Tuesday, February 26, 2013

The New Charter of Industrial Freedom

The Image below is NOT the old "Charter of Industrial Freedom." It is instead an editorial by Samuel Gompers that appeared in the A.F. of L. Federationist lauding the labor provisions of the Clayton Antitrust Act as the Charter of Industrial Freedom -- an "industrial Magna Carta," no less! As Charters go, the memorable part was the proclamation in Section 6, "That the labor of a human being is not  a commodity or article of commerce." It was a noble sentiment but, as discussed previously, had negligible traction as legal doctrine.
For the New Charter of Industrial Freedom, I'm going to suggest something entirely different from lofty phrases and woolly intentions. In fact, I'm going to take liberties with the notion of a "Charter" and suggest something more akin to a chart of accounts than to a manifesto.

The trouble with manifestos or any other sort of persuasive journalism is that they are indelibly marked with the sign of the commodity. The popular press was no less a product of the new industrial conditions that emerged during the 19th century than were the boot polish, stomach pills or packaged cereals whose advertisements filled the columns of the newspapers.

Persuasion in the resulting "free market of idea" presupposes that there is indeed a market of idea, that it is free and that that is a good thing. The treatise, pamphlet, article, book or blog post thus takes its place proudly as a commodity on this market, confident that it will find just as many buyers as it is intrinsically worth. Or it takes its place grudgingly in some forlorn niche, resentful of the puffery and commercial pandering that  propels unworthy screeds to the top of the ideological heap.

Hold that thought while I check my stats to see if this has gone viral yet.

The point is that criticism cannot win the free-market-of-ideas lottery because even if it does momentarily that only goes to show that the lottery wasn't rigged after all. Catch 22. The manifesto affirms at the level of metalanguage what it denies manifestly.

Framing The New Charter of Industrial Freedom as a chart of accounts (with liturgical undertones) aims beyond superficial persuasion to deeper layers of inculcation, confession, calculation and reflection. I won't go into a detailed rationale here for the framing but instead will briefly reference a couple of sources that underlie that rationale: James Aho's The Religious, Moral and Rhetorical Roots of Modern Accounting and Rob Bryer's "Accounting and Control of the Labour Process."

Bryer wrote of a capitalist mentality, inculcated by the accounting process, which uses the accounting information to control the labor process and minimize costs “by holding the collective worker accountable for the rate of return on capital.” In its broader historical context, as recounted by Aho, that bookkeeping originated with a moral and confessional purpose quite distinct from the purposes and mentality that evolved from it. One might even say that the evolved capitalist mentality glorifies and defends precisely those motives and actions that bookkeeping was invented to expunge as sinful (see also Weber's pessimistic conclusion: "fate decreed the cloak should become an iron cage.").
Almighty and most merciful Auditor, We have followed most faithfully the devices and desires of our own pocketbooks. We have not strayed from thy bottom line. We have left unpaid those social costs which we could shift to others and we have amassed revenues from doing those things which we ought not to have done... And thereby we have successfully maximized return on investment and shareholder value. Amen!
This is not to chastise the capitalist mentality for moral hypocrisy, though, but only to stress the efficacy of the bookkeeping technology at focusing and refining the "devices and desires" of those who employ it. But it is only efficacious insofar as its objects are conceived as commodities. A counter-mentality -- whether it calls itself socialist, trade unionist, ecological or anti-capitalist -- cannot be founded on the commodity-principle derived from the capitalist bookkeeping. But neither can it be founded on pure negation.

In "Time on the Ledger," I have sketched a prototype of what such a social accounting process might look like. It is only an outline -- a stick-figure that can only be fleshed out through a broad collaborative effort. It is due to be published in May as Chapter 11 in Toward a Good Society in the Twenty-First Century: Principles and Policies. Also in May, I have been invited to participate in the Economics and the Commons Conference in Berlin.

