Although the widely celebrated consumer sovereignty allows people to choose whether to consume Coke or Pepsi, nobody could even dream of suggesting that workers can act as sovereign individuals within their place of employment. Ideologists mouth comforting platitudes that depict people as sovereign individuals in their role as consumers, but obviously ultimate control of the workplace firmly resides with the employer. As Frederick Winslow Taylor, the father of scientific management, proclaimed in 1911, when the giant corporations were beginning to dominate the U.S. economy, “In the past the man has been first; in the future the system must be first” (The Principles of Scientific Management, 1911).
Strangely enough, although the law in Britain and the United States evolved rapidly to allow for increasing freedom in the commercial sector, until relatively recently very ancient law regulated the obligations of workers to their employers. Karen Orren described the persistence of this archaic legal structure in her book Belated Feudalism (1991). This legal framework dates all the way back to the Statute of Artificers (1563), the Statutes of Labourers (1349), and even earlier. The first of these laws was intended to reinforce employer control after the Black Death created a scarcity of workers. With fewer people available for work, laborers’ bargaining position had improved. Rather than accept their temporary disadvantage, the rich and powerful passed the Statutes of Labourers (1349), which codified earlier court decisions, seriously restricting the rights of laborers to change employers or location.
Of course, courts did not issue decrees that blatantly trumpet their decisions, beginning with the words: “By the Statutes of Labourers. . . .” Instead, they based their decisions on later courts whose verdicts flowed from these ancient laws. Only in the late 19th century, when railroad strikes began to create serious interference with commercial activity, did the Interstate Commerce Commission finally begin to apply a more modern legal theory. Over the next few decades, the legal system in the United States slowly began to break away from these ancient legal doctrines (see Orren 1991).
During the New Deal, popular pressure forced the law to evolve in a direction more favorable to unions. Since then the law has increasingly turned against the rights of unions, often on the grounds that unions violate the rights of individual workers.
The striking imbalance of power between individual workers and employers is so obvious that it requires no comment at all. Even our everyday language betrays the unequal distribution of power between the employer and the employed. The employers, being in a superior position, are said to “give” or “offer” work. For their part, employees should “accept” their jobs gratefully or find another suitable place of employment. In this sense, a sort of consumer sovereignty does actually operate in the workplace. There, the consumer — namely, the employer — enjoys nearly dictatorial powers over the seller — namely, the workers who sell their labor. Given the enormous stress associated with the labor market, no wonder so many people attempt to retreat into consumptionism.
Despite the obvious imbalance between workers and employers, some economists stubbornly insist on seeing only voluntary arrangements in the workplace rather than an exercise of power. For example, two highly respected economists — one of whom was the instructor in my freshman class in economics — compared the relation between employer and employee to that between shopper and grocer. They maintained that just as shoppers can fire their grocers by patronizing a different store, employers can choose to do business with different employees. “Telling an employee to type this letter rather than to file that document is like telling my grocer to sell me this brand of tuna rather than that brand of bread” (Armen Alchian and Harold Demsetz, “Production, Information Costs, and Economic Organization,” American Economic Review 62.5, 1972, p. 778). The economists made no mention of the delicious irony that the relationship between the consumer of labor service (the employer) and the seller of labor services (the employee represented in their example as a subservient grocer) may possibly be the strongest example of consumer sovereignty — that of the employers who purchase the services of their workers.
Other economists take this sort of fanciful thinking about voluntary arrangements in the workplace to an even more absurd level by claiming that workers preferred what were obviously coercive measures. For example, Greg Clark proposed that “factory discipline [was] successful because it coerced more effort from workers than they would freely give. . . . The empirical evidence shows that discipline succeeded mainly by increasing work effort. Workers effectively hired capitalists to make them work harder” (“Factory Discipline,” Journal of Economic History 54, March 1994, p. 128).
Greg Clark was referring to the sort of theory earlier proposed by Clark Nardinelli, who, presumably in all seriousness, declared that during the Industrial Revolution, children in the factories would voluntarily choose to have their employers beat them. In his words: “Now if a firm in a competitive industry employed corporal punishment the supply price of child labor to that firm would increase. The child would receive compensations for the disamenity of being beaten” (“Corporal Punishment and Children’s Wages in Nineteenth Century Britain,” Explorations in Economic History 19.3, July 1982, p. 289). Does any parent seriously believe that children would actually make such a calculation — especially when their parents pocketed their earnings? Similarly, Steven Cheung maintains that riverboat pullers who towed wooden boats in pre-communist China agreed to hire monitors to whip them to restrict shirking (“The Contractual Nature of the Firm,” Journal of Law and Economics 26.1, 1983, p. 5).
Perhaps those children defied all of our understanding of child psychology and chose to have themselves beaten to earn more money for their parents. Following that logic, we could extend our notion of voluntarism to slavery. After all, some people in impoverished nations, such as early China, Japan, and Russia, were so destitute that they sold themselves into slavery (see Orlando Patterson, Slavery and Social Death: A Comparative Study, 1982, p. 130). Voluntary slavery exists today in some of the poorest parts of the world. Would any rational person see slavery as an indicator of freedom rather than absence of choice?
Michael Perelman is professor of economics at California State University at Chico, and the author of fifteen books, including Steal This Idea: Intellectual Property Rights and the Corporate Confiscation of Creativity and The Perverse Economy: The Impact of Markets on People and the Environment. His forthcoming books include Railroading Economics: The Creation of the Free Market Mythology (Monthly Review Press) and Manufacturing Discontent: The Trap of Individualism in Corporate Society (Pluto Press). The above essay was adapted from Manufacturing Discontent.