"The extent of the arbitrary authority of owners and managers over employees is surprisingly neglected by political thinkers, given how much time we spend at work and how little in the polling booth. Elizabeth Anderson provides a much-needed, important, and compelling account of this overlooked subject. Private Government deserves to be widely read and discussed."--Alan Ryan, professor emeritus, University of Oxford

"This is a very exciting and extremely important book that presents a major challenge to philosophers and social scientists to think about the modern workplace as a form of private government. It is strange that, in a liberal society, there is so little discussion of the relations of power that characterize the workplace. Anderson deftly brings together history, economic theory, and philosophy to have just that conversation. This book unsettles some very deep, unjustifiable assumptions we have about the nature and organization of work today."--Alexander Gourevitch, Brown University

Private Government

How Employers Rule Our Lives (and Why We Don't Talk about It)

PRINCETON UNIVERSITY PRESS

Contents

When the Market Was "Left"

Two Images of Market Society

The ideal of a free market society used to be a cause of the left. By "the left," I refer to egalitarian thinkers and participants in egalitarian social movements, starting with the Levellers in the mid-seventeenth century, continuing through the Enlightenment, the American and French Revolutions, and pre-Marxist radicals of the late eighteenth and early nineteenth centuries. In the United States, the association of market society with egalitarianism lasted through the Civil War. We need to recover an understanding of why this was so, to better grasp the importance of evaluating ideals in their social context, and the problems with current ways of thinking about ideals of equality and freedom.

Consider two of the most famous passages ever written about market society. The first, by Adam Smith, sketches an image of market society as a free society of equals: When an animal wants to obtain something either of a man or of another animal, it has no other means of persuasion but to gain the favour of those whose service it requires. A ... spaniel endeavours by a thousand attractions to engage the attention of its master who is at dinner, when it wants to be fed by him. Man sometimes uses the same arts with his brethren, and ... endeavours by every servile and fawning attention to obtain their good will. ... But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and shew them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer. ... It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love. ... Nobody but a beggar chuses to depend chiefly upon the benevolence of his fellow-citizens.

The second passage is by Karl Marx. He recasts Smith's image of the market as a mere portal into relations of domination and subordination:

[The] sphere ... within whose boundaries the sale and purchase of labour-power goes on, is in fact a very Eden of the innate rights of man. There alone rule Freedom, Equality, Property and Bentham. Freedom, because both buyer and seller of a commodity, say of labour-power, are constrained only by their own free will. They contract as free agents, and the agreement they come to, is but the form in which they give legal expression to their common will. Equality, because each enters into relation with the other, as with a simple owner of commodities, and they exchange equivalent for equivalent. Property, because each disposes only of what is his own. And Bentham, because each looks only to himself....

On leaving this sphere of simple circulation or of exchange of commodities, which furnishes the "Free-trader Vulgaris" with his views and ideas, and with the standard by which he judges a society based on capital and wages, we think we can perceive a change in the physiognomy of our dramatis personae. He, who before was the money-owner, now strides in front as capitalist; the possessor of labour-power follows as his labourer. The one with an air of importance, smirking, intent on business; the other, timid and holding back, like one who is bringing his own hide to market and has nothing to expect but — a hiding.

These two passages encapsulate a dramatic change in the egalitarian assessment of market society that took place between the eighteenth and nineteenth centuries. By egalitarian, I refer to an ideal of social relations. To be an egalitarian is to commend and promote a society in which its members interact as equals. This vague idea gets its shape by contrast with social hierarchy, the object of egalitarian critique. Consider three types or dimensions of social hierarchy: of authority, esteem, and standing. In a hierarchy of authority, occupants of higher rank get to order subordinates around. They exercise arbitrary and unaccountable power over their inferiors. In a hierarchy of esteem, occupants of higher rank despise those of inferior rank and extract tokens of deferential honor from them, such as bowing, scraping, and other rituals of self-abasement that inferiors display in recognition of the other's superiority. In a hierarchy of standing, the interests of those of higher rank count in the eyes of others, whereas the interests of inferiors do not: others are free to neglect them, and, in extreme cases, to trample upon them with impunity. Usually, these three hierarchies are joined.

