The cultural assumption of a true free enterprise system would be: “Individuals are responsible for their own lives and labors. They trade as equals, but are beholdin' to nobody.”
Free enterprise isn't anything like big-corporate capitalism. We've been told the two are equivalent, but that's just another bit of cultural brainwashing.
Think about it. Job holders by definition aren't capitalists. Job holders, no matter how well paid they might be, function merely as the servants of capitalists, just as medieval serfs functioned as the servants of lords. They are beholdin'. They function in a climate of diminished responsibility, diminished risk, and diminished reward. A climate of institutional dependency.
The daily act of surrendering individual sovereignty – the act of becoming a mere interchangeable cog in a machine – an act we have been conditioned to accept and to call a part of “capitalism” and “free enterprise” when it is not – is the key reason why the present Job Culture is a disaster for freedom.
James Madison, the father of the Bill of Rights, wrote:
“The class of citizens who provide at once their own food and their own raiment, may be viewed as the most truly independent and happy. They are more: They are the best basis of public liberty, and the strongest bulwark of public safety. It follows, that the greater the proportion of this class to the whole society, the more free, the more independent, and the more happy must be the society itself.”
Madison was speaking specifically about independent farmers, but he was also a believer in the independent entrepreneur – and for the same reasons.
Madison (and his like-minded friend Jefferson) knew that people who are self-sufficient in life's basics, who make their own decisions, whose livelihood relies on their own choices rather than someone else's, are less likely to march in lockstep. Independent enterprisers are far more likely to think for themselves, and far more capable of independent action than those whose first aim is to appease institutional gods.
Living in the Job Culture, on the other hand, has conditioned us to take a “someone else will deal with it” mentality. “I'm just doing my job.” “The boss makes the decisions.” “I'm just following orders.” But if someone else is responsible for all the important choices in life, then we by definition, are not.
I reminds me of my favorite part of Paul Graham's essay on "Why to not not start a startup":
16. A job is the default
This leads us to the last and probably most powerful reason people get regular jobs: it's the default thing to do. Defaults are enormously powerful, precisely because they operate without any conscious choice.
To almost everyone except criminals, it seems an axiom that if you need money, you should get a job. Actually this tradition is not much more than a hundred years old. Before that, the default way to make a living was by farming. It's a bad plan to treat something only a hundred years old as an axiom. By historical standards, that's something that's changing pretty rapidly.
Now we look back on medieval peasants and wonder how they stood it. How grim it must have been to till the same fields your whole life with no hope of anything better, under the thumb of lords and priests you had to give all your surplus to and acknowledge as your masters. I wouldn't be surprised if one day people look back on what we consider a normal job in the same way. How grim it would be to commute every day to a cubicle in some soulless office complex, and be told what to do by someone you had to acknowledge as a boss—someone who could call you into their office and say "take a seat," and you'd sit! Imagine having to ask permission to release software to users. Imagine being sad on Sunday afternoons because the weekend was almost over, and tomorrow you'd have to get up and go to work. How did they stand it?
I have a plan to fix this, but it's a little difficult to describe because people have a hard time thinking outside of the surf mindset, the assumptions that underlie the "job culture". It will take some time.
Hmmm, it seems I can't edit comments on blogger. Anyway...
Great post. As I was reading I was thinking, "this sort of reminds me of Paul Graham's essay 'How to Make Wealth'". It's great to hear that perspective from someone else.
I think the world would be a more interesting place if everyone could discover and use their full potential. The current system makes that a challenge. Although clearly people still manage to do it.
Not sure how much I trust anything by a guy who can't spell "beholden" and thinks it's an abbreviation for beholding. I also think his logic is fairly unsound. As much as I may enjoy starting my own companies it's not for everyone.
There are very good reasons why getting a job is the default and a startup is the exception. Society has more or less functioned that way since the dawn of humanity.
You should check out some Peter Drucker. He laid out the 'fundamental physics' of organizations and business.
Also Russell Ackoff's work on democratic corporations.
Some relevant Drucker quotes:
“Instead of being managed “in the best balanced interests of stakeholders,” corporations [in the 1980’s were] managed exclusively to “maximize shareholder’s value”… Managing a business exclusively for these shareholders alienates the very people on whose motivation and dedication the modern business depends: the knowledge workers. An engineer will not be motivated to work to make a speculator rich.”
“Altogether, an increasing number of people who are full-time employees have to be managed as if they were volunteers. They are paid, to be sure. But knowledge workers have mobility. They can leave. They own their ‘means of product,’ which is their knowledge.”
“Capitalist society was dominated by two social classes: the capitalists, who owned and controlled the means of production, and the workers — Karl Marx’s “proletarians,” alienated, exploited, dependent.
The proletarians first became the “affluent” middle class as a result of the “Productivity Revolution”… Around 1950, the industrial worker — no longer a “proletarian” but still “labor” seemed to dominate politics and society in every developed country. But then, with the onset of the “Management Revolution,” the blue-collar workers in manufacturing industry rapidly began to decline both in numbers and, even more noticeably, in power and status. By the year 2000 there will be no developed country where traditional workers making and moving goods account for more than one sixth or one eighth of the work force.
