I recall in Socialism Mises saying that it was wrong to complain about the misery of the capitalist system. His point was that it is not the fault of capitalism that it takes time for the mass of wealth to develop to the point that the large group of poor is eliminated. Capitalism did not make people poorer except in the sense that poverty is a relative term and some people would have had their wealth grow faster than others. I doubt many people moved from a comfortable yeoman farming life to city squallor, so those that moved must have done so for the purpose of bettering their lot, horrible as it looks to us now through the social history prism.

workers felt like they had less freedom than under the feudal system where the aristocracy would largely leave workers alone except when it came to demanding exorbitant taxes for the privilege of using their land.

I have NEVER seen this asserted anywhere besides, I think (or vaguely recall might be better), Das Kapital and even there I thought it was only asserted as a fact, with a lament for the fact that workers were not conscious of this source of their malaise.

Obviously most workers felt like that loss of freedom was a worthwhile price to pay for a better and far more secure income

Or they just didn’t want to die in rut? I thought NPOV didn’t believe in rational action theory and now he prescribes it holus-bolus.

JC: briefly, what happened was that the EU introduced a directive (I think it was) on cross-border bankruptcies that essentially meant that corporate group bankruptcies would be managed by the country in which the group had its ‘centre of main interests’ (COMI). The idea was to prevent another BCCI saga in which Luxembourg insisted on trying to run the bankruptcy of a business bigger than its whole economy and generally impeded the vastly-more-capable British courts no end.

So principle was that your bankruptcy had nothing to do with formalities like incorporation or place of management and control (tax residency indicia) but was COMI. Immediate application was flight to UK bankruptcies, arguing that the COMI of all the subsidiaries in the group was also the UK because practically the group was ran out of the UK>

Response at trial was an immediate claw-back of power by local courts (the actual local administration/liquidation still has to follow local law, so things like employee entitlements, but things like being allowed to sack them at all, and ranking in the winding-up, are determined by the COMI.

At trial, German and French courts simply refused to believe this. On appeal, they acknowledged that the English courts had correctly found COMI, partly because the appeal judges were smarter – no surprise what the French courts found when French-owned groups started filing in France and arguing that the COMI of all their subs was in France – why yes they said :)

I think Germans were a lot slower to really accept COMI.

I haven’t looked at in detail in a couple of years now though.

the immense exploitation and suffering of the working class during the first 100 plus years of capitalism.

So exploitation started with capitalism… sheesh.

The slaves of ancient Greece and Rome were not exploited? The serfs of medieval France? Are you expecting me to seriously believe that the feudal system was not exploitative? What happened to the workers who cut and carried stone to build the pyramids? Let’s not even start into the way underlings were treated by the Aztecs.

John Ball, Wat Tyler and Jack Straw had pretty similar ideas to Marx (and many hundreds of years earlier), except they were fighting for the right of working people to get paid any wage for their efforts (considered a fiendishly radical idea at the time).

“The whole concept of the class war is one of the divisive legacies of Marxism, it is a sad thing that anyone would want to maintain that kind of rage.”

This is a typically glib analysis, Rafe. It is true that Marxism quickly became the dominant strand of socialism but the evidence clearly indicates that some form of anti-capitalist ideology was bound to take root and flourish during the early decades of the industrial revolution given the immense exploitation and suffering of the working class during the first 100 plus years of capitalism. Such an ideology would have resonated just as strongly even if Marx was never born.

Can you elaborate a little on this:

an interesting side-effect is an increase in French companies bankruptcies being administered out of the UK, to the apoplexy/sheer disbelief of local courts.

Re skilled employment, overall, I don’t know. In technology probably not excessively, although there are a lot of French around the world. In finance, yes, London just pays too much better (although maybe this will change somewhat). Still lots of very smart French people in France, but a hell of lot in London too. Real crunch is the bottom of the skilled ladder, where you don’t qualify for the exceptions (ie real world applies to the really skilled, only – this is almost universally the case in France in fact, see eg ‘Grandes Ecoles’).

Certainly right that the real effect is unskilled – probably mainly different factors driving the skilled bit as I have actually suggested above (although part of it is that inherently lower remuneration for essentially guaranteed employment).

I wasn’t trying to put words into your mouth. Just trying to follow your argument. What interests me is whether this appeal to ‘exploitation’ ends up being coherent and whether it leads to fairer or less fair outcomes.

My experience of unfair dismissal and what commonsense I can bring to bear on the subject leads me to believe that rules against unfair dismissal lead to more unfairness than they solve.

For every employee who benefits there’s one who suffers (who doesn’t get offered a job or more work) and the system is likely to be gamed to buggery – by both sides. (The one example I have had experience of was like this).

I’m with you on this issue, but is it really true that high skilled labour is fleeing France in any great numbers? France has very high labour productivity. I thought the effect was mainly on the unsilled – and the result is unemployment there.

they should be protected directly – through the enforcement of entitlements, not by virtue of judgements like the company is profitable and can afford to pay.

