Exit, Voice, and Cheap Talk (Workplace Domination Part One)

Tyler Cowen returns to the issues of employer/employee domination today, but since I never blogged his first response, I want to start working through this debate from the beginning.

The Crooked Timber bloggers offered a lengthy list of workplace depredations, and then suggested that these depradations require government intervention in the form of workplace regulation. It’s a long and interesting post, and it takes a couple of stances that I strongly disagree with (against the Basic Income Guarantee, for one) but the attacks have mostly been focusing on the idea that worker mobility (quitting) is a better solution than workplace regulations that give workers recourse. This is generally described as the difference between “exit” and “voice.”

In his first response, which was off-the-cuff “due to travel commitments,” Cowen seemed to treat the issue as if all complaints about domination in the workplace could be treated in terms of worker’s “willingness to pay” for various protections, and that regulations might better be replaced with cash. This attempt to treat economic efficiency and liberty as interchangeable irritated many bloggers, who went on to call for the “Diaperization of the GMU Economics Department.”

Of course, this is silly, but worse, like most ad absurdum attempts at refutation, it’s non-responsive, as Matt Yglesias shows here.  If anyone actually thought that abusing faculty would increase revenue, they probably would do it, and academics with less bargaining power do experience some of the depredations that Henry Farrell jokingly described. I’ve personally had to work in open cubicles, under nosy supervisors, and with no air conditioning, and anyone who’s ever been to a faculty meeting or an APA keynote knows what it’s like to have workplace commitments require a strong bladder. (Maybe diapers aren’t such a bad idea… but no: never bite the bullet on an ad absurdum.)

We accept these dominations when they seem justified or when we don’t have a better recourse. The academic job market makes exit a very difficult proposition; mostly, we’re glad to be employed. The overall increase in administrators who find ways to tighten the screws on academic workers looks both bad and inefficient, but given that we’ve got one of the best jobs in the world, we often don’t complain very loudly.

What we need is a distinction between productivity-enhancing workplace rules and circumstances that merely enhance a manager’s ability to dominate his subordinates. In reality, many instances of manager-domination are actually productivity-reducing, and lots of businesses limp along at less-than-optimal productivity this way.

A firm that has *no* recourse mechanism will not realize that they are losing good employees to bad managers, but because recourse is sometimes expensive it may seem that firms are better off simply ignoring these problems. Yet I would argue that there are many pro-employee workplace innovations that reduce domination and increase productivity, yet are often not implemented. These are proverbial hundred-dollar bills on the ground, and the “pro-exit” stance taken by many of the Bleeding Heart libertarians and GMU economists looks, to me, like a simple mistake akin to the response “That $100 bill can’t be there; somebody would have picked it up!”

Cowen has already complained that this is merely a theoretical $100 bill, however, and that if I and the CT bloggers have real innovations of this sort in mind, we ought to either propose these innovations so that others may use them or keep them a secret and go start a business with them and make lots of money making the workplace more free. I intend to say more about specific proposals, but this post is already too long, so….

9 thoughts on “Exit, Voice, and Cheap Talk (Workplace Domination Part One)”

  1. I'm reading these in order and on my downtime, so maybe you get to this, but:

    Why, exactly, do you need the distinction between actual productivity-enhancing rules and dominating ones? If your target is domination, it doesn't seem to matter if the domination enhances productivity, for two reasons.

    1. Productivity is, at best, an indirect good for most workers (it may be more directly beneficial for academic workers, since we tend to be abnormally non-alienated from our work).

    2. The fact that domination is "good for me" in terms of some of my interests does not generally make it any less domination or much less morally problematic. Part of the core insight, I think, of Pettit, is that domination is about whether my situation is responsive to my own agency and conception of my good, not just whether it maximizes my own interests.

    1. Well, I’m going to try to argue that a focus on productivity is a) non-arbitrary and b) reduces domination through constitutional provision rather than through reciprocal power. (I think this is important because reciprocal power seems to militate in favor of exit over voice.)

  2. Your post incorrectly asserts that our original piece is opposed to Basic Income. It is not. It is merely opposed to the claim that a basic income, financed by levels of taxation libertarians would approve of, would be high enough to achieve the goals they claim for it. I repeat, we do not oppose Basic Income as such. (Arguably, depending on what you mean, a "basic income guarantee" is something different again.)

    1. Thanks for stopping by, Chris. I've clearly misunderstood you, because it looked like you didn't just worry about the levels of taxation required, but also felt that work in the marketplace was superior. (Here's what gave me that impression: "we should be clear that neither measure in our opinion comes close to providing a reasonable alternative to work".)

      If your point is simply that the Basic Income Guarantee is insufficient to protect workers from domination, then I agree. But it looked like you also meant to valorize firm-work above non-firm-work, and that worried me.

      PS- It's hard to say for sure, but it looks to me like you and your fellow bloggers have incorporated a basically libertarian non-interference approach to freedom in your response to the Bleeding Hearts folks. Perhaps this was simply strategic, adopting a shared set of assumptions for the sake of argument, but if not, please give republican non-domination approaches to freedom another look.

  3. “neither measure” in the bit you quoted refers to the figures of $11,170 and $15,080. So we’re saying there that a basic income set at those levels doesn’t provide people with adequate exit options from work, that’s all. And yes, I’m very sympathetic to a republican non-domination approach (as I would be as someone who works on Rousseau!). But we didn’t want to make our response to the BHL people dependent on too many controversial assumptions, as you correctly surmise.

    1. I apologize for the misreading. Would you agree that a social minimum (like the $15k figure) would be an adequate "pre-entry" alternative to work? I.E. would that be an adequate sum to pay to all Americans and recoup as VAT? I think that about $13,200 would work, though you'd have to tweak it for BIG-inspired producer price inflation (this might not be as bad as some people estimate, since you could eliminate the minimum wage to preserve entry options for low-skill workers.)

      By the way, your essay's quick calculations on the tax cost of such a Basic Income look a bit off to me: the BIG could replace Social Security, unemployment and disability insurance, so the tax level would only rise about twenty percent. But even this is deceptive: the aggregate or "effective" tax rise would be almost zero (basically, just administrative costs) because the median family would pay exactly what they receive, so this would create many fewer distortions than the equivalent tax for spending purposes.

  4. We're working on a long reply to, well, everyone at the moment, so I'm going to defer the answer to your first question. On the second, we had some pushback from John Quiggin already, so we're looking at our calculations. The answer may depend on exactly which BI proposal get considered.

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