Coercion and Motivations in the Economic Sphere (Deconstructing Coercion, Pt. 3)

Now that we have outlined the general motivations for human action, how do these function in different spheres of human life?  (I will not, of course, be comprehensive here and try to cover the entire scope of human life!)  

In most people’s conception, and certainly in the “Christian libertarian” (for lack of a better term) conception, the religious sphere is governed primarily by the love motivation, the economic sphere is governed primarily by the reward motivation, and the political sphere is governed primarily by the fear motivation: we obey God because we love Him, we obey our boss because he will pay us, and we obey the government because we don’t want it to kill us.  (Hate could also enter into any of these spheres, and I will give brief attention to its role in the economic sphere and a bit more attention to its role in the political sphere.) 

However, as I think is apparent already in that quick summary, this is dangerously oversimplistic.  The example just given above about serving God shows the complexity of motivations even in the religious sphere, a sphere from which even the coercive element does not seem entirely absent.  (This is a contentious subject, and not one I want to enter into here, but inasmuch as leaders of the Church are entrusted with the power of binding and loosing, the exercise of church discipline has a coercive character–it moves to action by the motive of fear–at the very least fear of losing fellowship, at the most, fear of losing salvation.)

The economic sphere is certainly more complex.  First, briefly, the most marginal motivation in the economic sphere, it seems to me, is hate.  Of course, it is quite possible that I could hate someone enough that I would refuse to sell to them.  This was common in the age of segregation and still is in regions charged with racial conflict; classical economists claim that good economic sense will automatically overcome such behavior, but this is to underestimate the power of irrational hate.  Or I could hate someone enough that I would go buy from their competitor even when it didn’t make economic sense, or hate someone enough to refuse to employ them.  However, it is worth noting that in each of these cases, hate doesn’t really motivate an economic action as such; it motivates a refusal of an economic action: I won’t buy, I won’t sell, I won’t employ.  So we might consider hate as an occasional but relatively infrequent intrusion upon the economic sphere, rather than something which characterizes it.  

If we cannot exclude hate as a possible motivation in the economic sphere, then we certainly cannot exclude love, however much we may tend to view the realm of love and the realm of contract as mutually exclusively.  Most obviously, I might often buy things out of love for others.  But on a larger scale, could I not, for instance see my neighbors in desperate need of some good that I am able to provide, and so start up a business out of a desire to help them and provide it for them?  Defenders of capitalism often speak in this way–the entrepreneur identifies a need, and develops a business to serve it–however, they do not really believe this provides the true motivation for the entrepreneur; instead, it is the profit motive, which is to say reward.  Adam Smith of course said it most famously: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”  This has been a pillar of capitalist theory since–we must expect people to work, buy, and sell chiefly because of the benefit to themselves that they expect.  Within reason, of course, there is nothing terribly wrong with this, but if the reward motivation completely detaches itself from any love motivation–if I seek my own self-interest without any regard to that of others, then we will soon have a very ugly situation on our hands.   

For my purposes here, though, I want to take chief note of how the reward motivation, which I acknowledge to be the dominant one in economics, can easily become distorted into a fear motivation.  Consider someone happily working at a small company–he does his job, to be sure, out of a desire for a paycheck, and perhaps does it well because he wants a bonus.  Of course, he will probably be a better worker if there is an element of love as well–if he really likes his boss, and wants to please him, and if he thinks the work he is doing is valuable.  A new manager takes over, and efficiency is the name of the game (I’m imagining an Office Space sort of situation here).  Workers are afraid of getting laid off.  The motivation to work because of desire to get a paycheck has changed into a motivation to work because of fear of not getting a paycheck.  And as the movie Office Space shows, once this becomes the dominant motivation, you have a very unhealthy work environment.  Moreover, I would submit that once this happens, we have a subtly coercive work environment.  Now, the free marketeer will object and insist that we have a perfectly voluntary system here, because no one is under any legal compulsion–the employees are perfectly free to choose not to work.  However, the free marketeers believe that if someone is legally required to do something, on pain of receiving a steep fine, then this is coercive.  Now, what, I must ask, is the material difference between these two situations?  If someone acts in a certain way because they are afraid of the severe financial consequences of acting otherwise (in losing their job), how is this different from someone who acts in a certain way because they are afraid of the severe financial consequences of acting otherwise (in paying a steep fine)?  

 The coercion, of course, becomes less and less subtle the more desperate the situation of the employee.  If the employee has plenty of independent means, he is unlikely to be very intimidated by threats of losing his job.  Indeed, if the work situation becomes too unpleasant, he will probably just quit.  A typical middle-class worker has a lot more cause to fear unemployment than a wealthy person, but given an unpleasant enough work situation, he will probably take his chances and quit, and try to get a job elsewhere.  Someone who is dirt-poor, isolated, and unsure of the chances of getting any other work may, through terrible fear, put up with the most horrific work conditions lest things become even more horrific by losing his job.  This of course happens all around the Third World, and more often than we care to think in the First.  And yet our free marketeers will insist that this remains a perfectly voluntary arrangement.  But, as soon as any legal strictures are brought into the picture, be they the tiniest fines or penalties, capable of inducing much less fear and much less severe consequences, they decry these as “coercion.”  

