What is “Contract Feudalism”?

Elizabeth Anderson recently coined the term “contract feudalism” to describe the increasing power of employers over employees’ lives outside the workplace.

According to Anderson, one of the benefits that the worker traditionally received in return for his submission to the bosses’ authority on the job was sovereignty over the rest of his life in the “real world” outside of work. Under the terms of this Taylorist bargain, the worker surrendered his sense of craftsmanship and control over his own work in return for the right to express his “real” personality through consumption in the part of his life that still belonged to him. This bargain assumed,

the separation of work from the home. However arbitrary and abusive the boss may have been on the factory floor, when work was over the workers could at least escape his tyranny… [T]he separation of work from home made a big difference to workers’ liberty from their employers’ wills.[1]

Wage labor, traditionally, has involved a devil’s bargain in which you “sell your life in order to live”: you cut off the eight or twelve hours you spend at work and flush them down the toilet, in order to get the money you need to support your real life in the real world, where you’re treated like an adult human being. And out in the real world, where your judgment and values actually matter, you try to pretend that that other hellhole doesn’t exist.

At the same time, Anderson points out, this separation of work from home depends entirely on the relative bargaining power of labor for its enforcement. (I’ll return to this, the central issue, later on.)

The Shift in Power

But it’s apparent that the bargaining power of labor is shifting radically away from workers. For all too many employers, the traditional devil’s bargain is no longer good enough. Employers (especially in the service sector) are coming to view not only the employee’s laborpower during work hours, but the employee himself as their property. White collar and service workers are expected to live on-call 24 hours a day: that thing they used to call “home” is just the shelf they’re stored on when their owner isn’t using them at the moment. And the boss has a claim on what they do even during the time they’re not on the clock: the political meetings you attend, whether you smoke, the things you write on your blog — nothing is really yours. Most people who blog on political or social issues, probably, fear what might turn up if the Human Resources Gestapo do a Google on them. As for the job search itself — good God! You’ve got to account for every week you’ve ever spent unemployed, and justify what use you made of your time without a master. If you were ever self-employed, you might be considered “overqualified”: That is, there’s a danger you might not quite have your mind right, because you don’t need the job badly enough. Not to mention the questions about why you left your past job, the personality profiling to determine if you’re concealing any non-Stepford Wife opinions behind a facade of obedience, etc… It’s probably a lot like the tests of “political reliability” to join the old Soviet Communist Party.

Examples of contract feudalism have been especially prominent in the news lately. The example Anderson herself provided was of Michigan-based Weyco, whose president forbade his workers to smoke “not just at work but  anywhere else.” The policy, taken in response to rising cost of health coverage, required workers to submit to nicotine tests.[2]

Another recent example of “contract feudalism” is the saga of Joe Gordon, owner of the Woolamaloo Gazette blog, who was fired from the Waterstone’s bookstore chain when it came to his bosses’ attention that he’d made the occasional venting post after a particularly bad day at work.[3]

Yet another is a National Labor Relations Board (NLRB) ruling that allowed employers to prohibit employees from hanging out off the job. Here is the gist of it, from a Harold Meyerson piece at the Washington Post:

On June 7 the three Republican appointees on the five-member board that regulates employer/employee relations in the United States handed down a remarkable ruling that expands the rights of employers to muck  around in their workers’ lives when they’re off the job. They upheld the legality of a regulation for uniformed employees at Guardsmark, a security guard company, that reads, “[Y]ou must NOT… fraternize on duty or off duty, date or become overly friendly with the client’s employees or with co-employees.”[4]

The “Vulgar Libertarian” Response and its Errors

Many free market libertarians instinctively respond to complaints about such policies by rallying around the employer. One commenter, for example, said this in response to Elizabeth Anderson’s post at Left2Right blog: “It’s a free market. If you don’t like your employer’s rules, then work somewhere else.” One of the most common libertarian defenses of sweatshops, likewise, is that they must be better than the available alternatives, since nobody is forced to work there.

Well, yes and no. The question is, who sets the range of available alternatives? If the state limits the range of alternatives available to labor and weakens its bargaining power in the labor market, and it acts in collusion with employers in doing so, then the “free market” defense of employers is somewhat disingenuous.

