Labor and Stockholders: Applying Locke’s Notion of Property

John Locke’s view on how something becomes a person’s property could fundamentally alter labor-management negotiations in companies. Moreover, our assumption that management participates in the discussions may be upended. The key, I contend, lies in how we classify labor. I submit that the paradigm that has been handed down to us is deeply flawed in its fundamentals, and yet strangely we do not even question its contours.

In describing his notion of property, Locke begins with the state of nature, wherein “every Man has a Property in his own Person. This no Body has any Right to but himself.”[1] Unlike Thomas Hobbes, Locke did not think that rights depend on the existence of government. From a person’s body, Locke goes next to its labor, as properly one’s own. It follows, Locke contends, that “(w)hatsoever then [a person] removes out of the State that Nature hath provided, and left it in, he hath mixed his Labour with, and joyned to it something that is his own, and thereby makes it his Property. It being by him removed from the common state Nature placed it in, it hath by this labour something annexed to it, that excludes the common right of other Men. For this Labour being the unquestionable Property of the Labourer, no Man but he can have a right to what that is once joyned to, at least where there is enough, and as good left in common for others.”[2] The caveat at the end means that as parcels from the commons are belaboured, the resulting private property should not exhaust the commons itself, which nature provides to all. Yet even when all land, for example, has been claimed by individuals and government, surely Locke’s claim still holds that in mixing with an object, the labor of one’s person, being his or her property already, extend the property to the object too.

Yet what if another person already owns the object? Locke assumes the laboring person snatches it out of the state of nature, where anyone can appropriate the object with one’s own labor. If the basis of Locke’s theory of property is not the state of nature itself, but, rather, that a person’s own person and labor are one’s property—whether in the state of nature or in an arranged society—then a right of property is still in the mixing of a person’s labor in an object. In cases in which the object is already owned by another and he or she consents to the labor of another being mixed with said object, then either the laborer has an ownership share or he or she contracts with the pre-existing owner to sell the share.

Hence, companies, whether owned by private interests (capitalism) or a government (socialism), contract with employees essentially to purchase their property rights that naturally accrue as their respective laboring mixes in with the means of production. I distance the labor from the means of production because the latter do not gain a property right in working on an object, for it makes no sense to say that a machine has its machine and work as property. The implications of this distinction are nothing short of huge with respect to the assumptions we make about business and capital.

In financial reporting, labor is classified as an expense to be deducted from revenues to arrive at profit. The returns to a company’s owners (e.g., stockholders) come off after the profit, rather than being an expense of doing business. If Locke is correct that labor also gives rise to a property right, then the sale of the stake is also extra-business, rather than a mere means of production. That is, the cost of labor should rightfully be classified with dividends after profit.

By implication, rather than negotiating the sale of the labored property as if it were an expense, the talks would be between owners. For one group of owners, that of capital, to say, “We can pay more, but we’ll have to cut expenses” would be a category mistake. So too, would the common (and convenient) assumption, “If we pay you more, we’d have to raise prices and we’d lose business.” Within the property classification, buying up the labor-property shares would come out of dividends, rather than to be made up for by intra-business revenue or expenses. This “third rail” is never brought up as even an alternative—the capital-owners’ dividends presumably being off the table. Such a narrowing of a debate goes a long way in getting what you want in negotiations. John Locke might just say, not so fast!

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1. John Locke, The Second Treatise of Government, section 27, in Locke, Two Treatises of Government (Cambridge University Press: Cambridge, 2003), p. 287.

2. Ibid., p. 288.

Hobby Lobby: On the Significance of the Case

For all the controversy stirred up by the case of Hobby Lobby v. Sibelius(2014) on whether an employer must comply with the mandate for contraceptives coverage in the Affordable Care Act, the significance of the decision handed down in a 5-4 majority opinion by the U.S. Supreme Court may be less than some commentators were predicting. 

The full essay is at "Hobby Lobby"

World Cup Soccer Frenzy in the U.S.: A Threat to the NFL?

First, 19 out of 20 brains of former NFL football-players showed lethal brain damage in autopsies. Then, it was 45 out of 46 brains.[1] Missed at first from the initial assumption that concussions from the occasional hard-hits—which make good television—have been the cause of the dementia-causing protein in the damaged brains, was the impact of the more subtle mini-concussions from regular play. A 21 year-old with dementia (CTE) had not had a concussion from a major hit.  Nor had a high-school senior football player with chronic (CTE) brain damage in the front lobe, and thus severe short-term memory loss, difficulty thinking, personality changes, and fits of rage. Suicides are not uncommon, not to mention an abbreviated life-span.[2] Meanwhile, the violence of the sport ironically continued to be the main draw to an American audience, with cheers at the most jarring clashes. What is going on here, and is there light at the end of this tunnel?

