised the standard of living, raised wages, reduced the work week, gotten rid of many of the abuses. I mean, the fact that so many people, more than ever today, can take, effectively, leisure on the job if they want--it's true that in some cases they can't, but in so many more they can--suggests that the overall situation is not as bleak as your argument.

Elizabeth Anderson: Well, in some respects it is the case that conditions of work are a lot better than they were even 50 years ago. I would credit automation for a lot of that, especially, you know, in manufacturing jobs. It's a lot less injury-producing--

Russ Roberts: safer--

Elizabeth Anderson: It's a lot less polluting. It's way safer. And, you can go right outside of Detroit to the River Rouge automotive assembly plant. They have tours. It's amazing how much better working conditions are for workers assembling these trucks than they were back, you know, during the era of mass industrial employment. So, I agree with you that there have been some genuine gains. But there have also been some degrees of deterioration because of the decline of permanent, full-time employment. There's an increasing percentage of workers who are part of the Precariate, who really are not sure what they are going to be doing--some on tents[?]. It's a lot less stable, especially for younger workers, who are now, you know, jumping from one job to the next because nothing really lasts or builds into a career. And those people are especially vulnerable.

Russ Roberts: Do you want to say something about the gig economy? And Uber, Lyft, etc., where on the surface at least--and I feel this way; I suspect you don't--but it seems to me that that allows a lot more autonomy for people. And they really appreciate it.

Elizabeth Anderson: Well, it is true that Uber drivers have a great advantage in that they can set their own hours. And that does enable a lot of autonomy. The downside is that a lot of these workers don't have secure enough employment to plan ahead, do long-term projects like buying a house. There's a lot more insecurity. And, of course, if you actually take a look at the business plans of Uber and Lyft, they've been losing money like crazy. It's not clear that they have a real idea about how to turn a profit.

Russ Roberts: Yeah, it's not clear it's viable. I agree.

35:54

Russ Roberts: Let's step back for a minute. I really enjoyed the first part of the book where you talked about the Levellers and the egalitarian strain in 17th century thinking, which I knew nothing about. So, talk about who the Levellers were. And, we'll come back full circle, we'll get to modern times. But the sort of vision that people had about personal liberation flourishing and autonomy. You tell that story very well. So, give us that background.

Elizabeth Anderson: Yes. So, the Levellers were a bunch of revolutionaries in 17th century England, during the English Civil War. And they were pretty much--we would call it today the Left side of the spectrum, although of course the Left-to-Right spectrum wasn't really invented until the French Revolution about a century later. The Levellers, what I find interesting about them, was that they were, as the name implies, very strong egalitarians. And they were also very strong advocates of free markets. And that's what really struck me. Because today we're used to thinking that egalitarians are against the market. But, in fact, through the entire 17th and 18th century, and in the United States deep into the 19th century, egalitarianism and free market thinking went entirely hand in hand. So, the Levellers really kicked it off. Many of the Levellers were small craftsmen. And they were opposed to subjection to the monopoly guilds. They wanted to run their shops as they saw fit, and be able to trade freely without the regulation of the monopoly guilds. And so, they made constant petitions to Parliament to abolish monopoly. Because monopolies were of course a state creation. A state would hand over a monopoly to a guild, and the guild--all the shots were called by the large craftsmen, and they regulated what the small craftsmen were able to do: the days of trading, the kinds of goods they would put on the market, where they were allowed to trade. Very powerful arguments were made by the Levellers that this repression of free trade was created stagnant--it stagnated the economy; you'd have much greater economic growth if you just allowed free competition to arise. And they also argued, quite plausibly for their day, that the rise of open and free competition would multiply opportunities for ordinary workers to become self-employed, and get out from underneath an oppressive boss, and enable them to set up shops for themselves. I think it was a very compelling argument in its time, and highly persuasive.

Russ Roberts: And then, how does that--how did Adam Smith's vision fit in with that? About a century later?

Elizabeth Anderson: Yes. About a century later, Smith is advancing that argument I think with very powerful reasoning for its day. Smith also argued that free markets would liberate workers. But, you really had to be serious about freedom across the board. So, that required abolition of monopolies of all sorts. He was especially concerned about the monopoly in land, in England. Only a couple hundred families owned virtually all the land in England. It was locked up in these dynasties and the laws of inheritance for bad: the great estates were being broken off and sold off in pieces. So, yeoman farmers were pretty much shut out of the market in land. Smith argued that the great, aristocratic landlords were very inefficient at farming. The most efficient worker would be the one who is self-employed. The yeoman farmer. He had the greatest interest in proving productivity because he got to keep 100% of the fruits of his labor. A tenant farmer didn't have nearly that incentive to improve productive techniques, because he would only get to keep part of the portion of his labor, of the value that he adds. And so, Smith argued that the most efficient system, the most productive system, would be one in which the estates could be freely sold off, in bits, to yeomen farmers. And then you would have a boom in agricultural productivity. But even more important from Smith's point of view, you would have a boom in self-employment. And that would dramatically improve the freedom of workers. Smith thought the same about abolishing the monopoly guilds, abolishing apprenticeship and other forms of involuntary labor. This is all Smith's free market vision, was overwhelmingly designed to support the freedom and advancement, material advancement, of ordinary workers. So, we should be really be reading Smith as a friend to the ordinary worker. And arguing that freedom and equality as ideals are compatible, in a free market system.

41:44

Russ Roberts: And as you point out--I thought this was a great observation--Adam Smith's pin factory isn't really much about factory. It's really an artisanal pin, to some extent. It's a group of skilled people working together, but without the kind of capital and infrastructure that describes a modern industrial manufacturing plant. And, as you point out--and I'll let you continue your story--the Industrial Revolution comes along, which changes the size, the efficient and effective size, of firms. And that changes everything, in your vision.

Elizabeth Anderson: Yes. Exactly. So, if you read Smith carefully, what you find is the crux of his argument is that incentive effects swamp economies of scale. He basically thought economies of scale were negligible, except for a very few types of enterprise--canals, for instance, are really large. They take huge infusions of capital. But there weren't many things like that, he thought. So, what's important to keep in mind is that even though historians conventionally date the beginning of the Industrial Revolution a little bit before Smith wrote the Wealth of Nations in 1776, in reality, nothing like the 19th century factory system was predictable in 1776. The shops, the manufacturing enterprises, were very small. And if you have, like, Smith's pin factory, only 10 people working at it, you could easily see that in such a small enterprise there could be a lot of camaraderie between the owner of the shop and the employees, each of whom had a reasonable expectation that with further experience they might be able to set up an enterprise of their own. One of the key pieces of evidence that I think is quite telling for this era, which was equally true of the United States, was how common drinking was. Between bosses and workers. It showed that they were having fun together. They were much more on an equal plane than what happened with the rise of the factory system. So, what happened with the Industrial Revolution is, a set of technologies was invented that massively increased economies of scale, to a degree that was completely incomprehensible in the late 18th century. And, once you have, once you scale up the size of the enterprise--again, I think it's just fundamental scale and hierarchy pretty much go hand in hand. It's almost impossible to manage a large-scale enterprise without a hierarchy of offices. And it's that distance between managers and workers through layers of the hierarchy that opens them up to greater forms of abuse than when their boss worked under identical conditions to they themselves as in the traditional artisanal mode, when, you know, a master craftsman did exactly the same kind of labor as his journeyman.

Russ Roberts: It's extremely interesting. I think about my father's father, my grandfather, who was a peddler, and who I would say temperamentally not very well suited for employment and working for somebody else. And as a result, had a pretty hard life, financial. Did okay. You know. But a lot of ups and downs; and some very tough times. And never any particularly great times for his financial wellbeing. And, so, I don't want to romanticize self-employment. And I don't want to understate the hardships of a Manchester, England factory worker in 1850, because I don't think they were very pleasant. Of course, nothing was very pleasant back then. Or, a few people had pleasant lives, but not so many. And, when I step back and put your history in perspective, I'm struck by the fact that that all changed mostly through forces not related to people like you and me--philosophers and policy analysts--but more just through the natural forces of competition and human innovation. And so those technologies that made the firms bigger, that allowed a lot of workers to be treated in a somewhat brutish way by authoritarian bosses and hierarchies, that's what gave us the wealth that lets us have, so many people have today. Not everybody, but so many. And so, I'd ask you as a philosopher, as an ethicist: Was that a good deal? Should we not encourage that over the generations? Or should we pay a price, and intervene in that system in ways that would slow it down but would lead perhaps to more dignity in the short run?

Elizabeth Anderson: So, I think if we look at the history of the Industrial Revolution, it is true that the great benefit it brought was spectacularly increased productivity. Just immense. Mind-blowing, compared to previous centuries. But I wouldn't credit technological improvement alone for the improvement in ordinary workers' lives. I would argue that the rise of the Labor Movement and the democratization of the advanced countries, the economically advanced countries, were also critical factors in making sure that the fruits of that higher productivity were widely distributed to the workers. So, that was, I think, an essential part of the story of the second half of the 19th century. And all the way through the post-War era. The strength of the Labor Movement was very, very important in ensuring both the dignity of workers within the firm and their access to the fruits of this enormous technological improvement. And what we see is, you know, in just the broad history of capitalism, is there's an inflection point in the mid-1970s. And, what you see around that time is worker productivity, labor productivity continues to increase, but workers are no longer seeing advances in their wages that track rises in productivity. Whereas, for the post-War era right around to the mid-1970s, workers' wages were increasing pretty much exactly in line with increases in productivity. Workers really haven't done well in the past few decades, notwithstanding spectacular technological advances, because most of the economic growth has been absorbed, maybe, by the top 10%.

