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You might or might not buy into Holmes and Sunstein’s framing that “all rights are positive rights.” But even if you reject it and want to maintain a distinction between positive rights and negative rights, the point they’re making still stands: Our negative right not to be interfered with by other people does depend on having a positive right to certain mechanisms of enforcement, provided by government, which prevent those people from interfering with us. If we didn’t have such mechanisms, we’d be facing coercion all the time. Sure, it wouldn’t be government coercion, but government isn’t the only entity capable of coercing people; private-sector actors are all too capable of violating people’s consent, and without any counterbalancing force to keep them in check, they’d have free rein to do so at every opportunity. As Balioc writes:

The basic pure-anarchist [philosophy] that says “just let people do whatever they want and things will work out for the best” — isn’t very popular. The pitfalls are too obvious and too pronounced. Notably, in the pure-anarchist world some people invariably choose to exercise their free choice by becoming bandits and warlords, who go around forcibly restricting the choices of others (often in especially unpleasant ways).

So [we] tend to conjure up large powerful public institutions, Hobbesian leviathans, charged with defending us from each other and thereby safeguarding our greater freedoms.

[…]

The idea is that we use public coercion to eliminate private coercion.

Or in other words, we use mechanisms of coercion that are actually accountable to the public and the democratic process to eliminate forms of coercion that aren’t accountable to anyone or anything except the coercers. It may not be better than having no coercion at all, but seeing as how the latter isn’t an actual option, it’s the best alternative available.

Anti-statists, of course, won’t necessarily agree with this. They’ll often argue that, whatever the consequences might be, the most important thing is simply that people have as few constraints on their action as possible – that’s what freedom means. And in a sense, their definition is right; the fewer constraints a person has on their choices, the freer they are. Again though, it bears repeating that government isn’t the only thing that can constrain a person’s choices. If someone is being coerced by a private actor – or even if they aren’t being coerced by anyone at all, but are simply having their choices constrained by the circumstances they’re in (and don’t have any government services to help them out) – then those things too can make them less free. A person stranded on a desert island, for instance, with no resources available to them aside from rocks and coconuts, might be totally “free” in the negative sense – that is, they’re free from all government laws and regulations – but it’s very hard to argue that their situation makes them more free in an absolute sense than someone living in a wealthy First World country with all its abundance and possibilities. Granted, they aren’t having their choices constrained by other people, but their choices are still being constrained by external forces, namely their circumstances and nature itself. It’s not that anyone is actively stopping them from making whatever choices they might want to make – but the space of choices available to them is so severely limited that the “freedom” they have within that limited space barely amounts to anything. Even though they’re technically allowed to do whatever they want, the number of things they’re actually able to do is miniscule compared to the array of options available to the person in the rich country, who might have more things they aren’t allowed to do, but who also has far more things that they’re able to do the first place, so they’re actually far less constrained in their space of choices overall. In short, “freedom from” isn’t really worth anything without “freedom to.”

These considerations don’t just apply to people on hypothetical desert islands, either – they’re just as true for people here in the real world. The more resources someone has – the more things they can actually choose to do if they want to – the freer they are; and conversely, the fewer resources they have – and the fewer options they have – the less free they are. We might say that the jobs they take and the places they live and the transactions they engage in are all voluntarily chosen, and are therefore “free” choices; but if their array of options was so limited to begin with that they never really had any other alternatives to choose from, then a “free choice” never really existed for them at all – they weren’t truly free in any meaningful sense. As Sandel writes:

[There’s an argument to be made] that, for those with limited alternatives, the free market is not all that free.

Consider an extreme case: A homeless person sleeping under a bridge may have chosen, in some sense, to do so; but we would not necessarily consider his choice to be a free one. Nor would we be justified in assuming that he must prefer sleeping under a bridge to sleeping in an apartment. In order to know whether his choice reflects a preference for sleeping out of doors or an inability to afford an apartment, we need to know something about his circumstances. Is he doing this freely or out of necessity?

The same question can be asked of market choices generally—including the choices people make when they take on various jobs.

