What would the workplace look like if workers were truly free? Elizabeth Anderson, a leading theorist of democracy and social justice, joins Nick and Goldy for an exploration of the ethical limits of market, theories of value and rational choice, and true freedom.
Elizabeth Anderson is the Arthur F. Thurnau Professor and John Dewey Distinguished University Professor of Philosophy and Women’s Studies at the University of Michigan. She is the author of Private Government: How Employers Rule Our Lives (and Why We Don’t Talk about It), and a recipient of the 2019 MacArthur Fellowship.
Further reading:
Private Government: https://press.princeton.edu/books/hardcover/9780691176512/private-government
The philosopher redefining equality: https://www.newyorker.com/magazine/2019/01/07/the-philosopher-redefining-equality
Website: https://pitchforkeconomics.com/
Twitter: @PitchforkEcon
Instagram: @pitchforkeconomics
Nick’s twitter: @NickHanauer
Elizabeth Anderson:
There’s millions of different ways to write the rule to the market. And you could write the rule so that instead of empowering just a handful of billionaires, the people at the top, they can actually be empowering the vast majority of people.
David Goldstein:
Hear that Nick, they could write the rules to empower me, not just you.
Nick Hanauer:
I know, I know.
Speaker 4:
From the offices of Civic Ventures in downtown Seattle, this is Pitchfork Economics with Nick Hanauer, one American capitalist take on how we got into this mess and how we can get out.
Nick Hanauer:
I’m Nick Hanauer, Founder of Civic Ventures.
David Goldstein:
I’m David Goldstein, Senior Fellow at Civic Ventures. So Nick, what is the label that I use to describe you as my employer?
Nick Hanauer:
My plutocratic overlord. Well, my benevolent plutocratic overlord.
David Goldstein:
That’s right, benevolent plutocratic overlord.
Nick Hanauer:
Overlord.
David Goldstein:
And you laugh at that, but you admit there’s quite a bit of truth in that statement.
Nick Hanauer:
I am benevolent. I am plutocrat, and I am your overlord.
David Goldstein:
You are, and this gets to the heart of the conversation we’re having today-
Nick Hanauer:
Exactly.
David Goldstein:
… with the political philosopher, Elizabeth Anderson. I don’t know. A year-and-a-half ago, I read her book and it just immediately jumped out at me, yes, yes, this is exactly the world that I see, where she describes in her words the communist dictatorships in our midst. And by communist dictators, she’s talking about people like you.
Nick Hanauer:
Yeah. And we are incredibly fortunate to be able to talk to Elizabeth today who is one of the foremost political philosophers in the world. And her book, Private Government: How Employers Rule Our Lives (and Why We Don’t Talk about It) really is a super important contribution to today’s discourse about political philosophy, but also about economics. How we think about the economy, how we think about relations within the economy, how we think about the role of workers and capital within the economy, all of that stuff. And it should be… Go ahead.
David Goldstein:
I was saying how we think and talk about these things and how they help reinforce the status quo.
Nick Hanauer:
That’s right. And with that, let’s talk to Elizabeth Anderson.
Elizabeth Anderson:
I’m Elizabeth Anderson. I’m John Dewey Distinguished Professor of Philosophy and Women’s Studies at University of Michigan in Ann Arbor. I recently wrote a book called Private Government: How Employers Rule Our Lives (and Why We Don’t Talk about It). And I’m currently writing a book that’s going to be coming out of Cambridge University Press on the history of the Protestant work ethic. So it’s kind of a follow-on book that’s explaining some of the historical roots of our current labor regime and alternatives to it.
David Goldstein:
That sounds fascinating. So I have to tell you Elizabeth that when I read your book, Private Government, it immediately appealed to me because my whole life, I’ve had this deep intuition that wage labor, salaried work was both unnatural and fundamentally unfree. And so, you can…. Sorry, Nick.
Nick Hanauer:
And as Goldie’s employer, I can affirm that he is an insubordinate, difficult…
David Goldstein:
So if you could I guess just start off by giving us a summary of your thesis here.