What I proposed in "Time on the Ledger" is a social accounting framework for evaluating the net social productivity of different hours of work arrangements. The basic idea is that first, there are fixed social cost to labor that are not reflected in capitalist accounting and the way that employers can shed their labor costs by laying off workers and second, there is a technologically-determined optimal length of working time per worker exceeding which subtracts from net social product over the longer period. The information from this process can guide collective bargaining and public policy advocacy while at the same time inculcating a commons mentality in practitioners. It is not enough to translate back and forth between capitalist accounting perspective and a commons ideal. One must become fluent in a new social accounting language.

I would like to conclude these introductory remarks on the New Charter with a digression on prayer and confession. Karl Marx concluded his letter to Arnold Ruge of September 1843 with the following, "What is needed above all is a confession, and nothing more than that. To obtain forgiveness for its sins, mankind needs only to declare them for what they are." A confession! My little parody above was paraphrased from the general confession in the morning and evening prayer of The Book of Common Prayer. An entire book of commons prayer may be too ambitious an undertaking. But perhaps a reworking of that morning and evening prayer...

What appeals to me particularly about that liturgy is that it is performed as a dialogue between the minister and the congregation. It is, to be sure, a scripted and rehearsed dialogue -- a set piece, so to speak. Aside from any specific religious content, the ritual of this dialogue performs a vital centering purpose, opening up the mind and heart to a deeper level of receptiveness. It seems to me that such a centering ritual would be entirely appropriate for a group assembled to carry out a social accounting analysis.

"Give us back our commons and you can keep your poor relief."

"The revolution in spinning deprived agricultural labourers of this part of their subsistence at the very time when enclosure was making them more dependent on wages and diminishing the demand for agricultural labour."

"el que no obra por el bien de todos sino por el suyo"

liturgy: forms of public worship
worship: "worth ship"
value (labour theory of)
labour power
common-pool resource
"labor is not a commodity"


labor is knot a commodity

robot macht frei
In former times, when the services were personal, it was for the interest of the lord to have as many persons as possible to perform those services. As in later times a West Indian or South American planter did not count the magnitude of his estate by the number of acres, but by the number of slaves he had upon it, so a feudal baron regarded his wealth by his villeins, not by his acres. But when personal services were changed into money payments the very object of keeping up a large number of serfs was done away with. It was not then the number of tenants, but the amount of rent that the lord regarded as the great object of his estate. It mattered not to him if the rent was paid by fifty or five hundred tenants; indeed he would rather prefer a small to a large number, as the rents would be more easily collected and even increased by large holdings, and the pasture of the wastes improved by being subject to a smaller number of commonable rights.

Monday, February 18, 2013

Labor is (not) a Commodity

"Labour is a commodity like every other, and rises or falls according to the demand." – Edmund Burke
"Labour is not a commodity." – International Labour Organization, Declaration of Philadelphia
"We must now examine more closely this peculiar commodity, labour-power." – Karl Marx
Organized labor’s millennium lasted exactly six years, two months, two weeks and five days. On October 15, 1914, U.S. President Woodrow Wilson signed the Clayton Antitrust Act. Samuel Gompers, founding president of the American Federation of Labor, hailed the labor provisions of that law as "the most comprehensive and most fundamental legislation in behalf of human liberty that has been enacted anywhere in the world", "the foundation upon which the workers can establish greater liberty and greater opportunity for all those who do the beneficent work of the world" and the "industrial Magna Carta upon which the working people will rear their structure of industrial freedom." Gompers gushed that the words contained in Section 6 of the Act, "That the labor of a human being is not a commodity or article of commerce," were "sledge-hammer blows to the wrongs and injustices so long inflicted on the workers."

