“Libertarianism and the workplace”?

by on July 3, 2012 at 11:58 am in Economics, Philosophy | Permalink

Numerous readers have asked me for a response to this lengthy post from Crooked Timber.  Travel commitments limit me from offering anything close to a full treatment, but here are a few points:

1. Is the complaint that workers aren’t getting enough of the pie?  Let’s consider giving them cash instead of workplace regulations.

2. It would be nice to see an estimate of how much the workers cared about the issues raised in this post, say in terms of willingness to pay.  I would start with that number.

3. Is the complaint that workers are getting an inefficient mix of money and workplace freedoms?  Maybe so, but I’ve yet to see the argument.  And what if it turned out they were getting too many workplace freedoms and not enough money, say because of intra-family externalities and the intra-family tax rate on the money?

4. Is the complaint is that workers should be getting the mix of money that the authors desire to see in place, rather than what the workers themselves wish to have, taking opportunity costs into account?  If so, I’m probably not on board but in any case let’s see the authors fess up to that upfront and then defend it.  Let’s see how many of the workers they can convince.

5. How about a brief mention of the fact that labor-managed firms are mostly not a big success?  Or that some rights can involve a notion of property?  I’d like to see an empirical paper on what kinds of workplace freedoms are allowed by labor-managed firms, more or less?

6. How about a brief mention of the fact that workplace regulations, in practice, very often are used to protect insiders and restrict employment for outsiders?

I find many (most?) of the cited restrictions on labor freedom, if that is the right phrase, defensible.  Consider this:

They can be fired for donating a kidney to their boss (fired by the same boss, that is), refusing to have their person and effects searched, calling the boss a “cheapskate” in a personal letter, and more.

The latter two seem obvious to me, and on the first perhaps it is better to give your kidney to a complete stranger.  Become friends later on, as Virginia Postrel did with Sally Satel, to avoid putting the other person in a conflict of interest situation.  (I do agree that a moral boss should have quit, but not that the firing should be legally prohibited per se.)  Presenting these and other mentions as self-evidently objectionable I don’t find so compelling.  I also see a big difference between “I can find a case settled like this” and “this is always the law” and on that we are left a bit at sea.

I am not comfortable with the mood affiliation of the piece.  How about a simple mention of the massive magnitude of employee theft in the United States, perhaps in the context of a boss wishing to search an employee?

When I was seventeen, I had a job in the produce department of a grocery store.  They made me wear a tie.  They did not let me curse.  Even if there was no work at the moment, I could not appear to be obviously slacking for fear of setting a bad example.  They had the right to search me, including for illegal drugs.  I suspect that “contract indeterminacies” gave them other rights too.

The company kept each and every one of its promises to me and they paid me on time every two weeks.  The company also taught me a lot.  I honor that company to this day.  I also did my best to keep each and every promise to them.

What I did observe was massive employee shirking, rampant drug use including what appeared to be on the job, regular rule-breaking, and a significant level of employee theft, sometimes in cahoots with customers.

I understand full well that’s only one anecdote and only one side of the picture, and yes the company did fire vulnerable workers and quite possibly not always with just cause.  Still I get uncomfortable when this other side of the story is ignored.  When I hear the phrase “workplace coercion,” the first thing I think of is employee theft, estimated by the U.S. Chamber of Commerce at over $50 billion a year.

Addendum: If I ponder my workplace at GMU, I see many more employees who take advantage of the boss, perhaps by shirking, or by not teaching well, than I see instances of the bosses taking advantage of the employees.  Make that two anecdotes.

Ray Lopez July 3, 2012 at 12:09 pm

Oh gosh, it’s economists venturing outside their field, that’s the subject of “Libertarianism and the workplace”. I flunked out of law school, but I do recall from Constitutional Law class that that the workplace has limited constitutional freedoms. Yes, true. For example the First Amendment does not apply. The theory is: take it or leave it. Another place this is true: all borders (including airports). You can be strip searched for no probable cause (theory is: you can always turn around and go back home). Rock on TC! Please enter into a discussion about: why socialist Sweden has the greatest stock ownership per capita, and the future of ‘worker-owned businesses’ like Avis Rental Car (at one point). Why not more such businesses? Why did the Russian people sell their vouchers in the early 1990s?

dearieme July 3, 2012 at 1:14 pm

“why socialist Sweden has the greatest stock ownership per capita”: because it’s socialist only in the (American?) imagination, perhaps?

Eric H July 5, 2012 at 3:17 pm

Please inform the people who insist that Sweden is a model for actually working socialism that should be widely emulated that this is a fantasy. Thank you.

srbaker July 3, 2012 at 1:15 pm

First Amendment states that Congress shall make no law, not that GE shall make no rule…

Anon. July 3, 2012 at 1:37 pm

Sorry to destroy your fantasy with facts, but Sweden has (in general) freer markets than the U.S.

TJIC July 3, 2012 at 1:55 pm

> Oh gosh, it’s economists venturing outside their field,

Yes. An economist sharing thoughts on how two parties engage in voluntary trade is CLEARLY outside his field.

GiT July 3, 2012 at 7:58 pm

I think the more apt point would be that, at best, economists talking about the rules which govern how parties engage in voluntary trade is at the very limit of their field, on a border shared with philosophy (broadly) or, (narrowly) ethics, law, and politics.

Silas Barta July 4, 2012 at 3:44 am

For example the First Amendment does not apply. The theory is: take it or leave it.

Yeah, I mean, like, how bizarre is that? I hire some dude to fix my roof, why can’t he just spend the whole time screaming “Arm the homeless!” while up there, and still get paid?

It’s just so *weird* how that 1st Amendment goes right out the window when you’re working for money! A complete betrayal of the idea, lemme tell ya!

The Anti-Gnostic July 4, 2012 at 12:45 pm

but I do recall from Constitutional Law class that that the workplace has limited constitutional freedoms

The reason you flunked law school is you were apparently unable to grasp that the Constitution does not apply to private actors.

TGGP July 4, 2012 at 10:54 pm

There are two amendments which apply to private actors, the one banning slavery and the one banning alcohol. But for the most part you’re right.

Be Nice July 5, 2012 at 1:06 pm

Anti-Gnostic, why do you have to be a troll?

Sugar Stumpy July 3, 2012 at 12:19 pm

I don’t think the article was meant to argue that more workplace regulation is required. The question raised, rather, is “why is abridgement of freedom by an employer ok but similar actions by the government are not”? There is lots of bad behavior in the workplace and employers try to prevent that by imposing a cost on an employee who does not behave as they desire (e.g. firing them, cutting wages etc). Govt does the same. But libertarians only care about the govt actions — why? Not obvious to me. Some say, “the employee could just do whatever they want and then get fired, that’s there choice” — but you can (e.g. with the ACA) just refuse to buy health insurance and pay the fine. Employers can impose large costs on their employees, and sure, you agreed to the contract but then again you can always move to another country, right? Gov or employer both say, essentially: do this or I impose cost C. Write down a budget constraint; I don’t see a big difference. Many conversations with libertarians lead me to believe that they only care about low taxes and all the freedom/liberty stuff is window dressing, thus the lack of concern about freedom in other spheres.