Smith depicts market relations as egalitarian: the parties to exchange interact on terms of equal authority, esteem, and standing. He implies such egalitarian content by contrasting market exchange with begging, a kind of gift exchange in which subordinate parties offer tokens of asymmetrical esteem — "servile and fawning attention" — in return for something they want. The resort to servile fawning supposes that one's interests have negligible standing in the eyes of the other. The prospective benefactor may turn away a beggar just as a master may shoo away his spaniel from the dinner table. The transaction is humiliating to the beggar, and may involve his submission to the other's authority: servility is how servants behave toward their masters. Behind every gift exchange, ostensibly an altruistic affair, lurks dependency, contempt, and subordination. By contrast, in market exchanges with the butcher, the brewer, and the baker, each party's interests have standing in the eyes of the other. Each party expresses this recognition by appealing to the other's interests as a reason for him to accept the exchange. The buyer is not an inferior, begging for a favor. Equally importantly, the buyer is not a superior who is entitled to simply order the butcher, the brewer, or the baker to hand over the fruits of his labor. Buyers must address themselves to the other's interests. The parties each undertake the exchange with their dignity, their standing, and their personal independence affirmed by the other. This is a model of social relations between free and equal persons.

Marx depicts this sunny egalitarian story of market exchange as utterly superficial. The market is a "noisy sphere, where everything takes place on the surface." If this is Eden, it is just before the Fall. The action of real importance takes place once the contract is signed and the time comes to execute it. The worker is now dragged out of Eden into the sphere of production. His employer, like God, curses him to toil by the sweat of his brow. Now it is clear where the parties stand in the order of esteem: the capitalist enjoys an "air of importance," his employee is timid and cringing before him. They stand unequally in the order of authority: the capitalist strides in front, with the employee obligated to follow wherever his employer takes him. And they stand unequally in the order of standing: where the capitalist beams, in expectation of profit from the relationship, his worker "has nothing to expect but — a hiding." The performance of the contract embodies a profound asymmetry in whose interests count: henceforth, the worker will be required to toil under conditions that pay no regard to his interests, and every regard for the capitalist's profit.

What happened between Smith and Marx to reverse the egalitarian assessment of market society? It is not, as some have supposed, a revaluation of self-interest as a motive for relating to others. Smith denies Marx's claim that in market transactions "each looks only to himself." On his account, a successful bargain requires each to consider how they could bring some advantage to the other. Without a sympathetic appreciation for what might interest the other in transacting with oneself, and without acknowledging the independent standing of the other as someone whose property rights must be respected, no bargain will be struck. Smith, no less than Marx, reviled selfishness as a basis for relating to others. What happened, I shall argue, was the Industrial Revolution. Smith wrote at the mere threshold of the Industrial Revolution, well before its implications for relations of production could be fully grasped. Marx wrote in its midst, at a point when workers were bearing its most frightful costs, and enjoying precious few of its benefits. The Industrial Revolution was a cataclysmic event for egalitarians, a fundamental turning point in egalitarian social thought. It shattered their model of how a free society of equals might be built through market society. The history of egalitarianism in the nineteenth century is a history of extraordinary innovation and experimentation with alternative models, some of which rejected market society wholesale, others of which sought various revisions and supplements to it. Most of these experiments — utopian socialism, anarchism, syndicalism, Georgism, communism, democratic state socialism, workplace democracy, to name a few — either failed, were denied a real trial, or never managed to scale up. The most visible successes — notably, social democracy and labor unions — while still with us, are in decline or under stress in our postindustrial, globalized economy.

Intellectually, public discourse is underequipped to cope with these challenges. The Cold War induced a kind of amnesia over what the nineteenth-century struggles were about, presenting a radically reductionist picture of alternatives, especially in the United States. Images of free market society that made sense prior to the Industrial Revolution continue to circulate today as ideals, blind to the gross mismatch between the background social assumptions reigning in the seventeenth and eighteenth centuries, and today's institutional realities. We are told that our choice is between free markets and state control, when most adults live their working lives under a third thing entirely: private government.

My aim is to get a clearer view of what this third thing is, what challenges it poses to the ideal of a free society of equals, and how it might be reformed to enable that ideal to be realized under contemporary conditions. To gain clarity, we need to recover the intellectual context of egalitarian thought before the Industrial Revolution, when the market was "left."

Egalitarianism before the Industrial Revolution: Masterless Men, Levellers, and Locke

