Private Government

1. Market society was once championed by egalitarians

Opposition to economic monopolies was part of a broader agenda of dismantling monopolies across all domains of social life: not just the guilds, but monopolies of church and press, monopolization of the vote by the rich, and monopolization of family power by men.

Early market advocates saw free markets as a path to equality and liberation from various forms of oppression. They believed that by breaking down economic monopolies and opening up trade, more people would achieve personal independence and become "masterless" individuals. This vision was supported by thinkers like the Levellers, John Locke, Adam Smith, and Thomas Paine.

Key aspects of this vision:

• Dismantling of economic, religious, and political monopolies
• Universal access to property ownership and self-employment
• Reduction of servile dependencies on lords and masters
• Increased bargaining power and dignity for workers

The hope was that a free market society would create a more egalitarian order, where individuals could achieve autonomy and equal social standing through their own efforts and enterprise.

2. The Industrial Revolution shattered the egalitarian vision of market society

The Industrial Revolution destroyed those hopes, but not the idea of market society on which those hopes rested.

Economies of scale brought about by the Industrial Revolution fundamentally altered the structure of production and labor markets. Large-scale enterprises replaced small proprietorships, and opportunities for self-employment shrank dramatically. This shift undermined the core premise of early market egalitarianism.

Key changes:

• Concentration of capital in large firms
• Decline of artisanal and small-scale production
• Rise of wage labor as the dominant form of employment
• Widening gulf between employers and employees

The reality of industrial capitalism diverged sharply from the earlier vision of a society of independent producers. However, many continued to deploy market rhetoric and ideals even as the actual conditions no longer supported them, creating a disconnect between ideology and reality.

3. Private government dominates modern workplaces

Most workers in the United States are governed by communist dictatorships in their work lives.

Workplace authoritarianism is pervasive in modern economies, yet often goes unrecognized. The typical employment relationship involves subjecting workers to a form of private government with extensive control over their activities and behavior.

Characteristics of workplace private government:

• Hierarchical authority structures
• Unilateral rule-making by employers
• Limited due process or appeal rights for workers
• Extensive monitoring and control of worker behavior
• Arbitrary exercise of power by managers

This system of governance stands in stark contrast to democratic ideals in the political sphere, yet affects most people's daily lives far more directly than state authority in many cases.

4. Employers wield extensive power over workers' 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.

Employer authority extends far beyond the workplace itself, often intruding into workers' private lives and personal choices. This expansive power is enabled by the legal doctrine of at-will employment in the United States, which allows employers to fire workers for almost any reason.

Examples of employer control:

• Regulating off-duty speech and social media activity
• Dictating personal appearance and grooming standards
• Mandating health and lifestyle choices
• Influencing political participation and affiliations
• Monitoring personal communications and activities

The breadth of this authority creates a state of "republican unfreedom" for workers, who are vulnerable to arbitrary interference in many aspects of their lives by their employers.

5. Economic theories often overlook workplace authoritarianism

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.

Ideological blinders in economic theory often lead to a mischaracterization or outright denial of workplace authority. Many economists and libertarian thinkers portray employment relationships as voluntary market exchanges between equals, ignoring the reality of power imbalances and hierarchical control.

Key misconceptions:

• Equating employment with independent contracting
• Focusing solely on entry and exit conditions, not ongoing governance
• Assuming perfect competition eliminates workplace authority
• Neglecting the role of state-established baseline rules

These theoretical oversights contribute to a systemic neglect of workplace governance issues in public discourse and policy debates. Recognizing the reality of private government in the workplace is crucial for addressing its impacts.

6. Workers lack meaningful voice and protection in private governments

Employers' authority over workers, outside of collective bargaining and a few other contexts … is sweeping, arbitrary, and unaccountable—not subject to notice, process, or appeal.

Limited worker rights characterize most employment relationships, with few checks on employer power. Unlike citizens in a democracy, workers typically have little say in the rules that govern their work lives and limited recourse against arbitrary treatment.

Deficits in worker protections:

• Lack of due process in disciplinary actions
• No guaranteed rights of free speech or association
• Limited privacy protections
• Inadequate safeguards against harassment and abuse
• Weak enforcement of existing labor laws

The absence of robust worker voice and rights leaves many employees vulnerable to exploitation, unfair treatment, and violations of their dignity and autonomy.

7. Workplace democracy and labor reforms offer potential solutions

My point is simply that workers need some kind of institutionalized voice at work to ensure that their interests are heard, that they are respected, and that they have some share of autonomy in workplace decisions.

Empowering workers through various institutional reforms could help address the democratic deficit in workplace governance. While full workplace democracy may not be feasible or desirable in all contexts, increasing worker voice and rights can mitigate the worst abuses of private government.

Potential reforms:

• Strengthened labor unions and collective bargaining rights
• Worker representation on corporate boards (codetermination)
• Enhanced legal protections for worker speech and privacy
• Improved mechanisms for addressing workplace grievances
• Greater employee participation in decision-making processes

These approaches aim to introduce more democratic elements into workplace governance without completely dismantling existing organizational structures.

8. Rethinking workplace governance is crucial for a free society of equals

A free society of equals cannot be founded on an institutional structure in which the vast majority of workers for most of their productive lives labor under such government.

Reconciling democratic values with workplace realities requires a fundamental reconsideration of how we organize economic production. The current system of private government in the workplace is incompatible with ideals of freedom and equality in the broader society.

Key considerations:

• Balancing efficiency with worker autonomy and dignity
• Aligning workplace governance with democratic principles
• Addressing power imbalances in employment relationships
• Recognizing the centrality of work in people's lives and identities

Developing new models of workplace governance that better respect worker freedom and equality is essential for realizing the promise of a truly democratic society. This challenge requires ongoing experimentation, debate, and institutional innovation.

Last updated: November 20, 2024