Roosevelt famously summed it up with the line:

True individual freedom cannot exist without economic security and independence. […] Necessitous men are not free men.

If someone is fortunate enough to have abundant resources at their disposal, they accordingly also have more freedom to choose which transactions they want to engage in and which they want to reject; they can be more selective. But those who aren’t so advantaged enjoy less freedom of choice; they simply have to take what they can get. And this is important not only because of how it affects their ability to make their way in the world as individuals, but because of how it affects their interactions with each other as well. More specifically, it means that when you bring together both types of people – the advantaged and the disadvantaged – and have them transact with each other in the same economy, there will naturally be a disparity in bargaining power between them. The richer people will have a marked advantage over the poorer ones in terms of power and autonomy. And this disparity will tend to blur the line between choices that are made entirely freely and choices that are compelled by necessity. The poorer people will often have little choice but to accept whatever terms the richer people offer them, simply because they have no better alternatives. What does it really mean, then, to say that they’re “choosing freely” in such situations? Does true freedom of choice really exist when someone is under this kind of duress from their circumstances? Commenter haalidoodi shares some thoughts on the matter:

The discussion of “is money power” is an interesting one in its own right. I’ve worked with the IRB (the official ethics review board) at my university to design human experiments, and one of the things they explicitly forbid is “excessive” compensation for experiments. If you’re performing surgery or giving an experimental drug you can be cleared to give thousands of dollars in compensation, but if you’re running some rudimentary psychological experiment the board is very hesitant to approve compensation any higher than $20 an hour or so. The justification? Higher amounts would be “coercive”.

This might seem like strange reasoning to those in economics: after all, in economics we typically look at prices as a matter of cost-benefit analysis. If the price is higher than the perceived cost, then the transaction is performed voluntarily and both sides benefit. So why does the IRB forbid excessive compensation?

I like to use a simple analogy to give students of economics a slightly different perspective on this matter. Imagine being confronted by a gun-wielding mugger, who demands your wallet. Clearly a coercive situation, right? But let’s break down exactly what’s going on, in oversimplified economic terms. Here’s what’s happening: an external actor who you have no control over is manipulating the costs and benefits you’re facing (in this case, raising your cost of not cooperating) until it’s in your rational self-interest to behave in the way they want you to. Power, it can therefore be said, is simply the ability to manipulate the costs and benefits other people face until they “voluntarily” go along with what you want.

Yet when you break it down like this, it turns out that lots of situations that we consider free and voluntary are similar to this mugging situation: a price change in an essential good, an employer threatening to sack an unproductive employer, etc. But we all know intuitively that a change in the market price, for example, is still somehow qualitatively different in its morality than a mugger stealing from you.

So what is that difference? Why does your average Joe call the mugger a thief, but scoffs when someone says “taxation is theft”? I suggest that it’s a matter of moral legitimacy: “coercion” and “theft” are morally charged terms that suggest moral “badness”, a qualitative judgment outside the purview of both empirical science and economics. Nearly all social situations involve some sort of manipulation of costs and benefits external to the self, but affecting the self, yet we only get mad about some of them. I suggest that this is because certain bodies, individuals, etc. are popularly recognized as having some vaguely defined “moral legitimacy”, some form of implicit consent that Locke described as the “social contract”. It’s a pretty wishy-washy subject which makes lots of folks uncomfortable, but I believe it’s how the world works.

Anyways, back to the central point: money can be said to translate to power because it allows you to manipulate the “profit functions” of others to a very large degree, mainly by raising the compensation for doing something until the opportunity cost of not doing it becomes unbearably high and they are functionally “coerced” into doing what you want.

As Sandel summarizes:

In real life, persons are situated differently. This means that differences in bargaining power and knowledge are always possible. And as long as this is true, the fact of an agreement does not, by itself, guarantee the fairness of an agreement. This is why actual contracts are not self-sufficient moral instruments. It always makes sense to ask, “But is it fair, what they have agreed to?”

