Confessions of a Supply-Side Liberal

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Jobs

United States Joint Services Color Guard on parade at Fort Myer, Virginia 

Jobs and the nature of work are central to the issues I laid out in my first post "What is a Supply-Side Liberal?" I am prompted to write about jobs and the nature of work today by the interesting debate about giving up freedom to get and keep a job kicked off by Chris Bertram, Corey Robin and Alex Gourevitch at Crooked Timber, answered by Alex Tabarrok and Tyler Cowen at Marginal Revolution, who in turn are answered by John Holbo. Adam Ozimek at Modeled Behavior provides clarity to the debate.  And the hive mind of Karl Smith and Adam Ozimek at Modeled Behavior asked me by tweet to weigh in. I won’t try to do a blow-by-blow, but I have some things to say. If you don’t have the energy to read the whole debate, everything I say below can be understood from just reading this litany of limitations on employee freedom from the post that started it all: Chris Bertram, Corey Robin and Alex Gourevitch at Crooked Timber.

1. Abridgments of freedom inside the workplace:

On pain of being fired, workers in most parts of the United States can be commanded to pee or forbidden to pee. They can be watched on camera by their boss while they pee. They can be forbidden to wear what they wantsay what they want (and at what decibel), and associate with whom they want. They can be punished for doing or not doing any of these things—punished legally or illegally (as many as 1 in 17 workers who try to join a union is illegally fired or suspended). But what’s remarkable is just how many of these punishments are legal, and even when they’re illegal, how toothless the law can be. Outside the usual protections (against race and gender discrimination, for example), employees can be fired for good reasons, bad reasons, or no reason at all. 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 searchedcalling the boss a “cheapskate” in a personal letter, and more. They have few rights on the job—certainly none of the First, Fourth, Fifth, Sixth, and Seventh Amendment liberties that constitute the bare minimum of a free society; thus, no free speech or assembly, no due process, no right to a fair hearing before a panel of their peers—and what rights they do have employers will fight tooth and nail to make sure aren’t made known to them or will simply require them to waive as a condition of employment. Outside the prison or the military—which actually provide, at least on paper, some guarantee of due process—it’s difficult to conceive of a less free institution for adults than the average workplace.

2. Abridgements of freedom outside the workplace

In addition to abridging freedoms on the job, employers abridge their employees’ freedoms off the job. Employers invade employees’ privacy, demanding that they hand over passwords to their Facebook accounts, and fire them for resisting such invasions. Employers secretly film their employees at home. Workers are fired for supporting the wrong political candidates(“work for John Kerry or work for me”), failing to donate to employer-approved candidates,challenging government officialswriting critiques of religion on their personal blogs (IBM instructs employees to “show proper consideration…for topics that may be considered objectionable or inflammatory—such as politics and religion”), carrying on extramarital affairs, participating in group sex at home, cross-dressing, and more. Workers are punished for smoking or drinking in the privacy of their own homes. (How many nanny states have tried that?) They can be fired for merely thinking about having an abortion, for reporting information that might have averted the Challenger disaster, for being raped by an estranged husband. Again, this is all legal in many states, and in the states where it is illegal, the laws are often weak.

To me the ethical question of whether work requirements are morally justified is very closely tied to the economic question of whether or not those requirements are necessary for the effective production of the goods and services the job is intended to produce. To make this ethical point, let me give the example of our volunteer military—a comparison that Chris Bertram, Corey Robin and Alex Gourevitch allude to.

In my view, our volunteer military system is one of the glories of our republic. I cannot see how the drastic governmental coercion of a military draft could ever be justified if a volunteer military can do the job of protecting our country and policing the world as well as our volunteer U.S. Military has. (In this post let’s leave aside questions about the morality of decisions by our Commanders in Chief—here I am only talking about the overall effectiveness of the U.S. Military.) But as it is, men and women voluntarily choose to join the the U.S. Military. Once they join, many are sent far away from home into the face of hostile attacks. Moreover, they are all subject to a wide range of commands from superior officers and to military discipline. If they are fired—that is, dishonorably discharged—there is a due process procedure, but one that respects the needs of the military to do what it takes to be an effective fighting force. As long as the effects (both intended and collateral) of what the U.S. Military is doing on those outside the U.S. Military itself are on net positive, I don’t see an ethical problem with allowing people to choose to become soldiers and subject themselves to military orders and discipline.

