Interview: Power in the firm.

Author:Chandler, Daniel

In her 2017 book, Private Government: How Employers Rule Our Lives (and Why We Don't Talk About It), Elizabeth Anderson argues that workplaces give employers authoritarian powers over workers. She shows how free market discourse has blinded us to the authoritarian nature of the workplace, and explores ways to democratise work.

Daniel Chandler (DC): There is a lot of interest in the UK regarding questions about power and control in the workplace. You are working with a new think tank, Common Wealth, on these issues. There are also policy ideas coming out of the Labour Party in particular about different models of ownership and workplace democracy. In your book you draw a parallel between the power that the state exercises over citizens and the power that employers exercise over their workers. Could you say a bit more about what you mean by 'private government'?

Elizabeth Anderson (EA): I am trying to get at the idea that the workplace is a little government with authority relations--that bosses have authority over workers. Once we can see the workplace as a form of government, we can ask what the constitution of that government is. In American workplaces, and I think to a substantial degree in workplaces in the UK, the constitution of that government is a dictatorship. It is fundamental to it that workers don't have a constitutive voice in how things are run. They are subject to the authority of their workplace government without having a voice within it. That's what I call private government. Private government is government that is not accountable to the governed, because the governed don't have authority within that form of government.

DC: There is a debate within economics about the nature of power within the firm. One objection to the parallel which you draw is that workers can leave firms more easily than citizens can exit their countries. What is your response to that?

EA: I think this is only a matter of degree. Within the EU it's actually quite easy to exit your country! You have guaranteed rights to enter other countries in the EU.

The power to leave an employer, meanwhile, declines over time. Suppose one's occupation is such that one is powerless and vulnerable to abuse at work. So, for instance, the overwhelming majority of workers in the United States who work in restaurants suffer from sexual harassment by bosses, by customers and by co-workers. Well, if they want to stay in that industry where are they going to exit to in order to avoid this? You don't know that you are going to be subject to sexual harassment until you enter that job and experience it. It's hard to tell from the outside. But someone who accumulates a record of quits is going to look less and less employable. Under American law people who quit also can't collect unemployment insurance. So, there are huge costs to exit.

DC: There hasn't been much discussion of power relations between bosses and workers in recent decades, even on the left. Why do you think this is?

EA: I think the dominance of free market discourse plays a role. When we conceive of the employment relation as a matter of freedom of contract it presents a superficial appearance of 'no power', because the two parties enter into a contract as independent parties. There is supposedly a meeting of minds, and they work out the details in mutually acceptable terms. But that is illusory.

The employment contract is not something that's been independently devised and negotiated between the parties. In fact, the default employment contract is much like the marriage contract. Its default terms have been set by the state. In the nineteenth century, the marriage contract cancelled out a woman's independent legal existence. She was rendered by the terms of the contract entirely subordinate to her husband. Today the state has altered the marriage contract to make things more equal. But it hasn't altered the employment contract to equalise the power of workers and employers.

The employment contract, by default, hands nearly all power to the employer, reserving almost none for employees. Yes, you can negotiate from that baseline, just as under the old law of coverture wives could negotiate from a powerless baseline for a pre-nuptial agreement to retain some rights, say to keep their own property. But in reality, when you have dealt all the authority cards to one side, what incentive does that side have to deal any of those cards back to the other side? Very little.

Ordinary workers really only have the power to get authority cards back if they are organised as a collective in a union. Then they have some power, but as individuals generally not.

DC: Some economists argue that it doesn't really matter what is written in the contract--that the eventual relationship will just reflect the relative...

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