Yancey Ward July 3, 2012 at 12:31 pm

When you invite someone into your home, would you allow them to do whatever it is they wish and not throw them out for any reason? If you really don’t see the difference between conditions set by an employer and the government, then I think you will never get it.

MJ July 3, 2012 at 12:37 pm

It’s somewhat disingenuous to so cavalierly compare private property and contract rights as they relate to residences and businesses. In reality, they are two completely different creatures.

Yancey Ward July 3, 2012 at 12:42 pm

They really aren’t so different- both have owners who have their rights, too. Or if you think they don’t, then there is no discussion.

MJ July 3, 2012 at 12:59 pm

Owners absolutely possess rights. However, you’re offering a false dichotomy. Call me brazen, but I’m going to suggest most homes do not require the input and interaction of many diverse individuals with competing economic interests to survive. Firms do.

Cliff July 3, 2012 at 1:45 pm

MJ,

What is the relevance of that?

Yancey Ward July 3, 2012 at 9:02 pm

Like Cliff, I ask what is the relevance. What you think only makes it in a firm’s interest to deal fairly with employees, but it does not follow that government should be mandating this self-interest.

Andrew' July 4, 2012 at 9:58 am

The question raised, rather, is “why is abridgement of freedom by an employer ok but similar actions by the government are not”?

1. Constitution theory
2. Participation
3. Competition

1 says why it is not okay. 2 and 3 say why it is worse. 2 and 3 together says why I could be rewarded as an employer if I better aligned to the employee desires and argues for Federalism.

Sugar Stumpy July 3, 2012 at 12:50 pm

but the same argument could be made for why the government is taking action. Why let people “trash” the country by not buying health insurance, drinking super large sodas and getting fat, not getting k-12 education, having ugly haircuts, etc? If you don’t like it, move to Canada! Or wherever.

Anon. July 3, 2012 at 1:39 pm

One argument is practicality: there are severe immigration restrictions almost everywhere, there are few to no nations that respect property rights and individual liberties. On the other hand there are millions of businesses that hire people. Hell, you can start your own and enforce whatever rules you want. You can’t start your own nation.

achilleselbow July 5, 2012 at 8:06 am

“there are millions of businesses that hire people”
O RLY? Check the unemployment rate. (Yes, yes, I know, if we just get rid of taxes and regulations millions of jobs will suddenly appear, yawn).

“Hell, you can start your own and enforce whatever rules you want. You can’t start your own nation.”
I would venture that, given the wages and assets of the vast majority of workers today, both are in fact equally unrealistic. But keep telling yourself that.

“there are few to no nations that respect property rights and individual liberties.”
Oh, boo hoo. Only if you have a ridiculously capricious notion of individual liberties. Most people in the Western world are just fine with theirs, which may explain why libertarianism does not have any significant existence outside the Anglosphere. And to take the annoying libertarian approach, why should THIS government care how much ‘freedom’ other governments offer, when they’re all supposedly in competition for talent? Wait, are you saying that exercising your right of choice to move to another country is actually a huge inconvenience that shouldn’t be imposed on people? That there’s a really high transaction cost involved? You think?

mulp July 5, 2012 at 3:14 pm

“One argument is practicality: there are severe immigration restrictions almost everywhere,”

And it was the restriction on immigration to the British colonies imposed by “the King” that was part of the justification for the treason of rebellion.

But now we have many people saying “love it or leave it” in response to objections to policies including the policies restricting immigration just like one of the justifications for rebellion.

“You can’t start your own nation.”

Sure you can, just like “we” did: commit treason, form a conspiracy, rebel, and win the civil war.

Floccina July 5, 2012 at 12:10 pm

Canada will not allow most people to immigrate.

byomtov July 3, 2012 at 1:05 pm

When you invite someone into your home, would you allow them to do whatever it is they wish and not throw them out for any reason? If you really don’t see the difference between conditions set by an employer and the government, then I think you will never get it.

If you really don’t see the difference between inviting someone into your home and hiring someone to work for you then I think you will never get it.

Cliff July 3, 2012 at 1:48 pm

The only difference I see is transaction costs. Decisions made at the point of hiring are fine, but if you later spring it on your employee that by the way, sex with the boss is required as a condition of employment, that puts them in a bind with the inability to costlessly shift employment. I suppose under certain circumstances the same could be true of inviting someone into your home.

byomtov July 4, 2012 at 1:14 pm

The only difference I see is transaction costs.

Whatever you call it, the cost is substantial. Giving a cost a label that makes it sound minor doesn’t make it minor. What’s the average duration of unemployment these days?

Brandon Berg July 4, 2012 at 6:15 am

There are differences, certainly, but there are no salient differences. None of the differences actually constitute a valid argument for greater government regulation of employer-employee relations.

byomtov July 4, 2012 at 1:09 pm

Are you serious?

If you invite a woman for dinner, and then refuse to feed her unless she has sexual relations with you, she can leave without, at least, suffering financial consequences beyond having to buy her own dinner.

I’d call that a pretty salient difference.

chris m July 16, 2012 at 5:42 pm

I think you missed sugar stumpys point. Using your analogy the question he is asking is not whether the guest can do whatever they wish but whether you can do whatever you want to the guest just because it is your home.

Yancey Ward July 3, 2012 at 12:32 pm

And this:

but you can (e.g. with the ACA) just refuse to buy health insurance and pay the fine

But the government doesn’t allow you to just refuse to buy health insurance and not pay the fine. Do that, and you will end up in jail eventually. Do you see the difference now?

Sugar Stumpy July 3, 2012 at 12:40 pm

Your boss doesn’t allow you to e.g., post on a personal blog in your own home about your political preferences. You do that, you get fired. Do A (post on blog), pay X (negative shock to utility from getting fired). Do A (refuse to buy health insurance), pay X (negative shock to utility from paying fine). No, I don’t see a difference.

You may say, “well just don’t take a job there then!” To me this is like saying, “well just move to a different country!” Sure, people can do it, but for a lot of people it may be quite costly.

Yancey Ward July 3, 2012 at 12:43 pm

I believe in an unadulterated right of free association for people regardless of who they are.

Valance Arrow July 3, 2012 at 3:22 pm

Just silly. Such freedom is a dream of the 1% and theirs alone.

Andrew' July 4, 2012 at 9:25 am

By what mechanism does a razor threshold cutoff establish itself between the 99.0 and 1.0 percentages?

Cliff July 3, 2012 at 1:50 pm

You choose your job, you don’t choose the country you are born in and the citizenship you have. Moving to a different country is far more costly then getting another job. Losing your job is not as bad as being forcibly imprisoned or killed. Those are important differences.

