The best defense against sexual harassment is a free labor market

Jeffrey A. Tucker – November 15, 2017

Lin Farley, the person who coined the phrase “sexual harassment” in 1975, is today deeply unhappy about the movement she started. She thinks it has flopped.

“At first,” she writes, “it felt as if the term had the potential to change everything. Working women immediately took up the phrase, which finally captured the sexual coercion they were experiencing daily.”

It’s true that by giving the practice a name, she writes, the rules in corporate life and government began to change. Training programs against sexual harassment are common. Women with some degree of professional success, resources, and other options have new ways to seek redress. The law changed. Lawyers have won big.

She is less convinced that much has changed in practice for the average woman professional. Coining the phrase “has done far less to encourage the conversations I had envisioned back in 1975 that I believed would help to change our culture,” she writes. “Worse, it allows those who would argue that the culture and power dynamics have changed to fall back on the new rules as evidence.”

Laws Don’t Work

This is hardly the first time that new laws failed to achieve the hoped-for effect. Her proposed solution? Beyond recommending more talk, more exposure, more #metoo hashtags, she doesn’t seem to have one, beyond writing furious opinion articles for the New York Times.

More government involvement only means fighting coercion with more coercion – not a very promising path.

My alternative proposition: the best possible defense against all forms of exploitation at the workplace, including that which takes a gendered or sexualized form, is a free market in labor. Laws, mandates, and regulations that lock people into particular jobs, industries, and career paths make workers more vulnerable to abuse from bosses. The best way to equalize power between owners/managers and employees is a highly competitive labor market.

The further we move from the free market, the more the exploitation of labor is a major problem.

Let’s specify here that there will never be nirvana. This world will never be a place of universal holy decency. Trolls, jerks, and exploitative bosses will always be with us. The real question is: how can the power that bad people have over good people be reduced in a way that results in the least-possible harm to people and society? At minimum, victims and potential victims need a way to escape. The escape route should be obvious, low cost, and not injurious.

This is about more than the right to quit and get a new job. It’s about establishing an intensely rivalrous market for labor, such that employers have to be decent people to get and retain workers. They have to behave or lose talent to their competitors. Money talks, instructs, and trains people to be better people. It’s about an economy in which no one is trapped, imposed upon, or forced by lack of options to endure personal degradation.

The Capitalist Way

Providing such an escape was central to the liberal revolution of the 18th century: no serfdom, no slavery, no servitude. The result was capitalism, the only system of economics ever actually to eliminate the role of exploitation in labor and capital relations (Marx had it exactly backwards).

Look at what Ludwig von Mises wrote in 1927 about the power of labor vs. the power of capital in a free market:

In a private enterprise, the hiring of labor is not the conferring of a favor, but a business transaction from which both parties, employer and employee, benefit. The employer must endeavor to pay wages corresponding in value to the labor performed. If he does not do this, he runs the risk of seeing the worker leave his employment for that of a better-paying competitor. The employee, in order not to lose his job, must in his turn endeavor to fulfill the duties of his position well enough to be worth his wages. Since employment is not a favor, but a business transaction, the employee does not need to fear that he may be discharged if he falls into personal disfavor. For the entrepreneur who discharges, for reasons of personal bias, a useful employee who is worth his pay harms only himself and not the worker, who can find a similar position elsewhere.

Sounds beautiful, right? Exactly. The ideal here sounds fantastic, if we would get around to practicing it. Mises immediately turns to the problem of intervention in the free market. All interventions create bureaucratic forms of management to supplant market forces. This reduces real labor rights – even when it takes place in the name of labor rights.

What are the interventions that have reduced labor rights and given bosses the sense that they are not engaged in business deals so much as “granting favors” to workers on a quid pro quo basis? The list is long but includes health care mandates, mandatory vacation times, the costs of payroll taxation, professional licensure, minimum wages, and the long list of so-called “labor rights” that only end in trapping workers in jobs from which they can’t walk away.

All these programs stifle competition in the labor market. They make workers less marketable and cause people to cling to the jobs they have. To put a fine point on it: Obamacare contributed massively to enabling sexual harassment.

Job Lock

Think of your own case. If you walked out of your job today, how long do you suppose it would take to get another? How long would you expect to be without income? In some service industries like restaurants, hotels, and bars, it usually takes a few weeks. But once you enter into more high-end positions, matters become grim. It can take six weeks to two months to land another position.

Termination severance, by tradition from days of old, provides for only two weeks of income. Then you have the huge problem of health care. The timer starts right away. You will have to go to the misnamed “marketplace” dominated by Obamacare, or pay a penalty to the government. Then you might have to move, and that is expensive. Meanwhile you are trying to line up interviews and make a good impression – even while you are panicked about your life, social status, and finances as never before.

You look at all of this and think:

Yeah, I think I’ll keep my job. True, my boss is a jerk. He creeps me out. He’s got all kinds of issues. My manager was making vague insinuations that make me uncomfortable. He explodes abusively just to show his power. My supervisor is trolling my social media and asking personal questions that are none of his business. But what can I do? No one wants to face unemployment.

Job lock of this sort is a major reason for the disproportionate power that bosses have over workers. It is a major contributing factor that enables and perpetuates exploitation. The more choice exists in the labor marketplace, the more workers are in a position to demand decency, respect, and decorum from management.

Please Come Back

Some years ago, back when the economy was growing fast and companies were desperate for workers, I witnessed a scene in a convenience store I will never forget. A young worker came in a few minutes late for work. The boss was furious with her and started yelling at her, in front of customers. His face was turning red.

She stood there taking it all in. When he was done, she calmly took off her badge and put it on the counter. She said “goodbye” and walked out the front door.

What do you suppose happened? Immediately the bossman realized what a jerk he was being. He went flying out the door to stop her. He begged her to come back. I couldn’t hear the conversation but he seemed to bring her around. Apologies, raises, better hours, promises not to be a jerk – I can’t say for sure what it was. But whatever he said persuaded her to come back and start work.

I watched this scene with a sense of awe. There we have it, the picture of an ideal! The labor contract is an exchange in which both parties benefit. If one party wants out, the deal is over. No one is ever harmed. No one is ever humiliated. No one should ever have to face the problem of providing any kind of quid pro quo services that are not in the contract. Fairness, decency, and humane values win.

A free market means progress toward ending all forms of exploitation, including sexual harassment, indecency, inappropriate touching, casting couches, lunches that last too long and become too intimate, suggestive texts, late-night personal communications, invasive interrogations of personal lives, star chambers, subtle or not-subtle intimidations, or any other form of imposition. The path to peace and human dignity is the same here as everywhere else: make all things voluntary.

You say that this will not finally put an end to the problem? It won’t. But it gives us the best possible way to improve our lives and diminish human suffering. That’s more than can be achieved [with] any laws, op-eds, shaming, or far-flung hopes for humanity to improve on its own.

This article was originally published on Fee.org. Jeffrey Tucker is Director of Content for the Foundation for Economic Education.

 

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