Sadankata

There are many ways to think about labor relations and organized labor and in my head, there are two extremes. There’s a labor-maximalist view, where worker rights are paramount, workers are always right and need every protection available from big business. The other extreme is the antitrust view of labor – if companies are not allowed to be monopolies, why should workers be?

Like all extremes, both those views are in some way rational but also in some way so wrong as to be impracticable. But I’ve recently started to think differently about labor. Started, not finished.

I started with a thought experiment. A world similar to most countries today with no slavery or serfdom or any other form of indenture. The only difference is the absence of corporations. Individuals grow all the food they eat, and make almost all the goods they use. What they don’t make, they buy. What they make excess of, they sell.

In this world, a hypothetical Jack is married to Sally, and they have three children. They live in Idaho on a 20-acre parcel. Jack built his farmhouse by his own hands, with wood from trees he felled on his tract. He farms about 1-2 acres of that, growing potatoes and wheat as staples, alongside vegetables over the summer. He has livestock too; a few head of cattle, some pigs, goats and chickens.

He and his family live a good life. He makes most of what he consumes – he grows all the food he eats, built his own house, and even makes some of his clothes with wool from his livestock. He has some skill in woodwork, and made the two tables and five chairs in his house. The things he can’t make, like good cotton clothes, and boots, and pots and pans, he buys from his neighbors. They’re infrequent purchases anyway, he buys a new pot once every five years and James’s cotton undershirts can last three years. He finances this with the proceeds of woodwork he does for his neighbors.

An important artifact about Jack’s labor is that he does what needs to be done, without fail, else he doesn’t eat. If the potatoes aren’t planted in the spring, or harvested in the summer/fall, his family doesn’t eat. If the cows aren’t milked every morning, there goes his family’s calcium and phosphorus intake for the day. If he takes his family on a month-long vacation in spring or fall, he might as well not return because there won’t be food when he gets back.

This is one of the wonders of the modern economy. We can craft a system such that one person’s absence from work does not impact their livelihood. We have such wonderful things as PTO, and have made vacations outside of town accessible to the people. The most important development that made this possible is agglomeration of labor in corporations. Before corporations, entrepreneurship and labor were joined at the hip. In our thought experiment, if Jack wanted to try out a new irrigation system for his potato farm, he would have had to do it himself.

Without corporations, every individual would have needed to be an entrepreneur. The corporation made it possible to exchange only labor and/or time without being fully exposed to the success of the actions.

An incredible invention. Almost like magic.