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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Location: Northwest Arkansas, United States

Friday, June 17, 2005

Still More on Contract Feudalism

I've written in the past about Contract Feudalism: a state of affairs in which, thanks to the state's pro-employer intervention in the market, the bargaining power of labor is so weak that workers will suffer just about any indignity to keep their job. In a post last week, I linked to a good article in Monthly Review about organized capital's strategic offensive over the past thirty years to weaken labor's bargaining power. The state capitalists, since adopting their new neoliberal consensus of the Seventies, have been hell-bent on creating a society in which the average worker is so desperate for work that he'll gratefully take any job offered, and do whatever is necessary to cling to it like grim death.

But even so, I never cease to be surprised by the new indignities that labor is subjected to. Just when I think things couldn't get much worse, I find this abomination (via Wake-Up Wal-Mart Blog, hat tip to The Green Lantern who drew my attention to it):

New rule requires workers to work any shift or be fired

Wal-Mart officials in Cross Lanes told employees on Tuesday they have to start working practically any shift, any day they’re asked, even if they’ve built up years of seniority and can’t arrange child care.

Store management said the policy change is needed to keep enough staff at the busiest hours, but some employees said it appears to be an attempt to force out longer-term, higher-paid workers.

“We have many people with set schedules who aren’t here when we need them for our customers,” said John Knuckles, a manager at the store, which is located in the Nitro Marketplace shopping center and employs more than 400.

“It is to take care of the customers, that’s the only reason,” he said.

Workers who have had regular shifts at the store for years now have to commit to being available for any shift from 7 a.m. to 11 p.m., seven days a week. If they can’t make the commitment by the end of this week, they’ll be fired.

“It shouldn’t cause any problem, if they [store employees] are concerned about their customers,” Knuckles said.

Several single mothers working at the store have no choice now but to quit, said one employee, who would not give her name for fear of retribution.

“My day care closes at 6 and my baby sitter can’t work past 5,” said the employee, a mother of two who has been a cashier for more than three years. Neither of the services is available over the weekends, she added. “I have to be terminated; I don’t know what I’ll do.”

“Wal-Mart is supposed to be a family-oriented company, but kids don’t matter,” the worker said.

Along with the “open-availability” policy, the store is requiring all floor employees to learn how to run cash registers, several employees said. They suspect this is an attempt to brace for the departure of many of the employees who now work as cashiers.

When announcing the new policies, store managers said they expected to lose about 60 people, according to another employee who asked not to be named.

“They said sales were down so much, they had to make a change,” the worker said. “The past year they’ve really been nitpicking” longer-term employees, who are paid more.

“A lot of people were mad and there were women crying — it’s just terrible,” said the worker, who has been at the store six years. “I’ve put up with a few things, but this has got to be the worst thing I’ve seen them do.”

Other Wal-Mart stores have open-availability rules, but it does not appear to be required of each store by company headquarters. Managers at Wal-Marts in South Charleston and Ripley refused to comment, but one employee at the store in Spencer, also speaking on condition of anonymity, said there was no such policy in place there.

(One thing that jumps out at me, especially, is that the policy's being used to harrass and drive away better-paid senior workers, and simultaneously increase job insecurity and management control over the overworked people that are left. Surprise, surprise, surprise! That's what's meant by the "increased labor productivity" the talking heads on CNBC make so much of.)

I haven't been able to figure out, just from reading the story, whether the policy actually requires workers to be on-call on their days off and come in at a moment's notice, or just to be available for scheduling on various shifts. Gretchen Ross of The Green Lantern, in response to my query, says she's pretty sure it's the former. If so, that's especially hellish. Wage labor, traditionally, has involved a devil's bargain in which you "sell your life in order to live"; you cut off the eight or twelve hours you spend at work and flush them down the toilet, in order to get the money you need to support your real life in the real world, where you're treated like an adult human being. In other words, the bargain assumed, in Elizabeth Anderson's words (she's the person who coined the term "contract feudalism"),

the separation of work from the home. However arbitrary and abusive the boss may have been on the factory floor, when work was over the workers could at least escape his tyranny (unless they lived in a factory town, where one's boss was also one's landlord and regulator of their lives through their leases). Again, in the early phase of industrialization, this was small comfort, given that nearly every waking hour was spent at work. But as workers gained the right to a shortened workday--due to legislation as well as economic growth--the separation of work from home made a big difference to workers' liberty from their employers' wills.

