The Free Labor Market and Other Capitalist Just-So Stories

Some years ago, I coined the term “vulgar libertarianism” to refer to a particular, egregiously bad form of right-libertarian analysis. I did a long series of posts (“Vulgar Libertarianism Watch”) at my now mostly inactive blog, in which I applied the concept to a considerable volume of absolutely wretched material from the right-libertarian commentariat. I thought I’d pretty well left off beating that particular horse, considering the state of its corpse. But having just stumbled across the most astonishing example of vulgar libertarianism I’ve seen in years — “The Exploitation of Labor and Other Union Myths,” by Mark S. Pulliam (The INDEPENDENT REVIEW, Winter 2019/20) — I can’t resist picking up the old gore-flecked bat for a few more swings.

“Vulgar libertarianism” was, in part, a play on the vulgar Marxism of the Second and Third Internationals, from Engels and Kautsky on, which turned “historical materialism” into a crude self-parody. It was in equal part an allusion to what Marx called the “vulgar political economy” of the generation after Ricardo and Mill. By the latter term, Marx meant that political economy had ceased to be an attempt at the scientific explication of the laws of economics, and the economists had instead become “hired prize-fighters” on behalf of plutocratic interests. Classical political economy was originally a radical critique of the parasitism of landlords and the rent-seeking of mercantile capitalists. But with the triumph of the industrial capitalists in 1830s Britain, the focus of political economy shifted from scientific investigation and a radical challenge to concentrated economic power, to an apology for the status quo.

Here is how I first explained the idea:

This school of libertarianism has inscribed on its banner the reactionary watchword: “Them pore ole bosses need all the help they can get.” For every imaginable policy issue, the good guys and bad guys can be predicted with ease, by simply inverting the slogan of Animal Farm: “Two legs good, four legs baaaad.” In every case, the good guys, the sacrificial victims of the Progressive State, are the rich and powerful. The bad guys are the consumer and the worker, acting to enrich themselves from the public treasury. As one of the most egregious examples of this tendency, consider Ayn Rand’s characterization of big business as an “oppressed minority,” and of the Military-Industrial Complex as a “myth or worse.”

The ideal “free market” society of such people, it seems, is simply actually existing capitalism, minus the regulatory and welfare state: a hyper-thyroidal version of nineteenth century robber baron capitalism, perhaps; or better yet, a society “reformed” by the likes of Pinochet, the Dionysius to whom Milton Friedman and the Chicago Boys played Aristotle [Note — that should be Plato].

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 the 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.”

And Pulliam’s article is 99 and 44/100% vulgar libertarianism — a defense of the current system in terms of “free market principles,” as though it were the kind of free market society which has never actually existed — all the way through.

That’s especially true of the central feature of vulgar libertarianism: its use of the language and theory of free market economics to defend actually-existing capitalism. From beginning to end, Pulliam makes dogmatic pronouncements about the impossibility of labor exploitation in the existing capitalist system — but with qualifiers and subordinate clauses that make it clear he’s referring to a storybook society that never existed

Pulliam states that, “[a]s written by progressive academics, the history of labor unions in America is as full of fiction as Aesop’s fables or the Grimm brothers fairy tales.” But the leftist account of the history of capitalism and of organized labor refers for the most part to a world that actually existed — whereas the “free market system” to which Pulliam pays homage is every bit as fabulous as the land of Cockaigne. His entire world is imaginary. Just for starters:

Self-ownership leads to recognition of the institution of private property. In a free society, one owns what one produces or acquires through consensual exchange. When entering into civil society, pursuant to a fictitious (but essential) social contract, people surrender some of their natural rights in exchange for the protection of laws. Our state and federal constitutions represent the terms of this “bargain.” 

No, historically speaking recognition of the institution of private property follows enclosure of the commons with the help of the state. The idea of property claims arising primarily from putting vacant land to use with one’s own labor was some ahistorical shit Locke came up with to justify the property — acquired through robbery — of the Whig aristocrats who financed his writing. In that, he was a lot like Pulliam.

