Workers are neither Investors nor Citizens of Firms

Working humans are so much more than “resources”. This is one of the central lessons of the current crisis. Caring for the sick; delivering food, medication and other essentials; clearing away our waste; stocking the shelves and running the registers in our grocery stores – the people who have kept life going through the Covid-19 pandemic are living proof that work cannot be reduced to a mere commodity. Human health and the care of the most vulnerable cannot be governed by market forces alone. If we leave these things solely to the market, we run the risk of exacerbating inequalities to the point of forfeiting the very lives of the least advantaged.

How to avoid this unacceptable situation? By involving employees in decisions relating to their lives and futures in the workplace – by democratising firms. By decommodifying work – by collectively guaranteeing useful employment to all. As we face the monstrous risk of pandemic and environmental collapse, making these strategic changes would allow us to ensure the dignity of all citizens while marshalling the collective strength and effort we need to preserve our life together on this planet.

Every morning, men and women, especially members of racialised communities, migrants and informal economy workers, rise to serve those among us who are able to remain under quarantine. They keep watch through the night. The dignity of their jobs needs no other explanation than that eloquently simple term “essential worker”. That term also reveals a key fact that capitalism has always sought to render invisible with another term, “human resource”. Human beings are not one resource among many. Without labor investors, there would be no production, no services, no businesses at all.

Every morning, men and women, especially members of racialised communities, migrants and informal economy workers, rise to serve those among us who are able to remain under quarantine. They keep watch through the night. The dignity of their jobs needs no other explanation than that eloquently simple term “essential worker”. That term also reveals a key fact that capitalism has always sought to render invisible with another term, “human resource”. Human beings are not one resource among many. Without labor investors, there would be no production, no services, no businesses at all.

To the question of how firms and how society as a whole might recognise the contributions of their employees in times of crisis, democracy is the answer. Certainly, we must close the yawning chasm of income inequality and raise the income floor – but that alone is not enough. After the two world wars, women’s undeniable contribution to society helped win them the right to vote. By the same token, it is time to enfranchise workers.

Representation of labour investors in the workplace has existed in Europe since the close of the second world war, through institutions known as works councils. Yet these representative bodies have a weak voice at best in the government of firms, and are subordinate to the choices of the executive management teams appointed by shareholders. They have been unable to stop or even slow the relentless momentum of self-serving capital accumulation, ever more powerful in its destruction of our environment. These bodies should now be granted similar rights to those exercised by boards. To do so, firm governments (that is, top management) could be required to obtain double majority approval, from chambers representing workers as well as shareholders

In Germany, the Netherlands and Scandinavia, different forms of codetermination (Mitbestimmung) put in place progressively after the second world war were a crucial step toward giving a voice to workers – but they are still insufficient to create actual citizenship in firms...  https://democratizingwork.org/ "Coronavirus shows why we must democratise work.   @The Guardian, May 15, 2020

A few weeks ago I was asked repeatedly to co-sign the widely translated and circulated petition partially quoted above. Since some influential thinkers were already signed up, and I am (here and here) a friend of virtue signaling (for a nice argument see here), so the temptation to join in a noble cause was great. But I also knew that the text -- undoubtedly a messy compromise among the early drafters -- could not be changed anymore. And while I shared in the eloquently expressed concerns, in particular that badly designed and hasty bail-outs will just reinforce a flawed status quo, I could not in good good conscience co-sign. I have a number of conceptual and empirical reservations, and as I reflected on these I realized that I find the whole underlying vision of this document misguided.

 

Workers and employees are not "citizens" of firms and their "top management" is not a "government," and they should not be. Just as we should resist the corporate newspeak which turns every customer or client into a 'friend,' 'family-member' or 'patron,' we should resist (the corporatist-democratic-speak) turning our employee status into one one of citizenship. As a metaphor it's misleading as an aspiration fearsome.

 

If a worker is treated as a citizen of a company then you open the door for a company or bureaucratic organization to view itself as a sovereign over these 'citizens'. This is undesirable if only because plenty of states that insist on continuing a whole series of claims on and obligations to emigrants (that is, former citizens) and exiles who want nothing to do with these states. If companies start viewing themselves as sovereigns there is little conceptual space to prevent the increasing encroachment of their power over the lives of employees. 

