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Essay Prompts for the Final Paper

Develop a defensible, interesting thesis in response to this prompt, and

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Q-

Anderson argues that workplaces can function as “private governments”. What are her arguments for this claim? In what ways is she building on the republican theory of freedom developed by Pettit? Give a critical assessment of her ideas: in what ways is she right and in what ways is she wrong?

BASIC INCOME STUDIES
An International Journal of Basic Income Research
Vol. 2, Issue 2
COMMENT
December 2007
Debate: “Basic Income and the Republican Legacy”
Guest editor: David Casassas, University of Oxford
A Republican Right to Basic Income?*
Philip Pettit
Princeton University
1. Introduction
The basic income proposal provides everyone in a society, as an unconditional
right, with access to a certain level of income. Introducing such a right is bound
to raise questions of institutional feasibility. Would it lead too many people to
opt out of the workforce, for example? And even if it did not, could a
constitution that allowed some members of the society to do this – at whatever
relative cost – prove acceptable in a society of mutually reciprocal, equally
positioned members? I assume in this short essay, however, that none of these
problems is insurmountable. I concentrate on the question of how far
republicanism makes room for justifying something like a right to basic income,
assuming that there are no problems of this kind with introducing and
establishing such a right.
Any satisfactory argument for a basic income should satisfy two desiderata.
First is that of adequacy: the argument should establish a right to an intuitively
* I am indebted to David Casassas and Jurgen De Wispelaere for their editorial assistance, and for some helpful
discussion of the issues.
Copyright ©2007 The Berkeley Electronic Press. All rights reserved.
2
adequate level of income. 1 Second is that of independence: the argument should
establish a claim to a nonnullifiable, nonstigmatizing basic income.
These desiderata should be relatively uncontroversial. The defenders of a
basic income have all had an adequate income in mind, by some intuitive
criterion of adequacy. And they have wanted to make such an income available
as a right that is not subject to provisos about existing means, employment
history, willingness to perform certain services, or anything of the kind (Van
Parijs, 1995; 2001). The attraction of republican political theory is that it
underwrites a basic income scheme argument that satisfies both of these
desiderata better than do alternative schemes.
2. Utilitarian and Liberal Alternatives
Utilitarian theory makes a very good case for a financially adequate basic
income, but it is not clear that it could satisfy the independence desideratum. If
the government used the utilitarian criterion in making distributional decisions,
it might turn out by happy accident that promoting utility would argue for
giving each a basic income. But, that would not mean that people would enjoy
basic income as a right; they would enjoy it only so long as this was for the
utilitarian best.
A plausible liberal argument for a right to a basic income must offer a liberal
reason – related to the cause of liberty rather than utility – for establishing a legal
right to a basic income in every society. And that liberal reason ought to provide
a more plausible ground than the utilitarian counterpart for establishing and
maintaining such a regime.
First, let liberty be understood, in the spirit of contemporary liberalism, as
the absence of interference by others. In particular, let it be understood as the
absence of interference in the basic liberties: the absence of interference, roughly,
in the harmless exercise of liberties of belief, expression, association, ownership,
and the like. The cause of promoting the traditional basic liberties is unlikely to
argue, in that case, for a regime in which everyone has a right to a basic income.
Possessing those liberties will be maximized by inhibiting those who would
interfere. And it is unclear what role a basic income policy would play in such a
regime of inhibition.
Philippe Van Parijs (1995) directs us to a second, more promising way of
arguing for a basic income right from within a broadly liberal vision. He argues
1
For an attractive way of identifying an adequate level, refer to Amartya Sen’s notion of basic capabilities (Sen,
1985; Nussbaum, 1992).
Pettit: A Republican Right to Basic Income?
3
that we should reject the distinction between the absence of maltreatment by
others that allows us the possession of liberal liberties and the absence of natural
or social obstacles that gives value to the possession of those liberties, enabling
people to exercise them with greater ease or in a greater range of cases (Rawls,
1971). We should treat intentional obstruction and unintentional limitation on a
par – we should see each as a variety of liberty-reducing interference. Since each
reduces our choices, they are equally opposed, as Van Parijs says, to “real
freedom.” As we establish rights to legal protection against intentional
interference, we should also establish legal rights against having to endure
remediable limitations. And such rights might well include the right to a basic
income.
But even this derivation of a basic income right is not fully satisfactory. For it
is implausible to treat unintentional limitation as being as bad, in the ledger of
liberty, as is intentional interference. If someone stands in my way, that’s a
different sort of challenge to my liberty than the challenge provided by the tree
that has fallen in my path. If someone threatens me with harm if I take a
particular action, that is a different sort of challenge than one which occurs when
someone warns me that I will suffer harm, say from natural causes, should I take
that action. It is entirely plausible to provide people with rights against
intentionally imposed harm from others but not so plausible to provide them
with rights against unhappy twists of fate, if the rights are supposed to be
freedom-based.
We see that utilitarian premises do not provide an argument for a suitably
entrenched right to a basic income. The premises invoked in this liberal approach
might argue for such a right but are not suitably compelling. This approach is
indifferent to the contrast, marked in traditional discussions of liberty, between
the ill of being restricted by natural obstacles and the evil of being subject to the
intentional constraints of others.
3. The Republican Turn
Republican political theory can make a firmer and more persuasive case for a
right to basic income than any of these approaches. 2 In particular, it can satisfy
not just the adequacy desideratum but also the independence desideratum – i.e.
the desideratum that utilitarianism would fail and that liberalism would satisfy
only at the cost of rigging the requirements of freedom.
2
For a congenial, republican case for basic income – which I had not known about when I wrote this piece – see
Raventós (2007).
4
The basic distinction between republican and liberal political theory is that
the former construes freedom, not as the absence of interference by others, but as
the absence of a certain sort of dominating control. Let us say that others control
me to the extent that their presence in my life raises the probability of my acting
according to their tastes. And let us set aside the reasoned and nondominating
variety of control exercised when others give me advice or information on a takeit-or-leave-it-basis. Let us focus instead on unreasoned control.
Unreasoned control – henceforth, called “control” – may be exercised
through interference, such as when others remove an option, replace it with a
penalized alternative, or reduce my capacity to choose rationally, whether by
exploiting a weakness or inducing false beliefs. But control may also manifest
without such active interference. Suppose that others are in a position of being
able to interfere in any of those ways that gets me to behave according to their
tastes. And imagine that they decide to interfere only on a need-for-action basis.
They leave me alone so long as I behave according to their taste, but they are
ready to interfere if I begin to deviate from that pattern – or if their taste changes.
Such agents control what I do, whether or not I realize it, even when they
find no reason to interfere actively. They exercise control by invigilating my
behavior, monitoring it with a view to interfering when necessary – and only
when necessary. If I manage to act as I choose, I am lucky; I happen to choose as
they want me to choose. Whatever I do, then, I do by their implicit leave. In the
words of the old republican complaint, I act only cum permissu: only with
permission.
The view that unreasoned control takes away liberty and that it may assume
a wholly invigilatory character is just the view, in more traditional terms, that
liberty requires nondomination. I will escape domination only to the extent that I
occupy a protected position and am empowered against such control on the part
of others. My freedom will consist in that protected and empowered status.
Let liberty be restricted to the possession of the basic liberties: that is, let
those liberties define the domain of freedom and let freedom require the mere
possession of those liberties (Pettit, 2008). We can still argue for a right to a basic
income, so long as the possession of those liberties is taken to require not just the
absence of interference by others in the relevant areas of choice but also the
absence of unreasoned control – the absence of domination (Pettit, 1997; Skinner,
1998; Viroli, 2002; Pettit, 2007c). The cause of promoting basic liberties in this
republican sense does markedly better than the alternative justifications we have
been considering.
Pettit: A Republican Right to Basic Income?
5
The argument is straightforward. Others will control me, if only in the
merely invigilatory fashion, only to the extent that the division of powers
between us means that they can interfere with me at will – that is, without
prevention – and at tolerable cost, i.e. with a degree of impunity. If I am not
assured a basic income, there will be many areas where the wealthier could
interfere with me at tolerable cost, without their being confronted by legal
prevention of that interference.