Russ Roberts: Yeah. I just think that's just totally wrong. But it's what they believed, and we're not going to debate it here other than to point out that we don't measure productivity particularly well in the era of computers. We don't measure prices very accurately when there's enormous, rapid quality improvement. So I would argue that our measures of the standard of living are grossly inaccurate; and to just make a crude argument, since we're not going to get into the weeds here: I don't think the average American would want to live in 1970. Or 1973, which is sort of that inflection point. So, I think that's a bit of a--that's a long, 'nother story. Interested listeners, all my listeners know, this is one of my favorite issues; and I'm creating a series online called "The Numbers Game." You can go to policyed.org and look at the first two videos produced that start to look at these issues in more depth. So, I encourage people to do that. But, I do think there are people being left behind these days. And I just don't think it's the bottom 90%. I think it's the people with the least skills who are least able to be part of the modern economy. And I think they do have a very hard time. I think they have a tough time in the workplace. I think the places that are, the options that are available to them are much bleaker than they used to be. And certainly bleaker than what you and I are able to enjoy. We're working; and I don't--that part I don't deny.

50:58

Russ Roberts: Talk a little bit about--and you can react to that, if you want.

Elizabeth Anderson: So, it just seems to me that the income data show that the vast majority of increases in income have been reaped by pretty small slice at the top. So, yeah, you could argue that maybe objective standards of living have improved because now everybody's got cell phones and so forth. I worry more about the difficulties that workers have in, say, getting access to health care. To a certain degree health care reform has helped them. But, a lot of those workers are actually priced out of the market even today, because we don't have Universal Health Care. It's education, access to higher education is increasing in cost. There are some real basic things here where I think people are having a harder time getting access to. Not to mention housing prices in the areas of major job growth. And, here's a point at which you and I would probably agree. I think that intensity of zoning regulations that forbid free development of cheaper housing for ordinary people is a major cause of outrageously inflated housing costs in the major metropolitan areas where we are seeing the largest growth in really good jobs. And that is severely constraining opportunities for ordinary workers.

Russ Roberts: Yeah, we do agree on that. I would just make the point on the areas of housing, health, and education, that most of the problems with affordability come from government subsidizing access to the system. So, it's a little bit like the Yogi Berra line: It's so expensive, 'It's so crowded nobody goes there any more.' It's true that the prices have been driven up, but that's often because more and more people have access to it. Now, in the case of education it's often through subsidized loans, which is a really messed up way to do it, I think, unfortunately: If you don't finish college, in particular, it's a brutal system.

Elizabeth Anderson: Oh, I agree. It's awful. Yeah.

Russ Roberts: We probably agree on some of that, too.

53:28

Russ Roberts: Before we close, I'm going to ask you for some suggestions. But, I do want to mention that Nassim Taleb in a recent episode--I think it was last summer--did talk about how employees are more like slaves than, say, contracted workers. So, for listeners who are struggling to opening their mind to Elizabeth's arguments, he does make the point that, to keep your job is really a thing that workers long for. And they will do some things that are not so pleasant. They will give up that weekend to work overtime because the boss wants them to, and so on. So, even for white collar workers, there is a level of slavery there. And the question is: One way to think about it is, 'Is it worth it?' And, I think a lot of workers would say it is. But I like your point, which is, 'But that's just not necessarily the right criterion for deciding whether some of these practices should be legal or become conventional.' So, let's turn to things you'd like to see done to make the world a better place in this dimension.

Elizabeth Anderson: Yeah. So, I think it would be worth Americans to look overseas to the German model. Germany has incredibly high productivity, very flourishing manufacturing sector. And they also have a system of governance known as co-determination in which workers elect representatives to management. And that gives them a voice in how their workdays are regulated on the shop floor; it gives them a measure of dignity as well as a pathway into being able to exercise the skills of management. I don't think anybody looking over at the condition of the ordinary German worker would think that they are losing out very much in standard of living. They have a really great life. And that suggests to me that we don't have to sacrifice technological improvement and productivity gains if we give a voice to workers in the workplace. I think we can have our cake and eat it, too.

Russ Roberts: So, why don't we see more--if that's true, why don't we see more worker cooperatives here in the United States? Why wouldn't, again, a firm that wants to attract good workers create that type of relationship with their workers?

Elizabeth Anderson: Well, as it happens, Germany-style co-determination is actually against the law. And the reason for this is that technically speaking, under American labor law co-determination is considered the same as a company union, where the boss effectively regulates the union. And those things are illegal. I think we should modify labor law to permit such arrangements--not company unions, but co-determination on the German model.

Russ Roberts: What else would you like to see?

Elizabeth Anderson: I would like to see changes in labor union law, as well. I think it's important for workers to have access to modes of organization that aren't necessarily sited in an individual shop floor. In the days of mass employment, mass manufacturing employment, it was easy to organize workers on a very large scale. But, those kinds of systems of employment have really declined lately. And that's made organization much more difficult. So, I would like to see, for instance, access to unionization on the part of temp workers. I'm not sure exactly how that would work. But I do think it's time to rethink the classic union model as it's developed in the United States.

Russ Roberts: Do you think we should change the ability of employers to fire at will?

Elizabeth Anderson: I think some constraints on the ability to fire at will would be merited. One way to deal with that is if you did have worker voices within the firm, they could still handle this internally without the need for litigation. Of course, litigation expenses if you actually take it to a court are very, very expensive. But there are other ways to modify the internal governance of the firm so they can handle this internally, which is usually cheaper than going to the courts. I'd rather see something like that--more autonomy for workers in the internal governance of the firm than handing everything over to a complex system of state regulation that would be enforced either by a government agency or by the courts.

59:06

Russ Roberts: So, one of the--let's close with a bit of a conundrum, which is that as sympathetic as I am to many of your arguments about freedom, the economist in me tends to look at the incentive effects and the costs and whether that's going to ultimately make most people better off. I'm not a utilitarian, though. So, it's an interesting challenge for me. But I'm thinking about the following. So, let's say we changed the ability of firms to fire at will on the basis of, say, drug use, on the basis of political expression. Maybe on the basis of suspicion of sexual harassment. Incredible things have happened in the last 6 months when stories came out, not proven in court but accepted as probable or believable or almost certainly true, and people were summarily fired from all kinds of for-profit, non-profit enterprises. People's roles taken out of movies they'd already performed and were filmed in. It's really an extraordinary time. And most of us think, 'Gee, that seems great. That's how the market responds to these kind of things. In many ways, it's responded better than the way the political market responded to accusations against various politicians.' And yet, once we put those issues as rights, put those opportunities as rights--the ability not to be fired for those behaviors or not to be dictated--it would make it a lot more expensive for people to be hired. And my worry is if we move to what you would call maybe a freer system, it could be a world where workers have a hard time getting access to it, because, now that these things are going to be so clear-cut and objective, there's inevitable subjectivity and legal nuance. And is it really going to make people better off? I don't know. What are your thoughts on that?

Elizabeth Anderson: I do agree that that might be a concern. And, we really would have to look empirically, see how it plays out. And then go back to the drawing board and rejigger the way the internal governance of the firm works. Because, the other side of the coin, of course, is that a lot of people are unjustly fired, for reasons that, you know--

Russ Roberts: Sure.

Elizabeth Anderson: Yeah. So, there are tradeoffs here. And we just have to look empirically and see if we can design institutions that give us the best tradeoffs.

Russ Roberts: Is that the way you'd think about it, though? Would you look at it in a utilitarian way as costs versus benefits? Or would you put some freedoms as sacrosanct that you would not allow a private firm to impinge on, infringe on?

Elizabeth Anderson: Yeah. So, I do think that there is a role for some baseline liberties that the employer cannot infringe upon. And that would include things like freedom with respect to sexual orientation. And basic anti-discrimination law. Certain levels of fundamental dignity, like the right to go to the bathroom. There are a number of things like that which I think aren't going to detract in any significant way from productivity, just basic in a way, a set of constitutional rights for the worker to certain kinds of liberties that the employer can't infringe. So, I think there's a baseline level that could be set as part of the constitution of the firm. But, firms and working conditions and so forth vary so much, I don't think a lot can be done at that level. You want the internal governance of the firm to be responsive to some of the more fine-grained concerns that arise due to very different manners, modes of production. And that, I think you get that information by enabling workers to have a voice in how they are governed.

Russ Roberts: Why don't you close by talking about autonomy generally, and human dignity. In a certain sense, your workplace is a third of your life, roughly--more or less, in today's world where we usually get the weekends off. And yet, it plays an outsized role, I think, in our self-respect and in our sense of identity. Maybe that's a bad thing. But I think it's a real thing. What are your thoughts on that?

Elizabeth Anderson: Yeah. I agree. I think it plays a spectacularly large role, in the sense of dignity and worth that workers have, especially in countries that inherited the Protestant work ethic. I think this is a very deep cultural thing, and it's no longer attached to any particular religious idea. So, here I am an atheist, but, boy, do I--I am very strongly driven by the Protestant work ethic. No getting around it. It's just--I feel it in a very deep-rooted sense. And I think many people do. That's a sense of where they get their dignity. I think it's a very, very powerful strain in American culture in particular, even in contrast with the rich countries of Europe. And, I think there are costs to it. Absolutely. One of the things I worry about is that the impending automation of millions of jobs may well lead to a situation in which tens of millions of people maybe don't have many prospects of stable work at all. And I think we really have to worry about where are they going to find, not just the needs of subsistence--even libertarians are thinking about having some kind of basic income scheme to cover them--but it's a question of how are they going to fill their hours with meaningful activity in which they can take pride. I think the problem hits men harder than women. Women are used to thinking, 'Okay, if I can't get a job, I can raise my kids; and that's super-meaningful activity.' And men, maybe will come around to that view, but I think it's harder given the way dependent care is gendered in American society. Men feel a little uncomfortable in those roles. And then, you know, suppose we get the Google Truck, and millions of truck drivers are unemployed. What are they going to be doing? What's going to be their source of pride and dignity in a sense that they're contributing to society? I think it's a real open question, how we're going to handle that.