Elizabeth Anderson:
Yes. So in private government, I’m really doing two things. One is trying to give people a sense of the original appeal of free markets and how that was an ideal that was formed before the industrial revolution. And then how the industrial revolution just changed everything and turned our current beliefs into free markets [inaudible 00:04:36] this something rather different than what they originally wanted to be. So if you read Adam Smith, Tom [Paine 00:04:42], other pre-industrial revolution figures, they saw free markets as a path to practically universal self-employment. And the reason for that is that they thought that if you really had markets free so you don’t have any chartered monopolies from the government, and you get rid of all this government corruption which is rigging the system in favor of the rich, and you break out the gigantic lords of states, that is you have to eliminate the inheritance laws that keep them consolidated, that property would devolve to the most efficient producer which would be the person who earns 100% of the fruits of his labor.
That is the self-employed worker. And so you’d have a society of yeomen farmers and basically self-employed business people. Waged labor would be an extremely marginal feature of such an economy. That idea was carried forth in the United States all the way up to the Civil War. It was basically Abraham Lincoln’s platform, free labor, free labor. It wasn’t just an anti-slavery platform, although it was that. It was also about giving away chunks of capital out west that is the Homestead Act precisely to empower a yeoman farmer class that doesn’t have to take orders from anybody else. And that was the concept of freedom that was originally linked to the market, is that if you are self-employed, you don’t have to answer to anybody else. You are directing yourself.
Or as Lincoln said, “God gave everybody a head and two hands. And I take it that means that he intended that that head govern those two hands.” It was an ideal of individual autonomy and emancipation. But what happened was, with the industrial revolution, huge concentrations of capital, economies of scale made it such that the very small business person just got economically wiped out. The small craftsman, the yeoman farmers, they just got killed. And what arose was the modern employment relationship, the wage labor relationship, where workers basically don’t have any property. They work with their hands that they own themselves. Instead, they have to get a job from an employer and work for a wage.
And I’m not so much concerned in this book with the fact that they’re getting paid a wage rather than say returns on capital. What I’m interested in is, what are the social relationships within the firm? And my argument is the vast majority of firms, those relationships are functionally a dictatorship. The boss runs the company and everybody has to follow whatever the boss says or they get fired. And that’s my problem, is that any kind of dictatorial structure is a structure in which it leaves people open, vulnerable to all kinds of abuse.
David Goldstein:
And you point out that Adam Smith, who’s essentially the patron saint of neoliberalism, didn’t anticipate this. That when he writes about the pin factory, the famous pin factory, it wasn’t really a factory at all. It was a workshop.
Elizabeth Anderson:
Right. I mean they were not… He did worry that in the modern pin factory… First of all, it only had 10 workers in it. So it’s a very small operation. And he did worry that there was a kind of micro division of labor within the pin factory which was stultifying to workers, because one worker might just spend his entire day fitting heads on the top of pins or just sharpening the point. And you’ll see repeated a single operation. And he worried that this scaling would stultify workers and really make for a less fulfilling life. But in principle, you could reorganize a 10-person workshop in a different way more collaboratively among the workers. They could rotate positions so that everyone eventually learns all the skills to make the whole pin and then it wouldn’t be so stultifying. He didn’t think that. But there were later thinkers like John Stuart Mill, and even Karl Marx by the way, who I think had such a system in mind.
Nick Hanauer:
So Elizabeth, let’s take a step back because I really want to explore for those who haven’t read your book I think the really persuasive argument you make about why markets were identified with egalitarianisms a long time ago. I think it’s really worth just reflecting on the fact that 300 years ago, people lived in highly authoritarian circumstances, that everyone except the king was subject to someone that, whether it was parishioners to the church, or indentured servants to their masters, or women to men, or vassals to kings, whatever it was. I mean people, everyone got pushed around in an authoritarian way and in an arbitrary way, and you were at the mercy of people in a very profound way. And so the idea of markets comes along where someone is essentially masterless and that was an incredibly appealing idea. Tell folks about that. I think it’s really worth [inaudible 00:10:34] underscoring that.
