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The Solution to Labor Exploitation Is Workplace Democracy

At the very heart of our capitalist economic system is something grotesque: labor exploitation. That’s immoral — and we need some form of workplace democracy to undo it.

David Ellerman holds up Mondragon as the best-known example of worker democracy on an industrial scale. (RAFA RIVAS/AFP via Getty Images)

The idea that in the most basic sense we own ourselves is a very powerful one. Dystopian novels are filled with horror stories about people being harvested for organs or transformed into breeding machines, treated as a mere means for other people’s ends. From this ideal, the claim that we don’t just own ourselves but whatever we produce is a logical next step, invoked by everyone from Lockean libertarians to Marxists.

And yet our current economic system rests on the expectation that most people do not get to keep what they make with their labor. If I work at McDonalds, the company effectively “rents” me as an automaton to produce everything from Big Macs to McFlurries, which are then sold to make the company a profit. In return, I receive an hourly wage based on the original contract I signed to allow myself to be rented.

Socialists of all stripes object to this dynamic, though the reasons and solutions vary widely. For some, the indignity of being paid a few bucks an hour while higher-ups receive a bounty inherently devalues low-level employees. For others, the issue is more one of exploitation. Since labor is what creates the product, workers and not bosses should be getting the biggest slice of the pie. And finally, there are those who frame the issue in terms of coercion. They point out that the ostensibly free market actually requires billions of people to sign up for jobs they would rather not do, because the alternative is starvation. The lion’s share of many people’s life is spent servicing the ruling classes under duress.

David Ellerman’s new book, Neo-Abolitionism: Abolishing Human Rentals in Favor of Workplace Democracy, is a welcome contribution to this discussion, offering up a radical critique of “human rentiership.” A political philosopher and former adviser to Joseph Stiglitz at the World Bank, Ellerman makes the dramatic case that human rentiership, even if consensual, isn’t fundamentally different from slavery. His solution: workplace democracy, a “system where people are always enfranchised as the legal members/citizens/owners in the company where they work.”

Labor Is as Labor Does

Before there was the labor theory of value, there was the labor theory of property entitlements. Its classical formulation was laid out by John Locke in the Second Treatise on Government, where he infamously ruminated that, in the beginning, “all the world was America” — aka uninhabited, or at least not owned by anyone whose rights he thought we needed to care about. This supposedly untouched land was transformed through human effort, as people mixed their labor with the matte of the earth and gained a “natural right” to it as property.

Locke’s idea proved to have a long shelf life, in no small part because of its affinities with America’s “workmanship ideal” and the Protestant work ethic. Work came to be seen not just as a means to an end, but as valuable in itself — or even, in the writings of classical political economists like Adam Smith and David Ricardo, the source of all economic value.

Ellerman points out that leftists often attack the pro-capitalist flavors of these kinds of arguments, and rightly so. Defenders of market stratification, from Locke down to Ben Shapiro and Jordan Peterson, tend to argue that there’s an indelible link between how hard you work and the rewards you get under a capitalist system. “You own your own labor” and should be rewarded on that basis, as Shapiro put it in his recent book.

The most well-known critic of this position was Karl Marx, who observed that if you genuinely hold to the labor theory of property entitlements — that we own what we make — it’s impossible to be a capitalist, since the workers are the ones who make the product. Capital contributes a bit, but relatively little next to the people who actually mine ore, put together Nike shoes, or flip the burgers.

This inversion was so devastating that savvy defenders of capital like F. A. Hayek advised the political right to stop appealing to labor as the basis of an entitlement to property — a point which was roundly ignored by those who imagine CEOs must work almost two thousand times harder and smarter than their employees.

Why Ellerman Doesn’t Like Marxism

Ellerman does not go down this well-known route to criticizing capitalism, even disdaining the “moral idiocy” of much of Marxist theory (ouch). According to Ellerman, Marxism misses the main ethical problem with capitalism and indeed any system of alienated human labor: human rentiership. Instead, they wrongly pinpoint private ownership as the root of exploitation and advocate social ownership as the solution.

Historically, the socialist commitment to social ownership has often meant state ownership — which, Ellerman argues, proved just as bad or worse than private ownership. Ellerman regards this not as a bug, but a feature, of Marx’s fundamental framework; much like capitalism was defined by fundamental ideological horizons its defenders couldn’t overcome, so too are Marxists unable to think past this “public/private distinction.”

Rather than indict private ownership — late in the book, Ellerman even argues that sometimes corporations and competition can be useful, provided they are supplemented with “stronger anti-trust, environmental, and corporate transparency measures” — Ellerman insists the real moral outrage is the renting of human labor by others, which is just as objectionable if done by the state as by capital.

Ellerman doesn’t shy away from comparing the practice to a form of slavery. This might seem hyperbolic since there is a quasi-voluntary and transient quality to human rentiership that is entirely lacking in slavery. And indeed, Ellerman acknowledges that some left-wing critics have tried to probe at this idea through demonstrating it is both more coercive and less transient than appears.