COMMENTS (57 to date)
N. Martinez writes:

Regarding the claim of sexual harassment in the restaurant industry... Its probably up there by today's standards, that standard being a dirty joke qualifying as sexual harassment. When I was working in the business as a teenager, it was one giant game of "grab ass". I think this is the natural state of a 40+ person work force with an average age of about 20. Is it "ok"? Probably not, is it dangerous, well, Ill make a similar claim, 90% of the time is perfectly safe and there are certain "players" that partake in the game while most that wish not to are left out.

johnk writes:

The topic of contractors needs to be illuminated. I worked for the Federal government as a contractor for 6 years doing the same thing for 4 different contractors. One issue for the government is that contracted work is accounted for differently in budgets. For decades increasing the federal workforce has been something to be avoided. Contract work seems to enrich a lot of people - the contracting companies, their lobbyists, the states where they work, etc. This is one reason we have fewer federal employees but a larger federal workforce overall. More importantly, contractors can be fired whereas the Federal work force is union and firing them is nearly impossible. Being able to bid on these contracts is a racket in itself. The government can’t collective bargain on price or commission. Becoming an official participant in the government contract bidding process is complex and not easily understood. One feature of these contracts is that a flat rate is bid by the company for a number of workers with a skills designation like “programmer II.” The contractor is then incentivized to find the least qualified people at this level as the contractor makes more margin. Sometimes, where a contract rolls over from one company to another, the new company will seek to hire less qualified staff so that they can make larger margin. This process is called “juniorization.” Would love to have someone to research this. I am sure the public would appreciate learning how this racket works.

Steve writes:

Some points of truth follow:

a) Hiring and firing high-end workers is expensive and hiring and firing entry level/low end workers is cheap, so the low end worker is expendable in organizations view. Economic Analysis: Supply of Entry Level workers far exceeds the demand for them driving wages lower and raising the level of abuse/harassment. Entry Level workers include fresh college graduates who are desperate to cut their teeth in the workforce hence they are vulnerable and gullible. So, management bad behavior persists continuously.

b) As a contract worker at a bulge bracket, swiss investment bank in Chicago, I was pressured to give money $20 for a retirement gift to a person I did not work with; the retaliation was I got the silent treatment from the entire trading operations group, 12 people, for weeks.

c) At a boutique financial advisory in Chicago, I was rebuked for laughing at a qualified investor prospect mocking President Obama the same not more than others having rebuked Clinton or the Bush's over the years.

I ask Mrs. Anderson and anyone what protections does the worker have?


Michael Byrnes writes:

One of the things Anderson brought up early on in the podcast was the business cycle. I think this is a really key point.

In an economy at full employment, employers are going to have to compete for workers in a way that will incentivize them to improve working conditions.

I don’t think full employment is a panacea, but it at least nudges employers towards a greater focus on retention of staff in a way that would be expected to be beneficial on net without subjecting employers to having to jump through more regulatory hoops.

Floccina writes:

Even in monopsony If things get bad enough workers can walk out en-mass, which is some limit on persecution. You do not really need a formal union. If turnover is very high it seems it would not be a monopsony market.

I love the idea of Open book management (https://en.wikipedia.org/wiki/Open-book_management), I think it would reduce abuse. Along with that I think less abused workers would produce more.

Also really good workers are seldom abused and can often get away with a lot sometimes the boss takes abuse because he knows he cannot afford to lose an employee.

Also freedom can be obtained: http://earlyretirementextreme.com/how-i-live-on-7000-per-year.html

If people all saved more housing and vehicles could be much cheaper. Housing and vehicle seem more positional.

John Aiton writes:

I had responsibility for a factory in Avezzano, Italy. Italy had employment guarantee , a constitutional right, we couldn't fire anybody.

It had to be the unhappiest site we had. The most consistent complaint was lack of trust . There was more theft , back stabbing and brown nosing I have ever seen.

Blake McDonald writes:

I'm very surprised there was no mention of flat business models, similar to Valve Corporation and a few others. There are no bosses or managers at all. I think this is the answer for many libertarians. This uses self managed teams where people work on what they want and build coalitions. Valve has been the most profitable company per employee in the United States! I'd love for you to have someone on to talk about this since I've never heard it come up on the show.

Dr Golabki writes:

@Blake

Russ is a step ahead of you...
http://www.econtalk.org/archives/2013/02/varoufakis_on_v.html

I'm pretty skeptical that this approach would work for larger companies that do different types of work. I agree with Elizabeth that there's a certain level of size where you need hiereachy.

Glen Raphael writes:

Russ, I was disappointed you didn't push back more on the claim that a lack of (unscheduled) bathroom breaks among poultry workers was an example of "abuse" by "bosses". You accepted this example and called it "pretty appalling", when...it's simply not.

The world contains many jobs for which unrestricted private bathroom breaks are either impossible or would destroy SO MUCH productivity that in a free market, workers will prefer to negotiate for gains in OTHER areas than bathroom-break flexibility. Perhaps they'd rather have more salary or get paid for more work-hours than would be possible in an environment with more unscheduled bathroom breaks. In such circumstances, insisting that the few workers who can't time their bathroom use wear diapers is not "abuse". We fail to notice this out of our own privilege and the failure to spend ten minutes thinking through the logic of the situation.

I wish somebody would ask Elizabeth: "Imagine - just as a hypothetical - that the bosses AREN'T being abusive - what ELSE might possibly explain the policy result that you're attacking?"

If it's too hard to see this in the original context, let's try a different one:

(1) A symphony orchestra with a world-famous conductor and soloist is tightly crowded onto the stage of a thousand-seat theater. With a full house, midway through playing the first movement, the second clarinet needs to pee. Should they put down the instrument, get up, and quietly say "excuse me, pardon me, coming through..." as they carefully push past any other still-playing instrumentalists in their way, tripping over a few music stands, to leave the stage area and use the facilities, then reverse the process ten minutes later? Should the concert stop to accommodate their personal needs? Or should they perhaps refrain from drinking too much and/or consider wearing a diaper? Is it "abuse" or even "pretty appalling" to insist the performers stay on stage and try to finish the job they signed up for until it's done?

(2) A pair of workers climb to the top of a 200-foot antenna tower to fix a broken radio component. There is no bathroom up there. Trying to pee BEFORE the job or hold it until AFTER or (if need be) wear some sort of pad might be good ideas; would it be "abuse" to encourage those sort of options?

Having granted that such jobs EXIST, the question is: does the job of assembly-line poultry worker have similar characteristics? And the answer is yes, it does. Much like a symphony, the productivity of a factory line depends on a group of people all doing their specific job at the same time in the same place. Any one person leaving damages the productivity of the whole group, so the factory would have to pay MUCH lower wages if it allowed free entry and exit mid-shift.

Poultry workers also have a long preparatory stage before productivity can occur - the dictates of hygiene make it so they can't just jump in and out from working on the line. Getting into and out of a clean suit or clean room is a bit like climbing/descending that 200-foot tower- it's an extra bit of time/effort investment that makes short shifts impractical.

Even a democratic workforce setting policy by VOTE would choose to limit bathroom breaks in such circumstances, if they realized the tradeoffs being made.

(Other examples of limited-bathroom-break careers: astronaut, test pilot, lumberjack, farmer, long-range trucker...)

Dan Berger writes:

Russ' instincts are correct, the rise of temp and contract workers is due in large part to changes in the regulatory and legal environment. Statutes, administrative law, and case law have shaped the way firms hire both employees and other firms. In addition to labor laws, the advent of wrongful termination lawsuits creates defensive Human Resources strategies. The reasons for hiring contractors or temps can usually be fit into three categories:

- Workforce flexibility - An employer needs a way to gain more workers to meet variable demands. This might mean seasonal workers, or increased production to fulfill orders geenerated by a successful marketing campaign. A firm does not want to incur the costs of hiring and training temporary workers only to dismiss them later, when instead they can engage a contractor company to supply ostensibly qualified workers, even at a premium price.

- Workforce stratification - When offering benefits to employees, most employers would recognize the innate unfairness of offering benefits to some workers and not others (and there may be laws against it). Thus many firms may contract out functions such as janitorial services, production machinery maintenance, or IT. This leaves an employer more able to increase compensation and benefits to attract specialized workers for their core business.

- The "Audition Effect" - In HR circles, it is often discussed how hard it is to find qualified employees; how employers are constrained in what questions they may ask an applicant or their former employers, and how many shortcomings there are in evaluating resumes. If a temp or contractor performs well, a firm may hire them away from the contracting agency (this is called "insourcing") and be reasonably sure they will have a quality employee.

On a side note, Russ asked why individual workers don't contract themselves with a firm rather than work for a temp agency. The answer is that in many states it is illegal; if a contractor is behaving much like an employee, the state may consider them to be an employee, thus being subject to labor laws and entitled to the benefits thereof.

I do hope Russ is successful in enticing an undergraduate to study the topic, and I look forward to hearing all about it in a future EconTalk.

Dr Golabki writes:

I wonder if Elizabeth and Russ would comment on the captured employees of academia... the graduate students!

During my PhD I was putting 80+ hours a week for a small federal stipend. I would often set up Sunday morning meetings with my advisor because that was the only time I could get, only to receive a 4pm email from my advisor saying he was sorry, but he wasn't going to be able to make.

