Henry: A Challenge to Anderson on Firms & the State
The exchanges between Anderson and her commentators raise interesting questions about the relevant differences between the state and the firm in relation to the promotion of freedom. In this blog post, I raise a challenge to Anderson by demonstrating why firms may actually be better at promoting freedoms than the state.
Both types of governments—the state and the firm—are generally oriented toward the promotion of freedom. The state promotes positive, negative, and republican freedom through the maintenance of certain background institutions. The firm promotes positive freedom in the market through the efficient production of goods. Additionally— as Anderson points out—the firm must operate without excessively jeopardizing the republican and negative freedoms of its workers. That said, as Anderson notes, "it is the state that establishes the default constitution of workplace governance" (Anderson 60). For example, economist Tyler Cowen describes how "health insurance, retirement benefits, and immigration status" are legally bound to one's job (Cowen 111).
As philosopher Niko Kolodny explains, "the concern is that, unless care is taken, in giving [a government] justified powers, we also give them unjustified powers" (Kolodny 103). People under a government must take measures to ensure that their freedoms are protected. According to Anderson, "there are four general strategies for advancing and protecting the liberties and interests of the governed under any type of government: (1) exit, (2) the rule of law, (3) substantive constitutional rights, and (4) voice" (Anderson 65-6). Two questions arise: (A) Which strategies are used in the cases of the state and the firm? and (B) Which strategies tend to better promote the freedoms of people under a government?
In the United States, the rule of law, substantive constitutional rights, and voice are generally employed to protect and promote freedom under the state. Anderson writes that "to have to follow due process in making and enforcing laws, and in applying sanctions, provides vital protections against abuses of governors’ discretionary power" (Anderson 130). The Bill of Rights protects classes of rights from infringement by the federal or state governments. Representative democracy is intended to ensure that people have a say in governance. Exit through emigration, on the other hand, is generally not an easy-to-access option in most countries.
Conversely, the threat of exit is typically used to promote freedom under firms. Employees can change or quit jobs at any time, which forces firms to cater to their employees. As economist Tyler Cowen notes, "the desire to attract and keep talent is the single biggest reason why companies try to create pleasant and tolerant atmospheres for their workers" (Cowen 114). That said, as Anderson points out, this means that "the amount of respect, standing, and autonomy [workers] get is roughly proportional to their market value" (Anderson 138). In other words, companies only promote workers' freedoms when it helps their bottom line. Cowen also argues that "the contrast between business governance over workers and political 'rule of law' is a potentially misleading one" (Cowen 114). According to Cowen, laws can often be arbitrary and overbearing, and "the gains for workers and customers from... firing discretion—not just the gains for bosses—outweigh [the] costs" (Cowen 112-3). Exit is not the only way that firm behavior is regulated. Anderson also points out that the state implements "laws regulating corporate governance, workplace safety, fringe benefits, discrimination, and other matters" in order to ensure that firms do not infringe on workers' republican and negative freedoms (Anderson 53).
Anderson chides Cowen for his "professional bias against taking qualitative information, such as workers’ narratives and articulated complaints, seriously" (Anderson 134). As such, I figured that a handful of Pew Research Center studies might be illustrative: while only 38% of U.S. adults are satisfied with the way that democracy is working in the U.S., 51% percent of U.S. workers are extremely or very satisfied with their job overall. According to a Gallup Survey, 88% of adults employed full or part-time are either completely or somewhat satisfied with their job. Anderson is also concerned with the "respect, standing, and autonomy" workers get (Anderson 138). Companies outperform the state in that regard as well. While only 63% of U.S. adults think that the U.S. respects the personal freedoms of its people, 78% of U.S. workers say they are treated with respect at work all or most of the time. Anderson is further concerned with the ability of workers to self-advocate. The problem is likely worse for the state—71% of U.S adults think that the U.S. political system does not allow people like them to have an influence on politics.
There may be confounding factors that contribute to these polling results, and self-reported satisfaction may not be a great proxy for the promotion of freedoms. That said, these Pew Research Center and Gallup opinion polls challenge the premise that firms do a worse job than the government at promoting freedom. They also challenge the assumption that the rule of law, substantive constitutional rights, and voice are more effective strategies than exit for promoting freedom.
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ReplyDeleteSuper interesting post, Henry. The statistics you bring in are illuminating when it comes to the central state-firm contrast that Anderson makes. However, these statistics may not be significant, given the acknowledged incongruence between the state and the firm. The fact that more U.S. adults are satisfied with their jobs than with U.S. democracy makes sense just by circumstances, but it does not mean that job conditions are just. Anderson has pointed out that "the costs of emigration from oppressive private governments are generally lower than the costs of emigration from states" (63), and the option set, however just or unjust it is, is much larger when it comes to choosing a workplace than when it comes to choosing one's country of residence. The mere fact that there are more options when choosing one's place of work indicates a higher chance of choosing a workplace they are somewhat satisfied with than choosing a state they are somewhat satisfied with.
ReplyDeleteFurthermore, countries are obviously much larger than firms. While there are large firms, it does not compare to the size of a country. It is easier to satisfy as many people in a group as possible when the group is smaller. Also, the smaller size of firms compared to states means that firms are comparatively homogenous. A more homogenous population is much easier to satisfy than a heterogenous one.
All of this being said, I wonder if "satisfaction" is really a measure of significance if the "option set" of workplaces is not justified, as Anderson argues on page 61. Sure, workers may be generally satisfied with their work, but this is a relative measure. Let's say I was in a shipwreck and ended up stranded on an uninhabited island for an extended period of time. I would be extremely satisfied if, one day, I found a can of baked beans in the wreckage. But if I found a can of baked beans in our dorm lounge, my satisfaction with the can of beans would be much lower. This goes to show that satisfaction does not imply rightful conditions if all workplace options suck. If one chose the best they could get within an unjust option set, sure, they would be satisfied, but that would not necessarily mean the conditions of the firm they chose are just.
In many ways, the questions that Ella proposes here speak to the questions that Blackburn and Sen raise about what it means to be satisfied, or really what it means to maximize utility. Perhaps satisfaction could be measured by employees considering their wages and if they are sufficient for people to live upon. Another measure of satisfaction could be measured upon whether people's work enable them to have a work life balance. While both of these measures could contribute to overall satisfaction, they do not have to. People value different things, and thus what it means to be satisfied could also be different.
DeleteThank you Ella and Livia for your thoughtful comments. Ella, you rightly stress two key caveats that I acknowledge in my blog post: (1) there is an "incongruence between the state and the firm" and (2) "self-reported satisfaction may not be a great proxy for the promotion of freedoms." That said, I am not sure that these caveats invalidate my argument. I argue that the factors that encourage firms to promote freedom are more effective than the factors that encourage states to promote freedom. This includes things that you mention like the relative costs of emigration, amount of options, and sizes. I argue that these structural factors better contribute to the promotion of freedoms than the constitutional, legal, and democratic protections for which Anderson advocates.
DeleteAs for the second caveat that satisfaction does not measure freedom, Livia, you make a good point that satisfaction covers a wide variety of things that people value. For these reasons, I also include a comparison between questions about respect. As I see it, the survey responses, taken as a whole, seem to indicate that freedoms are better protected under firms than under states. Further, Ella, your can of beans example could just as easily apply to one's choice of state. In fact, as you mention, people have fewer options from which to choose in regards to states. Thus, if anything, it would be more likely that the unjust option set exists for states rather than for firms.
Thus, I still think that the survey responses indicate the importance of structural factors like exit opportunities and plausible alternatives rather than legal protections and voice for promoting freedom under governments.