On January 3, 1921, in the case of Duplex Printing Press Co. v. Deering, the U.S. Supreme Court ruled that "there is nothing in the section to exempt such an organization [i.e., union] or its members from accountability where it or they depart from its normal and legitimate objects and engage in an actual combination or conspiracy in restraint of trade," thereby confirming an opinion long held by objective observers that the labor provisions of the Clayton Act didn't actually exempt unions from court injunctions. In the meanwhile, Gompers journeyed to Paris to lobby for virtually identical language in the Treaty of Versailles, affirming the official non-commodity status of workers everywhere: "Labour should not be regarded merely as a commodity or article of commerce." In 1944, the International Labour Organization reiterated as the first principle of its Declaration of Philadelphia that "Labor is not a commodity."

The everyday experience of working people, economic policies of governments, bargaining priorities of trade unions and theoretical models of economists refute the idealistic maxim that labor is not a commodity. An early rationale for the proposition was given in 1834 by William Longson of Stockport in his evidence to the House of Commons Select Committee on Hand-Loom Weavers:
…every other commodity when brought to market, if you cannot get the price intended, it may be taken out of the market, and taken home, and brought and sold another day; but if a day's labour is offered on any day, and is not sold on that day, that day's labour is lost to the labourer and to the whole community…
Longson concluded from these observations of labor's peculiarities that, "I can only say I should be as ready to call a verb a substantive as any longer to call labour a commodity."

Karl Marx was emphatic about the peculiar historical nature of labor – or, more precisely, labor-power – as a commodity. Rather than reject the label outright, though, he chose to examine it more closely. Marx observed that for labor-power to appear on the market as a commodity, the sellers must first be free to dispose of it (but only for a definite period) and also must be obliged to offer labor-power for sale because they are not in a position to sell commodities in which their labor is embodied.

Connecting Longson's observation to Marx's, it would seem as though, aside from moral strictures, one of the qualities that most distinguishes labor-power from other commodities – its absolute and immediate perishability – is what compels its seller to submit unconditionally to the vagaries of demand. To paraphrase Joan Robinson, the misery of being regarded as a commodity is nothing compared to the misery of not being regarded at all.

So if labor-power is not a commodity, or is only one due to peculiar and rather disagreeable circumstances, what is it, then? Consider the idea of labor-power as a common-pool resource. Labor-power can be distinguished from labor as the mental and physical capacity to work and produce use-values, notwithstanding whether that labor-power is employed. Labor, then, is what is actually performed as a consequence of the employment of a quantity of labor-power.

Human mental and physical capacities to work have elastic but definite natural limits. Those capacities must be continuously restored and enhanced through nourishment, rest and social interaction. "When we speak of capacity for labour," as Marx put it, "we do not abstract from the necessary means of subsistence." It is the combination of definite limits and of the need for continuous recuperation and replacement that gives labor-power the characteristics of a common-pool resource. As Paul Burkett explains, Marx regarded labor power not merely as a marketable asset of private individuals but as the "reserve fund for the regeneration of the vital force of nations". "From the standpoint of the reproduction and development of society," Burkett elaborates, "labor power is a common pool resource – one with definite (albeit elastic) natural limits."

"Common pool resource" is not the terminology Marx used; Burkett has adopted it from Elinor Ostrom's research. For Ostrom, common pool resources are goods that don't fit tidily into the categories of either private or public property. Some obvious examples are forests, fisheries, aquifers and the atmosphere. Relating the concept to labor is especially apt in that it illuminates, as Burkett points out, "the parallel between capital's extension of work time beyond the limits of human recuperative abilities [including social vitality], and capital's overstretching of the regenerative powers of the land." That parallel debunks the hoary jobs vs. the environment myth.

The basic idea behind common-pool resources has a venerable place in the history of neoclassical economic thought. It can't be dismissed as some socialistic or radical environmentalist heresy. In the second edition of his Principles of Political Economy, Henry Sidgwick observed that "private enterprise may sometimes be socially uneconomical because the undertaker is able to appropriate not less but more than the whole net gain of his enterprise to the community." In fact, from the perspective of the profit-seeking firm, there is no difference between introducing a new, more efficient production process and simply shifting a portion of their costs or risks onto someone else, society or the environment. The opportunities for the latter may be more readily available.