Now... even with all of the above, I loved my PhD, it was the greatest time of my life (insert blanket caveat about children being born here). However, many of my fellow students did not have the same rewarding experience and once they were in a group they really had very few realistic alternatives.

I think it's an interesting example because (A) Elizabeth and Russ probably have some (at least second hand) experience with it, and (B) it illustrates the power boss can have over a student/employee even if the student/employee has relatively strong alternatives.

Dr Golabki writes:

Glen -

This is my reading of your argument:
1. The free market is an unalloyed good.
2. Poultry workers being required to ware diapers is a product of the free market.
3. Therefore poultry workers being required to ware diapers must be good.

The important point isn't the poultry worker example. The point is if you are a librarian who starts with premise #1, you'll always end up in the same place.

Dr Golabki writes:

Great podcast....

I think the reason libertarians and modern liberals tend to talk past each other on this is the definition of "freedom".

Libertarians tend to see freedom as binary... you either have it or your don't. As Elizabeth says, employment-at-will means that either party can terminate the relationship at anytime and in that sense it's equal.

Modern liberals tend to see freedom as a mater of degrees. My degree of freedom is determined by my next best alternative. If the poultry factory boss asks his workers to give up bathroom breaks (or sets productivity goals that cannot be achieved without giving up bathroom breaks), or some other indignity, an employee might refuse. The boss's next best option is to replace the employee, which might be a slight inconvenience, but is basically 100% chance of being fine. The employee's next best option is to quit and look for a new job, which might result is something like... 10% end up in a better job and have the experience be a net positive
20% inconvenience, but get a new job and things are fine
50% major challenge with significant cost associated with the change, but get a new job and things are okay in the long run
20% life derailed with major impacts on your family

What does game theory tell us about the relative freedom of those two parties and how the negotiation will end?

Russ makes the point that it's not nessesarily the guy that quits, but the marginal "quitter" that sends a signal, which restrains behavior. I think that's a great point if you treat each small employee / employer negotiation as independent events. But they are correlated across employees, across employers and across time and they systemically biased in one direction.

Craig N writes:

I enjoyed Mr. Robert's remark about the would-be opportunity for Prof. Anderson to start a temp agency. Generally I am delighted by the idea of any academic starting a business and employing others. Opportunities abound! There's admirable restraint in making excellent points while never pressing the guest to concede a flaw.

Alexander writes:

As much as I enjoy Dr Roberts' podcast, this episode has been a joke, not a funny one also. Although it does blend in seamlessly with the recent episode on the Burning Man: interviewing a senile hippy on the wonders of "happenings", "humanness", and other libertarian topics. From this perspective, this latest interview of a leftist social justice warrior from the depths of inbred academia (who concurrently is also a "philosopher" specialising in such exotic topics as "feminist epistemology") is a worthy continuation. A humble idea for the next podcast: inviting Snoop Dogg to discuss Rachmaninoff's second symphony.

I apologise for the venomous content of my comment. I do understand that my politically incorrect ramblings are unlikely to pass through the censorship; however, I could not find a more civil expression to communicate my distaste.

From love with Russia,

Alexander

Ed Bunetta writes:

Russ,
About Elizabeth Anderson's podcast. Your house cleaners hourly pay. I do not think they are able to clean 8 homes, at least most work days.

David Zetland writes:

Great podcast. Anderson is on point when it comes to the "normal worker" and the lack of market power they have. Is that their tough luck for lack of a PhD and tenure? I think not, the extra profits to capital (the 1%) are not exactly helping society.

FYI, I'm more disturbed than amused by some of the free market/libertarian dogma in these comments, which remind me of my earlier years as a "experience free" libertarian. The fact is that many workers are indeed burdened by low wages and few outside options. That's why I see basic income as a better option than minimum wages (bad idea if productivity is lower) and tighter regulations (it's hard to regulate "compassion" so better to give people an escape from shitty jobs).

The bottom line is that most listeners to this show are perhaps too insulated from the blue collar world to know what others are experiencing -- and thus they perhaps miss that reason why voters "irrationally" vote for Brexit/Trump.

ps/As for "leftie/soft" issues, I think that this podcast was quite central in its topic and value. The Burning Man podcast (as someone who's been there 6x) was a bit flaky.

Ben writes:

Hi Russ
I really enjoy listening to your podcasts. They cordially and respectfully address challenging topics. I have recently been reading Noam Chomsky's Profit over People which I found very confronting. A quich search indicates that you have not yet interviewed him. I would appreciate the chance to hear the two of you discuss one of his many books.

Dan writes:

Great podcast Russ-

One question I had: I wonder if the guest has ever been to Germany? She's keen on suggesting we follow their model.

Here's the issue: the labor laws prevent people from getting fired in Germany. It drove one family I know to leave the country for the U.S. I'm not exaggerating. It was their number one reason. They just couldn't stand it anymore.


Bob Hubbard writes:

[Comment removed. Please consult our comment policies and check your email for explanation.--Econlib Ed.]

Seth writes:

Elizabeth agreed that housing regulation has impacted (perhaps caused) less supply/higher prices in some areas, but not as open to the idea that regulation may also be the culprit in healthcare and education prices.

Ed Hanson writes:

I never heard the word risk in terms of the owner and boss, only the worker, no balance there, no measure of the greater consequence.

As for the German system of government insistent of workers union having some management control all I read was it resulted in greater productivity. Is that true? A timely post on econlog seems to disagree:

http://econlog.econlib.org/archives/2018/02/americans_are_r.html

This shows Denmark which is riher than Germeny but 20% poorer and somewhat unhappier than the US. Rather than Government mandate for greater union power, let the market determine when it is best suited. Not mMentioned is although union collaboration with the boss may be illegal in the US, membership on a board of directors is not. Just perhaps that is good enough to satisfy the need.

[ broken HTML fixed—Econlib Ed.]

Ed

Jesse Connell writes:

1. "... today we're used to thinking that egalitarians are against the market"

Marketing works. She might as well have said, "today, we all generally accept that free markets are only good for the rich and powerful, but back in the day, some pro-free market people were actually well-intentioned!"

2. Regarding employers drinking with employees - my first reaction to this is that in late 18th century, it was normal to drink beer all day because drinking water was generally less safe? I could be wrong and it could be that there was indeed an interesting level of socialization at the time.

3. Ms. Anderson's depiction of the way employers relate to employees just doesn't ring true. I think this is common when academics opine on the state of the non-academia world. Really, a given employee may feel stuck with their job, but since so many employees are able and willing to flip the bird and walk out if treated bad enough, employers do generally tread with reasonable care, if not exactly lightly.

Imagine an employer needs to operate with 20 employees. It may be the case that 5 of the employees will suffer harsh treatment, but there will be 5 others who will flip you the bird on their way out the door, and the rest will fall somewhere in between. It doesn't do to just plan to hire 20 people who will all accept working in hell, unless you're willing to pay them all. Moreover, in my experience, the lower-skill the job, the more bird-flippers you'll find in the workforce. They also serve as a buffer for the other workers - at times, I appreciated some of my coworkers keeping the bar low for the rest of us. :-)

Mine is one man's experience, thus anecdotal. Reality is varied, so who knows, but I'll remain skeptical of characterizations based on clinical observations from academics outside the "real world."

Glen Raphael writes:

Dr Golabki:

What would YOU do about the fact that concert musicians can't take a bathroom break in the middle of a concert? What would YOU do about the fact that somebody who has climbed a tree or a tower can't take a comfortable bathroom break while they're up there? Do you accept that SOME jobs might require unbroken multi-hour shifts for reasons that have nothing to do with "abuse" by "bosses" but merely reflect the nature of the job and the nature of reality?

If you DON'T accept it, what do we do next? Ban the public performance of any music that takes more than an unbroken half-hour to perform? Require loggers to mount a portable bathroom in any tree they are trimming?

If you DO accept it, then you must admit there exists a category "jobs that benefit from long shifts" and a set of people who want to DO jobs in that category. Which means passing laws restricting or banning jobs in that category...hurts people. Me, I am OPPOSED to hurting people, so I oppose such laws.

Sure, it's possible one could know all this and still want the bathroom law, but you need to acknowledge the tradeoffs being made - this law WILL HURT PEOPLE. It's not merely preventing ABUSE, it is also eliminating jobs or making those jobs pay less or be less convenient or have worse job conditions in other ways.

FWIW, my differing attitude here comes in part from the fact that I have (briefly) worked on an assembly line. I liked the workers I met on the line; I don't want to damage their livelihood by inflicting well-meaning but misguided regulations on them.

So demanding a "right of bathroom break" seems like a real "let them eat cake!" moment. It's the first example she gave and the most prominent and concrete one; if it's not supportable, the rest of her argument still might hold up, but it doesn't seem to bode particularly well.

Luke J writes:

Adding personal narrative to Dan B's comments re: temp agencies.

I was hired by a temp. agency in Texas nearly out of high school. They had me working a night shift loading assembly lines @ Motorola some nights and valet parking other nights. These part time jobs fit my other work schedule, which was simple office work and occasional warehouse help.

When I moved states, the temp agency intended to place me at a doing similar office work, but they had to fill that position before I was moved. When they looked at my job skills and saw I could drive a forklift, they placed me at a freight forwarder for a short gig.

After 10 months, that forwarding company hired me on full time. I got a raise and the company got a break on the hourly wage. 15 years later, and I'm nearly six figures managing international logistics for a major e-commerce co. I didn't go to college (or have not yet), but things have worked out pretty well.