Elizabeth Anderson:
This part of the story goes back actually to the mid-17th century. There were all kinds of economic disruptions that were taking place in England at the time which created a group of people who were called at the time masterless men. Because you have perfect competition. Nobody has any power over anyone else. They don’t have any market power. As soon as you sell your goods on the market, it doesn’t mean that you are selling your independence to somebody else. You just get some cash and you can deal with it like you want. So as long as the market is perfectly competitive, and the people who are meeting each other in the market are all independent small business people, then market relations are a plausible model of how you could have a free society of equals, where everyone gets what they need from other people just by meeting at these markets and trading what they’re producing for what everybody else is producing that they want.
David Goldstein:
And by equality, you don’t mean equal in wealth, you mean social equals?
Elizabeth Anderson:
Right. They’re social equals in the sense that everybody recognizes the party they’re interacting as somebody who has rights. You have to persuade them to give up their stuff for what you’re offering. You can’t just order them to hand it over, and you can’t order them around in any other aspect of their life either. They’re a free and independent person. So they’re equal in that sense.
Nick Hanauer:
And in the world before the industrial revolution, that was, if not probable, a plausible scenario for a good society. And indeed the United States was seen as the place in the world where such a society could take root and flower. Then along came the industrial revolution.
David Goldstein:
And we ran out of land. We ran out of land to steal from the natives.
Elizabeth Anderson:
Yeah, I mean that-
David Goldstein:
We stole it all.
Elizabeth Anderson:
… signifies that the American model of a society of free and equal persons was limited strictly to white men. And they got to pursue that idea right at the gross expense of American Indians and of course in the south, slaves. This is actually a deep part of the history of egalitarianism though. I want to stress that is that the idea of a society of equals always starts off being less than universal. And then you have the people excluded have to start a social movement and say, Hey, I hear you’re talking about these highfalutin universal principles, but I haven’t been included. And you see that with the abolitionist movements, with the feminist movement. It’s a demand to be included in this vision, and that typically requires an alteration of the vision that’s being promoted.
David Goldstein:
It’s interesting. You focus… In your book, you talk about ideology and how we have cognitive limitations as humans that make us rely on ideology. We talk about narrative a lot as a shortcut to make sense of the world. What’s interesting is when you talk about… I assume you’re talking about neoliberalism here, the ideology with which we’re viewing the world now.
Elizabeth Anderson:
Yes.
David Goldstein:
It places a constraint on us that actually blinds us to the reality of the workplace. So if you could talk about how important it is to actually even just recognize that we’re being ruled by ideology.
Elizabeth Anderson:
Yes. So look, neoliberalism has a ideological rhetoric of free markets. That’s where we’re free and equal. And what I just described to you was historically how that could possibly be. And it could be on condition that everyone’s self-employed. The industrial revolution wiped out most self-employed people. And indeed, if you look at the statistical abstract in the United States, you can see that rates of self-employment have been steadily declining for well over a century in the United States. And now, they’re below rates of self-employment in a Social Democratic Norway. So that original vision doesn’t work anymore. But neoliberalism keeps on talking as if we’re all free and equal in the market because they haven’t focused on the peculiar features of the labor market.
The labor market’s different from all other markets. If I sell my apples that I own to you, I walk away as free as before or after my apples have been sold. But if I sell my labor to you and you’re my employer, I can not walk away from that transaction. What I really contracted into is a relationship of subordination to my employer who now gets to order me around for most of the day. But it’s even more striking than that in terms of the loss of liberty involved. Because under American labor law, the default presumption is a rule that’s known as employment-at-will. And that means that the boss can fire you for any reason or no reason at all, just completely arbitrarily.
That entails that not only can employers order you around while you’re at work, it means that your boss could fire you for stuff you did while you’re off hours, off duty. Your boss can fire you because they don’t like your entertainment preferences or they don’t like your sexual orientation. Maybe in the latest Supreme Court decision, maybe they’re going to draw a line there. But in general, except for a few categories of discrimination, bosses can hire and fire people on any arbitrary grounds, and that gives them the scope to meddle with people’s private lives.
David Goldstein:
Right. You could fire me, Nick for let’s say my Twitter account.
Nick Hanauer:
Yes. [crosstalk 00:16:43]-
Elizabeth Anderson:
Well, that [crosstalk 00:16:44].
Nick Hanauer:
… come very very close many times.
Elizabeth Anderson:
Yeah.
David Goldstein:
Yeah, I’ll tell you what Nick, we’ve come close to firing you over your Twitter account.
