“Not only can employment be regarded as one more common pool resource among others, it can also be argued that it is the common pool resource par excellence – the instance that stands as the single most far-reaching and democratically vital model of a common pool resource. Donald Stabile alluded to something in this vein when he noted that, “Human labor is also the primary constituent of the society whose values must be part of any criterion of social evaluation.The appropriate starting point in any policy directed at social costs is with those imposed on labor.”
Until now, labor is explicitly considered as a commodity, and we intuitively know that human labor cannot be subjugated in such a way. But is there a concrete alternative? Tom Walker thinks so, and believes a new social accounting is the method to get there. The following is excerpted from chapter 4 of his book:
Book: Jobs, Liberty and the Bottom Line, Tom Walker, Draft: 12/07/2011
Tom Walker, on Employment as a Common Pool Resource:
“[Elinor] Ostrom’s framework for distinguishing different types of goods and services classifies them as either highly subtractable – meaning that one person’s use of a resource leaves less available for others – or have low subtractability and as either more or less excludable, depending on how difficult or costly it is to exclude people from access to the good. Taken together, those two pairs constitute a matrix that specifies four ideal types of goods. Private goods are subtractable and excludable (that is it is not difficult to exclude beneficiaries). Public goods are neither highly subtractable nor excludable. The remaining sectors are common pool resources, which are subtractable but difficult to exclude and toll goods, which have low subtractability but are not difficult to exclude people from.
Labor is commonly treated as a commodity, which the employer purchases with a wage or salary. However, it is also possible and useful to view a job position, with its income, status and promotional opportunities, as a good that the worker purchases with his or her time and relevant skill and credentials. From the perspective of the workers, job positions would arguably rank within Ostrom’s analytical grid as both highly subtractable and difficult to exclude potential competitors from. Employment thus would count as a common pool resource in that framework. A disclaimer is necessary here. A good needn’t be available only in a fixed quantity to be considered subtractable. The supply can be ever expanding, but if demand expands faster than supply, there still may not be enough to go around. Contrary to the theoretical abstractions based on assumptions of perfect competition, full employment, etc., price competition doesn’t clear the market for jobs, nor can most workers voluntarily withdraw from competition on the job market and subsist on a private income or the family farm.
Another way of thinking about common pool resources is as gifts. Peter Barnes uses the generic term, the commons, to refer to “all the gifts that we inherit or create together.” If it seems strange at first to refer to employment as a gift, it should be remembered that we already do so in everyday speech – “I applied for the job but they gave it to someone else.” “She’s a hard worker, if only someone would give her a job.” We don’t talk about a store giving us something we’ve just bought. But we do talk about teachers giving students their grades. There is some ambiguity in the notion of employment as a gift. After all, as Barnes points out, “A gift is something we receive, as opposed to something we earn.” On the one hand, people do earn their job opportunities by acquiring credentials, experience and networks of contacts. But, on the other hand, those qualifications don’t always land them the jobs they are qualified for and people often take advantage of connections to get jobs they’re not really qualified for. Despite an inexhaustible supply of rhetoric and ritual about meritocracy, there remains a residual element of vassalage in the employment relation, as there is in academia.
Successful institutions of the type identified by Ostrom rarely come into being through explicit contracts. More often they evolve through long periods of informal, collective learning about what works and what doesn’t. Another approach to creating these institutions would involve more deliberate experimentation. For such institutional innovation to take place, however, it is essential, Dryzek cautioned, that participation “move beyond the narrow community of political economists and political theorists and into society at large.” Treating employment as a common pool resource could be one such deliberate experiment.
The labor commons union is proposed here an experimental institution that would treat employment as a common pool resource. Such an undertaking has various precedents, none of them exact but all nonetheless suggestive. The traditional workers’ ethic of the craft guilds viewed the work available as something akin to a common resource. Guild principles included the proposition that a given amount of work could be divided up equitably among the available hands. This is not to say that workers assumed the amount of work to be unalterably fixed for all time. They were, however, dealing with the finite demands of a given locality at a particular time. In addition there are worker co-ops, works councils, syndicalism and the movement unionism such as the eight-hour leagues and nine-hour leagues in the U.S., Canada and the U.K. in the nineteenth century.