Suppose there are just a few employers and many available employees, and
that times are hard. In those conditions I and those who like me will not be able
to command a decent wage: a wage that will enable us to function properly in
society. And in those conditions it will be equally true that we would be
defenseless against our employers’ petty abuse or their power to arbitrarily
dismiss us. Other protections, such as those that strong trade unions might
provide, are possible against such alien control. But the most effective of all
protections, and one that should complement other measures available, would be
one’s ability to leave employment and fall back on a basic wage available
unconditionally from the state.
Next suppose that you live in conditions where you, and perhaps your
children, depend financially on your husband. In such conditions he is likely to
control you, even though he never resorts to violence or other abuse. He may let
you act as you please within certain limits, while being disposed to stop you – at
the limit, by leaving you – if you breach those limits. You would live under your
husband’s control, almost certainly straining to keep within his restrictions,
unless there is an effective, financially viable alternative such as that which a
basic income would provide. Other protections may be available here as in the
first case – for example, he may be legally required to provide maintenance
should you separate – but these are unlikely to be equally effective and in any
case they will be powerfully supplemented by a basic income.
Such examples show it to be entirely plausible that promoting the resilient,
republican possession of basic liberties argues for establishing a legal right to a
basic income. Such a right would mean that people had adequate income for
functioning properly in society. And that income would mean that people would
not have to beg the favour of the powerful, or even of the counter-clerk.
However, why give the basic income right to all, not to only those in need?
A number of considerations might argue for this provision. A universal right of
the sort imagined would resist electoral pressure for change better than would a
needs-tested right, since it would benefit everyone in common, thus being a
more entrenched and firmer bulwark against domination. A universal right
6
would mean that those who rely on the basic income – distinct from the
independently wealthy – will not have to assert their right on the grounds of
being a class apart: people who depend on others’ goodwill and are easier targets
of control and domination. And a universal right symbolizes the fundamental
equality of all in relation to the collective provisions of government; only some
will depend on the basic income that all receive, but all can see that the income is
there to depend on, should they themselves fall on hard times.
Would government itself exercise dominating control in establishing a basic
income regime? Would it do so, for example, in relation to the wealthy who are
the net creditors in the effected redistribution? As a matter of logic, the liberal
government that interferes with people in order to reduce overall interference
will have to take liberty-as-noninterference away from some in order to increase
such liberty overall. But the government that interferes with people in order to
reduce overall domination may not have to take liberty-as-nondomination away
from any in order to increase such liberty overall. There is no similar necessity of
logic here.
If I can stop a certain pattern of interference that you practice, or if I can
make it too costly for you to continue it, then my allowing it does not mean that I
am dominated. If I allow you to keep the liquor cabinet key or to hide my
cigarettes, you still interfere with me when you act under that permission. But
your interference will not be control or domination; the interference will be
controlled or nonarbitrary.
Does the interference that government might practice in establishing a right
to a basic income count as a controlling or dominating form of interference in the
lives of those of us who are relative losers? Under appropriate conditions, it can
be held to be controlled and nonarbitrary.
Let the activity of government in establishing a basic income right have to be
supported by considerations that all of us explicitly or implicitly take to be
relevant in public decision-making. And if it is not uniquely supported by
considerations of that kind, let it be chosen from among acceptable candidates on
the basis of some procedure – say, a parliamentary vote or even a referendum –
that is supported by such considerations. To the extent that such conditions
obtain, one can plausibly say that the measure introduced is an exercise of
controlled interference, and so not dominating in itself (Pettit, 2007a; Pettit,
2007b). The wealthy individuals who are relatively disadvantaged by the
measure will not themselves exercise the required checking. But the co-governed
people as a whole will exercise such checking; and if they do so by implementing
Pettit: A Republican Right to Basic Income?
7
a regime of common reasons or values, then they can be thought of as acting in a
way that does not discriminate between wealthy and poor.
4. Conclusion
Utilitarianism fails to provide premises that would persuasively support a basic
income right, because they would not argue for a suitably firm and universal
right. Liberalism, even the left variety of liberalism, would not persuasively
support a basic income right because the premises it has to invoke for the
purpose, given a conception of freedom as noninterference, are not suitably
compelling; they make freedom depend, not just on the possession of the basic
liberties, but on the absence of natural obstacles to the exercise of those liberties.
Only republicanism serves well in the required role. The premises it invokes
are inherently and independently persuasive, deriving from a well-established
conception of freedom as nondomination. And, absent problems of feasibility,
they give us plausible grounds for arguing in favor of a dispensation in which
people enjoy a universal right to a basic income.
References
Nussbaum, M. (1992) “Human Functioning and Social Justice,” Political Theory 20 (2),
pp. 202–246.
Pettit, Philip (1997) Republicanism: A Theory of Freedom and Government. Oxford: Oxford
University Press.
Pettit, Philip (2007a) Examen a Zapatero. Madrid: Temas de Hoy.
Pettit, Philip (2007b) “Joining the Dots,” in M. Smith, H. G. Brennan, R. E. Goodin and
F. C. Jackson (eds.) Common Minds: Themes From the Philosophy of Philip Pettit. Oxford:
Oxford University Press.
Pettit, Philip (2007c) “Republican Liberty: Three Axioms, Four Theorems,” in C. Laborde
and J. Maynor (eds.) Republicanism and Political Theory. Oxford: Blackwell.
Pettit, Philip (2008) “The Basic Liberties,” in M. Kramer (ed.) Essays on H. L. A. Hart.
Oxford: Oxford University Press.
Raventós, Daniel (2007) Basic Income: The Material Conditions of Freedom. London: Pluto
Press.
Rawls, John (1971) A Theory of Justice. Oxford: Oxford University Press.
Sen, Amartya (1985) Commodities and Capabilities. Amsterdam: North-Holland.
Skinner, Quentin (1998) Liberty Before Liberalism. Cambridge: Cambridge University Press.
Van Parijs, Philippe (1995) Real Freedom for All: What (If Anything) Can Justify Capitalism?
Oxford: Clarendon Press.
8
Van Parijs, Philippe (2001) “A Basic Income for All,” in J. Cohen and J. Rogers (eds.)
What’s Wrong With a Free Lunch? Boston: Beacon Press.
Viroli, Maurizio (2002) Republicanism. New York: Hill and Wang.
Philip Pettit
Princeton University
308 Marx Hall
Princeton, NJ 08544
United States
Email: ppettit@princeton.edu
Princeton University Press
Chapter Title: Private Government
Book Title: Private Government
Book Subtitle: How Employers Rule Our Lives (and Why We Don’t Talk about It)
Book Author(s): Elizabeth Anderson
Published by: Princeton University Press. (2017)
Stable URL: https://www.jstor.org/stable/j.ctvc775n0.6
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Chapter 2
Private Government
Communist Dictatorships in Our Midst
Imagine a government that assigns almost everyone a superior
whom they must obey. Although superiors give most inferiors a
routine to follow, there is no rule of law. Orders may be arbitrary
and can change at any time, without prior notice or opportunity to appeal. Superiors are unaccountable to those they order
around. They are neither elected nor removable by their inferiors. Inferiors have no right to complain in court about how they
are being treated, except in a few narrowly defined cases. They
also have no right to be consulted about the orders they are given.
There are multiple ranks in the society ruled by this government. The content of the orders people receive varies, depending on their rank. Higher-ranked individuals may be granted
considerable freedom in deciding how to carry out their orders,
and may issue some orders to some inferiors. The most highly
ranked individual takes no orders but issues many. The lowestranked may have their bodily movements and speech minutely
regulated for most of the day.
