The Official Organ of LaborNET
click here to view the latest edition of Workers Online
The Official Organ of LaborNET
Free home delivery
Year End 2005   
F E A T U R E S

Interview: Back to the Future
James Gallaway collars Unions NSW secretary, John Robertson, on threats, challenges and opportunities.

Unions: A Real Page Turner
Jim Marr glances through Workers Online’s 2005 news stories and finds there is more one way to skin a Rat

Industrial: The Pin-Striped Union
Rachael Osman-Chin profiles a white collar union that is having some almighty blues.

International: Around The World In 365 Days
It was a year of online activism, as LabourStart's Eric Lee reports

Legends: Terrific, Tommy
Jim Marr tackles a champion.

Your Rights At Work: Worth Fighting For
The Your Rights At Work campaign has been a big part of this year and, as Phil Doyle reports, it is making a difference.

Politics: The Year That Was
Frank Stillwell looks at year that saw the politics of fear; and finds many reasons to be very afraid.

Economics: Master and Servant Revisited
Evan Jones asks if the Neo Liberals are taking us back to the future

Culture: 2005: The Year of Living Repetitively
Nathan Brown ignores Oasis and decides to look back in anger after all

Bad Boss: The Bottom Ten
Nathan Brown digs through his voluminous dirt files and comes up with the top 10 grubs of the year.

Religion: Hymns from a Different Song Sheet
James Gallaway on the Way, the Truth and life according to Brian.

C O L U M N S

Predictions
The Crystal Ball
Workers Online consults a raft of leading psychics to find out what readers can look forward to in 2006.

The Soapbox
The Things People Say
It was a year of quotable quotes, reports Phil Doyle.

Parliament
The Westie Wing
Ian West checks the rear vision mirror on 2005, and plants his foot down

The Locker Room
The 2005 Workers Online Sports Awards
After years of being overlooked by selectors at club, representative and national levels, Phil Doyle and Jim Marr, agreed to hand out our 2005 sports gongs.

Postcard
Postcard from East Timor
In East Timor entertainment also spreads an important message into the community

E D I T O R I A L

Waves of Destruction
2005 was the year book-ended by two waves of destruction - the first causing untold suffering across the Indian Ocean; the second reawakening our darker angels on beaches closer to home.

N E W S

 Melbourne Burns AWAs

 Corporates Defend Costello

 Speaker Won't Talk

 Bank Pays on Dodgy Contracts

 Plan to Save Jobs

 Harper's Bizarre Excuse for Failure

 It's Not Fair: Business

 Workers Walk As Warnings Wiped

 Teenager Hit With Shrapnel

 Pay Day “Unlawful”

 Tassie Rail Win

 Professionals Fear for Their Kids

 Boss Pings Rorters Charter

 New Ways to Take a Share

 An Hour of Need

 Boeing Steals Christmas

 Trouble at the Mill

 Activists What's On

L E T T E R S
 Pension Pinching
 Free to Rat
 Tax Cuts and Cockroaches
 Proportion, Not Distortion
 Corp That!
WHAT YOU CAN DO
About Workers Online
Latest Issue
Print Latest Issue
Previous Issues
Advanced Search

other LaborNET sites

Labor Council of NSW
Vic Trades Hall Council
IT Workers Alliance
Bosswatch
Unions on LaborNET
Evatt Foundation


Labor for Refugees

BossWatch



Economics

Master and Servant Revisited


Evan Jones asks if the Neo Liberals are taking us back to the future

Capitalism is rooted in a fundamental hypocrisy. Nurtured by the ideological tidal wave of 'liberty', cushioned by the sometime accession of democratic polities, capitalism has consistently managed to camouflage its essentially anti-democratic and anti-egalitarian character.

The capitalist workplace is of necessity anti-democratic, feudal. There are variations on a theme, from tyrannous to benign, but the variations are within the feudalist fold.

The rise of capitalism in the eighteenth and nineteenth centuries saw endless dissent because its character was transparent and the alternatives were tangible. The dissent was over the fundamentals - what kind of socio-economic system we would have.

A system based on wage labour was facilitated by the denial of alternatives - enclosure closed off access to land and subsistence, machinofacture drove out artisan-based manufacture. Hundreds of thousands migrated to the 'new world' in the search of independence (only perennially to deny independence to others). In the subsistence economies, the colonisers had to put a head tax on the locals to force them onto the plantations and down the mines.

Liberalism (and its hand-maiden, the new breed of self-styled 'economists') was the great ideological vehicle to obfuscate the then obvious. Economic liberty replaced universal liberty (the appropriation had been well set in place by the defeat of the Levellers and Diggers during the English Civil War). Liberalism then became a vehicle for the propertied, and the unpropertied could be damned. They should certainly be denied the vote.