Of course, having said all this, I should also say that I don’t think the mere fact that such power asymmetries exist means that the optimal solution is therefore to do like haalidoodi’s IRB and just prohibit those with more resources from ever being able to make overwhelmingly compelling offers to those with fewer resources. After all, the whole reason why these offers are considered “coercive” in the first place (or at least, more coercive than they would be if they were being made to richer people) is because the people on the receiving end of them feel like they have no choice but to accept them – and the reason why they feel that way is because the offers make them appreciably better off than any other available alternative. If all we do is ban such transactions, then, we aren’t making anyone better off; we’re simply constraining the poorer people’s freedom of choice even further, and keeping them from being able to make even the slightest improvement to their situation. And that’s not something that even they themselves would want; for them, even a less-than-ideal alternative is better than no alternative at all. So what’s the better solution, then? It’s pretty simple: We ensure that they actually do have enough material security that they don’t ever feel like they have no other alternative (whether that be by providing them with resources like education and healthcare, giving them alternative offers of employment, or using some other means). We give them enough positive freedom that they don’t ever feel compelled to accept some grossly unfair offer out of pure necessity. As Balioc explains:

[In contrast to the pure-anarchist model], the left-liberal model posits that no one can make truly free choices without a certain level of material security and comfort. Because those things are so fundamentally important to such an overwhelming proportion of people, anyone who doesn’t have them or can’t count on them is fundamentally under the power of anyone who can offer them. So it is that power dynamics allow those people to get pulled into arrangements that are not genuinely free and are overall bad for the world (or at least markedly sub-optimal).

The solution is to have the state ensure, directly, that everyone has enough resources. Which probably entails coercively redistributing money away from the people who have tons and towards everyone else, or at least towards the people who have the least.

It’s true, having a government that’s able to use laws and taxes to ensure that everyone has a basic level of material security and freedom of choice does involve some degree of coercion; by implementing those laws and collecting those taxes, the government is imposing certain constraints on its citizens. It is, strictly speaking, reducing their negative freedom. But in so doing, it’s increasing their positive freedom by expanding the space of opportunities that are available to them, so that on net, they’re able to do more than they’d otherwise be able to – i.e. they have more autonomy. As commenter Epistaxis writes:

For a […] positive refutation of the anti-government strain of libertarianism, consider Amartya Sen’s Development as Freedom. His argument is that if our goal is to maximize individual freedom, that actually requires social-welfare programs like public education and health care, because lower taxes don’t make you free in any meaningful sense if you’re confined to dead-end jobs due to poor education, hospitals due to poor preventive medicine, or illness and bankruptcy due to not being able to afford health care in the first place.

And as Robert Kuttner adds:

[It’s important to acknowledge] the role of government in promoting affirmative liberties. A young person from a poor family who does not need to incur crippling debt to attend university is a freer person. A low-income mother who cannot afford to pay the doctor attains a new degree of freedom when she and her children are covered by Medicaid. A worker who might be compelled to choose between his job and his physical safety becomes freer if government health and safety regulations are enforced. The employee of a big-box store who can take paid family leave when a child gets sick is freer than one whose entire life is at the whim of the boss; likewise a worker with a union contract that provides protection from arbitrary dismissal or theft of wages. An elderly person saved from destitution by a government-organized Social Security pension has a lot more liberty than one bagging groceries at age 80 to make ends meet, or one choosing between supper and filling a prescription. An aspiring homeowner who doesn’t need to spend countless hours making sure that the mortgage won’t explode is freer to spend leisure time on other activities if government is certifying which financial products are sound and is prohibiting other kinds.

Anderson sums up the whole issue of positive freedom versus negative freedom (plus a third kind of freedom which she calls republican freedom) like this:

[Critics of government often depict] a zero-sum trade-off between the liberties of the state and those of its citizens. But there are at least three concepts of freedom: negative, positive, and republican. If you have negative freedom, no one is interfering with your actions. If you have positive freedom, you have a rich menu of options effectively accessible to you, given your resources. If you have republican freedom, no one is dominating you—you are subject to no one’s arbitrary, unaccountable will. These three kinds of freedom are distinct. A lone person on a desert island has perfect negative and republican freedom, but virtually no positive freedom, because there is nothing to do but eat coconuts. An absolute monarch’s favorites may enjoy great negative and positive freedom if he has granted them generous privileges and well-paid sinecures. But they still lack republican freedom, since he can take their perks away and toss them into a dungeon on a whim. Citizens of prosperous social democracies have considerable positive and republican freedom, but are subject to numerous negative liberty constraints, in the form of complex state regulations that constrain their choices in numerous aspects of their lives.

