Markets and Freedom: Common Mistakes

Yes. Yglesias’s post is just an exercise in missing the point.

Since Yglesias isn’t actually a libertarian (he blogged for ThinkProgress for a few years) I’m pretty sure he’d agree with points 1, 2 and 3. He definitely wouldn’t claim that markets have “inherent normative weight” and nothing in his post suggests so. This isn’t an argument over whether people should have to “endure nasty sounding conditions for their own good,” but rather over how best to improve people’s conditions.

The argument is that good working conditions are a form of employee compensation. And it’s better to increase employee compensation than to specify how it should be allocated.

Point 4 and 5 say that the market Yglesias describes is unrealistically mobile–workers can’t actually switch between wages and and other forms of compensation as easily as he implies. That’s true, but you’re advocating making an imperfectly mobile market into a immobile one, where workers have no choice at all whether to take the higher wage or protection against search. So this doesn’t really address the point.

He definitely wouldn’t claim that markets have “inherent normative weight” and nothing in his post suggests so.

Hello? The smug title of his post alone — “Life is Good for Skilled Workers” — implies that this is as it should be. Yglesias’s implication is that people with math skills and advanced educational credentials should enjoy better wages and working conditions. Nowhere does he say “why should a GMU econ prof make more money than a minimum-wage employee? Is it fair? Is it just?” He simply assumes that skills = desert, and that skilled workers deserve to be paid more, deserve their market rewards. He never says this explicitly, but it’s implicit in the post, at least as I read it.

This entire debate has turned into two sides each adopting the most wild of propositions to support their prior belief systems. Examples from this latest post (leaving aside the insentient discussion of the apparently rampant problem of workers having to “blow their supervisor”) include:

…one can make a good normative case for markets and contractarian mechanisms if and only if there is relative equality of resources and bargaining power among the relevant actors.

This is a total red herring. Or take this

This isn’t consumer choice in some idealized marketplace – it’s the product of an underlying political struggle. And it’s a political struggle that workers have been losing over the last few decades.

A fine question to ask here would be is the life of the average American worker better than it was several decades ago? It is hard to understand how anyone can argue yes.

While this entire thread may have been interesting for a post or two, it has certainly lost that value. CTers clearly do not believe in markets and they will not change their opinions. BHLers are not going to become stateists. All that’s left is collective back-slapping as each side high-fives itself for a “slam dunk.” Let’s just admit that the point here is not to change anyone’s mind and move on….

Re comment #7. Here are the second and third links, respectively in my first comment. Apologies for the coding error.

leaving aside the insentient discussion of the apparently rampant problem of workers having to “blow their supervisor”

Haha, stupid CT liberals! There is no sexual harassment in the workplace! I know because RobW says so.

which is to come up with a bunch of just-so stories about how we oughtn’t regulate work rules, because there’s a hypothetical high paying firm that searches its workers to stop theft and then there’s a hypothetical low paying firm that doesn’t

Which, again, is a hypothetical that seems to be somewhat out of touch with the real world, since it is often the lowest-paying companies that treat their workers like shit; a company that is not treating its workers well in one area of compensation is not especially likely in the real world to treat its’ workers well in others. Respect for workers’ dignity and improved wages generally seem to go hand in hand. I’m not sure why many people are suddenly leaping to “it must be a trade-off!” when “it is easy to be a shit to the poor” is an equally valid explanation.

Fun fact: F1 drivers pee in their jumpsuits.

Fun fact: F1 races last about an hour and a half. Work shifts do not.

CTers clearly do not believe in markets

Since when did “do not believe markets are inherently a superior form of exchange process” become “do not believe in markets”?

RobW’s third link is the standard libertarian argument that we have DVDs now so everything is better. It is hard to understand how anyone can argue.

His second link has this gem:

(One common misconception is that Big Corporation with a capitalized value of billions of dollars necessarily has more bargaining power than does an individual worker whose net worth is, say, only five figures. But if that worker has skills that are bid for by two or more big corporations – or, indeed, by two or more any sized employers – then it’s untrue that Big Corporation’s power to bargain with this worker is greater than this worker’s power to bargain with Big Corporation.)

It is strange how CafeHayek notes, quite correctly, that there is more than one Big Corporation willing to bargain for skills, then fails to note that there is not likely to be just One Worker with the kinds of skills they’re willing to bargain for; quite a lot more, actually. Actually, it’s not strange, because that is the only way you can say with a straight face that workers have the upper hand in bargaining situations.

The way I read their rhetoric, such as I’ve read, what I think Libertarians really want, certainly the extreme ones, are slaves. One person’s servitude is another person’s liberty. Granted, they profess the ‘absolute right’ of self-ownership. But that is useless without a commons, and this they seek to minimize, and privatize. And granted, the Universal Basic Income advocated by the Bleeding Heart Libertarians would be a barrier, but I believe this marginalizes them from the mainstream of Libertarian thinking. Political rights are useless without economic rights, without the right to make a reasonable living. Libertarians are bright enough to know this. Economic rights have been gradually eroded for most workers, and the Libertarians are not satisfied. These losses to the working man have not been enough for them. Libertarians cry out for more. When will they be satisfied? When they have slaves, and I think they are willing to destroy the Republic to get them.

JBTW, even if you started with absolute equality of assets for all, by pure market mechanisms you would gradually end up with the inequality we now experience, in which the corruption at the top is merely an expression of that inequality. What we see as corruption is merely market forces having taken over the government. The Right’s complaints about over-regulation are just window-dressing. And we will eventually end up with worse, in which all power is concentrated in the hands of a few.

A large factor in the exploitation of workers is how public the job is. Farm workers and poultry processing workers are exploited more than university professors in part because there are fewer ‘random bystanders’ in those jobs. Without witnesses some human beings become tyrants. When you add in some sort of productivity measure – so many pounds of chicken or produce per hour, you give the boss a focus for his tyranny. They’re always “Just trying to speed up the line” , and it never occurs to them to bring people drinks of water or add 10 minutes to the afternoon break if the crew is on schedule. It’s always finding the person who is a step behind, playing “What’s wrong with this picture?” all day long on the factory floor. From there it’s a small step for the boss to believe he “knows who is screwing off and who really needs to pee”.
People behave badly more often in private than in public, and the modern work world is becoming more private all the time. In a lot of offices you can’t even drop in to say hello to a friend, you must call in to get a pass into the building.

I personally think the best way to deal with the ‘idiots with ideas’ problem is to tell them to stop making things universal. Just figure out, if we’re a world that’s going to buy our chickens already dead and wrapped in plastic, how to ensure that the chicken packers earn enough to buy their kids shoes and put gas in the car, and make sure they are treated as well as one of the stupider members of the elites own family. Even upper class intellectuals have marginal family members, being upper class they can shelter those people from the worst of the world, but if they couldn’t – if Susan, and her 3 kids, were dependent on the income she made plucking chickens, how much should chicken-pluckers get paid, and how often should they get yelled at, groped, slapped, sent home early, worked late without pay, that sort of thing.

The problem with elites is they think the working poor want their jobs. Most of us don’t, we just want to do our job reasonably well and go home at the end of the day with enough energy to play a quick round of monopoly with the kiddies before everyone goes to bed. The current management style of squeezing the last little bit of productivity out of each worker each day isn’t conducive to that.

This week I went to the dentist and noticed the receptionists were on the phone constantly. I found out their dental corporation had decided to take advantage of the down time between checking in patients by running some sort of call center through the front desk. Each receptionist was supposed to answer a certain number of calls per hour based on how many people she checked in at the desk – If she had 9 patients this hour she had to answer 12 calls, if she had only 6 patients check in the next hour she must answer 16 phone calls. The calls were related to some sort of cosmetic dental practice – caps and whitening, I think. They were scheduling people in for ‘consultations’ at another office. We were in the low-income dental clinic, the corporation had a high-end office across town. If they didn’t make their quota they stayed on the phone during their lunch or after work, until they had logged their 80 to 100 phone calls for the day. It was incredibly irritating, they had no time to talk to me about scheduling follow-up care for my daughter, they just handed us a slip and said that was our next appointment and if we didn’t like the date and time we could call the 800 number when we got home, they no longer had time to look at a calendar and let you pick a day or time for your next visit. A regular dentist couldn’t get by with this, but this is the only authorized provider for kids on the low-income insurance plan, so they can do as they please.

@chrismealy (and others) Full employment makes a big difference to the argument, but I didn’t see it raised in the Yglesias post, or in the bits of the BJL stuff I’ve looked at. Links?

@ temp #3: I repeat my question to you from the previous post https://crookedtimber.org/2012/07/04/coercion-vs-freedom-bhl-vs-brg-happy-4th-of-july/ :

Can you provide us with some real world examples of countries that have gotten there, or closer to there than most others, by systematically skipping the kind of regulations under discussion and instead opting for cash distributions? One could argue that the countries that are least inegalitarian in the prosperous west are the nordic model welfare states where regulations are extensive and unions even more extensive.

You in that thread replied: “I think the Nordic nations are actually a good example. I’m not an expert, but my understanding is that labor regulations are weaker than in other Western European nations, while redistribution is stronger. See “flexicurity”, for example.”

I don’t agree that the Nordic model societies exemplify what you seek to exemplify. First, there is definitely ample working life regulations on health and safety, working hours, vacation, anti-discrimination and parental leave. Second, it is true that the nordic model have relative to other european welfare state relatively little DIRECT regulation in certain regards (minimum income). But that fact must be understood in the wider context of the general nordic model which include VERY strong labor unions and unionized bargaining and a support system designed to enhance and help general (sector or system wide) bargaining between labor market organization. Such a system is in effect INDIRECT labor regulation.