Nick Hanauer:
That’s true. It’s true. It’s true.
Elizabeth Anderson:
No, but that’s actually really important because it means that employees can be coerced into showing up at campaign events for candidates who are favored by their boss. It’s very coercive.
David Goldstein:
So expand on what you mean by private government, because it’s such an important idea.
Elizabeth Anderson:
So any multi-member organization like a firm or like a club is going to need a kind of constitution to it or a way of organizing itself so that decisions are made, can be made, that govern the group. A government is private when the decision makers, the people who run that organization, keep stuff private from the people who are governed under the rules of that organization. So within the workplace, I call the default constitution of the workplace a private government because the C-suite can make decisions that determine how workers are going to have to behave in the workplace. But the workers don’t have any voice in that.
They don’t have any standing to complain, unless they’re represented by a labor union, which is only about 6% of private sector workers. They don’t have any standing at all, and their interests don’t really have to be consulted. So that’s what makes it private is that the rules, the decision making process is kept private from the people who are governed within that organization. It’s like Louis XIV, “L’etat c’est moi,”, “The state is me.” You rabble out there like my subjects. You don’t have anything to do with decision making. That’s what Louis XIV is about. So the government was a private thing for him. It was his private business. And the subjects who had to follow his rules, they didn’t have any say or standing at all.
Nick Hanauer:
suspiciously familiar like someone I know who may be president now.
Elizabeth Anderson:
Yeah.
Nick Hanauer:
At least that’s the way he thinks. But Elizabeth, the alternative to a private government you would say is a democratic government.
Elizabeth Anderson:
But only in the broadest sense. Look, there’s a lot of different ways to organize things. So if you’re small enough, you could run the workplace as a participatory democracy, where every worker is exactly equal and you all make decisions together. Once you scale up, that’s really unworkable. You do need some kind of workplace hierarchy. I know this… Look, I was chair of my department for five years, the philosophy [crosstalk 00:19:51].
David Goldstein:
I’m sorry.
Elizabeth Anderson:
So that [inaudible 00:19:54] I actually became part of management. I was a boss for a while. And the thing about being chair of the department is, there’s a reason why they concentrate responsibility for running the department in one person. Because the truth is that the most of the job of running the department is insanely bureaucratic, and professors don’t want to have to deal with it. There’s tons of stuff. And so if you just had a committee, you can never get everybody on board to make these decisions. It’s such a drag. And so, you’re going to need some kind of hierarchy. Within a university, the hierarchy is pretty loose frankly compared to most workplaces. But generally speaking, you are going to have a hierarchy of offices.
But it doesn’t preclude the workers having some kind of substantial voice in the system, even if they don’t literally elect everybody. So a model that I find pretty attractive is the German model of codetermination which was established in Germany after World War II. And on that system, the workers elect almost half of the members of the board of directors of the corporation, and they also jointly manage the factory floor with representatives of capital interest. So it’s a kind of collaborative mode of government where the workers have a say both at the lowest level of organization as well as at the highest levels on the board. So they have a voice, but it doesn’t mean that it’s a full 100% democracy.
Nick Hanauer:
Of course the neoliberal view is, well, I mean, if you don’t like it, you can quit. So freedom.
Elizabeth Anderson:
Yeah. But the problem is that, what are the options out there? And wherever you go, you’re just entering another dictatorship.
Nick Hanauer:
Right.
Elizabeth Anderson:
So it’s like, suppose [Coney 00:21:56] is eastern Europe before the wall came down and the Iron Curtain came down. And they all decided, Oh yeah, we’ll have free movement of workers between Romania, and Poland, and Czechoslovakia and so forth. It was like, okay, you get your choice now. Well, I’m sorry, all the choices are bad. Right?
Nick Hanauer:
Yeah. And I love your analogy I think in the book which was, just because you could immigrate out of Italy didn’t mean that Mussolini wasn’t a dictator.
Elizabeth Anderson:
Exactly.
Nick Hanauer:
And I think that, particularly in a market environment, which is as consolidated as America’s, the notion that freedom you can quit is just ridiculous. And the ability to quit is not equivalent to the ability to fire the boss most consequentially-
Elizabeth Anderson:
Yeah.
