Episode 199: Guest Elizabeth Anderson on Private Government (Part One)

0:00 Mark: You're listening to the Partially Examined Life, a podcast by some guys who at one point set on doing philosophy for a living, but then thought better of it. Our question for episode 199 is something like, should political science be restricted to talking about the state or about other power relationships as well? And we are joined by Elizabeth S. Anderson, professor at the University of Michigan, to talk about her new book, Private How Employers Rule Our Lives and why We Don't Talk About It. And we'll probably also get into her 1999 article, what is the Point of Equality? For more information, Please check out partiallyexaminedlife.com this is Mark Linsenmayer, Free to Be You and Me in Madison, Wisconsin.

0:35 Seth: This is Seth Paskin, oddly disquieted by being in College Station, Texas.

0:40 Wes: This is Wes Alwan in Cambridge, Massachusetts.

0:43 Dylan: This is Dylan Casey, Respecting Everyone in Madison, Wisconsin.

0:46 Elizabeth: And this is Elizabeth Anderson in University of Michigan, Ann Arbor.

0:50 Seth: Welcome.

0:51 Elizabeth: Thank you. Great to be here.

0:53 Mark: Can you tell us a little about sort of your area of expertise, what you've been talking about these days? Tell the folks more about who you are.

0:59 Elizabeth: I've been teaching at the University of Michigan for 31 years now, and my focus is political philosophy, social epistemology, feminist theory, democratic theory. I think a lot about political economy issues about how to organize markets and property and commerce and things like that from an egalitarian point of view.

1:29 Mark: You were actually there when I was an undergrad, if it's been that long, but I never had any classes with you. I didn't understand at that point what the point of political philosophy was. I think I hopefully evolved since then.

1:42 Seth: Yes, we all hope that, too.

1:46 Mark: So maybe we should just throw out a few initial questions, summarize at a very, very high level, and then we'll let you see which of our many misconceptions you want to start correcting. Guys, who wants to start with that?

1:59 Seth: I will. I've been working in it for more than 20 years now. So my philosophy degree basically served my corporate, I guess, if not ambitions, then at least pretensions. And I actually first heard you interviewed on Russ Roberts podcast Econ Talk, where I thought Russ maybe did not do you the best of service. He was not as generous with you as he could have been, but that's his style. Sometimes I also felt as though you were speaking to maybe one part of the corporate structure, that maybe my experience has not been the same as you describe in your book.

So I'm coming at it partially from the experience of being part of the corporate world, but definitely being a knowledge worker, white collar, however you want to characterize it. So I'm interested in exploring a little bit about that and whether what you describe is accurate to a full extent for, let's just say unskilled manual laborers or. And whether it extends to people in my realm and maybe there's some crossover there. So that's one part of it. And then I'm very interested also in. I thought your article what's the Point of Equality? Was.

I think you're an exceptional writer, and I really appreciated the way you were able to articulate the various threads in the egalitarian literature. And so if we have time or if that's the direction the conversation goes, I'd be very interested in exploring some of those themes.

3:31 Mark: Yeah, let me riff on that. I think it's very tempting with this in a lot of the venues that you've presented at, to take this as a practical proposal.

3:39 Seth: Right.

3:39 Mark: You're saying private government at how that companies, in effect, act like dictatorships, and so somehow the workers need to have more voice. And it gets very quickly into, like, what are you actually proposing? Give us a set of policy proposals. And you say, like, that's not really the point here. The point is to talk about really the conceptual underpinnings of why, according to the predominant paradigms, which you characterize as sort of libertarian within economics and political philosophy. Well, I guess it's why those things are divided, why political philosophy is regarded as applying simply to the state, why government and the state are synonymous.

So a lot of the work that I think we can help you do here, that you can explain to the folks, is to reiterate these points in your book about what conceptually, what ideologically is wrong with the traditional way of looking at things? And with that, you have some helpful apparatus of even just what constitutes an ideology. How these are kind of like a hermeneutic. In other words, they could be helpful. They're models. They're ways that we make sense of things, but they can also blind us to certain things. And so elaborating exactly how that works and the fact that we were able to get into what is the point of equality and get a little more deeply into what are the philosophical things driving you was just a bonus.

