Private Government

E. Anderson

American public discourse is also mostly silent about the regulations employers impose on their workers. We have the language of fairness and distributive justice to talk about low wages and inadequate benefits. We know how to talk about the Fight for $15, whatever side of this issue we are on. But we don’t have good ways to talk about the way bosses rule workers’ lives. Instead, we talk as if workers aren’t ruled by their bosses. We are told that unregulated markets make us free, and that the only threat to our liberties is the state. We are told that in the market, all transactions are voluntary. We are told that, since workers freely enter and exit the labor contract, they are perfectly free under it: bosses have no more authority over workers than customers have over their grocer.

Labor movement activists have long argued that this is wrong. In ordinary markets, a vendor can sell their product to a buyer, and once the transaction is complete, each walks away as free from the other as before. Labor markets are different. When workers sell their labor to an employer, they have to hand themselves over to their boss, who then gets to order them around. The labor contract, instead of leaving the seller as free as before, puts the seller under the authority of their boss. Since the decline of the labor movement, however, we don’t have effective ways to talk about this fact, and hence about what kinds of authority bosses should and shouldn’t have over their workers....

One issue.. continued to bother Paine near the end of his life: widespread poverty...

[Thinker T. Paine] shows enormous faith in free markets and does not display a trace of the anti-capitalist class conflict that characterized nineteenth-century politics. [Why?] The answer is that labor radicals saw access to self-employment as central to avoiding poverty and attaining standing as equals in society. In the late eighteenth and early nineteenth centuries, the most radical workers were not the emerging industrial proletariat, but artisans who operated their own enterprises. As such, they were simultaneously capitalists and workers...

In an economic context in which the self-employed find their status and opportunities threatened by powerful institutions, it does not make sense to pit workers against capitalists. Popular politics instead pits the common working people against elites — that is, whoever controls the more powerful institutions. It may also pit the common working people against idlers ...

Paine’s low-tax, free-trade libertarian agenda made considerable sense for an export-led agricultural economy facing high grain prices, as was true for late eighteenth-century America. “The commerce by which [America] hath enriched herself are the necessaries of life, and will always have a market while eating is the custom of Europe.” Free market wages were high in a country suffering from chronic labor shortages, and in which self-employment was a ready option for nearly all. When the bulk of the population is self-employed, pleading for relief from state meddling is quite a different proposition than it would be today. There is not much call for employment regulations if there are few employees, and virtually all have a ready exit into self-employment.

When no enterprises are large enough to have market power, there is no need for anti-trust regulation. When land is abundant and practically free, land use and pollution regulations are hardly needed because people are spread out and environmental effects (as far as people understood at the time) minimal. When people can appraise the quality of virtually all goods for sale on inspection, and nearly everyone grows what they eat, there is little need for laws regulating the safety of consumer goods. Arcane financial instruments could not bring an economy to its knees in an era in which banking was primitive and much of the economy was not monetized....

The Industrial Revolution shattered the egalitarian ideal of universal self-government in the realm of production. Economies of scale overwhelmed the economy of small proprietors, replacing them with large enterprises that employed many workers. Opportunities for self-employment shrank dramatically in the course of the nineteenth century, and have continued to shrink to the present day. The Industrial Revolution also altered the nature of work and the relations between owners and workers in manufacturing, widening the gulf between the two...