Take aways:

a) Temp agencies help ppl learn and develop useful job skills.

b) Temp agencies help ppl find useful employment without requiring multiple interviews, applications, and that weird place of accepting offer 1, just in case, but hoping offer 2 will be made soon.

c) Temp agencies help employers quickly fill needed spots by creating a pool of pre-qualified candidates. This also works for the employer should a temp working be fired or quit, a replacement is easier to find.

Following that, and to the podcast as a whole, I am amazed by the claims of abuse that are (not apparently) rampant. I've worked in the corn fields at 14, landscaping, fast food, waiting tables, door to door sales, temp agencies, companies needing long hours with few benefits, and even a company mentioned in the podcast. I've never experienced nor met anyone who has experienced the communist dictator. I am very curious if this is a west coast vs east coast kind of thing. Maybe people out here are more chill. Just a thought.


tomh writes:

Glen -

This is my reading of your argument:

1. Brilliant!

Dr Golabki writes:

@Glen

Of course I agree that there are some jobs where long shifts are important... but... I'm not sure it follows from that that the only way poultry workers could be allowed bathroom breaks is if we destory live classical music. But as I said, I'm not particularly interested in the specifics of the poultry worker example.

I'm unclear on the underlying position that you are taking. Which of the following are you:

1. Dogmatic Libertarian - The free market is inherently good, therefore any free market labor transaction is good. Not only is it good that some poultry workers ware diapers, but it's not possible for any burden on employees to be excessive. Elizabeth is wrong about basically everything she said.

2. Pragmatic Libertarian - Elizabeth may have some good points about the structure of the labor market disadvantaging some employees and she may be right that this can led to excessive burdens on employees in some situations. However, she overstates the problem and any legislative "solution" would likely be worse.

3. Liberal-tarian (don't really like this name, but stealing it from a previous podcast anyway) - Elizabeth makes goods points about the structure of the labor market and is correct that government intervention played and important role in creating broad based wealth in America over the past 200 years. While we need to be very very cautious of over regulation and unintended consequences, there are still some cases where government intervention may be appropriate.

I think position "1" is wrong because it misunderstands how the relative power of individuals affects their actual freedom.

I don't really have a problem with "2", although I generally I side more with "3". Importantly, the difference between "2" and "3" is not fundamental, it's a just different reading of the empirical data. As a long time EconTalk listener, I don't think either side should be very confident that their interpretation is correct.

Tom H writes:

At the high level, it sounds like Ms. Anderson values stability more than freedom. I found several points of view interesting.

  • Having a Union that writes the rules is preferable to an employer who writes the rules. I helped design the Rouge factory, and in the process made it much safer & comfortable for the employees. It also resulted in the closing of two other truck plants. Because it takes hundreds of people to run an assembly line, there were union members who advocated for mandatory overtime because they wanted to work the overtime and voted to allow the company to force the rest of the workforce to work overtime.

  • Contract labor allows individuals to negotiate their own pay & hours. Want to work only 20 hours a week, don't want health benefits or adoption assistance or free gym memberships, just want to get paid for time worked.

  • There are lots of govt contractors that are former feds that are double dipping. They retire at 52, draw 85% of their high 3 yrs salary, and then go back to the same agency doing the same job as a contractor instead of a full time employee.

  • Barriers to entry are another factor. When I hire someone to clean my house or paint my house, I know they are most likely not the ones who will be doing the work. They could start their own business and offer me a better deal for the $100. But then they will have to incur the overhead of seeking new clients, and may grow to the point they will have to hire help. Then they will have to take a portion of the revenue to cover their time, and pay the the employees something less than they charge the homeowner.

There are too many different preferences to begin to blame the bosses for not being able to cater to every employees individual wants. That is why there is a labor market. And individual players needs change over time. My list of priorities from an employer has changed several times as I gotten married, had kids, and watched them go off to college. It started with money, then shifted to flexible schedules & no travel, and ended with meaningful work. I no longer need to pick kids up from school by a certain time or be home to help with homework. I don't mind working late, or weekends, or traveling. 10 years ago that was a deal breaker. I'm not sure you can generalize a 200m person work force. There are people who quit Apple and Google, in spite of the high pay, free food, and ping pong tables. There are employees who vote to de-certify union representation, or choose not to join a union in a right-to-work state.
There is a reason Costco and QuikTrip show up on lists with the best pay and benefits. It doesn't take a HS diploma or special skills. You have to be willing to work nights, weekends, and show up when you are scheduled. So why if this is preferable to plucking chickens in a diaper do they have trouble hiring?

Glen Raphael writes:

@ Dr Golabki:

I am interested in the specifics of the poultry worker example. Either they do or do not support her narrative, and that matters - we shouldn't just make up plausible stories and claim to call them evidence without regard to the underlying factual basis. Facts matter.

Your #2 isn't far off, but it's missing something. My underlying position is that different people are different and that is okay. Different people have different skills, abilities, and physical characteristics and there is nothing wrong with jobs existing which happen to favor some sets of characteristics more than others. The mere fact that some employees find some aspect of a job uncomfortable or difficult doesn't automatically suggest to me the need for laws prohibiting whatever job aspect has that effect. It is certainly theoretically possible that such a law might be a good idea, but my presumption is against it; anyone suggesting such a law needs to make the case that it would help; the mere fact of differential impact alone doesn't suffice to do that.

If you think that such laws are generally a good idea, then yes, you really are saying we ought to ban live classical music performance - or any other jobs that demand unusual skills or attributes. If you see a difference in principle between the two situations, perhaps you could engage with the examples I'm giving and tell me what that difference is?

If you're under 4 feet tall, you might feel uncomfortable trying to play professional basketball or work as a lumberjack. People on the low end of the relevant bell curve might experience some teasing from coworkers. If Elizabeth went looking for stories about this she could probably find a few, no? So, knowing that some people with a certain job are uncomfortable we could try to pass laws to somehow mitigate the advantage of height OR we could accept that not all jobs are for all people. Some jobs are easier for tall people, and that is okay.

If you have short stubby fingers or are missing some fingers, you might find it hard to play classical piano or clarinet. We could pass laws about this OR we could accept that not all jobs are for all people. Some jobs are easier for people with long skinny fingers, and that is okay.

If you have a small bladder and don't want to wear a diaper and are unable or unwilling to time your need for bathroom breaks, you might find it hard to perform any job that requires putting on a spacesuit or a flightsuit or a wetsuit or a cleansuit and going through a decontamination or pressurization or cleaning stage as part of entering or leaving the work area. We could pass laws about this OR we could accept that not all jobs are for all people. Some jobs are easier for people with a large bladder and/or good bladder control, and that is okay.

Emerich writes:

Anderson comes across as quite reasonable, though politically left of center. But one important issue that was just touched on has outsized importance to the topic: Anderson says that the scaling up of factories in the 19th century led to the imbalance in power between bosses and workers and the latter's immiseration. This seems inconsistent with the fact that real incomes and standards of living in Great Britain accelerated starting around mid-century, coinciding with the scaling up she says was in full swing.

The improvement in living conditions for ordinary workers in the 19th century was explosive. Anderson believes the formation of labor unions played a role in that, but I suspect that an analysis of the timeline, in Britain or elsewhere, would show that labor unions come after the rise in wages. Look around any country that still has subsistence-level poverty, such as in India, Bangladesh, etc. Does any reasonable person believe that forming and joining unions would lift them to first-world incomes and lives?

A more fundamental error, perhaps, is that Anderson implicitly believes that it's possible in principle for all people to work in conditions that are at all times pleasant to them. Little chance. People are too varied in personality, ability, and inclination to work hard for enforced job security to comport with economic dynamism and productivity growth. On the contrary, German and other European economies demonstrate that legislated job security is economically and emotionally deadening as a more and more people stay in jobs they're bad at and dislike, rather than look for jobs that are more compatible. The result is "eurosclerosis".

Mike Diaz writes:

When I was in public school my teachers made me wait until the period was over to go to the bathroom. No big deal. Just plan accordingly.

Nothing wrong with diapers either. My kids wore them and my mother wears them. No big deal.

I don't need philosophy professors saving me.

Oh, and most people don't want to be the boss. They'd rather be told what to do and not be held accountable for outcomes the way the boss is.

I do agree, in general, that life is hard. That's about all I got out of this one other than to be wary of people with PhDs trying to help me on the basis of empirical data.

Dr Golabki writes:

@Emrich

"Anderson says that the scaling up of factories in the 19th century led to the imbalance in power between bosses and workers and the latter's immiseration. This seems inconsistent with the fact that real incomes and standards of living in Great Britain accelerated starting around mid-century, coinciding with the scaling up she says was in full swing.

The improvement in living conditions for ordinary workers in the 19th century was explosive. Anderson believes the formation of labor unions played a role in that, but I suspect that an analysis of the timeline, in Britain or elsewhere, would show that labor unions come after the rise in wages. Look around any country that still has subsistence-level poverty, such as in India, Bangladesh, etc. Does any reasonable person believe that forming and joining unions would lift them to first-world incomes and lives?"


Elizabeth was quite clear that she sees free markets as a key driver of increasing standards of living. She just said that in the long-run you need some additional support for workers. She might not be right, but I don't think there's anything inconsistent with what you said.
"A more fundamental error, perhaps, is that Anderson implicitly believes that it's possible in principle for all people to work in conditions that are at all times pleasant to them. Little chance. People are too varied in personality, ability, and inclination to work hard for enforced job security to comport with economic dynamism and productivity growth. On the contrary, German and other European economies demonstrate that legislated job security is economically and emotionally deadening as a more and more people stay in jobs they're bad at and dislike, rather than look for jobs that are more compatible. The result is "eurosclerosis"."
I don't think Elizabeth ever said anything like this. There's a difference between saying that there's a basic level of human decency that should be required in the work place and work should be "at all times pleasant". This is a straw man.
Dr Golabki writes:

@ Glen

"My underlying position is that different people are different and that is okay. Different people have different skills, abilities, and physical characteristics and there is nothing wrong with jobs existing which happen to favor some sets of characteristics more than others. The mere fact that some employees find some aspect of a job uncomfortable or difficult doesn't automatically suggest to me the need for laws prohibiting whatever job aspect has that effect."