4:57 Elizabeth: Why don't we start a little bit by talking about ideology? So ideology on my picture, it's a kind of schematic that we use to represent society because each of us has direct experiential contact with only a small bit of our social order. And so we need these models or abstract representations of how the big structural pieces of our social order fit together. Ideology supplies that. And here I'm using ideology in a neutral sense. But then there's ideology in the pejorative sense. And that's what happens when the pictures we use to understand our society contain distortions or omissions, or sometimes even downright lies, and so make us unable to grasp normatively problematic features of the way our social order works.

And my book, Private Government, is trying to explain how a very pervasive way in which Americans talk about government and markets and the choices before us are omitting a really profound feature of our social order that has problematic features. And when you omit that, what I call private government, which is the nature of corporate governance, then you don't really have an adequate way to criticize what's happening to you. So our current ideology, the way most people talk, the way politicians talk, is that we have only two choices. We can either leave the management of certain problems to the state, which is called government, or we can leave it up to the free market.

And on this ideological representation, on the free market, we're all free and equal. We make all of our choices by individual consent. We decide whether or not we're going to enter some contractual relationship with anyone else. So it's totally voluntary. Whereas the state, on this view, is full of coercion. We don't get a choice. The state just issues us orders, it lays down laws. We could be put in prison for violating them. So in this picture, the market is the realm of freedom and government is the realm of coercion, hierarchy, command, and so forth.

What I think this dichotomous picture of the institutional options before us is omitting is the existence of the firm. The vast majority of people who are employed are employed by some kind of firm. And that firm is a little government. It isn't a market. Economists tell us that the boundary of the firm is defined by the place where market relations end and authority relations or governance relations begin. And that's because if you are in a multi employee firm, you don't have contractual relations with your co workers. The relationships you have with the other people you're working with are ordered by your boss.

And you also don't really have a contractual relationship, even with your boss, in the sense that you don't get to negotiate the terms of your boss's authority or have any say in the orders that your bosses give. Your only choice is to put up with it. Or to leave. That is a form of government. It's not the state, but it is a form of government in that we have a hierarchy where some people can issue orders to other people and can dish out sanctions for failure to comply up to the standards that the commander expects. The omission of that reality, I think, is part of what makes our current political discourse ideological in the pejorative sense, because it renders invisible a major aspect of our lives that has really normatively problematic features.

The main feature being that the typical default government of the firm is what I call a private government. It's a government in which the governed have no voice, their interests don't have to be consulted. Often they're notified of decisions that have an enormous impact on their lives. Without any opportunities to prepare for it, they could just get the pink slip tomorrow right after they've signed a mortgage or bought a car, and they have no recourse. That's private government at work. You're not entitled to know what's going on or have your interests consulted, or have a voice in what the decisions are.

But suddenly, now your boss can dish out major losses to you just because you're part of this large organization that is ordering your life. That's what I wanted to make visible. And I wanted to show why that condition is objectionable and to suggest that we need some reforms and that political philosophy can help us think about that. Because political philosophers think about what a just constitution looks like. And those questions can be applied equally much to the little government of the firm as to the big government of the state.

10:49 Mark: I think there's a distinction often recognized between structural protections and actually felt harms that in. When we talk about government, we talk about, look at the Constitution, it's all about preventing potential abuses. But you can imagine, you know, that we wouldn't have developed this kind of government if we hadn't gone through some periods of some bad monarchs, some monarchs that were abusing those things. If all monarchs were kindly and beneficent and seemed to have the interests of the populace at heart, then there would not have been revolutions like that.

And I think maybe if people aren't feeling this as a pressing social issue, it might be because, well, as you point out, the people that would be doing the arguing are probably in the upper echelon of workers, you know, that actually have more rights, more bargaining power with their employers, more options if they leave their job, are not in as desperate financial circumstances, are more mobile, have all these other things like that. Unless you actually see abuses which is why part of this book is dedicated to pointing out specifically, especially with lower income workers and more replaceable, less specialized skilled workers, that these abuses actually are taking place.

And so therefore, even if the abuses are rare, even if they were rare, it would still be better for us to have structural protections in place. And just getting us to think about that, that is a thing we should be worried about.

12:15 Dylan: We've seen historically the way those revolutions have happened is through labor union changes. Right. That seems to be the way in which you'd see that kind of a strike is a kind of revolt. And even before there were unions, you'd have people striking even without a union. And one way in which I took your point about talking about private government was that is partly a rethinking of what was going on and maybe what we should have been talking about in the economic and labor reforms that have happened in the past, even in the past 150 years, that rather than it being capitalist versus socialist or communist, which has something to do with solving the problem with, let's call it public government solutions, is really understanding that there's a tension between any kind of market like activity or the firm, as you point out, and that there are really multiple governments at work and maybe even a hierarchy between those governments.

