Workers of the World Unite for a Free Market
Protected firms can get away with abusing workers.
By way of Roderick Long I’ve learned that Amazon.com has some pretty rough rules for its employees. (Long draws on the Huffington Post and the Times Online.) According to the Times, employees at the Bedfordshire (UK) warehouse were:
- Warned that the company refuses to allow sick leave, even if the worker has a legitimate doctor’s note. Taking a day off sick, even with a note, results in a penalty point. A worker with six points faces dismissal.
- Made to work a compulsory 10½ hour overnight shift at the end of a five-day week. The overnight shift, which runs from Saturday evening to 5am on Sunday, means they have to work every day of the week.
- Set quotas for the number of items to be picked or packed in an hour that even a manager described as “ridiculous”. Those packing heavy Xbox games consoles had to pack 140 an hour to reach their target.
- Set against each other with a bonus scheme that penalises staff if any other member of their group fails to hit the quota.
- Made to walk up to 14 miles a shift to collect items for packing.
It also reports that workers are “Given only one break of 15 minutes and another of 20 minutes per eight-hour shift and told they had to notify staff when going to the toilet. Amazon said workers wanted the shorter breaks in exchange for shorter shifts.”
In a help-wanted ad posted at Express, Amazon tried to attract employees to its Coffeyville, Kansas, fulfillment center with such benefits as, depending on the job, standing stationary 8-10 hours or walking 10-15 miles a day: “[M]ust be able to repetitively lift, bend, stoop, and squat while selecting items.” The job pays $10.50 daytime, $11 nights.
Reuters reports that “A former Amazon.com Inc worker has sued the online retailer, saying it shorts as many as 21,000 warehouse workers nationwide on overtime pay.”
Controversy Erupts
When the news hit the libertarian blogosphere, controversy erupted. Controversy? How could that be? A couple of bloggers at the LRC Blog (see this and this) dismissed the Huffington Post’s notice as just the standard progressive’s whining about “capitalism.” Gosh, people actually were expected to work for their pay? one commenter asked sarcastically.
But libertarian Long’s Austro-Athenian Empire blog took a different tack. Rather than asking why Amazon employees didn’t find jobs elsewhere, Long wrote, “a better question would be: ‘Is it likely that Amazon would be able to get away with this crap in a non-oligopsonistic labour market?’”
It’s a fair question that libertarians don’t ask nearly enough. For the record, oligopsony is the flip side of oligopoly, that is, a small number of buyers, in this case, of labor services. (I would go further and say a small number as the result of government restrictions on competition—but I get ahead of myself.)
I surmise that the typical free-marketeer reaction to the Amazon story is this: People take those jobs voluntarily after judging that what they receive in pay is worth more than what is required of them. Using good praxeological reasoning, we can be confident that, all things considered, these jobs are the best opportunities available to the people who take them. Thus there are no grounds for complaint.
Well, not quite. While the application of praxeology is valid, what if the set of opportunities available is artificially constricted by government action? That would make it a different story. (The point is applicable to third-world sweatshops workers and Bob Cratchit also.)
And how might that set be constricted? By all the things we free-marketeers constantly grumble about: occupational licensing (from flower arranging to hair-braiding to taxi driving to teaching), zoning (separating commerce and residence), government-held land (creating artificial scarcity), and barriers to entry from taxes and regulation that are a greater burden on potential and nascent businesses than to established firms. Moreover, explicit and implicit privileges (such as eminent domain, transportation subsidies, economic-development benefits, government product standards, and patents) induce concentration and cartelization, leaving fewer and larger firms bidding for workers’ services.
Less Bargaining Power
In general, any government intervention that makes it harder to start businesses pushes people into the labor market with less bargaining power than they would have in a free market. Less bargaining power for workers means more bargaining power for bosses. So it stands to reason that some percentage of the workforce must put up with lousy job conditions they would reject in a minute if there were a wider array of better opportunities, including self-employment. But there isn’t because the State, with the backing of established businesses, has kept those opportunities from coming into existence—sometimes by outright prohibition, sometimes by “progressive” measures to “protect” consumers and workers. Technology now makes it more feasible for people to work independently, but statutes and ordinances still stand in the way.
It all comes down to the same thing: squelching competition and creating dependence on thusly protected big hierarchical and often authoritarian firms. (Yes, small business gets some State benefits too, but see Roderick Long’s response here. Also see C. L. Dickenson’s “Free Men for Better Job Performance” here and here.)