 

You may think that citizenship is the answer to the very real existing problem of corporate tyranny and arbitrary powers over workers. But this is an instance where the solution is worse than the problem. Once one has sovereignty and, say, a subsidiary principle (common in federative polities) then rather than treating the state as a countervailing power to corporations and non-profits and non-profits and corporations as a countervailing powers to the state, these will become delegated powers. In states that are politically weak and poor, this will merely accelerate the power of corporations against the government. In states that are rich this will only increase the legal space for corporate control over employees' lives outside work hours. Sovereign power is, in principle, unlimited.

 

As an aside, it is notable that the petition wishes to 'decommodify' work by rejecting the conceptualization of workers as “human resource,” and conceptualize these "stakeholders" as "labor investors." Evidently human capital theory has -- despite talk of "dignity" -- a firm grip on the imagination of the drafters of the petition. But to treat workers as labor investors is a disastrous move because it encourages firms to shift their risks even more onto the backs of workers. This has already happened with many workers' pensions and is correctly treated as an instance of neoliberalism gone amok.

 

Strikingly the petition does not address the problem by calling for rights of individual employees against their new sovereigns. (Oddly, the petition only recognizes  "collective rights;" I return to this below.) Rather it calls for  more 'democracy' within firms. What's fascinating to me is that the very institution that has failed to provide the relevant protections at the national level (democracy), which is responsible for the existing status quo in most rich countries, is now called upon to rectify the problem at the individual firm/organization level. But why think that genuine democracy would work better within firms?  We are never told. I close with two observations on this.

 

First, the petition kind of pretends as if the status quo, or at least "human health and the care of the most vulnerable" is "governed by market forces alone." At one point it says "that market mechanisms alone cannot be left in charge of the choices that affect our communities most deeply" and implies this is the case "in the health sector." This may have been true in the nineteenth century, but we are very far removed from this situation today. Democratic legislation governs most of the pre-conditions of and constraints on economic life directly through licensing, zoning, health and safety regulations, subsidies, etc. and indirectly through taxes and trade regulation. The health sector, in particular, is among the most regulated of all industries at all levels even in the United States. (In many other places, the provision of care is either in government hands or under substantial government control.) That is to say the current situation is itself the outcome of the multi-faceted and open-ended play of political and market forces.  To pretend otherwise does not help solve the problem. What's really needed is education and, in particular, mass political mobilization at the national and international level (including, I agree, strengthening of union rights).

 

Second, I agree with the petition that the rich have been winning too many of the political battles in government. But why think they won't do so more in corporations? In particular, why think democracy will do a great job protecting the most vulnerable workers? Odds are that left to their own democratic devices within corporations, management and the educated and wealthier workers will combine against the most vulnerable. That's what democracies tend to, after all. (Even unions, alas, do not have a stellar record on this score.) Similarly, judging by our existing democratic politics, there is also no reason to expect that democratic firms will be green in virtue of being democratic. And once legitimated by and understood as sovereign power, the space to resist, to exit, or to experiment with alternatives has been narrowed which is welcome to the corporate class, but nobody else.

 

 

 

 

Comments

[Charles Blattberg]

But federalism.

[Ian Walling]

Respectfully, as a long time reader, I find this argument almost incomprehensible. I'll join your complaint against the language of "investment", but I also find it somewhat trivial. I'll also agree that it is quite silly to say that we are seeing is the result of markets and markets alone. I suspect this is one of those summary labels that signers with different politics could get behind. I'm certain there is a better single word summary term for the calamitous mixture of markets, monopolies, semi-permanently subsidized financial actors, semi-permanent pro-investor government action, and batshit ideology we are experiencing, but I suspect that most of the writers of this letter have built a large part of their life (sincerely) dodging red-baiting. Why expect the instinct to fade now?

