The Invisible Handcuffs of Capitalism: How Market Tyranny Stifles the Economy by Stunting Workers (7 page)

Workers are aware of these negative signals regarding the harsh consequences of unemployment. To capture the reality of this disciplinary environment, Jared Bernstein, today chief economic advisor to Vice President Biden, coined the expression YOYO economy—meaning that workers are told “you’re on your own.”
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Prisons also serve to reinforce the discipline of the workplace. The United States presently incarcerates more than two million people. Some prisoners represent a serious threat to society, but most do not. Given the popular association of marijuana with a lackadaisical work ethic, the harsh penalties connected with this substance may be relevant to efforts to maintain discipline.

Whether by design or not, the fate of prisoners and the homeless stands as a stark warning, not just for those who might find themselves without employment, but for those people who might otherwise dare to resist the Procrustean way of life. Be thankful for your employment or you might have to share the fate of those unfortunate people.

The Lethal Costs of Discipline

Although traumatization may be useful in disciplining the working classes, the heightened levels of stress takes a toll on workers’ health. Unemployment increases workers’ level of mortality.
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A study of younger workers who were part of a mass layoff confirmed the lethal
effect of job loss. These workers had persistently 15 to 20 percent higher mortality rates than others in their cohorts.
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The dread of unemployment creates stresses that affect others besides the workers themselves. Family members and others are drawn into the depression, anger, and even diseases that traumatization inflicts on workers. The recent expression “going postal” suggests how the traumatization of the unemployed can harm people outside the family.

Sado-monetarism threatens health in other ways. Because the purpose of this branch of Procrusteanism is intended to aid the rich at the expense of the poor, nobody should be surprised that it is associated with increases in both poverty and inequality. Richard Wilkinson is at the center of a rich literature that identifies the negative health effects of inequality.
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Here again, the causal link is stress, which inequality spreads throughout society. This stress harms the rich as well as the poor, suggesting further evidence of the dysfunctionality of capitalism, even by the standards of its intended beneficiaries.

Even though traumatization may harm the rich as well as the poor, the initial impact of a sado-monetarist tightening of the economy strikes the jobs of low-wage workers, pushing people who were just getting by into destitution. Over and above stress-related maladies, the poor often live crowded together in unhealthy conditions without nearby sources of good food. Lack of access to quality medical care compounds the health threats of poverty.

The effect on children is most tragic. Recent neurological research has shown that poverty affects the prefrontal cortex of children’s brains.
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This part of the brain is critical for problem solving and creativity. The lead author reported that the damage to this part of the brain was comparable to what might occur from a stroke.

Sadly, the enormous losses caused by the harsh efforts to discipline workers in a capitalist society go unnoticed. As the economy continued to sink in the late 2000s, the number of foreclosures and the increase in unemployment were of the same order of magnitude, but public attention was not equally proportioned.

The press has devoted far more attention to the losses that people have suffered because of the crash of the real estate market and the subsequent destruction of their pension funds. For example, a website featured in the
Wall Street Journal
, Greenspan’s Body Count, tallies deaths linked to the real estate bust, but not to the health effects of traumatization.
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Foreclosures are a tragedy, but so are job losses and the perpetual fear of unemployment.

Earlier forms of organization also had inhuman consequences and defects. One need only think about the widespread use of slavery. Even before slavery took hold in the colonies, the authorities in England applied harsh punishment to their own countrymen who lacked proof of employment. According to a statute of 1572, beggars over the age of fourteen were to be severely flogged and branded with a red-hot iron on the left ear unless someone was willing to take them into service for two years. Repeat offenders over eighteen were to be executed unless someone would take them into service. Third offenses automatically resulted in execution.
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Although some people had qualms about such brutal methods of organizing labor, for the most part such practices seemed both normal and profitable. Only gradually did people recognize that such crude measures represented a barrier to economic development. Similarly, people were slow to realize that the problem with slavery was not that a few slave owners were cruel and sadistic, but rather that the system as a whole was flawed.

The coercive systems of the past ended not because of humanitarian scruples, but because of their inherent inefficiency. For example, Adam Smith partially rested his case for a market society on the grounds of the counterproductive nature of overt coercion, such as with slavery.

Smith was correct that more subtle market coercion is more effective than crude Procrustean measures. However, he failed to develop his insight more deeply, to realize that harsh measures, whether or not they involve physical brutality, are ultimately self-defeating. The same fate awaits marketplace Procrusteanism.

In the future, people may well look back to the present time, wondering why people were so slow to realize the inherent irrationality of
the current system of organizing labor. The responsibility for this wakeup call should lie, in part, with economists, who, as the next chapter discusses, have gone out of their way to obliterate considerations of work, workers, and working conditions.

The Condition of Workers

Economists defined their discipline as a science of choice, built upon an elaborate—albeit unrealistic—theory about how consumers determine what commodities to purchase. Factors such as the influence of other people or advertising are usually excluded from the economists’ theoretical analysis.

Economists extended their science of choice to the workplace, where they grounded their theory on the assumption that the relationship between employer and employee was a voluntary arrangement. Each worker is assumed to decide whether the consumption that an hour of work makes possible is worth more than the sacrifice of an hour of leisure.

Within this theory, what happens in the workplace is a matter of indifference to both workers and economists. The same lack of interest applies to workers’ aspirations or any other aspects of their lives. Even worse, the theory treats each worker and each employer as an individual, excluding any class-based forces. Instead, individual workers
simply choose between using their time for leisure and accepting a wage with which they can purchase commodities.