That might be something to talk about separately about where private government stands with respect to public government. But I thought that that kind of revision in the way we should have been thinking about those worker revolutions that we've had in the past was an order too.

13:36 Elizabeth: Absolutely. I think it's important to recognize that there is a long history of a labor movement in the United States. Certainly in the mid 19th century, mid to late 19th century, we start to see the rise of labor unions. So right after the end of the Civil War, you have the Knights of Labor who are trying to organize the freed people of the South. And they're actually a remarkable multiracial organization. They're trying to organize blacks and whites alike, although to their discredit they didn't accept the Chinese. So you see early on in American history, the labor movement already underway, but it was also facing enormous amounts of violence.

So the big corporations would hire private police forces and basically just gun down workers on strike. Incredible violence. So there's always been a strong anti worker movement among the corporate heads in American society. And it was really only the Great Depression and World War II, where you saw some degree of union protection. And unions were strong in the post war era for about maybe 30 years. But corporate America was already busy chipping away at its power. And with Reagan being elected in 1980, he did everything in his power to destroy the protections of labor law.

Unions were already in decline ever since the 1948 passage of the Taft Hartley Act. And Reagan basically dealt with unions a near death blow. So now they only represent about 6% of private sector workers. 6 or 6.5%. It's declining for years. Most workers don't have access to a union. But it doesn't mean that they are happy with the conditions of work. It's just now much more difficult for them to freely express themselves because it's too easy to fire them for complaining. Even though officially under the law they're supposed to have freedom of speech to complain about work conditions.

They know perfectly well that in fact they don't have any recourse if they are fired for complaining. And so a lot of them keep a discontented silence. So I wanted to get back to the question of conditions in high tech. I'd like to get some feedback. I mean, it happens to be the case that my brother in law is a big time executive at Amazon, which has a notoriously nose to the grindstone style of work, not just for its warehouse workers and its lower workers, but also for its executives. So I'll just tell you a little story. We were planning to have a little family reunion in Maine and my brother in law was going to come out with his family and you know, I was going to come out with my family and meet up with my parents who are retired in Maine for fourth of July weekend.

And lo and behold, we're on our way to the airport when we get a phone call from my brother in law who says, sorry, I know I had booked this with Amazon, my boss, months ahead of time. They knew I had a vacation coming and they approved it. But now they've told me I got to work on fourth of July. So they just canceled it. And we were very upset since we're really looking forward to seeing him. And we asked them, what's up? You had this booked. And it turned out that Amazon just had decided that its executives had to meet on long run planning for the coming fiscal year.

And I'm saying, but look, did they really have to force people to come to work on fourth of July? That seems really, really unfair. Can't they meet on the 5th? No, Amazon wasn't into that. So he had to eat the cost of his travel and be unable to attend this family reunion with essentially no notice. And I asked him, well, you know, what's going on here. And he says it's the golden handcuffs that is that he's so highly compensated. You know, his boss told him, look, you're free to take a family vacation if you want, but you're not free to return to your job if you do that.

Wow. Yeah, I know. It's pretty tough. And of course, then he'd lose the Amazon stock that they promised him, which only vests if he sticks around for another two years.

18:43 Seth: I must be swimming in that perfect layer of the ocean where the water's not too cold or not too hot called middle management. Or middle management. So I worked for 12 years at Dell, which also has a notorious nose to the grindstone culture for executives, for everybody, which is driven from the top, because that's the way Michael Dell is. He's a hard driver and he expects that of everybody else. But my experience has always been that there's definitely been a priority placed on family to the extent that you give and you give and you give, maybe beyond the boundaries of what would be normally acceptable, but when you need to take that time because, you know, people have had cancer, people, family issues, children with special needs that they've.

It's always been super accommodating as long as you were willing to, like, sacrifice, you know, in the appropriate way. But, you know, beyond that, I was thinking more of your description of the exchange between the employer and the employee. So in your book Private Government, you trace the genealogy from Smith to Marx, pre industrial, post industrial. And this idea that there's an equal exchange between employer and employee and whether it's possible that the labor market can be an actual market of equals who are exchanging, have a fair and transparent exchange of whatever the appropriate medium is.

