Work Under Capitalism

Chris Tilly

• Publisher: Routledge
• Year: 2019
• ISBN:
  9781000009064
• Edition: 1
• Topic: Economics
• Subtopic: Labour Economics
• Index: Economics

Work Under Capitalism synthesizes recent institutionalist and Marxist ideas about the organization of production, situating production within a social context. Starting with the transaction rather than the individual, it builds upon a coherent theory and applies it to a wide range of experience, from household labour to transformations of health c

1
How to Work Things Out

Lessons from a Life of Hard Work

Rural French worker Marie-Catherine Gardez, born in 1891 in the Nord region, worked hard for all of her long life (Grafteaux 1985). Although she received four years of schooling, at the age of nine she began plying a loom with the rest of her family in the basement of their house. They wove cloth in a putting-out system, in which an agent provided them with thread and then paid them by the piece for cloth. Since automated, factory-based power looms had swept the French textile industry decades earlier, their hand looms and home-based labor represented a disappearing style of work.

During the growing season, the family migrated to Normandy, where they toiled on a farm owned by a large Parisian company, here receiving a combination of piece rates—40 sous per plot weeded, 3 sous per row of sugar beets thinned, and so on—and day rates for spreading fertilizer or working in the farmyard or house. At the harvest they gathered sheaves of wheat, in the early years following strapping young men with scythes, later following a mechanized harvester. Meanwhile, young Marie-Catherine helped her family with household tasks, such as cooking, cleaning, and laundry, and “stole” thread from her parents to weave handkerchiefs for a trousseau.

When Marie-Catherine married Auguste Santerre, they continued weaving and doing seasonal farmwork. At the farm, she moved on to helping with cooking and housework at the farmhouse, while he helped to run the farm’s sugar refinery—both now earning fixed salaries. Marie-Catherine continued to cook and clean in her own household and soon was raising a son; Auguste made fuel bricks and kept a garden for their own use, and also joined the volunteer fire department.

Their son, Auguste junior, apprenticed to a local barber, then took a barber’s assistant job (found for him by a cousin) in a distant town in the Paris region, working for wages plus tips. He supplemented his income by loading bricks at a factory. When the barbershop closed down, he opened his own small barbershop for business on weekends when the factory was closed, renting space from an acquaintance of his parents, a woman originally from the same village in the Nord. Marie-Catherine and Auguste senior then joined him in his town, finding work on another farm owned by the same Paris-based company. During the turbulent 1930s, Auguste père joined a union and went on strike. The union, with some help from France’s Socialist-led government, won the right to permanent rather than seasonal jobs. During World War II, the farm and its sugar refinery came under German military rule, and food and other necessities were rationed. When Marie-Catherine and Auguste finally retired, he cultivated their garden and those of neighbors; she continued to do housework and knit socks for neighbors, and the neighbors offered help in return. Even at a hospital and rest home in her mid-eighties, Marie-Catherine knit for the women in her ward.

What can we learn from this arduous curriculum vitae (other than heaving a sigh of relief that we no longer face the twelve-hour workdays and seven-day workweeks that the Santerres experienced in their paid employment)? For one thing, work for an employer with the power to hire and fire at a determinate rate of compensation—that is, work in a labor market—only represents one of many forms of work in the Santerres’ lives. Volunteer work, favors for neighbors, self-employment, housework, and even children’s unpaid work at the loom (since the parents received the pay) fall outside this model.

In addition, the incentives and rewards for the Santerres’ work varied widely. In some cases, they received material compensation, including cash (whether piece rate, hourly wage, tip, or proprietor’s income) or other rewards (such as training in the son’s apprenticeship or the thread Marie-Catherine and her sisters “stole” from their parents). For much of the work, the main incentive was commitment to a family unit or community. Coercion, which played some role even in these more benign cases, came to the fore under German occupation. We will return frequently to the triad of compensation, commitment, and coercion throughout this book.

The Santerres even performed the same work both inside and outside a labor market, under different incentive systems. Marie-Catherine prepared food, cleaned, and laundered for pay in the farmhouse, then went home and performed the same tasks without compensation for her family. Auguste the elder tended the company’s crops, but also worked his own garden. The younger Auguste barbered as apprentice, wage-laborer, and proprietor.

A number of larger forces shaped the Santerres’ work lives. Capitalist firms—the farm, the cloth merchant, the brick factory—exerted the largest single influence, but their power was tempered by worker organization, by state intervention, and by workers’ alternative sources of subsistence. Technological change drove down the price of the family’s weaving services, and altered the pace and work environment of the wheat harvest. The family’s own history stamped the location and nature of their toil, as did France’s productive history. Finally, a dense set of social relations surrounded the Santerres’ work. This is clearly true for the work not mediated by markets, but it holds as well for their interaction with the labor market. They migrated and found jobs through networks of kin and acquaintances. They performed work at times as a family unit, at other times among coworkers whose shared norms formed the basis for unionization.