The NFL is a wealthy organization, shielded from tax by its non-profit status. From taking in $10 billion a year as of 2014, and that figure expected to go to $25 billion by 2027, a lot is on the line in maintaining the status quo in terms of American culture and sport.[3] The NFL continued for a long time to deny any link between the CTE dementia and football even though the wealthy non-profit organization’s own sponsored study had already admitted to a link—the league kept the result secret for years.

Blinded by the astonishingly high pay, the players too have been complicit, even self-destructive, as they have ignored the incoming scientific evidence culled from the dead brains of former colleagues. The illusion of immortality that typically runs out of steam by age 40 is alive and well in many young athletes. Together with the monetary high, the illusion can feed the denial.

Perhaps even more astonishing, given the huge amount of money on the line for the NFL as well as that league’s players (and the team owners) is the propensity of masses of people to continue right ahead as if nothing had changed, even with the new knowledge. During the 2013-2014 season, two years after PBS’s Frontline exposition of the scientific evidence of “brown matter” in the brains of ex-pro-football players not yet elderly and Frontline’s investigation of the NFL’s cover-up and subsequent damage-control, I discerned no shift away from the huge interest in NFL games among the American public. Sunday afternoons still turned residential neighborhoods into temporary ghost-towns.

Do we not understand the concept of a sport in which head-bashing is a staple as being inherently dangerous? I think we do. Cognitive dissidence, the holding of contradictory beliefs simultaneously, is in all likelihood enabling the denial. This lapse so happens to be in line with the moneyed status quo and popular culture writ large. Change in the sport’s popularity is likely to be long in coming, and so the dollars are likely to keep coming to the NFL, the team owners, and the players. Powerful interests being highly invested in perpetuating the status quo while seeming to adequately address destabilizing news is nothing new.

American fans at the World Cup 2014 in Brazil, cheering on their team. Could the leap in numbers and enthusiasm be a game changer in terms of American sports? If so, will the most dangerous game bear the brunt of the squeeze? (Image Source: Frederic Brown via Getty Images)

The axis of change can come from unexpected places, however, with an earthquake far away setting in motion a sea-change of change eventually from the subtle shifts of subterranean tectonic plates under the sea. The frenzy intensifying at huge viewing parties in major American cities as team USA made its way through the World Cup in 2014, and the increased American viewership up 44 percent over the previous Cup in 2010 may evince such an earthquake, with any subsequent gradual shift under American sports being much less visible.[4]

  

In the 2014 tournament, a record-breaking 18.2 million viewers in the U.S.—a record American viewership at that point for a soccer game—saw the U.S. game with the E.U. state of Portugal.[5] For the game between the U.S. and the E.U. state of Germany, 1.7 million concurrent viewers were logged on to ESPN—more than the number that had signed in to watch Super Bowl less than five months earlier.[6] For the final, the record broke again, with 26.5 million people in the U.S. watching, according to the Nielson company, with over 750,000 more people watching the game online at any given minute.[7] Generally speaking, the average viewership in the U.S. for all of the 2014 World Cup matches was up nearly 40 percent over the previous Cup in 2010.[8]

Such a leap in popularity raises the possibility that soccer, which is known more accurately to the rest of the world as football, could act as a sort of pressure-release value on the inherently dangerous sport of head-clashes and body collisions. Even though the two sports are played in different seasons, the people over at the danger-plagued NFL must have noticed the dramatically increased popularity of soccer in the summer of 2014.

To be sure, soccer still had a distance to go before triumphing over American football’s major feast-day. After all, American football is, well, American, while taking up soccer means getting in bed with the rest of the world--something anathema to American isolationists and the "City on a Hill" pilgrims. Additionally, as some pundits observed, a low-scoring soccer game can be pretty boring (like baseball?). That's actually a fair point, which is why I advocate the heresy of making the goals wider. Lest too much scoring occur, the economic law of declining marginal returns suggests that the width be brought in a bit, though still wider than was the case for all those low-scoring World Cup games in 2010. Lest the statistics-obsessed traditionalist lose it over this suggestion, those little factoids are merely means, rather then ends in themselves.

Whether or not soccer is spruced up, the huge bump in both fan enthusiasm and numbers of Americans watching the World Cup games may point to a opening void in American sports, festering just under the surface since the bad news for American football Fans from that sport may one day be up for grabs, with the healthier, more athletic sport hopefully scoring more and reaping the benefits.

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[1] Frontline, “League of Denial,” PBS, 2012.