All three kinds of freedom are valuable. There are sound reasons to make trade-offs among them. If we focus purely on negative liberty, and purely concerning rival goods, it might seem that [the critics of government are] correct that the size of the liberty pie is fixed: one agent’s liberty over rival good G would seem to preclude another’s liberty over it. But this is to confuse negative liberties with exclusive rights. There is nothing incoherent about a Hobbesian state of nature, in which everyone has the negative liberty to take, or compete for possession of, every rival good. That would be a social state of perfect negative liberty: it is a state of anarchist communism, in which the world is an unregulated commons. Such a condition would also be catastrophic. Production would collapse if anyone were free to take whatever anyone else had worked to produce. Even the natural resources of the earth would rapidly be depleted in an unregulated commons. Without property rights—rights to exclude others—people would therefore be very poor and insecure. Opportunities—positive liberties—are vastly greater with the establishment of a system of property rights.

This is a standard argument for a regime of private property rights. It is impeccable. Yet its logical entailments are often overlooked. Every establishment of a private property right entails a correlative duty, coercively enforceable by individuals or the state, that others refrain from meddling with another’s property without the owner’s permission. Private property rights thus entail massive net losses in negative liberty, relative to the state of maximum negative liberty. If Lalitha has private property in a parcel of land, her liberty over that parcel is secured by an exclusive right at the cost of the identical negative liberty of seven billion others over that parcel. If we are good libertarians and insist that the justification of any constraint on liberty must appeal to some other more important liberty, then the libertarian case for private property depends on accepting that positive liberty very often rightly overrides negative liberty. It follows that even massive state constraints on negative liberty (in the form of enforcements of private property rights) can increase total liberty (in an accounting that weights positive liberty more highly than negative, as any accounting that can justify private property in terms of freedom must).

State-enforced constraints on negative liberty can also increase total liberty through their enhancement of republican freedom. This is a venerable argument from the republican tradition: without robust protection of private property rights (which, as we have seen, entail massive net losses of negative liberty), a republican form of government is insecure, because the state is liable to degenerate into despotism, exercising arbitrary power over its subjects. This argument has been carried over in modern libertarian writing.

This form of argument is equally applicable to substate [entities like private firms, which might be regarded in their own right as kinds of small-scale] private governments. If one finds oneself subject to private government—a state of republican unfreedom—one can enhance one’s freedom by placing negative liberty constraints on the power of one’s private governors to order one around or impose sanctions on one’s refusal to comply. This may involve state regulation of private governments. For example, a state’s imposition of a requirement on employers that they refrain from discriminating against employees on the basis of their sexual orientation or identity enhances the republican and negative freedom of workers to express their sexual identities and choose their sexual and life partners. It also enhances their positive liberties, by enabling more people to move out of the closet, and thereby increasing opportunities for LGBT people to engage with others of like sexual orientation. The state’s imposition of negative liberty constraints on some people can thereby enhance all three liberties of many more.

Anderson’s last point there, about how we might consider private firms to be kinds of miniature governments in themselves, is a particularly salient one, and one that I want to devote a whole separate post to in the future; but for now, let’s just take a brief moment to address it before we move on. We’ve already discussed in this post how the reverse point is true – how governments are essentially like private-sector firms, only owned by everyone. But the similarity applies in both directions; in a sense, private firms are a lot like small-scale governments, with the owners and executives being the governors and the workers being the citizens. Of course, unlike the traditional governments we’re most familiar with, most such private governments aren’t remotely democratic; they operate through wholly authoritarian top-down hierarchy, with the owners and executives telling their subordinates what to do, and the subordinates either obeying those orders or being permanently banished (i.e. fired from the firm). And this dynamic is extremely relevant when it comes to our discussion of coercion and consent – because while public-sector institutions are the ones that receive the most scrutiny and criticism for their infringements on people’s liberty, most people experience far more constraints on their freedom of action when they’re on the clock than when they aren’t. Chris Bertram, Cory Robin, and Alex Gourevitch illustrate this point:

