Corporate Serfdom?

This blog post outlines something I’ve suspected for some time. In the corporate/government/media world most of the people are more slave than free. Yes they get paid, sometimes very well.  But most of the decisions that they could make for themselves are in the hands of those in control.   This post below makes the case.

This slave class tends to look down on the more numerous classes of dependent helots, concentrated in the same cities, but with a sense of pity, occasionally with contempt. The slave class sees it as their moral obligation to support and even uplift the helots, who are usually darker skinned. The slave class both hates, fears, and ridicules the freer middle classes from the less densely populated regions in the interior, not understanding how and why the freemen tend to value their rights to bear arms and hold their own property so much.

The slave class is entirely dependent on the activities in the modern bureaucratic courts. They’re skimmers, financiers, rule-makers, centralizers, standardizers, administrators, teachers, technologists, and cultural manipulators. They usually turn their noses up at independence, even in matters of business, preferring to raise paper money for grand projects with social missions from their oligarchical superiors. They’ll happily trade autonomy for a recognized position within the court, even if it makes them soft and dependent on the system. Hand such a man a gun, and he will tend to feel frightened of the idea of shooting it.

The reason for this is simpler if we look at our society from a broader historical perspective: to hold a gun and to use it wouldn’t be just illegal in most cities without permits, but it would be a violation of a caste boundary. You’ll hear this often from slave women, who are usually quite happy and comfortable in servitude, no matter what she says in earshot of her masters to show what a spirited, hard-working, self-abnegating little slave she is.

When a slave man she knows brings up guns or buying a gun, she will have an immediate emotional reaction to it, sometimes even babbling about how terrible and dangerous guns are, and why one shouldn’t own it or even know how to use it.

Rather than calling the slave woman addled, we should recognize her reaction for what it is — an entirely sensible enforcement of the social caste boundaries which she has intuited. The armed super-cop praetorian is the one authorized to carry a gun. Members of the helot class who are criminals can also be permitted to carry guns now and again, so long as they don’t leave their neighborhoods to menace the powder-skinned slaves too often. Every once in a while, a helot kills a slave, but slaves will tend to instead blame the inherent sin of their own class rather than the semi-feral aggression of the helot types.

These slaves, especially when they advocate for national gun control laws, are just trying to enhance the relative power of the praetorian class, their oligarchical masters, and their own harem-like social organization, so highly dependent on refined, obscure, and fashionably fluctuating religious doctrines emanating from their high academies, as dramatized in the glowing liturgical pageants emanating from screens.

What’s interesting is just how little it takes to keep people in bondage.  If you listen to the typical narrative about the American south for instance you would believe that all the slaves were kept in chains. In fact that was far from the truth. There were very few chains and no walls or fences on the typical plantation.

That’s because the chains are in our heads.  We are bound tighter by  our fears than by any chains. Fear of being cast out, fear of failing, fear of letting the people depending on us down. Fear of losing all we have.  That’s what ties us down.

That actually works as a long as both side play fair. What happens though,  when the master decides to break the deal?  What happens when employees are treated like slaves and then expended?

I then found this interesting article from Nassim Taleb. He goes into things in more detail.

You start thinking: well, you know, if Bob were a slave, someone you own, you know, these kind of things would not be possible. Slave? But wait… what Bob just did isn’t something that employees who are in the business of being employees do! People who are employees for a living don’t have such opportunistic behavior. Contractors are too free; they fear only the law. But employees have a reputation to protect. And they can be fired. People who like employment like it for a reason. They like the paycheck!

People you find in employment love the regularity of the payroll, with the special envelop on their desk the last day of the month, and without which they would act as a baby deprived of mother’s milk. Then you realize that had Bob been an employee rather than what appeared to be cheaper, that contractor thing, then you wouldn’t be having so much trouble.

But employees are expensive… You got to pay them even when you’ve got nothing to do for them. You lose your flexibility. Talent for talent, they cost a lot more. Lovers of paychecks are lazy … but they would never let you down at times like these.

So employees exist because they have significant skin in the game –and the risk is shared with them, enough risk for it to be a deterrent and a penalty for acts of undependability, such as failing to show up on time. You are buying dependability.

And dependability is a driver behind many transactions. People of some means have a country house, which is inefficient compared to hotels or rentals, because they want to make sure it is available if they decide they wanted to use it at a whim. There is an expression “never buy when you can rent the three “Fs”: what you Float, what you Fly, and what you …that something else”. Yet many people own boats, planes, and end up with that something else.

True, a contractor has downside, a financial penalty that can be built-into the contract, in addition to reputational costs. But consider that an employee will always have more risk. And conditional on someone being an employee such a person will be risk averse. By having been employees they signal a certain type of domestication.

Someone who has been employed for a while is giving you the evidence of submission

Evidence of submission is displayed by having gone through years of the ritual of depriving himself of his personal freedom for nine hours every day, punctual arrival at an office, denying himself his own schedule, and not having beaten up anyone. You have an obedient, housebroken dog.

Employees are more risk averse, they fear being fired more than contractors do being sued

Even when the employees ceases to be an employee, they will remain diligent. The longer the person stays with a company, the more emotional investment they will have in staying and, when leaving, are guaranteed in doing an “honorable exit”….