Getting to Work

The saga of Marie-Catherine and Auguste anticipates many of this book’s major themes. In contemporary industrial countries, what people call “going to work” typically means leaving home, traveling for a while, and arriving at a place someone else owns to expend effort for pay under someone else’s orders; it means holding a job of some kind. Waged work of this kind has certainly become much more prevalent in the industrial world over the last century. Measured by total effort expended, nevertheless, a large share of work still takes place outside the ambit of jobs and labor markets: not only family business, fiction-writing, professional consulting for fees, commission sales, recital-giving, services for tips, and criminal enterprises, but also child care, domestic food preparation, home repairs, and schoolwork. Our book takes a large view of work in order to place the contemporary operation of jobs and labor markets in comparative perspective. It also takes a long view in order to promote understanding of the constant change that occurs within the world of work.

While concentrating on paid work and labor markets in the United States and other sites of industrial capitalism, the book frequently sweeps its gaze farther afield. Combating technological, market, and cultural determinisms, it argues that

• work does not issue from the efforts of isolated individuals who respond to market cues but from social relations among workers, employers, and consumers;
• labor markets are not natural, universal phenomena, but historically contingent products of struggles for control over the conditions of work;
• histories embedded in law, memory, prevailing beliefs, accumulated knowledge, and existing social relations strongly constrain paths of change in productive organization;
• employers, workers, and entrepreneurs create new productive organizations as mosaics of previously existing social structure and thereby unwittingly commit themselves to the established connections of that social structure;
• new technologies enter the organization of work chiefly as instruments of profit-seeking capitalists, always within stringent limits set by shared understandings and existing social relations;
• workers, employers, and supervisors often use their specialized knowledge of productive technologies as means of struggle;
• outcomes of struggles themselves reshape shared understandings, laws, governmental action, and beliefs of all parties concerning what organizations of work are proper or possible.

Above all, we reject efforts to derive work, labor markets, and professions directly from the timeless logics of individual interests, technology, market forces, or ideology.

Although we blast away at rival theories from time to time, however, our book does not concentrate on destruction or deconstruction of bad ideas. Instead, we do our best to construct a culturally grounded, historically informed account of work and labor markets as social interaction rather than as summations or resultants of individual action. In so doing, we seek to advance a program of transactional analysis that dates back to Adam Smith and Karl Marx, but has recently been gaining strength in economics and adjacent social sciences after a long period of inattention.

Assaying the Competition

Three broad views of labor dominate the theoretical landscape in both economics and sociology. In economics, the three perspectives go by the names of neoclassical, Marxist, and institutionalist theories. Sociologists most commonly call their close cousins rational-actor, Marxist, and structural theories. Within sociology, Weberian and functional analyses of economic phenomena (which explain social processes quite differently from rational-actor, Marxist, and structural approaches) have sometimes prevailed, but at present they have almost nothing distinctive to say about work and labor markets. Although more sociologists than economists pursue neo-Marxist or institutionalist analyses of economic structures and processes, the three perspectives cut across disciplinary boundaries.

Neoclassical Theories

Neoclassical theorists approach work with a startling degree of naturalism. According to this view, homo sapiens is homo economicus. Rational maximizing economic behavior has been characteristic throughout history. In particular, the trade-off between labor and leisure is eternal. Humans have always had to decide how to divide their time between work (with the consumption goods it brings) and nonwork, regardless of who is in charge. “In a perfectly competitive market,” according to Paul Samuelson (1957: 894), “it really doesn’t matter who hires whom: so have labor hire ‘capital.’” A corollary of Samuelson’s theorem is that self-employment generates the same results as other-employment. Even the invention of labor markets, by this view, did not mark a dramatic break in the history of work.

In this naturalistic framework, what propels economic history? The neoclassical view emphasizes the role of technological change and population growth, as formalized in the Solow growth model (Solow 1970). Other historical changes leave little or no trace. Of course, neoclassical analysts readily acknowledge that people modify labor markets with a variety of coercive or consensual structures. But the impact of these structures is transitory; once coercion is lifted, employers and workers soon revert to the same behavior they would have followed in the absence of coercion. And, in any case, explaining these changes is not part of the neoclassical agenda. “Often the economist takes as data,” Samuelson remarked in another work, “certain traditionally noneconomic variables such as technology, tastes, social and institutional conditions, etc.; although to the students of other disciplines these are processes to be explained and analyzed, and are not merely history” (1983: 318–319).

Most neoclassical theorists, furthermore, see modern Western capitalism as free of such modifying structures, even if Milton Friedman (1962) and Hernando de Soto (1989), among others, argue that it should be made freer still. Where institutionalists see a thicket of labor market institutions rooted in custom, neoclassical labor economists such as Edward Lazear and Joseph Stiglitz see profit-maximizing solutions to efficiency problems. Neoclassical theorists allow limited exceptions to the view that “history is neutral.” For instance, macroeconomists note that worker and firm expectations of future inflation depend on past experience with inflation, with the result that once a level of inflation has arrived it tends to persist. Similarly, elevated unemployment may self-perpetuate in a process of “hysteresis” (Blanchard & Summers 1986). But these exceptions are few and short-term in their historical scope.