On pain of being fired, workers in most parts of the United States can be commanded to pee or forbidden to pee. They can be watched on camera by their boss while they pee. They can be forbidden to wear what they want, say what they want (and at what decibel), and associate with whom they want. They can be punished for doing or not doing any of these things—punished legally or illegally (as many as 1 in 17 workers who try to join a union is illegally fired or suspended). But what’s remarkable is just how many of these punishments are legal, and even when they’re illegal, how toothless the law can be. Outside the usual protections (against race and gender discrimination, for example), employees can be fired for good reasons, bad reasons, or no reason at all. They can be fired for donating a kidney to their boss (fired by the same boss, that is), refusing to have their person and effects searched, calling the boss a “cheapskate” in a personal letter, and more. They have few rights on the job—certainly none of the First, Fourth, Fifth, Sixth, and Seventh Amendment liberties that constitute the bare minimum of a free society; thus, no free speech or assembly, no due process, no right to a fair hearing before a panel of their peers—and what rights they do have employers will fight tooth and nail to make sure aren’t made known to them or will simply require them to waive as a condition of employment. Outside the prison or the military—which actually provide, at least on paper, some guarantee of due process—it’s difficult to conceive of a less free institution for adults than the average workplace.

[…]

In addition to abridging freedoms on the job, employers abridge their employees’ freedoms off the job. Employers invade employees’ privacy, demanding that they hand over passwords to their Facebook accounts, and fire them for resisting such invasions. Employers secretly film their employees at home. Workers are fired for supporting the wrong political candidates (“work for John Kerry or work for me”), failing to donate to employer-approved candidates, challenging government officials, writing critiques of religion on their personal blogs (IBM instructs employees to “show proper consideration…for topics that may be considered objectionable or inflammatory—such as politics and religion”), carrying on extramarital affairs, participating in group sex at home, cross-dressing, and more. Workers are punished for smoking or drinking in the privacy of their own homes. (How many nanny states have tried that?) They can be fired for merely thinking about having an abortion, for reporting information that might have averted the Challenger disaster, for being raped by an estranged husband. Again, this is all legal in many states, and in the states where it is illegal, the laws are often weak.

Considering that all these examples are taken from places where governments already exist to limit employers’ infringement on workers’ freedoms, it’s not hard to imagine how much worse things would be if workers didn’t have any government protections at all. (Actually, it’s not even necessary to imagine; we need only look to the poorest countries to see what working conditions are like for workers who don’t have strong governments protecting their rights.) Of course, many anti-statists won’t acknowledge that there’s even any problem here in the first place; workers are free to quit any job they don’t like, they’ll say, so what’s the issue? Here are Bertram, Robin, and Gourevitch again in response:

[Many anti-statists] believe that workplace coercion is not coercion (or at least not impermissible coercion) for two reasons.

First, workers freely consent to work for their employer. […] Many libertarians take any voluntary contract, no matter how desperate the circumstances of the worker, as a proxy for consent.

[…]

Second, workers are free to quit any job not to their liking. […] Assuming, presumably, some kind of tacit consent theory, [anti-statists] conclude that any worker who performs a specific action at the behest of her boss—peeing in a cup, say, while the boss stands outside the stall, or peeing in her pants because she’s not allowed to go to the bathroom—is acting freely.

