The Invisible Handcuffs of Capitalism: How Market Tyranny Stifles the Economy by Stunting Workers (4 page)

Despite the poor record of large corporations in providing good jobs, business attacks any legislation intended to raise wages or improve working conditions as a “job killer.” The use of such clever terms effectively cuts off any discussion with those who might be foolish enough to advocate such policies. In light of the absence of
effective regulations to prevent workplace fatalities, more attention should be given to killer jobs rather than job killers. Such alternative phrasing cannot gain traction in the present political climate, because those who dare to question the wisdom of the Procrustean economy seldom manage to get a public hearing.

Although employment in the United States has increased during the last three decades, hourly wages corrected for inflation peaked in 1972 at $8.99, measured in 1982 dollars. By 2007, hourly wages had fallen to $8.32. Well-paying blue-collar jobs had been disappearing for years.
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Then, decent white-collar employment suffered the same fate. Both trends helped to give us an unprecedented stretch of thirty-five years without an increase in real wages.

In addition, jobs have become more insecure. A few decades ago, many people had long-lasting careers. They could feel reasonably certain that as long as they performed their job well, they could continue with the same employer and probably also advance to better positions.

Today, businesses now openly regard workers as disposable commodities. Downsizing, outsourcing, and plant closings have become routine events. The
Wall Street Journal
casually noted that “many management theorists” maintain that “the whole concept of a job—steady work at steady pay from the same employer—must be discarded.”
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Just after AT&T announced the layoff of 40,000 workers, James Meadows, vice president for human resources and responsible for administering the job cuts, explained corporate thinking about job mobility:

In AT&T, we have to promote the whole concept of the workforce being contingent, though most of our contingent workers are inside our walls. “Jobs” are being replaced by “projects” and “fields of work” are giving rise to a society that is increasingly “jobless but not workless.” … People need to look at themselves as self-employed, as vendors who come to this company to sell their skills.
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Meadows’s honesty points to the shallowness of business’s professed interest in job creation. For people like him, business supplies
plenty of opportunities. If people cannot take advantage of these, something is wrong with them. If not enough opportunities are available, some interference is upsetting the smooth functioning of the market. Masters of Procrusteanism never apologize for the way the system treats ordinary people.

Work! Work! Work!

Although jobs are at the forefront of economic policy dialogues, the nature of the work itself gets little consideration. After all, work raises troubling questions. With all of the advances in technology, why do people still have to work so hard? Although the physical demands of most modern labor are light compared to those who worked in William Blake’s “dark Satanic mills, “work in pre-capitalist societies had certain advantages over labor today. Before markets became dominant, people worked relatively few yearly hours. During harvest times, work was long and hard, but during much of the year, free time was abundant. Joan Thirsk estimated that in sixteenth- and early seventeenth-century England, about one-third of the working days, including Sundays, were spent in leisure.
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Innumerable religious holidays punctuated the tempo of work throughout Europe. Karl Kautsky estimated that there were 204 annual holidays in medieval Lower Bavaria.
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In short, modern technology has not so much been used to relieve people of the burdens of work as to extract more work from people.

Modern technology has eliminated many awful jobs. Relatively few people in the United States work in dangerous, subterranean coal mines. Yet many modern jobs put workers at risk for more subtle but equally lethal conditions. In so-called “clean rooms” for semiconductor production, workers lack adequate protection from the toxic chemicals that surround them, while they wear “bunny suits” to protect the silicon from the workers’ bodily impurities.

The contrast between jobs and work is striking. Many people work long hours in poor conditions, while millions of people are left looking for jobs. Shouldn’t a successful economy emphasize the
development of technology that makes work easier, rather than creating technology intended to make a smaller number of people work more intensively? Why wouldn’t a successful economy apply modern technology to make work less stressful? Such questions are rarely raised in polite society.

As I will explain later, modern economics frames the world in a way that precludes questions about the nature of work by adding its own Procrustean twist. Economics devalues work by reducing people to one-dimensional consumers who maximize their “utility”—economists’ strange term for enjoyment—by using their budgets (however limited) to select bundles of goods suitable to their personal tastes. Within this framework, work represents nothing more than the loss of utility that people experience because they choose to sacrifice leisure to get utility from consumption. In effect, the clock becomes the sole indicator of working conditions.

When Workplace Procrusteanism Subsides

Ironically, despite the constant drumbeat of business advocates calling for tax cuts and subsidies to aid corporations in their holy quest to create jobs, employers actually need a large pool of unemployed workers. When unemployment is low and the fear of getting fired subsides, workers’ bargaining power increases. Employers recognize pools of unemployed workers as a valuable tool for increasing their bargaining power.

Because most people do not enjoy taking orders and have a natural tendency to assert some independence, workers can become rebellious when workplace authorities do not treat them with respect, especially when they feel confident that comparable jobs are readily available.

In the late 1960s, when unemployment was unusually low, Procrustean authority was far less effective. For example, in 1968, Bill Watson, a sociologist, spent a year working in a Detroit automobile factory, where he witnessed several dramatic examples of the lengths to which workers went to challenge management. In one
case, workers revolted against the production of a poorly designed six-cylinder model car. After management rejected employee suggestions for improvements in the production and design, the workers initiated a “counterplan,” beginning with acts of deliberately misassembling or omitting parts. Workers in the inspection section made alliances with workers in several assembly areas to ensure a high rate of defective motors.

