Democratizing the Workplace

This post opens a symposium on Elizabeth Anderson’s Private Government: How Employers Rule Our Lives (and Why We Don’t Talk about It). Read the complete symposium here.

Frank Pasquale –

anderson-book-cover.jpgWork can go wrong in many ways. Ship breakers in Bangladesh routinely die as they try to dismantle abandoned vessels with acetylene torches. Meat cutters in Iowa suffer repetitive stress injuries during twelve-hour shifts on carcass-filled assembly lines. Truckers can endure a modern-day version of indentured servitude, forced to pay for the very vehicles they use to do their job. Retail bosses pressure sales staff to accept lower pay so their beleaguered brick-and-mortar stores can keep up with Amazon—which maintains its own competitive edge with a workplace culture reminiscent of Glengarry Glen Ross. The upper echelons of other tech workplaces are no Elysian Fields of job satisfaction, either: An avalanche of sexual harassment claims is overwhelming Silicon Valley, and burnout is endemic at struggling startups.

It might seem odd to discuss all these problems together—for example, Amazon developers appear to have little in common with day laborers. But good social theory aims to illuminate unexpected connections. Elizabeth Anderson’s bold Private Government is a firm foundation for twenty-first-century civic education in workplace democracy. Anderson exposes the inevitably political dimensions of work. And she leaves us in no doubt that for employees the workplace is tyrannical, ruled by the whims of exploitative and mercurial bosses.

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Techno-utopian, Cyclical, Political: Reconsidering the Path of Legal Employment

Frank Pasquale –

About a decade ago, when legal employment dipped sharply, there was a raging debate on the future of the legal profession. Some said the drop reflected a permanent decrease in legal work. The logic here was simple: computers were increasingly capable of completing more sophisticated projects. Having eclipsed paralegals in some document review tasks, they would, we were assured, soon supplant attorneys at writing briefs. These techno-utopians also evoked (what they called) a market logic: the more competition pressed firms to become more efficient, the more software they would deploy.*

Others saw the dip in employment as cyclical. It wasn’t just lawyers who suffered in the wake of the global financial crisis; employment in many fields fell. A drop in effective demand was shrinking the economy as a whole. The cyclical school predicted that when the economy rebounded, jobs for attorneys would also recover.

I will not attempt to adjudicate the dispute here. The most vehement techno-utopians, who predicted mass closures of law schools, the “end of BigLaw,” and obsolescence for attorneys, have ended up looking silly. The legal profession did not become the modern-day equivalent of buggy-whip manufacture. Even paralegal employment has been on the rise. In the broader economy, the techno-utopian story has fared even worse. One of its prime policy ideas—the notion of a “skills gap” crippling the economy thanks to workers’ lack of education—has been widely debunked. On the other hand, fewer persons are becoming lawyers today—an indication that the field is shrinking in some areas, to the chagrin of cyclical-ists.

Each approach is performative, in the sense that it not merely describes the world, but also prescribes future action. From a techno-utopian perspective, it is good to see fewer Americans becoming attorneys, because so many are performing roles that can be automated. From a cyclical perspective, growth in the number of lawyers is a positive trend, since it both reflects and manifests more economic growth generally. But it is possible that each of these economics-driven schools of thought is missing a bigger picture issue: namely, the political and social valence of legal work and its fair compensation. That is where discussions of the legal profession need a political economy perspective, rather than a merely economic one.

This political economy perspective should encompass many concerns. This post focuses on two: the beneficiaries of legal work, and its nature. My main point is that then trends which both techno-utopians and cyclical-ists celebrate as vindicating their own points of view, are ambiguous as to their effects on society generally.

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The Uneasy Case Against Occupational Licensing (Part 1)

Frank Pasquale & Sandeep Vaheesan–

Obama-era technocrats and Trump cronies may not agree on much, but they have made common cause against occupational licensing. That focus undermines important social objectives while obscuring far more important problems in the labor market. In this post, we cover the basics of licensing, and then reframe current attacks on it. In our next post, we will explain why licensing’s mix of consumer protection and labor market stabilization is a legitimate policy option for a wide range of occupations.