And what I meant by highlighting about the notion of high tech, or at least my experience, is that I'm wondering if the asymmetry that you describe, which I think, by the way, is completely accurate in many contexts, is a function of labor supply skills and some other factors. Because in the world that I live in, me as an employer and my company as an employer are desperate to keep talent, specifically software developer talent. There's way more jobs out there than there are software developers. And that skill is. It's not ubiquitous, right? It's rare and it's hard to find, and it's hard to get people who want to live in certain places and do that.

You have to go to where they are. And so the demands of that particular labor market seem to be a counterexample to what you described as far as the private government, in the sense that, yes, my company can dictate, you have to take a drug test and you have to do certain other things, and you have to follow these certain kinds of regulations and whatever. But the reality is these developers know that they can do whatever they want because if they get fired or if the company lays them off or whatever, there's another job right around the corner.

21:34 Elizabeth: Sure. So, look, I don't deny that for certain classes of talented, scarce workers, right, they have serious bargaining power. And even as individuals, they can negotiate a better position. Or maybe they don't even have to explicitly negotiate. It's just that the firm knows they better hang on to this talent because it's scarce, so they'll treat them decently. Absolutely. I'm just arguing that, you know, those are the lucky ones. You know, the same thing is true in academia. I think, of all employees, it's really hard to find a better job than my job.

You know, here I am, tenured, academic, got a reputation. I could wrestle a job offer from a peer institution without too much difficulty. I have real bargaining power with the University of Michigan. They know it. I'll be well compensated. But the best thing about my job, actually is it really isn't anything about the money. It's the unbelievable amount of autonomy I have. I get to decide what I'm going to do research on entirely on the basis of what I'm interested in and what I'm passionate about. This is an unbelievable privilege. Almost nobody gets that.

I don't even think most software engineers get that. I mean, maybe some of them just love every project that they're handed.

23:01 Dylan: No, they don't get that.

23:04 Elizabeth: I thought Google maybe gave one day a week where you could just kind of mess with your own thing, and

23:10 Dylan: that's not even true anymore. Google used to have the Google 20% or 10%.

23:16 Elizabeth: Oh, that's gone.

23:17 Dylan: The Google 0.05%. And it was, I think, only true for a certain percentage of Google employees.

23:25 Elizabeth: Tenured academics at elite research universities. It's pretty hard to discern a better job.

23:33 Dylan: That's why everybody loves tenured professors so much. That's why they have such a great reputation in the media.

23:40 Elizabeth: No, but I've known even tenured professors who are oppressed by their chair or by the dean or something.

23:47 Dylan: Oh, sure, yeah.

23:49 Seth: Is a university or an academic organization a firm then?

23:53 Elizabeth: Oh, yeah. So I actually think that there isn't as big a difference between profit and nonprofit as one might think. And the sociological investigations of this have shown what's called a convergence of cultures between profit and nonprofit and government organizations. There's a kind of cultural logic to workplaces that effaces a lot of these differences. I will say that there is still a public private distinction. I think that public universities are rather more transparent about how they operate than private universities. So say if you're still untenured, you have a much better sense of what your chances are and what the procedures are at a public university than a private university. But otherwise, I think they run pretty much by the same rules.

24:45 Dylan: Just to comment on the professorship, I mean, professors are a very broad vice presidential suite within a university. They're not like the C suite in terms of how they operate, but in terms of their autonomy. They.

24:57 Elizabeth: But they're also like such an unusual class of workers. Right? And it's not that many of us, it's strange.

25:05 Dylan: But I'd like to talk a little bit more about private government as distinct from public government and what kinds of distinctions we're making here and if there's a hierarchy there or not, what things are common in between them that make them government, and what's meant by private versus public. Because the way we just talked about it, and especially if we have the model of private government being workplace relations, that means. Means that all of these institutions, the firm, if you think of that as a canonical example would be Amazon or Google or even my medium sized company I'm part of, those are private governments.

But also all of the bureaucracy within our public government is private government, whether it be in federal or state or local. Those are all private government relations and all of the, you know, nonprofits. And basically it seems like any kind of realm of authority that has certain kinds of constraints on a person ends up being private government as distinct from a public government. So I'd like to talk a little bit more about what the realm of private government is as distinct from public government, and then also how private government is really distinguished in its own terms, as opposed to all other kinds of authority relations.