I certainly agree with this. After listening to Elizabeth speak for an hour I'm quite certain she would also agree. I think you'd be hard pressed to find anyone who disagrees.

I'd also point about that Elizabeth's policy solution was not "require all companies and organization to offer employees frequent bathroom breaks". Her proposed solution was to change labor laws to allow workers to collective bargaining around working conditions. This solution would clearly allow for poultry workers and concert pianists to address the problem in different ways, or to simply not view it as a problem at all.

Emerich writes:

Dr. Golabki,
Thanks for your comment. My comment was a bit of a straw man perhaps in that it restated what I thought she said in stronger form. Anderson did say she admires the German system, where employee unions are represented on boards and management is much constrained by their demands in ways boards and managements are not in the U.S. My point is that such remedies, by seeking to improve conditions for workers and make the workplace nicer and pleasanter, are far from costless. they exact a price in the form of slower-moving, less adaptable, less dynamic companies because of the constraints. On a macro scale, that translates into slower productivity growth, slower GDP growth, and lower incomes. In addition, such worker "protections", by raising the cost of hiring (by raising the cost of firing) make companies less willing to hire in the first place, and make employees less willing--and able--to seek other work if they're not happy in their jobs. I believe the use of temp agencies is more widespread in Europe than in the U.S. for just these reasons. And obviously, unemployment rates are considerably higher throughout Europe than in the U.S. So for all these reasons it's not clear that such measures benefit workers.

There's also the fact that that the benefits to those workers who are employed full-time come at the expense of those who can't get such jobs or who are unemployed, in part because of the sclerosis such policies create..

MDenny writes:

Interesting episode! Though I will give Mrs Anderson credit for being reasonable on several points I've got to say it very much sounded like an academic who has never really had a normal job talking about people with normal jobs. I've worked in multiple industries (Amusement parks, Banking, NGO, Higher Education) for minimum wage and much more than minimum wage... her description of the firm is really far from the actual truth, I'm sure there are some truly terrible places to work out there but I think they are the exception not the rule (though I wouldn't call most work places paradises either). There are many more levers in the firm that work against bosses than just people quitting. Many bosses are people and don't want to be seen as terrible people and that can be a huge piece of what is missing from her information. I suspect she got a lot of info from people who love to complain and will exaggerate their terrible work circumstances to no end (I've worked with plenty). PS -I don't want my poultry processor going to the restroom in the middle of their shift and coming back without a huge detox process! I can see (if its true) why they are required to not go to the restroom during their shift, which is probably only 4 hours till they are off for lunch.

Glen Raphael writes:

@Dr Golabki:

Elizabeth's policy solution was not "require all companies and organization to offer employees frequent bathroom breaks". Her proposed solution was to change labor laws to allow workers to collective bargaining around working conditions.

Er, no. German-style collective bargaining was part of her solution, but she also seemed to think companies should require "the right to go to the bathroom" as a "baseline level of fundamental dignity". The transcript above stops with a half hour still to go so it doesn't include this bit, but when Russ asks: "Would you make some worker freedoms sacrosanct that employers couldn't infringe on?" she gives "the right to go to the bathroom" as an example of such a thing. So no, she really really does think poultry (and other) workers are being denied and specifically need the ability to go to the bathroom more freely. Not just a vague ability to bargain about things like that but that specific thing, as a sacrosanct basic dignity, as part of a firm constitutional right not subject to bargaining.

Elizabeth also expresses the belief that providing this sort of right wouldn't detract significantly from productivity, and she is COMPLETELY WRONG ABOUT THIS. Perhaps if she realized HOW wrong she is she would change her view, I don't know. But she IS wrong about it, and somebody needs to point that out.

@MDenny:
[just regarding your PS]
There's actually TWO problems with breaking an assembly-line mid-shift for bathroom breaks. Yes, the need to properly checkin/checkout (detoxing, getting in and out of a clean suit, transitioning from area-of-food-preparation to area-with-bathrooms) is likely a huge pain in the ass that eats up extra resources, but that isn't even the worst problem. The worst problem has to do with the way an assembly line works.

Just as you need EVERY instrumentalist on stage at once in order to play a symphony, you need EVERY station manned on an assembly line in order to run that line. There are no OPTIONAL positions on an assembly line. Just as when one instrument takes a break the whole symphony has to stop, when one poultry worker takes a break the poultry line they are part of has to stop. Every assembly-line job matters, every job is essential, and every job depends on the jobs prior getting done. You can't just skip one task and make it up later when you get back.

So if we imagine the rule is that anyone can freely stop doing their job to take a bathroom break, in a group of 40 people, you might easily have different people taking a 20-minute bathroom break twice an hour, meaning the line is idle 66% of the time, meaning the line processes 1/3rd as many chickens as would a line without Elizabeth's "right to go to the bathroom" rule.

Michael Byrnes writes:

Glen Raphael wrote:

Just as you need EVERY instrumentalist on stage at once in order to play a symphony, you need EVERY station manned on an assembly line in order to run that line. There are no OPTIONAL positions on an assembly line. Just as when one instrument takes a break the whole symphony has to stop, when one poultry worker takes a break the poultry line they are part of has to stop. Every assembly-line job matters, every job is essential, and every job depends on the jobs prior getting done. You can't just skip one task and make it up later when you get back.

So if we imagine the rule is that anyone can freely stop doing their job to take a bathroom break, in a group of 40 people, you might easily have different people taking a 20-minute bathroom break twice an hour, meaning the line is idle 66% of the time, meaning the line processes 1/3rd as many chickens as would a line without Elizabeth's "right to go to the bathroom" rule.

It seems to me that there's a very large middle ground between the two extremes of "wear diapers to work and never get a bathroom break" and "anyone can freely stop doing their job to take a bathroom break". That the latter scenario wouldn't be effective isn't really a justification of the former.

William Rosen writes:

While listening I was reminded of Russell Ackoff and his radical prescription of the "Democratic Corporation". Rather than use the state to modify labor laws, he proposed that corporations adopt democratic principals to regulate interactions between functional silos and workers and bosses. He proposed an internal "market economy" system of cash flows, profit and loss which would provide information and incentives to keep the ill effects of corporate politics in check.

Dr Golabki writes:

@Emrich

"seeking to improve conditions for workers and make the workplace nicer and pleasanter [is] far from costless"

I totally agree with you're point above.

However, it doesn't necessarily follow that we shouldn't do something because it would have costs. Just as it doesn't follow that we should do something because employees find certain working conditions burdensome/offensive. The obvious question is... is it worth it?

I would also say that it's not clear that every type of intervention is going to slow long-term growth. If you are addressing large externalities / enable some type of public investment.

Glen Raphael writes:

@Michael Byrnes:

Sure, but as soon as you grant that one person stopping the line for a bathroom break has these characteristics:

(1) it takes a long time (for firm-specific reasons)
(2) it impacts the productivity not just of that one person but of a larger GROUP of workers

It becomes inevitable that there would be SOME social and economic pressure (and from the other workers, not just from bosses) to have FEWER bathroom breaks, whatever the current standard is. Taking even ONE 20-minute bathroom break mid-shift means everybody on that line is 1/3rd less productive in that hour than they could otherwise be, and that means the firm can't afford to pay them as much money for that hour's work as it could if that break were skipped. So there's a direct tradeoff. If salary negotiations were perfectly efficient and salaries perfectly reflected productivity, nobody on the line would get PAID during that one person's bathroom break.

Plus, it's simply not the case that EVERYONE needs to wear a diaper or finds the need to do so shameful. The equilibrium solution here is that people who don't NEED to wear a diaper because they are good at waiting 4 hours (or whatever the shift length is) or don't MIND wearing one take this job (and earn extra money by occasionally being willing to work long shifts) while other people who can't hold it or do mind find other jobs than this one. Some jobs have inherently disgusting or difficult aspects and that is okay.

Let's celebrate job diversity. If Elizabeth had her German worker councils in place and THEY wanted more bathroom breaks that'd be one thing, but as it is she is imposing her own privileged middle-class values on other people, risking their livelihoods because something about the work environment offends her own aesthetic values. Let's not do that.

Whatever the current standard is, it undoubtedly makes a few people unhappy in BOTH directions, but Elizabeth is only looking in ONE direction. If a suitable survey were done I would be willing to bet that you would indeed find some people complaining shifts are too long and they need more breaks (either to use the restroom or just because their hands or backs are tired) but you would ALSO find some people complaining they would like shifts to be LONGER so they can EARN MORE MONEY. Why privilege the former position?

Dr Golabki writes:

@Glen

If the question is...
Should we create a law that cannot be abridged for any reason, that applies to all companies and organizations, which mandates that "anyone can freely stop doing their job to take a bathroom break" at anytime time?

Then I agree with you... that is a truly terrible idea for a law, and we should not create it. I'm confident that no one on this thread would support such a law (including Elizabeth Anderson).

But, there's all sorts of rules that are conditional. Clayton Kershaw is allowed to throw things at is coworkers. I am not. I have to stop my car for red lights. I do not have to stop whatever I'm doing whenever I see anything red. Even the bill of rights isn't applied universally. I have freedom of speech. I do not have the freedom to yell "fire" in a crowded theater.