But that really is just for starters. Look at all the asides he throws in, in his description of how our “free market” society allegedly works: “In a society based on individual liberty, limited government, and the protection of private property….” “in a free market [wages] would be determined by a consensual exchange between buyer (employer) and seller (employee) as the result of competition.” “In a free society, an employment relationship must be between willing parties on terms acceptable to both, without fraud or coercion.” “…in a free society…” “In a competitive market…” “In the world of free markets…” “In any event, is there an inherent inequality between labor and capital? The classical economic model shows otherwise.” (Never mind whether the classical economic model describes anything outside the economist’s head.) “As long as there is competition among buyers and sellers as well as the absence of external coercion…” “Absent monopsony power…” “All that matters is the existence of competition among uncoerced market participants.” And (again): “In a free society…” In every case, his assertion of how things actually work includes a qualifying clause whose conditions have never been met by any society in history.

All the phrases in quotes in the paragraph above describe a mythical society that has never existed outside capitalism’s legitimizing propaganda. The concentration of wealth in a few hands, the separation of labor from ownership of the means of production, and the rise of the wage system, did not occur as the result of the “original accumulation of capital” through individual abstention. The concentrated ownership of land by absentee landlords did not come about through homesteaders mixing their labor with the soil. The predominance of commodity production and exchange, and of the cash nexus, did not come about via “the propensity to truck and barter” or the emergence of specie exchange from “the problem of mutual coincidence of wants.” We are not living in a free market society that was created by a “social contract” in which people agreed to create a limited government for enforcing life, liberty, and property.

None of the defining features of the current capitalist system came about by the means asserted in right-libertarian Just-So Stories, any more than your parents found you under a cabbage leaf.

The overwhelming bulk of land in medieval England, outside the domains of King, Church, and nobility, was common property in the form of open fields to which possessory rights were periodically redivided among villagers, or common pasture and waste. The peasantry was forcibly robbed of its rights of possession over the means of subsistence, first by the gradual enclosure of the open fields in late medieval times, and then by Parliamentary Enclosure of common pasture, wood and waste from the 18th century on at the behest of local landed elites. It was by such means that a propertyless working class was created and thrown into a wage labor market in which their only choice was to accept labor on whatever terms were offered. 

These robberies were carried out in the interest of capitalist farmers who argued explicitly, in the political literature of the time, that the rural population either would not work for wages at all, or would refuse to work for as long hours or as low wages as the propertied classes desired, so long as they had independent access to the means of subsistence. It was through the rise of agrarian capitalism, enclosure, rack-renting and eviction that the wage labor force was first created, ready made for later industrial capitalists to use.

And the state was more than ready, from the earliest enclosures on, to whip and torture the dispossessed peasantry into some form of wage labor. This goes back to the Tudor laws against vagrancy, forcing “sturdy rogues” to accept work on whatever terms offered and cropping their ears — or worse — if they refused any job offered. And in the Industrial Revolution, the Laws of Settlement prohibited workers from leaving their parish of origin on their own to seek work on better terms. Instead, the parish Poor Law authorities loaded up the unemployed by the gross and shipped them across parish lines to be auctioned off to employers in labor-poor areas like industrial Manchester. In addition to that, the English working class in the last decade of the 18th century and the first two decades of the 19th was subjected not only to the Combination Laws but to a whole host of police legislation outlawing friendly societies and all large public gatherings — all enforced by administrative bodies without common  law due process — under the guise of “national security” during the Napoleonic Wars. 

The situation was quite accurately summarized by J. L. and Barbara Hammond:  On behalf of the capitalists English society was “taken to pieces … and reconstructed in the manner in which a dictator reconstructs a free government.” 

Contrary to the myth recited by Mises and others, capitalist accumulation was not financed primarily by the abstention of small masters who lived frugally and worked hard like good Protestants. Where such thrifty and abstemious capitalists actually existed, they were usually fronting for silent partners in the landed oligarchy or the mercantile corporations who provided most of the investment capital. 