[2] Ibid.

[3] Brent Schotenboer, “NFL Takes Aim at $25 Billion, But at What Price?” USA Today, February 5, 2014.

[4] Kim Bellware, “USA vs. Belgium World Cup Match Breaks Another Ratings Record,” The Huffington Post, July 2, 2014.
[5] Kim Bellware, “It’s Official: The United States As a Nation Has Gone World Cup Crazy,” The Huffington Post, June 27, 2014.

[6] Ibid.
[7]David Bauder, "The World Cup Final Was the Most Watched Soccer Game in U.S. History," Associated Press, July 14, 2014.
[8] Ibid.

On the Banality of Disruptive Innovation

When a herd grabs hold of something, odds are that its original meaning will not only get trampled over, but also in a way that turns it up-side down before spreading it all over as if it were sweet-smelling manure. Particularly striking is the ensuing willfulness that typically contravenes efforts to pen in the herd to the confines of the term’s definition. I have in mind the erroneous and even tautological self-aggrandizing trajectory of the term disruption in the business sector of society. Drawing on Nietzsche, I submit that the offending sickness is centered in an interlarding presumptuousness to define an existing word conveniently, even in ways that are antithetical to the received meaning. That is to say, this cultural problem involves more than garden-variety ignorance.

The full essay has been incorporated into (or swallowed up by) On the Arrogance of False Entitlement: A Nietzschean Critique of Business Ethics and Management, available in print and as an ebook at Amazon.

Presbyterian Church (USA): Divestment from Companies Helping Israel

By a narrow vote of 310 to 303, the General Assembly of the Presbyterian Church (USA) voted in June 2014 to divest about $21 million in stock from Motorola, Caterpillar, and Hewlett Packard because their respective products were being used by the Israeli Government in violent occupation of the Palestinian territories. The Friends Fiduciary Corp, which manages investments for 250 Quaker groups, had divested from Catepillar, Motorola, and Veolia Environment two years earlier, and in 2013 the Mennonite Central Committee decided not to “knowingly invest in companies that benefit from products or services used to perpetrate acts of violence against Palestinians [and] Israelis.”[1] This point brings up the ethical point of what to do about companies that sell products used in violence by the Palestinians. To occupy is not like being occupied, though violence is violence. Moreover, using divestment from holding equity in a company may not be a very effective strategy, other than perhaps serving as a symbol, though even in this respect the effort can fad without having brought about the desired policy change.

The Caterpillar bulldozers used by the Israelis to topple Palestinian neighborhoods in shows of “collective justice” had actually been sold to the U.S. Government, which in turn either sold or gave the trucks to Israel. Even if Caterpillar’s management could possibly have predicted the eventual transfer from the buyer to a third party, holding the company ethically responsible for the actions of the U.S. Government would be unfair. To be sure, were the product inherently dangerous, such as a grenade, the eventual use could be anticipated even by the manufacturer, but a bulldozer truck’s use is not inherently violent. Nor would it be fair to draw attention to the company simply out of frustration with the U.S. Government, given the power of the main Israeli lobby, the American Israel Public Affairs Committee (AIPAC). If the U.S. Government is looking the other way as it hands over billions of dollars in aid to Israel even as it continues to occupy Palestinian territory and build still more settlements, taking frustration out on the companies that sell to Israel’s government violates the ethical principle of fairness. Even if divestment pressures the companies not to sell to Israel, the products can wind up there in ways that are beyond the ability of companies to control.

Furthermore, how much financial damage to the three companies is exacted from selling $21 million in stock? Presumably buyers exist—the Dow at the time heading close to 17,000 and the S&P above 1960. The principle impact, I submit, is symbolic; a religious group of 1.76 million members essentially says “No” to Israel’s violence-ridden occupation of a people. The ethical dimension is salient owing to the fact that the group is religious in nature. Yet even in this respect, like the years of divestment from South Africa to free Nelson Mandela and put an end to apartheid, the creation of a symbol does not portend quick results. Indeed, the condition of divestment can itself become part of the status quo, rather than an event.

Additionally, the symbol may backfire. At the Presbyterian assembly meeting, Rabbi Steve Gutow of the Jewish Council for Public Affairs, described the vote as coming out of a “deep animus” against “both the Jewish people and the State of Israel.”[2] To be sure, as depicted in the Oscar-winning 1947 film, Gentleman’s Agreement, anti-Semitism can be as subtle as simply saying nothing after a joke at a dinner table. Following the defeat of the Nazi Germany, many Americans were doubtless able to conclude that anti-Semitism and racism had been squashed “over there”—meaning there’s none of that here. The film demonstrates just how pervasive denial can be. Nevertheless, anti-Semitism (and racism) can also be used as a weapon that obfuscates the real point of a decision such as that of the Presbyterians. The violence of an occupier is sufficiently galvanizing for observers that the alternative charge of anti-Semitism has the air of phoniness. In other words, a person can be against such violence without hating Jews.