Out in the real world, where your judgment and values actually mean something, you try to pretend that that other place doesn't exist. Imagine if you could never enjoy a day off, or even an hour enough, without the constant awareness that the phone might ring and drag you back down into hell.

For all too many employers, the traditional devil's bargain is no longer good enough. Employers (especially in the service sector) are coming to view not only the employee's labor-power during work hours, but the employee himself as their property. They are expected to live on-call 24 hours a day: that thing they used to call "home" is just the shelf they're stored on when their owner isn't using them at the moment. And the boss has a claim on what they do even during the time they're not on the clock: the political meetings you attend, whether you smoke, the things you write in your blog--nothing is really yours. Most people who blog on political or social issues, probably, fear what might turn up if the HR Nazis do a Google on them. And as for the job search itself--good God! You've got to account for every week you've ever spent unemployed, and justify what use you made in your time without a master. If you were ever self-employed, I guess, you might be considered "overqualified": that is, there's a danger you might not quite have your mind right, because you don't need the job badly enough. And the kinds of questions about why you left your past job, the personality profiling to determine if you're concealing any non-Stepford Wife opinions behind a facade of obedience, etc.... It's probably a lot like the tests of "political reliability" to join the old Communist Party of the Soviet Union.

It doesn't take a rocket scientist to grasp the root of the problem, or the solution. Timothy Carver (aka Decnavda) puts the alternatives in very stark terms:

....anyone who has sat a negotiation table knows where the real power to gain a lion's share of the mutual benefit lies: with the power to walk away. If one side can walk away from the table and the other side cannot, the party that can leave can get almost anything they want as long as they leave the other party only slightly better off than if there was no deal at all....

What creates an imbalance in the power to walk away? One situation is need. If one side has to make the exchange, their power to walk away is gone.

....For most people, a job is the ultimate need. It from the earnings of job that all other needs are satisfied.

Capital is wealth that is used to help produce more wealth. By definition, capital is not needed by its owner: Wealth that is needed is consumed. Instead of investing in capital, the owner of excess wealth could choose to hoard land and gold, or indulge in ostentatious luxury. But capital is needed by the laborer, for whom it is necessary for the production of the wealth that the laborer needs to live.

Thus, free exchanges between labor and capital make the world a better place, because they all increase value in the world and they all make all participants better off than they were before the exchange. Free exchanges between labor and capital also inevitably result in capital retaining the greatest share of the increased value by exploiting its power to walk away from the exchange.

So how can we make the exchange more fair?

The socialist answer is to abolish the free market in labor and capital, and make the laborers the owners of all the capital they utilize. But this throws the baby out with the bath water. The exploitation of the zero-sum game is ended, but so are the wealth-producing advantages of the positive-sum game. The owners of excess wealth are forbidden from putting it to use in the creation of more wealth, and laborers have no incentive to produce excess wealth, since it cannot be invested. Increased value is never exploited, because there is no increased value.

The conservative answer is to give workers more training to do better or different work. But better training does not change the minimum needs the worker must satisfy to be willing to work. It merely increases the increased value of the labor-capital exchange, all of which can be taken by capital due to their power to walk away.

The liberal answer is to have the government meddle in the labor-capital exchange....

There is another way. The need for government meddling could end if the balance of negotiating power between labor and capital were equalized. Currently, the imbalance exists because capital can walk away, but labor cannot.

Carver proposes a basic guaranteed income to redress the balance of bargaining power. I prefer Benjamin Tucker's free market socialist solution. As Tucker argued, the imbalance in bargaining power between labor and capital was not the result of a free market, but of government intervention in the market on behalf of capital:

It was discovered that capital had so manipulated legislation that unlimited competition is allowed in supplying productive labor, thus keeping wages down to the starvation point, or as near it as practicable; that a great deal of competition is allowed in supplying distributive labor, or the labor of the mercantile classes, thus keeping, not the prices of goods, but the merchants’ actual profits on them down to a point somewhat approximating equitable wages for the merchants’ work; but that almost no competition at all is allowed in supplying capital, upon the aid of which both productive and distributive labor are dependent for their power of achievement, thus keeping the rate of interest on money and of house-rent and ground-rent at as high a point as the necessities of the people will bear.

