Private Government: How Employers Rule our Lives and Why We Don’t Talk about It, By Elizabeth Anderson (2019) New Jersey: Princeton University Press, 224 pages. ISBN: 978-0-69117-651-2

Members of the labour movement and the IR community have frequently noted (and railed against) the disconnect between the status of working people as citizens of a democracy and as employees of large private enterprises. In the political arena, working people have constitutionally protected rights. They have the right to participate in the governance of the state. They have the right to elect governors who are responsible to them. When entering the workplace, however, those democratic rights melt away and those persons become subordinates, “order takers” subject to the dictates of bosses to whom their labour is a resource, a commodity, much like capital and land.

The “theory of the firm”, developed by Richard Coase and widely accepted by the dominant clique of contemporary economists, insists that this situation is necessary in order to ensure the productive efficiency on which our high standard of living is based. Leading figures from that tribe admit to no inconsistency between the situation at work and political democracy. The terms of the employment contract, they argue, are the result of negotiations entered into freely between managers of the firm and individual workers who may, if they do not like what is on offer, go elsewhere.

In Private Government, Elizabeth Anderson, a distinguished professor of Philosophy at the University of Michigan, carefully dissects that defense and poses the question: Why, when it is so patently flawed, is that justification so widely accepted? Her answer breaks new ground in our understanding of the philosophical underpinnings of the contemporary labour-management relationship.

Anderson takes us back to 17th century England and the thinking of the so-called Levellers. Prominent writers from that group of “independent householders of the ‘middling sort’” (p. 83) argued in favour of the free market as the road, not only to a higher standard of living but, also, to a greater level of equality and freedom. Free enterprise would break down medieval structures of domination and subordination, and lead to a better life for all, or at least for most.

For about two centuries, that strategy seemed to be working. Rationalizations for a system in which everyone was subject to the largely arbitrary authority of someone over them fell away. As free enterprise advanced, the king lost “absolute authority over all of his subjects” (p. 10); the church lost much of its control of the laity; husbands were denied autocratic control over wives, children and servants. This breaking of the “great chain” of domination and subordination did not result in catastrophic disaster as had been predicted.

Among those who championed the cause of the free market as an egalitarian strategy, according to Anderson, were, in addition to prominent Levellers, Thomas Paine, Adam Smith and Abraham Lincoln. In the context of a world where production operations were generally small and workers in them could look forward to opportunities to become their own boss, the theory seemed to make sense.

Then, the industrial revolution happened. Its dominant effect was the emergence of the large enterprise with workforces that had to be coordinated. For this development to be economically successful, Anderson grants that managers did require considerable leeway to organize production and react effectively to contingencies as they arose. But it did not require Private Government as she, drawing on a passage in Adam Smith’s The Wealth of Nations, defines it.

Here are Private Government’s critical elements (p. 37-39): almost everyone has a superior they must obey; there is no rule of law, instead orders may be arbitrary and can change at any time without prior notice or appeal; superiors are unaccountable to those “they order around”; they are neither elected nor removable by “inferiors” who have no right to complain “in court” about how they are treated, nor do they have the right to be consulted about the orders they are given. There are multiple ranks in the society. The most highly ranked take few or no orders; the lowest “may have their bodily movements and speech minutely regulated for most of the day.” There is no private or personal sphere free from sanction. Everyone lives under surveillance. Since it owns all non-labour means of production and organizes production by central planning, the government is a “communist dictatorship.” It may not execute or imprison anyone but it may “demote employees, cut their pay; assign them inconvenient hours or too many or too few hours; assign them more dangerous, dirty, menial or grueling tasks; increase their pace of work; set them up to fail; and within very broad limits, humiliate and harass them” (p. 55). Its most common sanction is the threat of exile. Individuals are free to leave but “emigration can have severe collateral consequences.” The “vast majority have no realistic option” but to find work in another, equally problematic, dictatorship.

Despite its sanctioning powers, this government mostly secures compliance with carrots. People who follow orders particularly well may expect to be paid more and be promoted. Because it controls communications, the government also has a propaganda apparatus that is capable of persuading many to support it.

“Most workers in the United States,” are governed by such dictatorships, according to Anderson, whose “legal authority” allows them “to regulate workers’ off-hour lives as well—their political activities, speech, choice of sexual partner, use of recreational drugs, alcohol, smoking, and exercise” (p. 39). To support this statement, Anderson offers several concrete examples.

The object of Anderson’s project is to expose these authoritarian institutions, to provide concepts and language for understanding them and to stimulate public discussion about their status. Although she does not ascend a soapbox and rant, her attitude and call for action is clear enough. “Private governments,” she tells us, “impose far more minute, exacting and sweeping regulation of employees than democratic states do…” (p. 63). Indeed, those controls are “unconstitutional for democratic states” to impose on anyone not in jail or military uniform. The task, we are told, “is to replace private government with public government” (p. 65). How is that to be done? “There are four general strategies for advancing and protecting the liberties and interests of the governed under any type of government: exit, the rule of law, substantive constitutional rights and voice” (p. 65-66).

After considering these options, Anderson concludes that “there is no adequate substitute for recognizing workers’ voice in their government.” It is the only option able to “readily adapt workplace rules to local conditions… while incorporating respect for workers’ freedom, interests and dignity” (p. 69).

Anderson does not put forth any well-developed alternative to the contemporary landscape that she describes. She notes that collective bargaining “has been” the primary voice mechanism in the United States but her discussion of it is cursory. She fails to note that although international law heralds collective bargaining to be a fundamental human right that all governments have a duty to effectively “promote” with a view towards it being the dominant method for the establishment of terms and conditions of employment, U.S. governments have failed to act as collective bargaining has declined under increasingly blatant attacks from its opponents. Instead, she briefly canvasses several issues she identifies to be “difficulties (decentralism, adversarialism, employer resistance and union monopoly power) inherent to the U.S. labor union model” (p. 69-70). She might have mentioned that, to the extent that they are problematic, these issues have been either promoted (decentralism) or tolerated (employer resistance) by U.S. governments.

Anderson escapes these criticisms by asserting that her object is “not to defend any particular model of worker participation in firm governance.” It is instead to stimulate “public discourse” that acknowledges “this reality and the costs to workers’ freedom and dignity.” Strategically this might be a good approach. By refusing to offer a preferred alternative, Anderson denies potential critics a target to attack and leaves open for discussion a broad range of alternatives from the multi-level bargaining and national consultation systems of Northern Europe, for example, to the bi-cameral firm governance approach put forth by Isabelle Ferreras in her recent book Firms as Political Entities, Cambridge University Press, 2017.

The core of this book is a lecture that Anderson was invited to deliver at Princeton University. Also included in the package are the comments of four discussants and Anderson’s responses to them. That part of the book does not add a great deal to the central text. Three of the discussants are friendly and offer gentle suggestions. The fourth is a free market economist whose retort is predictable and, to me at least, unconvincing.

Anderson addresses her thesis almost entirely to a U.S. audience but it is, with some modification, also applicable to Canada. We do not have employment-at-will and there are more legal constraints on employers. Nevertheless, most elements of “private government” exist here to some extent and are equally objectionable. The discussion that Anderson wants to stimulate needs to take place in Canada, as well as in the U.S.