Labor vs. Capital: Continuing the Meritocracy Trap Debate

This post, an exchange between Andrew Hart, Marshall Steinbaum, and Daniel Markovits, continues their debate from our March 2020 series discussing The Meritocracy Trap by Daniel Markovits. Click here to read all posts in the series. 

Andrew Hart & Marshall Steinbaum: It seems to us that the issue is not whether one places income in buckets labeled “capital” or “labor,” but rather what those particular buckets signify when it comes to extremely wealthy people. We might all agree to call the $50 million that a healthcare CEO gets for working 80-hour weeks “labor” income, but the fact that the firm or the “economy” has seen fit to allocate $50 million as a proper compensation for a healthcare CEO does not, as far as we can tell, have much to do with the productive value of 4,200 hours of healthcare CEO work over the course of a year. To justify this income by reference to skill is a just-so story—part of the inequality regime of “hyper-capitalism,” as delineated in Thomas Piketty’s recent book Capital and Ideology.

But Markovits seems to accept at least some of the human capital justification for high salaries when he speaks of superordinate workers and their immense skills and training. Put another way, we think Markovits believes the operative question is whether a person needs to work 80-hour weeks to get the $50 million as a healthcare CEO, and if the answer is yes, then the money is labor income. By contrast, we believe that the question should be why a healthcare CEO is “worth” $50 million in the first place, and that the answer to that question may at least cast some doubt on the usefulness of the category “labor income” when a person’s yearly income is high enough.

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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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