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February 10, 2005

Adventures in Contract Feudalism

Anderson on Political Economy, Elizabeth Anderson: February 10, 2005

Gerald Dworkin's mention of the employer who banned his employees from smoking on or off duty illustrates the problem of contract feudalism, which I had raised in an earlier post.

"Commerce and manufactures gradually introduced order and good government, and with them, the liberty and security of individuals, among the inhabitants of the country, who had before lived almost in a continual state of war with their neighbours and of servile dependency upon their superiors. This, though it has been the least observed, is by far the most important of all their effects."

That's Adam Smith, in The Wealth of Nations (III.4.4), contrasting the feudal economic order with the emerging industrial order of the towns.  Under feudalism, wealthy landlords employed hundreds of retainers, servants, and tenants who depended on them for subsistence.  The price of dependence was servility: the duty to obey any arbitrary whim, however humiliating, called out as an order to them by their lord.  Commerce and manufactures liberated individuals from such abject servility, by enabling people to live off sales to thousands of customers instead of one master.  It enabled large numbers of people to enjoy personal independence for the first time.  This was "by far the most important of all" the effects of commerce and industry:  not economic growth, not efficiency, but the growth of personal independence from servility to masters (along with "good government").

Of course, matters were different for wage laborers than for independent shopkeepers and craftsmen.  Wage laborers did have to obey an arbitrary master on the factory floor.  But two features of industrial life tempered the humiliations of the factory regime.  The first was the profit motive.  Self-interest and pride are distinct motives, and sometimes come apart.  Under pressure of competition, the pleasures of ordering around and abusing inferiors just to swell one's pride had to take a back seat to productive efficiency.  And as Max Weber reminds us, publicly verifiable claims to efficiency legitimate the exercise of authority, reducing the sting of the obligation to obey through its service to an impersonal goal.  We should not make much of this factor in the early phases of industrialization, when wage laborers were in too weak a position to hold out for decent treatment.  But it was eventually to have its effects, especially with the advent of labor unions, one of whose critical functions on the factory floor has been to guard the dignity of workers against bosses who see their authority as an opportunity for the indulgence of pride.

The second, more important feature of industrial life that promoted the personal independence of workers from their employers was 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.

Nevertheless, to the extent that this liberty is secured by competition for workers and convention alone, rather than by legal right, it is vulnerable to invasion.  This is the lesson to be drawn from the story of Howard Weyers, the president of Weyco, a firm in Okemos, Michigan.  According to the New York Times (Feb. 8, 2005, p. C5), Weyers banned smoking by his employees not just at work but anywhere else.  Now they have to submit to nicotine tests as a condition of holding their jobs.  Four employees have quit rather than suffer this invasion of their privacy.

Weyers claims that he is simply trying to keep health insurance costs down, since smokers cost more to insure.  Such a rationale could just as easily be used to justify taking daily sperm samples from female workers to control their sexuality, on the ground that sex with multiple partners puts them at risk for expensive STD's.  In any event, not just efficiency but personal pride was at stake for Weyers, who once coached college football.  "I spent all my life working with young men, homing them mentally and physically to high performance.  And I think that's what we need to do in the workplace," said Weyers to the Times.  He wants to relive his glory days as a coach to late adolescents and young adults, enjoying the power and adulation of that role.

It doesn't have to be this way.  Thirty states (not including Michigan) protect workers from being fired for smoking off the job.  The issue here is not a "right to smoke."  Smoking is hardly such a core liberty interest that it could deserve dignification in the form of an inalienable right.  Rather, it's the right to conduct one's life outside of work independently of one's employer's arbitrary will.  It's the right not to be subject to contract feudalism.  Or, as Anita Esposito (one of the Weyco employees who quit rather than take the drug test) put the point, "it had nothing to do with smoking.  It had to do with my privacy in my own home."


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» Employers and Employees vs Liberty from Pseudo-Polymath
At the heart of this question is an ethical tension between the liberty for an emplyee and employer. I disagree with Ms Anderson's conclusion. [Read More]

Tracked on Feb 11, 2005 11:05:51 PM


Posted by: Martin James

This is a very interesting topic.

All in all its a little surprising to me that employers have not meddled even more in the private lives of individuals. It just shows that for all the talk of "human capital" we do not yet have a very advanced form of human capitalism.

The whole issue of the extension of freedom and privacy guarantees to nongovernmental organizations is still ahead of us.

Are employers the only groups of concern. There are also cooperatives, homeowners associations, banks, insurance companies, religious schools, etc. that are "voluntary" yet result in a concession of freedom and privacy for the sake of the institution or group.