Concerns about working conditions sound “left wing” but that’s only because libertarians have neglected the issue, without good reason in my view. (It was not always so. Nineteenth-century liberals explicitly appealed to working people and condemned the State-derived power of “capital.”) Too many contemporary libertarians mistakenly think that since sound economic theory tells us that poor working conditions can’t endure in an advanced competitive market, workers have nothing to worry about in a “capitalist” country like the United States. The problem with the argument is that “capitalism” doesn’t equal “free market,” and we haven’t had a free market—not even close. In fact, the economy we live in is far more the product of government-business collusion—going back to the beginning—than economic freedom.
Where the progressives and state socialists go wrong is in thinking that weak worker bargaining power is inherent in the market itself. It is not. It is the result of State privilege. Therefore the solution is not further government intervention, as the progressives want, but repeal of privileges, subsidies, licenses and the rest of the sources of political advantage that protect the well-connected at the expense of the rest of us.
People typically become libertarians because they favor individualism and abhor seeing themselves and others abused. Unfortunately, nonlibertarians don’t know this. They think libertarians are simply pro-business (and anti-labor). We can set the record straight by acknowledging that government-business collusion hurts working people.
Pingback by TGIF: Workers of the World Unite for a Free Market | Anything Peaceful on 18 December 2009:
[...] The rest of TGIF is here. [...]
Comment by Gerard Bendiks on 18 December 2009:
We all have standards. And our standards change because of time and place. They also change due to “monkey see monkey do”-ism. Our standards also vary from person to person. An aspect that I see is that these politically-imposed market restrictions have the effect of raising the proverbial first-rung-of-the-ladder higher from the ground than would naturally be. That means “short folks” have a harder time getting ON the ladder than the “taller” ones. It’s a cost to those who can least afford it.
Comment by Martin Buerger on 18 December 2009:
In a free market, outside organizations like the Huffington Post provide a valuable service by exposing working conditions at a facility to greater visibility. Having more information in the labor marketplace helps prospective employees (and those already in the job) to evaluate their comparative position in the market. If what Amazon is doing is truly beyond the norm, better informed employees will act and the company will want to upgrade its labor practices or pay to maintain staff.
But pleeeease, no new regulations and laws.
Comment by Sheldon Richman on 18 December 2009:
“An aspect that I see is that these politically-imposed market restrictions have the effect of raising the proverbial first-rung-of-the-ladder higher from the ground than would naturally be. That means ‘short folks’ have a harder time getting ON the ladder than the ‘taller’ ones. It’s a cost to those who can least afford it.”
Gerard, that is particularly well put.
Comment by Darian Worden on 18 December 2009:
Great article, Sheldon.
What about the effects of taxation on the labor market? It seems logical that if so much of peoples’ income goes to taxes, both directly and through the raised costs of necessities, that a small business today would need to make a larger profit to sustain its members than would be the case in a freed market. Another way the first rung of the ladder is raised.
Comment by Bob Kaercher on 18 December 2009:
That was wonderfully clear, well reasoned and well stated. Thanks, Sheldon.
Comment by Adam Knott on 18 December 2009:
Sheldon:
The problem with the above analysis is the following:
“But there isn’t because the State, with the backing of established businesses, has kept those opportunities from coming into existence—sometimes by outright prohibition, sometimes by “progressive” measures to “protect” consumers and workers.”
This is obviously a leftist analysis, as it conceives statism as the collusion of government and business, and leaves out mention of the leftist contributions to the current situation. Besides business, didn’t the New York Times, Harvard, journalists generally, the educational establishment, unions, and leftist politicians also “back” and even demand the level of state intervention we now enjoy?
And again:
“Therefore the solution is not further government intervention, as the progressives want, but repeal of privileges, subsidies, licenses and the rest of the sources of political advantage that protect the well-connected at the expense of the rest of us.”
OK So the progressives are wrong in wanting more government intervention, whereas what would solve the problem is less government intervention. And therefore, according to your article, the solution is repeal of privileges that favor the well-connected.
But what about the rest of the state apparatus that isn’t intended to favor the well-connected, but is intended to favor the “connectedly-challenged.” This “well-intentioned” aspect of the state apparatus is every bit as coercive as the state apparatus that is poorly intentioned. But mention of this aspect is absent from your article, and from the leftist’s critique of government generally.
What this amounts to, essentially, is leftists wanting to use libertarianism as a means to destroy specific aspects of the coercive state they find objectionable, while leaving in place those aspects of the state they find desirable. We can infer this from the consistent pattern wherein only business-connected or business-favoring aspects of the state are critiqued.
Intelligent libertarianism has largely moved beyond big business apoligism, but leftism and left libertarianism, as your article demonstrates, have not moved beyond egalitarian statism.
