Exit over Voice: Kojin Karatani on Athens’ Equality Problem

(This post is part of a roundrobin reading group on Kojin Karatani’s Isonomia and the Origins of Philosophy. I focus here on chapter one; James Stanescu previously discussed the preface and appendix, and Joseph Trullinger will be discussing chapter two in the next few days.)

In a certain sense, much of Karatani’s book is a brief in favor of the claim that Western philosophy was born in Turkey, not Greece, and then promptly destroyed by the Athenians, though some of the true Turkish philosophy occasionally reappears. But it’s difficult to ascertain why this slight geographic shift across the Aegean Sea should matter so much. (Karatani is Japanese, and so might have some slight preference for locating philosophy’s origins on his continent rather than the European one, but….) But like Heidegger before him, this allows Karatani to argue that the most prominent philosophical voices—Socrates, Plato, and Aristotle—were actually suppressing the insights that they stole from elsewhere and rebranding the whole enterprise.

The Axial Age: State, Market, Temple

Speaking very, very roughly, Buddha and Lao-tzu are contemporaries of Socrates, Plato, and Aristotle. What happened in the 6th and 5th centuries BCE to launch these philosophical traditions? The main candidates are novel political organizations (states and empires), population growth, and agricultural innovations.

Of course, it’s important to understand that there isn’t actually much evidence that the axial age was unique in generating egalitarian ethics, moralizing religious ideals, and wisdom traditions;  there was a market for satirical stories like The Eloquent Peasant a millennium and a half earlier. But perhaps for the first time, following the Axial Age these innovations stuck.

Karatani’s claim, ironically, is that they didn’t stick. Instead, Ionia’s egalitarianism was replaced by Athens’ democratic inequality, where equality for a few was purchased at the expense of the domination of many more. Most political units, Karatani claims, went from tribal units to tribal agglomerations dominated by one tribe and structured by class contestations mapped onto those tribal lines. This, he argues, produces a despotic Asian state, characterized by bureaucratic price fixing. A market where buyers and sellers agree on prices through negotiation is thus a major innovation—one he credits to Ionia. And unlike in other city-states and empires, the free market did not amp up economic inequality in Ionia. Instead, it led to economic equality. Despite his disdain for neoliberalism, Karatani here sounds like a classical liberal: if only markets were truly free, there’d be no permanent winners and losers and free markets would produce both affluence and equality.

The Ionians were somehow able to dissolve their older tribal allegiances and create something he calls a covenant community” without either tribal boundaries or fixed class identities. And they did this by embracing the commodity fetish of coinage, market pricing, and somehow refusing to form a state, not in the sense that all tribal societies refuse to be joined into states (until they are conquered) but in some independent way. This last refusal then becomes the basis of “moralizing” religions in which even prayer and sacrifice are understood as primarily reciprocal relationships with the divine.

Later, of course, Ionia was conquered by the Delian league, and then by the many antecedents of modern Turkey. But something briefly flared in Ionia that was eventually perverted into Athenian democracy: Karatani calls it isonomy.

Defining Isonomy

The term isonomy” is usually defined in English as equality before the law” in the sense of equal civil rights. I usually follow Herodotus in defining it as a kind of maximally inclusive government, such as election to public office by lottery would produce. However, there are two other candidates: isonomy sometimes refers to home rule” or independence from foreign domination, and it was used by Hannah Arendt to refer to a kind of resistance to government which she calls no-rule.”

Karatani starts with Arendt. Here’s the relevant passage from On Revolution:

“Freedom as a political phenomenon was coeval with the rise of the Greek city-states. Since Herodotus, it was understood as a form of political organization in which the citizens lived together under conditions of no-rule, without a division between ruler and ruled. This notion of no-rule was expressed by the word isonomy, whose outstanding characteristic among the forms of government, as the ancients had enumerated them, was that the notion of rule (the archy’ from archein in monarchy and oligarchy, or the cracy’ from kratein in democracy) was entirely absent from it. The polis was supposed to be an isonomy, not a democracy. The word democracy,’ expressing even then majority rule, the rule of the many, was originally coined by those who were opposed to isonomy and who meant to say: What you say is no-rule’ is in fact only another kind of rulership; it is the worst form of government, rule by the demos. 
Hence, equality, which we, following Tocqueville’s insights, frequently see as a danger to freedom, was originally almost identical with it.”

