Omission as Damage to Route Around

Seeing Iain Murray’s title, How the State Keeps You Working Long Hoursgot me pretty excited. Especially as I’ve been trying to fuse libertarian concerns with work-critical sentiments for a few years now.

And though the post had potential, it ultimately fell flat.

For one thing, it mainly comes from a non-anarchist perspective. So the chance of this being as radical as I hoped were dashed. Murray also discusses Tim Ferriss and how his book, The Four-Hour Workweek, could aid the structure of corporations. He attempts this even though, as he admits, the book was written with individuals of a lower class standing in mind.

Nevertheless, Murray writes that these recommendations of automation and effectiveness are halted in corporations by, “…processes that make them not just inefficient but ineffective.”

To explain why, Murray turns to two notable economists: Ronald E. Coase and Friedrich Hayek.

Coase studied (among other things) transaction costs and why firms existed. He reasoned that external transactions in the marketplace were of such a cost that firms made sense. But the Hayekian knowledge problems means, as Murray points out, “…that command-and-control structures suffer from a knowledge problem, because the commanders cannot possibly know as much as they need to know to make rational decisions.”

As such, Murray admits that the structure of corporations are largely based on a “master-servant relationship” (his term). He also explains that they exist that way due to Frederick Taylor and his methods of management called “Taylorism”.

After reaching all of these commendable conclusions, we reach a point where the article takes a turn for the worse:

The solution to the knowledge problem … is to use markets … But then we run into the problem Coase identified — transaction costs are higher in markets than in firms. If they weren’t, firms wouldn’t exist. Firms exist until their transaction costs get too high, and then they collapse. Some large companies have avoided this fate by using market-based processes within their organizational structures. The franchising business model also introduces these processes. (emphasis mine)

First, the marketplace corporations have been using are heavily corrupted by state subsidies. These include transportation subsidies, which fellow C4SS writer, Kevin Carson, has written about at FEE as well. These allow corportions to externalize costs while maximizing profits, thus staving off an otherwise inevitable collapse.

Second, Murray’s article uncannily resembles insights from Carson’s other FEE articles. Namely articles like Economic Calculation in the Corporate Commonwealth and Hierarchy or the Market, as well as an article called Taylorism, Progressivism and Rule by Expertswhich touched on the master-servant dynamic Murray mentions.

The omission of Carson’s work damages Murray’s argument in several ways. It undermines his claim for worker empowerment and would’ve helped reinforce his discussion of inefficiency in the corporate structure. It would’ve also given more historical and economic context for why the master-servant relationship exists.

Carsonian insights for future attempts at synthesizing work-skepticism and libertarianism may produce more radical and interesting results. It is my hope that Murray will implement them.

Anarchy and Democracy
Fighting Fascism
Markets Not Capitalism
The Anatomy of Escape
Organization Theory