Sunday, February 19, 2006

O Brother, What Art Thou Thinking?

Last week Mike guest posted about labor laws and spawned a 10-comment (!) debate on the subject. I thought about responding to some criticisms via comment but since I don't have much of anything to write about just now, I thought I'd turn it into a post.

In the comments section, I wrote that employers should be able to fire employees for whatever reason they want. And yes, that includes for reasons of race, marriage status, religion and every other distinction you can think of. Why? Consider the reasons an employer would do this: 1) because he's a jerk in which case it's his lose and 2) because the customer wants it in which case why punish the employer? Before you argue, ask yourself if you'd like to see Denzel Washington as a Nazi or William H. Macy as Martin Luther King. It's an extreme case, but the basic ideas are constant.

My brother correctly pointed out that firms do not fire people on a whim and they have a vested interest in seeing them work out. Yet he paradoxically thinks it's a good idea to require firms to have "proof of ineptitude" before firing someone. If the firm has a vested interest in seeing the employee do well, then why do you need a law requiring the firm not fire employees that could do well? (Consider this article I wrote about Donald Trump and his hiring practices for The Apprentice.)

Labor laws like these are layered in truthiness. For example, my brother also cites that he's been in the "real world" for about nine years and implies I'm detatched from it's realities. But his experience is a weakness as much as a strength because he's only been on the labor side. Not surprisingly, he thinks labor should be protected from management citing the "human cost." Feelings as opposed to facts.

The fact of the matter is if you start favoring one group, you punish another and usually several others. I may have been in the "ivory tower" for most of my life but it's not like I've been studying English literature. Economics is the study of choice and it's chiefly concerned with creating a better world; the conclusions I have made have not been arrived at lightly. And for the record, I've worked jobs myself. I've had good employers and bad employers; I've seen good employees and bad employees. The world is not so uniform you can ethically make a law that favors one side; laws are good for issues of homogeneity, not diversity.


Anonymous said...


Just because a company may think a course of action is in its best interest, it doesn't mean that is what they are going to do or even if it really IS in their best interest. Check the news. Business make bad decisions all the time. Remember Sony modifing a computer's rootkit in the name of copy-protection? Almost everything about it was a fuck-up. From how they did it, to their response ("most people don't know what a rootkit is so why should they care about it?"), even their first patch only made matters worse. It hurt them, and continues to hurt them, in many ways. It was a bad idea from the start but they did it anyway. Why? Not out of the facts or theories but out of feelings. Feelings cannot be so dismissed because they have a great influence over the choice we make.

"if you start favoring one group, you punish another and usually several others"
Shouldn't that also include your own "fire at will" belief? Why should the employee be punished because they're not the right race, religion, sexual preference, etc? If a customer demands a firing for such a trivial reason, is it a customer you want? I do not think profit should not be so ruthlessly purused. The father of modern economics believed even basic morality should be applied. Honestly, I'm seeing that less and less in the past 6 years.

You seem to imply that companies don't make mistakes, that everything they do is correct and based on facts. That is just not the case. In your previous post you talk about theory vs fact. But what about practice. Sure an idea may sound good on paper. Maybe it even works out in tests, but in something like economics, a field so dependent on human nature, a solid idea can still fall flat on its face. Guess who winds up paying the price.

The same is true of employment. Walmart was in a class action suit for not promoting enough women and minorities. I'm not going to say what is in their best interest since I don't know all the facts, but it seems to me that even if some of those promoted weren't all management material, it would still be worth it instead of this alternative. I don't think it's a paradox to ask for proof about the situation when someone is fired. Especially when I'm talking about such little proof they should have had anyway.

If you fire someone just because of a feeling like bigotry, then people do need protection from your actions. Say I ran a carrot farm. The labor requires little skill. Now let's say I fire everyone taller than me because I want to feel superior to my employees. I don't loose because the labor pool is so big I can find replacements without loosing any work. Does that make what I do acceptable?

Man is a feeling creature as well as a thinking one.

I talked about my real world experiences because it's all I have when it comes to economics. If I didn't draw on them, what would I have to talk with you about? It's not like you send me e-mails. I've tried writing to you but your responses are short at best. You've posted here more times than you've called me, so tell me how else can I bond with my only brother?


David said...

Jason, I'm not saying you shouldn't post here; in fact I love that you do. I'm just saying be careful of selection bias.

For example, just because most new stories you see are about businesses screwing up doesn't mean businesses need their hand held by government. It's true most new firms fail and some 33% to 90% of new products fail (the large range is due to changes in industry). But that's because business is hard, not because everyone outside of government is stupid.

Even if I were to concede that there are things people shouldn't be fired for (and I'm sure there are such things but they mainly exist as hypotheticals), legislating such a thing gets nasty pretty quick.

Take Wal-Mart. Just because they have lots of men in management positions doesn't mean they are sexist. One thing people constantly skip over on problems like these is the fact that women are more likely to take time off (for the kids or to have a baby and so forth). If you have to choose between two people--one who said she wants to have a baby (and thus will be taking time off in the next year or so) and the other who won't--who would you choose to be in charge, all other things equal? Now you might say, why should she be punished for having a baby but I have a better question for the alternative: "Why should Wal-Mart be punished because she wants to have a baby?" Talk about unfairness.

I think the problem we are running into is you and I see employment differently. You see it as a moral obligation to provide. I see it as trade: the employer gives a salary and the employee gives some labor. If at least one is not satisfied (for whatever reason) they are should be allowed to not engage in such trade. So before you start putting on the mantle of morality, remember you are saying it's okay to force someone to employ someone else. I think that's morally detestable.