Sugar Stumpy July 3, 2012 at 2:24 pm

Moving to a different country may or may not be more costly than getting a different job (imagine an employer saying, “Move to the Toronto branch of the company or you’re fired”). Losing your job is not as bad as being imprisoned or killed, but it is significantly worse than, e.g., paying the penalty for not having insurance under the individual mandate in the ACA or paying most taxes. Anyway, the point isn’t “which is more costly and by how much” but “why do we care about one but not the other.” I just don’t see how you can acknowledge both as being bad but give zero weight stopping coercion outside of the public sphere (philosophically, at least).

achilleselbow July 5, 2012 at 8:09 am

“You choose your job, you don’t choose the country you are born in and the citizenship you have. Moving to a different country is far more costly then getting another job.”

Allow me to respond to the above with quotes from posters who take your side on this issue:
-“The only difference I see is transaction costs.”
-“There are differences, certainly, but there are no salient differences.”

Eric July 3, 2012 at 2:41 pm

You may say, “well just don’t take a job there then!” To me this is like saying, “well just move to a different country!”

I disagree. They are quite different in my mind. As I read the article, I was impressed with how many times it said that the worker had parted ways with the company. I expect very few individuals to “part ways” with the United States over the ACA. The transaction costs are several times more than prohibitive.

Mike Hunter July 3, 2012 at 2:24 pm

That’s not true. It says specifically in the law that no one can be jailed for refusing to pay the fine. The IRS may intercept tax refunds, try to garnish wages, etc. but no one will lose their freedom.

Mark July 3, 2012 at 7:44 pm

This is a false statement.

Andrew' July 4, 2012 at 9:28 am

“no one will lose their freedom.”

Ha! Can we just agree to disagree on the definition of freedom?

I don’t want a mandate and I don’t want the mandated insurance. I was able to get around the insurance mandate of my employer, barely, because my individual insurance just barely covered the mandated procedures. I will soon no longer have that “freedom” and the government will soon change the nature of the penaltax.

Maxwell James July 3, 2012 at 12:52 pm

Exactly. I don’t think Tyler’s wrong about any of the particulars here (well, he may be underrating labor-managed firms, depending on how tightly that’s defined). But he’s ignoring the central argument of the piece. Which reflects the central difference between libertarians and liberals.

Slocum July 3, 2012 at 12:54 pm

Do you seriously not see the vast difference between government coercion — backed asset confiscation, by SWAT teams and state prisons vs employer ‘coercion’ which consists of nothing more than — at worse — ending the relationship between the employer and employee (which, of course, the employee remains equally free to do)? Employers can stop paying you, but they can’t confiscate your money and belongings or imprison you (in a place so brutal and poorly run, BTW, that there is a significant likelihood of being raped).

And do you really not see the stark difference between losing a job and finding another one vs going into exile? The United States, BTW, demands tax payments on income earned in exile AND if you get tired of that, the government imposes an ‘exit tax’ on those who give up their citizenship — can employers do anything like that to their ex-employees?

Sugar Stumpy July 3, 2012 at 1:12 pm

I am not arguing whether employer or government coercion is better or worse. My point (the Crooked Timber point, I think) is that power hierarchies exist in the private sector and play a big part in people’s lives. I might even be so bold as to use the term “pervasive.” But libertarianism largely doesn’t acknowledge their existence, which is strange for a philosophy that is supposedly about preventing coercion and maximizing freedom.

Speaking for myself, private coercion plays a substantially larger role in my day-to-day life than government coercion. In most cases, the existence of government appears to significantly reduce the total coercion I experience in total. I can also imagine how, for a person supporting a family with little access to credit and no capital accumulation, being fired could be a huge hit to household utility. Possibly more than moving to another country.

PS if this posts multiple times I am sorry

Anon. July 3, 2012 at 1:42 pm

You can opt out of those structures in a way that you can’t when it comes to government. They are not coercive. You can create your own. The analogy holds no water whatsoever.

Tom West July 3, 2012 at 2:00 pm

I think those on Crooked Timber would argue that opting out of a job (especially low skill, low pay jobs where most of the worst abuses of power take place) is probably *harder* than opting out the government’s orders. At least if you disobey the government, you get shelter and food (albeit in prison).

The idea that you have a choice about accepting a job and whatever work conditions go with it would be considered a problem of the privileged (the 70%?)

And to be honest, if I was in that position, I’m certain I’d find the governments requirements of me to be a *lot* less onerous and more avoidable than an abusive boss upon whom my children’s next meal depends.

Their solution, and they make the case that Libertarians who believe in practical freedom as opposed to nominal (but actually non-existent) freedom, should support, is a basic allowance to everyone that means every person has the actual freedom to avoid having to accept abusive working conditions.

I’m not sure it would be workable in real life, but on paper it seems a reasonable idea for consequentialist Libertarians (as opposed to religious Libertarians where as long as the ideal of freedom remains unimpaired, practical freedom is unimportant.)

Anon. July 3, 2012 at 3:30 pm

>I think those on Crooked Timber would argue that opting out of a job (especially low skill, low pay jobs where most of the worst abuses of power take place) is probably *harder* than opting out the government’s orders. At least if you disobey the government, you get shelter and food (albeit in prison).

Opting out of one job does not mean opting out of working altogether. If you have no money saved (and you’ve been working for a while) it’s your own fault. These false dichotomies are not only illogical and ignorant, they weaken whatever glimmer of a point the CT people may have had.

As for the minimum wage..how many people would stop working and simply receive the minimum? How much growth would that remove? Are we obligated to provide this wage globally or do only Americans deserve such a life? The long-term costs of such an approach are absurd.

Sugar Stumpy July 3, 2012 at 3:47 pm

Sure. But you can opt out of government also (move to a different country!) although immigration may be quite costly. Then again, as Tom West points out, it may also be very costly to quit your job, depending on your situation. The CT people were not arguing for more regulation in labor markets. They were just asking, “Why do we [libertarians] care about one so much and care about the other not a bit?”

E.g., Many government programs that libertarians rage about are also opt-out-able (the example I keep using is the ACA — just pay the penalty! certainly it’s much more lenient than being fired from your job!) and I think the CT labor unions example was quite a good instance of libertarian hypocrisy on this point.

TallDave July 3, 2012 at 4:21 pm

Sure. But you can opt out of government also (move to a different country!) although immigration may be quite costly.

Yes, but in no country can you negotiate the terms of your citizenship.

Then again, as Tom West points out, it may also be very costly to quit your job, depending on your situation.

It may also be very costly to your employer to fire you.

Sugar Stumpy July 3, 2012 at 5:02 pm

I wouldn’t be surprised if you could negotiate with http://en.wikipedia.org/wiki/Principality_of_Sealand or http://en.wikipedia.org/wiki/Gay_and_Lesbian_Kingdom_of_the_Coral_Sea_Islands! And you could always try to negotiate with other principalities — you may not have a very strong bargaining position, but many unskilled people living in economically depressed areas also probably have little or no negotiating power vis a vis their employers.

Anyway, the point of all this silliness is not to argue for more employment market regulation (actually I believe there should be less) or even encourage immigration to Sealand but to point out that for a political philosophy that supposedly cares only about maximizing individual liberty, libertarianism neglects to even acknowledge that coercion exists in private hierarchies (it is even hostile to the suggestion!). This doesn’t gel with most people who experience coercion at their job (or in their family, their union, etc) and I suspect that is part of the reason that libertarianism is not more mainstream.

