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The unbearable inevitability of conflict between workers and employers
How America’s particularly exploitative and authoritarian form of capitalism encloses the powerful in the fantasy that worker-vs-employer conflict is unnecessary and unnatural.
The world of Washington, DC politics has a bunch of weird little traditions that you only discover over time. For instance, the House of Representatives’ Committee on Education and Labor apparently gets a name change whenever majority control of the chamber flips. In fact, “the Committee on Education and Labor” was just its name under the Democrats over the last two years. After Republicans won control of the House at the start of the year, they switched it to “the Committee on Education and the Workforce.”
As you can probably guess, Republicans ditched the term “Labor” because it carries the whiff of commie sympathies. But read their explanation for the switcheroo, and what’s really striking is this little nugget: “The Left prefers the term labor because it creates a sense of enmity between employees and employers which union bosses and left-wing activists seek to stoke for political gain.”
Researching last week’s piece on workplace democracy, I stumbled across an op-ed that Republican Senator Marco Rubio wrote in early 2021, gingerly suggesting the GOP explore alliances with workers against “woke” corporate leadership. But first, he had to do some obligatory throat-clearing in a similar vein: “Republicans have rightly understood the dangers posed by the unchecked influence of labor unions. Adversarial relations between labor and management are wrong. They are wrong for both workers and our nation’s economic competitiveness.”
Notice the wording: the term “labor” creates a sense of enmity. Implying there is nothing inherent to relationship between employers and employees that could create enmity naturally; rather, conflict must be shoehorned in from outside the relationship, by ideological busybodies and self-interested bad actors. Rubio then goes on to imply that conflict between employers and employees is not just unnatural, it is wrong; it is destructive, and always to be avoided.
Again, if you’ve watched U.S. politics long enough, you start to notice recurring patterns. And another example is this idea that happy comity between workers and owners is the proper state of affairs towards which all well-meaning people gravitate—and that conflict between the two camps is both artificial and extremely unpleasant. Hence a skittishness about unions, and a skepticism about organizing workers in general, that extends beyond the GOP to plenty of centrists and Democrats as well.
This notion is, of course, all horseshit. But we’ll get to that in a minute. First, I want to tease out how this thinking, while horseshit, also touches on a very deep tendency in American political life.
Economics Is Politics, and Politics Is a Problem
Put succinctly, Americans kind of hate politics. We poor benighted weirdos who follow politics are in the minority. Most Americans don’t follow politics, and don’t like thinking about it.
Politics inevitably involves fights and anger and tension; deal-making and horse-trading and ugly comprises of principle. In any community where people have different needs, values, and priorities, all of which can’t necessarily be harmonized—which is every community ever—that’s the only way to hash out disagreements and arrive at a workable solution. It’s completely unavoidable, and also completely natural. But natural or not, most people don’t really like watching this whole process go down; they find it unpleasant and disconcerting.
There seems to be a romantic notion floating out there in the culture that if everyone is coming to the table with good intentions, then even if they have different values or backgrounds, consensus should be pretty easy and painless to arrive at. Politics should be close to a frictionless process, in other words. And if it’s not, something must be going wrong, and someone must be coming in with ill intent.
Why this is all so, I don’t know. My suspicion is that human neurology and psychology had about 2 million years to adapt to life in small hunter-gatherer communities, and then roughly a quarter of a percent of that time frame to adapt to life in large cities and nation states. When the relevant community is small enough that you can plausibly know the face of every person in it, and at least a little about their lives, the work of politics probably is a lot closer to frictionless! When the community in question is 360 million people, I don’t think it's surprising that most people kind of recoil or short circuit.
I pointed out in my last newsletter that every company is itself a political community. Because doing economic activity requires answering the questions: What should we build? What tasks should we take on? Who should do what? For what compensation? And how should resources be distributed amid all that? These are all just specific variations of the universal question posed by politics, “How are we to order our lives together?”
Another way to put this is simply that all economic activity is a subgenre of politics—including all relations between workers and owners, employers and employees. So everything that people hate about politics is also stuff they’re going to hate about economic decision-making. So I actually think the Republicans’ gut revulsion at “adversarial relations between labor and management” is not just hackish pro-business bullshittery, but often a genuine and deeply-felt sentiment. It’s a foolish and destructive sentiment; but nonetheless an honestly felt one, with some pretty deep roots in human nature.
My last piece also argued that culture war conflicts within workplaces could be settled with more legitimacy for all concerned if workplaces were more democratic. The trick about democracy, though, is its legitimacy comes from making conflict visible. The whole idea is “one person, one vote”—everyone has equal leverage over everyone else; equal power to make their demands known and felt. Everyone has an equal capacity to impose friction. And then we hash it out.