Nick Hanauer:
Right?
Elizabeth Anderson:
Absolutely.
Nick Hanauer:
These relationships are not equivalent because I have the legal right to leave the firm for whatever options I may be able to find. And the truth is that, in the current environment, only a small fraction of workers have great alternatives if they should quit. If you’re a top tier software developer, you have a ton of options, but not if you’re a mid-level employee in at an average firm. And so the power relations are very, very different.
Elizabeth Anderson:
Absolutely, yes. And of course if you look at the lowest tiers of workers like immigrant workers and agricultural worker visas, they’re almost slaves.
Nick Hanauer:
Yeah. No, absolutely.
Elizabeth Anderson:
All kinds of abuses are heaped upon them, because if they ever raised a hint of complaints, they would just be deported out of the country.
Nick Hanauer:
So Elizabeth, we are big fans of markets as long as they are well-constructed. So we believe that markets, if well-managed, can be the greatest creators of both increasing prosperity but also human happiness that the world has yet found. There may be better models, but we have not yet seen them. But the way in which we have organized markets in the United States is vastly imperfect and the way in which we’ve allowed radical inequality to seep into the market system and very troubling amounts of consolidation, all this sort of stuff means that the market actually isn’t serving people, people are really serving the market. What I’m really interested in is how you see the glorious future. If you could paint a picture of how you think the social, political, and economic system should work in the future, we’d love to hear it. Tell us what you think we should do.
Elizabeth Anderson:
Yeah. So I’m totally with you on the indispensability of markets and having generally open markets, competitive markets. But here’s the thing. A rhetorical trick has been played on us when it comes to so-called free markets. Because nowadays, in the hands of neoliberalism, free markets are defined as unregulated markets, and is markets that don’t constrain the biggest players in the marketplace. Whereas the original meaning of free markets, if you go back to Adam Smith for whom I had endless admiration, you really should read him. The Wealth of Nations is one of the greatest books. But you got to read it in conjunction with his great work of moral psychology, the Theory Of Moral Sentiments, which is a beautiful, one of the best books of moral philosophy ever written. The rhetorical trick is this, to think that free markets or so-called neoliberal markets are free markets, that is unregulated markets.
And this is a complete confusion. Every market has needs regulations just to get off the ground. It’s like saying, I’m going to have an unregulated baseball game. Let’s just toss out the rule book and we’ll play baseball. Well, I’m sorry. There is no game without rules. It’s the same with the market. Here’s the other thing, markets as we know them today are really creatures of social engineering. They’re incredibly elaborate pieces of social engineering, and they’ve been engineered by the law. There’s also norms involved which are not legal, but are just ways of going about doing things within the market so that, say for instance, if you were in the Middle East, you have to haggle over prices at every marketplace.
Whereas in the United States, the norm outside of the medical field is that the prices are stamped on the good. And if you end up haggling, you know you’re going to get screwed. And that’s how come the healthcare sector is not a market. And nobody should pretend that it’s a market. Because in a market, You know the price ahead of time. And markets cannot possibly function if you have to buy the good, and only later they tell you how much it costs. But that’s the way our system is working now. And they call this, Oh, yes, it would be horrible interference in the free market if we ran things any other way in the healthcare sector. Well, now I’m sorry. That’s not even a market at all. You can’t make decisions if you don’t know what stuff costs. And for the vast majority of people, you have no idea what your healthcare is going to cost until after you get something. And then, suddenly they hit you with a $20,000 bill that most people can’t afford.
David Goldstein:
And even if you have insurance, you don’t know what’s covered and what isn’t.
Elizabeth Anderson:
No, it’s impossible to tell. In fact, nobody knows until they do an elaborate investigation which of course inflates the cost of healthcare in the United States. It takes an insanely costly system even to figure out what your bill is going to be.
David Goldstein:
This is why everybody loves health insurance and car salesman.
Elizabeth Anderson:
Yeah, you’re right. Exactly. No, it is horrible. You know that you’re going to get shafted because they know more than you do.
David Goldstein:
Yeah.
