Freedom in the Economy 2: Cooperative Control

14 Mar

In a previous post, we defended a universal basic income as a freedom-enhancing economic policy. Such a proposal seems to be of the moment. Peter Frase and Mike Konczal discussed it, built off a post Frase wrote defending a basic income and discussing a convergence between right-wing and left-wing defense of it. Despite the apparent convergence between Left and Right, we suspect a potential divergence is on the surrounding economic conditions (h/t Suresh Naidu on this difference). There are many good things about a universal basic income, but it has its limits. For one, a universal basic income is a lot more freedom enhancing if loads of public goods are already provided – roads, primary education, universal healthcare.

More importantly, a basic income is a good but limited instrument for securing economic freedom in workplace relations. It raises bargaining power, and makes it materially possible to exit work. But the freedom to leave work is not fully guaranteed by a basic income, nor is freedom to leave work all there is to freedom in and at work. Some recent debates between Corey Robin (followed up here) and libertarians, especially Jessica Flanigan at Bleeding Heart Libertarians, and a reminder of a post ‘against jobs’ by Peter Frase, have drawn attention to just this point. It is obvious that having the economic means to leave a job, or at least being able survive for a while without a job, does not remove some of the most significant obstacles to leaving a job. We can use economic language and call these ‘sunk costs’ or simply use common sense and point out that spousal employment, schools for one’s children, family networks, social commitments, expertise and re-training requirements, can all majorly raise the cost of leaving a job. Even on its own terms, a basic income might be insufficient to secure the conditions necessary to allow workers to leave a job, or at least make threats to leave credible enough to put off domineering employers.

But that is not even the most significant point, as it is still a matter of how to think about whether or in what ways we are free to leave a job. The deeper point is that the forms of domination and unfreedom that can exist in an economy are heterogeneous and variegated. A basic income, and the freedom to leave and choose among employments, is a crude way of securing overall economic freedom. After all, though a credible threat a worker makes to leave employment might very well forestall some kinds of abuse, it is something of a nuclear option. If the only way to resist coercion in the workplace is by threatening to leave then it is not all that hard for the employer to call the employee’s bluff, especially when many actual cases of coercion are minor. One suspects that, when the main way of guaranteeing freedom from coercion, abuse and intimidation is by threatening to leave, workplace relations become more antagonistic and conflictual. When all you have is a hammer every problem is a nail. If most problems that arise in the workplace fall below the threshold of needing that hammer, there is little for the worker to fall back on. Unless that worker had voice, not merely exit.

Moreover, even if a basic income can create less unequal bargaining power between employee and employer, it is impossible to write contracts that specify all the relevant conditions. Contracts are inherently incomplete for reasons of imperfect knowledge. A million decisions arise in the workplace itself that could not be predicted. The question then is who should have the rights to control these decisions? These ‘residual rights’ as the economist Oliver Hart called them, can be organized so one person monopolizes them, or they could be distributed more democratically. That is to say, the point is not merely that workers should be free to say what they want, there should be power behind their voices. That is a conventional defense for unions, but onecan take the argument further. It is the idea behind cooperative organization and control of work itself. Workplaces in which the assumption of a labor contract is not that you pick your master, but that you become a co-operator, allow workers to enjoy kinds of freedom that simply are not available if their only option is to stay and serve and employer, or leave and serve a different employer. It is only in this way that each can exercise equal power in the day-to-day structure and operation of the workplace.

A final word in defense of basic income despite its limitations. Workplace cooperatives without a universal basic income would be considerably worse than those when each has a basic income. That is because in cooperatives there will be majorities, not unanimities, and the subtler pressures of public opinion. It is always necessary that any individual be able to leave those conditions. Though one suspects those forces would be weaker, and workers more willing to exercise their control rights against popular opinion, if they enjoy the economic security of a basic income. So if a basic income deals with only one dimension of economic freedom, it is also supportive and supported by other dimensions. All in all, though, there is good reason to think that economic freedom is not exhausted simply by guaranteeing non-coerced contracts. How the workplace is organized, who controls daily decisions, is also its own, distinct question.

3 Responses to “Freedom in the Economy 2: Cooperative Control”

  1. brent March 14, 2012 at 2:20 pm #

    We have all been submerged for so long in the neo-liberal vision of workplace domination as a fact of ‘nature’ that your alternative vision brings enormous relief. Attaining it seems remote at present, but it nonetheless helps to direct our struggles. Keep it up!

  2. Anthony Kammer (@akammer) March 14, 2012 at 5:59 pm #

    It is remarkable that so many people even on the left take for granted an undemocratic and hierarchical workplace, as though this had nothing to do with growing income disparities, precarity, etc.

    There are some states that recently passed laws to allow hybrid non-profit / corporate missions such as L3Cs or ‘community interest organizations’. These have a lot more legal flexibility to pursue business strategies that benefit employees and other communities beyond the shareholder. There’s also a federal bill, The National Cooperative Development Act (2011), that would allow greater experimentation in organizational form. It’s yet to be seen whether these organizations will give new constituencies like employees a role in organizational decision-making, but it’s becoming much more feasible.

    Lastly, there are places to look to for better corporate governance models than the US system of minority rule. German corporations under the codetermination system actually have seats for labor on their boards, sometimes approaching 50%.

Trackbacks/Pingbacks

  1. The Real Culture War III: Freedom Beyond Consumption and Equal Opportunity « thecurrentmoment - December 19, 2012

    [...] guaranteed some kind of basic income (a topic we will return to in a future post – but see here and discussions at Jacobin.). Call this the non-competitive view of opportunity. I have an [...]

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