The Invisible Handcuffs of Capitalism: How Market Tyranny Stifles the Economy by Stunting Workers (15 page)

Ironically, Thaler’s behavioralism is now coming into favor in Democratic circles. Together with his co-author Cass Sunstein, Thaler has promoted the idea of “libertarian paternalism” instead of outright regulation. For example, Thaler and Sunstein suggest that business could “nudge” people to increase their rate of personal savings by requiring workers to opt out of 401(k)’s instead of opting in.
¹²⁶
Such non-coercive policies are politically attractive because they seem to be doing something positive without inconveniencing business. At the same time, nudging tends to emphasize personal rather than social behavior. The irony was doubled when President Obama nominated Cass Sunstein to take the job that John Graham had held.

Thaler’s experience is relevant to this book because it suggests that even in those rare cases when well-meaning economists do trespass into questions of work, workers, or working conditions—territory usually proscribed by the discipline—their work is unlikely to be helpful with respect to workers’ interests. If such work will help the workers’ cause, it will be rejected; however, if it can be wielded to harm labor, economists are likely to embrace it as they did Thaler’s dissertation.

In this case, economists used his work by reducing the benefits of saving a worker’s life to undermine efforts to improve workplace safety. If Thaler had come up with numbers that had supported greater workplace protections, he probably would have experienced ostracism earlier in his career.

Workers as Objects

The disinterest of economists in the world of work filters into the popular culture, where labor receives less interest than ordinary economic transactions. The typical newspaper has a large section devoted to business, much of it taken up with the health of the stock market. Almost no papers today keep a reporter to cover workers. Other than the occasional ideologically correct, human interest story, the only section of the paper devoted to workers is the sports page, which concentrates on working athletes. Ordinary workers—people who may have difficulty in affording the cost of attending a major league sporting contest—rarely appear in the media.

Maintaining this distance from work, workers, and working conditions seems to be a natural reaction for those whose profits depend upon pushing people as hard as possible. Their concern is to produce commodities at the lowest possible cost, no matter what the consequences might be.

Of course, compulsion of any kind is foreign to economic theory. Conventional economics describes the labor market as a thoroughly voluntary arrangement—one that does not need to traumatize workers beforehand. Yet, once a worker enters into the workplace, the employer is free to exercise despotic powers. True, some limits exist. The law prohibits physical assault. Certain types of discrimination or sexual harassment are also impermissible, but the enforcement of such rules is rare. Even laws that require the employer to maintain a safe workplace go largely unenforced.

Direct concern for workers falls outside the purview of conventional economics and, all too frequently, the public at large. Instead, the Procrusteans have managed to create an intellectual climate in which people become oblivious to the hardships of their fellow citizens.

Economists are more than willing to lend a hand in this regard. In their theory, workers once employed only exist as labor, part of what they classify as a generic factor of production, along with the equally abstract categories of land and capital—none of which could be realistically measured. In the case of labor, bodies can be counted or those numbers can be
weighted by the years of education, but actual capabilities are irrelevant. Within this world, any accountant with a college degree could replace a star center on a professional basketball team without a college degree.

Within this theory, we can be confident that business will purchase the appropriate mix of land, labor, and capital and then ensure that the production process will proceed efficiently. How that happens is of no concern in terms of economic theory.

Procrusteans are more likely to react with a bitter sense of injustice when workers act as something other than a factor of production; for instance, when a union manages to win a fight for better wages. Business interests will make invidious comparisons, indignantly asking why those workers should get higher wages than some other poorly paid occupation.

Employers prefer to keep harsh working conditions hidden from the public, but the public often seems comfortable not knowing about such matters as well. There seems to be a kind of collusion on the part of business, government, the media, and the public to shroud abominable working conditions in secrecy.

The reception of Upton Sinclair’s novel
The Jungle
illustrates this phenomenon. Sinclair poignantly described the horrid working conditions in the slaughterhouses—including the periodic mixing of human body parts with the animal flesh sent to the market. The book alarmed the public so much that Congress was moved to pass legislation regulating the industry. The purpose, however, was not to protect the workers’ lost body parts, but rather to put consumers at ease about the safety of their meat supply. As Sinclair later remarked:

Concerning
The Jungle
, I wrote that “I aimed at the public’s heart, and by accident I hit it in the stomach.” I am supposed to have helped clean up the yards and improve the country’s meat supply—though this is mostly delusion. But nobody even pretends to believe that I improved the condition of the stockyard workers.
¹²⁷

Eventually, unionization improved matters in the slaughterhouses, but today, immigrants, without the benefit of protection by either
unions or government regulators, perform most of the work. Conditions today are not much better than what Sinclair described. As Eric Schlosser recently reported in his immensely popular book,
Fast Food Nation
:

The injury rate in a slaughterhouse is about three times higher than the rate in a typical American factory. Every year more than one-quarter of the meatpacking workers in this country—roughly forty thousand men and women—suffer an injury or a work-related illness that requires medical attention beyond first aid. There is strong evidence that these numbers, compiled by the Bureau of Labor Statistics, understate the number of meatpacking injuries that occur. Thousands of additional injuries and illnesses most likely go unrecorded.
¹²⁸

That people in comfortable positions would be more concerned about their stomachs than about other human beings should come as no surprise. Even so, the degree of disregard for the welfare of others, especially those who do the work upon which all of us depend, is shocking. Perhaps to do otherwise would create a painful sense of guilt.