And when the economic Liberals could not prevent the ascent of the adult franchise, their inheritors set about constraining the polity with the leverage of capital, and leashing the great unwashed by a massive apparatus of socialisation and propaganda. Thus was born 'liberal democracy', that two-headed contradiction in terms that is held by modern day so-called intellectuals to be the institutional life blood of human freedom.

So what goes on in the crucial nineteenth century? In the workplace, and in the law and the courts?

In the workplace. According to Geoff Sorrell (academic labour lawyer, 1979):

[Given] Pre-industrial and rural habits of work, with which the common law was powerless to cope, persistent and more Draconian means were seen to be needed by the Virtuous English middle classes. These were provided by the master and servant Acts.

So also Adrian (then) Merritt, another academic labour lawyer (1982):

... increasing industrialisation, accompanied by an expansion of the scale and sophistication of 'service' industries and occupations, led 'employers' to seek a more integrated and disciplined work-force than was provided under a system of independent contactors and labour-only sub-contractors, often hired on a seasonal basis. Workers had to be converted into 'hands' and subjected to the same sort of control as servants - by which was meant at that time domestic servants, on farm or in household, whose position was regulated by virtue of their status. Ironically, the extension to servants was ostensibly accomplished at law by utilisation of the concept (then in full flower) of contract which permeated the political and economic philosophy of nineteenth-century England. So the notion of a 'contract of employment' was created to allow the imposition of the old master-servant relationship on an area of work until then occupied largely by the 'independent' contract.

And it took Alan Fox, that mild Englishman who kept the hypocrisy alive in twentieth century intelligence until a new generation came along and picked up the baton (1974):

But application of the contract system proper to the employment relation would have suggested implications alarming to property owners. Since no employment contract could anticipate all relevant contingencies arising in work relations, many issues had to be settled during the everyday conduct of business ... the damaging implication of pure contract doctrine for the employer would have been that it could not allow him to be the sole judge of whether his rules were arbitrary or exceed the scope of his authority. ...

It followed that contract as the pure doctrine defined it could not be seen by the property-owning classes as an adequate foundation for governing the employment relation. Their needs were met by infusing the employment contract with the traditional law of master and servant, thereby granting them a legal basis for the prerogative they demanded.

Anybody that had read the now discredited Father Karl would know this stuff intuitively. There is 'labour power' and there is the power of 'labour'. And you can't fit the second, which is indefinite, into the purchase of the first.

Now the skilled artisans, the labour aristocracy of the pre-capitalist age, knew the point. And so they took to arguing that the law should take the language literally. If we're talking independent contract, let's have independent contract.

The Americans, in particular, felt the hypocrisy keenly. Having just abolished slavery, the unions argued that the courts were re-introducing it through the back door. And they were exactly right.

Rob McQueen, another Australian academic labour lawyer, got to the nub of the matter (1986):

The expressed desire for regulatory control over employees indicates not just an aversion to strict contractual principles on the part of employers but also a blurring of the boundaries between free and unfree labour.

And in this reality, Karl Marx got it wrong, at least in his economic theory in which he was trying to play the game on the terms of the Classical Economists. Capitalism, pure capitalism, said Karl, was built on the anomaly of appropriating surplus value out of free wage labour. Well yes and no. Unfree labour has been and still is an integral source of that phenomenon which that respectable press calls 'profits'.

Samuel Gompers, the man who built the elitist American Federation of Labor, thought that his skilled unions could beat the law at its own game. Said Gompers:

The whole gospel of the labor movement is summed up in one phrase ... freedom of contract - organized labor not only accepts, but, insists upon, equality of rights and of freedom.

But no, the law had other ideas. It said one thing and did another. Thus it was in England that a breach of 'contract' involved (at best) a fine to an employer but imprisonment (and loss of livelihood) to an employee, an imposition of the culture of master and servant. In the US the courts handed out injunction after injunction against striking employees. (And worse, tolerating violent repression of workers, but that's for another time.)

To quote William Forbath, an astute observer of the American scene (1989), in turn quoting a seamens' union leader:

The corporate bar has 'set up the idea that the earning power of property is property', and because 'the earning power of a plant depends upon labour', owners of factories somehow possess a property right 'to so much labour ... as will make [their factories] profitable'. This reasoning succeeds in bringing strike activities within the reach of equity only by violating the 'fundamental principle of American law' ... that there shall be no property rights in man'. ...

Thus, trade unionists uncovered the common law's contradictory commitments to competitive freedom on the one hand and security of property interests and contractual expectations on the others.

In short, unfree labour, slavery.

And all the while, the courts were tolerating mergers and cartelisation by business itself. According to Geoffrey Walker (an Australian trade practices lawyer, philosophically liberalist) in 1967:

Thus it came about by the end of the nineteenth century that the courts found themselves ranged squarely on the restraint of trade and monopoly. ... In effect, the public interest had come to be identified with the immediate interest of producers. The social significance of this current of authority emerges when one contrasts the attitude of the courts towards the organized restriction and coercion by producers with their attitude towards similar behaviour by organized labour. For the one group it was permission, for the other, repression. ... The double standard of liability so created, traces of which can be seen even in the most recent times, imparts to this chapter of the law an unsavoury taste of class justice.