Most readers of Arendt will know and love this passage. But it’s at odds with Herodotus and may well misread the historical political theory, if Karatani is correct. Karatani argues that the Ionians of the ancient Mediterranean world were able to achieve no-rule isonomy only through economic equality. From this economic equality they were able to dependably and sustainably preserve the possibility of equal self-government. And this economic equality was only possible because of a strong cosmopolitan right to immigrate and emigrate, along with a refusal of tribal or any other form of cultural or geographic loyalty to origins.” No-rule” then is only possible as no-source,” no arche.

The Forgetting of Isonomy in Athenian Democratic Theory

The Athenians, in contrast, prioritized positive liberties like voting and speaking in the Assembly over exit. This meant that their democracy was founded both homogeneity and several forms of domination: the domestic domination of slaves and immigrants, on the one hand, and the imperial domination of foreign cities on the other.

Solon’s term as archon might have had some hope of creating the conditions for true equality, as he eliminated debts and granted membership in the newly formed assemby to resident foreigners. But it took a tyrant to institute these reforms, and the tyrant who followed Solon, Peisistratus,  was able to seize power in large part because he executed land redistributions. This accustomed Athenian citizens to a novel form of equality, achievable only through the strong-man tactics of a tyrant who would enrich himself and his allies and thus preserve class relations.

Later Athenian tyrants would turn abroad to find resources to redistribute rather than risk their own wealth, like Percles who used profits from the Delian League to pay off Assembly members. Thereby, Athenians discovered something (seemingly) better than domestic equality: foreign conquests. Where the Ionians found true egalitarian isonomy through statelessness, the Athenians could only achieve a facsimile of  isonomy–democracy–through a strong state and an adventurous military. An active military requires a clear distinction between agricultural labor (slaves) and the standing army and navy (citizens), so this is the foundation of Athenian democracy, which is why all efforts to learn modern lessons from Greek demoratic forms are doomed to fail.

Exit and Voice

Political philosophers are more likely to argue about the contrast between positive and negative liberty, or between freedom and equality, than to focus on the pairing of exit and voice that derives from Albert Hirschman’s book Exit, Voice, and Loyalty. Understanding negative liberties like freedom from censorship or freedom from the establishment of a state religion primarily in terms of individual liberty and restrictions on state power creates the wrong impression. It’s an impoverished ideal of free speech rights that conceives of them merely to allow unlimited self-expression. When we defend free speech to ensure the effective support for each citizen’s policy preferences—in terms of positive liberty and effective political participation—we similarly run into questions about how much to tolerate intolerable ideas beyond leaving them uncensored.

The Hirschman paradigm suggests that we are better off if we think of two kinds of engagement: effective voice and cheap exit. Consumers and workers can always express their distaste for a product or working condition through mere complaining, but effective voice requires that the companies we work for or purchase from actually listen and respond, even if they don’t always give us what we want. For our exercise of voice to be effective, we need to feel heard and we need to feel that the exchange of reasons that follows is not merely a distraction. In the same way, the right of exit cannot be merely notional but impractical. Where exit costs are high, as when competing products are much more expensive, or other job prospects are poor, there is no cheap exit and threats to leave or switch brands are implausible. The nation-state often combines weak voice and expensive or impossible exit: it’s almost impossible for most people to effectively emigrate legally, and most citizens do not have an effective means to exercise their voice. Instead we are exhorted to practice loyalty—patriotic displays—and for some reason many of us accept this hostage situation with the forced loyalty of Stockholm syndrome.

Karatani argues, however, for an alternate: equality is realized through freedom. “The ability to move is a fundamental precondition of isonomy.” But where could they go? Karatani argues that emigrants could easily form new colonies in Ionia, or join older ones without penalty or prejudice. The underlying commitment to cosmopolitanism is distinct from the kind of ease of travel we now associate with the nation-state. (And note that fewer Americans move for jobs than we used to do.)

