How Private Power Crushed Liberty
* Book: Tyranny, Inc.: How Private Power Crushed American Liberty–and What to Do About It.
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Discussion
Yascha Mounk and the author:
“Yascha Mounk: You have a really interesting new book called Tyranny, Inc. One might think that when a conservative intellectual writes about “Tyranny, Inc.,” they’re writing about Harvard or Brookings. But you're writing about the big corporations in the United States. What do you mean by “Tyranny, Inc.?”
Sohrab Ahmari: This is not a tirade against “woke capital.” It's really a critique of the workings of unhindered capitalism as such. And it comes not from a kind of conservative cultural place in the sense that corporations are pushing gender ideology and so forth. But rather, on a much more fundamental level, it's an attempt to show how our supposedly non-coercive market societies are in fact suffused with coercion. But that this coercion is taken to be in a “private sphere,” it's in the marketplace, or the workplace, and, therefore, it's not treated as being justiciable or being subjected to democratic give and take. We are forced to acquiesce to coercion that is sometimes so systematic and so unjust that I argue it amounts to what I call private tyranny.
I give a tour of our political economy from the bottom up, from the point of view of, typically, people who have been victims of this kind of coercion—workers who are whistleblowers but are gagged from speaking out because of non-disclosure or non-disparage agreements, or the abuse of commercial arbitration, which is something that was meant for merchants to have relatively equal bargaining power when they met each other on the marketplace so they could agree to resolve their disputes through a private mediator but was never meant to be expanded into the workplace where you have situations of vast disparities in bargaining power. I tell the story of an employee who had a case against Ernst & Young for unpaid wages under California law, under the Fair Labor Standards Act, which is established as a federal minimum wage. Precisely because of the arbitration clause, which our Supreme Court—mainly conservative Supreme Court justices—has treated as evermore ironclad, he wasn't able to do a class action, which is the remedy that the relevant statute provides. The arbitration clause overrode that such that he would have had to individually arbitrate at the cost of about $200,000 in order to recover about 2% of that amount, so about $4,000.
More broadly, the corrosion of the real economy by asset-stripping private equity and hedge funds, including the erosion of local journalism, which is a threat to basic civic fabric and being able to hold local actors accountable. Many, many counties in the United States now lack any sort of local news coverage. And there are all sorts of negative effects, as you know, associated with that, to how the wealthy abused the chapter 11 bankruptcy process to shield their assets from lawsuits by workers and consumers who are legitimately aggrieved. So I tell that reported story, and then in the second half of this story, I tell more of a political economic history of how we ended up here from, roughly speaking, Lincoln's address to the Wisconsin Agricultural Society where he set out essentially the Whig Republican account of a free labor market; through the reforms of the New Deal that addressed a lot of these problems and brought about what I call “political exchange capitalism” in which capitalism is subject to democratic give and take and where politics kind of compass the market; to now, the neoliberal era, which may be on its last legs, but we’re still living through it, which I argue has brought us back to the pre-reform, pre-New Deal. So the book is, shockingly, a conservative celebration of the New Deal as well.
Mounk: How new is this? Or how bad is this moment in American history relative to other periods? I'm sure that some of the specific phenomena you're talking about are of this moment. The role of the arbitration court, certainly, I imagine is much greater today than it would have been 50 or 100 years ago. But of course, in the late 19th century, you had all of the different ways in which railroad bosses and others were in charge of American economic life and able to really extract resources from workers in very bad ways. Situate us in the largest sweep of American history.
Ahmari: I would say that, largely, it's a story of things being pretty bad. And then there was this mid-century era, on both sides of the Atlantic, this model took different names. Here it was New Deal liberalism. And then we have a kind of counterpunch with neoliberal ideology, this idea that not only should the state stay out of the way of market actors but the state should aggressively marketize elements of life that even the sort of most goonish 19th century, Gilded Age tycoon wouldn't have thought of as something that should be subject to market forces, like certain public utilities and so forth, that became very aggressively marketized in our time.