Labour occasionally had sympathy from the bench, Oliver Wendell Holmes for one, first on the Massachusetts Court and then on the Supreme Court after 1902 for the next thirty years.

Henry Higgins for another. In a 1911 case (the employer being the giant BHP) Higgins noted:

It ought to be frankly admitted that, as a rule, the economic position of the individual employee is too weak for him to hold his own in the unequal contest ... the power of the employer to withhold bread is a much more effective weapon than the power of the employee to refuse to labour. Freedom of contract, under such circumstances, is surely misnamed; it should rather be called despotism in contract.

The difference between countries was that Holmes was a member of a small minority in the US legal system. By contrast, Higgins presided over the federal Conciliation and Arbitration Commission, by which means he intended to introduce 'a new province for law and order'.

Into the twentieth century, the language of master and servant could no longer be applied in the circles of good taste. And so the language had to go, but the principles remained. The language of 'master and servant' was replaced by the language of 'managerial prerogatives'. And so it goes, and so it has remained.

Higgins and his Arbitration Court (later Arbitration Commission, now the Industrial Relations Commission) did act to offset managerial prerogatives, but they did not annul them. On the contrary, they reinforced the principle.

This basic commonsensical truth is once again obscured by the ideologues.

The H R Nicholls Society has dragged up Richard Epstein, naturally a University of Chicago Law academic, who is the last remaining fossilsed believer in freedom of contract as applied to employer-employee relations. If the looney-tune Epstein didn't exist, the hard Right would have had to invent him. We have brilliant labour law academics in Australia, essentially unemployable, because noone in authority wants to listen to and learn from their expertise.

And then there are the economists. Here is Gerard Garvey and Tim Duncan (sometime Murdoch flack), both functionaries for the Business Council of Australia on this occasion (1993):

Broadly, economics can tell us how a deregulated labour market would operate. The basic principles tell us how decentralisation and individual free choice produce neither chaos nor oppression, but rather efficiency, in the sense that the joint welfare of employers and employees is maximised, given limits of technology, time, natural resources and so on. They tell us that the market will produce an equilibrium between supply and demand at a certain wage rate. They also tell us that such an equilibrium will be 'efficient'.

The fundamental assumption economics makes is that equilibrium is possible in a free labour market because employers and employees engage in mutually gainful exchange. In other words, the market is not driven by unequal power between employer and employee, but rather by the reality that both of them can provide what the other wants and have the ability to do so voluntarily.

Are you still awake? No? Ah, our economists have produced the desired results.

Geoff Sorrell again, quoting the American Philip Selznick (1969):

The contract of employment inevitably becomes a prerogative contract, a mode of submission, if provision is not made for employee participation in the continuing process of rule-making and administration. With the control of that process reserved to the employer, contract can only fade to a shadow of its potential as an instrument of self-government.

Sorrell continues:

Regulatory, protective legislation may change the relative bargaining strengths of the parties in labour relations: it does nothing to facilitate participation by the employee in rule-making and administration. For the possibility of achieving this participation the employee must look, often unavailingly, to trade unionism. Unionism spells the possibility of joint in place of unilateral control of industry, of a devolution of power and authority in society and some restructuring of the relations of social classes. It is this, rather than any unsubstantiated claim of inroads into profits, productive power and capacity for investment that has primarily generated the historical hostility to the rise of trade unionism.

And that, dear reader, in a nutshell is the essence of the Howard Government's industrial relations 'reforms'. Anti-IRC, anti-union, anti-Labor Party. The unmitigated right to rule. Master and servant revisited. Industrial feudalism.

Q.E.D.

There is one difference. In the mid-nineteenth century, the strength lay with the genuinely independent 'contractors', the skilled artisans, resisting an autocratic workplace. Now the wage worker has a modicum of accumulated rights, and capital and its apparatchiks want to create a new category of 'independent contractor' (a new form of wage slavery) to replace the 'privileged' wage worker. Shifting labels, same conflict.

Neo-liberalism is the reincarnation of the hypocritical classical liberalism of the early nineteenth century. And Howard is the reincarnation of the hypocritical politics of that same period. Forward into the past, backwards into the future, with the obliteration of one hundred and fifty years of halting change towards a modicum of civility in what is essentially an uncivilized economic system.


------


email workers to a friend printer-friendly version latest breaking news from labornet


Search All Issues | Latest Issue | Previous Issues | Print Latest Issue

© 1999-2002 Workers Online
Workers Online is a resource for the Labour movement
provided by the Labor Council of NSW
URL: http://workers.labor.net.au/features/200513/c_historicalfeature_master.html
Last Modified: 21 Dec 2005

Powered by APT Solutions
Labor Council of NSW Workers Online
LaborNET