[But] the limitations of exit as an instrument of freedom can be illustrated by a simple analogy. Suppose Canada were a dictatorship, but the United States welcomed anyone who wished to leave, paid for her ticket and promised her a job. Would that mean that anyone who stayed behind was free? Or think about the implicit contract at the heart of ethnic cleansing: exit and live; stay and die. Now it’s undoubtedly true that exit is better than no exit—ethnic cleansing being better than genocide—in that it limits the reach of coercion. But it’s not true that exit lessens coercion and increases freedom among those who stay. Surely we don’t want to claim that those Jews who refused to flee the pogroms of tsarist Russia were somehow free. To be clear: the point is not that the workplace is as unfree as a dictatorship or the shtetl but that just because an employee can leave doesn’t mean she is free at work.

And Anderson makes a similar point:

[Anti-statists often] appear to be claiming that wherever individuals are free­ to exit a relationship, authority cannot exist within it. This is like saying that Mussolini was not a dictator, because­ Italians could emigrate. While emigration rights may give governors an interest in voluntarily restraining their power, such rights hardly dissolve it.

Needless to say, as these writers acknowledge, the analogy here isn’t a perfect one; after all, it’s considerably more difficult for most people to leave their country than to leave their job (even if they don’t have absolute freedom of choice in either case) – so if we’re weighing the relative merits of letting governments set their own rules versus letting private entities set their own rules, it really does make more sense to maintain strict limits on the governments’ ability to impose on people’s freedoms than to maintain equally stringent limits on the private entities’ ability to do the same. As Alexander writes, a good rule of thumb here might be to say that in general, institutions (whether they be public ones like governments or private ones like companies, clubs, or religious organizations) should be allowed to impose constraints on their members’ freedoms only inasmuch as those members are participating in the institutions voluntarily (and can freely leave for an alternative whenever they want) – since by opting to remain with the institutions, members are thereby indicating their willingness to accept those constraints as a part of their membership:

I think we would have to make an argument based on what kind of characteristics an institution needs to be more like a corporation or intentional community (which have the rights to be strict) vs. a national government (which should be erring on the side of permissiveness). To me, the key differences seem to be things like:

• exit rights and transaction costs of leaving
• number of other options
• ease of forming a new one
• degree to which membership is voluntary vs. hereditary

So to give an example, most people have the intuition that the US government banning pork for religious reasons is bad, but also that if you go into a mosque and demand they let you eat pork there you’re in the wrong. I think this is because:

• the people in the mosque have the option to very easily not be in the mosque
• if you don’t like the mosque, you can always go to a church or an atheist meetup
• you can always start your own mosque, with blackjack and hookers
• most people in the mosque chose to be there because they agree with the mosque’s principles

But:

• it’s hard to leave the US if you don’t like it
• there aren’t that many other countries and you might not be able to find one you like
• it’s very hard to start a new country
• most US citizens are only citizens because they were born here, and didn’t necessarily sign on to any philosophical commitments

This is ignoring some important issues, like whether banning pork is the ethically correct action, or whether the majority of the people in each community support the ban. It’s just trying to give a completely formal, meta-level account of why our intuitions might be different for these two cases.

Like I said, this seems to me like a pretty good general approach for weighing how much institutions like governments and private companies should be allowed to impose constraints on their members’ freedom. Having said that, though, I should also add that I don’t think it would be complete without an acknowledgement that for many workers, their jobs fall more toward the “costly to leave and difficult to find any better alternatives” end of the scale than the “easy to leave and easy to find better alternatives” end. Sure, if they’re highly educated and highly skilled, then leaving their jobs might not be such a big deal, since they can always be sure of having plenty of alternative job prospects to choose from – but for those without such advantages, their options will be much more limited, and they’ll accordingly have to accept much worse working conditions if they don’t have any other source of support. As Anderson writes:

The suggestion that enhancing exit rights alone would be sufficient to deal with the problems [faced by less advantaged workers] is not credible. What jobs are [these] workers supposed to exit to? When 90 percent of waitresses experience sexual harassment, they have no reliable place to escape it, other than by leaving their industry-specific skills behind, and even then, not so much, since sexual harassment exists in all industries. Add to this the problems of unemployment, underemployment, ineligibility for unemployment insurance for “voluntary” quits, and it’s easy to see how unhelpful “why don’t you just leave?” is as advice to workers. When workers have only exit rights and no voice, this amounts to a grant to the dictatorial employer to harvest the entire “producer’s surplus” – all the benefits that make their job better than workers’ next best alternative – that would otherwise accrue to workers before the job gets so intolerable that they quit. Indeed, given the uncertainties about whether conditions would be better elsewhere (extremely difficult for employees to determine), and the steep costs of job loss under any realistic scenario, an exit-rights-only regime in effect grants to dictatorial employers the power to appropriate considerably more than the workers’ producer surplus before they leave.