Cliff July 3, 2012 at 1:53 pm

If someone gives you a choice, and none of the options involves anyone forcibly imprisoning or assaulting you or being robbed (etc.), it’s not coercion.

Paul B July 3, 2012 at 3:18 pm

What if one of the options involves someone else (a friend or loved one) being assaulted/imprisoned? Is that coercion?
What if one of the options involves you starving to death? Couldn’t that be coercion?

This seems like an impossibly narrow reading of the definition of coercion.

chris m July 16, 2012 at 5:48 pm

Yes,” both the rich and the poor have the choice of whether to sleep under bridges”. (Anatole France)

Brian Donohue July 3, 2012 at 2:05 pm

“In most cases, the existence of government appears to significantly reduce the total coercion I experience in total.”

The key lies in being on the right side of the coercion. Of course it works for some.

MD July 3, 2012 at 1:32 pm

I think the focus is on regulation because that’s nothing else could do anything about the issues raised in the Crooked Timber/BHL debates. What else but law could stop you from getting fired because of an opinion you posted on this website?

I_am_a_lead_pencil July 3, 2012 at 2:48 pm

And you can quit if your boss also posts an opinion you feel warrants your disassociation with him. What of it?

MD July 3, 2012 at 2:59 pm

Although we are quite proud that you were able to string together not merely one, but TWO sentences, we note your continued struggles with reading comprehension. If you concentrate, when you re-read my comment and the comment it was directed to, you will see that I did not actually take a position on regulations versus no regulations. Therefore, your comment “What of it?” is not directed at the correct person. Again, however, we are really proud of your accomplishments, as limited as they may be.

GiT July 3, 2012 at 8:01 pm

Well, we can’t expect much. He is only a lead pencil, after all.

Richard July 9, 2012 at 12:53 am

“The question raised, rather, is “why is abridgement of freedom by an employer ok but similar actions by the government are not”? … But libertarians only care about the govt actions — why? Not obvious to me.”

Because government uses force. Employment is voluntary. Force is not a “cost”, it is force. A gun. Life or death. Not “a cost”. No matter how badly company X treats me, I can ALWAYS quit… and potentially form a competing firm, hiring away X’s best employees. I cannot do that with government. So no matter what X’s rules are, they are not binding on ME unless I CHOOSE to let them bind me. But a goverment’s rules… those are not avoidable. Even moving out of the country requires permission from the government (a passport, limits on cash, etc.)

It’s government’s gun the is the distinction for libertarians. Libertarians believe “the market” will provide a balance between things workers value (a paycheck, privacy, flexibility, etc.) and things employers value (having the job get done, maximizing morale across the employee pool, etc.). If an entrepreneur sees a market where the dominant employer(s) abuse employees, that entrepreneur will see a competitive advantage when hiring employees vs. existing employers.

I agree it’s easy to fall in to the trap that governments and employers are of the same kind… but they really are not. The extent that government is involved in labor relations only adds to the confusion.

MJ July 3, 2012 at 12:33 pm

To me, the most consequential point raised in Bertram’s piece is that many libertarians find it hard to believe that (exploitative) power hierarchies exist in the private sphere. Once this is addressed, libertarianism *could* become much more relevant in mainstream political discourse and policy analysis. Given the anemic state of the American labor market, I don’t see how it can be argued that employers don’t hold most, if not all of the cards.

Also, using anecdotal evidence of jobs usually staffed by low-skilled teenagers as a rebuttal to power hierarchies and employee malfeasance is plain sloppy.

Stefan July 3, 2012 at 1:18 pm

Yeah, this. It’s not that Tyler doesn’t raise salient points. It’s that none of this really seems to grapple with the piece’s core contention, which is that for a doctrine that place liberty at its core, libertarianism seems not only indifferent but outrightly hostile to considerations of liberty and coercion outside the sphere of government. Look at Yancey Ward up-thread, to take an example — these issues aren’t even issues, and if you don’t understand that, then you’ll never “get it.”

Or take Tyler’s suggestion that willingness-to-pay is the correct starting point to analyze issues of coercion, a somewhat odd notion from the standpoint of doctrinal libertarianism. How often do libertarians use wilingness-to-pay to measure the validity of governmental incursions on liberty? If we applied a willingness-to-pay test to the soda ban, for example, would we find any meaningful infringement here? I suspect not.

Sugar Stumpy July 3, 2012 at 2:26 pm

+1

raja_r July 3, 2012 at 1:29 pm

“(exploitative) power hierarchies exist in the private sphere”

Employer: “if you don’t do what I say, I will not associate with you any longer. you are free to do something else”

Govt: “if you don’t do what I say, I will throw you in jail, take away your possessions, separate you from your loved ones, etc”

Yep – I totally don’t see the difference.

MJ July 3, 2012 at 1:40 pm

This “association” translates into a paycheck. This income is used to purchase foodstuffs, housing and clothing. Nullifying said association therefore results in a termination of a person’s livelihood. At least when the gov’t throws you in prison you’re guaranteed meals and a roof over your head.

Anon. July 3, 2012 at 1:44 pm

…and now you’re arguing that getting fired is worse than being imprisoned. Which is not surprising to me because you need to believe that axiomatically in order to make any of the arguments you made.

The position is of course absurd.

MJ July 3, 2012 at 2:10 pm

Absolutely not; it’s merely an illustration of how power and coercion within the private sphere can be just as devastating as that wielded by governments. Furthermore, the government doesn’t have the legal authority to imprison its citizens without substantial evidence. Employers can terminate your association at whim in the United States. Democratic governments–and we can debate the theoretical and practical realities/implications of this–are much more accountable to the populace than private firms.

Anon. July 3, 2012 at 3:32 pm

The American government has been not only imprisoning its citizens at whim, it has been murdering them without any judicial oversight. Let’s not get silly, yes?

TallDave July 3, 2012 at 4:27 pm

Employees can also terminate their association at whim, even if it means their employer can’t buy “foodstuffs.” (I guess no one in your example has ever heard of foodstamps. Maybe we the USDA to sponsor more foodstamp parties on their behalf.)

Private firms are less accountable to the populace than gov’t? Really? Tell me, how often does a private firm muster its hired guns to forcibly dissolve a government on behalf of an outraged public?

Zephyurs July 4, 2012 at 12:10 am

And yet again for the umpteenth time, a herd of libertarians show that the only response they have to the idea of coercion in the private sphere is to shrilly call it a category error.

Cliff July 3, 2012 at 1:56 pm

So offering a poor person a lot of money to do what you want is wrong and exploitive?

MJ July 3, 2012 at 2:35 pm

The composition of a firm and its internal dynamics is far, far different from what you’re presenting. We can offer forth facile examples and arguments that little relevance or association with practical reality, or we can actually try to dissect this from a more rational and nuanced perspective. I’ll take a whack at it…

But, yes, if I offer you money to perform a task–barring employer-employee negotiation–knowing that without such money you will starve and die, that is exploitative. You effectively nullify their autonomy and any bargaining position they may have. I believe this certain dynamic characterized landlord-serf relations throughout much of human history.