Because there's lots of kinds of authority relations. And I don't think that you mean to say that every kind of authority relation is a private government, save for a specific class of them that are public government. I take you to mean that private government is a specific class of authority relations.

26:39 Elizabeth: I would agree with you there. So there's a. Government is a subset of all authority relations. There's all kinds of authority that is informal, it isn't backed by law, but maybe just by social norms.

26:53 Dylan: Parent, child. Right, right.

26:55 Elizabeth: Parent, child. Well, Actually there is legal backing for parents having authority over their children.

27:01 Dylan: Sure, yeah.

27:03 Elizabeth: But there's a lot more informality and intimacy and affection in those relationships, typically, although not always. And certainly there are cases of incredibly tyrannical parents who do shockingly abusive things to their children. So we can't leave that aside. So in a way that is a kind of a private government, although it might have more, just given that children can't really run their own lives yet, they're not mature enough.

27:32 Dylan: Yeah, I guess I would. I mean, it seems to me that parental relations in authority are much more dominated by social cultural norms and the kinds of limitations that have legal backing on them are more or less the exception rather than the rule. And it certainly isn't structured in such a way as I would think of, like our own public government where you have a const. There isn't a constitution of the family.

27:56 Wes: Right.

27:57 Dylan: That people operate under. Rather there are constraints put on behavior that has to do with sort of relatively gross understandings of what those relationships should be like so as to try to constrain things like horrible abuses of authority. But it's not the same kind of structure of rights that comes into our public government or anything like that. It's not formalized at all.

28:23 Elizabeth: Right. I mean, it's not formalized. Right. And yes, that's quite right. Whereas the employment relationship, actually there's a lot of formality.

28:34 Mark: Well, I want to stress the point that you make that the state, according to your analysis, is constitutive of the employee employer relationship.

28:42 Seth: Right.

28:42 Mark: The state does not invent the family. Exactly right. You could see the state as intervening when it sees, you know, that you've got this natural relation. And when it sees abuse, then maybe there could be some sort of society wide call for the country of which the family is a part to regulate that relationship. But according to your analysis, and this again goes against the normal libertarian way of looking at things, it's not just that in a state of nature somebody employs someone else and then, oh, the government is going to get in the way of that.

It's that you give the example of when you actually have an anarchic sort of situation where it ends up business has to be face to face. It has to be kind of, I show you the money and you give me the whip, I give you the idol. Very no trusting that. You have to have the ability to write down who owns what. You have to have a system of property that's uniform across the society. You have quite a number of things that the state is instrumental is necessary to set up in order to have employment relationships at all. And so in that case, it's not that when we want to regulate and prevent abuse of employees, that it's the state is stepping in.

It's just the state already is setting the terms. We just want the state to set the terms slightly differently.

30:03 Elizabeth: Yeah, I think it's really important to recognize that employment law and all kinds of regulations of the workplace set up the infrastructure for employment in the first place. I can't necessarily stress a large contrast between the employment relation and family relations, because there's an awful lot of legal infrastructure that underwrites the authority of parents over their children. These mostly arise in custody disputes. Right. When things break down. But the same is true in contract law. Right. Stuff happens according to mutual understandings that might not have been written down in the contract until things break down.

And then you got to look to the contract to decide who has what rights. And often people have been working on informal understandings of their relationship at work, and then some dispute arises. And then workers are commonly shocked at how few rights they have when the relationship breaks down because they were working on certain understandings that they thought were shared. And it turns out that when a dispute arises, they are not at all shared. And usually the employer is holding all the cards in that relationship. That's what private government is about.

Who's holding all the authority cards? Well, the government has dealt them out in advance to the employer by default.

31:39 Wes: We should say a little about this use of the word private. Yes, because they're using it in a particular way. Right. So there are state governments, or there are sort of types of states, authoritarian regimes, where they're in essence running a private government as well, in the sense that they keep the affairs of state. They treat that as if it's the private business of the rulers.

32:01 Elizabeth: Quite right. Yes. So we should get clear on the distinction between public and private, because the way it's used in popular political discourse, I think, is really confused the way we typically use it. We identify the public sector with the state and the private sector with a whole array market relations and all kinds of non state relations.

32:27 Dylan: Anything non state.

32:28 Elizabeth: Right, Anything non state. But in fact, the public private distinction doesn't track the state non state distinction. The public private distinction actually tracks the difference between what's your business and what isn't. Okay. So if you are subject to any kind of authority that treats your interests and how that government runs, how that authority runs, it's none of your business. Then you are subject to private government. Whereas if how that authority operates is something that the governed have a voice in, an interest in, have rights to know about how it's operating, then it's a public government. It is a public thing to the people who are governed. And that goes back to the original understanding of what the public private distinction was about.

