The Firm as a Political Entity
[.green]Josh Gabert-Doyon:[.green] Why has there been a push to reconsider the firm as a political entity in recent years?
[.green]Isabelle Ferreras:[.green] There are so many important points here. Let me maybe highlight a few. The first is the unbelievable level of inequality. Most people know that it's a problem that needs to be addressed, and obviously Piketty's book, Capital in the Twenty-First Century, absolutely turned the tables on the issue of rising inequality. But that was not enough in the sense that the public conversation mission was still about taxation, rather than corporate governance.
The other is the crucial role that corporations play in our political environment today. Firms have become such crucial actors that we need to pay attention to them. For instance, the involvement of Facebook in Trump's winning election campaign, the Cambridge Analytica scandal, these types of moments really raised the alarm. Yet it's not so clear what should be done. This pandemic is playing a huge role in the reconsideration that workers are central to the economy and if they decide not to go to work, or if they don't perform their job in an efficient way from home, then there are problems. It's obvious for working people and for union organisers, but speaking at the level of the system, workers were certainly not central to the way that our current system was built. We've been told that the most important actor in the economy was the financial investor. However, during the pandemic we've seen that you may have a pile of money at home, but if you don't have a worker coming to deliver the stuff you order or a nurse working at the hospital or a bus driver, or whatever person who we basically took for granted, then you have problems. And that is enabling the issue of corporate governance to be considered as an important issue, and one that shouldn't rest solely in the hands of financial investors.
Work
[.green]JGD:[.green] How does your background in sociology inform your understanding and your analysis of the economy?
[.green]IF:[.green] It's really central in that my entry point is workers. As a sociologist, I did my PhD on cashiers, checkout clerks in the supermarket industry, trying to understand their attitude towards work, their experience of the workplace, their challenges at work, and their attitude to the kind of work that is seen as alienating. I studied supermarket cashiers in Belgium using a qualitative method – spending time in supermarkets, interviewing them, working as a cashier myself etc. I came to realise how work was a very central experience to their life and I built a sociological theory of work, a political theory of work, that recognised work as an expressive experience that provides people the ability to develop their own sense of usefulness, of social inclusion: those goods that are central to a flourishing human life.
Not only is work an expressive experience, but it really enables people to take part in the public sphere in a Habermasian sense. That is, people at work are not with their family members. It's not the domestic world, it's really a public sphere where they meet customers on terms that speak to a sense of equal dignity expected between citizens. And yet obviously, they don't experience that very often, because customers don't treat them well, or because their manager is an asshole, etc.
That's the third layer in my understanding: that work is a political experience. It's a political experience because it mobilises peoples’ conceptions about what is just and unjust in a collective context. Basically, any decision that's taken in the workplace is judged in terms of justice. So, for instance, who gets access to a training? Who gets promoted? Or who can choose their vacation time first? Or when can you, you know, just enjoy your break? Or whether you work in an open-air space or your own little office. All these decisions that are standard decisions in our work lives that people experience on this extremely profound level, and it mobilises their conceptions of justice. I came to this idea that basically, work is, par excellence, the most political experience that people get. And yet they cannot express their views. They cannot weigh in on the decisions that concern them.
This led me to think about the firm as a political entity. It's the place where this work experience happens in the larger context of a supposedly democratic society, a society where people are educated, and expected to behave as citizens. But then when it's not, it matters most to them. At work, they are treated as non-citizens, and that's the huge contradiction of our time. We should do something about that. Because if we don't democracy as a political project is at risk.
Economic Bicameralism
[.green]JGD:[.green] Your idea of firm governance hinges on this idea of bicameralism – a legislative system split between two separate representative assemblies. Why is this an appealing structure for you?
[.green]IF:[.green] Well, let me start by saying that the term is probably, well, ugly. It's a technical term. I'm not sure this is ever going to be popular as a term. But what matters here is what we can learn from the study of political entities and their internal democratisation, to thinking seriously about the firm as a political entity.
If the firm is this political entity where those who govern are structured through the corporation, and those who invest capital hold all the political rights through the corporation to govern the firm, it means it's a political entity under the despotism of those who own capital. And if your question is how to be true to those workers who want to have a say, then it's a good idea to go back in history and look at how political entities started their own democratisation.
I looked at this under the study of democratic revolution, searching for that very specific setting where you have basically two constituencies: the landowners on the one hand and the commoners on the other, which is really the situation that's taking place in the firm. I went back to the fifth century BC, in Rome, which at the time was entirely governed by the Patricians – those who own property. What happened is that at some point the people, the plebs, said, we're not going to continue to cooperate here, because you take all the decisions in favour of your own interest. And the plebs were made up of the merchants, the trades, the army – essential functions that the Patricians needed fulfilled for the political entity to prosper. And the deal that was struck was that the plebs would be able to choose two Tribunes of the Plebs, and those two Tribunes of the Plebs were granted the right to veto all the decisions by the patricians. This is the bicameral principle.
