The Organization of Labor: Dignity

Assume, arguendo, that the political reforms favored by radical economists and others will not be implemented immediately. Are there other measures that can and should be taken to mitigate the oppressiveness of the Authority Relation in the meantime? My examination of that question is in two parts. The literature on job satisfaction and alienation is examined first. The more general issue of dignity is then considered.

1. Job Satisfaction/Alienation 

One cannot read the literature of radical economists and the sociology of work without being impressed that work sometimes is oppressively organized and that efforts to remedy that condition are warranted. But much of the literature also has another quality: It suffers for want of reality testing. Thus when confronted with a conflict between what workers say in response to question- naires and what they do in the market place, many social commentators place inordinate weight on questionnaires.99 Most economists, by contrast, would argue that preferences are revealed by actual choices. Consider the following study of assembly line workers at a General Motors assembly line plant in Massachusetts reported by Amitai Etzioni:

An examination of their previous jobs indicates that by six criteria of job satisfac- tion, the workers were much better off on their previous job; 87.4 percent had formerly heid a job where pace was determined individually; 72 percent had had nonrepetitive jobs; about 60 percent had had jobs requiring some skills and training; and 62.7 percent had been entirely or partly free to determine how their jobs ought to be done… They chose to leave these jobs and take the frustrating assembly-line jobs basically because the new jobs offered a higher and more secure income. Three- quarters of the workers reported that the reasons bringing them to the new plant were primarily economic. Wage differences were about 30 percent. [Etzioni, 1975, pp. 34 – 35]

To be sure, better pay and better working conditions would be preferred by all. Confronted, however, with the need to make tradeoffs, valued attributes will be adjusted at the margin. Except as it can be demonstrated that ‘ work has been organized in an inferior manner, so that more satisfying work modes can be devised without sacrifice in efficiency, complaints about prevailing work practices, where workers have voluntarily sacrificed greater work satisfaction for greater pay, are of uncertain purpose.100 Paul Blumberg nevertheless contends, “There is scarcely a study in the entire literature which fails to demonstrate that satisfaction is enhanced… or productivity increases from a genuine increase in workers’ decision-making power. Findings of such consistency, I submit, are rare in social research. The participative worker is an involved worker.”

Curiously, the evidence relating job satisfaction to productivity discloses little or no association between the two (March and Simon, 1958, pp. 48, 50; Vroom, 1964, pp. 181-86; Katz and Kahn, 1966, p. 373; Gallagher and Einhom, 1976, pp. 367, 371). Scott’s survey of the empirical work brought . on by the human relations school concludes with the blunt statement that “several decades of research have demonstrated no clear relation between worker satisfaction and productivity” (1981, p. 90). Gallagher and Einhom conclude their survey of that literature with the observation: “We feel that job enlargement and enrichment can be useful tools for management. However, the important question that remains is not whether these programs work, but rather, under what conditions will they be most effective” (1976, p. 373; emphasis added). And Gunzberg’s recent survey of work mode changes in Sweden concludes that the economic consequences of participative practices have been difficult to assess. Thus although they have, in his judgment, yielded social/psychological gains, they “do not add to the value of goods and services, and can add to their cost” (Gunzberg, 1978, p. 45).

Rarely, I submit, will optimum job design involve the elimination of hierarchy. Instead, it entails taking the rough edges off of hierarchy and affording those workers who desire it a greater degree of interested involvement. But it is no accident that hierarchy is ubiquitous within all organizations of any size. That holds not merely within the private-for-profit sector but among nonprofits and government bureaus as well. It likewise holds across national boundaries and is independent of political systems. In short, inveighing against hierarchy is rhetoric; both the logic of efficiency and the historical evidence disclose that nonhierarchical modes are mainly of ephemeral duration. Putterman, among others, evidently agrees (1982).

2. Dignitary Values

The foregoing discussion of participation benefits raises a serious doubt that efforts to effect participation can be justified on profitability grounds. That general conclusion might be challenged, however, by arguing that the studies to date are insufficiently discriminating. Even if participation does not yield detectable benefits in general, an examination of tasks in greater microanalytic detail will disclose that some tasks regularly benefit from participation. Moreover, some of the benefits of participation may show up in the social calculus even though the private calculus does not support them.

The more general issue is whether the inclusion of dignity as an underlying attribute of human nature is warranted. Why should it be? What are the refutable implications?

The issues here are beyond the scope of this treatise. I submit, however, that capitalism is prone to undervalue dignity and that institutional safeguards can sometimes be forged that help to correct the condition. Some of the procedural safeguards urged by labor law specialists (Summers, 1976, pp. 503-8, 519-22) are examples.

Jerry Mashaw observes that the unifying thread in the “natural rights” approach to due process “is the perception that the effects of process on participants, not just the rationality of substantive results, must be considered” (1985, p. 182). “At an intuitive level [w]e all feel that process matters irrespective of result… We do distinguish between losing and being treated unfairly” (p.183). Such intuition presumably lies behind Karl Llewellyn’s observation: “In no legal system are all promises enforceable; people and courts have too much sense” (1931, p. 738).

Unpacking all this is not easy. Two levels of argument can, however, be distinguished. The lower level involves the profitability calculus and maintains that remediable suboptimization by managers (e.g. first-line supervisors) ought to be corrected. The higher level involves the Kantian moral imperative never to treat anyone as a mere meaqs (Mashaw, 1985, p. 144; Pincoffs, 1977, pp. 175-79). The first of thqsipurposes will be served by judicious use of institutional safeguards. Assuming that upper levels of the organizational hierarchy are aware of the earlier described behavioral tendencies of lower levels of management, myopia can be checked (in some degree) by using the firm’s overall profitability calculus as a basis for deriving appropriate supervisory constraints. Purely calculative but informed upper-level decisionmakers can be expected to implement such orgarational reforms.

How far short of the Kantian moral imperative such reforms will fall is the remaining issue. Horvat expresses the soci|fst objection to capitalism as follows: “(Rjelations between persons are expressed and experienced as relations between things… Men evaluate each other as they evaluate objects” (1982, pp. 90-91). Economists, whose knowledge of capitalism and its nuances runs deep, ought to be involved in devising a thoughtful response. Safeguarding firm-specific values in human capital is easy. But what dignitary values beyond those warrant support? What are the comparative institutional ramifications? What are the tradeoffs?

Source: Williamson Oliver E. (1998), The Economic Institutions of Capitalism, Free Press; Illustrated edition.

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