A Restatement Of Economic Liberalism Prologue: Capitalism and the permissive society Introduction :: The Historical Context :: Reasons For Suspicion :: The Rise Of The Word Man :: The Dilemma Of The Economic Liberal :: The New Left Attack :: Poverty And Equality :: 'Alienation' :: Student Dissent :: Contemporary Radicalism :: A turn of the tide?

One early Marxist concept now back in fashion as a basis for anti-capitalist sentiment is that of 'alienation'. I wish I could think of a less ungainly name for the relation between many workers and their employment but it does refer to a real and undesirable phenomenon. It can be used, notjust rhetorically, but to refer to a sense of powerlessness which many people feel within large organisations, a feeling of meaninglessness about the operations performed and of a lack of any intrinsic satisfaction outside the wage packet. The archetypal example is that of the car assembly-line worker who performs identical repeat operations of a nature and at a pace over which he has no control.

Again, however, although the complaint is correct, the diagnosis and remedy offered are frequently wrong. As Edwin G. Dolan has remarked in a penetrating analysis of the concept, published interestingly enough in the Chicago-based Journal of Political Economy,¹³ alienation arises not so much from the system of property relations - whether capitalism or Soviet-style Communism - as from a particular stage of industrial and technological development involving the combination of an extreme division of labour with the wage system in large impersonal institutions. The individual can, of course, in present- day capitalism choose to avoid jobs with such characteristics, at the expense perhaps of less take-home pay; and the greater the place of competitive forces in the system the greater this choice is likely to be.

Nevertheless, the habit of deference to authority - alternating perhaps with bloody-minded rebellion against it - that grows up when the majority of the population have jobs characterised by the alienation syndrome, affects the whole character of society. The key variables are probably the proportion of the population in paid employment and the nature of the jobs they perform. After sadly quoting figures showing the decline in the proportion of the self-employed, one perceptive author speaks of the dangers that arise 'if society is progressively turned into one great hierarchy of employment'. As many exercises of freedom are of little direct interest to the employed, 'they cannot see the need for them, and they attach little importance to opportunities for action which hardly ever occur in their lives'. If the reader is wondering which neo-Marxist I am quoting, it is F. A. Hayek, in The Constitution of Liberty.¹⁴

Characteristically, but correctly, Hayek believes that these dangers are aggravated by tax and other legislation which discourage the independent businessmen or professionals in the supposed interests of the employed. He emphasises the need to preserve a body of men of independent means and to avoid replacing the present number and variety of employers by public corporations all dependent on the state.

There is, however, more to be said. Just as the extreme division of labour and movement away from self-employment is an expression of one phase of technological development, future technological advance may make possible a movement in the reverse direction. It is already a commonplace that the development of both factory and office automation should reduce drastically the number of routine jobs and increase the demand for jobs involving the discretionary use of varied skills.

Another less obvious aspect of the growth of potential output that advancing technology makes possible is that it will become sensible to work in ways that are, in the technical (although not economic) sense, inefficient. The deservedly famous passage in Marx's German Ideology where he speaks of a society in which it is possible for anyone to 'hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner' was, as he knew, not possible in his own day. But it should be possible to take out some of the fruits of the much higher level of productivity we may expect in the future in the form of a deliberately 'wasteful' and pleasanter pattern of work and/or in shorter hours, rather than in more and more material goods.

There is already an incipient tendency for a rise in the ratio of self-employed. A number of jobs, especially in the building and catering trades are shifting from an employee to a quasi- entrepreneurial basis - a development that is held back by various kinds of government intervention and by the hostility of organised unions. During the period in which the majority are bound to remain paid employees in the strict sense, there are two ways in which their influence over their working environment can be increased. One is 'workers' control' or 'industrial democracy'. The other is freedom of choice of occupation, or voting with one's feet.

The two approaches are not incompatible. By all means let us experiment with every sort of choice for giving people more say in the organisations in which they work - although my own feeling is that what people most want is, in the first place, to be informed in advance so that decisions are not sprung upon them and secondly, to be consulted so that they can express their views before it is too late, rather than to attempt themselves the tasks of management.

Another point, not generally realised, is that to the extent that workers really want to have a say in management, those firms who are responsive will find it easier to attract workers. Thus, ifthere is a real demand for greater workers' participation (although not for expropriating the owners), this too can be brought about by the market.

If the above remarks seem a little removed from reality, the main reason lies in the part played by the restrictionist activities of the trade unions themselves. Catering for minority tastes in, say, hours of work, or in preference for a more relaxed tempo of work, is a costly business. It can be costly because of the kind of preferences involved, or simply because they are minority tastes and an employer who caters for them will have to do more searching around for staff. These are real costs, which would exist in a non-capitalist society; and an employee who wishes to be treated in this way must expect smaller take-home pay. Unfortunately the insistence of union activists on levelling up all wage differentials between workers of comparable skills would soon discourage any employer who tried to cater for such minority tastes or attitudes. It will also not have escaped attention that the possibilities of shopping around depend on the state of the labour market. They were not worth much in the interwar period and they were of only limited use in the early l970s in high unemployment areas like Scotland. Here again trade union monopoly activity has, as already noted, a key role in reducing the overall demand for labour that can be maintained without provoking an inflationary explosion.

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13. E. G. Dolan, ‘Alienation, Freedom and Economic Organisation’,Joumal of Political Economy, September 1971.{back to text}

14. Hayek, The Constitution of Liberty, p. 119.{back to text}