37
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chapter 2
This government does not recognize a personal or private
sphere of autonomy free from sanction. It may prescribe a dress
code and forbid certain hairstyles. Everyone lives under surveillance, to ensure that they are complying with orders. Superiors
may snoop into inferiors’ e-mail and record their phone conversations. Suspicionless searches of their bodies and personal
effects may be routine. They can be ordered to submit to medical testing. The government may dictate the language spoken
and forbid communication in any other language. It may forbid
certain topics of discussion. People can be sanctioned for their
consensual sexual activity or for their choice of spouse or life
partner. They can be sanctioned for their political activity and
required to engage in political activity they do not agree with.
The economic system of the society run by this government
is communist. The government owns all the nonlabor means
of production in the society it governs. It organizes production
by means of central planning. The form of the government is
a dictatorship. In some cases, the dictator is appointed by an
oligarchy. In other cases, the dictator is self-appointed.
Although the control that this government exercises over
its members is pervasive, its sanctioning powers are limited. It
cannot execute or imprison anyone for violating orders. It can
demote people to lower ranks. The most common sanction is
exile. Individuals are also free to emigrate, although if they do,
there is usually no going back. Exile or emigration can have
severe collateral consequences. The vast majority have no realistic option but to try to immigrate to another communist
dictatorship, although there are many to choose from. A few
manage to escape into anarchic hinterlands, or set up their own
dictatorships.
This government mostly secures compliance with carrots.
Because it controls all the income in the society, it pays more to
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private government
39
people who follow orders particularly well and promotes them
to higher rank. Because it controls communication, it also has
a propaganda apparatus that often persuades many to support
the regime. This need not amount to brainwashing. In many
cases, people willingly support the regime and comply with
its orders because they identify with and profit from it. Others
support the regime because, although they are subordinate to
some superior, they get to exercise dominion over inferiors. It
should not be surprising that support for the regime for these
reasons tends to increase, the more highly ranked a person is.
Would people subject to such a government be free? I expect that most people in the United States would think not.
Yet most work under just such a government: it is the modern
workplace, as it exists for most establishments in the United
States. The dictator is the chief executive officer (CEO), superiors are managers, subordinates are workers. The oligarchy that
appoints the CEO exists for publicly owned corporations: it is
the board of directors. The punishment of exile is being fired.
The economic system of the modern workplace is communist,
because the government—that is, the establishment—owns all
the assets,1 and the top of the establishment hierarchy designs
the production plan, which subordinates execute. There are no
internal markets in the modern workplace. Indeed, the boundary of the firm is defined as the point at which markets end and
authoritarian centralized planning and direction begin.2
Most workers in the United States are governed by communist dictatorships in their work lives. Usually, those dictatorships have the legal authority to regulate workers’ off-hour
lives as well—their political activities, speech, choice of sexual
partner, use of recreational drugs, alcohol, smoking, and exercise. Because most employers exercise this off-hours authority irregularly, arbitrarily, and without warning, most workers
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40
chapter 2
are unaware of how sweeping it is. Most believe, for example,
that their boss cannot fire them for their off-hours Facebook
postings, or for supporting a political candidate their boss opposes. Yet only about half of U.S. workers enjoy even partial
protection of their off-duty speech from employer meddling.3
Far fewer enjoy legal protection of their speech on the job,
except in narrowly defined circumstances. Even where they
are entitled to legal protection, as in speech promoting union
activity, their legal rights are often a virtual dead letter due to
lax enforcement: employers determined to keep out unions
immediately fire any workers who dare mention them, and the
costs of litigation make it impossible for workers to hold them
accountable for this.
I expect that this description of communist dictatorships in
our midst, pervasively governing our lives, often to a far greater
degree of control than the state, would be deeply surprising to
most people. Certainly many U.S. CEOs, who think of themselves as libertarian individualists, would be surprised to see
themselves depicted as dictators of little communist governments. Why do we not recognize such a pervasive part of our
social landscape for what it is? Should we not subject these
forms of government to at least as much critical scrutiny as
we pay to the democratic state? My project in this lecture is to
explain why public discourse and political philosophy largely
neglect the pervasiveness of authoritarian governance in our
work and off-hours lives and why we should return our attention to it, and to sketch some thoughts as to what we should do
about it—for neglect of these issues is relatively recent. They
were hot topics of public discourse, academic and legal theorizing, and political agitation from the Industrial Revolution
through the New Deal. Now they are the province of members
of marginalized academic subfields—labor historians, labor law
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private government
41
scholars, and some labor economists—along with a few labor
lawyers and labor activists.
Our currently dominant tools for discerning our work
lives were manufactured before the Industrial Revolution and
originally designed as viewfinders to the future. They were rejected as useless by organized labor movements that arose in
recognition of the fundamental irreversible changes in workers’
prospects brought about by the Industrial Revolution. They
have been redeployed since the grave decline of organized labor
movements, but now as blinders on our actual institutional
landscape of work. We need different instruments to discern
the normatively relevant features of our current institutions
of workplace governance. In particular, we need to revive the
concept of private government.
Private Government: The Very Idea
Most modern workplaces are private governments. By this, I do
not mean merely that they are in the so-called private sector,
and have some internal structure of authority—as specified, for
instance, in the rules for corporate governance. I refer rather
to a particular sort of constitution of government, under which
its subjects are unfree.
The notion of private government may seem a contradiction in terms. In the impoverished vocabulary of contemporary
public discourse, and to a considerable extent in contemporary
political philosophy, government is often treated as synonymous
with the state, which, by supposed definition, is part of the
public sphere. The supposed counterpart private sphere is the
place where, it is imagined, government ends, and hence where
individual liberty begins. Here is a characteristic expression of
this view in U.S. public discourse: “Giving up our very freedom
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for a system that allow[s] the government to further meddle in
our private lives . . . [is] not the answer. . . . Every single thing
government does to increase its own power increases the size
of its slice of the liberty pie. . . . Since there are only two slices,
every time the government’s slice of the liberty pie grows, the
citizens’ slice is reduced.”4 That is according to Ken Cuccinelli,
the former attorney general of Virginia. But nothing hangs on
him. He is merely expressing a view widely accepted in public
discourse, certainly among libertarians, but not only among
them. Let’s unpack the confusions.
First, government exists wherever some have the authority
to issue orders to others, backed by sanctions, in one or more
domains of life.5 The modern state is merely one form of government among others, defined by Max Weber as “a compulsory
organization” that asserts a monopoly on determining the legitimate use of force over a territory.6 Popular usage before the
nineteenth century is much clearer about the government/state
distinction than we are today. Here is John Adams, replying to
Abigail’s famous letter asking him to “remember the ladies”:
We have been told that our struggle has loosened the bonds
of government every where; that children and apprentices
were disobedient; that schools and colleges were grown
turbulent; that Indians slighted their guardians, and negroes
grew insolent to their masters. But your letter was the first
intimation that another tribe, more numerous and powerful
than all the rest, were grown discontented. . . . Depend upon
it, we know better than to repeal our masculine systems.7
Here Adams frankly acknowledges that government is “every
where”—parents (and governesses) exercise government over
children, masters over apprentices, teachers over students,
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43
guardians over Indians, masters over slaves, husbands over
wives. We have seen from my previous lecture that this understanding of the scope of government was equally familiar to
actors in seventeenth-century England.
Now consider the public/private distinction. If something
is legitimately kept private from you, that means it is none of
your business. This entails at least one of the following: you are
not entitled to know about it, your interests have no standing
in decisions regarding it, you aren’t entitled to make decisions
regarding it or to hold those who do accountable for the effect
their decisions have on you. If it is private to you, that means
it is your business, and you may exclude others from making
it any of theirs. This entails at least one of the following: you
are entitled to keep others from knowing about it; you need
not consider others’ interests in making decisions regarding it;
you are not accountable to others for your decisions regarding
it; you are entitled to exclude others from making decisions
regarding it.
If something is public, that means it is the business of a more
or less well-defined group of people (members of the public),
such that no one is entitled to exclude any member of the group
from making it their business. Publicity in the informational
sense typically extends much further than publicity with respect to standing, decision making, and accountability. The
latter three categories refer to the governance of the thing in
question. Its public status, with respect to governance, involves
means by which the public asserts standing to make claims regarding its governance, and organizes itself to make collective
decisions regarding it, and/or hold accountable the individuals
elected or appointed to make such decisions.