I use the term “vulgar libertarian” to describe this “What’s good for General Motors” understanding of “free market” principles, which identifies the free market with the interests of employers against workers, big business against small, and the producer against the consumer. As I described it in Studies in Mutualist Political Economy:[5]

Vulgar libertarian apologists for capitalism use the term “free market” in an equivocal sense: they seem to have trouble remembering, from one moment to the next, whether they’re defending actually existing capitalism  or free market principles. So we get [a] standard boilerplate article… arguing that the rich can’t get rich at the expense of the poor, because “that’s not how the free market works” — implicitly assuming that this is a free market. When prodded, they’ll grudgingly admit that the present system is not a free market, and that it includes a lot of state intervention on behalf of the rich. But as soon as they think they can get away with it, they go right back to defending the wealth of existing corporations on the basis of “free market principles.”

The fact is, this is not a free market. It’s a state capitalist system in which (as Murray Rothbard put it in “The Student Revolution”) “our corporate state uses the coercive taxing power either to accumulate corporate capital or to lower corporate costs.”[6] As Benjamin Tucker wrote over a century ago:

… It is not enough, however true, to say that, “if a man has labor to sell, he must find some one with money to buy it”; it is necessary to add the much more important truth that, if a man has labor to sell, he has a right to a free market in which to sell it, — a market in which no one shall be prevented by restrictive laws from honestly obtaining the money to buy it. If the man with labor to sell has not this free market, then his liberty is violated and his property virtually taken from him. Now, such a market has constantly been denied, not only to the laborers at Homestead, but to the laborers of the entire civilized world. And the men who have denied it are the Andrew Carnegies. Capitalists of whom this Pittsburgh forgemaster is a typical representative have placed and kept upon the statute-books all sorts of prohibitions and taxes (of which the customs tariff is among the least harmful) designed to limit and effective in limiting the number of bidders for the labor of those who have labor to sell…

… Let Carnegie, Dana & Co. first see to it that every law in violation of equal liberty is removed from the statute-books. If, after that, any laborers shall interfere with the rights of their employers, or shall use force upon  inoffensive “scabs,” or shall attack their employers’ watchmen, whether these be Pinkerton detectives, sheriff’s deputies, or the State militia, I pledge myself that, as an Anarchist and in consequence of my Anarchistic faith, I will be among the first to volunteer as a member of a force to repress these disturbers of order and, if necessary, sweep them from the earth. But while these invasive laws remain, I must view every forcible conflict that arises as the consequence of an original violation of liberty on the part of the employing classes, and, if any sweeping is done, may the laborers hold the broom! Still, while my sympathies thus go with the under dog, I  shall never cease to proclaim my conviction that the annihilation of neither party can secure justice, and that the only effective sweeping will be that which clears from the statute-book every restriction of the freedom of  the market…[7]

But whatever restrictions could he possibly have been talking about? To read mainstream “free market” defenses of existing employment relations, you’d get the idea that the only restrictions on the freedom of the market  are those that hurt the owning classes and big business (you know, the “last persecuted minority”).

In fact, such vulgar libertarian apologetics share a very artificial set of assumptions: see, laborers just happen to be stuck with this poor set of options — the employing classes have absolutely nothing to do with it. And the owning classes just happen to have all these means of production on their hands, and the laboring classes just happen to be propertyless proletarians who are forced to sell their labor on the owners’ terms. The possibility that the employing classes might be directly implicated in state policies that reduced the available options of laborers is too ludicrous even to consider.

It’s the old nursery-tale of primitive accumulation. “ Lenin” of Lenin’s Tomb blog recalls being exposed to it in the government schools:

The illusion of a free and equal contract between employee and employer is one that exerts considerable hold, particularly given the paucity of industrial conflict over the last fifteen years. The thought that the situation  might be rigged in advance, by virtue of the capitalists control of the means of production, is so obvious that it eludes many people who otherwise place themselves on the Left.