For goodness sake, Nicholas, you’re putting words in my mouth here. I’m saying that the concept of exploitation, itself based on a concept of fairness, provides the underpinning of labour standards, awards and so on — not that regulations should be applied on a case-by-case basis according to profit. Of course they should be applied uniformly, bearing in mind the practicalities of the country in question. Firms that can’t meet them either should go under or invest in the wherewithal to raise productivity.

Where part of any bank or housing-related application inevitably involves your last six pay-slips (which are monthly, never weekly) and telling whether you have a CDD or CDI (‘regular’ and basically unsackable employment contracts), one can readily see how discrimination against the lower classes becomes systemic and compounding.

But that’s cool, because the workers are ‘protected’ and the evil corporations are obliged to put their employees first.

~ ~ ~
* an interesting side-effect is an increase in French companies’ bankruptcies being administered out of the UK, to the apoplexy/sheer disbelief of local courts.

But if you don’t take that judgement into consideration then they does seem a risk that companies are less able to deal with difficult economic circumstances where they are temporarily unprofitable. Certainly it would seem grossly unproductive (and unfair) to force a company to have to deal with draconian unfair dismissal laws if it really was having to shed staff just to keep its head above water, or even the legal ramifications of requesting that staff defer paid leave that would be otherwise due: it’s probably fair to suggest that in such cases employers have the right incentives to ensure their employees are not excessively overworked and overstressed to the point they are actually working unproductively – what they tend to lack is incentive to ensure their employee’s long-term mental and physical health remains good, which is a reason that laws determining maximum working hours and annual leave are needed, but I can see that there may be cases where it makes sense to temporarily suspect such conditions if the alternative is the significant likelihood of the company going bankrupt.

I’ll agree that you never can be really factually sure about anything in the social arena, not like a mathematical proof. Then again, constantly worrying about uncertainty will lead to the conclusion that it is safer never to hire anyone (or go outside). For a business to work at all, someone has to show a bit of confidence in the face of limited knowledge and take a risk. We have all heard the mantra that entrepreneurs deserve to reap generous rewards because of the risks they are up against — the other side of the same coin is that risks are risky and entrepreneurs who make bad judgements get the honour of taking it on the chin, like a gentleman.

The employee is taking relatively little risk in these situations, but their reward is also limited, sort of balances out.

It’s probably worth noting that there is a big jump between employee and entrepreneur, both in terms of risk and reward. A linear world would have a smooth transition and people could find their personal comfort-zone regarding the risk they are willing to accept, but (for better or worse) our world is nonlinear and involves a chunkular transition between wage slave and owner. I guess this is probably the heart of the thing that bothers the grass-roots socialists.

The agencies short term incentives are as you say. Their longer term incentives are not. Ill leave it to you to work out why. (Hint: we didnt use the agency again.)

It’s pretty cheap to register a new business name. I tried compiling a list of all the employment agents who advertise on “seek” (in order to automatically filter them OUT of my search) and I find a new one pops up at a rate of approx one every two weeks (that’s just IT). I would make a graph, but I’m nervous about being called a macho stats man.

I can’t tell you how I love tag lines like ‘lets face facts’. They’re so – well so masculine and matter of fact. They give me a kind of thrill – a bit of metaphysics on the cheap.

Anyway, regarding the facts, we didn’t trust someone to pick for us. We interviewed a short-list of about five. I think we also held second interviews for two and asked the second shortlist to do some sample work for us. Thing is, you really need to work with someone for a while to know if they’re going to work out.

The agencies’ short term incentives are as you say. Their longer term incentives are not. I’ll leave it to you to work out why. (Hint: we didn’t use the agency again.)

When you think about it, its one reason why people use agencies. It didnt protect us in this case, but this person wouldnt have got another job in an agency.

I would have thought it was one reason never to use agencies because when you think about the incentives in the situation, the agencies have no reason to care whether you got burnt or not. Indeed, the faster staff turns over, the more the agencies win. Let’s face facts: you and your co-workers were too lazy to sit down and interview a lot of candidates and use your own gut judgement to pick the one who seemed honest and hardworking, so you trusted someone to pick for you.

Have you thought about all the people who would have done that woman’s job properly? They get no particular favours from any agency, because the agency just wants good presentation skills and nothing else (enough for them to grab a sale and move on). They obviously get no particular favours from lazy employers either, because if everything goes well, they are simply not noticed at all and if things go badly, whoever knows how to game the system is always the winner.

We have unfair dismissal laws. There are some issues about workers getting ripped off – having entitlements effectively taken off them – in which case these should be protected- but I think they should be protected directly – through the enforcement of entitlements, not by virtue of judgements like ‘the company is profitable and can afford to pay’. And it is a nice idea to protect workers from irascible bosses. But the employers go see lawyers and get instructions on how to dismiss – an official warning etc. And in the meantime, the system is mainly exploited by lousy employees.

My only exposure to the system was a secretary I had at the Business Council. She came from an agency, represented herself as competent at doing various things, was assigned to me and another person. I gave her very little work (because it was more trouble than it was worth), she then said that she couldn’t work with me because I was too difficult. She was assigned full time to the other person who was organising a conference. She told him she was doing all the tasks he was asking her to do. Two days before the conference it became clear that she’d done almost none of what she claimed to be doing. She left in a huff saying the other person was too difficult to work with.