Privacy is relative to persons. A thing that is private with
respect to some persons may be public with respect to others. A
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private club is private from nonmembers, but generally a public
thing to its members: the club will typically have meetings to
which its members are invited, in which they learn about the
club’s activities and finances, insist that their interests be taken
into account in its operations, make decisions about it, and
hold officers of the club accountable. It follows that there is no
single public sphere or a single private sphere in society. There
are many spheres, and which are public or private depends on
who you are.8
Today we associate the state with “the” public sphere, and
things that are not the state’s business, but individuals’ own
business, with “the” private sphere. Insofar as these associations are thought to be inherent, the idea of private government
would appear to be contradictory. Isn’t everything in the private sphere part of individual liberty, and everything subject
to public (government, confusedly limited to state) control
a constraint on individual liberty? That is Cuccinelli’s idea,
which reflects associations entrenched in contemporary public discourse.
But of course the association of the state with the public
sphere is not inherent. It is a contingent social achievement of
immense importance. The centuries-long struggles for popular
sovereignty and a republican form of government are attempts
to make the state a public thing: something that is the people’s
business, transparent to them, servant to their interests, in
which they have a voice and the power to hold rulers accountable. Authoritarian governments insist on the opposite—that
the affairs of state are the private business of the rulers.
This point generalizes to all governments, not just governments run by the state. You are subject to private government
wherever (1) you are subordinate to authorities who can order
you around and sanction you for not complying over some
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domain of your life, and (2) the authorities treat it as none of
your business, across a wide range of cases, what orders it issues
or why it sanctions you. A government is private with respect
to a subject if it can issue orders, backed by sanctions, to that
subject in some domain of that subject’s life, and that subject
has no say in how that government operates and no standing to
demand that their interests be taken into account, other than
perhaps in narrowly defined circumstances, in the decisions
that government makes. Private government is government
that has arbitrary, unaccountable power over those it governs.
This of course is a matter of degree. Its powers may be checked
in certain ways by other governments, by social norms, and by
other pressures.
Note that the privacy of a government is defined relative to the
governed, not relative to the state. The notion of governments
that are kept private from the state is much more familiar: we
speak of corporate governance, church governance, and so
forth, in referring to legal entities that are private in relation
to the state. That notion of private government abstracts from
the people who are governed and their relation to these governments. It focuses only on the fact that the state is kept out of
decision-making in these governments. My definition of private
government focuses on the fact that, in many of these governments, the governed are kept out of decision-making as well.
Now consider the connections of government to freedom.
Cuccinelli depicts a zero-sum trade-off between the liberties
of the state and those of its citizens. But there are at least three
concepts of freedom: negative, positive, and republican. If you
have negative freedom, no one is interfering with your actions.
If you have positive freedom, you have a rich menu of options
effectively accessible to you, given your resources.9 If you have
republican freedom, no one is dominating you—you are subject
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to no one’s arbitrary, unaccountable will.10 These three kinds
of freedom are distinct. A lone person on a desert island has
perfect negative and republican freedom, but virtually no positive freedom, because there is nothing to do but eat coconuts.
An absolute monarch’s favorites may enjoy great negative and
positive freedom if he has granted them generous privileges
and well-paid sinecures. But they still lack republican freedom,
since he can take their perks away and toss them into a dungeon
on a whim. Citizens of prosperous social democracies have considerable positive and republican freedom, but are subject to
numerous negative liberty constraints, in the form of complex
state regulations that constrain their choices in numerous aspects of their lives.
All three kinds of freedom are valuable. There are sound
reasons to make trade-offs among them. If we focus purely on
negative liberty, and purely concerning rival goods, it might
seem that Cuccinelli is correct that the size of the liberty pie
is fixed: one agent’s liberty over rival good G would seem to
preclude another’s liberty over it. But this is to confuse negative liberties with exclusive rights. There is nothing incoherent
about a Hobbesian state of nature, in which everyone has the
negative liberty to take, or compete for possession of, every
rival good. That would be a social state of perfect negative liberty: it is a state of anarchist communism, in which the world
is an unregulated commons. Such a condition would also be
catastrophic. Production would collapse if anyone were free
to take whatever anyone else had worked to produce. Even
the natural resources of the earth would rapidly be depleted
in an unregulated commons. Without property rights—rights
to exclude others—people would therefore be very poor and
insecure. Opportunities—positive liberties—are vastly greater
with the establishment of a system of property rights.
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This is a standard argument for a regime of private property rights. It is impeccable. Yet its logical entailments are often
overlooked. Every establishment of a private property right entails a correlative duty, coercively enforceable by individuals
or the state, that others refrain from meddling with another’s
property without the owner’s permission. Private property
rights thus entail massive net losses in negative liberty, relative
to the state of maximum negative liberty. If Lalitha has private
property in a parcel of land, her liberty over that parcel is secured by an exclusive right at the cost of the identical negative
liberty of seven billion others over that parcel. If we are good
libertarians and insist that the justification of any constraint on
liberty must appeal to some other more important liberty, then
the libertarian case for private property depends on accepting
that positive liberty very often rightly overrides negative liberty. It follows that even massive state constraints on negative
liberty (in the form of enforcements of private property rights)
can increase total liberty (in an accounting that weights positive
liberty more highly than negative, as any accounting that can
justify private property in terms of freedom must).
State-enforced constraints on negative liberty can also increase total liberty through their enhancement of republican
freedom. This is a venerable argument from the republican
tradition: without robust protection of private property rights
(which, as we have seen, entail massive net losses of negative
liberty), a republican form of government is insecure, because
the state is liable to degenerate into despotism, exercising arbitrary power over its subjects. This argument has been carried
over in modern libertarian writing.11
This form of argument is equally applicable to substate private governments. If one finds oneself subject to private government—a state of republican unfreedom—one can enhance
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one’s freedom by placing negative liberty constraints on the
power of one’s private governors to order one around or impose sanctions on one’s refusal to comply. This may involve
state regulation of private governments. For example, a state’s
imposition of a requirement on employers that they refrain
from discriminating against employees on the basis of their
sexual orientation or identity enhances the republican and
negative freedom of workers to express their sexual identities
and choose their sexual and life partners. It also enhances their
positive liberties, by enabling more people to move out of the
closet, and thereby increasing opportunities for LGBT people to engage with others of like sexual orientation. The state’s
imposition of negative liberty constraints on some people can
thereby enhance all three liberties of many more.
Private government is, thus, a perfectly coherent concept.
To grasp it, we need to reject the false narrowing of the scope
of government to the state, recognize that one’s liberty can be
constrained by private governors in domains of activity kept
private from the state, and that increased state constraints on
people’s negative liberties can generate massive net gains in
individual positive and republican freedoms. It can even generate net gains in their negative liberties, to the extent that the
people being constrained by the state are private governors
over others.
Workplace Government and the Theory of
the Firm as Ideological Blinder
Employees are pervasively subject to private government, as I
have defined it. Why is this so? As far as the legal authority of the
employer to govern employees was concerned, the Industrial
Revolution did not mark a significant break. Legally speaking,
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employers have always been authoritarian rulers, as an extension of their patriarchal rights to govern their households.
The Industrial Revolution moved the primary site of paid
work from the household to the factory. In principle, this could
have been a liberating moment, insofar as it opened the possibility of separating the governance of the workplace from the
governance of the home. Yet industrial employers retained their
legal entitlement to govern their employees’ domestic lives.