On discovering this, Warren and Proudhon charged the political economists with being afraid of their own doctrine. The Manchester men were accused of being inconsistent. The believed in liberty to compete with the laborer in order to reduce his wages, but not in liberty to compete with the capitalist in order to reduce his usury. Laissez Faire was very good sauce for the goose, labor, but was very poor sauce for the gander, capital....

....Proudhon and Warren found themselves unable to sanction... the seizure of capital by society. But, though opposed to socializing the ownership of capital, they aimed nevertheless to socialize its effects by making its use beneficial to all instead of a means of impoverishing the many to enrich the few. And when the light burst in upon them, they saw that this could be done by subjecting capital to the natural law of competition, thus bringing the price of its own use down to cost, – that is, to nothing beyond the expenses incidental to handling and transferring it. So they raised the banner of Absolute Free Trade; free trade at home, as well as with foreign countries; the logical carrying out of the Manchester doctrine; laissez faire the universal rule. Under this banner they began their fight upon monopolies, whether the all-inclusive monopoly of the State Socialists, or the various class monopolies that now prevail.

Of the latter they distinguished four of principal importance: the money monopoly, the land monopoly, the tariff monopoly, and the patent monopoly.

Most important, by far, was the money monopoly, or

the privilege given by the government to certain individuals, or to individuals holding certain kinds of property, of issuing the circulating medium, a privilege which is now enforced in this country by a national tax of ten per cent., upon all other persons who attempt to furnish a circulating medium, and by State laws making it a criminal offense to issue notes as currency. It is claimed that the holders of this privilege control the rate of interest, the rate of rent of houses and buildings, and the prices of goods, – the first directly, and the second and third indirectly. For, say Proudhon and Warren, if the business of banking were made free to all, more and more persons would enter into it until the competition should become sharp enough to reduce the price of lending money to the labor cost, which statistics show to be less than three-fourths of once per cent. In that case the thousands of people who are now deterred from going into business by the ruinously high rates which they must pay for capital with which to start and carry on business will find their difficulties removed.... Then will be seen an exemplification of the words of Richard Cobden that, when two laborers are after one employer, wages fall, but when two employers are after one laborer, wages rise. Labor will then be in a position to dictate its wages, and will thus secure its natural wage, its entire product....

Just imagine a market in which jobs competed for workers, instead of the other way around. As I wrote in the "Contract Feudalism" post,

Instead of workers living in fear that bosses might discover something "bad" about them (like the fact that they have publicly spoken their minds in the past, like free men and women), bosses would live in fear that workers would think badly enough of them to take their labor elsewhere. Instead of workers being so desperate to hold onto a job as to allow their private lives to be regulated as an extension of work, management would be so desperate to hold onto workers as to change conditions on the job to suit them. Instead of workers taking more and more indignities to avoid bankruptcy and homelessness, bosses would give up more and more control over the workplace to retain a workforce.

Here's what the Anarchist FAQ has to say about it:

It's important to note that because of Tucker's proposal to increase the bargaining power of workers through access to mutual credit, his individualist anarchism is not only compatible with workers' control but would in fact promote it (as well as logically requiring it). For if access to mutual credit were to increase the bargaining power of workers to the extent that Tucker claimed it would, they would then be able to: (1) demand and get workplace democracy; and (2) pool their credit to buy and own companies collectively. This would eliminate the top-down structure of the firm and the ability of owners to pay themselves unfairly large salaries as well as reducing capitalist profits to zero by ensuring that workers received the full value of their labour. Tucker himself pointed this out when he argued that Proudhon (like himself) "would individualise and associate" workplaces by mutualism, which would "place the means of production within the reach of all."

UPDATE--Gretchen at Green Lantern has updated her original story. Wal-Mart, apparently, has caved under the pressure of public outrage. They're busy retracting, denying, "clarifying," and explaining what they "really meant." In other words, they're retreating as fast as the North Koreans after the Inchon landing.