Neoclassical thinking spotlights individual preferences. Persons exist as independent, self-motivating actors. Each person acts in a rational, self-interested way to maximize his or her (inherently unmeasurable) utility. Not only is the individual the unit of analysis, but indeed—given certain plausible axioms about the nature of utility—one cannot meaningfully aggregate from individuals up to a group or social utility function, as Kenneth Arrow (1950) demonstrated with his Impossibility Theorem.

Neoclassical scholars assume that the tastes or preferences that make up a person’s utility function are relatively stable and logically consistent. They take for granted certain patterns of preference: More goods are better, leisure is preferred to labor, marginal utility diminishes (that is, each additional unit of a good brings less utility to a consumer than the previous unit). Although a neoclassical framework does not altogether rule out altruism or envy (either of which implies that an individual’s utility is affected by the utility levels of others), the framework does presuppose that narrowly focused self-seeking dominates in the aggregate. Thus, for example, if many people preferred an austere lifestyle to an abundance of consumer goods, or if the typical worker’s choice of job and degree of effort exerted on the job were shaped primarily by affection or loyalty to employers rather than wages and working conditions, standard neoclassical models of work would go awry.

Neoclassical theory holds that preferences are determined outside the. economy, and thus outside of the world of work. Indeed, according to George Stigler and Gary Becker (1977), sufficiently little variation in tastes prevails that such variation is unlikely to have much economic significance. Meanwhile, the neoclassical firm—the key economic unit other than individual consumers or workers—acts single-mindedly to maximize the owner’s or stockholders’ profits. Again, neoclassical theorists do not deny that individual businesses may espouse world peace, environmental sustainability, or the promotion of a Christian lifestyle, nor that some managers may hold false or outdated beliefs about the way the economy works. But to the extent that any of these beliefs interfere with profitability, says the neoclassical doctrine, harder-headed maximizers will shoulder aside these owners and managers within their firms, and/or the firms will be displaced by more practical competitors.

Although this individualistic, rational model of economic activity has long characterized neoclassical descriptions of the microeconomic world of individual markets, until recently neoclassical macroeconomics left more space for the power of broadly held beliefs. In explaining why wages are “sticky” (failing to fall even when unemployment expands), John Maynard Keynes (1964) argued that workers strenuously resist any attempts to reduce their wages relative to those of other workers. He added, however, that due to “money illusion,” they do not perceive the erosion of real wages by inflation as a wage cut. In short, he described workers more attentive to their relative than absolute well-being—a description quite at odds with mainstream microeconomics.

Gary Becker sounded the battle cry of a new generation of neoclassical economists when he proclaimed (1976: 5) that “the combined assumptions of maximizing behavior, market equilibrium, and stable preferences, used relentlessly and unflinchingly, form the heart of the economic approach as I see it.” In the early 1980s, the rational expectations revolution (Begg 1982) swept Anglo-American macroeconomics, as theorists not only posited that all economic actors act rationally, but assumed as part of any economic model that all economic actors understand fully how the model works.

Neoclassical theorists look at the world of work and see symmetry of power. When a worker sells labor services to a capitalist (or, for that matter, direcdy to a consumer), both parties equally enjoy what could be called Walrasian power—the power to do business with someone else instead. (This sort of power bears the name of Léon Walras, the nineteenth-century Belgian economist who theorized that a bidding process brings supply and demand into balance.) Since “it really doesn’t matter who hires whom,” workers and capitalists make their contracts symmetrically. Such symmetry depends on a labor market that acts as if it were made up of many small units (individual workers and small employers).

Although actual economies manifest a mix of large and small units—18 percent of U.S. workers are represented by unions and 50 percent work in establishments employing 500 people or more—neoclassical economists argue that Walrasian impulses undermine market power and concerted economic action in all its forms. Workers’ ability to migrate erodes the employer’s power in a company town. Defectors, undercutters, and free riders jeopardize union attempts to extract rents as well as employer cartels’ endeavors to depress wages. Employers who discriminate on the basis of race, gender, or any other characteristic not linked to productivity will profit less than nondiscriminators and will eventually be driven out of the market. Government policies that seek to overrule the market generate underground economies, informal sectors, black markets. Thus—at least tendentially—power remains atomized, and the power of workers and owners remains symmetrical. Of course such reasoning follows a circular path, first assuming that workers and employers each pursue individual ends independently, then concluding that workers and employers act individualistic...

Table of contents

• Cover
• Half Title
• Series Page
• Title
• Dedication
• Contents
• List of Illustrations
• List of Photo Credits
• 1 How to Work Things Out
• 2 Worlds of Work
• 3 Cotton, Coal, and Clinics
• 4 An Analytical Frame
• 5 Employers at Work
• 6 Workers and Other Actors
• 7 How Work Has Changed, How Work Changes
• 8 Varied Work, Segmented Work
• 9 Inequality at Work: Hiring
• 10 Inequality at Work: Wages and Promotion
• 11 Contention at Work
• 12 Conclusions
• References
• Index