The Invisible Handcuffs of Capitalism: How Market Tyranny Stifles the Economy by Stunting Workers (34 page)

When workers fear repercussions from overt protests, they sometimes follow these orders to the letter, which generally causes a slowdown, eating into profits. For example, during a dispute with Verizon, workers adopted a “work-to-rule” strategy. According to one account of the workers’ behavior:

Technicians delayed the start of their days with a 20-minute truck safety check each morning. The check involved two technicians, one to operate the truck and another to inspect turn signals, brake lights, and hydraulic lifts. “Some mornings at the Watertown garage, you’d see 100 bucket trucks with their lifts spinning in the air,” said Dave Reardon, business agent for IBEW Local 2222. “It drove managers crazy.” “State and federal regulations require that we put out the proper signage—signs, cones, flags—when we work in manholes and near highways,” said Steve Carney, a field tech and a steward in CWA Local 1103. “We refused to take trucks out that did not have the right signage.”
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Taking a page from Sveijk:

A CWA [Communications Workers of America] fact sheet told workers how to work to rule: “Never go by memory, check your reference material” and “Never use your own judgment—ask!” This tactic was a powerful weapon for “outside” workers, the ones who maintain the underground infrastructure and install and repair lines and equipment. These technicians had leeway to determine how best to complete a job. During regular times they often disregarded company rules in order to get a job done quickly. But during the work-to-rule campaign, they followed Department of Transportation regulations, for example, to the letter.
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While such behavior might infuriate management, you can be sure that had an accident occurred during “normal” times, the company would have held the employee responsible for not following company policy.

The work-to-rule strategy is not limited to organized labor. Sometimes individuals or small groups of workers informally adopt work-to-rule behavior out of sheer frustration. Harley Shaiken uses the example of a machine shop:

A familiar sight in most shops is an engineer walking in with a stack of blueprints to ask the worker if a particular job is feasible. The machinist carefully studies the prints, looks at the engineer, and says, “Well, it can be tried like this but it will never work.” Grabbing a pencil, the machinist marks up the print and, in effect, redesigns the job based on years of experience….

[In one shop, when] management initiated a campaign to strictly enforce lunch periods and wash-up time, the judgment of some machinists began to fade. About this time a foreman dashed up to the shop with a “hot” job…. Anxious to get the job done quickly, the foreman insisted that the machinist run the lathe at a high speed and plunge the drill through the part. Under normal circumstances the machinist would have tried to talk the foreman out of this approach but now he was only too happy to oblige what were, after all direct orders. The part not only turned out to be scrap, but part of the lathe turned blue from the friction generated by the high speed. The disciplinary campaign was short-lived.
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Joan Greenbaum tells of a group of disgruntled British typists, who demonstrated their displeasure with their bosses by exactly transcribing dictation tapes. If the executives said, “Oh no, typist,” they typed “Oh no, typist.” They carefully transcribed all the sounds that the tapes recorded—“um,” “eh” included.
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Byzantine bureaucratic structures amplify Sveijk-like behavior because orders move down from one layer to the next, creating more space for would-be Sveijks. As Richard Sennett noted:

As orders pass down through the chain of command, each agent “translates” the order into action. This allows the agents considerable discretion.
With a childlike innocence, [Frederick Winslow] Taylor fretted that his precepts—so clear, so “scientific”—became smudged and messed in the corporations for whom he consulted. Reality failed him.
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Procrusteans can construct sophisticated command structures, but without the empathy of the people below, their systems may create enormous waste, even though they may be rational from the perspective of those in control.

Waste

A French scientist, Sadi Carnot (1796–1832), analyzed the nature of an ideal engine, one without friction or any loss of energy. He realized that such a mechanism, now known as a Carnot engine, would be impossible. Nonetheless, an understanding of an ideal machine does have a value. Comparing the performance of a real machine with an ideal one provides a measure of efficiency.

In the more complex world of human performance, coaches often take advantage of films of their athletes’ movements, searching for telltale signs of wasted efforts. The slightest hitch can dissipate energy or throw off the rhythm of the whole movement. For athletes competing at the highest levels, eliminating minute defects can spell the difference between success and failure.

Unlike the engineers or coaches, laissez-faire enthusiasts insist that market principles automatically maximize productive efficiency. The system would work better by eliminating government interference or unions, but otherwise nothing else is needed. Economists have their complex systems of equations that “prove” this market efficiency. Unfortunately, a careful analysis of these “proofs” reveals that they depend upon hopelessly unrealistic assumptions. A casual tour of the world quickly reveals that the economic performance of markets is less than stellar. As always, the chorus of free marketers will respond that the problem is that marketization has not gone far enough.

Why are our schools leaving so many poor children uneducated?
Here is a waste of monumental proportions because education is the key to unlocking the potential of the upcoming generation. The Procrusteans inevitably offer their market-based solution: privatize the schools and run them according to market principles without the interference of unions.

What about offering the schools better funding? Absolutely not! President George W. Bush, himself a product of an elite and expensive system of private education, callously compared providing more public educational spending to “pumping more gas into a flooded engine.”
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Privatized schools promise to produce as-yet-unproven market efficiencies that will somehow magically lower educational costs.

One obvious cost-cutting strategy is to relieve the educational system from the responsibility of educating those children who are most expensive to teach—the physically handicapped and those who are most deeply scarred by poverty. Would a rational society regard such measures as efficiency?

