What I’ve Been Reading: ‘Private Government’
In her book Private Government: How Employers Rule Our Lives (and Why We Don’t Talk About It), Professor Elizabeth Anderson attempts to provide a conceptual framework for the anti-democratic core of the capitalist firm, foregrounding the class relation as one of subjection to unaccountable, arbitrary private government. She contends that the distinction between public and private and their relation to government — and indeed, how such divisions and processes augment or diminish freedom — has been misunderstood, both in political philosophy and everyday discourse. What is public and what is private, she insists, is relative: if something is private from you, you have no business sticking your nose in, no right to influence it nor to demand justification from it. It is a private matter, and as such you are denied any transparency, accountability or decision making power over it. Public, of course, is the opposite: it involves you, and indeed its legitimacy rests on such involvement. The public sphere is constituted by those mechanisms of oversight and participation.
Government belongs to neither one nor the other. Hierarchies of authority in the management of social fields has or does exist in the family, the church, the state and, most pertinently, the workplace. That the state is associated with the public is not an inevitable, necessary relation, but the historical product of a militant assertion of political equality, individual rights, and democratic voice. Before this success, the state was private to the majority, but public to the king, queen, aristocracy, and so on. Hence its relativity. Parsing open that shell of exclusivity, thereby equalising the relations of those to whom the particular government impacts, is the fundamental aim of any democratic movement.
Anderson problematizes the notion of freedom as it is used in contemporary, libertarian-inflected discourse. There are three kinds: negative, positive, and republican — freedom from interference with action, freedom to realise your potential, and freedom from dominance by an arbitrary, unaccountable will. There may very well be trade-offs between these. Private property rights, she notes, are founded upon a quite substantial trade off: between the rights of all to hold resources in common, whose negative liberty must be violated in order to — as the argument goes — expand everyone’s positive liberty through the superior wealth-generating qualities of a system of exclusive, private ownership. Perfect negative liberty, where everyone may do anything without interference, is a Hobbessian dystopia, replete with its destitution of opportunities. Equally though, negative liberty restraints may be placed on the governors of private corporations so as to expand all three freedoms of their workers: to remove private ownerships interference over (read: denial) workers participation in economic decision making, to increase their life-chances through higher-wages, preferable conditions; and to make accountable a previously dictatorial regime.
Such claims — that even private property entails a massive restriction of freedom, and alternate property rights may in fact increase net liberty — are not new. G.A. Cohen, for instance, forensically argued as much in Self-Ownership, Freedom and Equality. What is more, whilst the notion of private government is a useful distillation of these arguments, it is not particularly groundbreaking. There is a long-running tradition of labour republicanism to which Anderson’s thought firmly sits within and yet, aside from a few meagre gestures toward union struggles in the 19th and 20th centuries, she leaves her intellectual descendents off the map. It is a shame, not least because if she truly wishes to broaden the discussion of what capitalist ‘freedom’ actually is, she might want to include those have made the dissolution of such private government their existential purpose. Nevertheless, Anderson wields the arguments persuasively, reintroducing and explicating what can be quite esoteric agitations to a modern context so as to demonstrate the coherence and objectionableness of the notion of private government.
Arguably, the more novel aspect of her work comes in dealing with the parenthesised statement in the title — why we don’t talk about it. Through a generous reading of Smith, Paine, Locke and the social movements of their near-day (the Levellers, most prominently), Anderson recasts the origin of capitalism as an ally, not an antagonist, to egalitarianism so as to pose two questions: first, where did it all go wrong? And second, why do so many pretend it didn’t? Free-markets and unfettered trade, she notes, were venerated as instruments for the emancipation of man. Caught within state-granted monopolies, dictatorial guilds, and punitive taxation of the poor by the aristocrats, rolling back the dead hand of the King produced a majority of ‘masterless men’, shorn of the hierarchies that gave feudal society its turgidity. In the place of the obsequious and servile stood the ranks of autonomous small-proprietors and the self-employed, where the division of labour had yet to stratify economic relations, and bosses and labourers toiled shoulder-to-shoulder. It was rather close to the ideals of liberated individuals, contracting freely as equals, that Smith portrayed as the antidote to domineering mercantilism in The Wealth of Nations. The market therefore chimed with the broader social goals of a buoyant liberalism — freedom and equality — and could be considered, as Anderson puts it simply, of the ‘left’.