So that “free market” relationship between employers and laborers, negotiating wages as equals, “without fraud or coercion,” and blah de blah de blah, Hail Ayn, Mother of Mises, was actually a negotiation between the people who were robbed, and either the robbers or the heirs and assigns of the robbers. And thanks to the state’s enforcement of the “property rights” of the robbers to their stolen loot, and all the ongoing forms of rent extraction and subsidy that exist to this day, the structure of inequality has replicated itself right up to the present.

And virtually all the things Pulliam and other right-libertarians take for granted, in their image of the “natural” free market society, as the result of spontaneous emergence, are likewise the result of imposition from above by overwhelming state force in collusion with the propertied classes. Believe it or not, the individual, fee-simple model of “private property” in land does not go back to Fred and Wilma’s bungalow in Bedrock. The almost universal model of land ownership, in the period from the neolithic revolution to the rise of the state, was the open field village system. It was suppressed by violence — in England by the measures recounted above, in Bengal by Warren Hastings, in Russia by the one-two punch of Stolypin and Stalin, by land clearances in British East Africa, ad infinitum, ad nauseam, world without end, amen. And as David Graeber recounts in Debt, societies organized around commodity exchange and specie currency were likewise imposed — again, violently — by states in the early modern period. 

In short, the entire picture of the world Pulliam presents, of the capitalist system as a “free society” that emerged through a social contract to create a limited government for enforcing property and contracts, with workers negotiating wages with employers based on their productivity in the free market, with no coercion or fraud, all of it facilitated by the division of labor and inventions brought about by those capitalists, is — to put it plainly — a big steaming pile of shit. What we have is a system imposed from the top down, and maintained to the present day, through the massive use of force on a global scale over a period of several centuries. Capitalism, as an actual historical system, did not emerge through the “invisible hand,” but by the iron fist.

But this whitewashing of the actual origins of capitalism and the wage system by no means exhausts all the factual errors in Pulliam’s diatribe. For example, he repeats all the standard right libertarian talking points about labor unions:

A union essentially operates as a cartel, fixing the price of its members’ labor by internal collusion rather than by market competition—just like members of the Organization of the Petroleum Exporting Countries (OPEC) work to increase the price of oil rather than letting the competitive market set the price. The internal price fixing for labor is called “collective bargaining.”

Like OPEC, a labor union threatens to withhold supply if the buyer does not agree to pay the “fixed” price. This withholding is called a “strike.” Unlike OPEC, however, a union attempts to prevent other sellers (who are not members of the cartel) from selling at a lower price, sometimes with the threat of violence. This is called a “picket line.” Strikers not only collectively withhold their own services (which is consensual) but also seek to prevent other workers from crossing the picket line (through force or coercion). Unions call these other workers “strike breakers” or “scabs,” but they are merely sellers willing to accept a lower wage—a function of competition and consensual exchange—which is entirely legitimate in a free society….

Also, unions, unlike OPEC, depend on government coercion. Federal law requires employers to “recognize” unions once they are “elected” by a majority of the employees; requires employers to negotiate exclusively with the union before taking action regarding the employees; prohibits employers from firing employees because of their union involvement; and prohibits employers from replacing striking workers under certain circumstances.

But like everyone else who uses these talking points, he doesn’t know the first thing about the actual history of labor struggle. One of the more amusing “myths” Pulliam sees fit to address is “The Model of Collective Bargaining Used in the Wagner Act Is beyond Reproach” — making it obvious that his imagined target is liberals and not leftists or socialists. 

You wouldn’t know, reading him, that conventional mass strikes and the exclusion of scabs originally weren’t the only, or even the primary, weapon in labor’s arsenal. You’ll find no greater critics of the effectiveness of the conventional strike than in the Industrial Workers of the World. Rather than giving your boss the opportunity to lock you out and hire scabs, it’s far more effective to go on strike on the job by slowing down, working to rule, having sick-outs at random unannounced intervals, or telling the customers all the dirt about how your employer cuts corners on quality.

Reading Pulliam, you’d also have no idea that the Wagner Act didn’t just forbid employers to do certain things. Far more importantly, it forbade workers to do a whole lot of things — namely, all those forms of direct action on the job I enumerated in the previous paragraph, along with a whole lot more. And that was the main point.