Posted by: Martin James | Feb 11, 2005 1:17:08 AM

Posted by: Perseus

My solution: Eliminate the tax deductibility of health insurance premiums for employers and transfer it to individuals on their federal income tax. This will eliminate one of an employer's major financial incentives to erode the personal liberties of its employees. Individuals will then be able to decide for themselves how much cost (in the form of higher health insurance premiums) they are willing bear for their private behaviors. This will also decouple health insurance from one's job so that losing one's job doesn't result in an immediate loss of health insurance. Otherwise, this will merely be the first of many inefficient government regulations designed to control employers.

Posted by: Perseus | Feb 11, 2005 2:23:18 AM

Posted by: oliver

"taking daily sperm samples from female workers"

Somehow I doubt we'll get to that point. Eggs on the other hand...

Posted by: oliver | Feb 11, 2005 8:48:11 AM

Posted by: Will

It's a free market. If you don't like your employer's rules, then work somewhere else. Employers that require more efficient lifestyles will in the steady state be able to offer a higher wage -- thus non-smoking workers would on balance do better to seek out such employers.

Posted by: Will | Feb 11, 2005 9:11:49 AM

Posted by: S. Weasel

I once moved into a house down the street from a filling station and garage and (since I drove a rolling rustbucket) was pleased to have it close by. One morning, I went in to buy a battery clamp. While the attendant was rummaging in the back, I looked over a large corkboard tacked all over with dozens of notes.

"I, Bill, promise my boss, Ron, I'll never be late again"
"I swear to Ron I will never smoke another cigarette"
"On my honor to my boss..."

Brrr. It was intensely creepy. The guy I dealt with was a sullen piece of work, too. I don't know if he was Ron or one of Ron's poor minions. Anyhow, I resolved never to have my car repaired there -- what self-respecting mechanic would put up with that?

I don't think there's any legislation that will prevent a boss from being an ass, however.

Posted by: S. Weasel | Feb 11, 2005 10:01:08 AM

Posted by: Terrier

Perseus, I actually don't disagree with your solution except that in this case the employer would just find another rationale.

oliver, re-read, please, and you may understand the point.

Will, so you won't mind taking a DNA test for any employment? The same market forces that will offer you a higher wage will also force more employers to adopt that methodology. At what point would you be willing to draw the line?

Posted by: Terrier | Feb 11, 2005 10:10:48 AM

Posted by: rtr

“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.”

This “due to legislation as well as economic growth” stood out as a vast improvement to me from some previous posts, and leftist understanding in general. It’s still a bit short on becoming an element of logically deducted knowledge. That is, economic growth cannot be fantasy dream-world legislated. What is produced with the marginal productivity of labor is what will be paid in wages in a free market.

“Nevertheless, to the extent that this liberty is secured by competition for workers and convention alone, rather than by legal right, it is vulnerable to invasion.”

Are we once again ignoring history? Liberty can be just as vulnerable to “legal right” as to the vagaries of the market place. There is no magic wishful solution that makes the individuals running the State and establishing its laws “angelic”. Those same individuals portrayed as “devilish” businessmen are the same individuals running the State. What rational person would grant such enormous powers to a State to be “devilish”?

“The issue here is not a "right to smoke." Smoking is hardly such a core liberty interest that it could deserve dignification in the form of an inalienable right. Rather, it's the right to conduct one's life outside of work independently of one's employer's arbitrary will. It's the right not to be subject to contract feudalism.”

It’s also called the right to quit and work for someone else who does not set such arbitrary conditions for employment. I would have more respect for Elizabeth Anderson’s position if she similarly derided the arbitrary will of the State, such as forcing employers and employees to provide health care insurance or fund Social Security. Ahh, there’s the arbitrary hypocritical rub. And let us not forget that there is nothing preventing the State from establishing the same sort of company town and its attendant regulations that is decried by the left. And when the State imposes company town regulations all lose the ability to escape by seeking better employer conditions elsewhere.

Posted by: rtr | Feb 11, 2005 10:54:20 AM

Posted by: john t

Perseus, good post,a side benefit of what you suggest would be the limitation of 3rd party insurance premiums. Ins co's just love sitting back on their lard filled asses and sending out their EFT's,reducing receivables and fattening the cash acct's. They do love those big corp accts. When and if they have to shop,or shop more than they do now,for the individual consumer my bet is that premium will stabilze,if not come down. On another note maybe some one will passingly refer to what we give up to gov't for it's service and benefits.