There are echoes between now and the pre-reform, pre-New Deal era. For example, I argued that we're back to in many ways, the Lochner era, named for a 1905 Supreme Court case where the High Court held that New York State could not regulate the hours that bankers had to work in one week. The legislature had imposed the 60-hour limit, but the court struck that down on the idea that this was a violation of the constitutional principle of liberty of contract, and many other child labor-type violations were struck down. I think we are going back to that in some ways: non-disclosure agreements, non-disparage agreements, etc. That kind of Lochner, libertarian mentality, which is very attractive to many American judges, is that at that point, if you look at that document and you see a clause that you don't like, you are free to either try to renegotiate or walk away. But that's not how reality at all works. The New Dealers recognized this and they tried to rectify it.
I present in the book an actual employment agreement from a very large, important company that says that its employees give up the right to their persona, their voice, and they do so for commercial purposes. And it's not just that the company might record you in order to use your phone or your image in a training brochure, but to market your voice to, for example, Siri, which uses human voice and likeness data to perfect its service. But that also could be sold to, I don't know, a future virtual pornography system.
Mounk: I see you as part of an effort to align the Republican Party's economic policies with some of its more natural constituency after this realignment towards cultural politics which has scrambled American politics in a certain kind of way. Does that feel like a fair characterization of your project? How successful has it been?
Ahmari: That's absolutely the correct characterization. And I would say, without sounding self important, that I have been one of the protagonists of trying to articulate a conservatism that tries to ameliorate some of the stresses caused by the market system on assetless Americans, and tries to build up lives of greater stability, less precarity for working class and assetless people. I've been trying to do that, I would say, for more than half a decade. And I didn't immediately warm up to Trumpism. In fact, I was one of the Never Trumpers at The Wall Street Journal in 2016. But over time, through a lot of thinking and even reflecting on my own life, and the sense of precarity that I felt as an immigrant when I first got here, struggling with health care costs—I'm a man of the right and so that pushed me toward embracing this ideal of working class or populist conservatism: it would solve the wounds of economic neoliberalism and, because it's conservative, it would also pay a due respect to ordinary people's yearning for greater order and more social cohesion than left liberals had granted them.
Looking back at it now, I'm actually quite disillusioned with that project. Circa 2018-19, it seemed like it would be so easy. But I don't think that Trump was able to actually realign the Republican Party during his time in office. Partly, you can blame the fact that you had to spend so much energy fending off challenges to his legitimacy. But even barring that, even if he had the executive willpower of an Andrew Jackson or the reforming genius of FDR, I just don't think that it's possible to easily realign the Republican Party. There are shining little exceptions. I would point to you know, Senator Hawley, Senator Rubio, Senator Vance as the people who are trying to play around with this. But largely, I just have come to believe that the Republican Party will continue to be a vehicle for the wealthy and a specific type of wealthy, even as Trump has brought in more, initially, white working class people and, in 2020, more of the multiracial working class.
Mounk: We have a bunch of disagreements about Trump that we don't need to prosecute right now, but we seem to be in agreement about the fact that even though he made certain moves in the direction of a more economically populist set of policies that would actually help the working class (which I think was an underplayed part of his appeal in 2016)—the fact that he said perhaps it is the state's job to make sure you have decent health insurance—he didn't really deliver on that.
Ahmari: I can give you a good example. Trump got the highest share of union household votes in 2016 for a Republican since Ronald Reagan in 1984. It's because of his trade talk and the sort of gestures that he made toward unions. But his Department of Labor was ultimately put in charge of Eugene Scalia, who is just a Big Law lawyer for corporations. And so on the issue of arbitration in that particular case of the Ernst & Young employee, the Trump administration actually went against his own National Labor Relations Board to side with Ernst & Young and ensured that the arbitration clause was upheld. That's just kind of confirming what you're saying. “