As the industrial revolution kicked into gear, however, this idyll rapidly degenerated. Smiths 10-man pin-factory; the harmonious exchanges of butchers, brewers and bakers, were outpaced by the satanic mills of big industry. Brutal hierarchies asserted themselves as managers contorted their workers into the alienating conditions of mechanistic production. Easy pathways from labourer to owner were blocked off by economies of scale and market consolidation, as temporarily masterless men were reattached to pernicious hierarchies of authority, esteem and respect.
In answering the second question, we see the relevance of this brief historiography. Essentially, Anderon’s argument is that when capitalisms defenders invoke the putative empowerment of workers and sellers freely-contracting eye-to-eye, they are trapped in this earlier period, before the dawn of the industrial revolution and the full metamorphosis of the relations of production it dragged along with it. This is not merely a matter of rose tinted glasses; it is stunted analysis, intellectual time travel, their frameworks trapped in an age radically different to our own. It is as if capitalist industrialisation, in the mind of many free-marketers, never occurred (quite ironically, given the tendency to continually remind its critics of how much growth it belched forth).
Indeed, I have encountered this tendency in my own studies. Any objections to potential changes to property regimes are invariably met with the insistence that this is going to steal from plucky individuals total control over their property, forgetting, of course, that most capital is now owned by faceless, passive investment machines, not their entrepreneurial owners. Differentiated ownership by shareholders, but not by workers, it seems, is completely fine. So too have I encountered the exit-fetish that Anderson expertly rebuts: that so long as individuals can choose where they work and leave at any time, there is no asymmetry of power or domination involved in the labour-market. Entering and exiting, in this formulation, is thus the only relevant object of analysis when it comes to the labour relation; the only action that can be performed by workers toward their potential employers. Not only does this position ignore the exit costs, especially for low-wage workers, and the question of where exactly they may exist to, they ‘blackbox’ — as Anderson quite rightly observes — what goes on within the firm. To the extent that they do address it, in Ronald Coase’s theory of the firm, for instance, they do so only to legitimate the anomaly of planning within an enterprise, mounting a neoclassical argument against internal markets on the grounds of efficiency gains from rejecting the ‘transaction costs’ that would be involved in independent and competing contractors. In does not occur to them, however, that the internal constitution of these firms represents a domineering, individual-effacing system of unaccountable authority. For all their love of freedom, they just seem to let this one slide.
Anderson included a number of critical commentaries on her argument in the book, opening up a much needed dialogue. A couple contributors questions the veracity of the historical account she offers, considering whether early capitalism was so freedom-loving after all and whether the free-market was as crucial to her egalitarian protagonists as she contends. Most interesting, though, is the exchange between her and neoclassical economist Tyler Cowen who, unsurprisingly, is not particularly keen on her critique of the capitalist firm.
What is so revealing here is his naked ignorance of the vast majority of peoples working conditions. Cowen picks a couple favourable tendencies of employers — that often, to increase attractiveness, they prioritise worker dignity; or that they compensate poor working conditions with higher pay — and then generalises them as characteristic of the labour-market as a whole. Indeed, this may be true if the labour-market existed as it does in the free-market imagination, with employers and employees on equal footing. But, existing as it does in the real world, beset by massive power discrepancies, the cushy conditions of top-tier workers does not apply to the rest of us. There is only so much bargaining power poverty stricken service workers have. To the extent that autonomy is respected for the most skilled and scarce workers (what Cowen trivialises as employee ‘perks’) it is instrumentalized as a tool to increase the competitiveness and, therefore, the profitability of the firm. As Anderson writes, ‘the amount of respect, standing and autonomy they get is roughly proportional to their market value.’ And it is this — the fact that human lives are only dignified if it pleases the accumulative ambitions of their masters — that the notion of private government excoriates. Cowen, too, reifies private government in posing the trade-off between better wages and better working conditions, which is usually resolved on the side of the latter, as revealing the fact that workers don’t really care about their own domination, refusing to countenance the possibility that such a trade-off may not transpire if workers were given control over their own conditions in the first place, instead of being forced to choose between toilet breaks and hot food. There are more intriguing contentions Cowen makes, but suffice to say, his critique inadvertently succeeds in illustrating precisely the ‘ideological blinders’ Anderson seeks to expose.
