Thursday, February 27, 2014

Cash on the Table: Markets, Values, and Moral Economies
Moral values inform our economic behaviors. On its face, this is an unassailable proposition. Think of the often spiritual appeal of consumer goods or the value-laden stakes of upward or downward mobility. Consider the central role that moral questions regarding poverty, access to health care, the tax code, property and land rights, and corruption play in the shaping of modern governments, societies, and social movements. Ponder the meaning of fair trade coffee and organic produce as well as Walmart’s everyday low prices. The moral aspects of the marketplace have never been so contentious or consequential; however, the realm of economics is often treated as a world unto itself, a domain where human behavior is guided not by emotions, beliefs, moralities, or the passions that fascinate anthropologists but by the hard fact of rational choices.

A great deal is at stake in understanding the moral dimensions of economic behavior and markets. In this volume, we bring together anthropologists, economists, and management scholars to look at the moral implications of markets.  Anthropologists tend to focus on the corrosive effects of markets on traditional lifeways and the ways in which global markets disadvantage marginalized peoples. Economists often have difficulty recognizing that markets are embedded in particular social and political power structures and that “free” market transactions are often less free than we might think. If anthropologists could view markets a bit more ecumenically and if economists could view them a bit more politically, then great value—cash on the table—can be found in bringing these perspectives together.

Tuesday, February 18, 2014

German Works Councils, the UAW, and VW's Stakeholding Culture

Workers at VW's Chattanooga, Tennessee, plant rejected UAW unionization by a vote of 712 to 626, the NY Times reports. This was a blow not only to the union, but to VW management as well. In a stance U.S. auto executives found as foreign as month-long holidays, VW leaders not only did not oppose the organization move, they seemed to welcome it as a way to introduce works councils.

By law and corporate culture, VW takes seriously the German model of "co-determination," with labor treated as stakeholders alongside stockholders. And they have exported this system of labor relations from their home in Wolfsburg to factories around the world.

The practice of co-determination is built around "works councils," tiered organizations of employee representatives (blue and white collar) elected by their peers. At the grassroots level, shop-floor works councils help organize employee schedules and make tweaks in the production line. Two years ago, middle management works councils successfully lobbied VW to have its corporate Blackberry server to stop sending message to employee's devices 30 minutes after their work day ends (and begin again 30 minutes before the next shift).

At the upper level, works council representatives hold half of the seats on the company's supervisory board, which introduces new voices and incentives in boardroom deliberations. VW obviously thinks this approach brings value, as they have implemented the system abroad.

So, with VW supporting the union, how did it lose this crucial vote? Union supporters have pointed out that the vote was much closer than other southern auto plant votes in recent years. And Republican politicians and pro-business groups took an aggressive, to the point of hysterical, public stance against the union (even threatening future expansion of the plant if the UAW won).

In fact, in the quotes I have read, workers are very open to works councils, and see VW as a good employer. The vote, then, should be seen as a commentary by basically satisfied workers on the UAW's confrontational model of labor relations, a perceived affinity for striking over stakeholding.

Paradoxically, U.S. labor laws meant to protect worker rights appear to prohibit the works council model in the absence of a union, thwarting the sort of organization that both labor and management prefer.  

Thursday, February 13, 2014

Romance, Wellbeing, and the Work of Love

For a long time, historians thought that romantic love (as we understand it, in a Hallmark Valentine's kind of way) was a Western invention, constructed by the romantic troubadours in French courts of the thirteenth century (see this piece by Catherine Winter).

Recent years, and the rise of brain scanning technologies and evolutionary psychology, have seen the conventional wisdom shift. Most explanations of romantic love these days focus on serotonin and dopamine levels, blood flow and MRIs; and these biological mechanisms are postulated to have emerged early in human history to promote pair bonding and care of our especially helpless young.

But it does not have to be either social construction or evolutionary mandate. Social and psychological triggers can flip the switch on chemical processes in our brains. This is the argument I make on a new PRI show titled The Really Big Questions, hosted by Dean Olsher.  My bit starts at 38:00 into the episode.

In previous posts I have argued that wellbeing requires a lot of not always pleasurable work. Fulfillment is distinct from giddy happiness; and it derives from the hard work of becoming the sort of person you want to be. Likewise, as I claim in the Love episode of The Really Big Question, more than biochemical, and it requires a lot of hard work.

Monday, February 3, 2014

Economic Lessons from Abroad: Workers, Wages, and Inequality

There are many varieties of capitalism, and, given our current travails, we in the U.S. are starting to realize that we may have a lot to learn from other ways of organizing the economy. 

By law, half of the board of directors at German companies are elected by the workers through a system of "works councils." This is a remarkable fact, and introduces all sorts of different incentives into corporate strategy (as compared to a narrow focus on shareholder value).

Adam Davidson, writing in the NY Times Magazine this week, notes the "beneficial constraints" the German system of worker/capital "co-determination" has on manufacturing there.  Similarly, Davidson shows how Harley Davidson has worked with his highly paid and skilled workers to turn around their failing production. He wonders if this would have been possible without experienced union workers.   

(I write about co-determination in my new book, and have blogged about VW's work's councils and their efforts to institute one at their new Chattanooga facility.)    

And it is not just our other OECD countries that have lessons--and cautionary tales--to offer. Levels of income inequality in the U.S. have over the last decades approached the level of developing countries. The Times today reports that middle class consumption is steadily eroding--from hotels to appliances to restaurants, the high-end and the low-end are growing at the expense of the middle. The Harley workers appear to be the exception. This may result in what Alain de Janvry, writing about developing countries, calls a "disarticulated economy," put simply, one in which workers cannot buy what they make, the opposite of the Fordist promise (to pay workers enough to afford the cars they make).       

Brazil in recent years has made great strides in re-articulating its economy, pulling millions into the middle class and stimulating domestic consumption. Perhaps, then, we should look to Brazil as well as to Germany for economic policy ideas.

Distribution of Value in Anglo-American and German Firms (based on Vitols 2004:371)

Anglo-American (early 1990s)
Germany (early 1990s)
Germany (late 1990s)
retained earnings