In the early twentieth century, the Ford Motor Company established a Sociological Department, dedicated to inspecting
employees’ homes unannounced, to ensure that they were
leading orderly lives. Workers were eligible for Ford’s famous
$5 daily wage only if they kept their homes clean, ate diets
deemed healthy, abstained from drinking, used the bathtub
appropriately, did not take in boarders, avoided spending too
much on foreign relatives, and were assimilated to American
cultural norms.12
Workers today might breathe a sigh of relief, except that
most are still subject to employer governance of their private
lives. In some cases, this is explicit, as in employer-provided
health insurance plans. Under the Affordable Care Act (ACA),
employers may impose a 30 percent premium penalty on covered workers if they do not comply with employer-imposed
wellness programs, which may prescribe exercise programs,
diets, and abstinence from alcohol and other substances. In
accordance with this provision, Penn State University recently
threatened to impose a $100 per month surcharge on workers
who did not answer a health survey that included questions
about their marital situation, sexual conduct, pregnancy plans,
and personal finances.13 In other cases, employer authority
over workers’ off- duty lives is implicit, a by-product of the
employment-at-will rule: since employers may fire workers for
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any or no reason, they may fire them for their sexual activities,
partner choice, or any other choice workers think of as private
from their employer, unless the state has enacted a law specifically forbidding employer discrimination on these grounds.
Workplace authoritarianism is still with us.
The pro-market egalitarian aspiration toward nearly universal self-employment aimed to liberate workers from such
governance by opening opportunities for nearly everyone to
become their own boss. Why did it fail? Why are workers subject to dictatorship? Within economics, the theory of the firm
is supposed to answer this question. It purports to offer politically neutral, technical, economic reasons why most production is undertaken by hierarchical organizations, with workers
subordinate to bosses, rather than by autonomous individual
workers. The theory of the firm contains important insights
into the organization of production in advanced economies.
However, it fails to explain the sweeping scope of authority that
employers have over workers. What is worse, its practitioners
sometimes even deny that workers lie under the authority of
their bosses, in terms that reflect and reinforce an illusion of
workers’ freedom that also characterizes much of public discourse. Both the theory of the firm, and public discourse, are
missing an important reality: that workers are subject to their
employers’ private government.
The pro-market egalitarian dream failed in part due to economies of scale. The technological changes that drove the Industrial Revolution involved huge concentrations of capital. A
steam-powered cotton mill, steel foundry, cement or chemical
factory, or railway must be worked by many hands. The case
is no different for modern workplaces such as airports, hospitals, pharmaceutical labs, and computer assembly factories,
as well as lower-tech workplaces such as amusement parks,
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slaughterhouses, conference hotels, and big-box retail stores.
The greater efficiency of production using large, indivisible
capital inputs explains why few individual workers can afford
to supply their own capital. It explains why, contrary to the
pro-market egalitarian hope, the enterprises responsible for
most production are not sole proprietorships.
But economies of scale do not explain why production is
not managed by independent contractors acting without external supervision, who rent their capital. One could imagine a
manufacturing enterprise renting its floor space and machinery
and supplying materials to a set of self-employed independent
contractors. Each contractor would produce a part or stage
of the product for sale to contractors at the next stage of production. The final contractor would sell the finished product
to wholesalers, or perhaps back to the capital supplier. Some
New England factories operated on a system like this from the
Civil War to World War I. They were superseded by hierarchically organized firms. According to the theory of the firm, this
is due to the excessive costs of contracting between suppliers
of factors of production.14 In the failed New England system,
independent contractors faced each other in a series of bilateral
monopolies, which led to opportunistic negotiations. The demand to periodically renegotiate rates led contractors to hoard
information and delay innovation for strategic reasons. Independent contractors wore out the machinery too quickly, failed
to tightly coordinate their production with workers at other
stages of production (leading to excess inventory of intermediate products), and lacked incentives to innovate, both with
respect to saving materials and with respect to new products.15
The modern firm solves these problems by replacing contractual relations among workers, and between workers and
owners of other factors of production, with centralized
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authority. A manager, or hierarchy of managers, issues orders to
workers in pursuit of centralized objectives. This enables close
coordination of different workers and internalizes the benefits
of all types of innovation within the firm as a whole. Managers
can monitor workers to ensure that they work hard, cooperate
with fellow workers, and do not waste capital. Because they
exercise open-ended authority over workers, they can redeploy
workers’ efforts as needed to implement innovations, replace
absentees, and deal with unforeseen difficulties. Authority relations eliminate the costs associated with constant negotiation
and contracting among the participants in the firm’s production. To put the point another way, the key to the superior efficiency of hierarchy is the open-ended authority of managers. It
is impossible to specify in advance all of the contingencies that
may require an alteration in an initial understanding of what a
worker must do. Efficient employment contracts are therefore
necessarily incomplete: they do not specify precisely everything a worker might be asked to do.
While this theory explains why firms exist and why they are
constituted by hierarchies of authority, it does not explain the
sweeping scope of employers’ authority over workers in the
United States. It does not explain, for example, why employers
continue to have authority over workers’ off-duty lives, given
that their choice of sexual partner, political candidate, or Facebook posting has nothing to do with productive efficiency. Even
worse, theorists of the firm appear not to even recognize how
authoritarian firm governance is. Major theorists soft-pedal or
even deny the very authority they are supposed to be trying
to explain.
Consider Ronald Coase, the originator of the theory of the
firm. He acknowledges that firms are “islands of conscious
power.”16 The employment contract is one in which the worker
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“agrees to obey the directions of an entrepreneur.” But, he insists, “the essence of the contract is that it should only state the
limits to the powers of the entrepreneur.”17 This suggests that
the limits of the employer’s powers are an object of negotiation
or at least communication between the parties. In the vast majority of cases, outside the contexts of collective bargaining or
for higher-level employees, this is not true. Most workers are
hired without any negotiation over the content of the employer’s authority, and without a written or oral contract specifying
any limits to it. If they receive an employee handbook indicating such limits, the inclusion of a simple disclaimer (which is
standard practice) is sufficient to nullify any implied contract
exception to at-will employment in most states.18 No wonder
they are shocked and outraged when their boss fires them for
being too attractive,19 for failing to show up at a political rally in
support of the boss’s favored political candidate,20 even because
their daughter was raped by a friend of the boss.21
What, then, determines the scope and limits of the employer’s authority, if it is not a meeting of minds of the parties?
The state does so, through a complex system of laws—not only
labor law, but laws regulating corporate governance, workplace
safety, fringe benefits, discrimination, and other matters. In the
United States, the default employment contract is employment
at will. There are a few exceptions in federal law to this doctrine, notably concerning discrimination, family and medical
leave, and labor union activity. For the most part, however, atwill employment, which entitles employers to fire workers for
any or no reason, grants the employer sweeping legal authority
not only over workers’ lives at work but also over their off-duty
conduct. Under the employment-at-will baseline, workers, in
effect, cede all of their rights to their employers, except those
specifically guaranteed to them by law, for the duration of the
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employment relationship. Employers’ authority over workers,
outside of collective bargaining and a few other contexts, such
as university professors’ tenure, is sweeping, arbitrary, and
unaccountable—not subject to notice, process, or appeal. The
state has established the constitution of the government of the
workplace: it is a form of private government.
Resistance to recognizing this reality appears to be widespread among theorists of the firm. Here, for example, is what
Armen Alchian and Harold Demsetz say in their classic paper
on the subject:
It is common to see the firm characterized by the power
to settle issues by fiat, by authority, or by disciplinary action. . . . This is delusion. The firm . . . has no power of
fiat, no authority, no disciplinary action any different in the
slightest degree from ordinary market contracting between
any two people. I can “punish” you only by withdrawing
future business or by seeking redress in the courts for any
failure to honor our exchange agreement. That is exactly all
that any employer can do. He can fire or sue, just as I can
fire my grocer by stopping purchases from him or sue him
for delivering faulty products. What then is the content of
the presumed power to manage and assign workers to various tasks? Exactly the same as one little consumer’s power
to manage and assign his grocer to various tasks. . . . To
speak of managing, directing, or assigning workers to various tasks is a deceptive way of noting that the employer continually is involved in renegotiation of contracts on terms
that must be acceptable to both parties. Telling an employee
to type this letter rather than to file that document is like
telling a grocer to sell me this brand of tuna rather than that
brand of bread. I have no contract to continue to purchase
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from the grocer and neither the employer nor the employee
is bound by any contractual obligations to continue their
relationship.22
Alchian and Demsetz appear to be claiming that wherever individuals are free to exit a relationship, authority cannot exist
within it. This is like saying that Mussolini was not a dictator, because Italians could emigrate. While emigration rights
may give governors an interest in voluntarily restraining their
power, such rights hardly dissolve it.23
Alternatively, their claim might be that where the only sanctions for disobedience are exile, or a civil suit, authority does
not exist. That would come as a surprise to those subject to
the innumerable state regulations that are backed only by civil
sanctions. Nor would a state regulation lack authority if the only
sanction for violating it were to force one out of one’s job. Finally, managers have numerous other sanctions at their disposal
besides firing and suing: they can and often do demote employees; cut their pay; assign them inconvenient hours or too many
or too few hours; assign them more dangerous, dirty, menial,
or grueling tasks; increase their pace of work; set them up to
fail; and, within very broad limits, humiliate and harass them.