We heard a week later that she was claiming 8 weeks severance pay for stress, (I doubt she’d been working there for a year) and the lawyers’ advice was that paying up was the least cost response. They said this was normal, and essentially open to pretty much any employee.

The costs involved in this are quite considerable. When you think about it, it’s one reason why people use agencies. It didn’t protect us in this case, but this person wouldn’t have got another job in an agency. So everyone gets the right to use this scam at least once – if they’ve got the gall.

I’m afraid I wonder why we don’t think of these things more in the way we do with family law. I’m generally in favour of no fault divorce including between employees and employers not because they can’t be bastards to each other, but because if they can’t get along, more damage will be done by something as dysfunctional as our legal system getting involved.

Except people stay in jobs where they are unhappy and feel they are being exploited for lots of reasons, even when the job market is quite tight. For a start, while it might be tight overall, it doesn’t mean there’s lots of options for a individual with a particular set of skills living in a particular area.
Employers realise that not all employees are prepared to re-train (which might take years, after which time the job market could look very different), or re-locate (which always involves significant costs, both personal and financial) just to take advantage of full employment conditions which should give them better bargaining power, and the nastier ones will take advantage of this to compel their employees to work under conditions that they would never tolerate themselves (another angle in the exploitation definition).

It should be noted that employees aren’t the only ones who suffer from exploitative conditions – good employers do too, because the reputation of employers in general is tarnished by the examples of obvious exploitation that occasionally appear in the papers. For instance, I had a high opinion of employers in general before WorkChoices was introduced (and hence was intially mildly supportive of at least the increased flexibility the package appeared to offer), but the flood of cases that started appearing in the news of employers drastically cutting pay and/or conditions even when companies were highly profitable and the economy was doing very nicely genuinely surprised me – and not in a good way. Just like the Solarium industry was recently campaigning for stronger regulation of solariums to weed out the cowboys that were ruining the industry’s reputation, if anyone stands to benefit financially from sensible labor regulation it’s good employers who do the right thing and treat employees with the respect that all human beings deserve. Interestingly enough my last employer, who if anything almost spoiled his employees, was/is a committed ALP man, and very strongly opposed to WorkChoices – perhaps because he knew better than most that many of his fellow employers didn’t always treat their workers well because it was the right thing to do, but because they knew they’d be breaking the law if they didn’t.

If a firm is already comfortably profitable, but tries to increase its profit by cutting wages, lengthening hours, economising on saftey and otherwise disadvantaging its employees (or suppliers or subcontractors), and it does this just because it can get away with it, thats exploitation.

I’m not sure I get this. Firstly I do concede safety – so you’ve got me on the hook there – I do accept that letting saftey slide is unfair. I still don’t think exploitation is the greatest word for it. I don’t for instance think that ‘exploitation’ is at the heart of the crime committed by James Hardie executives in perpetuating work they knew to be unsafe. It’s a lot worse than exploitation and exploitation is incidental to what was really going on which was a kind of fraud and wilful recklessness regarding the grievous bodily harm to which they were subjecting their workers.

As for the other stuff, do you want to legislate against anything you think is exploitation?

If there’s full employment, I can’t see any problem – because people can wander off into the rest of the labour market. Perhaps you’d then say that this means that they can’t get away with it.

If there’s not full employment there might be lots of reasons for it, but if the reason is that wages are too high – which was probably part of the problem in Australia in the early 1980s, then aren’t the greedy exploiters the ones who are helping the economy out of its hole and eventually making things better for the exploited – by (ultimately) creating the conditions which will increase employment?

I’m aware that one can defend such a rule on the grounds that it is part of a wider scheme which really does produce a better result for those who might be exploited. I’d believe it in Scandanavia. In Australia where we look after the people at the bottom end on the cheap, I’m not sure I’d feel too good about the protection if I wanted to get some job that was deemed exploitative. It’s pretty lousy protection.

Anyway, I’m not arguing anything with any great force here. Most people seem to be OK with legislative definitions of exploitation. They may well be right. I’ve got my qualms about it but beyond my observations above, don’t think I have anything much to say on it.

But in making that point you’re not helping me in the tiniest bit to understand why you don’t agree with my definition. I did say that it was a first approximation.

I’d be interested to know yours, once you’ve had a chance to think about it. If, on the other hand, your point from the start has been that it’s an empty concept, obviously I don’t agree.

Bear in mind that the point is to establish a basis not for moral judgment, but for regulating wages and conditions. Since the conservative/libertarian as I’ve charactereised him rejects the need for such regulation, he obviously has little use for the concept of exploitation — at least in this context.

It’s pretty damn rarely the case that anyone chooses between immediate and personal starvation and a job that is so risky or damaging to your health that it will almost certainly cut your life short, or result in constant health problems.

Further, I don’t believe that having the government mandate a minimum set of health & safety standards need result in employment opportunities being reduced, providing it’s done sensibly. For a start, any equipment or training costs associated with meeting such standards can be 100% subsidised if really needed.