The central purpose of the Wagner Act was to domesticate organized labor, by enlisting union bureaucracies as enforcers of labor contracts against direct action and wildcat strikes by their own rank-and-file. It prohibited precisely those labor practices that were most effective — because most disruptive to employers — and limited unions to conventional strikes.

At the time Wagner was passed, the central business component in the New Deal coalition was capital-intensive, export-oriented heavy industry. Given the long planning horizons of mass production industry and its need for predictability, it was extremely vulnerable to disruption — and disruption was exactly what there was a lot of in the period before Wagner. At the same time, given its capital-intensiveness and the predominance of administered pricing in industrial markets, such firms could afford fairly large wage increases without much sacrifice.  

In its substantial provisions, the Wagner regime was virtually identical to the state of affairs under the American Plan’s company unions, developed under the ‘20s model of welfare capitalism. Under the American Plan — a leading proponent of which was GE’s Gerard Swope, also a central figure in FDR’s industrial policy — workers were guaranteed periodic productivity-based wage increases, recognition of seniority and a grievance process. In return, management got official recognition of its right to manage, and the union leadership was enlisted in enforcing contracts and keeping their members in line on the job.

By the way:  The knee-jerk reaction of Pulliam and like-minded right-libertarians will no doubt be to denounce the forms of direct action on the job I discussed earlier as violations of the employer’s rights. But let’s stop for a moment to consider the implications of the labor relation’s status as an incomplete contract. As Samuel Bowles and Herbert Gintis argue,

An employment relationship is established when, in return for a wage, the worker B agrees to submit to the authority of the employer A for a specified period of time in return for a wage w. While the employer’s promise to pay the wage is legally enforceable, the worker’s promise to bestow an adequate level of effort and care upon the tasks assigned, even if offered, is not. Work is subjectively costly for the worker to provide, valuable to the employer, and costly to measure. The manager-worker relationship is thus a contested exchange.

The very term “adequate effort” is meaningless, aside from whatever way its definition is worked out in practice based on the comparative bargaining power of worker and employer. It’s virtually impossible to design a contract that specifies ahead of time the exact levels of effort and standards of performance for a wage-laborer, and likewise impossible for employers to reliably monitor performance after the fact. Therefore, the workplace is contested terrain, and workers are justified entirely as much as employers in attempting to maximize their own interests within the leeway left by an incomplete contract. How much effort is “normal” to expend is determined by the informal outcome of the social contest within the workplace, given the de facto balance of power at any given time. And that includes slowdowns, “going canny,” and the like. 

The “normal” effort that employers are entitled to, when they buy labor-power, is a matter of convention. What constitutes a fair level of effort is entirely a subjective cultural norm, that can only be determined by the real-world bargaining strength of owners and workers in a particular workplace. It’s a lot like the local, contextual definitions (e.g. what constitutes “reasonable expectations” in a particular marketplace) that the common law of implied contract, fraud, etc., would depend on in a common law system absent state regulation. If libertarians like to think of “a fair day’s wage” as an open-ended concept, subject to the employer’s discretion and limited by what they can get away with, they should remember that “a fair day’s work” is equally open-ended.

I suppose Pulliam and like-minded folks could respond by arguing that the worker is morally obligated to work to their maximum effort, and to obey all orders as given, regardless of enforceability. But that doesn’t bear much looking into. The idea of maximum effort is ridiculous; literal maximum effort would lead to injury, or would otherwise be unsustainable over an extended time. And if qualified by “reasonable” or “sustainable,” we’re back to the same subjective test already discussed. As for literal, unquestioning obedience, they probably shouldn’t go there, considering that that’s the basis for the extremely effective tactic of working to rule. In practice, workplace productivity depends on the extent to which workers treat management directives and company policies as damage to be routed around, and keep things going despite management. 