Elizabeth Anderson:
That’s really the problem. You have radical asymmetrical information and people are taking advantage of you. So the point is that you can always write the rule to the market different. You can write the rules so that everybody actually gets value for money, where you actually need to have… You need to compete. So you should write the rules so that you can’t just let monopolies flourish. Monopolies is one of the biggest problems we have these days, both in the employment sector and in all kinds of contracting sectors that people are only dimly aware of, say with franchises, or even with chicken farmers. Do you know what the contracts look like for chicken farmers?
David Goldstein:
They’re basically [inaudible 00:29:29] now.
Elizabeth Anderson:
Yeah. And it’s the most exploitive thing possible, is that the farmer has to assume all of the risks. They have to buy all of their inputs at prescribed prices and even get the little chicks supplied to them by the same party that buys all their products. So they’re squeezed from both ends, and they’re taking all the risks of bad weather and accidents and so forth. They make almost nothing. It’s a scandal that such an arrangement is permitted. But in fact, it’s absolutely pervasive. And we have to say in tech, Apple wants to charge 30% of revenues. I think Grubhub thinks that it can’t make a profit until it’s grabbing 50% of restaurant revenues. Well, who’s cooking the food? I don’t even see how they could… I don’t even see how this business model could work because they’re going to drive the restaurants out of business restaurants. Restaurants, there are on very small margins.
David Goldstein:
One of the points that you make that I think is really important is that, even in orthodox economics, they acknowledged that the market itself stops at the firm. That is the border of the market. That there is no market within the firm. And as we empower the firm and they become bigger and more monopolistic, you actually have less market.
Elizabeth Anderson:
That’s exactly right. Yes. But even in these quasi-market relationships, the big players are so powerful. They’re essentially dictating terms to the small parties. And so, even though formally it’s still a contractual relationship, there’s very little room for maneuver like in the chicken farmer example. Every last thing they do is dictated to them by Monsanto or whoever’s doing the contract. They have almost no room to maneuver. But my point is that that’s all a function of the way the rules were written. But there’s millions of different ways to write the rules of the market. And you could write the rules so that instead of empowering just a handful of billionaires, the people at the top, they can actually be empowering workers, small business people, the vast majority of people.
David Goldstein:
Hear that Nick, they could write the rules to empower me, not just you.
Nick Hanauer:
I know, I know. I’ll take it under consideration. We’ll talk about it in your next review. Yeah. There you go. That’s-
Elizabeth Anderson:
The biggest scam in the world is to think that deregulation is a thing. It isn’t the thing. There’s regulations that favor the power for people, and there’s regulations that favor regular ordinary people. But there’s no such thing as a market without any regulations at all.
Nick Hanauer:
Yeah. That’s a great point. There is no such thing as deregulation. There’s only, who’s getting more power and who’s getting less power.
David Goldstein:
So speaking of dictatorships, we like to ask the benevolent dictator question. I know you’re a philosopher as opposed to a policymaker. But if we appointed you benevolent dictator with absolute power, no political constraints whatsoever, what might you do to make a freer world for the typical worker?
Elizabeth Anderson:
One thing would be to empower workers within the firm, and it doesn’t necessarily mean that you have full democracy within the firm. But I think we should be tinkering with various models of codetermination and strengthen those models. But here’s the second thing that I think would be worth doing. And that is enhancing people’s access to property, to capital. Right now, our inheritance laws let billionaires just pass the billions down to their kids virtually without constraint. But there’s no real good reason for that. We could rewrite the inheritance rules so that most of it just gets redistributed as capital grants to ordinary people. A couple of decades ago, Bruce [Ackerman 00:34:00] [inaudible 00:34:00] this out, and that was already 20 or 30 years ago. He figured, you could give everyone a universal capital grant of $80,000. And I think that was around [$1990 00:34:11].
On a much smaller economy, imagine what that would be today. It would be a big hunk of change. And one of the things we know now is that people’s prospects are very heavily dependent not just on their income flows at the moment, but on whether they have a fallback position. That is some savings, some capital. It makes a vast difference to people’s wellbeing. Imagine if every kid got a capital grant so that they could start out in life with some decent level of security, that would be pretty remarkable. And let me point out that the original architect of such a proposal was another great hero of mine, Tom Paine. The great American revolutionary actually proposed universal stakeholder grants for all young adults starting off in life that would be collected from essentially property taxes or inheritance taxes on lands, which is the main four property in those days.