Stefan July 3, 2012 at 3:13 pm

Again, the unwillingness to grapple at all with the reality of different forms of social institutions is kind of breathtaking. It goes without saying, of course, that no one ever claimed that there is “no difference” between employers and government. No one claimed it, but this is immediately where raja_r goes. (Some) libertarians seem literally blind to issues of coercion outside of government.

Note also that the examples of government coercion cited: imprisonment, separation from my family, etc. But of course, I as an affluent member of society, face almost literally no threat of these things. For all the power these threats seem to hold over libertarian imaginations, these concerns could not be further from my daily existence, or the daily existence of most Americans. (The Americans for whom these concerns are most real are, of course, those whose interests elicit the least amount of sympathy from libertarians, but that’s another discussion.) Workplace coercion, although perhaps less extreme, is far more pervasive. Hence the need, I suppose, to deny that there’s even such a thing.

Dan Hanson July 3, 2012 at 5:36 pm

Libertarians have no problem understanding that there are complex power structures and social organizations in the private sphere. They have no problem understanding that sometimes things are done to people that are unjust: sometimes even things that aren’t actionable in court.

This doesn’t just apply to the workplace. You can be screwed over by power structures that exist throughout society. Existing with other people means signing contracts that can restrict your liberty. If I sign a loan with the bank, the bank has a pretty big hammer it can hit me with if I don’t live up to my end of the bargain. I can choose to move into a condominium, knowing full well that the collective decisions of the condo board will overrule my personal desires should we disagree on how I must behave. My local neighborhood has zoning rules I must follow. I can be kicked out of any club or organization if I violate their rules of conduct. And so it goes. Life in the private sphere is complex, and a free citizen recognizes that and deals with it.

Libertarians are primarily concerned by the relationship between citizens and the state. Affairs between private citizens are their own business unless there are torts or violations of defined civil liberties.

The difference between libertarians and many liberals is that libertarians recognize that people own businesses, and therefore have the right within very broad limits to determine the conditions under which they will hire people to work in those businesses. And in return, employees have a right to choose the conditions under which they will accept a job. The mere existence of a disparity in wealth between us, or a disparity in how much the employee desires a job vs how much I desire having him as an employee is not relevant.

Furthermore, libertarians tend to be very sensitive to the limits of coercive action in fixing these perceived wrongs. They see society and an economy as a highly complex system that is difficult to push and prod in the ‘right’ ways without creating unintended consequences. For example, France has significant restrictions on the employer’s ability to fire a worker, based on the same ideas in the Crooked Timber discussion. The idea was to help poor workers and ‘protect’ them. Instead, it has biased the employment market towards more ‘respectable’ employees, and made it hard for young people with no job history and especially young immigrants to find a job in the first place. If you can’t fire someone, who are you going to hire? That nice young boy from the good family, or the applicant who recently emigrated from Kenya?

Or perhaps you won’t hire someone at all: All these sorts of restrictions raise the risk of hiring, and therefore they either have to suppress wages or decrease employment. Libertarians would say that the labor market is a better way to work out the details of the employment contract and wages, and that doing so by government fiat is bound to create distortions and generally hurt the people you are trying to help.

ed July 3, 2012 at 1:57 pm

“I don’t see how it can be argued that employers don’t hold most, if not all of the cards.”

Did you forget that most employees are allowed to quit anytime, with no notice, for any reason whatsoever?

GiT July 3, 2012 at 8:20 pm

You can bring criminal charges and civil torts against employees for damages they cause. So they aren’t really allowed to quit anytime, insofar as there are times at which they could quit which would cause justiciable harms.

Ryan Miller July 3, 2012 at 12:35 pm

I second what Sugar Stumpy has to say, but further isn’t the point that the cash is negotiated at a point where the worker has a lot of freedom (whether to leave a prior job, whether to take a different offer) but the conditions of employment can change after that, when the employee is in a potentially poor negotiating position, not having any other offers in hand but having a large mortgage or a sick child. Thus there’s no reason to believe that employees can pre-negotiate to stop this, because there’s no way of enumerating all possible abuses. Sure, as pointed out in the article, reputations get out and a valuable employee is lost and so this is not all to the employer’s benefit, but because the employee has only one job infrequent incidents are devastating to the employee but not to the employer, so the employer continues to spend more money on sales or R&D rather than HR oversight of supervisors.

kvm July 3, 2012 at 12:39 pm

Why not buy insurance to mitigate those infrequent but devastating incidents?

Zamffir July 3, 2012 at 12:56 pm

Because you cannot commercially insure yourself against ‘my job got so bad I decided to quit ‘

Andrew' July 3, 2012 at 1:04 pm

I did. Savings accounts?

The government kcufs up the interest rate, but we can discuss that later

Ryan Miller July 3, 2012 at 9:28 pm

I can, and do. For people in the upper middle class, I don’t have much pity for those who don’t self insure. But the original CT article was already quite clear that the bargaining position of upper middle class workers was stronger; this is but one of many reasons why this is so. For the working class, self insuring against a long period of job loss (I say long, because a recession is precisely when the employer has more leverage and can use it to advantage) is difficult to impossible. We subsidize health insurance for the poor,and this is just another form of such subsidy. Of course we can’t liter ally just subsidize insurance in this case because of the terminal adverse selection problem. So we regulate.

Andrew' July 4, 2012 at 9:32 am

I have exactly the pity for people who don’t self-insure to the extent that the government has directly and indirectly screwed up the insurance market.

You have to be either all-in or all-in with self-insuring. It is very risky to self-insure largely because the government has made it that way.

I will still bust my ass to do so, as long as I’m allowed to.

I could give plenty of ideas to get around the supposed adverse selection problem (that was gotten completely backwards by Nobel Laureates in the runup to the rushed and rammed through legislation boondoggle, btw). Just don’t claim that it is helping those people out.

FYI July 3, 2012 at 1:07 pm

Your negotiation position doesn’t always dimish once you take a job. And the whole ‘got a mortgage and a sick child’ can be used to justify anything. Why not have the government paying you the same amount as your employer if you get fired? Why not have legislation to force that employer to keep you employed until your child gets healthy?

How about employers leaving companies who are failing and need the employees the most? I know this is not as dramatic, but is it fair? Are you up to regulating that as well?

Ryan Miller July 3, 2012 at 9:57 pm

No, it doesn’t always, or maybe even mostly, but often it does. As for your latter worry, we often distinguish culpability. If you’re fired for cause, then you did something against the bargain you struck and you deserve the consequences. We still provide some cushion in terms of food stamps, section 8, medicaid, etc. If you’re not fired for cause, then we have unemployment insurance, which does pay you a substantial fraction of your working wage. The case where the employer unilaterally changes the bargain is a third case, which would seem to justify better treatment than the firing case.

