What is your view on liberal anti-capitalism?
This perspective’s representatives are David Ellerman, and E. Glen Weyl. They that capitalism is incompatible with liberalism for various reasons such as violating liberal principles of justice, being inefficient or over-emphasizing diversification/exit-oriented risk reduction strategies to the detriment of commitment-based ones.
David Ellerman’s case for capitalism being illiberal is discussed in:
https://www.ellerman.org/wp-content/uploads/2020/03/Article-from-ReclaimingLiberalismEbook.pdf
I mean, to a certain extent isn’t this just arguing the reality of the world vs our ideals?
Ultimately, capitalism supports the idea of private ownership of goods and competition via free markets. Liberalism elevates the individual, emphasizing that each person has equal rights under the law as well as innate political & civil liberties. In definition, I do not see how they must be incompatible.
I do acknowledge that neither liberalism nor capitalism exist in a vacuum. But, I find many of the critiques of capitalism are more critiques of crony capitalism, bad human behavior, or the overall prevalence of human greed (many times all three). There is no system - whether it be a government or a company structure - humankind could create that would be immune to our own bad behavior. Our current system follows the theory that it is these moments where a government (one that is also constrained in its ability to infringe upon the rights of its citizens) would step in to regulate.
I am also not convinced the workplace must reflect Buchanan’s liberalism, or that corporations should become democratic institutions. This just sounds like a recipe to make corporations even more bureaucratic, less nimble, and less willing to make difficult decisions to be competitive and innovate; a business that cannot compete is one that fails.
While I do lament the influence large corporations have over some governments (in particular in the US) I am not convinced this is a solution that would make large corporations more effective.
All just my opinion.
Capitalism includes the employment contract where the employer gets 100% of the property rights to produced outputs and liabilities for used-up inputs while workers as employees get 0% of that. That’s a descriptive point. Morally, this assignment violates the liberal principle of justice that legal responsibility should be assigned the de facto responsible party since workers are jointly de facto responsible for using up inputs to produce outputs but aren’t legally responsible
I just think this is leaning too much into how things should work in theory and not why things are the way they are in practice. There are many situations where we need people to be willing to take risks, and one of the ways we can encourage that is to provide protection from liability. I worry this would only disincentivize people from taking necessary risks.
Just using the architecture/engineering/construction (AEC) industry as an example, increasing the personal liability of the employee could lead to a drop in productivity because of what is at stake if there is a mistake, and mistakes are unavoidable in the AEC industry.
Limited Liability Companies (LLCs) are very popular and were explicitly set up to limit the personal liability and provide personal asset protection for all members against debts (business or personal), legal claims, etc. so that if something happened - or a major mistake were made - the owner and employees would only risk their company assets (should they have them) and have their personal assets legally protected; they wouldn’t lose everything they own. If the mistake is large enough, they can still lose their right to practice their chosen trade, but that wouldn’t come from a government authority (in the case of architects and engineers, whoever signed and sealed the drawing set could lose their license).
Corporations are similar in this regard, only the company is owned by shareholders which also makes it easier to transfer ownership. In the case of publicly traded corporations, we would also have stockholders and who are not necessarily even employees. In principle, corporations take advantage of this to raise fund when they are undergoing risky ventures.
This is in contrast to a sole proprietorship where the owner has much more individual control but risks losing their business and personal assets if there is a large enough mistake.
Basically, what I’m getting at is many of the systems we have put in place already exist to limit the personal risk to ones livelihood, and spreading around the liability for decision making may not be a good thing or something people necessarily want. Increasing personal risk could actually be a disincentive for people to be willing to work in certain industries. (And given the housing shortage in the US, the AEC industry is not one we want to slow down).
If certain companies want to run their business in a more democratic fashion, then all the power to them. I would be curious to see how they would contractually spread around the liability for decision making or how they might defend themselves in a legal setting; both would be necessary before it becomes a standard for any industry.
The liberal norm of legal and de facto responsibility matching determines which party should be held responsible. It doesn’t determine the degree of personal liability or risk to personal assets. There is no conflict between limited liability and democratic firms.
The pure application of the liberal principle of justice is to deliberate actions.
A group of people is de facto responsible for a result if it is a purposeful result of their deliberate and intentional joint actions
Democracy in the workplace doesn’t mean that every decision would be subject to a collective vote. At a bare minimum, the board of directors must represent those governed by management, the workers. There can still be a managerial structure to support nimble decision-making. Critiques of worker representation on the board of directors would much more significantly apply to widely held corporations with far-flung shareholders. Worker can monitor management rent-seeking better
This sort of company structure could work, but I think it would need to be tested to see if it were actually viable or competitive in a broad sense.
But I get the sense that this sort of company structure might only be viable for industries that don’t require much risk or have a reliable cash flow; they would probably already need to be very established companies or very small. If too many decisions are subject to decisions-by-committee then I get the sense they would avoid risk at all if they could.
I just think all this would need to be tested.
There are plenty of examples today of companies with similar structures that seem to work:
https://www.nceo.org/articles/employee-ownership-100
It is important to note the argument is that the employer-employee contract is invalid not that the people will benefit from this change (although they probably will)
It is important to consider the political implications of a move in this direction. Having a more powerful democratic firm sector would result in more lobbyists that have an eye on workers’ interests
It is important to note the argument is that the employer-employee contract is invalid
I think this is really the part where I am not convinced.
If all parties have a mutual meeting-of-the-minds, the capacity to do the work, are compensated as agreed upon (and as legally permissible), have all of their duties and responsibilities legally permissible, are not coerced into signing the contract, and have the freedom to leave the contract on their own will, then where is the issue? If an employee agrees that the product of their services belongs to that company in exchange for an agreed upon sum, then can it not be argued the employer bought it?
I also think the article draws a line connecting slavery and the employer-employee contract, equating the two in a way I find very unconvincing.
I do agree parts of some employer-employee contracts should be invalidated (such as non-compete agreements).
As for lobbying, I would advocate for it be eliminated altogether.
It would be unconvincing if the article was really arguing against slavery and then ruling out employment contract by equating it with slavery. That would be a false equivalence fallacy. The employment contract is a voluntary self-rental while slavery involves coercive ownership of people. However, that isn’t what the paper is doing. The reference to self-sale contracts is to recover the underlying principles of inalienable rights, and demonstrate that they apply to employment
Consent isn’t sufficient to transfer de facto responsibility from employees to employer. Employees (and a working employer) are jointly de facto responsible for using up inputs to produce outputs regardless of contract. Since there is no transfer, there is an inherent mismatch here
Employment isn’t a contract to sell the product of labor because to sell something you must first own it, and workers never own it.
(The workers jointly own the product of their labor) → democratic firm