Therefore, both the divestment strategy and the charge of anti-Semitism can be viewed as weak responses. To the extent that political mobilization would be futile too, given the political power of the pro-Israel lobby in Washington, D.C., we might just be left with a “no good alternative” situation in which the quagmire goes on and on. With regard to the natural frustration at the status quo protected by long-entrenched, powerful interests, perhaps the sad reality is that most people simply tune out.

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[1] Jaweed Kaleem, “Presbyterian Church (USA) Makes Controversial Divestment Move Against Israel,” The Huffington Post, June 20, 2014.

[2] Ibid.

Trading Egalitarian Reputational Capital For First-Class Business: JetBlue Airline

It may sound trite, but managers really do compromise or expunge their company’s reputational capital altogether in order to chase down the additional revenue obtainable from a market segment that had been extraneous to the reputation. If the new advertisements have a Janus-like duplicitousness air, the source is not likely even to admit to the previously long-held principles. Indeed, the contrivance can be discerned from the way in which artful managers use words themselves—stretching them for an intended effect well past their respective meanings and customary usages. Unfortunately, the made-up diction can be contagious in a society that esteems organizational position.

I have in mind Jet Blue’s switch from its egalitarian single-class cabins to the first/coach bifurcated model. Left in the jet-wash is the company’s long-standing principle of egalitarianism, lost in the anticipation of more revenue from business travelers. Jami Counter at a website that includes reviews of airlines suggests that Jet Blue would no longer be “challenged winning their fair share of corporate and business contracts because they didn’t have a true premium experience.”[1] What, pray tell, is a premium experience? How does a true one differ from the mere garden-variety? In the case of JetBlue, the benefits to the business traveler include “the longest, widest flatbed seats” on any route within the U.S., and four “suites”—single-seat “pods” with their own doors.[2] The latter reminds me of the forts my elementary school friends and I used to make in the woods behind the school; each of us would pick a bush and use its base to build a tiny enclosed “fort.” It would seem that adult business travelers have the same instinct.

In any case, we don’t have to look far to see where verbal garbage like “a true premium experience” comes from. Perhaps the experience-warping complimentary “signature drink” before take-off and a “cocktail” before dinner might render experience itself transparent, such that the airline could indeed market “experience” itself. All the same, I would be more interested in the 100 channels on the seat’s 15-inch screen, and whether I could plug my laptop into it as I sit in my little fort as the elongated tin can careens forward at 30,000 feet at 500 miles an hour.

Jamie Perry, the airline’s director of product development, delivered a line as if on cue that the novelty would not be limited to the “Mint,” or first-class” experience; an “effort to reinvent the core cabin”[3]—where “core” is a cover for coach—boils down to bigger seats, power-outlets at each one, and up to 100 channels of television undoubtedly to placate perturbed pre-existing customers accustomed to flying egalitarian. Perry's linguistic over-reach—the larger seats and additional plugs hardly constituting an invention in any sense of the word (and reinvention being an oxymoron, like rebeginning)—points to a certain round-aboutness that is anything but up-front and transparent. 

Behind the "reinvented cabin" is a manufactured shift from the longstanding egalitarian premise to that of all boats rising—just not to the same level. The lack of equivalence is precisely what the fuzzy word-play is meant to blur. That is to say, the crafty wordplay—“core” for coach and “premium experience” for first-class service—dovetails with the wily switch from the long-held principle to one that allows for broader revenue streams. 

I disagree with Counter’s contention that JetBlue did not change its business model in the process; in fact, I would say that the first-class/coach standard fare deprives the airline of the more distinctive model, and thus of the associated reputational capital. To be sure, Counter does acknowledge that the change “could alienate the loyal JetBlue flier who now has to walk past (five) rows of a very premium experience.”[4] There we go again! How exactly does a person walk past an experience? Does a person say, “Hey, guess what—yesterday I was out doing errands and I drove right past an experience!” The response is likely to be, “Time for your medication again, dear.”