Perhaps the thought is that where consent mediates the
relationship between the parties, the relationship cannot be
one of subordination to authority. That would be a surprise to
the entire social contract tradition, which is precisely about
how the people can consent to government. Or is the idea that
authority exists only where subordinates obey orders blindly
and automatically? But then it exists hardly anywhere. Even the
most repressive regimes mostly rely on means besides sheer
terror and brainwashing to elicit compliance with their orders,
focusing more on persuasion and rewards.
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Alchian and Demsetz may be hoodwinked by the superficial
symmetry of the employment contract: under employmentat-will, workers, too, may quit for any or no reason. This leads
them to represent quitting as equivalent to firing one’s boss. But
workers have no power to remove the boss from his position
within the firm. And quitting often imposes even greater costs
on workers than being fired does, for it makes them ineligible
for unemployment insurance. It is an odd kind of countervailing power that workers supposedly have to check their bosses’
power, when they typically suffer more from imposing it than
they would suffer from the worst sanction bosses can impose
on them. Threats, to be effective, need to be credible.
The irony is that Alchian and Demsetz are offering a theory
of the firm. The question the theory is supposed to answer is
why production is not handled entirely by market transactions
among independent, self-employed people, but rather by authority relations. That is, it is supposed to explain why the hope
of pro-market pre–Industrial Revolution egalitarians did not
pan out. Alchian and Demsetz cannot bear the full authoritarian implications of recognizing the boundary between the
market and the firm, even in a paper devoted to explaining
it. So they attempt to extend the metaphor of the market to
the internal relations of the firm and pretend that every interaction at work is mediated by negotiation between managers
and workers. Yet the whole point of the firm, according to the
theory, is to eliminate the costs of markets—of setting internal
prices via negotiation over every transaction among workers
and between workers and managers.
Alchian and Demsetz are hardly alone. Michael Jensen and
William Meckling agree with them that authority has nothing
to do with the firm; it is merely a nexus of contracts among independent individuals.24 John Tomasi, writing today, continues
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to promote the image of employees as akin to independent
contractors, freely negotiating the terms of their contract with
their employers, to obtain work conditions tailor-made to their
idiosyncratic specifications.25 While workers at the top of the
corporate hierarchy enjoy such freedom, as well as a handful of
elite athletes, entertainers, and star academics, Tomasi ignores
the fact that the vast majority of workers not represented by
unions do not negotiate terms of the employer’s authority at
all. Why would employers bother, when, by state fiat, workers
automatically cede all liberties not reserved to them by the
state, upon accepting an offer of work?
Not just theorists of the firm, but public discourse too, tend
to represent employees as if they were independent contractors.26 This makes it seem as if the workplace is a continuation of arm’s-length market transactions, as if the labor contract were no different from a purchase from Smith’s butcher,
baker, or brewer. Alchian and Demsetz are explicit about this,
in drawing the analogy of the employment relation with the
customer–grocer relation. But the butcher, baker, and brewer
remain independent from their customers after selling their
goods. In the employment contract, by contrast, the workers
cannot separate themselves from the labor they have sold; in
purchasing command over labor, employers purchase command over people.
What accounts for this error? The answer is, in part, that a
representation of what egalitarians hoped market society would
deliver for workers before the Industrial Revolution has been
blindly carried over to the post–Industrial Revolution world.
People continue to deploy the same justification of market
society—that it would secure the personal independence of
workers from arbitrary authority—long after it failed to deliver on its original aspiration. The result is a kind of political
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hemiagnosia: like those patients who cannot perceive one-half
of their bodies, a large class of libertarian-leaning thinkers and
politicians, with considerable public following, cannot perceive half of the economy: they cannot perceive the half that
takes place beyond the market, after the employment contract
is accepted.
This tendency was reinforced by a narrowing of egalitarian
vision in the transition to the Industrial Revolution. While the
Levellers and other radicals of the mid-seventeenth century agitated against all kinds of arbitrary government, Thomas Paine
mainly narrowed his critique to state abuses. Similarly, the Republican Party kept speaking mainly on behalf of the interests
of businesspeople and those who hoped to be in business for
themselves, even after it was clear that the overwhelming majority of workers had no realistic prospect of attaining this status, and that the most influential businesspeople were not, as
Lincoln hoped, sole proprietors (with at most a few employees,
the majority of whom were destined to rise to self-employed
status after a few years), but managers in large organizations,
governing workers destined to be wage laborers for their entire working lives. Thus, a political agenda that once promised
equalizing as well as liberating outcomes turned into one that
reinforced private, arbitrary, unaccountable government over
the vast majority.
Finally, nineteenth-century laissez-faire liberals, with their
bizarre combination of hostility toward state power and enthusiasm for hyperdisciplinary total institutions, attempted to
reconcile these contradictory tendencies by limiting their focus
to the entry and exit conditions of the labor contract, while
blackboxing what actually went on in the factories. In fact, they
did drive a dramatic improvement in workers’ freedom of entry
and exit.27 Under the traditional common law of master and
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servant, employees were bound to their employers by contracts
of one year (apprentices and indentured servants for longer),
could quit before then only on pain of losing all their accrued
wages, and were not entitled to keep wages from moonlighting.
Other employers were forbidden to bid for their labor while
they were still under contract.28 Workers were liberated from
these constraints over the course of the nineteenth century.29
This liberation, as is well-known, was a double- edged
sword. Employers, too, were liberated from any obligation to
employ workers. As already noted, the worst the workers could
do to the boss often involved suffering at least as much as the
worst the boss could do to them. For the bulk of workers, who
lived at the bottom of the hierarchy, this was not much of a
threat advantage, unless it was exercised collectively in a strike.
They had no realistic hope under these conditions for liberation
from workplace authoritarianism.
No wonder a central struggle of British workers in the midnineteenth century was for limits on the length of the working
day—even more than for higher wages. This was true, even
though workers at this period of the Industrial Revolution were
suffering through “Engels’s pause”—the first fifty to sixty years
of the Industrial Revolution during which wages failed to grow.30
My focus, like theirs, is not on issues of wages or distributive
justice. It is on workers’ freedom. If the Industrial Revolution
meant they could not be their own bosses at work, at least they
could try to limit the length of the working day so that they
would have some hours during which they could choose for
themselves, rather than follow someone else’s orders.31
That was an immediate aim of European workers’ movements
in the mid-nineteenth century. As the century unfolded, workers largely abandoned their pro-market, individualistic egalitarian dream and turned to socialist, collectivist alternatives—that
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is, to restructuring the internal governance of the workplace.
The problem was that the options open to workers consisted
almost exclusively of private governments. Laissez-faire liberals,
touting the freedom of the free market, told workers: choose
your Leviathan. That is like telling the citizens of the Communist
bloc of Eastern Europe that their freedom could be secured by a
right to emigrate to any country—as long as they stayed behind
the Iron Curtain. Population movements would likely have put
some pressure on Communist rulers to soften their rule. But
why should Leviathan set the baseline against which competition took place? No liberal or libertarian would be satisfied with
a competitive equilibrium set against this baseline, where the
choice of state governments is concerned. Workers’ movements
rejected it for nonstate governments as well.