Aside from all that, the threat of even conventional strikes has some value without forcible exclusion of scabs. There are natural rents accruing to the existing workforce’s tacit or situational knowledge of the production process, to the productivity accruing to the “social capital” embedded in the relationships they’ve built up over time, and to the cost of replacing them. The replacement cost is especially high because, given the tendency of power hierarchies to promote information-hoarding by workers, the tacit knowledge of the production process isn’t even in management’s possession. It, along with the social relationships built up by the previous workforce, must be painstakingly rebuilt over a period of years. Mises may have thought the miracle of double-entry bookkeeping turned the “Entrepreneur” into an omniscient planner, but reading Oliver Williamson and other New Institutionalists is useful as an antidote to such nonsense.

If you doubt the role of such tacit knowledge, or the extent to which corporate profit depends on enclosing it and workers’ cooperative intellect for rents, go back and reread the discussion above of the effectiveness of the work-to-rule tactic, in which workers stop correcting for the stupidity of management. 

Other portions of federal labor law, like the prohibition of sympathy and boycott strikes and the Presidential power of imposing “cooling off periods” under Taft-Hartley, are also aimed at clipping the wings of organized labor and depriving it of powers it would have had even without enforced collective-bargaining under Wagner. The great regional general strikes in the pre-Wagner period involved coordination all up and down the supply and distribution chains, with transport workers playing a key role in transforming single-industry strikes into general strikes. The cumulative effect of a concatenation of even partially effective strikes in factories, suppliers, wholesalers, warehouses, retailers, and transport workers refusing to haul scab cargo either from suppliers to factory or from factory to retailer, coupled with consumer boycotts encouraged by strikers, could be quite devastating.

So the Wagner regime, and the rest of federal labor law, were in effect a devil’s bargain in which workers were asked to give up their most effective weapons and instead restrict themselves entirely to declared mass strikes in the periods between the expiration of one contract and the ratification of another. It was like asking the Massachusetts militiamen at Concord to come out from behind the rocks, put on red uniforms and march in parade ground formation. And in return, they were given the same things provided via company unions under the American Plan:  productivity-based pay raises, respect for seniority, and a grievance process. What did employers get out of it? An end to wildcat strikes, slowdowns, random sick-outs, work-to-rule, and the open mouth — all enforced by the union bureaucracy, as partner to management. They got long-term stability, predictability, labor discipline enforced by the unions themselves, and — most important of all — union recognition of “management’s right to manage.”

Even Henry Hazlitt, who originally formulated many of these right-libertarian talking points in Economics in One Lesson, admitted that unions could be useful for price discovery, insofar as imperfect information left employers ignorant of the actual productivity of labor. But then Hazlitt probably deserves a little credit for intellectual honesty, at least compared to Pulliam.

Pulliam’s approach to the history of capitalism is similar hackwork.

Prior to industrialization and the division of labor in the form of specialized trades, nearly every man toiled on the land. If he owned the land outright, the crops he grew were his property. If he toiled on the land of another, he either paid rent or shared his crop with the owner. As trades developed, blacksmiths, cobblers, weavers, and the like either had the resources to acquire their own tools and supplies or had to rely on another to furnish these items—capital goods. In the former situation, he was his own master; in the latter, he was an apprentice or workman in the employ of another. The workman had to share the bounty of his labor with the provider of capital on terms agreeable to both. This is the conceptual origin of the modern employment relationship….

With the advent of the Industrial Revolution, a population that for centuries had subsisted—sometimes barely or not at all—primarily on labor-intensive agricultural production increasingly became engaged in factory production. This was a momentous shift. Technology, enabled by capital investment and the profit motive, transformed the economy. Factories, machinery, innovation, and inventions (including the steam engine) wrought dramatic social changes…. People often relocated to pursue opportunities, and the sheer number of people vastly increased due to sharply declining mortality rates. Capitalism transformed society in many ways, most of them quite positive.

That may be the “conceptual origin” of the employment relationship, in the minds of employers and their hired propagandists. But it’s certainly not the historical origin. 

Pulliam writes as though the immaculate “provider of capital” just happened to be there, in possession of the means of production, and the workman just happened to not be in possession of them, so that these two individuals who just happened to find themselves in this circumstance were left to negotiate — as equals — a division of the labor product “on terms agreeable to both.”