Comment by Sheldon Richman on 18 December 2009:
Mr. Knott, this criticism strikes me as unfair. Anyone familiar with my paper trail would know that I criticize all aspects of government intervention, and I don’t attribute it all to business lobbying. However, it is certainly true that the record of government intervention in the United States was largely written at the behest of influential business leaders, who were often allied with the group you describe as “the New York Times, Harvard, journalists generally, the educational establishment, unions, and leftist politicians.” Take a look at who was lobbying for big government during the Progressive Era. That period was not unique.
“What this amounts to, essentially, is leftists wanting to use libertarianism as a means to destroy specific aspects of the coercive state they find objectionable, while leaving in place those aspects of the state they find desirable.”
Surely you jest.
As for “the rest of the state apparatus that isn’t intended to favor the well-connected, but is intended to favor the “connectedly-challenged,’” I agree (as I’ve long written) that it also should be repealed as unjust. But those measures, which let State officials appear to be helping the very people they routinely harm, shrink in importance next to the system of privilege that runs so deep it not even noticed.
A leftist analysis? Perhaps. Bastiat sat on the left side of the French assembly, next to Proudhon. Who was on the right? The defenders of the old despotic mercantilist aristocracy.
Comment by Daniel Morin on 18 December 2009:
This is so true, Libertarians are perceived as pro-business, and consequently as anti-labor. By demonstrating the free market benefits the employees, more people will favor the free market.
Comment by Roderick T. Long on 18 December 2009:
Note to Adam Knott: You might want to actually read some left-libertarian writings before making these outrageously inaccurate statements about the movement! You could start here.
Comment by Clay Barham on 18 December 2009:
GO TO PERSON
Every family should have a “go to” person who can give answers to political and issue concerns, as suggested by Rush Limbaugh. Learning how means starting at the roots, the beginnings and differences between two sides of the same coin, which is all there is. One side is long established, where the few rule the many, irrespective of their labels. The other side is the newest, that of individual freedom and limited government. Why do many follow each side, and why the conflict between them? What side do current issues come from, such as health care, cap and trade as well as amnesty for illegal immigrants? What side of the coin most impacts the lives of your family, to whom you provide the answers? Call up claysamerica.com for the roots of both sides and improve your understanding of the issues so you have the answers. This is what Leonard Read advocated as well. Claysamerica.com
Comment by Dennis on 18 December 2009:
I always look forward to your Friday editorials and this is definitely in the top 5. Thank you so very much. BTW, four or five years ago I heard about a survey where 70% of Americans said they would never start a business due to the regulations involved. Furthermore, I believe that I recall a piece on FEE written around 1999 by a grad student at Johns Hopkins who estimated that 10% of GDP is spent complying with regulation.
“Many people want the government to protect the consumer. A much more urgent problem is to protect the consumer from the government.” – Milton Friedman (1912-2006)
Comment by Kevin Carson on 19 December 2009:
Adam Knott:
If you look at the different forms of state action that were allegedly intended to benefit the “connectedly-challenged,” I think you’ll find that for the most part they were not passed primarily as the result of the political influence of that third rail of politics, the power block of welfare moms. They were passed primarily at the behest of those who were very much connected, because they served the interests of those groups in some way. You’ll also find that their main function is secondary or ameliorative, and that they were adopted as a way of limiting or regulating the side-effects of the primary interventions on behalf of the privileged.
To the extent that there’s a dominant ideology at Harvard or the New York Times, it’s Crolyism–which is hardly anti-business.
Comment by Black Bloke on 19 December 2009:
I’m surprised to find that Adam Knott and Roderick Long are actually different people!
Comment by Sheldon Richman on 20 December 2009:
Black Bloke: Not sure I understand your comment.
Comment by D. Saul Weiner on 20 December 2009:
Excellent Sheldon.
I would only add that the high taxes (payroll, Income Taxes) and cost of health care (limiting his pay) also serve to minimize the net benefits to the employee, thus further eroding the Cost:Benefit proposition available to him.
Comment by Sheldon Richman on 21 December 2009:
Thanks, I’m a little surprised this article would occasion libertarian controversy. We should be more familiar with our own radical tradition.
Comment by Eric H on 27 December 2009:
Your piece is a good litmus test for consistency within the libertarian paradigm. I think formerly right-leaning folks such as myself will appreciate your even-handed application of what I take to be libertarianism’s sole guiding principle: freedom from coercion.
Pingback by We All Have the Same Goals « Scarcity and Inequality on 27 December 2009:
[...] We All Have the Same Goals I love how Sheldon Richman titled this article “Workers of the World Unite for a Free Market.” [...]
Pingback by Militant Libertarian » Workers of the World Unite for a Free Market on 5 January 2010:
[...] by Sheldon Richman, TFO [...]