On the ethical question of unfreedom at work, the only difference between the volunteer U.S. Military and other employment is (1) the high level of importance of the U.S. Military’s task, and (2) what the U.S. Military needs from its employees to be effective at its task. In my view, in jobs that are voluntarily taken, and can be voluntarily left, job strictures that are necessary for a firm to be effective at producing the goods and services it specializes in are ethically OK.

I am troubled, however, when a firm takes freedom away from its employees unnecessarily. This can easily happen, for example, when the owners of a firm are not easily able to monitor the underbosses they employ, and these underbosses use their power over the employees under them at least in part for personal gain rather than for the sake of the firm’s mission. A firm may also take freedom away from its employees out of ignorance. In our paper “The Decline of Drudgery and the Paradox of Hard Work,” which is not yet ready to circulate, Brendan Epstein and I argue that figuring out how to make jobs more pleasant without using too many resources to do so is an important dimension of technological progress. At the cutting edge, this kind of technological progress can give a firm a competitive advantage. And once any bit of technological progress has happened, the ignorance of the way things were done before becomes apparent. But many firms are nowhere near the cutting edge of the on-the-job-utility/productivity frontier; many operate far below the level of current best practice.

Since organizations involve many people, they do not always coherently pursue their declared mission. (And indeed, even individuals do not always behave coherently.) In judging unfreedom at work, I think we should judge according to an organization’s declared mission or missions. This is a little like the legal principle that things the government does should have a rational basis. An organization could declare that its mission is making profits, protecting endangered species from extinction, fostering a particular religion or political point of view, seeking truth or raising economic welfare. Whatever it declares its mission to be, it should only ask its employees to sacrifice their freedom for the sake of furthering that mission. Now if an organization declared that its mission was to make life miserable for its employees, within limits that might be allowable too, but only if the organization clearly declared that to be its mission in advance.

What is a good set of institutions to prevent organizations from taking freedom away from their employees unnecessarily? The key is to have the judgment made by others who are sympathetic to the organization’s general type of mission, and who will have appropriate deference to the organization’s specialized knowledge about what works and what doesn’t, but without ties to the organization itself. For organizations whose mission is to make a profit, I think it is important to have the judgment made by a panel of others who have met a payroll and worried about their firms going under. This may seem overly favorable to firms, but remember that it represents a higher level of due process for workers than current law in most states.   

The reason I don’t think a regular jury can adequately judge job dismissals is that it would be hard for most people to ignore the fact that something very valuable has been taken from someone who is fired from a job. It is not easy to remember that the person hired to replace the one fired gains something equally valuable. And it is not that easy for most people to appreciate how necessary is the threat of firing (or where firing is impossible, how important is the threat of some sort of demotion) at a systems level to undergird those dimensions of workplace discipline that are necessary for a firm to fulfill its missions of making a profit and effectively producing goods and services that improve people’s lives. 

Let end with a point that ties into the concerns I raised in my first post "What is a Supply-Side Liberal?" The fact that employees are willing to put up with so much for the sake of keeping their jobs indicates just how valuable jobs are to the typical employee. Economists tend to use simple models with no preexisting distortions to illustrate the benefits of low taxes. In simple models with no preexisting distortions, workers actually don’t value their existing jobs much at all—they can always get another job. The fact that, in the real world, jobs are very valuable to people makes the destruction of jobs by taxes and unwise regulations much worse than if people didn’t value jobs.

The simple models are nice because what happens in the absence of taxes is clean and neat and attractive.  But the benefits of low marginal tax rates are actually much greater in more advanced models where, in ways I will discuss down the road, (a) imperfect competition is already leading firms to underproduce and (b) minimum wages, union power, occupational licensing, and the need to obtain worker cooperation lead to jobs being valuable to people, as jobs are valuable to people in the real world

  

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