Economists never conspired to exclude work and working conditions from their theory. They were open in their hostility toward anything concerned with production and the workers who made that production possible—for example, Lionel Robbins, who published the most influential book written on the proper way to do economics, or in his words, “to delimit the subject-matter of Economics.” He expressed contempt for those who veered off the path of transaction-based economics in the direction of work, workers, and working conditions: “We have all felt, with Professor Schumpeter, a sense of almost shame at the incredible banalities of much of the so-called theory of production—the tedious discussions of various forms of peasant proprietorship, factory, organization, industrial psychology, technical education.”
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No mainstream economist has ever directly challenged Robbins’s position.

Instead, they had powerful motives that led them in the same direction. First, they were trying to win professional prestige. Toward this end, economists could represent their simplified choice mathematically, making their theory appear to be scientific. Second, they were also intent on constructing a theory that would respond to (or still better, evade) critics who regarded capitalism as unjust, especially with respect to its treatment of workers. Within this theory, economists were able to put aside any criticisms about unfairness or exploitation.

Thoughtful economists expressed reservations about the realism of this treatment of the workplace. For example, Frank Knight, an influential figure in shaping the conservative Chicago school of economics, warned:

Time does not in any sense measure the alternative or sacrifice, and … its employment in any use is a sacrifice in the first place only because there are other uses for it, which are the real sacrifice; but it is measurable, and our intelligence, forced to have something quantitative to feed upon, like the proverbial drowning man catches at any straw.
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Knight’s readers might be expected to feel more sympathy for the potentially drowning economists than for the workers, whose conditions economists were attempting to obscure.

Economists are not totally unmindful of workers. They agree that workers might be well advised to get more education in order to increase the value of their time. Here, too, the emphasis is on individual responsibility. Alan Greenspan suggested that deficiencies in education were the root cause of inequality. Note that education does not enter into economists’ theory of the relationship between labor and capital. Instead, workers are treated as if they were capitalists, accumulating what economists call “human capital.”

The absence of work, workers, and working conditions leaves a gaping hole in economic theory. Perhaps the most striking reason for including working conditions in any analysis of the economy comes from shocking statistics on industrial accidents. Consider the 1969 testimony of Secretary of Labor George Schultz, a University of Chicago labor economist and dean, who later became Secretary of the Treasury and Secretary of State and then head of Bechtel, the world’s largest construction firm. Schultz was testifying about the extent of industrial accidents during the Nixon administration. He informed Congress that 14,000 workers died annually from industrial accidents. Putting this figure into context, he remarked, “During the last four years more Americans have been killed where they work than in Vietnam.”
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Schultz’s comparison gives new meaning to the concept of class warfare.

Congress enacted the Occupational Safety and Health Act in 1970, the year after Schultz’s testimony. Even so, by 2006, almost 350,000 more workers had died on the job. Despite the decline of employment in dangerous occupations and the rising share of service work, occupational deaths continue at an unconscionably high rate. In its annual Workers’ Memorial Day statement, the Centers for Disease Control reported:

Daily, an estimated 11,200 private-sector workers have a nonfatal work-related injury or illness, and as a result, more than half require a
job transfer, work restrictions, or time away from their jobs. An estimated 9,000 workers are treated in emergency departments each day because of occupational injuries, and approximately 200 of these workers are hospitalized.
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While less dramatic than deaths from injuries, occupational diseases cause almost ten times as many deaths as industrial accidents—about 60,000 per year in 1992.
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For example, over the last decade about 400 coal miners perished on the job. Over the same period, more than 10,000 miners succumbed to job-related diseases, especially black lung disease.
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Although the government does not tabulate such data, the American Public Health Association estimated in 1990 that 350,000 new cases of occupational diseases developed from toxic exposures each year.
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A more recent study estimated that in 2004, an estimated 200,000 people in California alone were diagnosed with a preventable chronic disease attributable to chemical exposures in the workplace; another 4,400 died prematurely as a result. These diseases produced an estimated $1.4 billion in direct and indirect costs. Direct medical costs of chemical and pollution-related diseases among children and workers totaled over $1 billion.
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Economists’ success in reframing the nature of the labor market to exclude matters of work, workers, and working conditions is matched by the media and the law. The media rarely notice deaths in the workplace or the prevalence of poor working conditions. The legal penalties for occupational deaths are remarkably small. The maximum punishment for causing a worker’s death by
willfully
violating safety laws is a six-month sentence, half the maximum for harassing a wild burro on federal lands.
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In this environment, employers find it profitable to cut back on maintenance expenditures. leaving workers vulnerable. A former Justice Department prosecutor lamented that since 1970 “only 68 criminal cases have been prosecuted, or less than two per year, with defendants serving a total of just 42 months in jail.”
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This laxity is even more shocking in light of companies that have been involved in
multiple incidents.
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What is more, the official data probably understate the actual toll that industry takes on workers. One recent study, based on the experience of the state of Michigan, estimated that available government data fails to capture between 60 and 70 percent of occupational injuries and diseases.
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In a Procrustean economy, a unique pathology exists for both work and unemployment. Even though unemployment has deleterious health consequences for individual workers, recessions can actually decrease mortality.
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Being employed might be more stressful than being unemployed!