One example Sidgwick used to illustrate this was "the case of certain fisheries, where it is clearly for the general interest that the fish should not be caught at certain times, or in certain places, or with certain instruments; because the increase of actual supply obtained by such captures is much overbalanced by the detriment it causes to prospective supply." Sidgwick admitted that many fishermen may voluntarily agree to limit their catch but even in this circumstance, "the larger the number that thus voluntarily abstain, the stronger inducement is offered to the remaining few to pursue their fishing in the objectionable times, places, and ways, so long as they are under no legal coercion to abstain."

In the case of labor-power, "fishing in the objectionable times, places and ways" manifests itself in the standard practice of employers considering labor as a "variable cost." From the perspective of society as a whole, maintaining labor-power in good stead is an overhead cost. The point is not to preach that firms ought to treat the subsistence of their workforce as an overhead cost. That would no doubt be as effectual as proclaiming that labor is not a commodity. As with Sidgwick's fishery, a greater advantage would accrue to firms that didn't conform to the socially-responsible policy.

Ostrom explained the differences between various kinds of goods by calling attention to two features: whether enjoyment of the good subtracts from the total supply still available for consumption and the difficulty of restricting access to the good. Private goods are typically easy to restrict access to and their use subtracts from total available supply. Public goods are more difficult to restrict access to and their use doesn't subtract from what is available for others. Common-pool goods are similar to private goods in that there use subtracts from the total supply but they are like public goods in that it is more difficult to restrict access to them.

If it were merely a matter of selling to employers, then labor-power would have the uncomplicated characteristics of a private good. Working for one employer at a given time precludes working for another. Hypothetically, the worker can refuse to work for any particular employer thereby restricting access. But here we need also to contend with that peculiarity of labor-power noted by the silk weaver, William Longson that a day's labor not sold on the day it is offered is "lost to the labourer and to the whole community."

"If his capacity for labour remains unsold," Marx concurred, "the labourer derives no benefit from it, but rather he will feel it to be a cruel nature-imposed necessity that this capacity has cost for its production a definite amount of the means of subsistence and that it will continue to do so for its reproduction." This contingency and urgency of employment effectively undermines the worker's option of refusing work, so that in practice labor-power has the features of a common-pool good rather than of a private one. Collectively, the choice of refusing work is further weakened by competition from incrementally more desperate job seekers – a population Marx called "the industrial reserve army."

So is labor a commodity or is it not? The arch, paradoxical answer would be "both." Examined more closely, the capacity for labor – labor-power – reveals itself as a peculiar commodity that exhibits the characteristics of a common-pool resource rather than a private good. An actual Charter of Industrial Freedom must address these peculiar characteristics rather than bask contentedly in the utopian platitude that labor is not a commodity.

NEXT: The New Charter of Industrial Freedom

Friday, February 15, 2013

"Labor is Not a Commodity"

The New Republic, December 2, 1916:
THE threat of the American Federation of Labor, at its annual meeting last week, to disregard any injunction based upon the conception that labor is property indicates a frame of mind that may well become alarming if it is not met with sympathy and understanding. The emotion behind the ringing report adopted by the convention is a noble one, one that appeals to the laboring man's finest impulses. It is a yearning for independence and self-respect, for economic emancipation and a revolt against the whole proprietary attitude which capital so often takes toward labor, which looks upon a workingman as a thing of value, to be appraised according to output, skill, endurance and docility. "That the labor of a human being is not a commodity or article of commerce," is full of intense meaning to the union men who insisted on its enactment. The workingman who has found his strike for higher wages and better conditions blocked by the cold decree of a class-biased judge knows how it feels to be looked upon as the property of his employer.