Now, I don't know the specifics of the poultry processing example. Waring diapers may well be worth it. But I do not believe that poultry processors are tripling their productivity by making employees where diapers.

I feel like I'm about to hear someone tell me that the adult diaper will do for my bum, what the smartphone did for business communication.

Andy writes:

I do not see how Dr. Anderson's thesis applies only to private employers. Her actual argument is with hierarchical organizations. Perhaps she notes this in her book but if so, this point did not come up or across in the interview. People who have worked for government and/or non-profits can tell similar tales of abuse. The current #metoo movement certainly has many example of sexual misconduct, for just one example, in the public sphere.

If this is a organization or management problem then the whole approach to problems in the workplace will have a different focus. Private ownership is not the starting point.

Glen Raphael writes:

@Dr Golabki writes:

Now, I don't know the specifics of the poultry processing example. Waring diapers may well be worth it. But I do not believe that poultry processors are tripling their productivity by making employees where diapers.

I feel like there's an underlying intuition here that you're missing. Let's try one last time, one more metaphor - if this one doesn't work I give up. So...

(1) Elizabeth is a college professor who gives 40-minute lectures. If SHE takes a 20-minute bathroom break BEFORE class or AFTER class it has no impact on class productivity, but if she takes one DURING class she kills half the productivity that hour not just for her, but for all 35 students in the room. Clearly "don't take a bathroom break DURING CLASS" is a good rule for PROFESSORS because their work has OUTSIZED LEVERAGE here. Right? With me so far?

(2) Now let us further suppose the class is doing a group project such that if ANYONE leaves, the class can't continue in that student's absence but has to sit there twiddling their thumbs waiting on their return. In that situation, any specific student wanting to take a break mid-class has the precise same leverage the professor had - they, too, would be preventing 35 students from learning during half the allotted class time.

So a rule that says any one student can leave mid-class (and nobody is allowed to tease or mock or penalize them for doing so), would sometimes result in classes having half as much productivity (when ONE student takes a break) or in the worst case (a FEW students take breaks) could result in no productivity at all.

Are we agreed about this, as it applies to the hypothetical class?

Are we agreed that workers on an assembly line are in much the same situation as students in that class?

I don't think I can make it any simpler than that. So yes, whether you believe it or not, poultry processors REALLY ARE massively increasing their productivity during hours that limit mid-shift breaks. I mean, there's nothing special about bathroom breaks, it's unplanned breaks of any sort that utterly destroy the line's productivity.

So...you can still choose not to believe this, but it's like choosing not to believe in gravity. This problem is inherent to what an assembly line IS and has nothing to do with how mean the bosses are or how much or how little power the workers have.

Glen Raphael writes:

I think the main disconnect here comes from failing to put ourselves in the position of an assembly-line worker. We tend to think in terms of the jobs we know about, which brings in extra assumptions we don't realize we're making.

For instance, if you are a white-collar worker you might have a half-dozen items on your to-do list. If you can't work on the top item on your list, you just work on a different item. If there's nothing else to do you can go to your boss and say "I can't do X because I'm waiting on Bill to finish his part - what should I do instead?" and your boss gives you something else to put on the list. In that world, your productivity is only very loosely coupled to Bill's; there is slop in the system. So if you or Bill take bathroom breaks at will, it doesn't impact anyone else.

An assembly-line worker's productivity is not like that, it is quite tightly coupled to that of the workers around them.

So imagine you are part of a team assembling sandwiches at a Subway franchise. Amy bakes the bread, Brian slices the bread, Corey adds the main ingredient, Duane adds secondary ingredients (eg tomatoes and peppers) on top of the main ingredient, Emily wraps the sandwich in paper, and Fred hands the sandwich to a customer and takes their money. Because they all have just ONE JOB they are all ridiculously efficient at their job and the line moves quickly.

If Amy The Baker stops working, Brian the Slicer has no bread to slice. Brian doesn't have a half-dozen other things on his to-do list - his ONLY to-do item - the only thing that defines his time as productive - is "slice the bread" and to perform that task he needs...bread. To slice. Brian's productivity on the line drops to ZERO if he has no bread. Or if Amy stays but Brian leaves, the bread gets baked but doesn't get properly sliced and Corey can't do his step until it does.

An assembly line is super-optimized like that. People have specialized tools and skills; they get good at their one and only thing to do; their one thing needs inputs from earlier people on the line and produces outputs that are someone else's inputs. So long as everybody is doing their job the line is productive; the minute somebody stops doing their job the line has to be reconfigured or stop entirely.

Thus, the productivity of the team on an assembly line depends on ALL the workers being present and is massively impacted by people coming and going in an unscheduled way. This is REALLY DIFFERENT from how most other jobs work, and that difference is what makes taking an unplanned break a big productivity-killing deal where in other jobs it might not be.

Dr Golabki writes:

Glen -

"I think the main disconnect here comes from failing to put ourselves in the position of an assembly-line worker."

The disconnect is that you are living is a world where there are two possible options for bathroom rules:
1. Everyone must ware a diaper while on the job
2. Anyone can stop doing their job at anytime time

I'm more than willing to agree that there are MANY MANY jobs where rule 2 is not a good idea. But I don't think we are stuck with those two extremes.

You brought up school, which is a good example of an intermediate rule. In many classes I took in school the rule was that you could not go to the bathroom during class because it would be disruptive to everyone else. My classmates managed survive without diapers because there was a coordinated time between classes to go to the bathroom.

What's the right rule for the poultry industry? Maybe it's waring diapers? Maybe it's 2 coordinated 12 min breaks every 10 hour shift? I don't have enough information to really know. The one thing we all agree on is that legally mandating that "anyone can stop doing their job at anytime time" is probably a bad idea.

Glen Raphael writes:

@ Dr Golabki:

The rule currently in force ISN'T "Everyone must wear a diaper while on the job". It never HAS been that. That rule is a strawman that you have invented.

Nobody is checking whether employees wear a diaper. Nobody is saying "you didn't wear a diaper today; you're fired!" Wearing a diaper IS NOT THE JOB REQUIREMENT.

Rather, the job requirement is to find a way to work the full shift, so you don't ruin that shift for your coworkers. A diaper is ONE possible strategy which most workers on the job don't need but which is available to them if it happens that they do need it.

The current situation is "a shift length is chosen that is comfortable for MOST of the workers, but might occasionally make a couple workers uncomfortable...and that is okay."

The two options appear to be:

(1) it is legally allowed for some workers to be made uncomfortable some of the time in the interest of greater productivity and employability.

(2) it is NOT legally allowed for some workers to be made uncomfortable some of the time in the interest of greater productivity and employability.

I am arguing for #1. You (and Elizabeth) appear to be arguing for #2, on the basis that this particular form of conceivable discomfort violates basic human dignity. Even though astronauts and a dozen other high-status professionals are subject to this exact same potential indignity, you think what's good enough for astronauts isn't good enough for poultry workers.

Dr Golabki writes:

@ Glenn

"The current situation is "a shift length is chosen that is comfortable for MOST of the workers, but might occasionally make a couple workers uncomfortable...and that is okay.""

If this is really the situation... obviously that's fine. There are aspects of every job that "might occasionally make a couple of workers uncomfortable". There's never been any point where anyone has that that "occasionally making a couple of workers uncomfortable" should be the threshold for major labor reform.

But Elizabeth's description of the situation is not at all consistent with yours. She clearly believes people are being treated pretty badly. Who's right? I don't know.

Emerich writes:

Dr. Golabki:

You say:
"However, it doesn't necessarily follow that we shouldn't do something because it would have costs. Just as it doesn't follow that we should do something because employees find certain working conditions burdensome/offensive. The obvious question is... is it worth it?

I would also say that it's not clear that every type of intervention is going to slow long-term growth. If you are addressing large externalities / enable some type of public investment."

Agreed. I would also observe that the U.S. produces enough new rules every year to fill 100,000 pages in the Federal register, usually more. What proportion of those are justified on the basis of a serious cost-benefit analysis? Russ often refers to the baptists and bootlegger alliances to push laws that sound laudable, but also happen to benefit narrow interests. The benefits are concentrated while the costs are spread among the public. Yes, some of the new rules may be good, on net. But baptist and bootlegger alliances, multiplied over many decades, are a fundamental reason for the steady winding down of advanced economies, as Mancur Olson described in his Logic of Collective Action. He uses the more elegant term "distributional coalitions" for baptists and bootleggers. And of course Kenneth Arrow was one of the first to apply this sort of thinking to economics, with his impossibiity theorem and other work that paved the way for Public Choice theory. The overwhelming conclusion of theory and evidence is that good intentions, such as those voiced by Anderson, may result in good outcomes when translated into legislation. But more often they are perverted by the political process to produce malign outcomes not intended by "baptists" or well-meaning philosophers, but often welcomed by special interests cheering them on.

Mike A writes:

The interview was thought provoking. My first thought was, in a Pareto of problems needing solutions, is this anywhere on the list? Throwing out provocative terms like communist dictator, feels like a cheap appeal to an emotional response instead of a carefully crafted position. Throughout the interview, I felt that this was an uninformed academic point of view where publishing is the only object. My guess is that without ever holding a job in the private sector, the author compiled a list of horror stories, applied social justice spin then concluded workers are really to stupid or weak to act on their own behalf. Surprise, near the end of the interview, private sector workers need union representation and government bureaucrats to get management in private companies to conform to the latest social justice cause. Reading about how well universities are doing with all the recently created social injustices, I recommend the author focus on solving the problems closer to home. (campusreform.org for real horror stories)

Having 40+ years working from entry level positions to high tech executive management, the idea that management in private industry is equivalent to a communist dictator is disturbing. Poorly run companies go bankrupt, the boss is out of a job, CEO's are fired by boards of directors, activist shareholders can change the course of a public company. Companies do not operate like a democracy, and not every voice has equal value, this is not a revelation.