Upshot: A propertarian-libertarian that support much, much stronger legislative and institutional support for unions, unionizing and centralized union bargaining on the labor market in the US might present the nordic model as a desirable alternative to direct labor regulation in debats with liberal egalitarians. But are there any such propertarian-libertarians?

Here are links on the situation in Sweden. (Keep in mind that the last two decades have seen neo-liberal policy attacks on the model that have modified the processes and output in important and, from a point of view of justice, often detrimental ways.)

http://www.av.se/inenglish/lawandjustice/workact/
http://www.mi.se/other-languages/in-english/the-swedish-model/
http://www.forsakringskassan.se/omfk/publikationer/publications_in_english ( social insurance including a right to parental leave from the workplace )

Roughly half the U.S. labor force is employed in organizations with over 100 employees. The employment relationship is one of accepting authority and following rules prescribed by authority. The basic form of the “contract” is: do as we, the bosses, tell you, or get fired, and there are significant losses or costs entailed by being fired. If the cost of getting fired is reduced or eliminated, it reduces the ability to enforce the rules, and, potentially, the technical efficiencies and productivity of bureaucracy are lost.

“Full-employment” of sufficient degree that it actually reduced the costs of job switching — of getting fired for not following the rules — would undermine the whole basis of bureaucratic employment, and the efficiencies and productivity it can entail.

That’s not intended as an argument against full-employment on a macro basis, but it is an argument against supposing that the dilemmas and challenges of establishing fair wages and working conditions can be achieved solely on a macro basis.

We use authority, and power, to marshal labor and other resources, to achieve high technical efficiency and productivity, but such uses does pose dilemmas. Throwing around loose metaphors, such as “labor markets” and the execrable “skills” just seems to obscure the issues.

I used to like reading Ygelesias. Now he just seems like another wilfully ignorant dick.

“Full-employment” of sufficient degree that it actually reduced the costs of job switching—of getting fired for not following the rules—would undermine the whole basis of bureaucratic employment, and the efficiencies and productivity it can entail.

Not necessarily. It would probably force them to introduce (or, rather, to expand) a different set of intensives, like those based on ‘seniority’. Which is better than ‘fear of losing medical insurance and becoming homeless’.

One should always be very suspicious when someone proposes that others endure nasty sounding conditions for their own good, which the someone proposing would never dream of countenancing for himself or herself.

I can find nearly no trace of this suspicion in hipsterweblogoland. Yet I’d expect it to be a basic hurdle to cross for anyone writing about work conditions. Going through the moves, at least. But no, look at the optimathingy instead.

I confess having some irrited mental gestures about it along these lines : the suspicion is indeed a basic, evident thing to have and all the marketobabble is about trying to start the conversation without it, to not-think it.

“[W]estern workers use their cartels to maintain the brutal and immoral immigration restrictions we have today. These low-paid workers are the ONLY people who benefit from them and they have no qualms about hurting millions upon millions of foreign workers…Unskilled labour is GROSSLY OVERPAID in the west because of this restricted competition.”

Dean Baker’s The Conservative Nanny State makes short work of the idea that our immigration restrictions benefit less-skilled workers rather than trained “professionals.” As it turns out, the planet we live on is full of doctors, dentists, and lawyers, trained every bit as well as our domestic crop, who would happily move their practice to the US if the regulatory regimes let them do so.

There are a bunch of other ways in which that passage from commenter “Anon” is clearly coming from an alternate reality, of course.

Actually, I like to think that the ancien regime was right about one thing – skills are their own reward. If you have high math skills, you should enjoy math. Intellectual delight should be your reward. It may be nice that somehow, you find a way to make money at what delights you intellectually, but you don’t merit reward. Of course, a test and vocation oriented educational system sorta obscures this. Intellectual delight has been roundly rejected in favor of one sort of deligh only: the delight in making money. But the latter, I suspect, is much rarer than the former. And really, why should we form our entire society around those who delight in making money? Let’s, instead, lessen the power of money, and raise the profile of other forms of delight. The delight in making money, which may have been helpful at a certain stage in the development of the economy, has become positively damaging now.

If a miner noticed unsafe working conditions, the existence of other mines hiring in his (apologies for the gendered pronouns) area would force, in a sense, the unsafe mine to improve things or risk having their workers leave.

And if he didn’t notice them until after they killed him, then everything’s hunky-dory? Acting as your own safety inspector all the time is not as easy in the real world as it is in libertarian fantasyland — even aside from the fact that the miner has an actual job to do and inspecting the safety conditions isn’t it, inspecting safety conditions is difficult skilled work that the miner may not be qualified for in the first place.

Granted, some of the specific abuses mentioned in this family of threads can’t be hidden, but *at best* an exit option will only help employees avoid the nonconcealable abuses, and even then only if there are no social consequences to switching jobs a lot *and* if the abuse in question isn’t an industry-wide standard.

Bruce Wilder @ 23

We use authority, and power, to marshal labor and other resources, to achieve high technical efficiency and productivity, but such uses does pose dilemmas. Throwing around loose metaphors, such as “labor markets” and the execrable “skills” just seems to obscure the issues.

I don’t know that Matt Yglesias is a dick, but it does seem to me that he’s young, by which I mean that he hasn’t had the experience yet to work through all the implications of what an optimist might call the rationalization of the human spirit, or a pessimist like Marx did call the social relations of production which are necessary to run a large-scale productive enterprise, or indeed any enterprise at all that isn’t strictly familial or tribal.

As many old geezers have, I’ve been on a number of sides of this, from fetch-and-carry wage slave working for a sadistic bully to middle-manager in a slightly incompetent, slightly hysterical bureaucracy, to shop steward tasked with defending the indefensible.

We’re trying to stir human beings in all their bewildering complexity into a productive system which claims to be the embodiment of rationality. It’s amazing that it’s worked as well as it has, which, frankly, is not very. Whatever ameliorations we broadly social democratic folks come up with will have to be equally complex, it seems to me, and then, of course, we’ll have to cobble together a politics which can defend them.

No wonder we’re frustrated. No wonder we think libertarians are nuts, and Mitt Romney is a nasty joke on all of us.

(adding on) I find it interesting the the problems of a deflationary economy with a slack labor market are considered to be ‘natural’ and not highly problematic, while the problems of a full-employment economy are considered to be bad.

Frankly, if I were running a business, I’d prefer a market with high demand and a tight labor market to the opposite. In the first case, I’ll either make a lot of money, or go out of business and get a job. In the case of a bad economy, success could well mean just survival, while failure means going out of business and looking for a job in a bad job market.

I should add that I think this outrage isn’t fake exactly, just convenient. I’m sure Michael Jordan really believed, when psyching himself up for games, that the opponents he insisted had insulted him but hadn’t really had insulted him.

It is very satisfying for libertarians – and I am afraid I know this with certainty – to super-identify with a group of poor people who really would be helped by libertarian policies. Frex, ending the wicked folly that is the War on Drugs really would benefit poor people and people of color enormously. So you can let yourself really feel the injustice of the drug war, because it aligns with your beliefs. But you end up fetishizing that outrage. It becomes a talisman against charges that you are heartless toward the poor, or people of color, because of your political-economic priors. What comes to matter is the performance of the stance – exactly the accusation of “political correctness” right-wingers make against liberals and leftists.

The whole time you really are against the War on Drugs, or nativism. But you love the fact of your opposition too much for your own sake.

Wow, that his some bad argument and some worse question-begging from MY on this one. I hope he improves on this point. It was always a shame Slate hired him to write about something that’s not his best area.

My experience matches pretty well with Yglesias “hypothetical.”

I worked one summer loading boxes on trucks at FedEx. Start at 4AM, finish whenever the trucks were all loaded (sometime between 8 and 10), in a non-air-conditioned warehouse, working at a crazy pace, and they searched everyone on entry and exit. And all that was explicit up front.

The advantage? They hired people every week and you started work immediately, and they paid about twice the hourly rate that any other unskilled job paid.

Afine Theorem, I think you’re missing something. I live (and work, as a boss, though I have a boos too, i.e., I’m not the owner of the firm where I work) in Brazil, which has a regulated market (you can’t fire people without reasonable cause or you pay a fine, there is a law against moral harassment etc. ) and we have full employment right now. And yet, it’s clear to me (though I don’t have quantitative evidence on this) that these laws improve worker’s condition in Brazil. In fact, there are some news once in a while about workers making the case (judicial case) against sexual harassment, moral harassment etc.

Rebutting Yglesias can be laborious because so much of his argument is contained in his assumptions. Yglesias’s assumptions are widely shared, though, so it’s worth the effort, and this was nicely done.

I’ll only add that the “gotcha” around which Yglesias builds his piece is based on a complete misreading:

Henry Farrell says it would enhance productivity to start mistreating economics professors … But then in the next paragraph, he says it wouldn’t be productivity-enhancing:

Even the quotes provided by Yglesias don’t back this up. In the first quoted paragraph, Henry is actually discussing the shortcomings of Cowen’s (inferred) view on productivity. Yglesias, however, assumes that Henry is adopting Cowen’s view.

The second quoted paragraph isn’t really about productivity, but if it had been, Yglesias draws the wrong conclusion. Cowen’s view (again, by inference) seems to at least allow for the possibility that GMU’s productivity would improve if the school shed its well-paid professors who take so many unregulated bathroom breaks. Moreover, the Cowen view has a lot going for it, as we’ve seen with the increase in the use and abuse of adjuncts. Yglesias, however, assumes this is inconceivable, and that the Cowen argument must be the reverse, apparently because the market is necessarily and correctly generous with high-status workers, and punitive to low-status workers. (To be fair to Yglesias, I think that would actually be the thrust of Cowen’s argument in real life.)