Posted by: john t | Feb 11, 2005 11:03:04 AM

Posted by: Tony

You ought to check out the results of a web search on "Ford Sociology Department". The idea of contract feudalism is hardly new!

More generally, I'm bothered by the idea that freedom to establish contracts (employment or otherwise) should be absolute, because we know, from many many examples, that such "freedom" soon degenerates into a limitless exercise of power, and the majority of individuals end up with less liberty rather than more. That's why labor regulations are so important. Libertarians who believe that limitless freedom to enter into enforceable contracts is somehow "liberating" need to more seriously consider the emergent phenomena that result. It's a naive approach that I consider more dangerous than communism.

Posted by: Tony | Feb 11, 2005 11:20:29 AM

Posted by: Bret

If the workers don't like it, they can (and have) quit. All employers doing something they don't like? Then they can start their own company (I've started three companies which now employ more than 100 people, partly for that very reason). Indeed, testing for nicotine makes at least as much sense to me as testing for marijuana (though I personally wouldn't advocate for either).

Posted by: Bret | Feb 11, 2005 11:49:31 AM

Posted by: DoctorDoctorPhil

Elizabeth Anderson's analogy between testing for nicotine and for sperm in women in spurious at best. Sex is a normal, healthy activity. Smoking is pernicious in any and every form. Why should an employer be obligated to take on the extra burden?

A happy medium would be to require smokers to pay the extra premium associated with their cohort out-of-pocket. There's no reason why an employer should be forced to pay extra for a habit long associated with morbidity and early death.
Frankly, I'm surprised by your opposition to this plan. Wasn't it Bill Kessler at FDA during the Clinton years who wanted to regulate tobacco like a drug? Wouldn't that also hamper personal freedom?

Posted by: DoctorDoctorPhil | Feb 11, 2005 2:51:17 PM

Posted by: S. Weasel

There's no reason why an employer should be forced to pay extra for a habit long associated with morbidity and early death.

Early death is a boon to the pension department. And everybody's going to get sick and die; smokers just have the grace to do it ten years younger, while paying gobs of extra taxes in the process. And no, I don't smoke.

Posted by: S. Weasel | Feb 11, 2005 4:31:47 PM

Posted by: rtr

Well if smokers can be required to pay extra premiums than overwieght or obese people can be forced to pay extra premiums, or those with pre-existing conditions can be forced to pay extra premiums. The local or national individual or democratic tyrants will draw the arbitrary lines for you. This is safe socialism as opposed to unprotected communism.

Perhaps employees can retort that employers are acting like feudalists when they chastise their employees for being late. Is there anything more "feudal" than 9 to 5 working hours? "Appropriate" dress attire? Personal hygiene standards? Prohibiting racist comments outside the job in public forums?

The bottom line is the same "feudal" aspects of private contracts do not magically disappear by putting the word "State" in front of coercion (as opposed to explicitly voluntary contract), and much worse, "bad" feudalism is enforced on all by the State and is much harder to get rid of. It chokes progress and liberty.

Posted by: rtr | Feb 11, 2005 4:45:01 PM

Posted by: catfish


I'm interested in the states that have laws that prevent firing for offenses such as smoking. Can you provide cites to a quick source or at least the technical term for such statutes so I can look them up on.



Posted by: catfish | Feb 11, 2005 5:11:34 PM

Posted by: Terrier

DoctorDoctorPhil, her point about testing for sperm was about PROMISCUOUS sex being considered dangerous! The whole point was where does it end? Pay a little more for risky behaviors, a little more for bad genes, at what point does your life become none of your employer's business? Would you answer an application question about whether you ever ate sushi? How many sex partners you have had? Do you speed when you drive?

Posted by: Terrier | Feb 11, 2005 6:29:39 PM

Posted by: No Labels Please

OK Liz:

From your previous posts I believe I understand your grand sweep and agenda. I may even not disagree with your objectives. I don't even need to read the next ten volumes. But:

--Where does your ill-disguised hatred of capitalism and commerce come from? Please analyze and discuss.

--Who will employ either the compelled smokers or compelled non smokers? Remember Venn diagrams please.

--Can we get rid of the 1940's Woody Allen Brooklyn Intellectual terminology please?

--Would you [politely] like smoke?



Posted by: No Labels Please | Feb 13, 2005 2:35:48 AM

Posted by: No Labels Please


In a more generous spirit than some of my past comments, here's to Liz Anderson for consistently providing some of the most intellligent and well thought-out commentary [of either stripe] on the web.