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Data Nationalization in the Shadow of Social Credit Systems

Frank Pasquale –

The political economy of digitization is a fraught topic. Scholars and policymakers have disputed the relative merits of centralization and decentralization. Do we want to encourage massive firms to become even bigger, so they can accelerate AI via increasingly comprehensive data collection, analysis, and use? Or do we want to trust-bust the digital economy, encouraging competitors to develop algorithms that can “learn” more from less data? I recently wrote on this tension, exploring the pro’s and con’s of each approach.46038488 - law concept: circuit board with  scales icon, 3d render

However, there are some ways out of the dilemma. Imagine if we could require large firms to license data to potential competitors in both the public and private sectors. That may sound like a privacy nightmare. But anonymization could allay some of these concerns, as it has in the health care context. Moreover, the first areas opened up to such mandated sharing may not even be personal data. Sharing the world’s best mapping data beyond the Googleplex could unleash innovation in logistics, real estate, and transport. Some activists have pushed to characterize Google’s trove of digitized books as an essential facility, which it would be required to license at fair, reasonable, and non-discriminatory (FRAND) rates to other firms aspiring to categorize, sell, and learn from books. Fair use doctrine could provide another approach here, as Amanda Levendowski argues.

In a recent issue of Logic, Ben Tarnoff has gone beyond the essential facilities argument to make a case for nationalization. Tarnoff believes that nationalized data banks would allow companies (and nonprofits) to “continue to extract and refine data—under democratically determined rules—but with the crucial distinction that they are doing so on our behalf, and for our benefit.” He analogizes such data to natural resources, like minerals and oil. Just as the Norwegian sovereign wealth fund and Alaska Permanent Fund socialize the benefits of oil and gas, public ownership and provision of data could promote more equitable sharing of the plenitude that digitization ought to enable.

Many scholars have interrogated the data/oil comparison. They usually focus on the externalities of oil use, such as air and water pollution and climate change. There are also downsides to data’s concentration and subsequent dissemination. Democratic control will not guarantee privacy protections. Even when directly personally identifiable information is removed from databases, anonymization can sometimes be reversed. Both governments and corporations will be tempted to engage in “modulation”—what Cohen describes as a pervasive form of influence on the beliefs and behaviors of citizens. Such modulation is designed to “produce a particular kind of subject[:] tractable, predictable citizen-consumers whose preferred modes of self-determination play out along predictable and profit-generating trajectories.” Tarnoff acknowledges this dark possibility, and I’d like to dig a bit deeper to explore how it could be mitigated.

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The Real Barriers to Access to Justice: A Labor Market Perspective

Frank Pasquale – 

There is a vast literature on access to justice in the United States. In what Sameer Asher has diagnosed as a broadly neoliberal discourse, the legal profession itself stars as the key barrier to access to justice: It is slow to adopt technology, restricts entry with excessive licensure requirements, and bogs down in technicalities. Let’s assume, for now, that these are fair charges.* Are they really the reason why so many consumers feel unable to fight giant corporations, or why employees feel trampled by the fissured workplace?

I’d like us to keep in mind a few other factors. The evisceration of class actions, the rise of arbitration, boilerplate contracts—all these make the judicial system an increasingly vestigial organ in consumer disputes. You cannot read a book like Lewis Maltby’s Can They Do That? without recognizing that the powerlessness of most workers is not the result of a paucity of lawyers (especially in an country with more per capita than almost any other), or greedy firms overcharging for services. It is, instead, the result of a web of rules woven by lobbyists and elite attorneys over decades with the intent of making the firm, in effect, a private government. Corporations have skillfully funded candidates in state judicial elections (or politicians who appoint judges) who promote their vision of a stripped-down, nightwatchman state. Make lawyers as cheap and skilled as you want—they can’t help victims access justice if the laws themselves are systematically slanted against them. The same goes for #legaltech: I expect every innovation to, say, create apps to help the evicted to be overwhelmed by a tsunami of money backing services like ClickNotices.

On the criminal side, the underfunding of public defenders (and other advocates for those targeted by the carceral state) is shameful. From a supply-side perspective, the answer here may be to cheapen training and thereby double the number of public defenders, so that states could perhaps hire two at $24,000 a year instead of one at $48,000. I do not believe that’s a great solution. As long as there are $1.5 trillion tax cuts flying around (mainly to top income brackets), and 1412 households in the US making over $59 million annually, I’d put forward a vision for more spending on these vital services, at a good wage, with a strong Public Service Loan Forgiveness Program. The latter should not even be considered a subsidy, given the vast profits the government has made on student loans generally, and the market’s systemic undervaluation of public service work. I realize that policy is going in the opposite direction now—but let’s also realize how much that development is driven by private lenders’ lobbyists, who want to make the federal student loan program a quicksand of confusing paperwork and high interest rates in order to make their own products comparatively more attractive.