In part, this is because people are prepared from an early age to expect and accept this state of affairs. In high school Business Studies class, I was shown along with my class mates a video sponsored by some bank which purported to demonstrate how the division of labour came about. It all took place, it seemed, in a relatively benign and peaceful fashion, with no intruding political questions or economic phases. From the cavemen to cashcards, it was really all about work being broken down into separate tasks which would be undertaken by those most able to do them. Then, finding contact with nearby villages, they would trade things that they were good at making for the things that the other villages were good at making… The only interesting thing about this propaganda video is that it raised not a single eyebrow — as how could it? One is led to expect to work for a capitalist without seeing anything necessarily unjust about it, and one has nothing to compare it to. The worker is taught to sell herself (all those job interview training schemes) without perceiving herself as a commodity.[8]

I had a similar reaction to all those passages on time-preference in Bohm-Bawerk and Mises that just accepted, as a matter of course, that one person was in a position to “contribute” capital to the production process, while another for some mysterious reason needed the means of production and the labor-fund that were so graciously “provided.”

The most famous critic of this nursery-tale, of course, was the state socialist Karl Marx:

In times long gone-by there were two sorts of people; one, the diligent, intelligent, and, above all, frugal elite; the other, lazy rascals, spending their substance, and more, in riotous living. The legend of theological original  sin tells us certainly how man came to be condemned to eat his bread in the sweat of his brow; but the history of economic original sin reveals to us that there are people to whom this is by no means essential. Never mind! Thus it came to pass that the former sort accumulated wealth, and the latter sort had at last nothing to sell except their own skins. And from this original sin dates the poverty of the great majority that, despite all its  labour, has up to now nothing to sell but itself, and the wealth of the few that increases constantly although they have long ceased to work.[9]

But the criticism was by no means limited to statists. The free market advocate Franz Oppenheimer wrote:

According to Adam Smith, the classes in a society are the results of “natural” development. From an original state of equality, these arose from no other cause than the exercise of the economic virtues of industry, frugality and providence…

[C]lass domination, on this theory, is the result of a gradual differentiation from an original state of general equality and freedom, with no implication in it of any extra-economic power…

This assumed proof is based upon the concept of a “primitive accumulation,” or an original store of wealth, in lands and in movable property, brought about by means of purely economic forces; a doctrine justly derided  by Karl Marx as a “fairy tale.” Its scheme of reasoning approximates this:

Somewhere, in some far-stretching, fertile country, a number of free men, of equal status, form a union for mutual protection. Gradually they differentiate into property classes. Those best endowed with strength, wisdom, capacity for saving, industry and caution, slowly acquire a basic amount of real or movable property; while the stupid and less efficient, and those given to carelessness and waste, remain without possessions. The well-to-do lend their productive property to the less well-off in return for tribute, either ground-rent or profit, and become thereby continually richer, while the others always remain poor. These differences in possession gradually develop social class distinctions; since everywhere the rich have preference, while they alone have the time and the means to devote to public affairs and to turn the laws administered by them to their own advantage. Thus, in time, there develops a ruling and property-owning estate, and a proletariat, a class without property. The primitive state of free and equal fellows becomes a class-state, by an inherent law of development, because in every conceivable mass of men there are, as may readily be seen, strong and weak, clever and foolish, cautious and wasteful ones.[10]

How We Got Where We Are Now

In the real world, of course, things are a little less rosy. The means of production, during the centuries of the capitalist epoch, have been concentrated in a few hands by one of the greatest robberies in human history. The peasants of Britain were deprived of customary property rights in the land, by enclosures and other state sanctioned theft, and driven into the factories like cattle. And the factory owners benefited, in addition, from near-totalitarian social controls on the movement and free association of labor; this legal regime included the Combination Acts, the Riot Act, and the law of settlements (the latter amounting to an internal passport system).

By the way: if you think the above passages are just Marxoid rhetoric, bear in mind that the ruling class literature of the early industrial revolution was full of complaints about just how hard it was to get workers into the  factories: not only were the lower classes not flocking into the factories of their own free will, but the owning classes used a great deal of energy thinking up ways to force them to do so. Employers of the day engaged in  very frank talk, as frank as that of any Marxist, on the need to keep working people destitute and deprive them of independent access to the means of production, in order to get them to work hard enough and cheaply enough.

