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

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

Elizabeth Anderson is extremely influential among US political theorists. Distinguished Professor in Philosophy at the University of Michigan, she’s a must-quote if you’re working on labor and egalitarianism.
Upcoming book: Hijacked: How Neoliberalism Turned the Work Ethic against Workers and How Workers Can Take It Back. (Cambridge UP, 2023)

The Book in (super) Brief

First reaction when you read the title: The government is private, according to Anderson! Good news, I would say, isn’t it? What’s better than privatizing the state?

Nothing like this. Private government here is not private state. It’s referred to the “governance” in private businesses and the relations of power along the hierarchical scale – namely, employer vs. employee.

Throughout the book I see 3 provoking stories:

1.     The disillusionment with the free market after the Industrial Revolution

Anderson compares the effects of free market predicted by Smith (independence, equal standing of relations among individuals) vs. those actually depicted by Marx during the Industrial Revolution (employment-at-will contracts, wage slavery).

She asks the readers “What happened between Smith and Marx to reverse the egalitarian assessment of market society?”

Adam Smith (1723-1790) vs. Karl Marx (1818-1883) 

Surprise, surprise: The "Cataclysm" of the Industrial Revolution occurred.

The Industrial Revolution had a significant impact on the idea of universal self-government in production. With the rise of economies of scale, big companies took over from small individual businesses. These large enterprises hired many workers, but the power soon shifted away from the small proprietors. Smith’s “masterless” man (the artisan, the tradesman, etc.) was replaced by the factory employee.

The owners held more authority and control, while the workers had less influence over the decision-making process. Mental labor (mostly employers) was separated from manual labor (employees) which was radically deskilled.

  1. CEO Leviathan’s story. Contracts of employment-at-will are but dictatorship on the workplace.
Dangerous Jeff Bezos in the guise of Hobbes's Leviathan

According to Anderson, “when workers sell their labor to an employer, they have to hand themselves over to their boss, who then gets to order them around.” Or better, “Under the employment-at-will baseline, workers, in effect, cede all of their rights to their employers, except those specifically guaranteed to them by law, for the duration of the employment relationship. Employers’ authority over workers…is sweeping, arbitrary, and unaccountable – not subject to notice, process, or appeal.”

The authority relation is clear: asymmetry in standing, power, accountability, and interests governs the workplace. Employee’s interest never counts because they simply have no bargaining power.

  1. Why are we not talking about this?

We know how to talk about the Fight for $15, whatever side of the issue we are on. But we don’t have good ways to talk about the way bosses rule workers’ lives. Instead, we talk as if workers aren’t ruled by their bosses.

The Cold War induced a kind of amnesia over what the 19th century struggles were about, presenting a radically reductionist picture of alternatives, especially in the US. Images of free market society that made sense prior to the Industrial Revolution continue to circulate today as ideals, blind to the gross mismatch between the background social assumptions reigning in the 17th and 18th centuries, and today’s institutional realities. We are told that our choice is between free markets and state control, when most adults live their working lives under a third thing entirely: private government.

...A WAY OUT...?

Anderson tentatively suggests looking at the German system of workplace democracy where firms are both owned and managed by their workers. She writes, “the only way to make people free under that government is to make that government a public thing, accountable to the governed.” However, she acknowledges that there are drawbacks that may result in longer decisions and lower productivity.

My Take Today

1) It's the government, not the market!

Anderson's claim that self-employment became unfeasible after the Industrial Revolution because of the rise of large-scale businesses is at least controversial. Either it became unfeasible because it was inefficient and uncompetitive compared with the prices and services offered by large-scale businesses or because government introduced regualtions.

On the one hand, consumers became less dependent on money and on sellers because standardization and automation allowed for lower prices, more and different services, and more competition among suppliers. Considering that individuals play dual roles as both consumers and producers in the market, this outcome is evidently Pareto efficient. Despite the potential inefficiency and wastefulness of self-employment, individuals still retain the freedom to bear all associated costs and pursue self-employment, as no firm can prevent them from doing so.

On the other hand, if we think about the amount of paperwork you need to do when starting a business on your own and the regulations (standards, pollution, safety, etc.) you need to meet, it becomes clear why self-employment is basically inexistent. Keeping up with the ever-changing and increasing regulations has now become feasible only for large corporations, which can afford to employ hundreds of people to handle these complexities. It is unsurprising that self-employed individuals and one-person companies emerged primarily in industries that were in their infancy and hence not heavily regulated or regulated to a minimal extent. Take the example of Steve Jobs: during the 1980s, the internet remained an unregulated space, allowing him to establish his own business by himself. Today, you can be self-employed on Youtube and still making millions of money as Mr.Beast shows us. Why? Because it's a private space and way less regulated than anything out there. 

2) Whose bargaining power?

Anderson claims that only employers have a credible threat towards their employees. However, what about the employees? Employers usually have invested money, time, and training of those they have hired. If an employee leaves a company, the company has to start looking for someone else again, which is costly. Companies do not have a genuine interest in firing their employees.


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