To their objection, libertarians and laissez-faire liberals had
no credible answer. Let us not fool ourselves into supposing
that the competitive equilibrium of labor relations was ever established by politically neutral market forces mediated by pure
freedom of contract, with nothing but the free play of individuals’ idiosyncratic preferences determining the outcome. This is
a delusion as great as the one that imagines that the workplace is
not authoritarian. Every competitive equilibrium is established
against a background assignment of property rights and other
rights established by the state. The state supplies the indispensable legal infrastructure of developed economies as a kind of
public good, and is needed to do so to facilitate cooperation on
the vast scales that characterize today’s rich and sophisticated
economies.32 Thus, it is the state that establishes the default
constitution of workplace governance. It is a form of authoritarian, private government, in which, under employment-at-will,
workers cede all their rights to their employers, except those
specifically reserved for them by law.
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Freedom of entry and exit from any employment relation
is not sufficient to justify the outcome. To see this, consider an
analogous case for the law of coverture, which the state had
long established as the default marriage contract.33 Under coverture, a woman, upon marrying her husband, lost all rights
to own property and make contracts in her own name. Her
husband had the right to confine her movements, confiscate
any wages she might earn, beat her, and rape her. Divorce was
very difficult to obtain. The marriage contract was valid only
if voluntarily accepted by both parties. It was a contract into
subjection, entailing the wife’s submission to the private government of her husband. Imagine a modification of this patriarchal governance regime, allowing either spouse to divorce
at will and allowing any clause of the default contract to be
altered by a prenuptial agreement. This is like the modification
that laissez-faire liberals added to the private government of
the workplace. Women would certainly have sufficient reason
to object that their liberties would still not be respected under
this modification, in that it preserves a patriarchal baseline,
in which men still hold virtually all the cards. It would allow
a lucky few to escape subjection to their husbands, but that is
not enough to justify the patriarchal authority the vast majority
of men would retain over their wives.34 Consent to an option
within a set cannot justify the option set itself.
Back to the Future
My historical investigation explains why a certain libertarian
way of thinking about market society and its promise made
considerable sense in its original context prior to the Industrial Revolution, and why it was reasonable for egalitarians to
support it at that time. But the Industrial Revolution destroyed
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the context in which that vision made sense. The new context
perverted what was once a liberating, egalitarian vision into
support for pervasive workplace authoritarianism—arbitrary,
hierarchical, private government. The evolving rhetoric of
laissez-faire liberalism that arose in the nineteenth century
papered over the real issues and represented, in Orwellian
fashion, subjection as freedom.
Workers’ movements from the mid-nineteenth century
through World War II were not fooled by this.35 That is not to
say that they all had sound ideas for how to solve the problem.
I have no space to recount the follies of democratic state socialism.36 Nor do I have space to recount the catastrophes of
state communism, which were dominated by the same totalitarian vision of the original designers of total institutions—only
dramatically scaled up, more violent, and unmixed with any
skepticism about state power. Like the original designers, state
communists looked to ideals of neither liberty nor equality, but
rather to utilitarian progress and the perfectibility of human
beings under the force of private government.
My point is rather that, with the drastic decline of organized labor, and especially with the triumph of ostensibly free
markets since the end of the Cold War, public and academic
discourse has largely lost sight of the problem that organized
workers in the nineteenth century saw clearly: the pervasiveness of private government at work. Here most of us are, toiling
under the authority of communist dictators, and we do not see
the reality for what it is.
No doubt many of us, especially most of those who are reading these lectures, do not find the situation so bad. My readers,
most likely, are tenured or tenure-track professors, who, almost
uniquely among unorganized workers in the United States,
enjoy due process rights and a level of autonomy at work that
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is unmatched almost anywhere else among employees.37 Or, if
they are college students or graduates, they are or likely will be
the dictators or higher-ranked officials of private governments.
Or they will escape the system and belong to the thin ranks of
the self-employed who have no employees of their own. The
people I am worried about are the 25 percent of employees
who understand that they are subject to dictatorship at work,38
and the other 55 percent or so who are neither securely selfemployed nor upper-level managers, nor the tiny elite tier of
nonmanagerial stars (athletes, entertainers, superstar academics) who have the power to dictate employment contracts to
their specification, nor even the ever-shrinking class of workers
under ever-retrenching collective bargaining agreements. That
55 percent is only one arbitrary and oppressive managerial decision away from realizing what the 25 percent already know.
But this 80 percent receives almost no recognition in contemporary public and academic discourse.
I do not claim that private governments at work are as powerful as states. Their sanctioning powers are lower, and the
costs of emigration from oppressive private governments are
generally lower than the costs of emigration from states. Yet
private governments impose a far more minute, exacting, and
sweeping regulation of employees than democratic states do in
any domain outside of prisons and the military. Private governments impose controls on workers that are unconstitutional for
democratic states to impose on citizens who are not convicts
or in the military.
The negative liberties most workers enjoy de facto are considerably greater than the ones they are legally entitled to under
their employers. Market pressures, social norms, lack of interest, and simple decency keep most employers from exercising
the full scope of their authority. We should care nevertheless
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about the insecurity of employees’ liberty. They work in a state
of republican unfreedom, their liberties vulnerable to cancellation without justification, notice, process, or appeal. That they
enjoy substantially greater negative liberty than they are legally
entitled to no more justifies their lack of republican liberty than
the fact that most wives enjoyed greater freedoms than they
were legally entitled to justified coverture—or even coverture
modified by free divorce.
Suppose people find themselves under private government.
This is a state of republican unfreedom, of subjection to the
arbitrary will of another. It is also usually a state of substantial
constraints on negative liberty. By what means could people attain their freedom? One way would be to end subjection to government altogether. When the government is a state, this is the
anarchist answer. We have seen that when the government is an
employer, the answer of many egalitarians before the Industrial
Revolution was to advance a property regime that promotes selfemployment, perhaps even to make self-employment a nearly
universally accessible opportunity, at least for men. This amounts
to promoting anarchy as the primary form of workplace order.
The theory of the firm explains why this approach cannot
preserve the productive advantages of large-scale production.
Some kind of incompletely specified authority over groups of
workers is needed to replace market relations within the firm.
However, the theory of the firm, although it explains the necessity of hierarchy, neither explains nor justifies private government in the workplace. That the constitution of workplace
government is both arbitrary and dictatorial is not dictated
by efficiency or freedom of contract, but rather by the state.
Freedom of contract no more explains the equilibrium workplace constitution than freedom to marry explained women’s
subjection to patriarchy under coverture.
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In other words, in the great contest between individualism
and collectivism regarding the mode of production, collectivism won, decisively. Now nearly all production is undertaken
by teams of workers using large, indivisible forms of capital
equipment held in common. The activities of these teams are
governed by managers according to a centralized production
plan. This was an outcome of the Industrial Revolution, and
equally much embraced by capitalists and socialists. That advocates of capitalism continue to speak as if their preferred system
of production upholds “individualism” is simply a symptom
of institutional hemiagnosia, the misdeployment of a hopeful
preindustrial vision of what market society would deliver as if
it described our current reality, which replaces market relations
with governance relations across wide domains of production.
Workers in the nineteenth century turned from individualistic to collectivist solutions to workplace governance because they saw that interpersonal authority—governments
over groups of workers—was inescapable in the new industrial
order. If government is inescapable or necessary for solving
certain important problems, the only way to make people free
under that government is to make that government a public
thing, accountable to the governed. The task is to replace private government with public government.
When the government is a state, we have some fairly good
ideas of how to proceed: the entire history of democracy under
the rule of law is a series of experiments in how to make the
government of the state a public thing, and the people free
under the state. These experiments continue to this day.
But what if the government is an employer? Here matters
are more uncertain. There are four general strategies for advancing and protecting the liberties and interests of the governed under any type of government: (1) exit, (2) the rule of
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law, (3) substantive constitutional rights, and (4) voice. Let us
consider each in turn.