David Goldstein:
What do you think, Nick? You’ve signed on to the Giving Pledge if you and your fellow super rich would… Instead of putting that money into charitable foundations, we just taxed it at 90% and redistribute it to Americans?
Nick Hanauer:
I have to say, I’ve never heard that particular idea, but it’s very appealing. The direct transfer of wealth from the very wealthy to everyone else, I’m in total agreement with Elizabeth. It would be really, really good for people, but it would also be yikers at a highly saleable political proposition.
David Goldstein:
I think you can make a pro-market argument for this too. And that is, if you’re just going to redistribute this money to everybody else, the market’s going to decide what to do with that money. Individuals are going to use it as they see fit. Some will waste the money away on luxuries, and others will invest wisely in themselves. And that is a market deciding how that money should be spent as opposed to a handful of really rich people and the people they put in charge of their foundations after they die.
Nick Hanauer:
That’s right, yeah. Well, Elizabeth, this has been a fantastic conversation.
Elizabeth Anderson:
Oh, it’s been really fun. Thanks for inviting me.
Nick Hanauer:
Again, we’re huge fans of your work and feel really privileged to have gotten to chat with you about it. And when your new book is done, we would love to have you on talking about it.
Elizabeth Anderson:
I’d love to come back.
Nick Hanauer:
All right.
David Goldstein:
Well, thank you.
Nick Hanauer:
Thank you so much.
Elizabeth Anderson:
Thanks. It was fun.
Nick Hanauer:
Talk soon.
David Goldstein:
Bye.
Elizabeth Anderson:
Bye.
Nick Hanauer:
What’s just so striking Goldie to me about her analysis is that it just underscores how crazy it is that when the CEO does it, it’s an expression of freedom. But when the democratically elected governor does it, it’s tyranny. How did we get there?
David Goldstein:
Yeah, you know how Nick. It’s the stories we tell ourselves about the way the world works. And I think it’s so overused, but I’ll bring up the matrix. There’s this idea, and yes, it’s a provocative conceit she uses in talking about private government and these. She starts off that chapter and essentially describing a communist dictatorship. And what she’s describing is the profound unfreedoms of the workplace. But what she does is she opens your eyes to this thing we’ve been blinded to, which is that much of our lives are spent in this unfree condition.
So I think it’s really important for people to understand that we don’t have to accept this, that there are different ways to govern the workplace and that the workplace is a kind of government in it of itself. This is a theme we hit a lot. We can change the rules. We can change the rules of the workplace. We can change the rules of the economy. It’s not physics. And in a democracy, we can elect leaders who will pass different laws that will shift that balance of power a little bit back towards workers.
Nick Hanauer:
And I think our strong view is if they did that, it wouldn’t be bad for the economy. It actually would be good for it.
David Goldstein:
Right, because it is a… The market is an institution that is based on pro-social behavior.
Nick Hanauer:
That’s right, and benefits from more participation, not less.
David Goldstein:
Right.
Nick Hanauer:
The less consolidation, not more.
David Goldstein:
Right.
Nick Hanauer:
Higher wages, not lower wages. And more innovation, not less.
David Goldstein:
Positive feedback loop is what we’re talking about. The more people that can fully participate in the economy at all levels, the faster and more prosperous the economy will grow and for everyone. That feeds back in on itself. And so, again, it’s not a long book. It’s actually… We say, Oh, she’s a philosopher. That must mean it’s really difficult. It’s not a difficult book. It’s a fascinating look at the history of market ideology and where we went wrong, and I highly recommend it.
Nick Hanauer:
Absolutely. In the next episode of Pitchfork Economics, we’re going to redefine rural America with economist, Gbenga Ajilore.
Speaker 4:
Pitchfork Economics is produced by Civic Ventures. If you like the show, make sure to subscribe, rate, and review us wherever you get your podcasts. Find us on Twitter and Facebook at Civic Action and Nick Hanauer. Follow our writing on Medium at Civic Skunk Works, and peek behind the podcast scenes on Instagram @pitchforkeconomics. As always from our team at Civic Ventures, thanks for listening. See you next week.