Back in 1974, Stephen Marglin published an important essay, “What Do Bosses Do? The Origins and Functions of Hierarchy in Capitalist Production” (pdf).
Marglin was responding to the tradition within mainstream economic theory, from Adam Smith to neoclassical economics, that hierarchy and specialization were indispensable for increasing productivity and achieving efficiency. He countered that “capitalist hierarchy has little to do with efficiency” but, instead, was designed to guarantee “to the entrepreneur an essential role in the production process” and “to provide for the accumulation of capital.”
Smith’s ideas are receiving renewed attention, in relation to the other side of the capitalist relationship: workers.
According to Barry Schwartz, most workers are unhappy with the work they’re doing—and that’s at least partly due to Smith.
the ideas of Adam Smith have become a kind of self-fulfilling prophecy: They gave rise to a world of work in which his gloomy assumptions about human beings became true. When you take all opportunities for meaning and engagement out of the work that people do, why would they work, except for the wage? What Smith and his descendants failed to realize is that rather than exploiting a fact about human nature, they were creating a fact about human nature.
The transformation I have in mind goes something like this: You enter an occupation with a variety of aspirations aside from receiving your pay. But then you discover that your work is structured so that most of those aspirations will be unmet. Maybe you’re a call center employee who wants to help customers solve their problems — but you find out that all that matters is how quickly you terminate each call. Or you’re a teacher who wants to educate kids — but you discover that only their test scores matter. Or you’re a corporate lawyer who wants to serve his client with care and professionalism — but you learn that racking up billable hours is all that really counts.
Pretty soon, you lose your lofty aspirations. And over time, later generations don’t even develop the lofty aspirations in the first place. Compensation becomes the measure of all that is possible from work. When employees negotiate, they negotiate for improved compensation, since nothing else is on the table. And when this goes on long enough, we become just the kind of creatures that Adam Smith thought we always were. (Even Smith, in one passage, seemed to acknowledge this possibility, noting that mindless, routinized work typically made people “stupid and ignorant.”)
Schwartz makes it out to be a tension between our lofty aspirations and the drudgery of the jobs we actually do. (And he uses the example of the “dancing janitors”—who help out with patient care without additional compensation—to illustrate the idea that we’re looking for something more than wages.)
I’ll admit, I do think there’s a tremendous amount of dissatisfaction on the job. And I like the idea that economic theory is “performative” (that is, it both captures something going on in the real world and creates that world).
But he buries the real issue elsewhere in his piece:
This, again, is what Adam Smith thought. In his famous example of the pin factory, he extolled the virtues of the division of labor: “One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head.” Our work experience might be poorer, but we — or at least our bosses — would be richer.
So, we’re back to where we started, with the bosses. Whether or not hierarchy and the division of labor are efficient, it’s the bosses who are becoming richer as a result of the work employees do. And employees are forced to have the freedom to work for the bosses in order to purchase the commodities and pay off the debts they need to reproduce themselves and their families. Workers get wages and salaries, bosses get profits.
That’s what workers do—unless and until we create another kind of enterprise, in which workers make the important decisions about the work they do and what will be done with the value they create.