Exit is usually touted as a prime libertarian strategy for
protecting individual rights. By forcing governments to compete for subjects, exit rights put pressure on governments to
offer their subjects better deals. “The defense against oppressive hours, pay, working conditions, or treatment is the right
to change employers.”39 Given this fact, it is surprising how
comfortable some libertarians are with the validity of contracts
into slavery, from which exit is disallowed.40 In their view,
freedom of contract trumps the freedom of individuals under
government, or even the freedom to leave that government.
While contracts into slavery and peonage are no longer valid,
other contractual barriers to exit are common and growing.
Noncompete clauses, which bar employees from working for
other employers in the same industry for a period of years,
have spread from technical professions (where nearly half of
employees are subject to them) to jobs such as sandwich maker,
pesticide sprayer, summer camp counselor, and hairstylist.41
While employers can no longer hold workers in bondage, they
can imprison workers’ human capital. California is one of the
few states that prohibit noncompete clauses. As the dynamism
of its economy proves, such contractual barriers to exit are not
needed for economic growth, and probably undermine it.42
There should be a strong legal presumption against such barriers to exit, to protect workers’ freedom to exit their employers’
government.
The rule of law is a complex ideal encompassing several
protections of subjects’ liberties: (a) Authority may be exercised only through laws duly passed and publicized in advance, rather than arbitrary orders issued without any process.
(b) Subjects are at liberty to do anything not specifically pro-
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hibited by law. (c) Laws are generally applicable to everyone
in similar circumstances. (d) Subjects have rights of due process before suffering any sanctions for noncompliance. Not all
of these protections, which were devised with state authority
in mind, can be readily transferred to the employment context. Most of the solutions to problems the state must address
involve regulations that leave open to individuals a vast array
of options for selecting both ends and means. By contrast, efficient production nearly always requires close coordination of
activities according to centralized objectives, directed by managers exercising discretionary authority. This frequently entails
that the authority of managers over workers be both intensive
(limiting workers to highly particular movements and words,
not allowing them to pursue their own personal objectives at
work or even to select their own means to a prescribed end)
and incompletely specified. The state imposes traffic laws that
leave people free to choose their own destinations, routes, and
purposes. Walmart tells its drivers what they have to pick up,
when and where they have to deliver it, and what route they
have to take. In addition, managers need incompletely specified
authority to rapidly reassign different tasks to different workers
to address new circumstances. Finally, excessively costly procedural protections against firing also discourage hiring. All these
obstacles to applying rule-of-law protections in the workplace
empower employers to abuse their authority, subject workers
to humiliating treatment, and impose excessive constraints on
their freedom.
At the same time, it is easy to exaggerate the obstacles to
imposing rule-of-law protections at work. Larger organizations
generally have employee handbooks and standard practice
guides that streamline authority along legalistic lines. Equal
protection and due process rights already exist for workers in
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larger organizations with respect to limited issues. A worker
who has been sexually harassed by her boss normally has recourse to intrafirm procedures for resolving her complaint.
Such protections reflect a worldwide “blurring of boundaries”
among business, nonprofit, and state organizations, which appears to be driven not simply by legal changes, but by cultural
imperatives of scientific management and ideas of individual
rights and organizational responsibilities.43 Some but not all of
these managerial developments are salutary. They are proper
subjects of investigation for political theory, once we get beyond the subject’s narrow focus on the state.
A just workplace constitution should incorporate basic constitutional rights, akin to a bill of rights against employers. To
some extent, the Fair Labor Standards Act, anti-discrimination
laws, and other workplace regulations already serve this function. A workers’ bill of rights could be strengthened by the
addition of more robust protections of workers’ freedom to
engage in off-duty activities, such as exercising their political
rights, free speech,44 and sexual choices. Similar protections for
employee privacy could be extended in the workplace during
work breaks. The Occupational Safety and Health Administration (OSHA) prohibitions of particularly degrading, dangerous, and onerous working conditions can be viewed as part
of a workers’ bill of rights. Nabisco once threatened its female
production line workers with three-day suspensions for using
the bathroom, and ordered them to urinate in their clothes
instead.45 It was only in 1998 that OSHA issued a regulation
requiring employers to recognize workers’ right to use a bathroom, after cases such as Nabisco’s aroused public outrage.
Workers in Europe are protected from harassment of all kinds
by anti-mobbing laws.46 This gives them far more robust workplace constitutional rights than workers in the United States,
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who may be legally harassed as long as their harassers do not
discriminate by race, gender, or other protected identities in
choosing their victims.
There are limits, however, to how far a bill of rights can go in
protecting workers from abuse. Because they prescribe uniformity across workplaces, they can at best offer a minimal floor.
In practice, they are also grossly underenforced for the least
advantaged workers.47 Furthermore, such laws do not provide
for worker participation in governance at the firm level. They
merely impose limits on employer dictatorship.
For these reasons, there is no adequate substitute for recognizing workers’ voice in their government. Voice can more
readily adapt workplace rules to local conditions than state
regulations can, while incorporating respect for workers’ freedom, interests, and dignity. Just because workplace governance
requires a hierarchy of offices does not mean that higher officeholders must be unaccountable to the governed, or that
the governed should not play any role in managerial decisionmaking. In the United States, two models for workers’ voice
have received the most attention: workplace democracy and
labor unions. Workplace democracy, in the form of workerowned and -managed firms, has long stood as an ideal for many
egalitarians.48 While much could be done to devise laws more
accommodating of this structure, some of its costs may be difficult to surmount. In particular, the costs of negotiation among
workers with asymmetrical interests (for example, due to possession of different skills) appear to be high.49
In the United States, collective bargaining has been the
primary way workers have secured voice within the government of the workplace. However, even at its peak in 1954, only
28.3 percent of workers were represented by a labor union.50
Today, only 11.1 percent of all workers and 6.6 percent of private
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sector workers are represented.51 Although laws could be revised to make it easier for workers to organize into a union,
this does not address difficulties inherent to the U.S. labor
union model. The U.S. model organizes workers at the firm
level rather than the industry level. Firms vigorously resist
unionization to avoid a competitive disadvantage with nonunionized firms.52 Labor unions also impose inefficiencies due
to their monopoly power.53 They also take an adversarial stance
toward management—one that makes not only managers but
also many workers uncomfortable. At the same time, they often
provide the only effective voice employees have in workplace
governance.
It is possible to design a workplace constitution in which
workers have a nonadversarial voice in workplace governance,
without raising concerns about monopolization. The overwhelming majority of workers in the United States would like
to have such a voice: 85 percent would like firm governance to
be “run jointly” by management and workers.54 In the United
States, such a constitution is illegal under the National Labor
Relations Act, which prohibits company unions. Yet this structure is commonplace in Europe. Germany’s system of codetermination, begun in the Weimar era and elaborately developed
since World War II, offers one highly successful model.55
It is not my intention in this lecture to defend any particular
model of worker participation in firm governance. My point is
rather to expose a deep failure in current ways of thinking about
how government fits into Americans’ lives. We do not live in
the market society imagined by Paine and Lincoln, which offered an appealing vision of what a free society of equals would
look like, combining individualistic libertarian and egalitarian
ideals. Government is everywhere, not just in the form of the
state, but even more pervasively in the workplace. Yet public
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discourse and much of political theory pretends that this is not
so. It pretends that the constitution of workplace government is
somehow the object of voluntary negotiation between workers
and employers. This is true only for a tiny proportion of privileged workers. The vast majority are subject to private, authoritarian government, not through their own choice, but through
laws that have handed nearly all authority to their employers.
It is high time that public discourse acknowledged this reality and the costs to workers’ freedom and dignity that private
government imposes on them. It is high time that political theorists turned their attention to the private governments of the
workplace. Since the Levellers, egalitarian social movements
have insisted that if government is necessary, it must be made
a public thing to all the governed—accountable to them, responsive to their interests, and open to their participation. They
were shrewd enough to recognize the pervasiveness of private
government in their lives. It is time to go back to the future in
recovering such recognition and experimenting with ways to
remedy it.
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