A Positive Role for Colonization?

According to Karatani, the Ionian system of isonomy was based on the priority of cheap and easy exits.  It’s hard to think of colonialism as a positive political impulse, but in this case it’s closer to the ideology of the frontier: rather than wrangle with entrenched interests or demand to be heard, an Ionian could simply pull up stakes and leave. As Karatani tells it, this both empowered Ionians in their effort to gain effective voice in the endeavors of their current states, and it ensured that all market transactions occurred in a truly reciprocal and ultimately egalitarian manner, without rent-seeking activities which could create permanent class divisions. Trade with neighboring city-states was carried out privately, while Athenian trade leagues were state affairs with plenty of skimming by elites. Conquest of other states could create a revenue stream for division as well.

In part this is based on Karatani’s claim that the ease of emigration and new city-state formation meant that no large farms and landholders could emerge. In contrast, the capture of slaves enables larger farms and a division of labor that then grounded the class system. The “despotic Asian state” always lurks as a possibility so long as human beings are too closely attached to the land, whether as serfs, slaves, or ethno-state citizens.

What is Faith to Free Men?

The most provocative claim in chapter one of Karatani’s book is his speculative comparison of Ionia to Iceland, where he notes that both Iceland and Ionian literature are characterized by a rejection of the gods: the Icelandic sagas seem to reject or ignore the Norse gods, while the Ionian philosophers are uncharacteristically naturalistic for the time. In the same way, 18th century American towns were also the product of migrants fleeing the strict class structures of a homeland, where many of them had been deeply religious. And yet these Americans formed relatively egalitarian communities once they arrived, characterized by easy exits to new frontiers, and a curiously deistic and pluralistic society blessed by Nature’s God. (Karatani doesn’t comment on the murder of indigenous peoples that made that frontier possible, however.)

Karatani thus sees freedom of movement, naturalistic religion, and social and economic equality as the key to isonomy.  Returning to Arendt, he advocates for the ward system to help to broaden the sphere in which freedom can produce equality.

Tune in next week to Joseph’s blog Between Two Untruths to read about chapter two.

The Progressive Case for the Welfare State: A Refresher

Many of my own fellow-travelers police progressivism in a way I sometimes find frustrating. It is de rigeur to chastise neoliberals and technocratic moderates for their lack of radicality. My work tends towards the technocratic/participatory divide around how policies should be made, and so I often don’t have strong policy preferences unless I’ve researched a question extensively. Thus I may be the wrong person to offer a common sense or standardized progressive defense of the welfare state, but I thought I’d give it a shot. Here goes:

Soft-core Case

  1. Taxes are the price of a good society. Many of the benefits that citizens enjoy are the positive externalities of our shared institutions, including safety net institutions. Thus, the wealth we earn in the marketplace is only partly due to our own effort, and largely due to social investments. Taxes are thus dividends owed for those social investments, and also the seed capital of future social investment.
  2. Private charity is laudable, but historically it has always come up short of real need. The welfare state responds to these failures of private efforts to ameliorate real suffering. Meanwhile, public provision of charity has been massively successful at reducing poverty and alleviating suffering. (The measures of poverty that claim otherwise assume away the goods and services supplied by safety net institutions.)
  3. The regulatory state responds to memorable injustices and documented depredations of private institutions and interests. Public regulation of industrial activity has helped to solve large-scale coordination problems, giving us cleaner air, safer drinking water, and lower mortality than countries who do not regulate those goods.
  4. It is no coincidence that the richest countries have more pervasive welfare states. Both serious poverty and large inequalities are inefficient for finding talented workers and ensuring that they are not excluded from sectors of the labor market that the rich might be tempted to monopolize.