She continues:

[Tyler] Cowen argues that employers have to compete for talent, and this makes them respect workers’ autonomy and dignity. “The desire to attract and keep talent is the single biggest reason why companies try to create pleasant and tolerant atmospheres for their workers.” I agree with his statement: when workers are respected by their employers, this is the main reason why. It doesn’t follow that all workers do get respected by their employers. Rather, the amount of respect, standing, and autonomy they get is roughly proportional to their market value. Employers don’t have to compete for workers who aren’t scarce: those who are unskilled, inexperienced, living in areas with high unemployment, or with other liabilities, such as arrest record or disability. That’s a lot of workers. Blacks, for example, who are about 12 percent of the labor force, suffer from virtually permanent double-digit unemployment rates. Workers of all races who live in towns devastated from plant closures due to competition from abroad also suffer from high unemployment, because their mobility is low. Much of the time, the entire economy operates in periods of substantial unemployment or underemployment, affecting workers generally: even if they have a job, the cost of job loss is so high they have to put up with nearly any abuse just to hang on to an income. Meanwhile, employers use their power to design workplaces to create a fine-grained division of labor in which workers are deskilled and thus easily replaceable.

Alexander further examines just how disempowered these workers really are in relation to their employers:

It is frequently proposed that workers and bosses are equal negotiating partners bargaining on equal terms, and only the excessive government intervention on the side of labor that makes the negotiating table unfair. After all, both need something from one another: the worker needs money, the boss labor. Both can end the deal if they don’t like the terms: the boss can fire the worker, or the worker can quit the boss. Both have other choices: the boss can choose a different employee, the worker can work for a different company. And yet, strange to behold, having proven the fundamental equality of workers and bosses, we find that everyone keeps acting as if bosses have the better end of the deal.

During interviews, the prospective employee is often nervous; the boss rarely is. The boss can ask all sorts of things like that the prospective pay for her own background check, or pee in a cup so the boss can test the urine for drugs; the prospective employee would think twice before daring make even so reasonable a request as a cup of coffee. Once the employee is hired, the boss may ask on a moment’s notice that she work a half hour longer or else she’s fired, and she may not dare to even complain. On the other hand, if she were to so much as ask to be allowed to start work thirty minutes later to get more sleep or else she’ll quit, she might well be laughed out of the company. A boss may, and very often does, yell at an employee who has made a minor mistake, telling her how stupid and worthless she is, but rarely could an employee get away with even politely mentioning the mistake of a boss, even if it is many times as unforgivable.

The naive economist who truly believes in the equal bargaining position of labor and capital would find all of these things very puzzling.

Let’s focus on the last issue; a boss berating an employee, versus an employee berating a boss. Maybe the boss has one hundred employees. Each of these employees only has one job. If the boss decides she dislikes an employee, she can drive her to quit and still be 99% as productive while she looks for a replacement; once the replacement is found, the company will go on exactly as smoothly as before.

But if the employee’s actions drive the boss to fire her, then she must be completely unemployed until such time as she finds a new job, suffering a long period of 0% productivity. Her new job may require a completely different life routine, including working different hours, learning different skills, or moving to an entirely new city. And because people often get promoted based on seniority, she probably won’t be as well paid or have as many opportunities as she did at her old company. And of course, there’s always the chance she won’t find another job at all, or will only find one in a much less tolerable field like fast food.

We previously proposed a symmetry between a boss firing a worker and a worker quitting a boss, but actually they could not be more different. For a boss to fire a worker is at most a minor inconvenience; for a worker to lose a job is a disaster. The Holmes-Rahe Stress Scale, a measure of the comparative stress level of different life events, puts being fired at 47 units, worse than the death of a close friend and nearly as bad as a jail term. Tellingly, “firing one of your employees” failed to make the scale.

