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On the Efficiency Objection to Workplace Democracy

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Abstract

Are workers dominated? A recent suite of neo-republican and relational egalitarian philosophers think they are. Suppose they are right; that is, suppose that some workers are governed by an unjust and arbitrary power existing in labour relations, which persists even in the presence of the actual ability to exit. My question is this: does that give us reason to impose restrictions on firms? According to the so-called Efficiency Objection there are relevant trade-offs that need to be considered between the efficiency of firms and the freedom of workers, and upon considering these trade-offs, we should reject workplace democracy. In this paper, I present a dilemma for the Efficiency Objection. I argue that either the Efficiency Objection is justified on moral grounds or non-moral grounds; if the Efficiency Objection is justified on moral grounds, then it fails because efficiency cannot be valued for its own sake (it is only instrumentally good); if the Efficiency Objection is justified on non-moral grounds, then it fails because of the respect that we owe to persons as persons; therefore, the Efficiency Objection fails.

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Notes

  1. See Anderson (2015, 2017), Breen (2015), González-Ricoy (2014; 2020), Hirvonen and Breen (2020), Hsieh (2005), Landes and Néron (2018), Neron (2015), O’Shea (2019, 2020a), and Vrousalis (2021).

  2. For a recent survey of arguments for workplace democracy see Frega et al. (2019). See also Breen (2015, 2017) González-Ricoy (2014; 2020), Landemore and Ferreras (2016), and Néron (2015) as cited in Hirvonen and Breen (2020). See also Hsieh (Hsieh 2005; 2009) as cited in O’Neill (2017).

  3. See Anderson (2017: 45).

  4. See Frega, Herzog, & Neuhäuser (2019: §3.1) for an overview. See Frye (2020) and O’Shea (2020b) for a recent debate over the relationship between non-domination and efficiency. See §4 for a more nuanced treatment of the Efficiency Objection.

  5. I take this example from Anderson (2017: 135), who cites a study from Oxfam America (2016). In the study, multiple workers (using pseudonyms for fear of retribution) cited that it’s common to wear diapers and that many workers defecate on themselves while standing in line.

  6. See Anderson (2017: 55).

  7. See Alchian & Demsetz (1972: 777) as cited in Anderson (2017: 55).

  8. As cited in Anderson (2017: 55).

  9. I draw on Hirschman (1970) in carving out the conceptual terrain in the language of “exit” and “voice”. I should also note here that, strictly speaking, Berlin (1969) might only claim that negative exit is sufficient for freedom. However, Pettit (2012: 41) seems to claim that, when speaking of political freedom, Berlin would also hold that something like external voice is necessary. However, note that the modal operator here (i.e., potential ability) is restricted to cases where the government would bar you from exercising your voting rights. Thanks to Matthew Palynchuck for pressing me to clarify this.

  10. See Breen (2015), González-Ricoy (2014; 2020), Hirvonen and Breen (2020), N. Hsieh (2005), Landes and Néron (2018), Neron (2015), O’Shea (2019, 2020b), and Vrousalis (2021).

  11. Cf. Levy (2016: 679).

  12. The cost here can be either psychological or economic in nature. For instance, suppose that David wants to quit his job in the slaughterhouse to attend college; he knows that, given his financial situation, he will have to incur an unreasonable debt to attend college. And yet, even though a college degree would increase David’s earning potential, and give him a more desirable job, it is not clear to him that this choice would be rational. How come? Well, it is important to note that the psychological cost—i.e., the subjective fear of risk—is likely processed in a higher degree for individuals in David’s situation since they do not have a robust support system that could bail them out. Similarly, the economic cost—i.e., the actual risk—is likely processed in a higher degree for individuals in David’s situation since the debt incurred from education is perceived as worse from David’s point of view than it would be from someone who has greater financial resources. To see this, consider David’s counterpart—David*—who is like David in all respects, except for one thing: he has a rich uncle who is willing to pay for 50 % of his education. In this case, it seems like David* has a lower psychological cost insofar as he knows that his rich uncle is cutting the risk in half; and he has a lower economic cost insofar as his rich uncle is artificially altering David*‘s set of financial resources. Thus, David* has more positive exit than David.

  13. See Breen (2015) and González-Ricoy (2014) as cited in Jacob & Neuhäuser (2018: 934).

  14. According to neo-republican and relational egalitarians, non-domination is the absence of non-arbitrary interference. It could be that internal voice is not necessary for non-domination. But for the purposes of this paper, I will assume that it is. For instance, Pettit (2012) might disagree.

  15. See Jacob and Neuhäuser (2018).

  16. For instance, internal voice does not seem to be a necessary condition on political freedom according to Pettit (2012).

  17. By “efficiency”, I mean the reduction of production costs (i.e., labour, material, supplies, etc.) and transaction costs (i.e., resolving disputes, planning, fees, etc.). For discussion on the relationship between “transaction cost economics” and the efficiency objection see Singer (2018: 832).

  18. Hereafter, when speaking of the trade-off between efficient firms and the freedom of workers, I will understand the “freedom”, to pick out the relevant political sense of freedom captured in workplace democracy. Thanks to an anonymous referee for pressing me to clarify this.