33:24 Dylan: I like that, the kind of distinction that you're making, I mean, so I'm thinking that in making laws, as a public government makes laws, and insofar as the citizen, I have a way to know how those laws are being made and what laws are being suggested and have a voice through a representative in that. That's sort of what I mean by public government. And along with that also comes rights associated with my interaction with that. And also on the side of public government, they're able to invoke sanctions that, including incarceration, including violence against me, and that private government generally is not.

There's all kinds of things that I think of as public government mainly in the form of bureaucracy, which my distance in understanding that and negotiating that those things in public government is much, much further away. Would those be more like private government relations, or are those just another form of public government relations, or.

34:29 Elizabeth: So I think what you're pointing out is that the public private distinction isn't exactly a dichotomy, but more of a spectrum.

34:37 Dylan: Sure.

34:38 Elizabeth: So any kind of government could be more or less accountable to the governed. So you mentioned, for instance, there are some bureaucracies that seem to operate without any regard for the impact of their decisions on the people regulated by them, even though, formally speaking, these bureaucracies exist under a democracy which is supposed to be responsive to the will of the people. So, yes, so I agree that there are these pockets of relatively private government that can arise within otherwise public or democratic governments.

35:19 Dylan: Well, so that last thing, it just occurred to me, something that is interesting is that I might have said that public government before this conversation, before reading your book, that public government is sort of in the realm of rights, in between individual entities. So I am a citizen of a country that's really divided by a landmass, and there's a government over that, and that is defying the relations amongst those peoples, and there is authority over those people regarding their persons. And that, in fact, I would have then classified kinds of governments there as democratic governments, oligarchic governments, authoritarian governments, that kind of thing. And all of them would have been forms of government. But when you use the word public government, it really means democratic government. So that an authoritarian government really isn't a public government at all.

36:16 Elizabeth: Quite right.

36:17 Mark: I like the distinction, though, that Liz makes between the different types of hierarchies. So there's authority, which is the ability to order subordinates around, but then there's also standing, which is a matter of whether the government has to pay attention to the interests of the citizenry. So I think you could have a monarchy where, yeah, it is a monarch, the monarch is in charge and maybe even has arbitrary and unaccountable power, but still it's a constitutional monarchy, and the monarch is required, on pain of being deposed or something like that, of considering as objectively as possible the interests of the citizenry. So it seems like you could. It doesn't have to be democracy, it just has to actually pay attention to the interests of the governed. And that would still be public in some ways.

37:11 Elizabeth: Let me put it this way. If the monarch really has arbitrary power and just wake up one day and decree something, then the people under that government, under that monarchy, don't really have independent standing. They're just living at the whims of the monarch. And the monarch might in fact, have some measure of benevolence and so happen to decide to take the people's interests into account. But that's not the same as having standing, which I take to require being entitled to have one's interests considered. And that would require, in the normal course of things, for the people also to have some voice, because how would anyone know what their interests are if they're not entitled to express their interests and have that voice in government?

So that's why I think public government, it has to have some democratic elements. It might not be fully democratic, but it's got to have some element in it where the voice of the governed is heard and carries some weight in decision making.

38:21 Wes: So I think part of the complication here is that there are different senses of restrictions on authority, some of them strictly legal and then others practical. And I think some of your critics kind of seize on this. So, for instance, in the case of a monarch, whether as a matter of technical legality, they can act on their whim. And I think it's de Tocqueville, right, who says this, but correct me if I'm wrong, they tend not to. And so, in fact, a monarchy can actually be consistent with a high degree of freedom, even though it's not consistent with a high degree of equality, because the monarch is essentially restricted by the threat of being deposed, by the countervailing force of the.

The nobles, and by Popular dissatisfaction, I don't know. So correct me if I'm wrong about that, but I think it becomes complicated when you get into the question of how whim and authority is restricted socially and practically through social as opposed to legal forces and all of that stuff.