P.S. ECONTALK is a great podcast, thanks for the thoughtful and provocative subjects.

Dr Golabki writes:

@Emrich

"Agreed. I would also observe that the U.S. produces enough new rules every year to fill 100,000 pages in the Federal register, usually more. What proportion of those are justified on the basis of a serious cost-benefit analysis? Russ often refers to the baptists and bootlegger alliances to push laws that sound laudable, but also happen to benefit narrow interests. The benefits are concentrated while the costs are spread among the public. Yes, some of the new rules may be good, on net. But baptist and bootlegger alliances, multiplied over many decades, are a fundamental reason for the steady winding down of advanced economies, as Mancur Olson described in his Logic of Collective Action. He uses the more elegant term "distributional coalitions" for baptists and bootleggers. And of course Kenneth Arrow was one of the first to apply this sort of thinking to economics, with his impossibiity theorem and other work that paved the way for Public Choice theory. The overwhelming conclusion of theory and evidence is that good intentions, such as those voiced by Anderson, may result in good outcomes when translated into legislation. But more often they are perverted by the political process to produce malign outcomes not intended by "baptists" or well-meaning philosophers, but often welcomed by special interests cheering them on."

I agree with all this. I'm just trying to get out of a common disconnect between classical and modern liberals. Classical liberals often focus on all the problems with public intervention, to the point that they can basically justify any private activity. Modern liberals often focus on all the problems private enterprise to the point where they can basically justify any public intervention. Both have a point and both can go to far.

Dr Golabki writes:

@ Mike A

"Poorly run companies go bankrupt, the boss is out of a job, CEO's are fired by boards of directors"

Sounds like you are describing the soviet union in the '80s.

Sure, bad companies and countries eventually collapse, but you might have a justified grievance if, in the meantime, they are mistreating you and controlling a large percentage of your life.

I know is not a perfect comparison, but I think it is thought provoking... which I think is the point.

Gary Stroud writes:

I ran two poultry plants, each employed about 150 workers. The notion of not allowing bathroom breaks never occured to me. Perhaps I should have done that, the margins in the business are so small that the increased production would have impacted my bottom line. By the way, I have never known a poultry company to require employees to wear diapers.

Unions cost money to the employee and the company. The only one that makes money with a union is the union. I will never understand anyone campaigning for union representation. If they do they have not been involved with one either as a union worker or part of management.

KrisD writes:

I owned a small temp agency on an tourist economy based island with 7000 people from 1996-2006. I had high hopes of placing office staff etc. Instead we did housecleaning. I paid the best I could between $13-$17 per hour and charged from $20-$32 per hour. I was not a business whiz which hurt me long term. Most of my profits were eaten up by FICA taxes, L&I, unemployment tax, plus insurance, rent, phone, advertising and Quickbooks annual "tax table" upgrades--by the time I quit they were a whopping $360 annually (I am surprised they don't have competition--there is money to be made there!) My primary competitors were "under the table" cleaners who were charging $20 an hour and not paying any taxes. Russ do the people you hire pay taxes--do you 1099 them? There seems to be a lack of awareness of the cost and paperwork and liability involved in employing people--thus the spread of temp agencies. It was a great day for me when I let my last employee go and stopped paying that darned employee "tax table" upgrade to Quickbooks!

Heresolong writes:

To echo Luke J, I worked for temp agencies after I got out of the Navy. I was a nuclear engineer so didn't suffer from a lack of qualifications, but didn't know what I wanted to do. I traveled, staying with friends and family, and working temp jobs wherever I landed as I didn't want a long term job or to go through the process involved in getting one. What I saw is very different that what Ms. Anderson saw.

1) Many of my fellow employees, having been paid cash at the end of the day, arrived at work each morning hung over and broke. When I worked at agencies that paid bi-weekly a significant percentage did not show up Monday morning after payday. In fact the secretary at the agency told me that they used to pay Thursdays but people wouldn't show up to work Friday.

2) Most agencies that I worked for had a time limit after which the company could offer you a job. If you were a good worker you often got a job at the end of the six or so months.

3) I worked some jobs that were weather and seasonal. A construction company that needs non-skilled workers on non-rainy days isn't paying to have people sitting around because it is raining.

So the temp agency suited people who needed a quick bit of income due to circumstances (me); people who couldn't hold a long term job due to alcoholism or drug use but could perform low skilled manual labor occasionally; companies who wanted to check out workers prior to committing to a long term employment; and seasonal jobs.

All in all I found it very useful and a good business model. I went in knowing that the pay was low but since my needs were also low at that time, the pay was commensurate with my lifestyle.

Josh writes:

Michael Byrnes,

"In an economy at full employment, employers are going to have to compete for workers in a way that will incentivize them to improve working conditions.

I don’t think full employment is a panacea, but it at least nudges employers towards a greater focus on retention of staff in a way that would be expected to be beneficial on net without subjecting employers to having to jump through more regulatory hoops."

This is just non-sense.
You don't need an economy at full employment to improve working conditions; you just need an occupation with a supply of jobs that exceeds the talent pool available. We could all be at full employment if the government made Google hire everyone as "computer engineer", but that doesn't make their job so--I couldn't be one as I don't have that skill set.

Not to mention, full employment doesn't lead to better working conditions; why would it?
Full employment that makes people work just enslaves people, and we know of the working conditions of slaves.
Full employment that makes companies hire doesn't automatically decree that the conditions are better because of full employment; that's a separate policy.

That being said, if workers want better working conditions, they have to consider how much competition they have to know what they can demand. Also, are they willing to trade that for pay?

How do you hurt working conditions? Not letting poor conditions go overseas to workers who will take the conditions available: to these workers, the alternative options are worse.
But if you impose protectionism, then we only serve to hurt consumers AND the workers who could've left the working fields for higher pay.

Thomas Hockman writes:

Another delightful podcast. Thank you. It seemed her sole example of abuse was poultry worker wearing diapers. But there is little to no credibility to that claim. Snopes posted a claim from Oxfam and response. Oxfam used to do good stuff, but now there are largely without credibility. https://www.snopes.com/news/2016/05/12/poultry-workers-diapers-oxfam/
Correct me if I'm wrong, but I did not hear her giving any nearly as good allegation of abuse. Considering that she at least twice talked about how hard she worked, I would have expected more support for her statement of abuse.
I did like her suggestion to decriminilize workers being voted into management.
Another path to reducing abuse, which would be state level, not federal, would be a minor change to unemployment law "procedure." I suggest only that an employer have to give a reason for terminating an employee concurrently with the terminating. If the employer does not, or changes it, it could be presumption that the reason was a pretext. The employer could still overcome the presumption, but would have the burden to so do. I have represented clients in unemployment hearings, and sometimes there is a big change in the reason given for termination in the hearing, compared to the real reason given at the time of the termination when the company determined that the real reason was not strong enough.

Dallas Weaver Ph.D. writes:

I was somewhat upset by what an academic "expert" Elizabeth Anderson had to say about employment and it took me a long time trying to understand how she believes what she believes about today's labor conditions. She talks as though she understands today's working person conditions and what would make things better, but her thinking doesn't agree with my long observations, especially in how she relates unions to part of the "solutions".

Implicit in her thinking and probable intellectual history is an assumption that institutions like Unions or government regulatory bureaucracies remain constant over time. We know that commercial institutions evolve or die all the time and even companies like US Steel combined with the USW who faced down presidents in the 50's failed into insignificance by the turn of the century with their lunch eaten by innovative non-union mini-mills to the point of a massive taxpayer bailout.

At a time when workers were interchangeable pieces on an assembly line or reasonably skilled labor, unions representing the group make sense. However, once obtaining monopoly power that power was used to help both the union leadership achieve political power and wealth along with extract monopoly rents for the members. However, the majority of the society was paying these monopoly rents in terms of the crappy cars of the 70's and overpriced products.

In her "good old days", the skilled craft unions were evolving from helping the "working man" into racists, sexists thugs, which is why we ended up with the teamsters/mofia alignment. They evolved, but her thinking has not evolved and she still thinks "workers" are still stupid interchangeable parts in a production process rather than most jobs evolving into narrow special individual jobs that aren't that interchangable. The world, including most jobs have changed to jobs where the individual counts and a good boss makes them understand their contribution to the team.

When she got to solutions to her preceved problems, her lack of understanding of the evolving job market and the present status of employment law becomes most apparent. As commented above, her chicken plant pee break comment was possiblly pure nonsense. As someone who has been involved with modern biosecure seafood processing necessary to meet bureaucratic import standards from the US and EU, even third world processing plants have processes and procedures with biosecurity similar to operating rooms in our better hospitals (full sanitation, cloting, etc.). It is not hypothetial that, like an operating room, you don't go in and out for pee breaks at will in any food processing facility meeting our and EU import standards.

In my business, I colluded with my employees to break the employment law all the time (got away with it: now retired). In the nature of our business, I had almost half my staff who were surfers and the business was such that we could get the morning stuff done by comming in early and the afernoon stuff could wait. When the surf was up they did split shifts to get the best break, but the law prevents accomodating the employees desires without a finincial penalty to the company, so we cheated. They also liked 4 day ski trips by working 7 days one week at 3 days another week (very illegal even if all the employees agree), another thing that she would use the law to crack down on. She thinks she know what the workers want, but she has probably never been a "worker" since grad school. She probably loves her "work", so like me "she has seldom worked a day in her life".


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