Even people with a strong sense of humanity seem to have an easier time sympathizing with workers in far-off places than those nearby. Students in the United States have organized remarkable movements in support of workers in sweatshops in China and other low-wage countries. But the plight of the farm workers in the hot fields of California’s Central Valley, which in the early 1970s generated a similar upsurge of support, no longer inspires much sympathy, even among students in California. Our language coldly objectifies these workers as field hands, suggesting that their being is reduced to a simple mechanical motion. The objectification of the people in the fields may be necessary to maintain a psychological distance. As a result, people whose plight should by any objective standard be brought to the attention of the public remain comfortably out of the sight of their more affluent brethren.

The Hidden Abode of Production

In the legend of Procrustes, travelers were unaware of the impending danger of the iron bed until it was too late, but eventually they must have realized the horror of their fate. Perhaps the Procrustean legend would have hit home for the slaughterhouse workers with severed body parts, but all too often the bed remains invisible, even to the people who are caught on it. Traumatization has not radicalized workers, but rather just made them more fearful of losing their jobs.

Perhaps a change is under way. In 2006, job satisfaction for workers under the age of twenty-five stood at only 38.6 percent, down from 55.7 percent in 1987.
¹²⁹
Some corporations, such as McDonald’s, Taco Bell, KFC, Staples, and Delta Airlines, are concerned enough about workers’ attitudes that they have hired advertising agencies to make their jobs seem more attractive. “Building an ‘employment brand’ is ‘absolutely critical,’” says Richard Floersch, McDonald’s Human Relations chief.
¹³⁰
The level of job satisfaction for all workers has fallen less dramatically to 47.7 percent in 2006, down from 61.1 percent in 1987. Even so, almost half of all workers still express satisfaction with their jobs, as do the majority of workers over fifty-five or those earning upwards of $52,000.
¹³¹

Such satisfaction may be only relative to the alternative—the hardship and deprivation associated with unemployment. The recent economic crisis might increase the level of job satisfaction. Wages may be miserable and working conditions unpleasant or even dangerous, but without any hope of an alternative existence, such a life of unremitting toil may seem natural. A job, even a low-wage job with poor working conditions, may not seem to be a source of dissatisfaction. Given such a perspective, questions about why people should be subjected to such conditions go unasked.

When working conditions do appear in the media, it is often in the context of a spectacular disaster in which the emphasis is on the heroics of those who have come to rescue the unfortunate workers. In such cases, the media says little about any negligence that might have put workers in harm’s way in the first place.

For example, in the case of the 2006 Sago mine disaster in which twelve miners died, the media largely ignored the fact that the company had a long history of safety violations. Instead, the media covered the rescue operation, often uncritically relaying misinformation provided by the company.
¹³²
Years later, the government continued to shield the company, promoted the outlandish theory that a lightning strike penetrated deep into the earth, traveled more than a mile, and then ignited a methane deposit.

Management may well have detailed blueprints of the worksite and intricate knowledge of the equipment but know very little about the nature of what goes on in the workplace. Instead, employers concentrate on gathering information about the workplace through invasive surveillance, in part to collect statistical information to measure efficiencies. Business uses computers to record the keystrokes of people entering data or truck drivers’ movements. The potential scope of such tracking expands almost daily. Fredrick Winslow Taylor would be delighted with the new Radio Frequency Identification chips that offer the potential to keep track of every employee’s physical location.

Interestingly, Charles Babbage anticipated more about modern machinery than the computer, observing:

One great advantage which we may derive from machinery is from the check which it affords against the inattention, the idleness or the dishonesty of human agents.
¹³³

The efforts to track and monitor workers and commodities spill over into everyday life, beyond the factory floor or the retail outlet, where the justification of guarding one’s property is no longer relevant. This amalgamation of detailed personal information, which makes a mockery of the right to privacy, gives business enormous power in the marketplace. This information is most effective to the extent it does not appear to be used in a Procrustean fashion. Business even makes the claim that its detailed knowledge of personal information, such as an individual’s financial situation and consumption patterns,
allows it to serve the public better—as if profit were the furthest thing from the mind of corporate executives.

Even more ominously, the government is an active customer for the same data. These data are especially dangerous because the government has the ability to combine the commercial data with secret wiretaps, records of computer activity, and even library records. One of the obvious objectives of such programs is to monitor those who dare to challenge the Procrustean nature of the economy, perhaps placing government monitoring at the heart of the system of guard labor.

Control versus Cooperation

Despite the massive amount of information that business collects, real knowledge about the workplace will remain elusive without personal contact, carried out with respect. Even when management does have vital information about working conditions, as seems to be the case with the Sago mine, ignoring life-threatening risks may be profitable—partially explaining the high levels of occupational injuries, diseases, and deaths.

Given the lack of contact with those at the bottom of the chain of command, management has no grasp of the untapped potential of its employees. Instead, management demands unquestioned obedience and absolute diligence from workers at the lower reaches of the hierarchy, without realizing that many of these people have the capacity to make greater contributions to the productive effort. Consider the atypical nursing home that engaged its entire staff in an effort to protect its residents from bed sores:

“The laundry workers helped us see that some clothes weren’t fitting the residents properly and were restricting their skin,” said Jeanie Langschied, a registered nurse there. The kitchen staff began putting protein powders in cookies to boost nutrition. They added buffet dining, so residents would not remain in one position for so long, compressing
fragile skin. Even the beauty shop “realized that wait times needed to decrease,” Ms. Langschied said, and residents should be repositioned while getting their hair done. “It was all departments looking at everything, and it was just amazing the information that flowed through.”
¹³⁴