Cheers Liz.

Posted by: No Labels Please | Feb 13, 2005 2:45:25 AM

Posted by: D.A. Ridgely

Might not a better way of seeing the problem here be a recognition that the relationship between employer and employee should not extend beyond monetary compensation (in which I would include paid leave and possibly retirement benefits) and services rendered? As others have pointed out (including Mr. Velleman in a different thread), tying health insurance to the employment contract is not even remotely rational. (Tying it to being a citizen of a state is worse, but we’ll leave that for now.) It developed as an historical phenomenon because of wage controls, themselves pernicious, and the law of unintended consequences has run amok ever since.

As Ms Anderson notes, company towns (and, I would add, share cropping) do approximate something like corporate ‘feudalism,’ especially where debt bondage has arisen as a result. But these are market aberrations, not (as Ms Anderson suggests) the inevitable end results of free markets. Moreover, this is hardly the same sort of situation the Weyco employees find themselves in, and the solution here is less government involvement, not more involvement to fix the mess it created in the first place.

In any case, we can’t really say whether Mr. Weyers’ ham-handedness in all of this would be to his or his remaining employees benefit in a genuinely free market. It may be that smokers are more efficient than non-smokers, even discounting extra average health care costs. It may be that this attitude discourages better prospective employees from applying to work there. It may be that the effect on morale even among non-smokers reduces efficiency. Who knows?

Posted by: D.A. Ridgely | Feb 13, 2005 12:55:50 PM

Posted by: rtr

Let's try employing some *knowledge* in the analysis.

Take D.A. Ridgely’s statement: “Might not a better way of seeing the problem here be a recognition that the relationship between employer and employee should not extend beyond monetary compensation (in which I would include paid leave and possibly retirement benefits) and services rendered?.”

What are the ill-defined non-philosophically established words (let alone “meaning”)?

1. “Might”

2. “Better”

3. “Seeing”

4. “Problem”

5. “Recognition”

6. “Relationship”

7. “Employer/Employee”

First, to answer D.A.’s question, no. “N” + “O”. Indeed, it would be the opposite of better. The entire definition and philosophical establishment of “employer/employee” is regardless of pre- or post- “modernist” deconstruction a false dichotomy. Let’s take the *known* (rare, indeed) fact (which took more than 2000 years to establish since the question was first formulaically implied) of TRADE. What is trade and why does it occur? Now, who is the “employ-er” and who is the “employ-ee”, and what does that have to do with anything?

No Labels Please’s commentary is emblematic of what Ross Perot termed the “giant sucking sound”. Has, as opposed to if I was not so sure, have, Elizabeth Anderson’s comments made us better off? Have they enlightened us? No, if you take them at face value they’ve made us worse off, *put* us in a platonic cave. “Contract” “feudalism”? “Contract” + feudalism”? Contract is remotely far away from feudalism! It’s evident none of you know what the hell feudalism is or was. Contracts can be amended, can feudalism be amended? Perhaps your pieces of paper law degrees can be Revoked by His/Her Highness? You might as well be professing your faith in intelligent design “social contracts”. Enough already with the John Lennon “The Market As Prison” claptrap. Ascribing reasons is anthropomorphic. Discerning reasons is not.

8. “Compensation”

9. “Monetary Compensation”

10. “Money”

It’s interesting that money is close to mine yet indifferent to the facilitation of the transference of ownership, or its “use-value” of enjoyment. Debt bondage is sexy to the left when they are, or deem themselves, in control. So should we work there or here and why? Should “should” be a choice possibility existence? Feudalism my ass. Ownership versus non-ownership. We’re not talking about “shortened” workdays but the *RIGHT* to shortened workdays. Collection versus production.

11. “Convention”

12. “Legal Right”

Call the faith of the left “mast’ah”, efficiently provide according to your means faster and faster? Thank god for the “advent” of labor unions. Jesus Christ was a philosopher too, but that’s an adventure in covenant feudalism for another time. Taking to heart the relationship between “is/ought” and “recognition/should” is as they say all fun and games until someone loses an eye.

Dear Sir/Lord/Master you are hereby terminated/fired. I quit. It’s the difference between 6 billion and six owners of property. “F” to the e-u, D.A.-”L” -ism. Welcome back to the clueless State.

13. I think that was/is enough for now.

Equal pay for equal work. Here's to the vacation right of "Leave" for non-pregnant post-partum males. Yes, cheers!

Posted by: rtr | Feb 13, 2005 2:53:44 PM

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