Albert Nock, surely nobody’s idea of a Marxist, dismissed the bourgeois nursery-tale with typical Nockian contempt:

The horrors of England’s industrial life in the last century furnish a standing brief for addicts of positive intervention. Child-labour and woman-labour in the mills and mines; Coketown and Mr. Bounderby; starvation wages; killing hours; vile and hazardous conditions of labour; coffin ships officered by ruffians — all these are glibly charged off by reformers and publicists to a regime of rugged individualism, unrestrained competition, and laissez-faire. This is an absurdity on its face, for no such regime ever existed in England. They were due to the State’s primary intervention whereby the population of England was expropriated from the land; due to the State’s removal of the land from competition with industry for labour. Nor did the factory system and the “industrial revolution” have the least thing to do with creating those hordes of miserable beings. When the factory system came in, those hordes were already there, expropriated, and they went into the mills for whatever Mr. Gradgrind and Mr. Plugson of Undershot would give them, because they had no choice but to beg, steal or starve. Their misery and degradation did not lie at the door of individualism; they lay nowhere but at the door of the State. Adam Smith’s economics are not the economics of individualism; they are the economics of landowners and mill-owners. Our zealots of positive intervention would do well to read the history of the Enclosures Acts and the work of the Hammonds, and see what they can make of them.[11]

Even in the so-called “free market” that supposedly ensued by the mid-19th century, the owners of capital and land were able to exact tribute from labor, thanks to a general legal framework that (among other things) restricted workers’ access to their own cheap, self-organized capital through mutual banks. As a result of this “money monopoly,” workers had to sell their labor in a “buyer’s market” on terms set by the owning classes, and thus pay tribute (in the form of a wage less than their labor-product) for access to the means of production. Thus the worker has been robbed doubly: by the state’s initial use of force to forestall a producer-owned market economy; and by the state’s ongoing intervention that forces him to sell his labor for less than his product. The vast majority of accumulated capital today is the result, not of the capitalist’s past labor and abstention, but of robbery.

So even in the so-called “laissez-faire” 19th century, as Tucker described the situation, the level of statist intervention on behalf of the owning and employing classes was already warping the wage system in all sorts of authoritarian directions. The phenomenon of wage labor existed to the extent that it did only as a result of the process of primitive accumulation by which the producing classes had, in previous centuries, been robbed of their property in the means of production and forced to sell their labor on the bosses’ terms. And thanks to the state’s restriction of self-organized credit and of access to unoccupied land, which enabled the owners of artificially scarce land and capital to charge tribute for access to them, workers faced an ongoing necessity of selling their labor on still more disadvantageous terms.

The problem was exacerbated during the state capitalist revolution of the 20th century, by still higher levels of corporatist intervention, and the resulting centralization of the economy. The effect of government subsidies and regulatory cartelization was to conceal or transfer the inefficiency costs of large-scale organization, and to promote a state capitalist model of business organization that was far larger, and far more hierarchical and bureaucratic, than could possibly have survived in a free market.

The state’s subsidies to the development of capital-intensive production, as the century wore on, promoted deskilling and ever-steeper internal hierarchies, and reduced the bargaining power that came with labor’s  control of the production process. Many of the most powerfully deskilling forms of production technology were created as a result of the state’s subsidies to research and development. As David Montgomery wrote in Forces of Production: A Social History of Industrial Automation,

[I]nvestigation of the actual design and use of capital-intensive, labor-saving, skill-reducing technology has begun to indicate that cost reduction was not a prime motivation, nor was it achieved. Rather than any such  economic stimulus, the overriding impulse behind the development of the American system of manufacture was military; the principal promoter of the new methods was not the self-adjusting market but the extra-market U.S. Army Ordnance Department… The drive to automate has been from its inception the drive to reduce dependence upon skilled labor, to deskill necessary labor and reduce rather than raise wages.[12]

Finally, the decision of neoliberal elites in the 1970s to freeze real wages and transfer all productivity increases into reinvestment, dividends, or senior management salaries, led to a still more disgruntled work force, and the need for internal systems of surveillance and control far beyond anything that had existed before. David M. Gordon’s Fat and Mean[13] refers, in its subtitle, to the “Myth of Managerial Downsizing.” Gordon demonstrates that, contrary to public misperception, most companies employ even more middle management than they used to; and a major function of these new overseers is enforcing management control over an increasingly overworked, insecure, and embittered workforce. The professional culture in Human Resources departments is geared, more and more, to detecting and forestalling sabotage and other expressions of employee disgruntlement, through elaborate internal surveillance mechanisms, and to spotting potentially dangerous attitudes toward authority through intensive psychological profiling.