In the process, workers and foremen argued over particular motors. Tension escalated. Workers went ahead and installed defective motors in cars, thereby forcing management to remove them later. The conflict ended only when a layoff allowed management to move the entire six-cylinder assembly and inspection operation to another end of the plant.
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In a second instance, the company attempted to save money by building engines with parts that had already been rejected during the year. Workers in the motor-test area lodged a protest, but management hounded inspectors to accept the defective motors. After the motor-test men communicated their grievances to other workers, they began to collaborate in intentional sabotage. Inspectors agreed to reject three of every four motors. Stacks of motors piled up at an accelerating pace until the entire plant shut down, costing the company more than ten hours of production time to deal with the problem. When management summoned inspectors to the head supervisor’s office, the inspectors slyly protested that they were only acting in the interest of management.

Watson’s third example is the most telling of all. During a model changeover period, management scheduled a six-week inventory buildup, keeping only fifty people on the job. These workers would have earned 90 percent of their pay if they had been laid off. Workers reacted to the opportunity and attempted to finish the inventory buildup in three or four days instead of six weeks. They trained each other in particular skills, circumventing the established ranking and job classification system to slice through the required time.

Management responded harshly, forcing workers to halt, claiming that they had violated the legitimate channels of authority, training,
and communication. If workers had been given the opportunity to organize their own work, Watson claims that they could have completed the task in one-tenth the scheduled time. Management, however, was determined to stop workers from organizing their own work, even when it would have been finished more quickly and management would have saved money because of the speed-up.
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So much for the idea that market forces lead to efficient choices!

Watson also described how workers engaged in hose fights at the workplace and organized contests to explode rods from engines. These incidents illustrate the enormous costs associated with a conflictive system of labor relations. One might argue that the particular managers that Watson described were unusually shortsighted, but something else was at stake. To admit that workers have something to contribute beyond blindly carrying out the demands of management undermines the ultimate rationale for management’s domination. As a result, managers often instinctively resist all encroachments on their authority, no matter how much this authority impedes productivity.

Watson’s story communicates a sense of the intense joy and exhilaration that workers felt from having the opportunity to organize their own activity. He applauded the industrial sabotage as “the forcing of more free time into existence.” He explained:

The seizing of quantities of time for getting together with friends and the amusement of activities ranging from card games to reading or walking around the plant to see what other areas are doing is an important achievement for the laborers. Not only does it demonstrate the feeling that much of the time should be organized by the workers themselves, but it also demonstrates an existing animosity….

While this organization is a reaction to the need for common action in getting the work done, relationships like these also function to carry out sabotage, to make collections, or even to organize games and contests which serve to turn the working day into an enjoyable event.
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Watson’s experience may not have been particularly unique. In the 1980s, the United States automobile industry had to dedicate an estimated
20 percent of its plant area and 25 percent of its workers’ hours to fixing mistakes.
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The industry had two options available. It could intensify its supervision over workers or it could actively engage its employees by giving them more control over their jobs. The first option is not only expensive, it further alienates the workers, perhaps encouraging other forms of sabotage. The choice made, that of more intensive supervision, suggests that the automobile industry seems to have adopted the attitude Watson experienced.

One could argue that the behavior Watson described was evidence of the need for a firm hand to control rebellious workers. That rebellion, however, may have been less a product of outrageous and unacceptable behavior by these workers than a natural response to the Procrustean response to the conflict inherent in the relationship between labor and capital.

Imagine how much the company lost just because management stubbornly refused to take advantage of the workers’ on-the-spot knowledge of the business. But to do so would have weakened the dysfunctional Procrustean hierarchy that allows managers the privilege of seeing themselves as superior to their underlings.

In fact, management’s perception is less relevant than that of the workers. Once you get beyond the theology of capitalism, the ultimate justification for this mode of production is that the efficiency of markets can offer the best possible life for people. Part of the illusion of efficiency is that capitalism is a meritocracy—that the best people rise to positions of authority. Consequently, maintaining the legitimacy of authority is crucial for capitalism.

The proper maintenance of authority is an old question. Machiavelli’s
The Prince
may be the classic text on the subject. His chapter 17 asks whether it be better to be loved than feared. He concluded “it is safer to be feared than loved.”
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Machiavelli’s conclusion is just as applicable for capitalist management as for a medieval prince. In this sense, a certain amount of Procrusteanism is a necessary requirement for the capitalist workplace.

The key insight from Watson’s experience is the degree to which the workers were able to organize themselves in spite of management.
Had their objective been to earn profits, their efforts would have qualified as entrepreneurial—and far more so than is usually expected from workers who lacked the formal qualifications usually associated with leadership.

The Federal Reserve to the Rescue

Business leaders understood why workers, such as Watson and his colleagues, openly challenged management. They had little fear of getting fired because unemployment rates were very low. Although they would never admit to such crass motives, business leaders know that maintaining a substantial level of unemployment gives them a strategic advantage. Losing a job posed few risks for Watson’s colleagues since many equally attractive jobs were available at the time. Where jobs are harder to find, workers are less likely to behave in ways that displease management, including demanding higher wages.

Since the end of the Second World War, the responsibility for creating the “appropriate” level of unemployment has fallen to the Federal Reserve. Officially, the Federal Reserve has a dual mandate to prevent inflation and to maintain full employment. In reality, the Fed concentrates on fighting inflation by vigorously preventing full employment.