Medium-Core Case

  1. There is a plausible case to be made for free markets: they tend to allocate resources more efficiently than alternative institutions when there’s a method for increasing the supply of that good. But free-market principles tend to fail where there are prospects of monopoly, including in situations of desperation where price-gouging becomes possible. Rent-seeking can happen both privately and publicly, but private rent-seekers tend to extract more value from those they exploit than public rent-seekers do.
  2. When users share a common-pool resource, they gain an incentive to maintain it, punish overuse and free-riding, and invest in future development. Economists have claimed otherwise for years, but eventually they gave Elinor Ostrom a Nobel Prize for her work showing that the so-called “tragedy of the commons” is avoidable.
  3. The safety net is properly understood as a common-pool resource, in specific, as a kind of infrastructure improvement. A functional public schooling system enhances human capital and makes workers more productive. A functional safety net for the very poor prevents the loss of human capacities to bad luck.
  4. Thus, there is good reason to choose mixed institutions (polyarchy) where markets and governments work together and in competition, with governments preventing the worst excesses of markets, and exercises of liberty (through exit, voice, collaboration, and innovation) preventing the worst excesses of governments.

Hard-Core Case

  1. We have stronger obligations to our fellow human beings than our moral psychology is equipped to recognize. The same part of our psyche that ignores the needs of strangers also hates other races and cultures. Group loyalties should be expanded as much as they can be.
  2. The nation-state partially corrects for flaws in our individual moral psychology. It generates the conditions under which we can recognize a limited set of our collective obligations that transcend our family and friends, making it possible to care for distant strangers, though not yet indiscriminately. We still feel stronger obligations to our co-nationals than to citizens of other countries; we have not yet discovered institutions that can produce recognition of cosmopolitan obligations. These obligations to co-nationals includes duties of care, reciprocity, and non-domination.
  3. Care and concern require us to seek both institutional arrangements and personal opportunities to engage with our vulnerable neighbors. Reciprocity requires that we ensure that capabilities and vulnerabilities are distributed in an egalitarian manner. Non-domination requires not just that we personally forgo interfering with each other, but that we reject institutional arrangements that allow other parties to arbitrarily and capriciously coerce our fellow human beings.
  4. Universal welfare programs, like universal infrastructure programs, are better at generating a shared sense of care, reciprocity, and solidarity.
  5. Universal programs are also more efficient than need-based programs. Universal programs don’t generate perverse incentives and poverty traps. Universal programs also don’t require resources be spent on civil servants to determine eligibility or investigate potential misuse.

Super Hard-Core Case

  1. Throughout much of our history, the state and private organizations have worked together to create conditions of exploitation. This includes colonialism, slavery, and the successors to slavery, and legalized discrimination against women, homosexuals, and indigenous peoples.
  2. Most large pools of intergenerational wealth are the product of those or other abuses, and most people earning above the median income are benefiting from that history of plunder as well. Other larger pools of wealth are primarily due to the financial sector which is propped up by the public regulatory state and through corporate capture of the state’s policies. Thus taxes and social spending are usually-inadequate efforts to repay those debts.
  3. Libertarians are right to note that redistributive efforts have usually failed to change the basic inequalities of distribution in our society, and that large regulatory states provide ample opportunities for regulatory capture and rent-seeking. But the answer is not to give up on reclaiming what has been expropriated, allowing the bandits to keep what they have stolen so long as they promise to raid no more! The answer is to redistribute more effectively, regulate more intelligently, and continue to target the ways that governments and regulators become captured by the interests of the wealthy.

I’ll note that I think the “soft-core” case is somewhat at odds with the “super hard-core” case, which is what often generates divisions between liberalism and progressivism. Yet I think this basically outlines my reasons for a commitment to the welfare state.

My friends who worry about moderate and technocratic ideological inconsistency are wrong, though. I think progressives should worry about governments, a lot. Governments do a lot of bad things, including a lot of things libertarians are good at recognizing and pointing out.