And that’s all entirely beside Henry’s point, which I take to be: improvements to productivity aren’t the only consideration. Yglesias isn’t able to grapple with this at all.

Wow, this effort by Yglesias is genuinely stunning:

At the end of the day, GMU professors wouldn’t react to a lower-quality work experience with “sputtering, semi-coherent outrage.” What they’d do is quit and go work elsewhere because they have skills that are in demand in the labor market.

As far as I can tell, MY has no qualifications of any kind, except the ability to spout bullshit on a couple of blogs. He’s got no professional experience or accreditations: he’s the journalistic equivalent of a 21 year old graduate who couldn’t get a job in America so shipped off to Japan to teach English for a few years: at some point those people suddenly realize they have nothing to offer the labour market. Who is he to say that if the creeping cost-cutting of the media industry reaches him, he’ll be able to up and leave for another job? He’s a waste of space sucking up air in an industry that has existed for no more than 10 years, and will probably get sucked up its own arsehole once the internet economy rationalizes. Will people like him float to the top? I sincerely doubt it.

WTF is a useless journalist who splutters for online tabloids like the Atlantic doing referring to himself as a “skilled worker”? He’s a practiced bloviator, not a “skilled worker.” That honour goes to people who can actually do something useful. I mean, ffs, this little skidmark can’t even spell.

The same, of course, applies to GMU professors, aka useless hacks who’ve been languishing in the Cock Bros International Institute for Plagiarism, earning money by being curmudgeons. At some point reality is going to catch up with that pack of jockstains, and no amount of spluttering is going to save them from a rational labour market that is suddenly only interested in economics professors who, like, understand shit and stuff.

Finally, Yglesias proves what a “skilled worker” he is by producing this cascade of unmitigated shite:

I’m open to persuasion. But you have to make the argument that tighter regulation of permissable work rules will in fact benefit the intended beneficiaries in a world where labor market regulation isn’t going to suddenly increase employers’ benevolence.

Gee, I wonder whether there’s any evidence anywhere in the world that “labour market regulation” might “suddenly increase employers’ benevolence”? And since when is a boss telling you when you can pee an example of a “permissable work rule”?

MY isn’t “open to persuasion” because his entire employment future depends on being able to recite this useless libertard crap for whatever nasty little capitalist will pay him. No one who writes crap like that post is open to anything except the next fat paycheque.

I know it’s often said around here that CT posters shouldn’t engage worthless spammers like MY because they’re not left wing, but I would like to take a different tack: why do CT posters engage a worthless spammer like MY who has no qualifications, no life experience, no skills and no brains? This is an academic blog, and he’s a journalistic hack.

tempo@21

Do you have a response to this? Apparently Denmark has a freer labor market than Sweden. In Denmark, parental leave is paid for by the state.

I think “much stronger legislative and institutional support for unions, unionizing and centralized union bargaining on the labor market in the US” is exactly what we should be aiming for. I support anything that will increase the power of labor, not limited to cash handouts. I think strong labor unions, high levels of redistribution through the state, full employment, and a highly mobile labor market will tend to produce the best outcomes. Do you agree that the evidence from the Nordic nations supports this position?

Damn, I got moderated replying to temp, possibly because I said too many insulting things about the Heritage Foundation.

too many insulting things about the Heritage Foundation.

Not logical, Captain.

More narrowly targeting the idea that it’s the high skill level of profs that gets them easier working conditions than line workers in chicken processing plants, I have my doubts that’s true in the developed world now and historical is demonstrably false.

One of the best jobs I ever had in terms of working conditions was in a Pizza Hut call-centre in the early 90s. It was a job with a time-clock and a schedule, but I sat at a computer and took orders for pizza. The skill set was, by some standards, fairly high: fluency in two languages was required, along with 40 words a minute typing. But in that place and time, that skill set was not rare at all. It paid about a dollar over the minimum wage. No one checked my bathroom and smoke breaks.

And, the whole story of Russian serfdom is about how Russia had lots of land and not enough farmers. Serfdom did not come about because serfs were unskilled, it came about because they were skilled.

Taking Yglesias’ example about “employee theft” to old Russia: There are two farms: One has an owner who does not discipline the serfs very harshly, but as a result they work less than on some other farms, so food is sometimes scarce in winter. The other has a petty tyrant of an owner who beats the serfs, rapes their daughters, and generally keeps them in a state of terror. The farm is very prosperous and the owner makes a lot of money, leaving plenty of surplus each fall to feed the serfs. Sometimes, people get hungry enough to run away from the first farm to the second, accepting the discipline in return for regular meals. Sometimes, people get sick enough of the abuse at the second farm to run away and work at the first, accepting the hunger for some modicum of dignity.

Does anything in this example imply that it would be wrong to criminalize beating serfs and raping their daughters?

As Patrick points out, the only barriers to trade they decry are the ones that provide some measure of protection to the relatively disadvantaged.

It seems to me that the poor would-be immigrant has a bit of a better claim to being “relatively disadvantaged” than his American counterpart. But maybe that’s just because I’m a heartless libertarian with fetishized outrage over this issue.

@59: And yet exactly the same thing could be said about white-collar professionals in poorer countries; a dentist or doctor in a third world country is unconditionally poorer than one in a first world country. Oddly enough, it’s only the “unskilled” workers who are deemed to require the tonic of third world earning power.

A freer labor market is a labor market with fewer restrictions on contracts between employers and employees.

faustusnotes:
why do CT posters engage a worthless spammer like MY who has no qualifications, no life experience, no skills and no brains?

The problem is not that MY has “no brains”. He’s intelligent enough. The problem is that, from my admittedly limited experience of reading him, his blogging is rather dull, boring, predictable. That’s a main reason I rarely read him.

So why do CT posters engage him? First, MY produces a large quantity of posts — he has to, b/c he makes his living by blogging, unlike most bloggers for whom it is a sideline or avocation or purely a means of promoting one’s ‘serious’ work, or whatever. Moreover, and significantly, MY started blogging early, in c. 2003 or ’04 I believe, if not before, and CT was also early into the field. As has been noted often before, if you started blogging early you have a built-in advantage in terms of audience. Those who started blogging after c.’o4 have a harder row to hoe. Of course it’s not impossible to get an audience if you started blogging late, but in general the later one started blogging, the more of a disadvantage one labors under.

= = = A freer labor market is a labor market with fewer restrictions on contracts between employers and employees. = = =

Say, for example, no government interference in an employment contract [1] where I receive 3 years work, salary, and bonus at a Wall Street firm as long as I agree to donate one of my kidneys to the CEO at his request?

Cranky

[1] noting for the 837th time that other than union members essentially zero USians have or could ever get an employment contract.

Barry @ 34: “Another way to put it is that the distribution of profits would shift towards workers.”

Well, actually, no, that’s not another way to put it. Because it is not a simple two-dimensional, necessarily zero-sum game.

Libertarians screw with our heads by using a very loose “market” metaphor to analyze a situation, where there is no actual market to denote or observe. The analytical idealization of a competitive market forms an important touchstone for common ideas of both fairness and efficiency, for balancing conflicting interests in a way that achieves a positive-sum outcome. So, those associations get imported into the argument, but only made explicit, when tactically convenient to trip up the liberal mind, even while the libertarian, so-called, is arguing relentlessly for a propertarian freedom of authority, which entails what is likely to be a negative-sum “bargain” of oppression. “Skills”, another loose metaphor with good psychological associations to the virtues of labor, qua “craftsman”, but no actuality in a world in which craft production methods disappeared more than a century ago, are used as an explanatory factor, to obscure the critical importance of capital and property and economic rents in the actual systems of production.

The actual systems of organization in which most of us labor scarcely feature anything even resembling a market. Variations in “market” wages or salaries are not used to regulate or coordinate the economy in which we live, which is a clear indication that considerations of allocational efficiency are secondary or even tertiary. In fact, most “market” prices — not just wages — are held more or less fixed, and administered. Our economy is organized, primarily, not by Hayekian market prices, but by administrative, managerial bureaucracy, making and enforcing rules. This is reality. Meanwhile, we are arguing out the politics and ethics of this system, as if it were The Matrix of a counterfactual, imagined Market economy, where the prime goal was allocative efficiency.

Full-employment, on a macro basis, is not nothing, but it is not anywhere near everything. And, it is brought up, I suspect, because it tends to reinforce this false vision of a market economy, where none exists. We cannot escape the necessity of an institutional framework in which to bargain, workplace by workplace.

The actual workplace, where authority has an economic function and can be used to improve technical efficiency (reduce error and waste) and improve productivity, poses real dilemmas. If the subordinate employees have no power, then the bargain that results is likely to be a negative-sum one, not a positive-sum one. Those with the power of authority will arrange things so that their own status is enhanced and they can shirk, undermining the efficiency of whole enterprise, even as they enhance their own share of a smaller pie. But, giving up authority altogether is not a feasible alternative, since it would require sacrificing the productivity and efficiency it can achieve.

Trying to analyze this situation as a simple Market relationship, where the possibility of Exit redeems the lost power of the subordinate, obscures the reality. Trying to discuss the subject in The Matrix world constructed by the libertarian economists is just giving an opportunity for folks (I guess I shouldn’t say, “dicks”) like Yglesias to show us how to “bend spoons” with counterfactuals like his imagined high-wage sweatshop.

His “full-employment” gambit is just another instance of “bending a spoon”, Matrix style.