Companies failing destroys capital, which disproportionately comes from those who can afford it without having their lives wrecked (and who explicitly chose a riskier option than say T-bills). Yes, it also leads to snowball unemployment, but those people are eligible for unemployment insurance. Also, failing companies get to undergo bankruptcy, where they can restructure all sorts of contracts to their advantage while continuing cash flow. The fired employee can also declare bankruptcy, but won’t have any cash flow or potentially any place to live while he does so.

kvm July 3, 2012 at 1:08 pm

As Andrew pointed out, you can “self insure”.

Andrew' July 4, 2012 at 9:34 am

We could means-test and, just like organ donation (ironic that) put on your driver’s license that you are certified self-insured for real emergency care.

Noone wants to hear about this because they aren’t interested in alinging what they are marketing as insurance to the way insurance would really work.

Go Kings, Go! July 3, 2012 at 1:05 pm

As Tyler pointed out (among other things being ignored in the comments) the conditions of employment can change to the betterment of employee (e.g., shirking, drug use and other things implicitly forbidden at the time of contract). Unless your proposed regulation addresses all post-contract amendments to the conditions of employment equally, it seems that “you can fire/quit” is still the best regulation.

Adrian Ratnapala July 3, 2012 at 2:31 pm

… but the conditions of employment can change after that, when the employee is in a potentially poor negotiating position, …

But that’s exactly the kind of situation where libertarians (and especillay the “bleeding heart” ones) are happy for the law to side with the employee. If your employer wants you to do something that you would normally have the right to refuse, then it had better be damned explicit in your contract, or at least implicit in the nature of your job. It it isn’t then libertarian principle side with the employee.

One *could* argue that libertarians lose sight of those principles and end up as corporate stooges. But the post doesn’t seem to be doing that. In fact it takes aim at exactly those argue for worker friendly rules on libertarian grounds.

Ryan Miller July 4, 2012 at 10:08 pm

That’s very fair. I am myself a BHL, and it’s showing. But I worry that something like “minimum income” is doing too much work given it’s political improbability. And I worry about whether a minimum income is enough to really make bargaining very equal. That said, my comments above probably don’t take enough stock of unemployment insurance as a middle ground.

In short, I suppose I am much more suspicious of government than most liberals, yet more skeptical of unrestricted consent than many libertarians. In addition, I worry that economic focus on average and marginal cases obscures a duty to those who need help the most.

Urso July 3, 2012 at 12:54 pm

Estimated deadweight loss of “employee shirking” attributable to marginal revolution dot com? But perhaps commenting on this website is, on the balance, more societally productive than whatever it is we are paid to do.

Byomtov July 3, 2012 at 12:56 pm

It would be nice to see an estimate of how much the workers cared about the issues raised in this post, say in terms of willingness to pay. I would start with that number.

Really?? You’d start by asking how much a worker would pay not to be coerced into sexual relations with the boss as a condition of keeping her job? Really??

That’s how you think about these things – that she’s supposed to negotiate for freedom from that before taking the job.

I guess so. I mean, when you were a teenager you saw workers goofing off, so that justifies everything.

FYI July 3, 2012 at 1:04 pm

You do understand the basis of prostitution don’t you?

And the point is not negociating freedoms before taking a job – it is finding out what kind of requests would you put up before leaving a job. Quite a different proposition, no?

byomtov July 3, 2012 at 2:01 pm

it is finding out what kind of requests would you put up before leaving a job. Quite a different proposition, no?

Not sure I understand your point here.

kebko July 3, 2012 at 1:11 pm

You’ve tried to pick the most morally shocking question to tar Tyler with, but the problem you’ve run into is that the answer to your question would be central, useful, and informative to everyone involved in the dilemma. The shocking thing would be that you apparently wouldn’t want to know how much a worker valued the avoidance of sexual coercion.
I guess that in your world, instead of having a complicated mixture of trade-offs, we aren’t supposed to consider the idea of trade-offs because it has been declared that there are things which shall not be asked. This is how we got burqas.

byomtov July 3, 2012 at 2:11 pm

The shocking thing would be that you apparently wouldn’t want to know how much a worker valued the avoidance of sexual coercion.

Correct. It’s irrelevant to normal employment, and it is unfair – yes, unfair – to ask someone to sacrifice her personal dignity to get a job. I realize the notion of “personal dignity” is incompatible with your notions of the world being run purely according to economic efficiency and freely entered contracts.

If you could see beyond the libertarian fantasy world you’d understand that overall employment and economic conditions strongly affect the bargaining power of employees. The employer-worker negotiation is often a very unequal process. How easy is it to find another job? How financially stressed is the worker due possibly to a previous stint of unemployment. To suggest that the employer enjoys absolute power over the employee as long as the employee can’t afford not to keep the job is the opposite of a pro-liberty position.

Go Kings, Go! July 3, 2012 at 12:58 pm

What I did observe was massive employee shirking

Which you and Alex suborn by producing such a beguiling and punchy blog.

FYI July 3, 2012 at 12:59 pm

The root of the discussion here seems to be the following: the right believes that employers can define employment on any basis (with few exceptions). The reason they believe this is ok is that employment is optional. No one is forced to take a certan job and can leave at any time, unless a contract was establish with that person’s permission. The left however, believes contracts (and actually any kind of work/employee relationship) is just another form of the strong dominating the weak. In their mind, people are forced to take jobs and since they have no option, any demand that they believe to be unreasonable is unfair and it should be controlled by government. That is why some people above were even failing to understand the difference between some crazy employer requiring employees to do X and the government requiring you to pay a tax.

This ties back to the discussion of Ayn Rand and free will. If you are a determinist, you will find reasons for government regulation of everything. People working at call centers are there because that’s all they can be, so telling them to have limited bathroom breaks is just unacceptable (funny anecdote: my 18 year old daughter just started to work at a large call center as a summer job and she finds it an amazing job – my sister in law, who is coming out of a divorce, works at the exact same place and finds it hell – as always, the problem with the left is that they simply don’t understand how the world works).

msgkings July 3, 2012 at 1:21 pm

‘the problem with the left is that they simply don’t understand how the world works’

Agreed, but you can find a lot of evidence that ‘hard’ libertarians have the same problem.

IMO ideologues of any persusaion get more clueless the more abstract and ideological they become.

Centrists/moderates/pragmatists that make up the majority of the population and who are the ones actually in charge of almost everything are very underrepresented on blogs (of all stripes).

Anthony July 3, 2012 at 1:38 pm

The reason they believe this is ok is that employment is optional. No one is forced to take a certan job and can leave at any time,

The obvious easy remedy is to ensure that employees generally have a multiplicity of choices, and that, absent contractual obligations, the cost of leaving one employer for another is kept as low as possible. This runs counter to the inclinations of the left, who generally want to eliminate the wasteful redundancy caused by competition, and to concentrate a large amount of work within the state because it’s generally too important to be left to the private sector.

JJ July 3, 2012 at 5:05 pm

“This ties back to the discussion of Ayn Rand and free will. . . . as always, the problem with the left is that they simply don’t understand how the world works).”