But this isn’t Ellerman’s approach. Instead, he goes for the jugular by insisting that even if it was fully voluntary and entirely transient, renting humans for labor would still be a great wrong comparable to slavery. Here he points out that many of the classical “defenses” of slavery insisted it had a contractual basis. Slaves were either working for their master in return for food and shelter or to spare themselves a potentially violent death.

But these apparently voluntary defenses turned out to be a sham, since what took place was effectively one group of human beings using another as means to an end, with the latter having few options beyond submission or revolution. Human rentiership is little different, Ellerman says, since virtually no one has an option beyond allowing themself to be rented out in return for a wage as long as the existing employment system persists.

Many socialists would again be nodding their heads at this point. Yet for Ellerman, the alterative isn’t socialism — which, in his eyes, amounts to renting human beings’ labor for the state’s purposes — but “a private property market economy where the people who work in each enterprise are the legal members or ‘owners’ of the enterprise.” This, to Ellerman, is workplace democracy, and “the best-known examples on an industrial scale are in the Mondragon system of worker cooperatives in the Basque region of Spain.”

Is Workplace Democracy the Solution?

Ellerman’s tone throughout the book is strident; insults like “idiocy” and “moral insanity” pepper the text. Sometimes this gives the book flavor, but a lot of the time it is needlessly polemical, especially when directed against those inclined to support his general argument.

I suspect that many socialists, including Marx himself circa the Critique of the Gotha Program, would find the claim that we shouldn’t be gravitating toward statism but instead toward workplace democracy an attractive one. Putting aside Ellerman’s tendentious dismissal of state ownership and simplistic gloss on various socialist experiments, it is true that many of these initiatives were overly statist and hierarchical. The failure to sufficiently democratize social democracy, especially in the workplace, left the door open for neoliberal rollbacks. Many contemporary socialists actually stress Ellerman-type arguments about the importance of workplace democracy to complement.

I’m also certain that many socialists would agree it is unjust to use others as means to an end and to maintain a system where we are compelled to rent ourselves into precarious servitude. The issue is what the alternative should be.

Ellerman’s is workplace democracy. But the biggest problem with his book is that he never gets into detail about what form this workplace democracy is supposed to take. As he admits at one point: “[My] purpose here is not to go into how the legal structure of a democratic firm can be derived from first principles but to focus on those first principles themselves (inalienable rights, rights to the fruits of one’s labor, and democratic rights) that apply against the human rental system and in favor of workplace democracy.”

This isn’t just a technical flaw. Ellerman takes a hard line on individual rights and autonomy, holding that under no circumstances should we be compelled or even volunteer to be rented out as a means to another’s end. But if that’s the case, it’s not obvious how workplace democracy would inevitably guard against that.

In his classic book In Defense of Anarchism, the philosopher Robert Wolff points out that any democratic system where we don’t achieve unanimous consensus involves some people having their preferences outweighed by majoritarian inclinations. As a strict “deontologist” — a believer that morality consists of doing one’s moral duty, no matter the outcome — Wolff concludes that even if democracy is better at respecting rights than the competition, it is still too flawed and should give way to anarchism.

This seems true of Ellerman’s workplace democracy, too. In those situations where disagreement inevitably arises, should those who were outvoted complain that they now work for a company where their democratically expressed wishes are not being respected? Is Mondragon treating its workers as a “tool or a piece of land” if most of the workers want to do x, but some of them insist on y and cannot be convinced otherwise?

Most of us would like to say no, because in a genuine workplace democracy everyone has the right to express a position, and their fundamental rights as workers will not be violated. But it seems hard to see how Ellerman wouldn’t be forced to conclude yes, since even a democratic decision cannot outweigh someone’s “inalienable” rights.

Actually Existing Workplace Democracy

Ellerman’s book is thought-provoking, and the ideal of workplace democracy is well worth struggling for. But we need a conception of democracy and worker rights that is strict enough to protect individual autonomy yet flexible enough to allow compromise and overlapping but partial consensus. Here it might be wiser to move from the airy realm of moral theory to the real world — unpacking how co-ops like Mondragon operate as a first step on the road to making workplace democracy global.

Workplace democracy could be organized along stringent super-majoritarian lines, requiring high thresholds of support for a given policy before one direction is taken over and against the objections of others. This would require engaging in compromise and deliberation with workers who disagree to try and ascertain the most desirable course. Perhaps further restrictions would need to be imposed on these supermajorities to ensure that the benefits of production and sales reach every member of the community, and so that part of the demos can’t grant itself special privileges and entitlements over and above everyone else’s.

There are a number of possible courses we could chart to conceive a functioning workplace democracy. Ellerman’s Neo-Abolitionism points us in some of the right directions. It is now up to us to improve on his arguments — and, above all, to win a more democratic world.