What makes this impulse threatening is that it has been blocked and misled into blind alleys not only by labor's enemies, but by its guides and advisers. The technical task of translating labor's yearning into a legal enactment has been woefully botched by its leaders. The rallying cry that labor is not a commodity or a property right has been attached, whether by design or by accident we do not know, to a legislative program which does not give labor what it wants, or what it thinks it is getting. A layman as a rule has no stomach for technical legal argument. That is one of the reasons why the lawyers in Congress find it so easy to pass laws which seem to do one thing, but really do quite another. The result has been that Congress has passed a law which organized labor firmly believes has exempted it from the Sherman law, but which in reality is skillfully drafted so as to do nothing of the kind.

There is no doubt that labor thinks it has been exempted from the Sherman law. In so far as this belief is based on more than a blind faith in what the Federation leaders have told them it seems to rest on the argument that the Sherman law makes it illegal to restrain trade in "articles of commerce," and that by declaring labor to be not an article of commerce, you take it out of the Sherman law. But you do nothing of the kind. When the Danbury Hatters were compelled to pay triple damages for violating the Sherman law, it was not because the Supreme Court thought labor was a commodity. It was because hats are a commodity The boycott of the Danbury Hatters restrained trade in hats, not in labor. When Debs was sent to jail for violating an injunction against interfering with interstate railroads by calling a strike, it was not because the labor of the men whom he called out was an article of commerce but because the things the railroad was carrying, and the railroad cars themselves were articles of commerce. Had the Clayton act been then in force it would not have changed either decision.

The test of the section does not get us any further. "Nothing contained in the anti-trust laws shall be construed to forbid the existence and operation of labor" and other "organizations, or to forbid or restrain the individual members of such organizations from lawfully carrying out the legitimate objects thereof; nor shall such organizations, or the Members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade, under the anti-trust laws." This is the work of a skillful draftsman. It is made to sound like an exemption But closely examined, it exempts nothing. In so far as it merely sanctions the "existence" of labor unions, it is meaningless, for their existence has never been supposed to violate the Sher­man law. The word "operation" adds nothing, for by canons of construction familiar to lawyers, this means "lawful operation." The word makes nothing lawful that violated the law before the Clayton act was adopted. Aside from this, the unions are simply allowed to "lawfully carry out the legitimate objects" of a union. If the courts think a boycott like the Danbury Hatters', or a strike like that of Debs, to be unlawful and illegitimate (and they are by precedent bound to do so) the Clayton act does not apply to them at all. The clause that labor unions and their members shall not be held to be illegal combinations adds nothing. Being is not a crime. It is what he does, not what he is, that lands a man in jail. The Dan­bury Hatters were mulcted because they conducted a boycott, not because they were a union. At most the phrase means that the mere existence of labor unions is not in violation of the Sherman law; but this has always been the law.

The provision prohibiting injunctions in the federal courts in labor cases "unless necessary to prevent irreparable injury to property or to property right" is worse than useless, from the point of view of labor. The phrase harks back to an old doctrine of equity, that injunctions may be issued only to protect property, and not to protect personal rights, a doctrine against which modern jurists have strongly and justly protested, and which modern courts have shown a wholesale tendency to disregard. The Clayton act intrenches it in our federal jurisprudence, in just the field of litigation in which personal rights are most in need of adequate protection. The theory on which the provision was justified to the labor leaders seems again to have been that, since labor is not a commodity to call a strike is not to affect a property right, so that no injunction will be given. But, as the lawyers who framed the section well knew, when a strike is called it hurts the employer in his whole business—his profits fall off, his plant lies idle, and he is deprived of its use. And the courts have held so often that it is now settled law, that a man's business is property. The provision, therefore will not prevent a single injunction to protect an employer against a strike. If it has any effect, it will be to prevent courts issuing injunctions against blacklists circulated by employers against workmen. If a workingman asks for an injunction against a blacklist, the court will tell him that since it can issue injunctions in labor cases only to protect property, and since his labor is not property, it cannot help him. Such is the doctrine into which labor's noble revolt against the conception that it is the employer's property has been perverted. It has led to a law which denies that a man's labor is his own property. Could the National Association of Manufacturers have framed a section more favorable to capital and more hostile to labor?