Regardless of whether the idea of sharing work makes sense strictly in terms of industrial efficiency, as an ethical proposition it is simply the reciprocal gesture of co-operative working arrangements. John Maurice Clark’s analysis of social overhead costs, discussed below [in the book], suggests that the notion also makes economic sense, given an appropriate social accounting framework. Just to be clear, social accounting does not refer to some warm fuzzy notion as opposed to the hard math of business. It is not socialist accounting, sociable accounting, sociological accounting or uniquely subjective. It is, properly speaking, the kind of accounting required when dealing with two or more discrete accounting units. It pays more rigorous attention to boundary conditions when the elements from those accounting units are aggregated. It is harder math than using the single firm’s bottom line as a one-size-fits-all metaphor. It requires explicit accounting for the cost-shifting that results from imposed economic transactions rather than an apologetic shrug about the difficulty of quantifying externalities.
Collectively, working people would be better off if they joined in refusing to compete in a race to the bottom. Some individuals might have to forgo receiving more than their share of the economic dividend from the expanded trade that might result from competition between workers. But where does it say it is an ethical imperative that the most ambitious should benefit at the expense of their less single-minded companions? Incidentally, by collectively conserving work effort, the workers acting cooperatively might achieve higher levels of productivity than otherwise as well as build greater social solidarity and security. Economists merely assume that competition between workers will result in greater expanded trade than would cooperation. They don’t consider all the factors.
How would the labor commons union come into existence? How would it be organized and governed? What principles would it uphold and tactics would it employ? These important details can be left for future elaboration, not least because they differ from case to case and in many instances would involve the reorientation of and transition from established institutions that themselves may vary substantially.”
Tom Walker, on the need for new methods of social accounting:
“Not only can employment be regarded as one more common pool resource among others, it can also be argued that it is the common pool resource par excellance – the instance that stands as the single most far-reaching and democratically vital model of a common pool resource. Donald Stabile alluded to something in this vein when he noted that, “Human labor is also the primary constituent of the society whose values must be part of any criterion of social evaluation. The appropriate starting point in any policy directed at social costs is with those imposed on labor.”
Werner Sombart (1952) described the concept of capital as something that “did not exist before double-entry book-keeping.” “Capital,” he wrote, “can be defined as that amount of wealth which is used in making profits and which enters into the accounts.” In “Accounting and the Labour Process,” Rob Bryer (2006) wrote of a capitalist “mentality” that consists of using accounting information to control the labor process “by holding the collective worker accountable for the rate of return on capital.” Such control from the bottom line is central, not incidental, to both the domination of the labor process by capital and the evolution of the ways that domination has been implemented through successive varieties of technology. Any alternative to that domination requires the development of a counter-mentality that “turns the capitalist development of calculation and accountability to other ends.”
Bryer imagined such counter-mentality as a “socialist mentality” but I would amend that to a “social-accounting mentality” to both enlist and implicate an existing social-accounting tradition as well as to differentiate the alternative mentality from advocacy of state socialism. Ownership of the means of production may be beside the point or the amenable forms of ownership may be more eclectic than traditional socialism assumes. It is not private ownership per se that is onerous but the domination over the labor process that capital decrees and a one-dimensional accounting mentality enforces. Social accounting is simply the kind of accounting that needs to be done when two or more accounting entities are aggregated. It differs from the accounting of a single enterprise in the way that transactions between the constituent parts are treated. Great care needs to be taken in defining the boundaries between parties to avoid the double-counting errors that are pervasive in attempts at social accounting.
…when these [standard] book-keeping calculations are naïvely transferred to social accounting practices – including collective bargaining – they also produce “really wondrous errors and confusions.” Today, national income accounting – the Gross Domestic Product (GDP) – is the most prominent example of social accounting. Most economists assume that a perpetually increasing GDP is an imperative for achieving well-being, full employment or some other normative goal. Critics of this supposed growth imperative suggest otherwise. But perhaps the debate is confounded by a misperception of what it is that is growing.
The problem of externalities:
…Roefie Hueting (2008) has adapted [Simon] Kuznets’s analysis of duplication to the issues of social and environmental externalities, using the term “asymmetrical entering” as a more inclusive description of the accounting error than double counting. Asymmetrical entering refers to the costs of restoring or substituting for an environmental or social free good after it has been damaged or destroyed. There is no subtraction from the GDP for the damage to the environment or social wellbeing, which is technically appropriate because there is no monetary exchange involved, but this is what makes counting the costs of restoration as an addition to GDP asymmetrical. Stefano Bartolini (2006) has made a related point about what he terms negative externality or negative endogenous growth (NEGs). This describes a vicious cycle in which the products required to substitute for the free goods of nature and society destroyed by the negative externalities of industrial activity count as growth even as they are generating additional negative externalities, which then lead to more substitution, more growth and so on.”