Admittedly, that can be rather unpleasant. Democracy is probably a lot like exercise or eating your vegetables: Doing the good and healthy thing—and doing it consistently over the long haul—can just be a grind. It’s just a hard fact of life you can’t get around.
And yet, in the realm of formal politics, I’d actually say Americans have gotten fairly good at practicing democracy. (Recent Trumpian crises aside, anyway.) We’ve conquered temptation and established the virtuous habits; we’ve gotten good at consistently eating our vegetables.
But we still think, mistakenly, of economic decision-making as a separate realm from formal political decision-making. We haven’t extended the habits of democracy into economics. In fact, our country’s policymakers and political culture actively resist doing so. Because in the economic realm, we still default to the assumption that the presence of conflict means things have gone wrong.
Free Market Ideology: Ice Cream Forever
One of the big reasons I think free market ideology has such an appeal on the right is precisely because it offers the seductive fantasy of escaping politics’ incursion into economic life. When it comes to conflict in economic decision-making, free market systems hide the ball; they lure us in with the idea that we can have ice cream as much as we want.
First off, a central feature of free market systems and their ideology is private ownership of firms.1 (Which really does need to be understood as fundamentally different from private ownership of possessions and things.) Owners and executives decide all those aforementioned economic questions about how to deploy resources and who does what for how much pay, and then the workers follow orders. The workers may not like their orders, but there is no way for them to make their dissatisfaction felt; they have no democratic voice by which to impose friction on their employers. (No way except for unions and organizing, which are illegitimate under free market ideology.) It’s a mix of oligarchy and dictatorship. Private ownership of firms is just a form of firm governance—authoritarian governance, specifically.
Authoritarian governance can be a very pleasant experience for the authoritarians themselves, along with their supporters and acolytes and enforcers. By definition, they do not feel the friction of conflict, since authoritarian government provides no legitimate means for anyone to impose friction on the ruler. And this feeds back around into the authoritarians’ own sense that they are the true will of the people they rule. No one’s telling them “no,” after all! It really does feel like the dream has been achieved. And when conflict does rear its head, it really does feel fundamentally illegitimate; like something has broken down and gone awry. That’s equally true of how political dictators and authoritarians experience the world, as well as the economic dictators and authoritarians of America’s ownership class.
Defenders of the free market system will reply that we do not need worker democracy within firms, because the competitive free market itself provides workers with a democratic voice. Every economic relationship is individualized and voluntary: If you don’t like the price at which someone is selling you a product or service, or the price at which they’ll buy it, you can go find another seller or buyer. If you don’t like how a business is run, what it pays, or the work conditions, you don’t have to be their employee. You can go work somewhere else. There is no decision that you have to live under if you don’t like it. This fundamental right of exit gives everyone the same bargaining power, and the same amount of leverage over everyone else. The principle of “one person, one vote” is thus achieved by workers “voting with their feet” for the employer they prefer.
This also means there is no genuine conflict—or, to be more precise, no natural conflict—in a free market system. Conflict is a communal phenomenon: the community must collectively come to a decision, and everyone must live with it even if they don’t agree with it—or be coerced into living with it. (And politics is, of course, irreducibly communal.) Conversely, in the free market, the circumstances that create conflict may arise, but conflict itself never actually occurs; people just break off the relationship and move on.
You could point out that the realities of grotesque income and wealth inequality in our country should render all these conceits obviously absurd: Clearly, there is conflict going on, and someone is getting screwed. But according to the moralistic folk-wisdom derived from marginal productivity of labor theory, a competitive market system naturally compensates everyone in accordance with their contribution to society. If you want your income to be higher than it is, you need to become more productive: work harder, work longer, or upgrade your skills. The only other option is to take money you don’t deserve away from people who do deserve it.
In other words, in this framework, it is not even conceptually possible for unions and organized labor to be forces for justice. The only possible way “bargaining” and “negotiations” can raise workers’ pay is theft through bullying: Unions come into the peaceful, functioning market order and create unnatural and unnecessary conflict with ill-intent.
Free Egalitarian Choice in Theory, Authoritarianism In Practice
We can briefly sketch all the ways the real world obstinately refuses to live up to the free market ideal. For the sake of simplicity and workability, the mathematical economic models that backstop free market ideology make all sorts of assumptions about how the world works that are, in reality, either exceedingly rare or utterly impossible: things like zero transaction costs (resources can go everywhere, and new firms can be set up, all instantaneously) and perfect universal knowledge (everyone knows the qualities and risks of every product and service).
