[lbo-talk] service coops (was Servant culture)

Wojtek Sokolowski sokol at jhu.edu
Thu Aug 14 14:07:07 PDT 2003


Jordan:
> do (and who knows, since you've never done it?). But for me, I'd
often
> rather deal with a service than an individual for lower-skilled labor
> tasks, since I think there's a lot more to it than just the labor
> itself. Wojtek wants to know what those things are, so I'll start by
> saying that I want to have it be easy to find someone responsible
> (advertising, business license, "office expense"), potentially insure
> and bond the workers, hopefully treat them well enough that they don't
> feel compelled to abuse the trust of being in someone else's house.

That sounds like the neoclassical theory of organization, which in a nutshell is "supervisors exist to prevent shirking (cf. Charles Perrow, _Complex Organizations, A Critical Esay, New York: MacGraww Hill, 1986). A more sophisticated version is that offered by Oliver Williamson (_Markets and Hierarchies_ , New York: The Free Press, 1975) which claims that organization (and vertical integration in general) saves transaction costs. Both approaches claim that administrative hierarchy exists because it produces greater economic efficiency, or "value."

An easy rebuttal is that such hierarchies also produce costs or disutility, so at the very least it is an empirical question whether such costs doe not outweigh supposed benefits. Zealous supervision and drive to efficiency may lead to hiring underqualified labor or to demoralization of labor who in turn may produce a low quality service. The inferior quality of that service may not be apparent before the warranty given to you by the boss expires. Other possible disutulities are managerial fraud that may produce greater negative than any shirking of direct producers (cf. Enron).

So it is equally plausible that corporate supervision produces not only utility but also disutility or negative value added, and the very least it is an empirical question which obtains under what conditions. I would argue that independent direct producers organized in a guild or a coop (which was the condition of service production for millennia until capitalist bosses took over) can produce better service quality and greater trust than corporate boss driven labor.

PS. Are you that guy in the red hat on the roof in the pic you sent?

Wojtek



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