And really, this post was inspired by a libertarian. Over at EconLog, Bryan Caplan offers a “refresher” designed for libertarians who find Scandinavian welfare alternatives appealing. It’s a kind of intervention for prodigals. It works primarily as a reminder to those who are supposed to have known those things, but it works well. In a few short paragraphs, Caplan combines empirical claims about the efficacy of libertarian policies with principled objections (to borders and to the coercion of taxation.) It’s not exactly an argument: more a statement of premises, with an argument perhaps taking the form of a longer book like Michael Huemer’s The Problem of Political Authority.

Yet it’s still enough to provoke debate with other libertarians. And in my view, arguments with one’s fellow-travelers can be helpful for your collective projects. As is not-often-enough-the-case, we are currently contesting the nature of the progressive/liberal divide during the primary contest between Hillary Clinton and Bernie Sanders. It’s worth remembering our basic commitments to public and participatory institutions, as well as to just and competent government.

(Post updated March 8th)

Varieties of Inequality

I can think of at least six kinds of inequality:

Clothes are seen hanging outside a bus which has been converted into a dwelling for Lu Changshan and his wife near newly-constructed residential buildings in Hefei, Anhui province in China on November 12, 2012 (Jianan Lu/Courtesy Reuters).
Hefei, Anhui province in China  (Photo by Jianan Lu.)
  1. Inequality of income: different people receive different wages, either for different jobs or for the same job, as profits from capital investments, or as government subsidies, transfer payments, or private charity.
  2. Inequality of consumption: different people consume different products (i.e. the generic widget) in differing amounts and of varying quality. Some people have cell phones, computers, and tablet computers; some have just a cell phone; some people own no electronics. Some people have two homes, some are homeless, etc.
  3. Inequality of liberty: some people are subjected to more threats and interference than others. Some people can break the law, for instance by using illegal drugs, without consequence, while others are imprisoned and subjected to the whims and demands of institutional forces and individuals with strength or authority.
  4. Inequality of security: some people live more precarious lives than others. Some people are systematically subject to more frequent risks of loss, or have less assistance or fewer resources to fall back on should things go badly.
  5. Inequality of status: some people get more respect than others. Some people are treated with disdain and denied the prerequisites of basic human dignity. Some people are ignored and invisible, while others get more attention than they want from paparazzi and news media.
  6. Inequality of capabilities: some people have more beings and doings than others. Rather than more widgets and gadgets, some people have better access to the things that make a life go well: work, play, love, health, safety, an opportunity to be heard and make a difference, etc.

Now, potentially all of these inequalities might be troublesome, but when I think about political economy, I tend to think that inequalities grow in importance (and injustice) as they move away from nominal measures like “income” and towards real measures like liberty, security, status, and ultimately capabilities. Of course, the varieties of inequality are interrelated, but not always in a clear way. For instance, some people have high incomes but low security, like military contractors, some fishermen, and oil rig roughnecks who can all make six figure salaries by taking on inordinate risk of death or crippling injury. A wealthy person suffering from crippling depression might be consumption-rich but capability-poor. And we’ve probably all met or worked with angry low-level bureaucrats whose low status is combined with high liberty and security, which allows them to act capriciously and lazily without consequences.

In the famous aphorism of the “rising tide which lifts all boats,” John F. Kennedy suggested that it was possible that as the US progresses, the rich, middle-class, and poor states might all be better off in absolute terms even if they maintained their respective places. Subsequent use of the aphorism has generally added “even if they do not improve equally.” In the “rising tide” case championed by Kennedy, “relative” inequality would increase as the gap between rich and poor increased, while “absolute” inequality (i.e. poverty) decreased, as the poor became wealthier. But this suggests a seventh kind of inequality:

7. Inequality of growth: when a company or a country grows, some people get a larger share of the growth than others, either as a share of income, consumption, status, liberty, capabilities, or security.