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There is no necessary trade-off between good work and more work

Frank Pasquale – 

Mainstream economists tend to frame employment policy as a series of tragic trade-offs. If policymakers raise the minimum wage, they are told, employment will inevitably fall, perhaps precipitously. Requirements for vacations, too, might crash the job market. (Never mind that dozens of other prosperous countries mandate paid vacation time.) Technocrats of the center left complain about employer-sponsored insurance as a dreadful distortion of the labor market. Sick pay, family medical leave, maternity and paternity leave—all have been blasted by one economist or another as a drag on economic growth and employment levels. “You are only hurting the people you are trying to help,” labor activists are told, again and again.

Such models are intuitively plausible, thanks to what James Y. Kwak has called “economism:” simplistic perspectives resulting from mechanical applications of supply and demand models to complex social phenomena. In general, the more costly something is, the less consumers will demand it. That reasoning leads, in turn, to more sweeping claims about the need to deregulate labor markets. If there is one policy issue most likely to consolidate bipartisan consensus among economically minded technocrats, it is a suspicion of barriers to entry in the workforce, including occupational licensure and “credentialization.” They lament the former as a paradigmatic example of state power hijacked by private interests to enrich themselves. Credentialization is framed as a market failure: The unjustified preference of bosses for workers educated in ways not directly related to the tasks they will be performing at work.Supply and Demand diagram. Demand has negative slope. Supply has positive slope. further explained below

The bottom line of this economism is grim. To the extent the state requires certain qualifications of workers, or workers themselves demand time off or other entitlements, there will be fewer jobs. Economist Tyler Cowen asks whether “whether workers might not enjoy ‘too much’ tolerance and freedom in the workplace.” While cash wages are taxed, “perks” are not, so employers will be tempted to oversupply perks at the expense of wages (or, even more troublingly to neoclassical diehards, at the expense of shareholders).

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The dark side of the ‘data-driven’

Frank Pasquale –

In her fascinating new book Automating Inequality, Virginia Eubanks recounts that the first “big data” set in the United States “was the Eugenics Records Office in Cold Spring Harbor. It was the public arm of the eugenics movement.” While the systematic collection of data has underpinned many important initiatives, it also has a dark side. Expect to see that dark side re-emerge with a vengeance in the next few years, as many American states intensify their surveillance of already disadvantaged groups.

Are there forms of knowledge that the state—or even university researchers—should not aspire to attain? Privacy law is meant to empower us with zones of thought and experience that no one can access without permission. Another branch of law, governing human subjects research, ensures that experimenters obtain consent before gathering data about individuals. As a member of the Council on Big Data, Ethics, and Society, I have thought and written about the types of data corporations and states should be able to gather about individuals, and the power relationships that data gathering entailed.benthams-panopticon-copy.jpg

Like disputes over free expression, the politics of data gathering for social science research is becoming a fraught area for progressives. For some, knowledge is an intrinsic good. Research of all stripes is a way of better understanding ourselves and our world. But there is another, more Foucauldian perspective: Where does the burden of scrutiny fall? What complicity does a social scientist have with the regime that provides data? The construction of what counts as “success” or “failure” in a given study is a highly political decision. A particular focus on some data or metrics comes at the cost of an exclusion or devaluation of others (akin to the “jurispathic” judgments Robert Cover recognized). All these questions will be critical as America’s laboratories (or meth labs) of democracy concoct innovative ways of denying health care to the poor, and ask social scientists to study “what works” in health policy.

Evaluating the Costs of Program Evaluation

The Trump Administration recently announced an intent to grant states permission to condition Medicaid benefits on work requirements (via Section 1115 of the Social Security Act). Former CMS Administrator Andy Slavitt immediately condemned the move. Activists were even more outraged. Journalists chronicled the many ways the work requirements were likely to worsen health outcomes, while burdening the vulnerable with paperwork and bureaucratic hurdles. New state “flexibility” will translate into cruel cutbacks for the disabled (who now may be denied transportation benefits).   Continue reading

Division, Distraction, and Domination: Revisiting The Miner’s Canary

Frank Pasquale – 

A magazine owned by billionaire Michael Bloomberg recently reported on workers’ declining share of national income. “Why don’t workers get the full benefit of rising productivity? No one has good answers,” it stated, to the merriment of left Twitter. A raft of memes reminded Bloomberg Businessweek of the lessons of Piketty, Marx, and political economy generally. Of course capitalism is going to disproportionately reward the owners of the means of production. Surplus value helps r > g, those gains are partially reinvested in the political system, which produces even more inequality—self-reinforcing domination without end, amen.