So if employees lower your tail risk, so do you lower theirs as well. Or at least, that’s what they think you do.

At the time of writing, firms stay in the top league by size (the so-called SP500) only about between ten and fifteen years. Companies exit the SP500 through mergers or by shrinking their business, both conditions leading to layoffs. Throughout the twentieth century, however, expected duration was more than sixty years. Longevity for large firms was greater; people stayed with a large firm for their entire life. There was such a thing as a company man (restricting the gender here is appropriate as company men were almost all men).

The company man–which dominated the twentieth century–is best defined as someone whose identity is impregnated with the stamp the firm wants to give him. He dresses the part, even uses the language the company expects him to have. His social life is so invested in the company that leaving it inflicts a huge penalty, like banishment from Athens under the Ostrakon. Saturday nights, he goes out with other company men and spouses sharing company jokes. In return, the firm has a pact to keep him on the books as long as feasible, that is, until mandatory retirement after which he would go play golf with a comfortable pension, with as partners former co-workers.

The system worked when large corporations survived a long time and were perceived to be longer lasting than nation-states.

About in the 1990s, people suddenly realized that working as a company man was safe… provided the company stayed around. But the technological revolution that took place in Silicon valley put traditional companies under financial threat. For instance, after the rise of Microsoft and the personal computer, IBM which was the main farm for company men, had to lay off a proportion of its “lifers”, who then realized that the low-risk profile of the position wasn’t so much low risk. These people couldn’t find a job elsewhere; they were of no use to anyone outside IBM. Even their sense of humor failed outside of the corporate culture.

Up until that period, IBM required its employees to wear white shirts –not light blue, not with discreet stripes, but plain white. And a dark blue suit. Nothing was allowed to be fancy, or invested with the tiniest amount of idiosyncratic attribute. You were a part of IBM.

Our definition:

A company man is someone who feels that he has something huge to lose if he doesn’t behave as a company man –that is, he has skin in the game

If the company man is, sort of, gone, he has been replaced by the companies person, thanks to both an expansion of the gender and a generalization of the function. For the person is no longer owned by a company but by something worse: the idea that he needs to be employable.

A companies person is someone who feels that he has something huge to lose if he loses his employability –that is, he or she have skin in the game

The employable person is embedded in an industry, with fear of upsetting not just their employer, but other potential employers.

An employee is –by design– more valuable inside a firm than outside of it, that is more valuable to the employer than the market

Perhaps by definition an employable person is the one that you will never find in a history book because these people are designed to never leave their mark on the course of events. They are, by design, uninteresting to historians.

How To Legally Own Another Person

If employees become free agents, what’s that going to do to the businesses cost structures.

Employee Extinction? The Rise of Contract, Temp Workers in Business

Look at what happens in sports. Who are the best paid players.  The free agents who can renegotiate a higher value for themselves.  This has been used ruthlessly to their advantage.

Bright companies might want to take a look at 19th Century labor practices before Taylorism and the way modern corporations structured their work after WW2. Here’s some videos from Westinghouse in the early 20th Century.

Pay special attention to the men in suits.  They are inside contractors, working on a machine that they have contracted to get running and more than likely install the machine at the customer’s site.  This was not an uncommon practice in late 19th Century factories.

Here’s another video of arms manufacture in World war 1.

The rise of Taylorism and efficiency expert on the shop floor along with the spread of assembly lines, along with the push by unions for labor agreements killed internal contracting for the most part. The ideal plant of the 1950’s became the huge floor space covered with lines that made everything exactly alike.  That was amazingly productive and that productivity drove the economy of the post war period.  The problems started when the markets got saturated and the companies were required to seek out a greater diversity of products and markets. Still the big company model prevailed and indeed even expanded as financial deregulation provided the giants the means to swallow smaller fish whether that was a good idea or not.

Needless to say that for a big company the company man was the ideal and tying the employees into servitude so that they wouldn’t wander was a good thing for the corps as long as corps lasted.  They ensured that way the what was between the employees ears remained company property.  This started to break down in the late 1980’s as the old vertical integration business model became obsolete due to foreign competition, government regulation, labor crises and new technologies.

I think that the big reason that things have gone downhill is that the trend had been for people to enter their careers as managers and nothing else.  Back in the 1960’s there was movement to create professional mangers that theoretically could manage any kind of company.  After all, the assumption was that you  just had to watch how the money flowed and the rest would handle itself.  The reality turned out to be different.

Frankly I don’t think that you can manage a team without knowing how the game works.  Not just how the rules work, but every little detail that make the thing run well. You also need to believe in what you are doing. Just filling a suit and a desk because that’s where you were offered the best deal doesn’t really cut it.

The modern economy is moving back to a more free contractor and vendors moving from project to project model. Especially  in China.

This is driven by the fact that with the internet and computers there is no longer a huge need to concentrate resources for management and control reasons.  The easy and incredibly cheap communications and manufacturing technologies are going to force  a rethinking of how things work.

Of course if the entertainment industry is any indication, the people at the top are still stuck in the 1960’s.

What the people in charge don’t understand is that the clock may have run out and if things don’t change, they will go down with the bloated top heavy ships that they have created.


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