Americans currently confront a situation domestically where the rich have made disproportionate gains in income and consumption compared to other classes, while the very poor experience severe losses in every category due to absurdly high rates of incarceration, lost life expectancy, increaased labor contingency, loss of meaningful participation in the political process, and many other factors. Yet while this inequality grows domestically, other inequalities are shrinking: Africa is growing again, and the the number of children who die each day from easily-treated poverty-related diseases has shrunk to half what it was a decade earlier. Some of the same factors that increased relative domestic inequality have reduced absolute global poverty. So this suggests that there are (at least) three different ways to measure inequality:

  1. The scope of the inequality: there is a difference between local inequalities and global inequalities, and on some measures and inequalities (for instance, status) the local matters more than the global, while sometimes it’s the domination or colonization of one place or group  by another that creates the problematic element in inequality.
  2. Inequality over time: for most of the world, each generation has been able to boast improved lives over the generation before. But there are times and places when this is not the case, and it may well not be the case in the future.
  3. Relative Inequality v. Absolute Poverty: Another important issue is that inequalities can be measured in relative or absolute terms: the “relative” measure is based on the difference between the most-advantaged and least-advantaged, or in some metrics between the extremes and the median. The “absolute” measure focuses on the actual levels of income, consumption, security, liberty, etc. which can rise independently or orthogonally to the difference between the best and worst.

In the literature, the last kind of inequality is often just referred to as “relative v. absolute inequality” but what really ought to concern us is when folks at the bottom face profound and multiple disadvantages. So when I think in terms of absolutes, here, I think we generally share the Rawlsian maximin intuition that we should confront and work to raise whatever the lowest-level of experience is, the floor or “bottom” that has become known as the situation of the “least-advantaged group.”

Civil-rights-leaders-want-Obama-to-talk-more-about-racial-inequalityAs for temporal and spatial inequalities, these are difficult issues indeed. Certainly there are Chinese cities where the environmental degradation is so bad that previous eras of lower consumption were actually better off; much the same may be true of European and American cities during our industrial growth spurts. We can think of the the inequality of growth as a problem that is primarily measured in terms of differences over time, but we also have to confront the profound differences between the growth levels in the US, Europe, and Japan, and the growth levels in Africa, South America, and Asia. There is growing confidence that these differences must be laid at the feet of poor institutional designs (hampered by colonial meddling) and cannot simply be explained by some form of exploitative expropriation of the developing world by the developed world.

There are broad measurement and aggregation problems with the more important kinds of inequality: it’s much harder to figure out how capabilities increase and decrease over time and populations than it is to measure income and consumption, even though measuring those is a very hard problem all on its own. Still, some theme have emerged. While there are some theorists who would not be ready to agree to the hierarchy of inequalities I’ve listed above, many justifications for libertarianism and classical liberalism rest on the assumption that the policies they advocate are best-able to achieve the maximization of the most important capabilities, securities, and liberties that I mention. After the work of Martha Nussbaum and Amartya Sen, there may well be disagreements about measurements and priorities, but there really are fewer folks who doggedly hold to the view that consumption alone is the key to the good life and ought to be maximized. Strangely, even as more people pay lip service to pluralism, there is more and more agreement on matters of fundamental metaethical goals. I take that to be a good sign.

But various versions of the problem of inequality that circulate strike me as potentially mistaken. For instance, it’s true that, in terms of wealth and income, the very rich lost more in absolute terms than the very poor: individual investors lost billions of dollars. But they did not lose a corresponding amount of consumption, security, status, or capability. Those losses play an important role in suggesting that the very rich were as surprised as the middle-class and poor by the structural problems in the shadow banking system and mortgage-market, however: after all, you expect a fraud or a crook to have enriched himself, not immiserated himself. On the other hand, differential inequalities of growth and security suggest that a very rich investor might be willing to make a bet that will double or halve her income even if it will do the same thing the very poor for simply because of the way one calculates gains and losses when you are very rich. (This goes back to Charles Karelis’s work on the differential rationality of wealth and poverty.)

Voice Beyond Recourse and Rights (Workplace Domination Part Four)

I’ve been putting off finishing my series on the Bleeding Hearts/Crooked Timber debates, because Chris Bertram had suggested that there might be a reply to critics. Now he says it might be a while longer, so I’m going to finish up.

