Democratic equilibria: Albert Hirschman and workplace democracy

Abstract

This paper clarifies the usage of Albert Hirschman's categories of market behaviour as of exit and voice in debates about workplace democracy by taking seriously his critique of the neoclassical analysis of competition. Promarket liberals are generally hostile to the idea of workplace democracy and tend to favour top-down hierarchies as a way of organising labour. This hostility is generally inspired by the neoclassical analysis of exploitation and efficiency, which leads them to defend distributions achieved through exit-based competitive equilibria. Following Hirschman, I propose to consider a hypothetical alternative: a democratic equilibrium, reached through the use of voice. I show that it would present the same appealing characteristics than its competitive counterpart while also accounting for the non-ideal conditions in which markets operate. Support for free markets should entail support for workplace democracy minimally understood as a strengthening of voice.

Enough chit‐chat, strike! Deliberation and agonism in corporate governance

“…7), as 'deliberative democracy is an ongoing and independent association, whose members expect it to continue into the indefinite future' (Cohen, 1997, p. 72). For these reasons, exit remains the dominant strategy in most for-profit organisations, even if voice may improve efficiency in some imperfect labour markets (Richard, 2020).…”

Wage Exploitation as Disequilibrium Price

“…Wertheimer to labour markets, see Richard (2020). For further arguments that rely less on Wertheimer but still make a similar point, see Anderson (2017) and Lindblom (2018).…”

“…Unsurprisingly, he argues for the position deduced earlier (Wertheimer 1996, 301–5). In defective labour markets, that is, in cases like Owner/Employee , he does advocate minimum wage laws and unionisation as remedies to low wages, in a move that recalls Pigouvian defences of collective bargaining (Takami 2009; Richard 2020, 290). Such third-party interferences are indeed justified for what he calls “strategic reasons,” when regulations correct existing inefficiencies and are thus beneficial to workers 20 .…”

“… 9 Note, however, that much of the literature on workplace politics relies on the idea that the working contract is more than “exchanging something for something” and that the relationship between an employer and an employee is more akin to a marriage given its power dynamics. For such a critique of the application of Wertheimer to labour markets, see Richard (2020). For further arguments that rely less on Wertheimer but still make a similar point, see Anderson (2017) and Lindblom (2018).…”

Is freedom as non-domination a right-wing idea?

“…Irving himself acknowledges that the reason firms exist in the first place is because of the gains in production efficiency made possible by hierarchy (p. 41), and it therefore seems unclear in what sense bosses’ interference is arbitrary in a Hayekian sense. Perhaps workplace democracy might have efficiency-enhancing criteria based on its epistemic virtues (Richard, 2019: 13), but Hayek certainly did not see democratic procedures as epistemically valuable. Indeed, it seems contradictory to use Hayekian republicanism to justify the very decision-making process – democracy – that Hayek himself was so opposed to.…”