Trying to catch up on the debate here.
Been so long since I read Lindblom’s book on markets; remember a very interesting analysis of the complexity of interdependence and his bewilderment that democratic states did not rein in private market power.
More interesting to me is Kaushik Basu’s critique of why markets are not likely to reach Pareto optimal conditions and of why Pareto optimality is a retrograde moral standard anyway and his argument for why interference with freedoms of private contract making can be justified in terms of welfare and freedom. See Beyond the Invisible Hand.
Still I think this is the book that people are looking for in this discussion
Freedom in the Workplace?
Gertrude Ezorsky
Cornell University Press
It’s short and stimulating. Read it several years ago.
Finally it’s important to remember that Marx reasons that the expansion of value is the goal of production and that the value in circulation in the system as a whole can only be increased by the exploitation of labor and that the need to increase the exploitation of labor is structurally imposed as a result of competition and the need to extract increasing sums of surplus value even as the valorization base shrinks relative to the total investment.
Marx thus enters the abode of production as he says in the famous passage of Part II of Capital I.
Working conditions are central to his analysis; the economist however is focused on the market and exchange where quantities and prices are contractually determined.
That means economists and their students have little understanding or interest in the actual conditions of the market.
One can even be a Ph.D. in economics and not know the first thing about working conditions as described brilliantly in Steven Greenhouse’s Big Squeeze.

faustusnotes,

Your comment at 49 pretty much made my day. cheers.

How about a more basic insight: markets are neither a person nor a thing but are relations between people. As such, “the market” cannot “be wary” of Greek debt nor can it “look for the next sign of weakness” nor can it be “on the hunt”. This type of talk completely hides the actual institutions and people who themselves are on the hunt, are wary, etc. It totally elides the holders of power and any notion of responsibility. Until we eliminate the personification-reification of the market, it will be very difficult to make lasting arguments against notions of market “freedom”.

temp @ 75

Back in 1985, in the midst of the lesser Dark Ages, the Reagan Administration was doing one of those periodic executive branch Kabuki dances about security leaks, and decided that all the members of the administration were to submit to lie detector tests. George Schultz, then the Secretary of State, famously decreed that the President could either accept his word as a gentleman, or his resignation.

I remember thinking at the time, how nice to have that luxury. Somehow I don’t think it was Schultz’s irreplaceable skills that kept him from getting canned. People who joined unions used to understand how such things worked, and all the current blather about contractual employment would have been seen for the bullshit that it is.

William Timberman:

I apologize, but I’m too stupid to interpret 76 in a way that answers the questions I asked in 75.

“I highly recommend taking Public Choice Theory 101 at your nearest college if you have the time.”

And I highly recommend you get a clue. Go sell crazy someplace else. We are all stocked up here.

“So by all means, let’s remove the market competition from healthcare.”

Or maybe have more than one dentist who takes the government insurance plan?

“MY isn’t “open to persuasion” because his entire employment future depends on being able to recite this useless libertard crap for whatever nasty little capitalist will pay him. No one who writes crap like that post is open to anything except the next fat paycheque.”

Sounds like Krugmans recent dustup w/ CFR..or “the Hank Greenberg(of AIG failure fame) bankrolled subsection on economic at CFR.

The thing about doctors and dentists is that they are organized. If not for that, you’d have quacks on every corner pulling teeth with pliers for 5 bucks a piece. Market competition. Don’t need any immigration for that to happen.

Yglesias strikes me as a train wreck.

temp @ 78

Nothing to do with your mental capacity at all. I wasn’t trying to address your questions, I was making an observation about who is trusted by employers and who isn’t, and why. If George Schultz was too oblique an example, try this: Andy Grove wouldn’t get searched on the way to the parking lot at an Intel fab, not because he can’t be replaced at the same or lower cost, or because he’s earned the right to be taken at his word, but because he can hurt people if he’s subjected to an indignity.

The point is that Yglesias’ toy model is irrelevant in a sane world, i.e. a world in which the assumption that the minimum-wage working class and the criminal class are identical isn’t simply a matter of administrative convenience. The law may be a blunt instrument for achieving this purpose, but in its current extremity, the working class might be forgiven for looking longingly in that direction.

As for a direct answer to your questions, it seems to me that Bruce has done a bang-up job of that in his reply at 85.

Yglesias’s career is based on a kind of glib contrarianism wrapped in the fiction that he is on the left. That, I think, explains the “something else.”

Yeah, this wasn’t one of MY’s finest efforts. I don’t agree with the posters who’ve said he’s incompetent–he’s a talented writer and one of the better ideologues out there, for which his philosophy background probably deserves some of the credit. And he’s admirable to the extent he’s made his new career by thinking “I don’t know much about economics, so I’ll learn more about it, become qualified to write about it in public, and then do that.” That bespeaks a basic curiosity which is seriously lacking among most of the professional media.

But it also deserves some of the blame for his descent into libertarianism, as this little dialogue has shown to be nearly fatal. He’s assimilated the standard libertarian boilerplate to the extent that when instances of its massive failure are pointed out by the writers here at CT and Brad DeLong, he’s left sputtering incoherence like this.

@ Marshall 94

The true sadness is that this assumption of the superior seriousness of the more libertarian is exactly the kind of blinkered perspective Matt used to criticize in the old media.

What’s the difference between regulating bathroom breaks and sexual harassment? It seems to me that sexual harassment derives from an unjust and illegitimate preference. We think that the sexual gratification that the employer gets from harassing his workers is not valid, and should not be counted as part of the social welfare. Thus, we ban sexual harassment, which seems to me to be a totally valid position. In contrast, for the most part employers do not regulate bathroom breaks because they get sadistic pleasure from watching their employees pee in their pants. Rather, they have found that regulating bathroom breaks is the best way to run a profitable business, and the desire to make a profit is a legitimate preference that should be counted as part of the social welfare. So although passing laws requiring bathroom breaks might benefit workers, they also come at a real, albeit small, cost. And once we recognize that cost, it seems like there are cheaper ways to benefit workers.

James – the ‘we’ in your comment is unclear, but I’m confident that neither the bulk of us here nor most people would analyze the problem that way. As far as I’m concerned you should be free not to be sexually harassed and you should be free to use the bathroom when needed. It’s wrong to describe arbitrary power of an employer over workers (whether it be to subject them to harassment or denial of peeing) as freedom, just as it’s wrong to suggest that laws preventing murder are denials of freedom (as the only thing being asserted is a desire to wield power over someone else).

I’d also say that anyone who forces their employees to go without using the toilet is in fact a sadist, and speculation that it’s driven by the demands of the market is just that.

And yes, workers would benefit if they didn’t need to soil themselves on the job because they were protected by law – no need for the word ‘might.’ Using the bathroom is not fungible.

In contrast, for the most part employers do not regulate bathroom breaks because they get sadistic pleasure from watching their employees pee in their pants. Rather, they have found that regulating bathroom breaks is the best way to run a profitable business, and the desire to make a profit is a legitimate preference that should be counted as part of the social welfare.

… whereas the desire to urinate is not?

“What’s the difference between regulating bathroom breaks and sexual harassment? It seems to me that sexual harassment derives from an unjust and illegitimate preference. We think that the sexual gratification that the employer gets from harassing his workers is not valid, and should not be counted as part of the social welfare.”

The hell?

No. Most of us think that workers have a right to work without being groped by their co-workers, or constantly asked about their junk, or whatever other jackassery people think up in their constant struggle to not be cool to each other. What the harasser wants isn’t something we’re worried about; he can go pound sand.

I hate to make this personal, but it’s like you don’t even look at this from the worker’s perspective. It’s like they don’t even exist for you. Economics is only a dismal science if you forget it’s about people, ultimately, and finding ways to make them happy.

@UnlearningEcon 103

I don’t think he’s pulling a Cowen at all, but maybe that phrase means different things to different people. He says that some government regulation is good and some is bad, and he’s using an admittedly simple model to make a rough distinction between the two.

Maybe by “pulling a Cowen” you mean that he spends very few words disagreeing with libertarians, and very many words disagreeing with the straw-man lefty position that every workplace regulation is good, and that from this we can infer that he really sides with the libertarians and against the lefties. I don’t think that’s right, but it would be consistent with other bloggers’ rhetorical strategies.

He says that some government regulation is good and some is bad, and he’s using an admittedly simple model to make a rough distinction between the two.

Doesn’t this make him adorable, though? Am I the only one who is touched by this?

Apropos of Yglesias “pulling a Cowen,” his response to Cowen’s response to the original post was, LOL. Glib: yes. Glibertarian: no.

@106: His most recent post assumes libertarian economics as axiomatic. He equates economic efficiency and social welfare. He asserts that frictionless markets are useful analysis tools, and then in the remainder of his post he assumes that they are completely correct. In his point #5 , “Pollution regulations, by the same token, really do hurt not only the owners of pollution-intensive industries but also the workers in said industries. ” The idea that pollution is an actual cost, borne by others and the workers, is absent from his economics; instead, regulating pollution is the equivalent of civil rights (moral, not economic.) His points 6 – 10 then assume that regulations always cost poor people money, that the only reason to adopt them is moral, and that even the moral benefit can be negative. It’s the most crude market fundamentalism imaginable, and his wording on pollution makes it clear that he doesn’t even understand externalities in an economic context.

If you prefer “adopts simplistic market fundamentalism as obviously true” instead of libertarian, I suppose that you might have a more precise description of Yglesias. It doesn’t make his weak arguments strong ones.