The state capitalists, since adopting their new neoliberal consensus of the Seventies, have been hell-bent on creating a society in which the average worker is so desperate for work that he’ll gratefully take any job offered, and do whatever is necessary to cling to it like grim death.

To summarize…

… things didn’t just “get” this way. They had help. The reduced bargaining power of labor, the resulting erosion of the traditional boundaries between work and private life, and increasing management control even of time off the clock, are all the result of concerted political efforts.

The fact that we accept as natural a state of affairs in which one class has “jobs” to “give” and another class is forced to take them, for want of independent access to the means of productions, is the result of generations of ideological hegemony by the owning classes and their vulgar libertarian apologists.

Nothing in the present situation is a natural implication of free market principles. As Albert Nock wrote,

Our natural resources, while much depleted, are still great; our population is very thin, running something like twenty or twenty-five to the square mile; and some millions of this population are at the moment “unemployed,” and likely to remain so because no one will or can “give them work.” The point is not that men generally submit to this state of things, or that they accept it as inevitable, but that they see nothing irregular or anomalous about it because of their fixed idea that work is something to be given.[14]

Claire Wolfe pointed out, in her brilliant article “Dark Satanic Cubicles,” that there’s nothing libertarian about the existing culture of job relations:

In a healthy human community, jobs are neither necessary nor desirable. Productive work is necessary — for economic, social, and even spiritual reasons. Free markets are also an amazing thing, almost magical in their ability to satisfy billions of diverse needs. Entrepreneurship? Great! But jobs — going off on a fixed schedule to perform fixed functions for somebody else day after day at a wage — aren’t good for body, soul, family, or society.

Intuitively, wordlessly, people knew it in 1955. They knew it in 1946. They really knew it when Ned Ludd and friends were smashing the machines of the early Industrial Revolution (though the Luddites may not have  understood exactly why they needed to do what they did).

Jobs suck. Corporate employment sucks. A life crammed into 9-to-5 boxes sucks. Gray cubicles are nothing but an update on William Blake’s “dark satanic mills.” Granted, the cubicles are more bright and airy; but they’re different in degree rather than in kind from the mills of the Industrial Revolution. Both cubicles and dark mills signify working on other people’s terms, for other people’s goals, at other people’s sufferance. Neither type of work usually results in us owning the fruits of our labors or having the satisfaction of creating something from start to finish with our own hands. Neither allows us to work at our own pace, or the pace of the  seasons. Neither allows us access to our families, friends, or communities when we need them or they need us. Both isolate work from every other part of our life…

We’ve made wage-slavery so much a part of our culture that it probably doesn’t even occur to most people that there’s something unnatural about separating work from the rest of our lives. Or about spending our entire working lives producing things in which we can often take only minimal personal pride — or no pride at all…

Take a job and you’ve sold part of yourself to a master. You’ve cut yourself off from the real fruits of your own efforts.

When you own your own work, you own your own life. It’s a goal worthy of a lot of sacrifice. And a lot of deep thought.

[A]nybody who begins to come up with a serious plan that starts cutting the underpinnings from the state-corporate power structure can expect to be treated as Public Enemy Number One.[15]

The chief obstacle to the latter process, she wrote, was “government and its heavily favored and subsidized corporations and financial markets…”

How Bad Do the Options Have to Be?

Now before we go on, as a market anarchist, I have to stipulate that there’s nothing inherently wrong with wage labor. And in a free market, employers would be within their rights to make the kinds of demands associated with contract feudalism.