Your main points though, about citizenship implying sovereignty, and the dubious virtues of democracy strike me as very off. Citizenship in no way implies sovereignty. I am a citizen of the State of New Jersey, but that does not make New Jersey sovereign, anymore than it makes the town I am in a sovereign. Citizenship does not carry sovereignty with it like a shadow; its origins, as you know as well as I, vastly predate the idea of sovereignty. Indeed, it is striking that its origins are in one of the best examples of a society without any sovereign body or individual actor. Calling for citizenship does not imply calling for sovereignty, either logically, or frankly, colloquially, where most people find the concept of sovereignty vague and implausible once spelled out. My rights have not shrunken since the University President declared me (implausibly) a citizen of the University.

But more than that, I cannot figure the baseline for your comparisons. You say that the cure will be worse than the disease; that we run the risk of increasing the power of employers over us. This reminds me of the student I had who claimed that we should send all children of mildly unfit parents into foster care. We already live (at least in the US, and in many other parts of the world) under employers who may fire us for speech outside of the workplace, for being too attractive or ugly, for taking too many bathroom breaks, for smiling at the wrong time, for having piercings or tattoos, and so much more. The baseline here is not some highly limited power, it is a thoroughly unaccountable power. I will take the risks of a profoundly vague connection to sovereignty for some actual accountability over already semi-sovereign employers here. As Elizabeth Anderson pointed out, this is government, just not with a few of the trappings of contemporary states, like full sovereignty or mechanisms of accountability.

Your claim that workplace democratization will lead to weaker states also strikes me as strange. Typically democratization at the bottom helps with democratization at the top. I'm not saying you are wrong, I'm just saying I cannot see why you would be right.

You ask why call for democratization rather than more rights against employers. I think you are right that the piece does not answer this question, but my own sense is that there is a good answer: power is always better than nominal rights. The power to compel the employer to bargain and concede is a vastly superior protection of worker rights than any law. Time and time again we see this story with labor law; the parchment is weak, and government enforcement so infrequent as to be almost a parchment barrier. What makes these laws work is the power of workers to demand their enforcement. This is best served not by parliaments and congresses, but by unions and better forms of worker representation and power. The dream of the state as countervailing power strikes me the way that the mixed constitution struck Tacitus: more often praised than practiced, and for utterly unsurprising reasons.

You are undoubtedly right that the rich hold real sway, undue sway, in unions, workers councils, and so on. But again I ask, against what baseline of comparison? We know that these organizations nonetheless highly reliably increase wages, workplace safety, and enforcement of labor law. This is like a Tory telling me that democracy can be corrupted so I should just accept an unreformed electorate in the 19th Century. The complaint is true and important, but does nothing to vindicate the alternative. I know no better form of power than the democratic one, and I know nothing that harms democracy like the power structures of racism, sexism, and capitalism. The best solution really does involve liquidating the capitalist class, public ownership, and full workplace democracy (rather than this halfway point in the article), but I don't associate you with opposition to gradualism in implementing best solutions.

I've gone on too long though, perhaps.

[Eric Schliesser]

Thank you for your long time interest!
So, I am going to set aside the status of New Jersey because it is actually tricky. But, yes, of course, you can have democracy without sovereignty. Wehold elections in all kinds of institutions without confusing it with sovereignty. But we don't treat the officers of such institutions as 'government' nor do we treat the members or participants as 'citizens.' We use the language of citizenry/government when we are dealing with a form of sovereignty. Even in cities and provinces we tend to talk of 'residents' and not citizens (although I spend my time in cities where the residents have a history of understanding themselves as burghers of some sort or another).
Anyway, since Rousseau, regrettably, citizenry and sovereignty are co-mingled. That may not be true conceptually, but such terminology matters a lot (say when you are stateless, the refugees, and the aliens.)

The baseline comparison is the present and our experience of how democracy works. Not an ideal of democracy we do not have. And democracy is risky business for the un-enfranchised and permanent minorities. That's not an argument to restrict existing political democracies--I am for strengthening these (even with urgency). But to turn corporations into democracies without individual rights (and with collective rights) is a form of corporatism that history has shown excludes the vulnerable.

Finally, it is odd for academics to expect that democracy will decide what is a "useful employment" and think this will serve academics and academic freedom well.