@Marc 112

I think every single sentence in the first paragraph of your post is wrong, except for the one where you only quote Yglesias. To pick just one , it is beyond obvious that Yglesias understands that pollution has costs (to pick just one example I found in about ten seconds using Bing, look at this). His point here is that forcing an industry to internalize pollution costs it is otherwise foisting on the rest of us will be bad for the workers in that industry as well as the capitalists. This doesn’t mean that pollution isn’t a cost: It means that when we try to advance social welfare by regulating pollution, we sometimes find the workers to be opposed to this, because they have weighed their costs and benefits.

Maybe I have some sympathy for Yglesias because I am a non-economist in a line of work where I apply “economics 101” often, even as I realize that it is a simplistic tool which can be used for ill in the hands of the wrong kind of fundamentalists. When Yglesias refers to its “analytic utility,” it does not mean that he agrees with every libertarian who has ever used a little economics to defend the interests of the wealthy. I’m not sure why you think he does.

From his post, what form of government workplace do you support that you think he rejects, and why do you think he rejects it?

@114: His entire post assumes the strict validity of market fundamentalism. His discussion of pollution didn’t have any of the caveats you mentioned: it’s a simple comparison of costs without considering the costs being inflicted on others. His discussion is sloppy, full stop: he implies that pollution costs inflicted on others *are not economic*, which is simple nonsense. It’s not too much to ask writers to pay attention to the words that they use.

For another example, look at his point #7: it asserts that banning political coercion is an economic cost to workers because they could sell their votes to their employers. Jesus. I hope you can’t see the problem with this chain of logic. And the entire thing is a chain of assertions like this. It’s a train wreck.

“herding children at the beach” actually sounds like a good description of moderating a comment thread

RE pollution and its cost. Take, as an example, unregulated dumping of dangerous chemicals, which hurts in the normal meaning of hurts workers, their families and everyone else in the vicinity. Forcing industries to stop doing that might increase their cost but it doesn’t hurt them, in the normal meaning of the word. Indeed, by forcing those industries to stop hurting people the regulations help those industries by seeing to it that their consumers don’t die off. The same, of course, is true of safety regulation, increased fuel usage efficiency and so on. By conflating increased costs for doing business with hurting Yglesias muddies the water.

There is more to life than economic efficiency and framing debates about lives and health of workers and others as essentially or importantly economic issues is intellectually sloppy.

Tom, what you say is true as far as it goes. But if I only listen to you I will be completely dumbfounded when, as happens over and over again, workers oppose regulating their own industries’ dumping practices. If I take note of Matt’s actual point, I won’t be. Earnestly pretending that workers won’t identify with their industry on these matters won’t help us shape policy approaches that overcome that resistance and regulate pollution. Earnestly pretending that Matt’s a monster for noting an observable fact as part of the political picture won’t help either. I was alive in the 70s, man. I saw this happen.

Jim,
I am not pretending that some workers don’t act as y0u suggest they do. I am, however, arguing that they are wrong to do so. I too was alive in the 70s and a functional, or at least semi-functional, adult and do not see what this has to do with anything. As I recall the automobile industry has opposed every State safety regulation from safety glass to increased fuel efficiency. They, whether management or labor, were and are wrong to do so. Given that the increased safety standards led to fewer deaths and, go figure, an effective sales pitch.

It seems to me that the proper approach to providing positive cover for necessary regulation isn’t to insist that the issues are not narrowly economic. But, of course, I could be wrong.

Temp,
Let me see if I understand your position, the events in Bhopal don’t show that the first consideration of regulations of poison ought to be the protection of workers and citizens more generally because of economically, in the sense of profit maximalization, necessity? This seems, to me in any event, to insist that life here on earth needs to bend itself to the desires of capital.

I mean really you seem, but I am not sure if you do, to be suggesting that while in the long run we, our progeny, and all else may well be dead but in the short run there will be badly paid and inherently dangerous jobs for some.

Ideally I have misunderstood.

Tom Bach,

You offer another scenario (Bhopal) where there may have been a feasible maximalist approach. But this is not the typical case. What do you think of the actual examples I offered? How should we set speed limits? How should we regulate CO2? Surely your answer to these questions isn’t “zero”, right?

Do you have an answer for how we should set speed limits or regulate CO2?

RPM, I have read everything Matt Yglesias has written for the last six years. There is no meaningful distance between his politics and those of Will Wilkinson. That’s just true. I’m sure it will invoke Henry’s wrath for criticizing someone who is of the Tribe, but that’s the reality.

Marius, #113:

I don’t think that criticism is entirely fair in this case. Since this depression started, full employment, a guaranteed minimum income, and/or any increase in labor regulations requiring respect for human dignity are all equally infeasible politically.

temp, what you’re suggesting is a recipe for policy analysis. We have good metrics for measuring health outcomes – things like DALYs, for example – and for measuring the effectiveness of interventions. Sadly, economics hasn’t caught up and doesn’t yet have the ability to quantify things like “convenience in travel.” Given economists are still unable to come up with an acceptable way of measuring growth and can’t agree amongst themselves on pretty much anything, why wait for them to pull their fingers out?

From MY’s “Ten Theses” post I was struck by this (the italics are mine):

You can’t fire a woman for being pregnant both as a matter of gender equity and because we conceive of American society as a multi-generational enterprise that aspires to endure.

In other words, one reason you can’t fire a woman for being pregnant is that there is a societal interest in encouraging (or at least in not discouraging) pregnancy and childbearing. This does not resonate much with me: I think the gender equity reason is enough. Also note the “we”: We “conceive of American society as a multi-generational enterprise that aspires to endure.” Stylistically, this is the kind of simultaneously banal and somewhat olympian-sounding pronouncement one might find in a Supreme Court opinion or a work of philosophy (I think, say, of Rawls’s style, or perhaps of Burke’s famous line about society as a contract betw. past and future generations). The line, in short, is rather out of place in a post about the costs and benefits of labor regulations written in an otherwise pretty informal style, or so it seems to me. (I suppose this is what blogging for a living can do to even a talented writer.)

Btw, Bloix @112: yes, although it’s speculative, I think you might be onto something there. One’s personal history has to affect one’s general outlook on things. However, it’s sometimes possible to transcend those limits…whether MY sometimes manages to do that, I don’t know.

Another quote from Yglesias’s “Ten Theses” piece: “If bosses were given greater freedom to coerce their employees’ political behavior, that would almost certainly increase incomes at the bottom end (in effect you’d be letting poor people sell votes) but corruption is bad and economic elites have too much rather than too little sway over the political system.”

This is deeply weird. First of all, bosses in all but four states have essentially every possible freedom to coerce their employee’s political behavior, on or off the job (except for interference with the secret ballot) — you can be fired for being a Republican, say, except in California, Colorado, New York, and North Dakota. (Smokers, on the other hand, are protected in 29 states.)

Second, this has not produced a lack of income for folks “at the bottom end” in California, Colorado, New York and North Dakota, compared to the rest of the country: they are ranked 9th, 13th, 15th, and 27th respectively in median income. Now this is probably because laws protecting workers’ outside activity are a symptom of a slightly less powerful economic elite and a slightly more powerful bottom group — but why in world would we expect bottom incomes to go up if those laws were repealed? Repeal would be a symptom of an increase in elite power, which generally has a negative effect on bottom-group incomes.

that’s yet another example of disingenuous argument by Yglesias, Yarrow. The smooth way that he conflates coercing the vote (“vote Repub or I’ll sack you”) and vote buying, which is completely different. It’s the same oily trick he used in conflating repressive contracts with “permissible work.” A trick also used by the Heritage Foundation (linked by temp above), whose “labour freedom” index is actually an “employer freedom” index.

These people have no shame.

Just a point about “narrowly economic”: I’m pretty sure that by “narrow” he’s talking about the effects on that industry, not the economy as a whole. That is, regulation of pollution may cost jobs in certain industries, but the broader health benefits outweigh the impact on employment by far. In addition there are all the moral considerations and the like, but that’s not what he’s talking about with “narrowly economic”.

faustusnotes: you realize his point is that employer coercion of political behavior should be illegal, right? What purpose do you think the alleged conflation is serving? Anyways, how is “vote Repub or I’ll sack you” and “vote buying” completely different? I can think of some similarities.

… groceries.

Libertarianism and its variants may be a disease of male adolescence, but it has close affinities with much economic reasoning – a kind of very simple picture in which everything can be counted out for each person, and then moved around, and the game will be solved if everyone gets what they should according to the rules (which no-one can quite agree on, but never mind that). The truth is that we don’t know what most stuff really costs, and who produces how much, because it’s embedded in a tangle of relationships, histories, unwritten understandings, unconsciously-absorbed mental formulae and so on. Cost-benefit can never be much more than a first rough guess. But then I guess if we acknowledged that, whole faculties would disappear, Treasury Departments around the world would colapse in nervous hysteria, and lots of people would have nothing much to say on blogs.

Matt has written, IIRC, that Foxconn is a good thing because the alternative for its workers is to be peasants farming rice like their ancestors for generations, which is a much less desirable life.

I believe this is an example of the fallacy called “excluded middle”. There is no law of nature that dictates them to either be peasants farming rice like their ancestors or to assembly ipads for merkins 90 hours/week for 30c/hr.

There is no law of nature that dictates them to either be peasants farming rice like their ancestors or to assembly ipads for merkins 90 hours/week for 30c/hr.

And yet, if I might play Yglesias’ advocate for a minute, until the latter came along, millions and millions of them were in fact stuck in the former. Aren’t you letting the imagined best be the enemy of the marginally-less-shitty?

If some third alternative actually comes along then I’m fairly sure Matt would support the freedom of Foxconn workers to leave Foxconn for the other thing, in droves (for whatever his support is worth, which isn’t much). Or if he doesn’t, that would certainly be a valid basis for criticizing him *then*. But until the promised land actually does arrive, why let it intrude into the analysis of the alternatives that actually do exist?