The Levellers undertook one of the first egalitarian social movements of the modern world. Arising in the English Civil War and strongly represented in Cromwell's New Model Army, they are best remembered for their calls for constitutional reform, including a nearly universal male franchise, parliamentary representation of districts in proportion to population, abolition of the House of Lords and the lords' privileges, and religious toleration. Notwithstanding their name, given to them by Cromwell, who feared that democratization threatened a mass redistribution of property, the Levellers were also firm defenders of rights of private property and free trade. Captain John Clarke, in the Putney debates, affirmed that the law of nature establishes a right to property. The Third Agreement of the People, promulgated by John Lilburne, William Walwyn, Thomas Prince, and Richard Overton, denied the state the power to "level mens Estates, destroy Propriety, or make all things Common"; to hinder freedom of foreign trade; to exempt anyone from paying their debts; or to enact permanent customs or excise taxes on goods, as these were "extreme burthensome and oppressive to Trade." Lilburne attacked the state-granted monopolies of printing, preaching, and foreign trade as infringing on "the Common right of all the free-men of England" just as much as the recently barred monopolies of soap, salt, leather, and other goods. He included, with full endorsement, the petition of William Sykes and Thomas Johnson against the licensed monopolies of the Eastland merchants, Merchant Adventurers, and other cartels in Londons Liberty in Chains Discovered. Walwyn submitted a systematic argument for free trade to Whitehall.

Given the tendencies of market society to generate inequality in income and wealth, what stake did this egalitarian movement see in promoting private property and free trade? To understand this, we must get beyond a narrow interpretation of egalitarianism in terms of current ideas about distributive justice. Egalitarianism, more fundamentally, is about dismantling or taming social hierarchy. The Levellers' support for free trade formed an essential part of a larger program of liberating individuals from interlocking hierarchies of domination and subordination. They saw in free markets some essential institutional components of a free society of equals, based on their proliferation of opportunities for individuals to lead lives characterized by personal independence from the domination of others.

To see this, we must consider the social order against which the Levellers were rebelling. Early modern England was characterized by pervasive hierarchies of domination and subordination. Nearly all people but the king had superiors, who claimed nearly unaccountable discretionary authority to rule their lives. Lords governed their tenants and retainers, masters governed their servants, bishops their priests, priests their parishioners, captains their sailors, guilds their members, male heads of households their wives, children, and servants.

Government was everywhere, not just in the hands of the organizations we identify today with the modern state. The Anglican Church ran its own system of courts, censorship, and taxation. Church courts regularly excommunicated and fined parishioners for infractions of church regulations, even when that conduct was lawful. The church censored publications it regarded as heretical or blasphemous. It exacted tithes from parishioners, regardless of their religious beliefs. Excommunication had consequences beyond expulsion from the church: by the Test Act, only those receiving Anglican Communion were eligible for public office. Guilds, too, operated their own court system, under which they routinely tried, fined, and jailed members who violated (or who merely refused to offer an oath that they had obeyed) the guild's minute regulations regarding matters such as the prices and quantities of goods for sale, and the location and days on which trading was permitted. Under the common law of coverture, a wife's legal personhood was subsumed under her husband's: she could not own property, make contracts, sue or be sued in her own name. Her husband was legally entitled to all of her wages, to control her movements, and to inflict corporal punishment for disobedience. Divorce was very difficult to obtain. Wives often acquired more leeway than the law recognized: mainly through contestation of their husbands' authority and appeal to custom, and rarely through prenuptial agreements and use of scattered laws and jurisdictions that limited coverture. Nevertheless, to speak of husbands' governing their wives was no mere metaphor. In an era where production was not yet separated from the household, servants — that is, any employees under contract — lived under the government of their employers as subordinate members of an extended patriarchal family. Apprentices were bound to service without pay. Under the common law of master and servant, regular employees had to work an entire year from sunup to sundown before acquiring entitlement to wages. Masters (employers) were free to withhold any amount of pay, without prorating, if their servants missed even a single day of work, or if they judged any part of their employees' work substandard. They were entitled to all of their servants' wages from moonlighting. Anti-enticement laws forbade competing employers to offer contracts to servants under contract to a different master. Again, although custom and market conditions often gave servants more leeway than the law prescribed, they could not be considered free by today's standards.

Various ideologies rationalized these hierarchies. One was the great chain of being. All creatures were linked in a great authoritarian chain of being reaching up to God, it was said, with everyone fixed to their particular link or social rank by birth. Everyone had some creature above and some below their place; even the king and pope were accountable to God; even the lowliest humans had dominion over animals. Breaking ranks would break the chain and unleash catastrophic disorder upon the world, detaching everyone from their connection to God. Another was patriarchalism. The king, as father to his country, stood to his subjects as the father to all the members of his extended family — his wife, children, servants, and slaves. Just as the father enjoyed absolute dominion over the subordinate members of his household, and owned all its property, so the king enjoyed absolute authority over all his subjects, and owned all the land of the realm. A third was the doctrine of original sin. Humanity's inherent proclivities toward sin justified comprehensive external constraint. Every sinner — every person — needed someone with authority over them to keep them in line. Original sin rationalized absolute authority over others, and was the traditional justification for slavery.