This fundamental asymmetry gives capital the power to create more asymmetries in its favor. For example, bosses retain a level of control on workers even after they quit, because a worker may very well need a letter of reference from a previous boss to get a good job at a new company. On the other hand, a prospective employee who asked her prospective boss to produce letters of recommendation from her previous workers would be politely shown the door; we find even the image funny.

The proper level negotiating partner to a boss is not one worker, but all workers. If the boss lost all workers at once, then she would be at 0% productivity, the same as the worker who loses her job. Likewise, if all the workers approached the boss and said “We want to start a half hour later in the morning or we all quit”, they might receive the same attention as the boss who said “Work a half hour longer each day or you’re all fired”. [Hence the existence of labor unions.]

But getting all the workers together presents coordination problems. One worker has to be the first to speak up. But if one worker speaks up and doesn’t get immediate support from all the other workers, the boss can just fire that first worker as a troublemaker. Being the first worker to speak up has major costs – a good chance of being fired – but no benefits – all workers will benefit equally from revised policies no matter who the first worker to ask for them is.

Or, to look at it from the other angle, if only one worker sticks up for the boss, then intolerable conditions may well still get changed, but the boss will remember that one worker and maybe be more likely to promote her. So even someone who hates the boss’s policies has a strong selfish incentive to stick up for her.

The ability of workers to coordinate action without being threatened or fired for attempting to do so is the only thing that gives them any negotiating power at all, and is necessary for a healthy labor market. Although we can debate the specifics of exactly how much protection should be afforded each kind of coordination, the fundamental principle is sound.

[Q]: But workers don’t need to coordinate. If working conditions are bad, people can just change jobs, and that would solve the bad conditions.

About three hundred Americans commit suicide for work-related reasons every year – this number doesn’t count those who attempt suicide but fail. The reasons cited by suicide notes, survivors and researchers investigating the phenomenon include on-the-job bullying, poor working conditions, unbearable hours, and fear of being fired.

I don’t claim to understand the thought processes that would drive someone to do this, but given the rarity and extremity of suicide, we can assume for every worker who goes ahead with suicide for work-related reasons, there are a hundred or a thousand who feel miserable but not quite suicidal.

If people are literally killing themselves because of bad working conditions, it’s safe to say that life is more complicated than the ideal world in which everyone who didn’t like their working conditions quits and get a better job elsewhere.

[…]

I note in the same vein stories from the days before labor regulations when employers would ban workers from using the restroom on jobs with nine hour shifts, often ending in the workers wetting themselves. This seems like the sort of thing that provides so much humiliation to the workers, and so little benefit to the bosses, that a free market would eliminate it in a split second. But we know that it was a common policy in the 1910s and 1920s, and that factories with such policies never wanted for employees. The same is true of factories that literally locked their workers inside to prevent them from secretly using the restroom or going out for a smoking break, leading to disasters like the Triangle Shirtwaist Fire when hundreds of workers died when the building they were locked inside burnt down. And yet even after this fire, the practice of locking workers inside buildings only stopped when the government finally passed regulation against it.

Even just a simple test of common sense confirms that most workers aren’t truly free to leave their jobs at will. After all, if nobody ever felt compelled by their circumstances to accept a bad job (or to stay in a bad job they already had), then the very concept of someone being stuck in a job they hated wouldn’t exist; people would always have a free choice in the matter, so there would be no reason for them to stay in such a position if they didn’t want to. But in fact, what we see in the real world is that most low-level workers are in just such a situation; they would happily quit their jobs if they could, but no better option is available to them, so they’re forced to spend their lives doing things they don’t actually want to be doing. Their space of choices, in short, is being constrained by their circumstances – and as a result, they are less free. Without any real resources at their disposal, all they can do is resign themselves to doing whatever work those who do have resources want them to do. In other words, they just have to go along with the will of the more powerful, whatever that might be.

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