The principle that we can find in the history of bicameralism is the idea that you have a second constituency which is granted the collective right to validate or veto decisions. Intuitively, the current corporation greatly resembles this structure the board of a corporation very much looks like a House of Lords, filled with owners (in this case not landowners, but share owners). So how do we organise the representation of the commons? I speak of labour investors, which is to say not only to me workers per se, who have like a proper contract with the firm, but it also includes those in the gig economy, like Uber drivers. But you can imagine that the representation of many different types of sub-constituencies made up of outsourced workers, independent contractors.
Obviously, those with a standard labour contract with the firm, but also workers along the value chain in. For instance, if you take Apple, there is half a million workers in China working for Foxconn. Foxconn is clearly a distinct legal entity. It has a totally different ownership structure than Apple. Yet, if you look at how it works in the Foxconn plant you will find Apple engineers who are monitoring the production. And so, it's hard to make the case that this should not be treated as labour investors for this big, giant political entity, Apple. And I think that's part of the project of democratising the corporation is also this project of solidarity; trying to rebuild the ties that were cut because of attempts to optimise through the legal system, with the corporation trying to find the better fiscal arrangements for themselves, which are all ways to basically not have firms held responsible for their own acts.
The idea is really to take stock of that history of how we moved away from the despotism of a property-owning minority. That's the history of bicameralism. And I suggest we should inject that into the history of the economy, because to me, capitalism is just another political system of governance. Capitalism, as I define it, is the monopoly of governance, where the right to govern is held by those who own shares and all the others have no rights to governance at all. But of course, this system is only working for those who own capital. It's made to work for them. And if we look at what's happening, it's very clear that those who invest their own labour are not accounted for in such a system. I believe we should democratise the economy, and one critical piece is the firm.
[Read Commoning the Company our report on how we can rewrite the rules of the company]
[.green]JGD:[.green] How should we be treating the multinational firm differently when it comes to this question of democratic decision-making within the firm? How would bicameralism work with multinational corporations?
[.green]IF:[.green] Right now, on my desk I have the first three first chapters of a book we are putting out on democratising transnational corporation, which will be a graphic novel. It's a group of researchers I organised working with a fiction writer and a cartoonist to make it a reality. It's a trade book, so not something from within academia going out to academia. How could we imagine democratising the multinational corporation? I think by following the steps that I just outlined. We should first identify who the labour investors are in that firm. That then enables you to remove yourself from existing legal categories that really blind us in our ability to act.
Once you understand who are the labour investors, we might inject the wisdom of representative systems. That would make room for situations that we might imagine with cleaners or janitors, maybe we'll find that a firm outsourced workers, and everyone employed by a certain cleaning firm are cleaning for three main clients. For those three main clients, the janitors are working part time, so you might want to suggest that these workers should be represented in the house of labour representatives for all three clients, as they invest their labour in all three firms. But they do so on a smaller representation than the in-house employees or other employees in another country where they only provide some partial service. Or it might also be considered that maybe the market is enough. I'm not anti-market. Trading stuff is okay. But if trading is a window-dressing for some structural labour power relations that enable the extraction of value unjustly on the labour investment, then it means we should turn to institutionalising instead of trading.
Planetary Boundaries
[.green]JGD:[.green] What do you expect the landscape to look like post-pandemic in terms of the firm and who its accountable to?
[.green]IF:[.green] I expect things to be much worse. I see huge concentration processes going on in many industries. In transportation and delivery, concentration is getting more and more intense. You have a few giants gaining more and more market power. It’s not a world that looks nice. It's a world where even democracy is in jeopardy. I think we face a multiplicity of crises. There's the pandemic, but also democratic and economic and a climate emergency. I'm not very optimistic, I have the optimism of the will. I think our role as scientists is to highlight that there are other principles along which we can organise our life, which have been successful in the past, and which could be extremely successful in the future, especially if we cared for the life of everyone and the life of the planet. But in the short term, I'm not optimistic.
[.green]JGD:[.green] You started by talking about how, early in your career, you were driven by this question of the worker and their fulfilment, but also the misery of their experience at work. What are the questions that you're grappling with now?
[.green]IF:[.green] That's a good question. I'm very oriented by the fact that I would like peoples' questions to be taken seriously. For instance, those cashiers had mixed feelings, but they had their own way to find a sense of duty and accomplishment. I would like to see a world in which workers can have their own views taken seriously about what they should produce and how they should do work. Because they may think that selling some crap with plastic packaging is not what they want to do. But obviously, their views are not taken seriously. And so, I would like to see workers empowered in an environment where they can voice their views. I would like us to live in a world where we can have these kind of conversation
The role of the state is a very big source of concern for me, too. I think we obviously need this public power: it's the expression of our collective ability to govern ourselves. We need states to regain capacity to put these frameworks in place, and to determine the limits upon which economic activity should be set – limits that should meet planetary boundaries. That is clearly not yet on the agenda. I spend a lot of time thinking about democratisation and how pushing internal democratisation of the firm can also provide a new push to meet planetary boundaries.
See Ferreras Isabelle, 2017, Firms as Political Entities. Saving Democracy through Economic Bicameralism, Cambridge University Press and https://democratizingwork.org for further information.