And invoking Ayn Rand is meant to establish your superiority to “the left” on this dimension? That is a howler.

GiT July 3, 2012 at 8:28 pm

“The left however, believes contracts (and actually any kind of work/employee relationship) is just another form of the strong dominating the weak. In their mind, people are forced to take jobs and since they have no option, any demand that they believe to be unreasonable is unfair and it should be controlled by government. That is why some people above were even failing to understand the difference between some crazy employer requiring employees to do X and the government requiring you to pay a tax.”

I’m not sure what you think you gain my turning your attempt at a ‘fair estimation’ of the other side into a caricature.

“The left” believes most work relationships are hierarchical, and that hierarchical relationships are open to abuse, and that such abuse can be mitigated by establishing laws of public order. This does not mean that all contracts are a matter of the strong dominating the weak, that any demand ‘believed to be unreasonable’ is unfair and should be controlled by the government, &etc.

Andrew' July 3, 2012 at 1:06 pm

They complain about it, but they make everything worse. They tell people to “follow the rules” and then complain about all the “hard working people who followed the rules.” Stop making the rules. Stop following the rules.

Meekins July 3, 2012 at 1:35 pm

Coase tells us that the whole reason one founds a firm is, to quote, Wikipedia, “to avoid some of the transaction costs of using the price mechanism.” Seems odd then to assume that of course we can discover the correct cash value of not being raped or not having to soil yourself, and that doing so if the obvious starting point for thinking about workplace dignity.

GiT July 3, 2012 at 8:32 pm

Nice point. To get obvious, it suggests that the starting point is rather the sorts of heuristics and simple rules (such as, don’t ask your workers for sexual favors, give employees notice before you fire them, let people go to the bathroom when they have to, ask someone to cover for any essential responsibilities you have while you piss, &etc), which public regulation of the workplace tries to formalize in part.

8 July 3, 2012 at 1:50 pm

What about the freedom to work in an all male office with no sexual harassment rules?

MD July 3, 2012 at 2:08 pm

All male office with no sexual harassment rules? So you want a place where you can flirt with coworkers without any repercussions?

Arthur July 3, 2012 at 1:55 pm

I think the problem is the frame.

If instead of a freedom frame he had a costs frame everything would be clearer.

If the employer has more information on what he will ask the employee to do when they accept a contract, what costs does this impose on the employee, even if he can quit?

Of course, this goes both ways. In Brasil, a lot of my young well educated friends arrive late at work everyday. As there’s not many of those, they can break some small parts of the contract, and it would be to costly for the employer to fire them for it, or even call them on it. They could go somewhere else.

There are a lot of other interesting cost analysis, of course i doubt any libertarian will go out of their moral talk to a more reality talk.

Andrew' July 4, 2012 at 9:55 am

I’m always up for cost talk.

What exactly does a new employee have to lose? He didn’t have the job. The next day, how much more does he know once he has the job? 5 years into a job I learned advancement was tough. I learned globalization. I learned cost-cutting. How much of this did my employer also not know when I started? How much did I learn the first week or month about the job requirements? In the first hour I learned that I could pee. How much has he really invested before he learns the vast majority of what he needs to know?

And how much of that is the fault of the employer versus the government screwing up the job market?

Mark July 3, 2012 at 4:52 pm

The last I heard, 80% of retail theft is from the inside.

Jon July 3, 2012 at 6:15 pm

Here’s what I want to know: how many of the writers have actually held a job in their lives? I mean that seriously.

Andrew' July 4, 2012 at 10:00 am

Had a bunch. Never had one I couldn’t pee at. Never had one I couldn’t leave that day. Never had one I felt I needed them more than they needed me. Never had one that was worse than interactions with government. Never had one where I didn’t think I could do significant damage to the organization.

Virginia Postrel July 3, 2012 at 8:25 pm

Just to set the record straight, Sally Satel was not a stranger when I gave her a kidney. Our lack of a relationship has been greatly exaggerated by people who want to tell a better story. She was what she calls a “fond acquaintance” and I would call a long-distance friend. Here is the account I wrote at the time: http://www.dynamist.com/articles-speeches/opeds/kidney.html

J D July 3, 2012 at 8:32 pm

Does anyone else imagine that just before Brian Leiter insults someone he positions himself in front of a mirror?

Jon July 3, 2012 at 11:39 pm

Great call!

ohwilleke July 3, 2012 at 8:36 pm

Much of traditional employment law is derived from the law of master and servant rooted in notions of serfdom and indentured servitude with modest modernization.

We are increasingly living in a world where most of us are interpersonally in more of a contractual relationship with our employers than a master and servant relationship.

The private law norms of contract law, which generally don’t permit one contracting party to have a say over irrelevant features of the other party’s life, and not those of master and servant law, are generally more appropriate in the modern era.

There may be isolated jobs where non-workplace related conduct is relevant to the employer-employee relationship. Political expression that is O.K. for most people off the job may be inappropriate for people who need to maintain a professional image of political impartiality on behalf of their employer. Different rules may be necessary for jobs likely to vault someone into celebrity status. But, for most of us, restrictions on employer regulation of non-work related conduct merely sets default terms of the deal that are overwhelmingly assumed, and allowing that to be overcome with boilerplate, non-haggled adhesion contracts allows for a subtle form of fraud in inducement. Sexual harassment laws have recognized that in general, if you aren’t a porn actor, sex with your boss is not part of the job and is not a reasonable interpretation of the agreement of the parties intepreting their deal in fact in a good faith manner. The reasoning is widely applicable and does not thwart the legitimate interests of the employer.

Notably, some of the earliest statutory employment laws specifcally limited employer involvement in employee political decision making which we is necessary when the public good is to overcome unimportant almost accidental rights of employers in private law arising from a rule that is just too general to be workable in many instances.

Eric H July 3, 2012 at 9:09 pm

Shorter Crooked Timber: Hierarchies are bad, and libertarians rely too much on theory to argue otherwise. They need to admit that democracy solves all of these problems.

Bob S July 3, 2012 at 10:05 pm

From the comments here, I noticed the posts that are pro-Crooked Timber have well thought out positions but the ones anti are rather short almost troll-like (like an 8th grader saying “either you get it or don’t”). I believe the pro-camp sees what the anti-camp sees but not vice versa, meaning the antis ironically don’t “get it”. I call myself a libertarian but even orthodoxy needs to be revisited from time to time to make sure we stay true to what individual liberty and freedom means. TC, you really believe that all bosses have halo on their heads and that all employees are ZMP shirkers? Strange that an economics blog would have such a disposition. Call me old school but an employee should NOT be fired if they call their boss a cheapskate. Sure freedom of speech as a statute doesn’t apply there but unless the employee fails to perform she can call me worse and keep on trucking.

GiT July 3, 2012 at 11:48 pm

Aptly enough, I think in the CT thread you might find mostly reasonable seeming libertarians and a decent share of more troll-like lefties. Maybe as a general rule people are more unfair in their home court and more fair in the away court, or, at least, one gets a more diverse sample of the home team than the away team. That’s not to rule out that liberals/leftists tend to be more fair in their arguments than conservatives/libertarians, or the reverse. I like to think those on the left are more fair-minded, but then I’m on the left.