The one thing these bastards seem to understand is how to go belly-up when somebody else has the whip hand. So don't let them forget....


Anonymous Anonymous said...

Cheap money does allow the purchase of more capital goods, that's why central bankers cut interest rates to boost economies.

Of course no capital goods would become free, but the lower price really does change things.

Look at micro-loans in developing countries. Loaning someone $100 to buy a lathe, sewing machine or vending cart allows them to become an independent business owner or contractor. However, banks now won't give those loans (or only rarely, when backed by a government development program) so there aren't that many people with that opportunity. Imagine a world where bank profits are so slim that banks and credit unions would want to cater even to such micro-loan customers. Or a community with a Local Exchange Trading system, where there wouldn't be any interest at all, and peer pressure would be sufficient to compel payment.

Whether workers would actually buy the means of production or would settle for a better deal, I don't know. I'd prefer to work in a democratic co-operative rather than for a corporation, but a lot of people don't care one way or another, as long as they get paid.

June 17, 2005 1:51 PM  
Blogger Kevin Carson said...


Tucker's view of money may bear a superficial resemblance to the 19th century money cranks who wanted to guarantee prosperity by inflating the money supply. But Tucker carefully distanced himself from the Greenbackers, etc.

Try comparing it to Rothbard's view of land. Government enforcement of absentee title to huge tracts of land, not founded on legitimate homesteading, increase the price of land relative to labor and thus force labor to pay a higher relative price for access to the land. Similarly, anything that reduces the number of people competing to supply capital will enable them to charge an artificially high price for supplying it.

In the case of large corporations, the fed may make state fiat credit *more* abundant. But state banking policy makes it scarcer and more expensive for ordinary working people.

June 17, 2005 2:27 PM  
Anonymous Anonymous said...

Thanks for the quote. I will admit that the government money and credit issues are ones I do not know enough about to fully understand, but I must say that I do not see an inherent conflict between your solution and a basic income. Indeed, the basic income addresses the reference to "Contract Fuedalism" in this post's title. Karl Widerquist,
coordinator of the U.S. Basic Income Guarantee Network has developed a moral justification of the basic income as a way for the individual to say "No" to social contract. My article was inspired by his work and explored the ecconomic effects of empowering individuals say "No".

But I would not suggest that the basic income would be the final or only solution. In some ways, it would only be the begining. Who knows what kind of society individuals will decide to create when everyone has the power to walk away from the outcome?

June 17, 2005 8:03 PM  
Blogger Larry Gambone said...

Great article and good comments. However, "John Knuckles, a manager at the store, which is located in the Nitro Marketplace shopping center"

Really!? "John Knuckles" , the "Nitro Market", Looks like Wallmart is working with the Mob

June 17, 2005 9:40 PM  
Anonymous Anonymous said...

A couple of things, not specifically related to the Wal-Mart issue proper. The term "feudalism" has been given the same sort of bad name as "free trade", "globalisation", or "privatisation", i.e. it's not the thing itself but the things and values that go under those names. I'll probably bring out what feudalism really involved in the material I will one day submit to KC, but meanwhile read Ganshof and give yourself a feel for the area from the novels of Alfred Duggan. The other point is that, while a Basic Income does address this area, it falls down in these ways: most implementations themselves imply more state mediation; there would be huge transitional problems; and in reality a Basic Income would only be viable long ter

June 18, 2005 6:05 AM  
Anonymous Anonymous said...

That chopped off the end, "...viable long term if it [Basic Income] was set at a fraction of what was needed for subsistence, enough to give the bargaining power, which can only be done within Malthusian constraints (which in certain times and places allowed it to be zero or even negative)." Then I added a few more things which I won't repeat.

June 18, 2005 6:09 AM  
Blogger Richard said...

Capital is wealth that is used to help produce more wealth. By definition, capital is not needed by its owner: Wealth that is needed is consumed. Instead of investing in capital, the owner of excess wealth could choose to hoard land and gold, or indulge in ostentatious luxury. But capital is needed by the laborer, for whom it is necessary for the production of the wealth that the laborer needs to live.