On the other hand, there are many varieties of capitalism. Some states are much better at democratizing financial security than others. The US and UK are both savagely unequal societies, but at least the latter has a National Health Service. Germany and France do more than either the US or UK to reduce inequality through taxes. Timing matters, too: the US of the mid-1960s had far more hope of durable egalitarianism than the US of the mid 2010s. As David Grewal has argued, “Understanding why r > g has generally held — and why it briefly did not — requires an account of capitalism as a socioeconomic system structured through law.” And we cannot tell that story without, as Angela Harris argues, looking at the role of race in structuring both economic and political opportunity.

Harris’s post focuses on the history of exploitative relations between central and peripheral powers. She argues:

Part of the mission of “law and political economy,” as I see it, is to broaden our investigation of the relationship between “race” and “economics” both spatially and temporally – beyond the bounds of America as a nation-state, and beyond slavery as a starting point. The proposition is that race is foundational to “law,” to “the political,” and to “the economy.”

Both social science graduate schools, and law schools, can use the pursuit of parsimony as an excuse to abstract away from the racial context of so much of what we study. Harris is right to bring race to the center. Many of the works she cites should be in the canon of law and political economy. They help us better explain the past, while illuminating troubling trends of the present. We need to elevate research that does this vital work, exposing the role of racecraft in distracting individuals from their real interests, to pursue some contrived purity or superiority.

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From Territorial to Functional Sovereignty: The Case of Amazon

Frank Pasquale

Economists tend to characterize the scope of regulation as a simple matter of expanding or contracting state power. But a political economy perspective emphasizes that social relations abhor a power vacuum. When state authority contracts, private parties fill the gap. That power can feel just as oppressive, and have effects just as pervasive, as garden variety administrative agency enforcement of civil law. As Robert Lee Hale stated, “There is government whenever one person or group can tell others what they must do and when those others have to obey or suffer a penalty.”

We are familiar with that power in employer-employee relationships, or when a massive firm extracts concessions from suppliers. But what about when a firm presumes to exercise juridical power, not as a party to a conflict, but the authority deciding it? I worry that such scenarios will become all the more common as massive digital platforms exercise more power over our commercial lives.

A few weeks ago, the Friedrich Ebert Stiftung (a think tank affiliated with the Social Democratic Party in Germany) invited me to speak at their Conference on Digital Capitalism. As European authorities develop long-term plans to address the rise of powerful platforms, they want to know: What is new, or particularly challenging, in digital capitalism?

My answer focused on the identity and aspirations of major digital firms. They are no longer market participants. Rather, in their fields, they are market makers, able to exert regulatory control over the terms on which others can sell goods and services. Moreover, they aspire to displace more government roles over time, replacing the logic of territorial sovereignty with functional sovereignty. In functional arenas from room-letting to transportation to commerce, persons will be increasingly subject to corporate, rather than democratic, control. Continue reading

The Epicycles of Health Care Market Design: Time for a Paradigm Shift in Health Policy

Frank Pasquale – 

Back in June, I attended the annual conference of health law professors held by the ASLME. This conference is a real intellectual feast for anyone interested in political economy. National experts describe the latest developments in the Affordable Care Act’s exchange marketplaces. Antitrust scholars consider the proper balance between delivery system integration and competition in accountable care organizations. The role of the state in structuring economic activity is critical to nearly every panel on insurance markets, licensure, and access to care.

SinglePayerNow

But there was very little buzz about what has become one of the hottest topics in progressive health policy in 2017: state efforts to develop single-payer health care systems or public options (like a Medicaid buy-in). Politicians and activists appear to be leading this charge, pushing proposals in California, Nevada, and New York. They have generated a lot of enthusiasm, and they will get more attention if the GOP manages to repeal the individual mandate and further damage insurance markets. Even self-described neoliberal Matt Yglesias has called on experts to further develop ideas here. And yet the academy seems slow off the mark. What explains this tardiness?

I think part of the problem is the sheer complexity—and thus intellectual challenge—of market design in a neoliberal era. Sarah Kliff recently eulogized the great health care economist Uwe Reinhardt by memorializing the “joy he always took in trying to understand the maddening, baffling inner-workings of the American health care system.” “Joy” seems like an odd emotion to express, upon encountering the complexities of ERISA, MedPAC, MACRA, MIPS, and the rest of the health care finance alphabet soup. But once you teach in these areas, the incrementalism of the well-informed is hard to shake. Continue reading