 So, coercion is undeniably a reality in employment.  What about in buying and selling?  Here, the fear motivation is rarely as strong, because it is rare that any single purchase will have ramifications as great as the loss or maintenance of employment.  Of course, there are certainly exceptions.  In large enough purchases, so large that the merchant or manufacturer’s livelihood depends on them, or in desperate circumstances, the buyer can gain a great deal of leverage over the seller.  The seller absolutely must make some large sale or face bankruptcy, and so the potential buyer is able to play on this fear and wield great power over the seller, forcing him to agree to terms that he would not normally accept and that we would not normally consider just.   Inasmuch as in this situation persuasion now takes place through fear, we have a coercive situation.  Of course, this may not be morally objectionable.  Perhaps the shopkeeper made several very foolish gambles, and that’s why he is in such straits.  If no one is willing to buy his product except at very unsatisfactory terms, that is perhaps his fault and not theirs.  However, we can certainly envision situations in which the seller is genuinely a victim.  Wal-Mart, for instance, is well-known for strong-arming small producers through its enormous buying power in some pretty unsavory ways. 

What about buying?  This is the part that interests me the most, because of the great increase in the sophistication of coercion that modern marketing has introduced.  In buying, there has always been a potential fear motivation, the fear of starvation, illness, or some other kind of great danger or suffering.  If a farmer loses his whole crop and is in fear of starvation, and comes to buy grain, then the seller is suddenly in a position of power over him, able to use that fear as a lever.  If the seller does so, and ratchets up his prices absurdly high, it is hard to see how this does not count as a kind of coercion.  However, for reasons unknown to me, our free marketeers will treat this as a completely voluntary transaction, and one in which the laws of supply and demand should have free rein to set a reasonable price.  They might object that the farmer does not need to pay the unreasonable price–he can just go to another merchant.  If this were true, then we would have no problem.  But of course, it is very often not true. Businesses know how much greater coercive leverage they can gain if it is not true, and that is why monopoly is such a prized goal.

 Now generally such coercive power over buying has been restricted to absolute needs–if someone breaks their pencil and has to buy another, the seller is unlikely to be able to bring much of a fear motivation to bear.  Enter the power of modern marketing.  Marketing of course has many valid uses, but one key function of modern marketing has been to redress the limitation that only absolute needs can put a buyer in a coerceable position.  The solution, of course, is to increase the scope of absolute needs, since “needs” are largely a matter of perception.  Take me, for instance.  I would say that I need a regular supply of milk, eggs, bread, butter, meat maybe three times a week, some cheese, salt and pepper, at least a cup of coffee a day, preferably some tea as well, several sets of nice clothing, a computer, earbuds, several albums of music, a cell phone, a number of computer programs, a steady supply of new books, wireless internet access, a comfortable bed and blankets, and some basic hygiene supplies.  Clearly, most of these are not genuine absolute needs.  But the fact that I perceive them as such means that I am prone to fear if I do not have them, and thus prone to having that fear worked upon to persuade me to do things or pay prices that I rationally would not want to pay.  And of course I think I would be reasonable in saying that this is a fairly short list of needs compared to most young people in the modern West, who are fairly easily persuaded that they need iPods, iPhones, thousands of songs of music, a digital camera with at least ten megapixels, an almost endless supply of the latest and most fashionable clothing, along with various food and drink addictions, ranging from the grossest junk food to the faddiest health food.  Some of this need-creation is done by marketing working on our physical appetites–whether the lust of the flesh or the lust of the eyes–but the most powerful forms work on our emotional appetites–on the pride of life–and sometimes by creating or preying on fear.  Teenagers are probably the most vulnerable demographic, easily convinced that they will be a complete social failure if they do not buy any number of fashionable absurdities.  We would point out that most of these “needs” are illusory, but in some cases, that’s not quite true.  For instance, in the realm of business, most businesses now pretty much need to have a website–if a new device can be successfully marketed to the majority of businesses in an industry, then suddenly, the others will find that it has gone from being a luxury to a necessity if they want to stay competitive. 