The capitalist probably reached his peak even earlier — by the turn of the century, and surely no later than World War I. Since then, no one has matched in power and visibility the likes of Morgan Rockefeller, Carnegie, or Ford in the United States; Siemens, Thyssen, Rathenau, Krupp in Germany; Mond, Cunard, Lever, Vickers, Armstrong in Great Britain; de Wendel and Schneider in France; or of the families that owned the great zaibatsu of Japan: Mitsubishi, Mitsui, and Sumitomo. By World War II they had all been replaced by “professional managers” — the first result of the Management Revolution. There are still a great many rich people around, of course, and they are still prominent in newspaper society pages. But they have become “celebrities”; economically, they have almost ceased to matter. Even on the business page all the attention being paid to “hired hands,” that is, to managers. And such talk of money as there is is about the “excessive salaries” and bonuses of these hired hands, who themselves own little or nothing.
Instead of the old-line capitalist, in developed countries pension funds increasingly control the supply and allocation of money. In the United States, these funds in 1992 owned half of the share capital of the country’s large businesses and held almost as much of these companies’ fixed debts. The beneficiary owners of the pension funds are, of course, the country’s employees. If Socialism is defined, as Marx defined it, as ownership of the means of production by the employees, then the United States has become the most “socialist” country around — while still remaining the most “capitalist” one as well. Pension funds are run by a new breed of capitalists: the faceless, anonymous, salaried employees, the pension funds’ investment analysts and portfolio managers.
But equally important: the real, controlling resource and the absolutely decisive “factor of production” is now neither capital nor land nor labor. It is knowledge.“
maroon, that's a rather pessimistic outlook, and one that I think was rather well addressed by Paul Graham's essay.
Nivi, Thanks for the links. I just bought the book.
Doesn´t your post imply that capitalists and capital are tied to each other?
Doesn't someone who is employed and holds a job becomes a capitalist when he invests the money he's been paid by buying stocks, bonds etc.?
I believe starting a company is at least worth a try. I just think capital has no name. And this coming from a country where 100% percent of the largest 25 companies are family controlled and if you guessed Mexico you are right.
It's true there are few individuals in society that have accumulated the more capital than all the rest combined but Paul Graham has also an essay on inequality being due to the amazing productivity of some of these individuals.
I don't believe working for a company is such a bad idea, where would startups get their employees?
What do you think? I'd love to hear from you.
Keik, I'm actually just quoting someone else.
To me, the real issue is the degree to which people own their work and are connected to the outcomes. Even as employees, people in startups have much more of a stake in what they are doing.
Sorry Paul, I might have misread your post... it's true you are quoting someone else.
I am very interested in finding a way for work to be owned by the worker, but have no plan as you do.
It might be that workplaces, due to the common top down delegation of authority that causes severe power struggles might be some very unfair places.
Really? I don't think it's pessimistic at all. I totally agree that a much larger number of people can (and likely will, in the near future) work for themselves than we currently see. I just don't believe it's over 50%, or even close.
Humans, I think, have a number of evolutionary artifacts (most notably risk aversion) that cause us to typically be followers rather than leaders. It's too deeply ingrained to be eradicated or even significantly reduced.
If I get a chance, I'll ask PG what he thinks on Tuesday.
Also, I should clarify. I don't think that getting a job is necessarily the default, but being a follower, rather than a leader, is. And that pretty much means a job, for the vast majority of people who prefer to not live a life of crime. And that is what I don't see changing.
themaroon, I certainly don't expect everyone to go out and start a startup either. What I have in mind is quite a bit different, but not easily described.
To "job," or not to "job," is not necessarily the question... In fact, like every duality, it can end up being a trap to address directly.
I was wondering what might cross-pollinate in your mind if you looked at a whitepaper I recently found on the implementation of Organizational Holarchies. The author draws his sources from several sources quite well-known ( to me at least), who are at the leading-edge of consciousness, including Ken Wilber's Integral Theory, Suzanne Cook-Greuter's work on Developmental stages (building on Jane Loevinger's), the Agile method of software development, and Elliot Jacques work on Requisite Organizations, to name a few...
I'm curious as to what your thought are on this. You'll have to register to download the article, but it's free at least, and quite in-depth.
hmm all these interesting opinions. I very much want to hear Pauls ideas described.
I think people working in startups have a vested interest because their value becomes tied to the success of the company through stock options, and therefore they have an interest in seeing the company through. I think this ownership is what Paul was talking about.
Society may have functioned the way of followers following and leaders leading since humanity, but it seems it has also functioned as power corrupts absolutely, and I believe that if the right person were leading then the people would be able to follow without worrying about someone using their labor power in a way that obviously extorts the people.
To that end, we need a way to utilize an open market to set the value on labor in the right way. If people would or even could set the value and acquire skills based on a predetermined value that their labor is worth, then I think this open market can work.
Though I am not sure how to do this. I do believe that people need to be in control of their wages to a higher degree, and to be more informed on how to do this, and the ways in which money is made, and how to properly set the value of their labor power. Paul your thoughts and I would be interested to hear your ideas in an email or some other medium than this blog comment. I think our ideas may be able to help one another. Good post.
you can quit a job, and if you're lucky find another one soon. you can't quit you're own business. it's a huge responsibility and investment. and only 1 out of a 1000 succeed.
and not everyone has a fair chance...
I totally agree, again. The future will look back at us as stupid evil monkeys.
Or nothing more than bees living to collect honey.
Great post, really mirrors my thoughts and feelings on the subject. I frequently envision how barbaric, misguided and irrational we might look to future generations. Just like some of our ancestors' attitudes and beliefs seem to us today (as PG pointed out).
So, when are you going to share your "plan to fix this"?
You might like the thoughts Yochai Benkler has, regarding a possible evolution, already underway, of how we conceptualize work, organization and production.
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