In my last post, I suggested that none of the methods proposed by the Crooked Timber bloggers could actually guarantee “voice” instead of merely reciprocal power. Most of their proposed solutions, like workplace regulations, offer only rights and institutional recourse. But “voice” is special, and especially central to our conceptions of positive, active liberty: in the political sphere we contrast the ability to seek redress of rights-infractions in a court of law with the ability to protest and deliberate about what rights we should have and how our society should be organized. Even voting for representatives isn’t enough to guarantee “voice” if the choice offered to citizens forecloses some options they would like to consider, as Kenneth Arrow has proven it must.

Following Jim Bohman and Hannah Arendt, I’d suggest that the ultimate source of “voice” lies in issue selection, the capacity to initiate deliberation rather than simply responding to choices offered by bureaucrats. Neither unions nor regulators can offer this opportunity: as they grow in size and complexity, it becomes more and more difficult for an ordinary worker to offer a unique solution and to have that opinion heard. This is why Arendt called bureaucracy “the rule of No Man,” critically echoing the self-satisfied pronouncements of the Federalists that democracy requires “the rule of laws, and not the rule of men.” Perhaps I cannot be dominated (arbitrarily interfered with) by a law, a rule, or a procedure, but neither can I exercise the important human capacity to engage fully in the constitution of our shared world.

How, then, can we guarantee voice? I have three suggestions: the No Asshole Rule, Workplace Democracy, and Syndicalism.

The No Asshole Rule is a book by Richard Sutton that I often recommend. It’s a great mix of Harvard Business Review cases studies and common sense advice, but the punchline is simple: assholes are bad for business, so identify them, put them on notice, and if they don’t shape up, get rid of them. (This is precisely the kind of soft evaluation that strict union rules make impossible.)

Workplace Democracy: Have you ever thought that your workplace was overly political, too dominated by gossip and loyalties? Well, you were wrong: the truth is, your workplace is not political enough. Workers can and have deliberated and voted on matters as diverse as pay and management, workplace safety, and hiring and firing. Of course, as an introvert I know that this can seem a daunting task: too many meetings, too much social coordination, too many opportunities for status and exclusion games. It’s exhausting, and I can readily see the ways in which the ultimate recourse to group decision-making removes many of the safeguards supplied by constitional provisions that guarantee procedural justice. But if you want voice, this is how to get it. If you don’t like the idea of workplace democracy, then perhaps these objections point to a problem with voice.

Syndicalism: This term has a long and variegated history, but syndicalism basically just means worker ownership of the firm. The real problem with instituting no asshole rules and more democratic procedures in the workplace is that it pits workers against shareholders. Yet there are already corporate forms, like partnerships, where workers participate in decision-making because they are part-owners of the company. If they make good decisions, they receive dividends; if they make bad decisions, they may have to give up some of their salary or even go out of business.

Of course, part of the special history of syndicalism is the forceful expropriation of currently existing physical plant and machinery by the workers. But pacifist syndicalism is also possible, and many community development corporations are organized in basically this way. The real problem for syndicalism is how to allocate savings and manage reinvestment: a successful industry will produce profits in excess of what should be reinvested in the same industry. If those profits are invested in another industry, the workers in the first industry becomes owners of the capital and physical plant used by workers in the second industry. This problem is probably insurmountable: savings equals investment and investment creates inequality. That’s probably okay because investment also produces increased productivity, i.e. a bigger pie to divide less evenly.

One solution is to conclude that it is better to forgo voice in the workplace and simply to advocate for a generous welfare state and a Basic Income Guarantee so that each worker has adequate exit options. This is what Tyler Cowen and Matt Yglesias conclude, and I can’t help thinking that their critics at Crooked Timber were unwilling to recognize that they might have good reason for coming to that conclusion because the critics are so excited to paint libertarians as heartless.

Another solution is to advocate for “property-owning democracy,” fully cognizant that this may create a smaller savings rate and leave future generations worse off, as Rawls did. But if this is your stance, you shouldn’t be satisfied with regulations and unions: you should advocate for a fuller reorganization of the political economy beyond simple workplace antagonism. This the Crooked Timber bloggers have not done.

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….