Now, again, not all of this by any means is morally objectionable.  In the latter example–of businesses constantly having to upgrade–that’s just part of how the advance of technology works, and although we might legitimately argue in certain cases that technology ought to move a bit more slowly, it is not necessarily exploitation for the purveyors of such technology to make it so that everyone has to jump on board.  And in the former example, we would no doubt say that the insecure buyers bear plenty of responsibility for letting themselves be duped into “needing” luxuries.  However, it is crucial to note that the fact that there is fault on the one side does not mean there is none on the other.  If someone has an irrational fear of something, and I decide to play up their irrational fears and use them to convince them to do all sorts of things for me, then I am certainly guilty of a wicked kind of manipulation, and probably, given the definitions we have been working with, a subtle form of coercion.  I think that we are naive if we do not recognize that a kind of “coercion” may be going on when a clothing company convinces a girl to pay four times what a pair of jeans is worth because they have played up her fears that she will be rejected by everyone if she doesn’t buy them.

The point here, of course, is not to argue that all or even most modern marketing is “coercive,” or to deny that most needless purchasing decisions are still made out of a vices as simple as covetousness, rather than fear.  The point is simply to establish that we need to offer a more complex account of how the economic sphere really operates in our world, and such an account, it seems to me, must include an analysis of the various subtle and even overt kinds of coercion at work.  In the next segment, I will turn to try and offer a similarly complex account of the political sphere.


The Tyranny of Efficiency

(following from “Embracing the Fall”)

My second big concern about Chapter 2 of Calvin and Commerce is that, to the extent that Hall and Burton want to confront and ameliorate the effects of man’s depravity in economics, their solution is one of law, rather than grace.  One of the first sections in the chapter is entitled “If We Recognize Depravity, We Will Not Tolerate Non-productivity.”  This language is harsh and a bit frightful.  For Hall and Burton, productivity and efficiency are the highest values, and the slothful nature of man must thus be greeted with no mercy.  The Calvinist doctrine of total depravity is meant to bring us all to humility, not pride, recognizing that we too are totally depraved.  This thus serves as a basis for a gracious and compassionate response to the sinner (in imitation of Christ), not a stark refusal to tolerate him. 

But there is no note of grace in Hall and Burton: “Workers who fail to enhance and to produce should not be rewarded; their job performance is not acceptable.  Workers who do enhance and produce should be rewarded; that in turn will lead to more productivity.”   Indeed, this is to put it more gently than what they go on to recommend–anyone who fails to produce must be severely penalized, so he will learn his lesson and produce more.  They call this “accountability in the marketplace,” but this accountability flows only one way–that is to say, employers must hold workers accountable, but workers are to be stripped of any means to hold employers accountable.  An accountable marketplace is one with

“the unrestrained/unrestricted movement of wages, rewards, and employment choices (on the employee’s side), and consequently the unrestricted ability to hire and fire (on the employer’s side).  The key word here is ‘unrestricted,’ meaning ‘free of distortion.’  A distortion of the second pillar of accountability is found in institutions and organizations–whether unions, trade guilds, cartels, or other collective bodies–that inhibit the free flow of employment.”  

Notice that they are not even sheepish about the qualifier “on the employer’s side”–for whatever reason, structures of accountability on the employee’s side are simply not important.  They complain that in most states and countries, “employers cannot fire at will, and most are required to show cause, even when firing untenured, nonunionized employees.”  What a horrible world, in which an employer would actually have to offer some reason for his actions before he stripped his employees of their livelihoods!  It’s almost as if Hall and Burton want to play right into Marx’s hands, by advocating a completely despotic capital class.  But if they want to do this, why must they drag poor Calvin into it?  What did he do to deserve such company? 

Of course, this reaction against legal constraints on capital masks a theological move that substitutes law for grace.  The remedy to depravity is a salvation by works, or, quite literally, by work.  The problem with the world in Hall and Burton’s model is that people do not work enough, and the solution is to make people work hard and reward them if they do, but punish them if they don’t.  Efficiency and productivity are thus idolized in their system, leaving us with their slightly chilling statement “We will not tolerate non-productivity.”  This leads to a kind of economic euthanasia (and indeed logically suggests full-blown euthanasia).  Unproductive members of society are not to be tolerated and are to be removed to make way for younger, more productive members.  Consider this statement, about why the tenure system at universities should be abolished (a system about which our authors are very worked up in these pages):

“The process of rewarding an educator who achieves a certain status greatly diminishes the employer’s ability to fire or release that worker.  As a result, the university becomes increasingly inefficient and may reach the point where it lacks the budgetary means to hire new–possibly more gifted–educators.  Furthermore, these experienced professors require higher salaries for jobs that could often be performed at a lower cost by younger, but equally talented, employees.” 

So much for honoring the  hoary head.  Seriously, I would’ve thought that, as Christians, we would value and cherish the very few sectors of society in which respect for the wisdom of elders still held out against the grist-mill of rational economic calculation.  But Hall and Burton will not have it–they seem to wish to subject every remaining arena of society to the dominion of the market.  If they have their wish (and modern society has come pretty close to giving it to them), they will be hard-pressed to offer any meaningful opposition to the proliferation of abortion, euthanasia, pornography, slavery, and everything else which subordinates the value of human persons to the value of money.