In the light of this, where would you put the person who decides to buy a pension so that he can be secure in his old age, or whenever he chooses not to work, or the person who buys insurance so that he can be secure against various exigencies in life, or the person who opens a savings account so that he has a little left aside incase he needs it? All these people are capitalists. Tucker wrote, "not to abolish wages, but to make every man dependent upon wages... is the aim of Anarchistic Socialism." But people in old age too old to work cannot be dependent on wages. People crippled by sickness or injury cannot be dependent on wages. Thank god most of the time people choose to invest a portion of their wages and are able to live on these investments in the forms of pensions and insurance and savings, instead of only being dependent on wages!

Also, whilst acknowledging that Tucker did not want the price of acquiring or borrowing capital artificially lowered, we should not loose sight of the fact that artificially lowering, preventing the price of capital from rising when demand for it rises, is an excellent way of making sure that workers don't get any when they need it!

And on workers' control: Tucker wrote "...The weak point in Mr. Bellamy's position will be located. I point it out in advance. It lies in his enormous assumptions that laborers, in order to recieve the profits which now go to their employers, must become their own employers, and that the only way by which they can do this is to assume through their salaried agents the conduct of industry. The Anarchistic solution shows that there is no such must and no such only. When interest, rent, and profit disappear under the influence of free money, free land, and free trade, it will make no difference whether men work for themselves, or are employed, or employ others. In any case they can get nothing but that wage for their labour which free competition determines. Therefore they do not need to become their own employers." (Instead of a Book p475) It is interesting that the Anarchist FAQ seems to ignore this opinion, which seems to be that workers' control is rather an irrelevant issue.

June 20, 2005 4:25 AM  
Blogger Kevin Carson said...


My late dad was a cop, and he said the real Mafia couldn't get their foot in the door here in Northwest Arkansas because the good ol' boys in the Chamber of Commerce and City Council were already doing the job.


Wow--you've dug up more Tucker for a comment than I have for my freakin' blog! Let's see.... I think Tucker deliberately excepted voluntary gifts and charity from his comment on universal subsistence on labor. And old-age pensions and other forms of insurance, arguably, are a consumption good indirectly funded by past wages.

On the irrelevancy of workers' control under individualist anarchism, I think the Anarchist FAQ's editors are actually saying pretty much the same thing from a different angle: nominal wage-labor would be irrelevant without the money and other monopolies, because the increased bargaining power of labor would result in de facto workers' control in all enterprises.

June 20, 2005 1:50 PM  
Blogger Richard said...


I don't see it as being, as the FAQ put it, "inevitable" that workers would end up controling industry, mainly for the reason that I can see a lot of workers as not wanting to. I was talking to Jon Simcock (of Total Liberty) a while back, and he said he had discussed workers' control with a group of workers, and they were convinced that it could work, that they could run their firms better than the bosses... but they didn't want to. They didn't want various committee meetings, and mostly, they didn't the responsibility. I think Entreprenuerialism is a skill, and just as Bakunin said that in the issue of shoes he would submit to the authority of a shoe maker, it is perfectly reasonable in the area of entrepreneurialism to submit to an entrepreneur, a manager. The trouble is that the present state capitalist system makes doing so an unfree choice.

On pensions and insurance, couldn't it be argued that all capital is a consumption good funded indirectly from past wages? I mean, it has to come from somebody's past labour.

June 21, 2005 4:20 AM  
Blogger Kevin Carson said...


It would be de facto workers' control in the sense that, for any issue seriously affecting the worker's satisfaction with his job and the perceived quality of his working environment, the decision would break in the way favored by a majority of the labor force. As for strategic direction of the firm on issues that workers were not intimately concerned with, as you say, in many firms they might consider the meetings and such too much bother. But wouldn't that be a form of delegation in itself, with the "professional entrepreneur" acting as a sort of de facto selectman?

I think that's what Tucker and Elkin both had in mind: a labor market such that, in any issue involving quality of work environment that the worker cared deeply about, the deciding influence would rest with labor.

As for capital, I strenuously agree that it's the accumulation of past labor. The question is, is it the past labor of the person ("abstemious capitalist") who benefits from it? There's a big difference between reinvesting some of one's own labor-product for one's own benefit, and paying someone else less than their labor-product and then reinvesting the difference for one's own benefit.

June 21, 2005 2:53 PM  

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