In The Limits of Organizations (1974), Kenneth J. Arrow explores the range of social and economic possibilities that are encompassed by the two extremes of what was then called the New Left, the notion that somehow in an ideal society there would be no conflict between one's demands on oneself and one's responses to the demands of society, and the libertarian New Right, which would resolve the difficulties between individual and society by substituting for difficult moral and power relationships "the worship of the market," that is, the price allocation system.
In our lives as consumers the price allocation system gives at least the illusion, if not the absolute reality, of personal freedom and individual autonomy. We survey the goods and services available, and within the limitations of the market, decide what we want or do not want and pay the price. The price we pay allows us to ignore many of the demands and responsibilities of our relations with others. If what we want is an imposition on others, that imposition is included in the price and we may make our choice free of concern for or even knowledge of the particulars. We can become, at least in part, the atomic, fully autonomous individual.
However, in our productive life, far more often than not, we do have even this illusion. For very good reasons, both theoretical and practical, price allocation does not work comprehensively and fully, and "it cannot be made the the complete arbiter of social life." The need exists for explicitly coordinated, self conscious, collective action and the allocation of resources through non-market methods. Thus arises the many forms of social organization of which we are all part - the business enterprise being the example that comes most readily to mind but including institutions such as the university, church, political party, and ultimately, the state itself. And even the revolutionary movements that might arise in opposition to the state. "Organizations are a means of achieving the benefits of collective action in situations in which the price system fails." And given the prevalence of organizations...
Empirically, and by economic, if not logical, necessity, Arrow maintains that these organizations are authoritarian in nature: "Among the most wide-spread characteristics of organizations is the prevalence of authoritative allocation. Virtually universally, in organizations of any size, decisions are made by some individuals and carried out by others. The fields in which an authority is valid may be limited; and the recipient of orders at one level may have his own field of authority. But within these limits, the giving and taking of orders, having someone tell someone else what to do, is an essential part of the mechanism by which organizations function."
Because of the prevalent authoritarian nature of organizations, all economic agreements are not the same. Employment agreements are qualitatively different from those that involve the exchange of commodities:
Indeed, as Herbert Simon has emphasized, an employment contract is precisely a contract on the part of the employee to accept authority. It differs therefore from a contract to purchase a commodity; what is bought and sold is not a definite objective thing but rather a personal relation. Within the scope of the contract, the relation between employer and employee is no longer a market relation but an authority relation. Of course, the scope of this authority will usually be limited by the terms of the contract, and, more fundamentally, it is limited by the freedom with which an employee can leave the job. But since there is normally some cost to the exercise of this freedom, the scope of this authority is not trivial.
This distinction, however, is lost on the right-wing, libertarian worshipper of the market. The idea that human relationships should be humane relationships is not acknowledged. An exemplar of this blindness is "Mr. Libertarian", Walter Block. He asks us, in Defending the Undefendable, to "consider as an example the case in which a (male) boss harasses a (female) secretary in an objectionable but noncoercive manner.... Just as a compensating differential must be paid to hire employees to work in damp basements, so it must be paid to female workers in offices where they are subject to sexual harassment." Since the secretary is (presumably) being compensated for being humiliated, humiliating her is just fine. In an obscure libertarian journal he explains that such humiliation "is part of a package deal: the secretary agrees to all aspects of the job when she agrees to accept the job and especially when she agrees to keep the job."
Those who are harassed, demeaned and taken advantage in the authoritarian environment of the workplace are supposed to have "agreed" to this treatment by the fact that they "agree" to keep their job. Despite the fact that those who might be treated in this way are exactly those who would have the most difficulty in leaving, doing so does present a market limit on the extent to which an employer may abuse his employees. But leaving a job imposes a cost to the employee. Why should an employee have to bear this cost in order to obtain humane treatment on the job? This goes beyond "blaming the victim" all the way to "punishing the victim," adding a further injury to one who has already been injured.
But for the right-wing libertarian ideologue, this is not enough! Being forced to leave a job due to inhumane treatment does indeed constitute an injury - an injury to the "employer" who, after all, has paid a premium to enjoy demeaning others! We thus arrive at the anarcho-fascist conception of "voluntary slavery":
Here’s the situation. My child is gravely ill. Only an operation can save his life. But, this medical care costs $100 million, and I am a poor man (we assume away the possibility of government health care that will swoop in and ruin our example). Seemingly, my only option is to witness the passing away of my beloved child. But wait! Rafe Mair, richer than Bill Gates, has for a long time wanted me to be his slave. He’d like more than anything else to boss me around, and then whip me every time I displeased him. He values this opportunity way more than the medical costs necessary to save my child’s life. So, we strike a deal. Rafe gives me the $100 million, which I immediately turn over to the hospital. Then, I go to Mair’s plantation, and become his slave.
Why is this so objectionable? Rafe and I both gain from this deal. I value my child’s life more than my own freedom; way more. Mair values my servitude more than the costs of buying me into servitude; again, way more, let us suppose. If voluntary slavery is legal, we can consummate this financial arrangement, to our mutual gain. If not, not, to the great loss of both of us. Slave-master Rafe would never shell out the cold cash if, after he paid, I could haul him into court on assault and battery charges when he whipped me. Then, without this financial arrangement, I would have to witness the death of my child, probably the most devastating thing that can ever happen to a parent.
The most authoritarian organization amongst the many that exist is probably the military. John Locke, the great enlightenment liberal, in his second treatise of government (section 139), observed that even though "...the preservation of the army, and in it of the whole common-wealth, requires an absolute obedience to the command of every superior officer, and it is justly death to disobey..." nonetheless "the serjeant, that could command a soldier to march up to the mouth of a cannon, or stand in a breach, where he is almost sure to perish, can [not] command that soldier to give him one penny of his money..."
Obviously Locke would not be impressed by the anarcho-fascist doctrine of "voluntary slavery". One might even suspect him of being something of a humanist.
http://mises.org/books/defending.pdf
http://www.lewrockwell.com/block/block134.html
http://www.gutenberg.org/dirs/etext05/trgov10.txt