P.S. The law of the excluded middle is an actual valid principle of logic which applies when there really are only two alternatives. I think you mean “false dichotomy” — but you haven’t shown that the dichotomy actually is false!

Aren’t you letting the imagined best be the enemy of the marginally-less-shitty?

That is what Data T. often does. I think you will find there is little point to making the observation, since Data T.’s views are quite fixed. His comment @151 fails to advance the discussion in any way. Of course there is no “law of nature” dictating that they be either peasants or factory workers. But since we’re not dealing with “laws of nature” here, the observation is irrelevant. For a particular poor peasant, the available alternatives may in fact be continuing rural poverty or a low-wage factory job. (I’m not saying which is better, but those may be the only available alternatives at the moment.) This is bad, unfair, and regrettable, but invoking the “law of nature” will not change it. DT’s comment @151 purports to be about opening minds to other alternatives, but in fact, in the context, it is a useless, pointless comment that serves no constructive purpose.

Bruce Wilder:

Your posts in this thread, along with Henry Farrell’s opening post and those of many other commenters, make very general criticisms of the kind of first-week-of-econ-101 model Yglesias uses. Some of these criticisms are undoubtedly correct. But no one actually thinks these basic models are perfect representations of reality. I think they can be useful to serve as a first model, and we can ask where the model goes wrong to get a clearer picture. I really think these threads would be more productive if people made specific criticisms of the models they disagree with and offered alternatives (like BRG did with the BHLs). You’ve gone further in that direction than anyone else but the picture is still not clear to me.

You’re right! The perfect competition model is an incomplete picture. But how do we apply the more complete picture to actual situations? If you throw out the simple model which says “policy X will do no good” that doesn’t imply “we should implement policy X.” You need a better model which shows how policy X actually helps people, and then you need to show it’s actually a better representation of reality in the specific case. That’s what I feel the opening post and subsequent discussion on this thread is missing, for all it’s somewhat justified criticisms of Yglesias.

For example, you ask: “I honestly do not understand, though, why you would suppose that bosses, left to their own devices, would be choosing a pareto-optimal outcome”

But Yglesias never says the optimal outcome will be achieved in the general case. He’s making a very specific argument about what will happen in a very specific case. There are many ways Yglesias believes the situation can be improved by government intervention, all he’s saying is that this specific policy won’t make things better. So this doesn’t serve as a counterargument.

So: why would bosses want an effective search of employees, while minimizing the harm to the employee? Because (according to the Yglesias model) it’s in their best interest. If they discourage employee theft, that leaves more money for them. And if they can search employees in a way that’s minimally invasive, employees will be happier to work there, which makes recruitment and retention easier, which also leaves more money for them.

Again, to be absolutely clear: I’m not saying this is a full account! There are other things going on, and bosses have other motivations besides maximizing profit. I get this. But, to defeat the Yglesias model and advance an argument that the policy in question improves worker lives, you need to explain what these other motivations are, incorporate them into your superior model, and demonstrate how the policy actually makes life better under these better-justified assumptions. Then, we not only defeat the overly simplistic model, we actually have a new model which improves our understanding and can guide policy usefully. Even if Yglesias is wrong, the particular way he is wrong may be interesting and illustrative, but instead of showing this, too many people are investing all their efforts into very broad attacks which don’t actually demonstrate how he is wrong.

temp says ” But no one actually thinks these basic models are perfect representations of reality”. The point is immediately refuted by Ram’s comment.

To follow up my own comment…

It never ceases to amaze me that modern bloggers bringing up the possibility of Coasian bargains (whether named so or not) almost invariably fail to appreciate the whole point of Coase’s analysis, which is that *where the state/community draws the default property/rights lines has a huge affect on transaction costs and whether such bargains are feasible in practice*.

The whole utilitarian argument for hard property rights rests on this fundamental principle — that the transaction costs of Coasian deals are smaller with typical “you have a right to keep or use what you make, or duly purchase from willing and rightful sellers” property understandings.

But of course, if this understanding were fully integrated, then some obvious glibertarian dodges around things like pollution control would require getting around a lot more cognitive dissonance.

If someone initially has the right to make a certain decision, but sells that right to someone else in exchange for something else, then it seems to me that the seller of the right probably values her compensation more than she values her right, while the buyer of the right probably values the right more than she values her payment. Otherwise, why would they have made this trade?

Possibly, one party or both did not make the optimal trade, whether because of imperfect rationality, or incomplete information, or whatever. Or maybe the trade, though optimal for both parties, is sub-optimal for a third party. These would be compelling reasons to interfere with the trade. But I tend to think people are complex, and situations are complex, and so the burden of proof is rather hefty when one wants to argue for interfering in situations like these. And FWIW, I’m not a libertarian by any means. I just think there’s a lot of lazy reasoning going on in these discusions, and a lot of implicit paternalistic claims that are worth drawing out if we really want to assess the competing arguments on the merits.

temp @ 157
I appreciate your remarks, and the opportunity to clarify my thinking.

temp @ 157: “why would bosses want an effective search of employees, while minimizing the harm to the employee? Because (according to the Yglesias model) it’s in their best interest. If they discourage employee theft, that leaves more money for them. And if they can search employees in a way that’s minimally invasive, employees will be happier to work there, which makes recruitment and retention easier, which also leaves more money for them.”

Of course, I don’t imagine that the bosses think it is in the best interests of the bosses, to minimize harm to the employee, unless the bosses are (politically) constrained or opposed. I read Ygelsias as deprecating the potential benefit of any particular constraint, with the search example just being an illustrative example used to argue the general case against constraints.

I would say, if there’s a government and a union in the picture, then, yes, the bosses may weigh the interests of the subordinate employees and seek a more positive-sum game outcome. Without such constraints, they probably won’t, though other circumstances will have some bearing on just how awful the outcome is, for the subordinate employees.

Laissez-faire made palatable by bosses, who act as supremely rational enlightened despots of the workplace, a visible hand of benign intent and calculation dealing good and best to some and all, strikes me as a bizarrely unrealistic fantasy. I don’t know how to “defeat” such as an argument, except to mock it.

I actually think that the intuitions of neoclassical economics are with me, not Yglesias, in that the optimal outcome, in the perfect competition model depends directly on the perfectly symmetric balance of Supply and Demand in conflict. The asymmetry and imbalance of the incomplete contract of the form, “Do as I say, or You’re Fired”, should be a red flag; the first analogue to domination ought to be monopoly/monopsony, which yields a decidedly suboptimal outcome, sans additional constraint.

It may be that I am misreading Yglesias, in supposing that he’s making a general argument against the necessity of political or institutional constraints for socially optimal outcomes. The search example, I thought, was chosen as illustrative of a general principle of non-intervention, but maybe that’s a misreading.

I do see where Yglesias does take the gambit of favoring macroeconomic full-employment, which is ever so (neo?)liberal of him, I guess, just as he, in other contexts, makes noises in favor of tax-and-transfer redistribution, the EITC and so on. I reject that gambit as an irrelevant distraction. The problem is micro-economic, lodged in the institution of the employment relation, not general conditions or fiscal policy, in my view.

I don’t see any basis, but assertion, for why the firm doing searches pays better, in Yglesias’s thought experiment. If employees had to be compensated for the inconvenience, due to labor market competition, then this is not a case of a “do as I say, or you’re fired” labor contract. The “do as I say or you’re fired” contract is open-ended, and carries with that open-endedness some (I would think) obvious hazards. The boss may start out requiring specific performance that’s directly relevant to controlling the production process and reducing waste and error — things like showing up on time and following established procedures — but the boss, absent political constraints, could also ask for a blowjob or start asking for unpaid overtime, or doing searches (in a way careless of employee time, dignity, privacy and welfare). Since it is an incomplete contract, negotiation over the values in exchange never stops, even though a committment was made and is essential to the operation of the “contract”.

To me, the apparent inability of Ygelesias to really grasp the nature of the “do as I say, or you’re fired” employment relation, which relation, after all, is very, very common, and something everyone has experienced, is evidence of an epistemic problem. The fact that we are trying to generalize and analyze the problem in a framework of terms and concepts, like “markets”, “contracts” and “skills”, when none of those things actually exist as concrete entities on the ground to which discusants can point and describe, contributes to the difficulty of keeping people with different viewpoints focused on a common, consensus reality. That’s a more important, interesting and general issue to me than policy design for government regulation of how and when an employer can search employees, but even if it weren’t, it seems to me you cannot really get to the latter, narrow issue, without in some wise overcoming the former, broad and general issue.

As a matter of political philosophy, bosses qua citizens might adopt a politics of enlightened self-interest, which favors, say, government regulation, which makes virtue pay and keeps fraudsters from ruining things for everyone. I am not saying that bosses have to be committed sociopaths in their politics.

I am saying that well-functioning “markets” require proper political constraints. Liberal bosses, subscribing to principles of enlightened self-interest, won’t spontaneously act like nice guys and be rewarded for their virtue by the benign God of Market Competition. The God of Market Competition is not benign. They might solicit government regulation that prevents their evil twins from winning in the Market Place, where a Gresham’s law operates, whereby evil drives out good. Or, more likely, they’ll vote Republican ;-) and work to destroy gov’t regulation in the public interest, labor unions, communities and the environment. But, I digress.

And, I’m not saying that the “Do as I say, or You’re Fired” contract is economically useless, a mere artifact of Capitalist domination, which can be discarded costlessly, come the Revolution. I think it is very common, because it is very, very useful in achieving technical efficiency and high productivity. Absolutely, I understand that the bosses might want to search employees to reduce rates of theft. That’s exactly the sort of economy or technical efficiency, hierarchies seek to achieve, and “do as I say, or You’re Fired” is a means to that end, in that it facilitates the detailed regulation of subordinate employee behavior as specific performance.