Even something like perfect competition, an ideal we can at least sort of approach, requires aggressive antitrust enforcement and policing of anticompetitive behavior by employers (all regulation that free market enthusiasts generally oppose) and full employment (a state the U.S. economy has achieved in, at best, 10 years out of the last 80).
Then there’s the fact that modern market capitalism did not spring fully formed from the aether, with every participant starting at an equal level of income and wealth from whence they can then make their choices. It emerged slowly, over time, absorbing the already-existing disparities of wealth and power created by centuries of empire and colonialism and monarchy and slavery and feudalism and every other form of exploitation and domination under the sun.
All these discrepancies—between the free market fantasy and the real world as it actually is—introduce power imbalances, and thus coercion, into the system. And all those imbalances run in the same direction: giving owners, employers, and the wealthy power over employees and customers. Companies know if their product is flawed or their work conditions are dangerous while customers and workers often do not. Transaction costs and the lack of perfect competition favor big market incumbents, giving them monopoly power to screw customers and monopsony power to screw employees. The constancy of unemployment and the constancy of poverty mean millions of people throughout the economy do not have meaningful choices, but must take whatever deal they can get, no matter how exploitative, just to avoid starving.
As a result, free market systems create de jure authoritarianism through capitalists’ private ownership of firms. But underneath this is also a layer of de facto authoritarianism, created by how we structure our “competitive” markets, aggregating overwhelming power and leverage to a relatively small population of owners and executives and investors, and leaving everyone else at their mercy. And for that small population of rulers, all these circumstances collude to create the illusion—the hologram, the virtual reality—of comity; of an escape from the ugliness and pettiness of political conflict.
This all isn’t just some perverse irony of human self-delusion; it’s a critical feature of free market ideology’s appeal. If we ever achieved a world where workers’ right-of-exit had real force, and really gave them equal power in economic decision-making, we would be cast right back into the problem created by unions and the leftwing quest for economic democracy: We would have conflict again! Owners would no longer give orders that workers obey, they’d have to actually negotiate with workers over how economic decisions will be made. And they’d often lose those negotiations! We’d have friction, and we’d have it everywhere. The illusion would be utterly shattered.
Free market ideology must keep offering an egalitarian world of freely-choosing individuals in theory, while delivering authoritarianism in practice. That’s its whole selling point. The ownership class can keep eating ice cream, while believing it’s eating vegetables.
With Friends Like These, the Free Market Doesn’t Need Enemies
One recent concrete example of this contradiction, and the concrete ways it plays out, should suffice: If the federal government runs fiscal and monetary policy correctly, while properly regulating market concentration and competition, we can create an environment of full employment and robust competition for labor. Thus it is at least possible to approach the free market ideal in a few limited respects: Under full employment, workers really can pick the job that is best for them, and not just any job that’s available to stave off destitution; their right-of-exit really does become leverage to demand better pay and work conditions from employers.
As I mentioned, the U.S. has not achieved this state often. But it has, on occasion, briefly approached it, in fractured fits and starts. In the years immediately before and after the pandemic, we got unemployment down to 3.5 percent, and strong wage growth for lower-income workers especially. We can do better, but it’s closer to full employment than we’ve been in decades.
And employers responded by absolutely freaking the fuck out.
See the flood of stories about worker shortages, rising costs of labor, “quiet quitting,” and all the rest of it—each one a sign that, for once, workers actually have the leverage to turn down job offers they don’t like and set at least some of the terms of their own employment. There are literally stories about how employers are disturbed at how few employees are willing to put in more time and effort than they’re paid for. Imagine being so accustomed to your position as the exploiter at the top of the food chain that when your employees refuse to give you free labor, it strikes you as some sort of calamitous breakdown in the social fabric.
It’s important to remember that actual competition is a hellish experience for owners and employers. They are under constant pressure to give up power and profits to either improve pay and work conditions, or to invest in better technology and business models to stay ahead of the competition—or, most often, both. It’s a situation they work their asses off to avoid.
The irony is that even getting close to the free-wheeling, egalitarian world of the free market ideal actually requires constant husbandry of the economy by the government—through regulation, fiscal policy, and monetary policy. We pretend that “small government” is synonymous with “free market,” when in fact approaching the actual social state envisioned by the free market ideal requires all sorts of constant care and management by a very powerful, very active government with plenty of coercive power.