39:19 Elizabeth: So most of the focus of my book is on the formal features of the employment relation. And of course within that relation there can be all kinds of informal pressures that prevent dictatorial employers from exercising the full extent of their authority as bosses. No doubt that's true. Of course that mechanism works better, as we mentioned before, with highly talented workers who are scarce in the marketplace. So that kind of normative pressure works a lot better for workers at the top than at the bottom of the hierarchy. The more a worker is just filling a function that is interchangeable with any number of other workers, say assembly line work, for instance.

The more replaceable you are, the more empty your threats of quitting are. And because the exit threat doesn't really carry much weight, those are the workers who are most vulnerable to abuse because there's no counter pressure on the employer against exercising the full weight of their authority. And even worse than that, there's even very little pressure against abuse like sexual harassment and wage theft, forcing workers to work off the clock, which is pretty routine in the retail sector and many other sectors of low paid work.

40:51 Wes: Yeah, this is where I thought your response to Tyler Cowen was very useful and fun to read.

40:56 Mark: We should clarify that, just the structure of the book. So it's two lectures that you gave and then four responses, four essays by different intellectuals too, historians and Tyler Cowen's the economists that were among them, and then your responses to them. So I thought that was very gutsy or perhaps just a way to easily get a longer book, but to actually include their criticisms right in there. And rather than just anticipating what you think people are are going to say about it, actually just putting what they say in there. I thought that was great.

41:25 Wes: To be a public as opposed to a private intellectual, you have to be answerable, right?

41:32 Elizabeth: No, I agree completely. I think that's right and I actually think that it makes discourse a lot livelier when you see the objections articulated by somebody who really believes in them. It's sort of a standard John Stewart Mill point. It's much harder to get up the enthusiasm and sharpness to articulating objection in the most forceful manner if you're just conjuring an imaginary opponent out of your head. Much better to have a real live opponent there that you can have a dialogue with.

42:03 Wes: Yeah, And I just thought, you know, in your response to Tyler Cowen in particular, yeah, the litany of sort of the disempowerment of the average worker in the United States. It's pretty shocking. And I think it's just not something. I mean, I think this is part of how the, the ideology that you describe leverages itself. You also just talk about the historical elements of that, the ways in which the free market did. Actually there was an egalitarian hope to that. But I think today when you have an economist academic who's well off thinking about this stuff, or anyone else who's in the upper middle class or has kind of a white collar job and does well, it's easy to simply be blind to the fact that most people are in pretty dire circumstances when it comes to employment.

I think you talked about the percentage of women waitresses that are sexually harassed. And what are they going to do? Their one power is to exit the job for what, another job in which everything circumstances are entirely the same. So it's something that even though I in some sense was aware of it, just to have it spelled out that way, I think, I don't know, I get the sense that Americans are not as aware of that as they should be.

43:11 Elizabeth: I agree completely. But a big reason why is that we see so little discourse about it. Politicians hardly ever talk about how workers get abused in the workplace. The media doesn't talk about it. I remember growing up, this was in the 1970s, I was a kid, but I tune in to the news broadcast in the evening and it was routine that they used to have. For any issue concerning workers, they would always have a labor representative speak out about various workers issues. Now all the news, it's business news, but it's never workers news. And this includes even the supposedly left leaning media like New York Times.

You rarely see the New York Times, they got all business section. I actually read it pretty regularly. They very rarely raise workers issues. Occasionally they do, but it's surprising how rare it is given how pervasive the problems are. And I think the decline of labor unions has made it difficult to get the message out occasionally. Now what we're seeing is workers are organizing outside of the union structure because the laws regulating unions have made it really difficult to organize. So a great example of this was the West Virginia teacher strike.

You know, unions are banned, Teachers unions are banned in West Virginia. None of these teachers was actually part of a union because unions don't exist there for public school teachers. No, they just organized over social media. But they were paid so little. And this was affecting the quality of instruction in schools. There was a shortage of teachers. So teachers have overloads. Students with needs can't get attention because there's not enough teachers to serve them. I think one of the more effective aspects of the West Virginia teacher strike is that they actually articulated the case that, hey, you know, striking for better pay isn't just for the teachers, it's also for the students because they can't attract qualified teachers, enough of them into the school system.

And so the children are also being shortchanged. And I would add that that is very characteristic of teacher strikes, that they aren't striking only for themselves, they're striking for conditions that would enable them to actually effectively teach the children. Chicago's teachers strike was like that too, where one of their biggest demands was to have air conditioning because the classrooms were so hot the kids couldn't concentrate on what was being taught. That's a real educational issue.