The only section of the Clayton act which is of any value to labor is that which gives, in a limited class of cases, trial by jury for violation of an injunction. It applies only where the thing which the workingman has done is not only a violation of the injunction, but also a crime. As far as this goes, it is a distinct gain, for one of the worst features of labor injunctions has been the fact that a violation of the injunction was tried by the judge who had issued it, and who naturally felt that anything that savored of a violation of it was a personal affront to him. But the section does not go far, and it is doubtful whether a laboring man will be very anxious to brand himself a criminal by claiming its protection. And it is not for this section that labor has been taught to treasure the Clayton act.

The men who are now complacently enjoying the success with which they have misled the officials of the American Federation of Labor may well spend a few minutes in sober thought. The counsel of lawlessness at the convention last week was not mere bravado. It was made by responsible men who had carefully weighed what they were saying. What will organized labor do when it discovers that it has been defrauded? If the courts decide that despite the Clayton act unions are still subject to the anti-trust laws, and still liable to injunction, as they inevitably must, will they not take this to be a challenge daring them to carry out their threat? To those who are concerned over the lack of popular confidence in the courts the prospect is most ominous. Labor leaders have staked so much on this legislation, this Magna Charta of American labor, that it will be hard indeed to persuade them that it will not be the courts that are to blame, but a pusillanimous Congressional committee of lawyers who were willing to draft a deceitful statute and shield themselves against the wrath of labor behind the Supreme Court of the United States.

Sunday, February 10, 2013

From The Christian Lady's Magazine, Oct. 1846

[Not from the Christian Lady's Magazine: "What is needed above all is a confession, and nothing more than that. To obtain forgiveness for its sins, mankind needs only to declare them for what they are." Marx to Arnold Ruge, September 1843.]

Every word here is so simple, and goes so straight to the heart, that it needs no explanation; and yet frequent and too often careless repetition has such a deadening effect upon our minds, that we may not do amiss to spend some time over this part of our service.

How childlike is the openings sentence, "Almighty and most merciful Father, we have erred;" here is no concealment or palliation attempted: we own freely we have erred, we have no wish to hide our faults, for it is to a most merciful Father that we come.

Tuesday, February 5, 2013

Robots, Anyone?

Testimony of Walter Reuther to the 1955 Joint Congressional Subcommittee Hearings on Automation and Technological Change (p. 124):
"Every tool on every operation has a green light, a yellow light, and a red light; and when all the green lights are on, it means that all the tools at each work station are operating up to standard. When a yellow light comes on, on tool No. 38, it means that the tool is still performing, but the tool is becoming fatigued and that is a warning sign, so that the operator sitting there looking at these panels will know that he has to get a replacement tool for tool No. 38. He stands by at that position on the automated machine, and at the point the red light would kick on, on the board, he walks over — the machine automatically stops — he puts the new tool in the place of the tool that is worn out, and automatically the green light comes on and the machine goes on. 
"When I went through this plant the first time I was told by a top official of the Ford Motor Co.: 'Mr. Reuther, you are going to have trouble collecting union dues from all of these machines.'
"And I said: 'You know that is not bothering me. What is bothering me is that you are going to have more trouble selling them automobiles.' That is the real significance. We have mastered the know-how of mass production, and what we need to do is to develop comparable distribution know-how so that we will have markets for the tremendous volume of production that automation now makes possible."
That was 1955. We “solved” the distribution know-how problem with something called “credit” a.k.a. debt: credit card debt, mortgage debt, government fiscal policy. How is that distribution know-how solution working out for you? Meanwhile that tremendous volume of cars has contributed to a tremendous volume of carbon dioxide in the atmosphere leading to a tremendous volume of seawater lapping at the NYC and Jersey shores during Sandy.

In 1956, Time magazine published a report titled, “One Big Greenhouse” and the Nation published an essay by Kenneth Burke titled ,”Recipe for Prosperity: ‘Borrow. Buy. Waste. Want.’” Those titles speak for themselves.