Here’s the problem, vis a vis the framework of Econ 101 (which trips up Yglesias): the perfect competition model is not just an imperfect or incomplete picture — it is not a “picture” at all. The perfect competition model is analytically useful to define concepts, but it is not descriptive at all, of anything — not a simplification or an approximation. There could never be an actual economic case, without genuine uncertainty or without strategic behavior; there could never be an economy where only allocative efficiency mattered and output was a function of inputs. It is not a matter of being an incomplete model of a more complex situation; it is a misapplication in kind: using an analytical model, where an operational model is required. At an absolute minimum for intelligent discussion, we need an operational model of the institution of the “Do as I say, or You’re Fired” labor relation, including the sources of its economic benefits or yield, as well as a realistic appraisal of the implications for how that yield is divided among labor, management and capital. (Yglesias’ whole argument consists of losing his grip on that reality though the expedient of using an analytical model that doesn’t capture, and cannot capture, the case.)

It seems to me that the concept of an “efficiency wage” goes a long way toward understanding why “do as I say, or you’re fired” is so common, as well as why countervailing policy interventions can greatly improve outcomes, including raising wages. Maybe I am unfairly misreading Yglesias in this regard, but his thought experiment seems tendentitiously pessimistic about the possibility of an intervention raising wages. The “efficiency wage” argument, though, seems to suggest that relatively powerless and low-paid workers could, with a little additional political power, impose constraints, which would achieve much higher wages, and this would be a movement toward something of a more positive-sum game.

I don’t see how the possibility of improvement in overall or “social” outcome, implied by the “efficiency wage” argument is defeated by a facially silly argument to the effect that the bosses, as supremely rational and benign despots, would have already raised wages, if it were possible. The monopolist doesn’t choose the perfectly competitive price and output. The profit-maximizing firm approaches a socially optimal result only when and to the extent it is constrained to do so. That insight doesn’t logically lead to an imperative to remove constraints, on the plane of reality I inhabit.

Bruce at @165, exactly! The idea that employers have to lure unskilled employees to work for them by better working conditions or by laying aside onerous security provisions is completely bogus and unwarrented – the company that puts onerous security provisions on their employees is much more likely to pay them less, to recoup a cost that is not directly related to production – the cost, say, of searching employees. The recent GQ article about the lifestyles of the poor, the near poor, the middle class and the rich – found here – http://www.gq.com/news-politics/big-issues/201207/amber-waves-of-green-jon-ronson-gq-july-2012?printable=true – is a nice illustration of this. Notice the dishwasher, Maurose Franz, whose main issue is respect. That is because, as the writer of the article says, comparing his own compensation, and that of the billionaire he interviews, to Franz’s: “Frantz washes dishes at the Capital Grille restaurant, a posh steak house near the harbor in Miami’s financial district. He nets $200 for a twenty-seven-hour week and receives no food stamps or government assistance of any kind. That means he makes in an hour what I make in five minutes and Wayne makes pretty much every time he breathes in and out.”

He has no power, nor belongs, apparently, to any labor organization that can push back against his employer. They can even steal from him (the “mysterious” fact that sometimes, when he goes to check out, he finds he has already been checked out), and they are certainly not thinking that, since they pay him less, they will hassle him less. MY’s fairy tale is an example of his lack of experience, I think. He’s never had to live like Franz. He never will.

Are “Markets” and “contracts” the same system, or alternative systems?

In any case, “markets” and “contracts” organize exchange, and, thus, facilitate specialization in production, but they do not, strictly speaking, organize production, itself.

Specialization in production would appear critical to human material welfare, as it appears necessary to the production of good tools, and conservation in the discovery of good techniques.

Henry is wrong to assert that an equality of initial endowments — “relative equality of resources”, whatever that means — is necessary for the normative case for markets, as a way of organizing exchange. Differences in resource endowments simply add to the potential benefits of specialization and exchange. Markets and/or contracts are particularly well suited to organizing trade among “strangers” — either over long-distances, or among large co-located groups (thousands or millions, instead of dozens), and are much superior to familiar alternatives, such as gift exchange or looting and pillaging.

What is true about the normative case for markets and/or contracts as a means of organizing specialization and trade among “strangers” is that the associated political governance should be “fair”, meaning egalitarian and symmetric in its principles and operation.

The central conceit of the market failures framework, which MY makes use of, is the assumption that markets emerge naturally, meaning without political foundation, and should be assumed to be without original sin, in that state of nature, until some “market failure” is identified, and only then, is a political intervention possibly justified. (The Friedmanite argument is that even in the case of acknowledged “market failure” sullying the sacred market, even in its imperfection, with political intervention, is likely to cost more than it is worth. Absurd.) Economists get themselves into that ball of wax, by initially reasoning from an ideal case, without uncertainty (incomplete or asymmetric information, risk or strategic behavior), and not acknowledging the utter impossibility of that supposed “ideal”. It is seriously faulty reasoning; uncertainty is a necessary element in the logical derivation of a model of markets.

Markets are always and everywhere, inherently, embedded in political institutions, and cannot exist without the supporting infrastructure of a kind of political “constitution”, which, in economic terms, is a public good.

In a certain world, of complete knowledge, one could imagine markets and contracts, in which transactions were always complete and fully warranted (really they don’t need to be warranted). Committments that were made, would always be fulfilled. No one would make a mistake. There would be no risk, or the risk would be of a completely manageable kind, fully anticipated in sufficient statistics: it would be enough to know the form of the distribution, its mean and variance, and one could make a decision on that basis, which would be practically identical to decisions made on certain knowledge.

The presumptive case for laissez-faire rests on imagining markets without uncertainty and incomplete information, where ex ante committments and expectations are always correct.

In the actual world of uncertainty and limited knowledge, contracts are always incomplete and all market transactions must be warranted, and political governance, meaning ex-post correction of mistakes made in market deals, is critical. And, the normative case for markets, rests on the fairness of that political governance.

In the case of the “Do as I say, or You’re Fired” labor contract, the fairness of political governance is critical, because of the incomplete nature of the contract. Ruling out political governance, as MY appears to want to do, is borderline insane in its cruelty to the subordinates, who work under such contracts.

The extent to which the fairness of political governance can be maintained in the face of economic inequality is an open question. Financial or money wealth, in particular, seeks returns from anti-social usury; purely financial wealth (unconnected to the ownership or management of productive factors) can only maintain returns, by corrupting political governance, reducing its fairness.

The classical model assumes complete information — no uncertainty or risk — and no strategic behavior, no exercise of power. None of that is true, or could be even approximately true, in any actual case; uncertainty and strategic behavior are necessary elements of any model worth discussing as an operational representation of a case.

The “do as the boss says, or you’re fired” contract pattern doesn’t exist in the classical model, under classical assumptions. So, you can’t analyze it, using classical assumptions. Whatever MY is doing in his analysis, he’s not addressing the case in question. Which is why, I, and others in this thread, have complained that he loses the thread.

The “do as the boss says, or you’re fired” contract only makes sense in a world of incomplete information, where people are following rules. In a world of complete information, you don’t have rules or management. Output is a function of factor inputs (output is at a maximum, given the inputs, because no one makes mistakes and there is no waste or error); get the allocational proportions of inputs right, and you’re good to go. Management doesn’t worry about motivating the employees, or supervising, or quality control, or scheduling. Prices clear every market, and multiply infinitely to cover every tiny variation; so, yes, the workers get compensated for the inconvenience of being searched; a ticket to a bad movie is cheaper than a ticket to good one, and the prices in a restaurant or at the barbershop may fluctuate by the second, as well as by every detail of your desired meal or how many hairs there are on your head. And, contracts are complete. Everybody commits ex ante, and that’s it. You can have risk, of a completely well-behaved kind, which can be exhaustively attenuated by complete (futures) markets, such that the actual unfolding of events disappoints relative to the expected outcomes in the distribution of income not one whit. No one makes a mistake, or to the extent that anyone does make a mistake, it has no consequence; it’s not a real mistake, because every actor is fully insured against variability.

I’m not saying that working through Pigou or Arrow-DeBreu is not useful training. I am saying it has no reasonable claim for being descriptive, or useful as an operational model.

The “Do as the Boss says, or You’re Fired” contract is an incomplete, contingent contract. Pretty much every “contract” covering transactions in an uncertain world of incomplete information is incomplete and contingent. Every trivial transaction at the supermarket is warranted, subject to political governance ex post; prices are more or less fixed, that is to say, administered and few — not varying much over time or in response to particularities.

For the “Do as the Boss says, or You’re Fired” contract, the exact nature of the specific performance required is worked out, continuously over time, after the contract is entered into. The promised wage rate or salary is more or less fixed at a level high enough that, in the circumstances of the local labor market, getting fired is very costly to the employee, so costly that the subordinate employee will, regardless of her own feelings, pretty reliably follow directions as given. (The ability of supervisors to observe specific performance, or prescribe it in detailed rules, matters, and is subject to a voluminous economics literature, but I avoid that digression.) You could contrast this labor contract/transaction with a more discrete exchange transaction for a specific labor service — like a haircut. Buying a haircut is not the same as hiring a barber to cut other people’s hair for a firm. In general, hiring people to work in a hierarchy or bureaucracy only makes sense to the extent it enables the firm to achieve technical efficiencies from managing their labor; management and “technical efficiencies” do not even exist in the classical model.