But in reality, the terms of this “sharing” were negotiated in a process — to borrow a phrase popular among right-libertarians — comparable to a wolf and a sheep voting on what to have for dinner. Capital didn’t just happen to be concentrated in the hands of a few employers, and workers didn’t just happen to have only their labor power to sell. There was a history behind these circumstances — a history, as Marx put it, written in letters of blood and fire. I already summarized that history above.

When the autonomist Harry Cleaver teaches his reading course on Capital, he assigns the historical material on primitive accumulation as background before starting his students out at the beginning with use-value, exchange-value, the circuit of capital, etc. The reason is to show that all the talk about necessary labor and surplus labor, the struggle over the working day, and all the rest of it, isn’t just some abstract theory of price formation in political economy. It’s a real power relationship resulting from historic crimes. 

As for the “division of labor” and all those “inventions,” Pulliam ignores — as we have already seen — the question of how it just happened to be the owners of large-scale capital who were in the position of having the capital to invest, and hence of reaping the benefits of all that new productivity. As I argued elsewhere recently, “[e]very single function allegedly performed by capitalists — investing, creating jobs, etc. — is something that could have been done horizontally/cooperatively by workers themselves if capitalists hadn’t preempted those functions.” Capitalists’ money is just “a symbolic marker of their accumulated wealth,” which enables them to preempt the channels of investment, finance, and coordination which might otherwise be organized horizontally by workers themselves. So billionaire capitalists aren’t actually “inventing” anything. As I wrote of Elon Musk:

He bought legal rights to boss around the people who are doing the inventing and developing, along with legal rights to their product. Literally all capitalists do is enclose the social intellect and cooperative labor of those who do the actual inventing, and extract rents from it.

Pulliam, after his extended indulgence in imaginary history, has the gall to write: “It is intellectually dishonest to skip from an agricultural economy to the factory system and deny the factory owner any credit for amassing the capital, devising the machines, and incurring the risk that made the enterprise possible.”

What’s really dishonest is to skip from an agricultural economy to the factory system without asking how the factory owner amassed the capital, how he happened to confront a labor market of landless, propertyless proletarians, or how he wound up with ownership rights to a machine almost certainly “devised” by someone else. And that’s exactly what he does. He literally skips from the agricultural economy to the factory system, and then manufactures a fake history about “social contracts,” “free societies,” and “limited government” to fill in the gaps.  

Pulliam also repeats the dogma, familiar to any regular reader of the polemics at, that “workers will be paid equal to the value of the marginal product of labor” (“absent monopsony power,” that is).

It takes an especial amount of chutzpah to repeat this chestnut after four decades in which real wages have remained stagnant while labor productivity continued to rise — but after, purely coincidentally I am sure, the power of organized labor was broken — and profits and management salaries have skyrocketed several hundred percent.

Mises, for all his faults, was at least honest enough to admit that when an a priori prediction apparently fails to materialize, one should consider the possibility that one of the conditions attached to that prediction has not been met. In this case, the failure of wages to match productivity increases suggests that some or all of the conditions in Pulliam’s subordinate clauses — “absent coercion,” “in a competitive market without monopsony power,” etc. — haven’t been met. And in fact, the respective bargaining power of worker and employer reflect a coercive background, resulting both from past violence and from present state intervention on behalf of employers.

But the problem with marginal productivity isn’t just its application — it’s with the theory itself. As stated by John Bates Clark, marginal productivity theory is essentially circular. The “marginal productivity” of a factor input is what it adds to the final price of the product, which means that whatever a factor owner is able to get away with charging for their “services” is by definition their marginal productivity. So when the owner of one “factor” (capital) extracts rents at the expense of the owner of another factor (labor), as a result of an unequal power relationship, their respective “marginal productivity” is determined by their power relationship. In other words, it’s not so much that profits and wages are determined by the marginal productivity of capital and labor, as the other way around.

