Oren M. Levin-Waldman will discuss his most recent article: “The Meaning of Worker Freedom” By Oren M. Levin-Waldman, Ph.D., on Wednesday, January 31, 2018th at 10am EDT on the Westchester On the Level radio broadcast. Listen “Live” or “On Demand”. Use the following hyperlink … http://tobtr.com/s/10552543 … to listen, make an inquiry, or share your perspective by calling 347.205.9201. Participants are asked to be respectful of all our guests and to stay on topic. This segment will air from 10-11am.
“The Meaning of Worker Freedom” By OREN M. LEVIN-WALDMAN, Ph.D.
We often hear that free societies require free markets. What is the logic of this? Because in a free society individuals need to act on their agency, and unless they can make unfettered choices, they aren’t truly free. A free market economy similarly requires that individuals be able to pursue their self-interests, as this pursuit is a tangible expression of their agency. But in a capitalist market are we truly free?
The key question is free for whom? Some might view a free market economy, or at least the language of a free market, as no more than a rationalization for a particular distribution of power. Those at the top — those who are able to prosper — can be said to be free because they have the resources to make choices while those at the bottom are not because their limited incomes effectively restricts the choices that they can make.
Perhaps we need to distinguish between free markets and the language of free markets. A market place is merely a structure or an arena where economic actors can interact with one another and buy and sell goods and services. In the same marketplace, workers are selling their services which we typically refer to as labor power. This marketplace is said to be free when there is no interference by government. That is, actors can make decisions in the market unfettered by the actions of the state.
The language of a free marketplace really speaks to an ideology that government ought not to have any role in the economic marketplace except to protect private property and enforce contract. Therefore, taxes should be low, if non-existent; regulation should be minimal, i.e. it should ensure that individuals are protected from harm; and there should be no wage floors or unions that artificially inflate wages because they also effectively limit the choices of workers to work for less.
There is no reason to believe that a regulated market would necessarily be unfree. Regulations that prevent harm to others or in some way level the playing field so that others can be assured a measure of opportunity, or at least can be assured equal opportunity, ultimately ensure greater freedom in the broader sense. Markets, after all, fail and actions from the public sector are needed to compensate and maintain markets in the long-term.
Architects of the New Deal during the 1930s were committed to maintaining a free market economy, but recognized that if left to its own devices it would implode under its own weight. Although Marxists desire a different economic structure, they have nonetheless recognized that capitalism requires mediating structures if it is to last. The language of free markets doesn’t so much seek to have free markets as it does a particular version of free markets: one where those in positions of power retain their power and those at the bottom know their place because they are vulnerable.
An unregulated market means that workers are left to the mercy of managers and owners of capital and therefore are not free. Why? Because capitalist markets are about disciplining workers. Because workers do not have the means to live without being dependent on others for income through work, they are forced to conform to the dictates of those who control the means of production or face uncertainty through unemployment and eventual poverty.
Therefore, as income inequality rises, those at the bottom of the distribution become more dependent and ultimately more vulnerable. Consequently, their rights as workers diminish, they become more vulnerable, and unfree because they are more susceptible to being dominated.
Early republican thinkers recognized that wage labor was a form of slavery because workers in the employ of others were subject to the control of others. And in an era before the advent of the welfare state whereby workers had no choice but to accept whatever pay and working conditions there were for survival, they could easily be dominated.
This reality is all the more so in an increasingly global economy whose effect is to push down the wages of those who are particularly lacking in skills. Consider the following: according to the language of free markets, globalism requires that wages fall in order to be competitive and that social programs be cut so that business environments will be more attractive to investment and economic growth. The effect is to only discipline workers more.
It is supremely ironic, then, that those who espouse the language of free markets maintain that this language guarantees workers more freedom because they would have the liberty of contract, in that they could opt to negotiate their wages and working conditions without the interference of the state. But this so-called liberty of contract leaves workers less freedom. Of course, the worker by the language of free markets can always leave and take another job elsewhere when they are exploited.
The exit option is only true in a slack labor market. A worker with few options for survival but to remain in an employment situation where there is exploitation, will only continue to be exploited. Further technological change which forces down the wages of low-skilled workers effectively exploits them more.
How, then, do we address this problem? Can a worker who needs to work for wages ever really be free? Only if that worker is not subject to the control and possible exploitation of his or her employer. This might require more state action; not less. Obviously laws to protect workers may help, but unless workers are involved in the construction of those laws they may not be nearly as effective.
A movement towards greater economic democracy would give workers more voice in the management of the firms they work for. This, of course, would require redefining the meaning of property rights. It also would undermine the efficiency often associated with free markets when decisions that may be good for the firm cannot be made because they are contrary to the interests of workers.
Paying workers a universal basic income (UBI) could result in greater freedom because workers receiving this UBI could more easily opt to leave exploitive employers. Some who espouse the language of free markets will counter that to a certain extent the Earned Income Tax Credit (EITC) which subsidizes low-wage work potentially ameliorates the potential for exploitation. Although based on the idea of a negative income tax as a UBI, one can only qualify if one works, which means that one still has the potential to be exploited.
It would appear that the only option at the moment for ensuring workers greater freedom is a UBI. Of course rising wages might also secure greater freedom, but increasing globalization effectively pushes them down. Only when workers aren’t dependent on employers for basic subsistence can they truly be said to be free. While this may potentially leave workers more dependent on the state, a UBI for all would mean that all are dependent on the state; not just those at the bottom of the distribution. In the end, we as a society will need to determine which is the lesser of the two evils.
Oren M. Levin-Waldman, Professor at the Graduate School for Public Affairs and Administration at Metropolitan College of New York, Research Scholar at the Binzagr Institute for Sustainable Prosperity, as well as faculty member in the Milano School for International Affairs, Management, and Urban Policy at the New School. Direct email to: firstname.lastname@example.org