  19. See Frega, Herzog, & Neuhäuser (2019: §3.1) for an overview.

  20. There are potentially more than five sorts of trade-offs that constitute the efficiency objection. Here, I only focus on the five that Dow (2003) has identified. In what follows I will use the term ‘democratic workplace’ to pick out those workplaces that satisfy the definition of a workplace democracy as I laid out in §2. I would like to thank an anonymous referee for pressing me to clarify the difference between (i) identifying a trade-off and (ii) identifying a justification for a trade-off.

  21. See Alston and Gillespie (1989) as cited in Frega et al. (2019: 6).

  22. See Alchian and Demsetz (1972) as cited in Frega et al. (2019: 6).

  23. See Dréze (1989) as cited in Frega et al. (2019: 6).

  24. See Bonin et al. (1993), Dréze (1989), and Gintis and Bowles (1996) as cited in Frega et al. (2019: 6).

  25. See Hansman (1996) as cited in Frega et al. (2019: 6). See also Singer (2018).

  26. Drawing on Singer (2018)  González-Ricoy (2019: §2.1) writes: “workplace regulation, if fully comprehensive, may cancel the reason why firms exist in the first place.”

  27. There might, however, be reasons that concern the second-order feasibility of acting. For instance, you might think that, even if it is not feasible to act on the moral reasons at a time t1, it might be feasible to act on non-moral reasons that will make it the case that it is feasible to act on moral reasons at a time t2. I leave this issue aside for now. See footnote 33 for further discussion.

  28. I should note here that the efficiency objection is not an all-things-considered objection to workplace democracy—there may be other considerations which count in favour of rejecting workplace democracy (see §5). Proponents of the efficiency objection might agree that some moral reasons tip the scale against efficiency concerns. What these moral reasons are, however, is what is under dispute. Thus, proponents of the efficiency objection might claim that the moral reason which justifies inequalities in distribution is efficiency—the implicit morality of the market C.f. McMahon (2012: 126-127) and Heath (2007: 369). Thanks to an anonymous referee for asking me to clarify this.

  29. See Dréze (1989) as cited in Frega et al. (2019: 6).

  30. For example, with (3) the worry seems to be that, since democratic workplaces can’t compete with non-democratic workplaces, countries that employ the former types of regulations on firms will not be able to compete with foreign investment, and, as a consequence, there will be fewer firms, which results in less opportunities for the least well off amongst us. Although (3) is a non-moral reason concerned with the overall feasibility, the worry that underlies it is moral in nature: there will be less opportunities for the least well off amongst us.

  31. I owe my phrasing of this to Pablo Gilabert. By “second-order feasibility”, I mean the feasibility of some action in a future context. For instance, it’s feasible that I wake up and run 5 miles tomorrow. But it’s not feasible that I wake up and run a marathon tomorrow. If I have a reason to run a marathon then I ought to perform those actions that make it the case that it will be feasible for me to run a marathon. Thus, I have reason to run 6 miles tomorrow, 7 the day after, 8 the next week, and so on. Here, I discuss second-order feasibility because when discussing first-order feasibility, the non-moral reasons can outweigh the moral reasons (e.g., the fact that democratic workplaces can’t compete with non-democratic workplaces due to their inability to attract capital investment). To take a step back, then, and discuss second-order feasibility is ask what we would do if it were the case that the non-moral reasons that we have to value efficient firms did not hold. Thanks to an anonymous referee for pushing me to clarify this.

  32. Again, see Anderson (2017: 135).

  33. Note that the table might not capture some of the fine-grained distinctions between these views (e.g., the relative scope, nature, grounds, and instantiated form of internal voice). By “Liberals” I have in mind Berlin (1969) and other nearby views; and by “Republican” I have in mind views like Pettit (2012) and Jacob and Neuhäuser (2018), which are sympathetic with Republican ideals, yet reject internal voice; and by “Neo-republican” and “Relational Egalitarian”, I have in mind the more robust views that accept something like internal voice, i.e., Hsieh (2005), Gourevitch (2013), Landemore & Ferreras (2016, Anderson (2017), González-Ricoy (2014); (2019); (2020), O’Shea (2019); (O’Shea 2020a); (O’Shea 2020b).Thanks to an anonymous referee for suggesting me to clarify this, which prompted a minor change to the table.

  34. This is because, on my view, workers might find it desirable to consent to domination in the workplace if it results in a greater monetary or non-monetary benefit. This might be a trade-off worth making.

  35. An anonymous referee points out that common arguments for non-democratic workplaces cite that the gains from efficiency are indirectly beneficial to workers due to resultant growth and technological innovation. For discussion on this see Von Mises (1935) and Roemer (1994).

  36. For instance, many find it wrong to leave unjust workplace discrimination to the market to sort out.

  37. See Kant (2010: 42) at 4:435. For an illuminating discussion on the Kantian person/thing principle see Ellerman (1988: 1111) and Cohen (2003: 706).

  38. I wish to thank the editor and two anonymous referees for their extremely valuable feedback and extensive comments on this paper. I also owe a special thanks to Robbie Dillon, Ian Gold, Morgan Gagnon, Chris Howard, Mylene Hangdaan, Sierra James, Stephanie Leary, Matthew Palynchuck, Eric Séguin, Natalie Stoljar, and for their helpful comments. And lastly, thanks to Pablo Gilabert for allowing me to audit his fantastic graduate seminar on Domination (Winter 2020).

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    Jordan David Thomas Walters

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Walters, J.D.T. On the Efficiency Objection to Workplace Democracy. Ethic Theory Moral Prac 24, 803–815 (2021). https://doi.org/10.1007/s10677-021-10192-6

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