In actuality, the coach passengers are to walk past rows of more spacious seating arrangements and larger television screens. Putting the matter thusly, rather than artfully and without concrete substance, makes the cost to the airline’s reputational capital transparent—especially with respect to the loyal (i.e., long-standing) passengers who will of course instantly notice the unpalatable change. Such passengers need only look over at Southwest Airline, whose approach to attracting more business passengers was to expand to big-city airports and offer “business select” priority boarding, a free drink, and extra frequent-flier miles rather than introducing a separate class of seating.[5] That is to say, Jetblue managers could have went with alternatives to the old first-class/coach model. The principles that a company supposedly “stands for” are indeed expendable, particularly when they grind up against an untapped source of revenue.

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1. Charisse Jones, “Egalitarian JetBlue Tries Out First Class,” USA Today, June 12, 2014.

2. Ibid.

3. Ibid.

4. Ibid.

5. Ben Mutzabaugh, “Southwest Finds Itself at a Crossroads,” USA Today, June 30, 2014.

On the Toxicity of Ineptitude and Denial: The Case of Wal-mart's Pharmacy

On June 6, 2014, Walmart conducted its annual stockholder meeting under “scrutiny on all fronts.”[1] Revenue at the company’s stores in the U.S. had declined for five consecutive quarters. Walmart was also facing ethical questions over how the company’s executives handled bribery allegations at the Mexican division, as well as on the low wages going to non-supervisory workers (esp. part-timers). In short, the question facing the management was whether the company was being managed by cutting corners, as manifest both in terms on incompetence and unethical conduct. That the shareholder proposal to split off the chair of the board from the CEO did not meet even a preliminary tally of votes suggests that the company would sooner go under than that its management would be held to account.

On the day of the meeting, I happened to be at a Walmart store for what must have been two hours. I had stopped in to pick up medicine only to find that the pharmacy employees had lost my prescription. “You cancelled it and it was handed back to you,” an employee informed me. The system says you have it. Well, I didn’t, and after waiting over an hour for a manager to look at the camera footage, I was coming to the conclusion that someone had lied to cover up the mistake. For the prescription was cancelled and returned to me forty-five minutes after camera footage showed me leaving the store for the day. “You could have phoned in the cancellation,” the store manager suggested. Unfortunately for him, that would not explain how the paper prescription got into my hands.

Turning to his assistant, the shift manager, I asked if it is likely that the prescription had been inadvertently thrown way. “Oh, no, that doesn’t happen here,” she assured me. “Well,” I concluded, “then if no one handed it to me, and your employees don’t throw things out in there, then the prescription should still be in there, right?” Even as she nodded affirmatively—meaning the paper had been misplaced—the store manager interjected his view that the chances are minimal that it is still there. “The system indicates that it was given to you,” he said. I was stunned. Had he not been listening? I began to understand how it could be that the front managers and cashiers could have been getting away with treating customers so rudely right under the nose of the store’s manager. He went on to add that he and his assistant had done “excellent due diligence” and unfortunately the camera angle did not give him a clear view of me talking with the pharmacist after I had dropped off the prescription so he couldn’t be sure—in spite of having “an excellent camera system.” I was stunned at the sheer disjunction in what the guy was saying.

Clearly, someone had lied, as no one had handed back my prescription to me (and I had not cancelled the prescription). In this case, the lie had staying power, for the medical provider who had written the prescription refused to reissue or revalidate it even when the pharmacist called to explain the situation. Even though Walmart had erroneously cancelled and lost my prescription, it was “my responsibility.” I was between a rock and a hard place, neither one being willing or even perhaps even capable of deviating from a rigid script. Not having a primary-care physician locally, I would have to go without until the end of my visit.

Speaking the next day with a pharmacist at a Walgreens after I tried again in vain by stopping by the offending hospital’s emergency room, I learned that it was indeed unusual for a prescription provider to refuse to revalidate a prescription that had been erroneously cancelled. I also gathered from that pharmacist that I had erred in supposing that the pharmacy at a Walmart would somehow be immune from the sort of incompetence that plagues the company at the store level.

That very evening, a Walmart truck-driver killed one comic and seriously injured Tracy Morgan and two other passengers on the New Jersey Turnpike after going without sleep for than 24 hours.[2] In response, a Walmart statement claimed that the employee had not violated any federal regulations. Nevertheless, police charged him with manslaughter and assault. Interestingly, Congress was at the time bowing to industry pressure by backing off proposed regulations that would have required companies like Walmart to see to it that their truck drivers are getting enough sleep. One might say that Walmart’s management is asleep behind the wheel, even amid claims of being fully alert.

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[1] Anne D’Innocenzio, “Walmart Faces Shareholder Scrutiny at Annual Meeting,” The Associated Press, June 6, 2014.

[2] David Jones, “Truck Driver in Tracy Morgan Crash Had Not Slept in 24 Hours: Complaint,” The Huffington Post, June 9, 2014.