More Waste

Modern technology, based on what has so far been an adequate supply of cheap energy, has advanced to the point where relatively few people are required to manufacture the goods people consume. The shrinkage in manufacturing employment follows a pattern similar to the earlier trend in agriculture, in which technological advances made a large portion of the farm population redundant.

Such technological improvements should make possible more leisure or free up labor to produce goods and services that improve the quality of life. But instead, leisure has become scarcer. Part of the problem is that business employs an increasing portion of the workforce in activities that do little or nothing to promote human welfare but which consume great quantities of working time. Often, this work actually detracts from human well-being. For example, unwelcome advertising and marketing intrude into many parts of our existence. The U.S.
Department of Labor estimates that sales managers, along with people engaged in advertising, marketing, promotions, and public relations held about 638,000 jobs in 2008. These jobs are expected to grow faster than the average growth in employment, although the development of online commerce should be expected to reduce their numbers.
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Many other forms of wasteful sales and advertising activities fall through the government’s statistical net. For example, a good number of young people probably get paid under the table to wave signs at passing motorists urging them to buy something from a particular merchant.

Spammers certainly fall outside of government surveys of marketing personnel. Business devotes considerable time and energy to defeating spammers, who often use brilliant technical schemes. These corporate expenses appear in government data as part of the normal costs of doing business, although they are really part of a web of unauthorized marketing. Business’s defensive actions force the spammers to devise even more ingenious methods of avoiding filters, causing still more resources to be dissipated.

Advertising is doubly wasteful from the standpoint of economic theory. The purpose of the market economy, according to its advocates, is to produce utility, but much advertising is designed to destroy utility by making people dissatisfied with their own possessions in order to induce people to buy something new.

Duplication of facilities also represents a form of marketing. For example, four competing gas stations were on a corner a few blocks from where I grew up. A single station would have easily supplied all the existing traffic. The extra effort required to construct and maintain the three superfluous stations represented a substantial waste. But since each company wanted to have a share of the market, the profit motive demanded this wasteful duplication. The mathematical economist Harold Hotelling even produced a theorem demonstrating why such locational strategies were rational for the individual businesses.
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One might argue that society lacks the expertise to decide which of the four operations should remain, but even if the wrong choice is made, the elimination of duplication surely offers sufficient savings to compensate for any errors of judgment.

An increasing share of the workforce devotes itself to mere paper shuffling, such as the buying and selling of stocks, bonds, or options. In order to make that work possible, a host of other people must supply those workers with energy, buildings, information technologies, and paper.

The federal government estimates that in 2008 real estate brokers held about 123,000 jobs and real estate sales agents, 394,000. Although, helping people relocate may provide a useful service, are almost half a million people necessary? Much of this industry assists real estate speculation, which makes housing less affordable. Given the vast improvements in informational technologies, certainly a good deal of the labor associated with the real estate business is wasted. Nonetheless, the U.S. Department of Labor expects employment in this industry to grow faster than overall employment during the next decade.
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Finally, much of the labor in the economy is dissipated in producing consumer goods that do not add to people’s happiness. Diverting efforts wasted in unproductive activities could offer great dividends. Some of the time saved could be used for leisure that could enhance workers potential, especially if society signaled to people how their skills could be rewarded. In addition, the resources currently used unproductively could be used to benefit society in ways that markets neglect, such as building schools and environmental remediation.

Guard Labor

Another kind of waste results from the efforts to control access to goods and services. Capitalists are only able to earn money to the extent that they can prevent people from using their products without paying. They must find ways to deny non-customers access to their goods, so they must devote considerable effort just to protect their property rights. Economist James O’Connor coined the term “guard labor” to describe this form of protection of property. To illustrate the nature of guard labor, he offered a description of a job I once had to explain what he meant:

Consider the labor of the ticket seller at a movie house. The seller’s task is merely to transfer the right to sit in the theater to the movie-goer in exchange for the price of a ticket. But it may not be immediately obvious that it is not the lack of a ticket that keeps you out of the theater…. The ticket is actually torn up and discarded by a husky young man who stands between the box office and the seat that I want. Marx writes that “it is plain that commodities cannot go to market and make exchanges of their own account. We must, therefore, have recourse to their guardians, who are also their owners.”
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Theaters often have layers of guards. One person may sell the tickets while another tears them up. With the advent of modern technology, a new generation of guards works to prevent people from accessing the show outside the theater—in the form of digital media for music, movies, and the like. Hordes of lawyers and technicians labor to create laws or develop new technologies to prevent the digital leakage of these commodities to people who might avoid paying for them.

Unlike the operator of the movie theater, some providers of goods and services allow the consumer access to the product before payment. In such cases, the guardians must make sure that consumers complete the transaction by paying their bills. This activity also employs many people. Then, in order to make sure all this guard labor works effectively, another layer of guardians must oversee the accounts.

In addition to the direct performance of guard labor, millions of auxiliary workers labor to provide the resources necessary to support guard labor. These workers build and maintain the offices, produce the telecommunications infrastructure, and supply the other goods and services that the guards require. In addition, these workers have their own complement of guards to oversee their work.

Retail stores employ sophisticated surveillance systems to deter theft. Other forms of guard labor are less obvious. Look at the shelves where stores encase their commodities in multiple layers of packaging. This packaging might help to protect the product from damage, but for the most part it does nothing to make the product more useful. In
part, the packaging is intended to entice consumers to buy the product. More often than not, the overriding function is to deter theft.