The thing about incomplete, contingent contracts is that the negotiation of their terms never really stops. They are not perfect ex ante, and all depends upon the political ex post governance or arbitration of the terms in evolving circumstances. This is how it has to be in a world of incomplete information, where your expectations are mostly mistaken or non-existent and you find out about the future, only when it happens. Entering into such a contract is a strategic behavior on the part of both parties; they’re playing a game. The behavior of the referee, and the coaches of the opposing teams, matter, in a game. MY seems to think it would be fine to take away both the ref and the coach of the subordinate’s team. I’m saying that a fair game, a positive-sum game, which benefits the subordinates to the full degree it can, requires fair political governance, which means ex post political constraints on the bosses.

Imagine for a moment, that I own and manage a small firm, say, a restaurant, where I have a crew of minimum-wage workers. In the classical model, output is function of inputs, and I add workers to increase my output, right up to the point where the workers are paid their marginal productivity. If the minimum wage rises, I have to use fewer workers, my output falls, and they lose their jobs. So sad.

In real life, in a real restaurant, there are many more dimensions to the problem, and output is not function of inputs. One could argue that under uncertainty of a well-behaved kind at least, workers are still paid their marginal product (I think Stiglitz proved this, formally), but now, I manage that: I manage the workers to make their marginal product equal their wage. If their wage rises, I will manage them in ways that increase their marginal product accordingly. Maybe, I invest more in training, and modify other practices, to reduce turnover, to keep my training costs under control. I’m more careful about how I treat them, because the cost of having someone quit is higher. Maybe, I’m just more careful with scheduling — I don’t ask an undertrained worker to stand-by just in case — a very low marginal product task. Maybe, I invest in tools and systems, as well as training, to make my workers more productive.

Now, you can ask why, if the possibility existed to increase the productivity of my workers, didn’t I do it, spontaneously? Why was the political constraint of raising the minimum wage critically important? I am profit-maximizing, right? Well, not really. “Profit-maximizing” isn’t well-defined, for a world of incomplete information and genuine uncertainty. You can’t know what “maximum” might mean. At best, I might be locally profit-seeking, which is not so global in its scope or implications. But, profit-seeking is satisfied by externalizing costs as well as minimizing costs. There’s slack in the system, error and waste, and if I can put some of that off on subordinates, to make my life easier I will. The positive-sum game of the firm, into which my subordinates and I have entered, might be a somewhat reduced-sum game as a result, but more for them, than for me, as I have the power, and I don’t care that much about their interests, which they don’t have as much political power to insist be respected.

Talking about how “skills” explain wages obscures the role of management, and capital (tools), in determining how productive labor is, as well as what claim labor can make on the output of the firm. The truth is, there can be a lot of slack, in an organization, which is able to employ people at very low wages. Management may value their own superior status, and feel that their status is enhanced by denigrating subordinates. Status competition can destroy welfare pretty reliably; the firm doesn’t value status, in the classical model, with its strict utilitarianism, but in real life, it can be a problem, that results in abuse of subordinates and a “reduced-sum game”, or pareto sub-optimal outcome.

Bruce Wilder:

Once again I find myself agreeing with much of what you have to say, but unconvinced that you are demonstrating that the classical model is wrong in its prediction in this particular case.

I agree, for example, that this is correct at some level:

Every trivial transaction at the supermarket is warranted, subject to political governance ex post; prices are more or less fixed, that is to say, administered and few—not varying much over time or in response to particularities.

Yet the laws of supply and demand still apply to prices at the supermarket. The classic model will give you the right answer to what will happen if production of a crop declines due to drought or disease. Most prices in most markets are “sticky”; they do not move rapidly in response to changing conditions, but nor are they actually fixed. Over time they do move more-or-less as the classic model predicts.

Labor markets are more complicated, but I think the general principle holds: there are lots of very complicated things going on, but that doesn’t mean we can ignore supply and demand entirely. It’s a part of the picture.

You talk about efficiency wages. Efficiency wages are a real deviation from simple supply/demand. But good workplace conditions are a form of worker compensation which can itself function as an efficiency wage. A rational owner who gives employees efficiency wages should want to minimize discomfort to the employees, because that means the owner can give less compensation in the form of cash. So in this case, deviation from supply/demand doesn’t relevantly change the calculation of the profit-maximizing firm; they should still pursue minimally intrusive search policies.

profit-seeking is satisfied by externalizing costs as well as minimizing costs.

Absolutely. This is why, as you explain, raising minimum wage can actually help workers (and this can be demonstrated in a fairly simple classical model). But, raising minimum wage actually increases the price of hiring workers. Specifying the form of a fixed amount of compensation–saying workers must be compensated in better working conditions rather than wages–does not. (it should be noted that Yglesias’s model doesn’t work in a firm where workers are searched and already making minimum wage, because the firm cannot respond by reducing wages. In this case, forbidding search is effectively a raise in the minimum wage.)

Management may value their own superior status, and feel that their status is enhanced by denigrating subordinates.

Yes, this is what I was asking you about in 94. I agree that to the extent that you view management as parasitic on the firm, it’s a real problem for Yglesias’s model. In this case, owners and labor should be aligned in trying to restrict such profit-reducing activity of management, and government can probably play a constructive role. The degree to which this is an accurate description of real firms I am not sure.

@faustusnotes174: Okay, so we make a rule saying our employer of the bottom-of-the-barrel workers can’t search; his workforce still contains a larger component of thieves and slackers than his competitors’ workforce. What does he do now?

Taking some simple assumptions as given and then trying to explain social outcomes is a fascinating pursuit. To this bystander, to looks like a bunch of bright people using Newtonian mechanics to explain a carnival ball (there’s lots of movement, so the the laws of motion must apply, right?). To take just one point, I believe empirical research strongly suggests that neither employers nor employees have much idea of their marginal costs or productivity. Even a nodding acquaintance with the actual production of any complex good suggests that working out any single employees contribution in any exact terms is more or less impossible. We’re talking about social relations of production, which are not reducible to any single individual (that’s why they are relations). Why not focus on the evident issues of power, hierarchy, subordination, status? A discussion of how many dollars a day is compensation for being groped is an absurd distraction.

faustusnotes @174:

The case being discussed in this thread is employee searches for theft prevention, not blowjobs. I think everyone involved in this discussion is supportive of laws against sexual harassment.

Your 4 scenarios:

1. This is possible, but doesn’t change the conclusion of the model: if you forbid search in the firm employing untrustworthy employees, they will be paid even less relative to employees at the firm with trustworthy employees.
2. Same as 1
3. This employer will have a problem with recruitment, since the firm next door will pay higher wages and treat employees better (by the premise of the question).
4. Seems entirely consistent with the model

I don’t think you understand what the model is used to demonstrate. The claim is not that companies which do searches will literally pay their employees more than other companies; there are all sorts of variations between firms other than search/not search which affect wages. In fact, the opposite is more likely the case: better paid workers will also tend to have better working conditions (this is indeed what Yglesias says in his post). The claim which the model is used to support, rather, is that forbidding search will reduce wages of those employees currently subject to it. The justification is that total compensation is set by supply and demand, and restricting the allocation of this compensation does nothing to supply or demand, and therefore will not change total compensation.

temp at 179:

The claim is not that companies which do searches will literally pay their employees more

Temp at 170:

If it didn’t pay better, and there was another firm down the street which was the same in every way but didn’t do searches, why would anyone work for the firm searching employees?

This is your explicit claim: that a company compensates employees for search by paying more. You are directly disputing the claim put by others, that companies that do searches also pay less.

Are you now admitting that companies that do searches pay less?

Also I don’t think this is true under your model:

if you forbid search in the firm employing untrustworthy employees, they will be paid even less relative to employees at the firm with trustworthy employees

Under your model, the employer will only spend as much on a search as people steal; if he or she doesn’t search, they will only reduce wages by the amount people steal. Anything else would not be an optimum profit-seeking behavior, right? Or workers wouldn’t accept the contract because (due to perfect information blah blah) they would know they were being ripped off. So, workers would not be paid “even less” if searches stopped – they would be paid exactly the same as they were being paid when searches were ongoing.

Actually there is a bigger problem in your argument, I think: implicit in your original reasoning is the idea that the searches are done capriciously, as a matter of workplace policy, with no actual underlying theft being targeted. Yet you want us to think employers are purely driven by profits and demand that we give justification for not making that assumption.

You need to try harder to make your model work.

if production of a crop declines due to drought or disease

In agriculture in particular, the supply is heavily managed. By the state.

“, is there some special magic about being an employer that gives you the right to infringe peopleÂ’s liberty in ways that even the police canÂ’t? If the employer thinks someone is stealing from him or her, then he or she should use the same methods everyone else does – call the cops.”

Well, telling the boss he can just as soon call the cops isn’t unlike telling the worker he can just quit: that kind of nuclear option is unuseful for resolving the quotidian run of work problems. And I don’t think it’s unfair to say that seeking a job handling others’ valuables raises at least a faint aura of general suspicion, as in the case of the FedEx handlers. You can’t run a business based on discovering such things only after the fact. Much as you wouldn’t want to only find out after the fact that the pilot was coked off his gourd. Of course none of that makes a justification to search or drug-test filing clerks. And it would work very differently for workers empowered (perhaps through unions) to make and enforce highly specified agreements concerning their submission to search than under the “do as I say or you’re fired” regime.

As an aside re calling the cops, I sometimes wonder over the fact that a store will call the cops over any shoplifting, no matter how small, but if they refused to resolve an error in their own favor, no matter how large, calling the cops on *them* is all but inconceivable. I mean literally – it wouldn’t even *occur* to most people to try it. Why is that?