Private Government, by Elizabeth Anderson

The conflicting interests of employers and employees are central to political theory and practice. In her book Private Government, philosopher Elizabeth Anderson argues that firms—literally—are private governments. Bosses in firms govern workers. Employees are subjected to arbitrary dominance, which negatively affects their freedom. Regardless of whether one agrees with this description, the underlying analysis should be recognized as valid.

According to Anderson, the ideal of a free market society used to be left-wing. Egalitarians in the 17th through 19th centuries pictured a world of self-employed individuals, or individuals in small family-owned businesses, as an alternative to monopolies run by states, the nobility, or the church. Their ideal was very different from today’s global markets and enterprises.

Modern firms build on hierarchical social structures granting employers the authority to push their employees around as they wish. Exit costs for workers are high, and their influence in firms is low to non-existent. ”Most workers in the United States,” Anderson writes, ”are governed by communist dictatorships in their work lives” (p. 39). She argues that workers need ”some kind of institutionalized voice” to ensure ”that their interests are heard” (pp. 143–4).

Anderson presents her theory in two chapters, which are then commented by four critics. She responds to the comments and further develops her argument in a final chapter that also concludes the book. The main merit of the theory is its independence from Marxism. It is an individualist theory of the conflicting interests on the labor market, which makes it integrable with political liberalism.

To some extent, the theory is context-dependent. Most practical examples in the book are from the United States. They illustrate moral problems that in some countries, such as Sweden, have already been solved through strong labor unions and progressive legislation. This does not matter for the validity of Anderson’s theory, but it makes a difference for its relevance.

On that topic, there is one thing I think Anderson should have done differently. Tyler Cowen, one of the four critics, writes: ”I find that a discussion of the alternatives to current arrangements needs to come at the center of the analysis, as the key questions are fundamentally comparative” (p. 115). That is, the current state-of-affairs may be criticizable, but if there are no better alternatives on the table it is difficult to evaluate how significant the criticism really is.

Anderson seems, at first, to concede that Cowen’s objection needs further thought. However, she then proceeds with an ad hominem attack (pp. 134–5):

I am not surprised that Cowen … is delighted with how great the wage labor system works for him … However, it appears that he has little notion of what work is like for those at the bottom of the workplace hierarchy… As an economist, he also has a professional bias against taking qualitative information, such as worker’s narratives and articulated complaints, seriously. … Has he bothered to check what working conditions are like for workers in the bottom half … ?

She concludes: ”Cowen won’t hear of it. He thinks the benefits of sweeping, unaccountable employer authority outweigh the costs” (p. 138).

These paragraphs in the final chapter leave a bitter taste. Anderson’s theory is valid, but so is Cowen’s remark that it is important for an overall judgment to make comparisons. The conditions on the labor market in the United States are undesirable, but how desirable are the practically available alternatives, and why?

Instead of speculating in Cowen’s income (!), knowledge, and professional capabilities, Anderson could have made a greater effort to discuss alternative arrangements and their feasibility. The bitter parts of the final chapter cast a shadow over an otherwise interesting and important book.

Anderson, E. (2017). Private Government: How Employers Rule Our Lives (and Why We Don’t Talk about It). Princeton University Press.