Here’s an especially good howler. “Class conflict is a favorite theme for liberals.” This approximates, as close as humanly possible, the direct opposite of the truth about liberalism. Pulliam conflates liberalism with the left, when they are entirely different things. The origins of liberalism lay in the Progressive movement at the turn of the 20th century. It was a direct outgrowth of the rise of the managerial corporation and the complex of other large, bureaucratic institutions that arose to serve its needs.

According to Rakesh Khurana of the Harvard Business School (in From Higher Aims to Hired Hands), the first corporation managers came from an industrial engineering background and saw their job as doing for the entire organization what they’d previously done for production on the shop floor. The managerial revolution in the large corporation, Khurana writes, was in essence an attempt to apply the engineer’s approach (standardizing and rationalizing tools, processes, and systems) to the organization as a system.

And according to Yehouda Shenhav (Manufacturing Rationality: The Engineering Foundations of the Managerial Revolution), Progressivism was the ideology of the managers and engineers who administered the large organizations; political action was a matter of applying the same principles they used to rationalize their organizations to society as a whole….

At the core of Progressivism’s managerialist ethos was the imperative of transcending class and ideological divisions through the application of disinterested expertise. 

In Shenhav’s account this apolitical ethos grew out of engineers’ self-perception: “American management theory was presented as a scientific technique administered for the good of society as a whole without relation to politics.” Frederick Taylor, whose managerial approach was a microcosm of Progressivism, saw bureaucracy as “a solution to ideological cleavages, as an engineering remedy to the war between the classes.” Both Progressives and industrial engineers “were horrified at the possibility of ‘class warfare’” and saw “efficiency” as a means to “social harmony, making each workman’s interest the same as that of his employers.”

We see this even in present-day liberalism. Liberals may chide “bad” billionaires for their greed, but their vision isn’t of a society without billionaires — it’s of a society in which “patriotic billionaires” like Warren Buffett pay their “fair share” of taxes, along with paying a living wage, and everybody gets along. Liberals like Nancy Pelosi, fundamentally, believe that it’s entirely possible to become a billionaire by doing good and without exploiting labor. They want a society that gives the worker a bigger slice of the pie, while still recognizing the legitimacy of profit as the result of entrepreneurial genius. Basically, they just want the capitalism of Henry Ford, without the antisemitic crankery. 

Pulliam, to no one’s surprise, puts the blame entirely on organized labor as the source of violence in labor disputes. But Benjamin Tucker, a principled free market libertarian who actually knew something about the history of capitalism and its functioning, saw things a bit differently. In surveying the violence at Homestead and elsewhere, he argued that the capitalists were the primary aggressors: “the original violation of liberty in this matter is traceable directly to them.” They sat atop a system founded on robbery; their profit depended on privileges, artificial property rights, and monopolies enforced by the state at the expense of labor, and other forms of state intervention that artificially reduced the bargaining power of labor. A free labor market, he said,

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 forge-master 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! 

Pulliam saves the biggest howler of all for his conclusion, in which he argues that, in the forty years since unions were broken through the shift to neoliberal state policies under Reagan and Thatcher — with substantial help from people like him — workers have never had it so good. At a time when Gloomy Guses on the Left see decades of wage stagnation, and a period since 2008 when most new jobs are low-wage, and an entire generation is stuck in unpayable college debt, unpaid internships, precarious jobs, and “entry-level” positions that require masters degrees but pay $15/hr, Pulliam sees an endless carnival of worker empowerment. Why, he breathlessly enthuses,

In the “gig economy” enabled by smart-phone apps and similar technology, many workers prefer the flexible hours of independent-contractor arrangements in lieu of traditional employment. Many employees telecommute, work part-time, or even share jobs—options that were unimaginable in 1935.

It’s only fitting that Pulliam, a showman until the last, closes an article full of fairy tales with the biggest fairy tale of all. I’d normally be skeptical that even a carnival barker like him could find big enough suckers to sell this pitch to. But on further reflection, it’s not the people actually suffering from the stagnant wages, skyrocketing rents and healthcare costs, and mountains of debt who are his marks. It’s the billionaires who shell out the money for this crap.

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