Andrew' July 4, 2012 at 9:49 am

No. It is just much simpler than CT makes it out. The piece reads like a state of the union address with a bunch of anecdotes.

What is the over/under on how many people really aren’t allowed to pee on the job? Let’s start the bidding at zero.

That might sound trolling to you, but it is the response those nonsense assertions deserve.

J D July 3, 2012 at 11:35 pm

Bob S, you may be right about these comments, but consider the sample. Also, when you say “TC, you really believe that all bosses have halo on their heads and that all employees are ZMP shirkers? ” I wonder whether you’ve read much of Tyler’s writing. Of course he doesn’t believe that; he’s saying that accounting for employee theft and shirking produces a more realistic image than if we don’t. Why check which end of the scale tips after loading only one of the pans?

Rahul July 4, 2012 at 1:49 am

If I ponder my workplace at GMU, I see many more employees who take advantage of the boss than I see instances of the bosses taking advantage of the employees.

Isn’t that just statistical. For every one boss if there are ten employees…….

GW July 4, 2012 at 3:59 am

“the first thing I think of is employee theft”

Are there statistics on this that do not come from the US Chamber of Commerce? The Chamber certainly has an interest in elevating the level of this figure.

There is an interesting recent counter-example I can offer from Germany. A large chin of bakeries in the Frankfurt region has been unable since early this year to pay their employees monthly as specified in their contract. Instead, the firm has unilaterally declared the contract to be altered and wages to be paid weekly (“as is usual in the US” the owner is quoted as saying), but in fact has gotten either many weeks in arrears or simply failed to pay wages for many weeks. This is occurring at a time in which the firm has actually expanded, opening at least two new retail outlets, suggesting that the owner is effectively garnishing wages to pay for the expansion. When interviewed by the Frankfurter Rundschau, ( http://www.fr-online.de/frankfurt/baeckerei-kette-mayer-mayer-mitarbeiter-klagen-ueber-ausbleibende-gehaelter,1472798,16493196.html ), a major national paper, he said that he had no deficit and denied that he was behind in paying wages (although a number of employees had provided their working hours and bank account statements to the newspaper as proof (in Germany, employees are paid by bank transfers)) and, when out of any other excuses, suddenly claimed a 420K Euro deficit due to massive employee theft. If this were really the case, he has certainly had ample time to investigate and prosecute his employees for this, but he hasn’t.

While I don’t doubt that some degree of employee theft is real and widespread, I suspect that the greater part is not at the level of taking home stale bread in the evening that cannot be sold the next day anyways but occurs at other business levels, and in no small part in the boss’s own office.

Kris July 4, 2012 at 5:00 pm

Man, coal miners in the early 20th century must’ve been really dumb to agree to be so thoroughly abused.

Yeah, they weren’t coerced by employers. No such thing. Private companies don’t coerce because you can always quit. Governments and unions shouldn’t have coerced those poor mining companies into safety regulations. Boo government and unions! Yay freedom loving coal companies.

J D July 4, 2012 at 7:40 pm

Comprehension before ridicule, Kris. Work on it. ; )

Eli Rabett July 7, 2012 at 10:44 am

It would be a good thing in your case JD.

Some people say a man is made outta mud
A poor man’s made outta muscle and blood
Muscle and blood and skin and bones
A mind that’s a-weak and a back that’s strong

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don’t you call me ’cause I can’t go
I owe my soul to the company store

Justus July 4, 2012 at 8:52 pm

When I hear the phrase “workplace coercion,” the first thing I think of is employee theft, estimated by the U.S. Chamber of Commerce at over $50 billion a year.

Yet corporate profits are $1.68 trillion, so employee theft is a shade under 3% of their profit (not even revenue, just profit). That seems way too small to be the “first thing” someone should think of. $50 billion is covered by the profits of just Exxon and AT&T. Surely there are more important reasons than that?

Meekins July 4, 2012 at 11:15 pm

Another thing about “employee” theft is that there’s only so much of it that line workers can pull off. Some line workers do steal, but the big losses don’t come from people in at least supervisory positions. You need access to engage in material pilferage.

Robert Winter July 4, 2012 at 10:33 pm

I am seeing this late and my comment may be a bit off point but when one is considering the need and appropriateness of workplace and worker regulation by employers in a capitalist system it would be well to apply similar standards to management, from whom the workers learn a lot, for good and bad. It was instructive that the NY Times a couple of days ago carried stories of Glaxo pleading guilty to a criminal offense carrying a $3Billion fine, Barclay’s being involved in a scam to distort LIBOR and JP Morgan practices in selling funds to its clients that are at best, dubious. The management of these companies, and the many who acted improperly by any reasonable standard in the financial collapse, often suffer little or no personal consequences and walk away with millions. Apply comparable investigatory standards to the conduct of management with appropriate corporate governance — not audit committees of banks with members with no banking experience, or the application of extraordinarily loose “business judgment rules,” or the dubious assumption that the “markets” will impose discipline — and it would be much easier to see it as fair and reasonable for the ordinary worker to be subject to the type of scrutiny you view as appropriate. The bad conduct you report seeing and which doubtless occurs may simply be a reasonable economic (if not particularly moral) reaction: given what “they” are getting, I am entitled to get mine — standards be dammed.

Robert Winter July 4, 2012 at 10:56 pm

After writing the prior comment, I read John Kay’s post of today “Not on my watch” re the Barclay situation, and the scope of management responsibility. I commend it to you.

Floccina July 5, 2012 at 12:04 pm

So if you cannot fire an employee at will can you fire a business at will? Can one fire Walmart and instead go to target just because target’s staff in more kempt?

Eli Rabett July 7, 2012 at 10:46 am

Well yes and it would be good if more people did so.

Eli Rabett July 8, 2012 at 4:26 am

There appears to be a confusion in many of these comments between supervisors and owners. Except for the smallest of businesses, they are not the same, even at the highest level of supervision (eg CEOs) and as Barkley’s shows that is often not a good thing. So supervisory meanness comes down to doing it for a raise or a thrill and not for the survival of anything, or the benefit of anyone besides the supervisor.

Eli Rabett July 8, 2012 at 7:02 am

A bit more seriously, Eli too when he was seventeen, had a job as a clerk in an insurance company. They the Bunny wear a tie. They did not Eli curse. Even if there was no work at the moment, Rabett could not appear to be obviously slacking for fear of setting a bad example.

The company kept the only promise it made and paid on time every two weeks. The company also taught a lot. I remember that company to this day. Eli also did his best to keep the single promise to them, to do the work assigned.

There was massive employee shirking, and regular rule-breaking. So you ask why, well Eli was a snot nosed teenager, with a family at home that fed and housed him and the pay was his for extras (let’s not go into what the extras were and were not). The other employees were trying to raise families, had second jobs to keep house and home and basically were giving back to the employer exactly what the employer paid for.

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