Sunday, July 8, 2012

BHL v. BRG: Value, vision, and the curious case of the missing asshole tax.

It's strange that the BHL crowd didn't revert to form and suggest a gentler, more hands-off taxation alternative in the debate with BRG. Instead of outright regulation, why not impose a small surtax on companies that use drug testing, search worker's lockers or computers, or impose other restrictions on workplace freedom? When Bloomberg proposed banning sodas, many BHL/liberaltarian/neoliberal types made a counteroffer of a soda tax--where's the asshole tax?

The obvious answer is that BHL doesn't seem very interested in finding an efficient way to tax/regulate jerk bosses, even though they claim some interest in advancing worker interests generally. Indeed, they see what BRG considers to be jerk-store worthy behavior as ultimately socially beneficial profit-seeking. The rationale isn't normal libertarian coldness, they claim, but rather a legitimate doubt whether this enterprise has much value for workers. They question whether workplace restriction constitutes coercion, seeing it instead as a function of the desire to decrease costs and run profitable businesses.

Part of the disagreement is that both sides seem to imagine that workers have a similar hierarchy of values to the ones they have adopted--that workers would, for example, much rather have workplace freedom, even if it comes at the cost of a dollar or two an hour, or that they would much rather maximize utility in such a way that abstract values like workplace freedom play a relatively small part in how workers value their time, and as such are already reflected in market prices for labor. Of course, on one level it is simply an empirical question as to how workers value certain impositions on their freedom in the workplace. But such value does not exist in a vacuum--it is a product of particular systems constituted by a variety of different social, legal, and cultural norms. In some countries, there's not much advantage to living in the city and working for wages compared with being a yeoman farmer in the country, whereas in others there is an enormous difference. Regulations on the urban workplace may keep a society stuck in an agricultural mode by encouraging the latter relative to the former. Or it may bring about changes that, by raising the status of such employment, encourages a new business model, one more conducive to urban development. Such things vary, and a great deal depends on creating smart regulation.

For this reason, the notion that restrictions on bathroom breaks, searches, etc. will reduce workers wages to a significant degree is almost certainly overblown. It may have some temporary distorting effects, but it will also have an effect on culture, law, and social norms in such a way to bring about changes in how people assign value to these indignities. Even if it doesn't, there's certainly more ways to ensure that workers don't steal, abuse bathroom breaks, or come to work under the influence of any drugs that may harm their performance than curtailing workplace freedom. We could look at the problem from the point of view of "why prohibit employees from taking higher paying jobs working for shitty companies who impose crappy rules?" The other way to look at it is why allow a business model in which nice employers have to compete with jerk employers on a level playing field. In the short term, regulation or taxation restricting/disincentivizing the high-wage, high-jerkiness model may lower worker pay, but it will also encourage other solutions to the problems that jerkiness supposedly combats. Neither BRG nor BHL are talking about making workplace theft legal, so it is highly likely that employers, knowing that other employers cannot use the jerk business model anymore, will still seek to prevent worker thefts, on the job intoxication, etc., and pass on some of these gains to their workers. Since they could still arguably do this through carrots rather than sticks--simply being nice and placing trust in workers might be enough, really--there's no reason to think that they wouldn't at least try. As Hobbes noted, all market systems are a product of not simply the scarcity of goods, but also of socio-legal restraints. One easy way to address scarcity is to kill other people and take their stuff. There's no reason for the strong to favor non-killing methods of addressing scarcity until we restrict their economic model and discourage it in favor of a mutually beneficial counterpart. Similarly, there's no reason for inherently jerky bosses to choose the nice guy path until we impose restraints that bias markets in favor of the desired outcome.

What this indicates is that it is probably just best to first focus on what kind of a society with what values we want to have and then worry secondarily about how to make it possible. In some cases, using taxes rather than outright prohibitions might make sense. In others, regulation is preferable to taxes--an a-hole tax may be a case in which regulation is simpler and gentler than taxation, but it certainly wouldn't be that much more difficult.  The Soviet Union decided that it wanted to be a statist, industrialized, command economy, and then it found ways to make this possible. Many of them were highly illiberal and repressive, but illiberal and repressive techniques were also very much in line with the vision they had in mind. Certainly a much more flexible economy like that of the US could implement much more moderate impositions on the power of employers with little effect on efficiency. And certainly BHL types could come up with a way to implement it through a tax. If indeed this isn't even a problem, no one would pay the tax. That they are opposing the idea itself largely on efficiency grounds, rather than finding efficient ways to implement the principles, is telling.

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