Meanwhile, the rich and powerful are constantly deploying their vast monetary, cultural, and political influence to prevent that husbandry from happening. And the fans of the free market fantasy are constantly encouraging and defending and aiding the rich in doing so. The real world does not just fail to live up to the free market ideal because the real world is messy; it also fails because free market ideology itself opposes the policies and practices that would bring the real world at least a little closer into alignment with the ideal.
Again, this is central to free market ideology’s ability to seduce: For the ownership class, the day-to-day pleasantries of being the authoritarian and the dictator is what confirms for them that the free market system is delivering on its promise of an escape from conflict. But that distribution of power must also be forever defended and maintained, without anyone quite realizing that defending dictatorship is what they’re doing. So the specific policies that are collected under the umbrella of free market ideology are conceptualized and sold as policies that defend individual freedom from “big government” and “big labor,” while in practice those policies entrench the reality of oligarchy and dictatorship under private capitalist ownership.
Taking Fallen Human Nature Seriously
Do employers and owners and their defenders know they’re doing all this? In at least some instances, the answer is certainly “yes.” But for the most part, I doubt it. I think most of them really do fall for the illusion. “It's difficult to get a man to understand something when his salary depends on not understanding it," as Upton Sinclair once quipped. Owners and employers are, like the rest of us, only human, and the heroes of their own stories.
Another pattern I’ve noticed in American politics—and a bitterly amusing one—is conservatives’ belief that, unlike liberals and leftists, they understand human nature as fundamentally fallen; how we are all prone to self-delusion and sin. So you would think that conservatives, of all people in politics, would be most open and receptive to everything I’ve just laid out. Hell, my entire argument is basically just Lord Acton’s observation that power tends to corrupt combined with Christ’s warning that it is easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of God.
Instead, it is a bedrock precept of conservative politics that owners and employers are benevolent: “Though the Left likes to treat employers like predators, we know that most job creators have their employees’ best interests in mind,” Republicans also asserted in their explanation for the committee’s name-change. Apparently, like a Latin American strongman and his subjects, employers know the true will and needs of their workers. When it comes to the “job creators”—the people who, according to the wisdom of the ancients, are more prone to sin than any of us—it seems that all this business about fallenness goes right out the window. For them, the standard laws of human nature are suspended.
For all the talk of the modern Republican Party becoming “working class,” their base remains employers—particularly small businesses, small proprietors, pass-through companies, and mid-tier capitalists. There are interesting divisions among the capitalist class these days: big, publicly-traded corporations and their investors and executives are somewhat friendlier to Democrats, thanks to the expanding popularity of social progressivism. But the privately-held companies, family businesses, and pass-through entities traditionally associated with “small business” remain much more politically reactionary—and have grown in size and clout to match their publicly-traded counterparts.
But one trait all these owners and capitalists share is their position as employers. They are the rulers in America’s authoritarian workplaces. They set their workers’ pay and decide their workers hours and conditions; they draw their profits and incomes from the same pool of revenue that supplies their workers’ pay; and their sense of ownership over their companies requires their workers’ subservience and obedience.
The owners and capitalists are the ones trapped in the hologram; the illusion that private ownership and the free market system have delivered the dream of “comity” in economic relations.
And their supporters in the GOP and the American right are caught just as fast in this virtual reality. These are the people Republican politicians rely upon not just for donations, but for actual feedback “from the voters” on how governance should proceed. They are the social waters Republican politicians swim in; they are often the social circles that produce those politicians. They create and sustain the foundations and think tanks that make up the rightwing’s brain trust.2 And the whole crew responds ferociously whenever that illusion is threatened.
To the tyrant, peace and comity and brotherhood are what happen when everyone does what the tyrant tells them, with dispatch and without complaint.
Instead of “free market systems and their ideology” you could also say “neoliberalism and neoliberal ideology.” But these days “neoliberalism” feels very inside-baseball to me. Its use is often rote or knee-jerk, and communicates affiliation with a particular tribe more than a popularly-understood description of a particular social order. So I prefer avoiding the term.
Admittedly, the Democrats are hardly pristine by comparison. They have plenty of wealthy donors and contributors to think tanks as well. As I mentioned, they increasingly enjoy support from the world of publicly-traded corporations and their executives and investors; along with a base increasingly made up of well-paid, well-educated elite workers in the creative professions. And none of that bodes well for the Democratic Party’s chances of genuinely championing working-class needs. But even elite workers remain workers; employees rather than employers. And to the extent that unions, organized labor, and mobilized low-income voters wield any voice in Washington, it’s Democratic Party politicians who answer to them.