45:51 Mark: Which of course an advocate of the market is going to say, well, that's because you're dealing with public schools that ordinarily, if you have a shortage of employees, then wages naturally go up so that you can attract more employees. And it's only because it's government budgets that are setting what the wages are and nobody wants to pay more taxes and nobody wants to, you know, so there's the political issues involved in that, that it creates an artificial market. It distorts the ordinary workings of the market to fulfill those things.

46:23 Dylan: Well, in fact, it wouldn't even be the market. Wouldn't the answer be. Look, the quality of the public schools in those locations is directly related to what the people in those locations are willing to pay for them. That would be the argument they're saying, look, we don't value education as much and we think that the level of education afforded by the teachers that we are able to get is just fine. And we don't think that it's worth as much as what you're saying it is. And so we're not willing to pay for it.

46:51 Elizabeth: Well, there's two different arguments going on here. Why don't we take the market argument first? Because that's had a serious impact, especially in the state of Michigan where we have a large charter school sector. That's supposed to be the pure market solution. Let charter schools arise and they can then get their state allocated per pupil tax dollars. Most of the charter schools in the state of Michigan are actually run by for profit school management companies. One of my former students, an honors student, Actually did her honors thesis looking at how charter schools operated in the city of Detroit, actually, and found that catastrophe reigned.

And then when she graduated, she actually went in to teach for America and found herself, lo and behold, assigned to one of these very schools that her honors thesis criticized. Ironically, then when she saw the inside view, it was even worse than anybody could have imagined. So what she found was that the market competition, parental choice, freedom of parental exit from the schools, actually was a disaster in the city of Detroit. And the reason for that is that the for profit charter schools were actually deliberately locating themselves in school deserts in very poor populations that didn't have access to transportation.

And so the parents had no choice but just to send them to the closest school. They exploited their monopoly position by basically just minimizing costs by hiring unqualified teachers. And then the students are stuck. There's no real choice in a situation like that. And she also uncovered evidence that when parents do get tired of poor charter school quality and exercise, the exit option, it's really bad for the kids. And the reason is because in the middle of the school year, suddenly they're in a new school, they're the new kid on the block, and they don't know who their friends are, what adults they can trust, who the bullies are.

And so they spend months instead of learning. They're just trying to figure out the social order of the school to protect themselves. And it's emotionally trying, and they fall behind academically. So exercising the exit option is actually really costly for children. If you want children to learn, what they really need is stable relationships among their peers and with their teachers and the principal and so forth, so that they can get secure and then they can focus on the learning. But charter schools aren't interested in that. When she joined the charter school assigned to it by Teach for America, she walks into her classroom, it's completely empty.

No desks or chairs, no nothing. No school supplies, no instructional, no workbooks, no textbooks, no nothing. She says, but what about my curriculum? They say, we don't supply a curriculum. That's your job, to create a curriculum from scratch with no instruction, guidance, supplies of any kind. Why? Because it's expensive to supply that. It's a for profit corporation, so what do they care? Markets don't really work in this domain.

50:09 Dylan: I guess I'm brought back to the idea that in talking about private government, we're talking about how the school system got implemented and that market was or was not working in this respect, but that even in the private government relation, that I'M sorry, I'm stumbling because I'm thinking two things at once. I'm thinking that in private government, like we were talking about the firm, that is the problem, that we're not recognizing that it's a private government in which we should be talking about rights and we should be talking about certain kinds of negotiated agreements, that kind of thing. Or is it an absence of market forces, proper market forces within the firm that allow for there to be the right adjustment of authority and obligation such that individuals have the right kind of autonomy? Those seem to be two different kinds of answers to it, which is the problem.

51:09 Elizabeth: Yeah, so libertarians say all we need is to enhance market forces and everything will be fine. And I'm a big fan of enhancing workers exit rights. Okay, I think it's helpful, but it's not a comprehensive solution and we shouldn't be satisfied just with whatever the market outcomes are. Because as I argue in my book, the state has already rigged the game in advance against the interest of workers in the structure of employment law, which already deals by default all of the authority cards to the employer. And in that context, workers are going to be in a disadvantageous position. And yes, a small elite might be able to use the threat of exit to get a better deal for themselves, but most workers are going to be stuck without that option really having any serious effect.

52:10 Wes: That's true.

52:11 Dylan: That's of course why they would band together. Right? Is one worker leaving typically doesn't matter anything to a corporation, but all the workers leaving, that matters. That's why you have unions, right?