The problem, from my standpoint, is that the reduced bargaining power of labor in the present labor market lets employers get away with it. What deserves comment is not the legal issue of whether the state should “allow” employers to exercise this kind of control, but the question of what kind of allegedly free marketplace would allow it.

The question is, just how godawful do the other “options” have to be before somebody’s desperate enough to take a job under such conditions? How do things get to the point where people are lined up to compete for jobs where they can be forbidden to associate with coworkers away from work, where even squalid, low-paying retail jobs can involve being on-call 24/7, where employees can’t attend political meetings without keeping an eye out for an informer, or can’t blog under their own names without living in fear that they’re a web-search away from termination?

I’m not a friend of federal labor regulations. We shouldn’t need federal regulations to stop this sort of thing from happening. In a free market where land and capital weren’t artificially scarce and expensive compared to labor, jobs should be competing for workers. What’s remarkable is not that contract feudalism is technically “ legal,” but that the job market is so abysmal that it could become an issue in the first place.

As Elizabeth Anderson already suggested in the quote above, the key to contract feudalism is the reduced bargaining power of labor. Timothy Carter puts the alternatives in very stark terms:

where the real power to gain a lion’s share of the mutual benefit lies: with the power to walk away. If one side can walk away from the table and the other side cannot, the party that can leave can get almost anything they want as long as they leave the other party only slightly better off than if there was no deal at all…

What creates an imbalance in the power to walk away? One situation is need. If one side has to make the exchange, their power to walk away is gone.

… For most people, a job is the ultimate need. It from the earnings of job that all other needs are satisfied.

So how can we make the exchange more fair?… The liberal answer is to have the government meddle in the labor-capital exchange…

There is another way. The need for government meddling could end if the balance of negotiating power between labor and capital were equalized. Currently, the imbalance exists because capital can walk away, but labor  cannot.[16]

For a Genuine Free Market

Contrast the present monstrous situation with what would exist in a genuine free market: jobs competing for workers, instead of the other way around. Here’s how Tucker envisioned the worker-friendly effects of such a  free market:

For, say Proudhon and Warren, if the business of banking were made free to all, more and more persons would enter into it until the competition should become sharp enough to reduce the price of lending money to the  labor cost, which statistics show to be less than three-fourths of once per cent. In that case the thousands of people who are now deterred from going into business by the ruinously high rates which they must pay for  capital with which to start and carry on business will find their difficulties removed… Then will be seen an exemplification of the words of Richard Cobden that, when two laborers are after one employer, wages fall, but  when two employers are after one laborer, wages rise. Labor will then be in a position to dictate its wages, and will thus secure its natural wage, its entire product…[17]

The authors of the Anarchist FAQ described the libertarian socialist consequences of Tucker’s free market, in even more expansive terms, in this passage:

It’s important to note that because of Tucker’s proposal to increase the bargaining power of workers through access to mutual credit, his individualist anarchism is not only compatible with workers’ control but would in fact promote it (as well as logically requiring it). For if access to mutual credit were to increase the bargaining power of workers to the extent that Tucker claimed it would, they would then be able to: (1) demand and get  workplace democracy; and (2) pool their credit to buy and own companies collectively. This would eliminate the top-down structure of the firm and the ability of owners to pay themselves unfairly large salaries as well as  reducing capitalist profits to zero by ensuring that workers received the full value of their labour. Tucker himself pointed this out when he argued that Proudhon (like himself) “would individualise and associate” workplaces by mutualism, which would “place the means of production within the reach of all.”[18]

So instead of workers living in fear that bosses might discover something “bad” about them (like the fact that they have publicly spoken their minds in the past, like free men and women), bosses would live in fear lest workers think badly enough of them to take their labor elsewhere. Instead of workers being so desperate to hold onto a job as to allow their private lives to be regulated as an extension of work, management would be so desperate to hold onto workers as to change conditions on the job to suit them. Instead of workers taking more and more indignities to avoid bankruptcy and homelessness, bosses would give up more and more control over the workplace to retain a workforce. In such an economy, associated labor might hire capital instead of the other way around, and the natural state of the free market be cooperative production under the control of the producers.

Translations for this article:

• Portuguese, Feudalismo de Contrato.

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