Why Worker Ownership of the Firm Is (Usually) a Bad Idea

In the past few months I've listened to a number of "capitalism versus socialism" debates in various forums. Notably, Gene Epstein has done three debates at the Soho Forum, arguing in favor of free markets with his opponent in each case arguing for some form of socialism. See his debate with Bhaskar Sunkara here, with Richard Wolff here, and Ben Burgis here. 

What's interesting is that the socialists always make some effort to distance themselves from the kind of state socialism that existed in the 20th century. It's as if they all realize there is a dark history that needs to be recognized and reckoned with. If I'm hearing them correctly, they (Sunkara, Wolff, and Burgis) all reject "state ownership of the means of production." None of them seem to be all-in on the concept of complete state control of the economy. Still, none of them shy away from the use of the state as a tool, a stick with which to beat non-compliant businesses that don't conform to their vision. Sunkara favors laws against using capital markets and wage labor. Epstein repeatedly asks him to bite the bullet on this totalitarian idea, something like, "So I'm going to jail if I go to Kickstarted to get funding for a new project?" 

Wolff and Burgis both seem to be advocating for a decentralized form of worker ownership. That is (if I heard them correctly) companies are not owned by the state, but the workers within a firm collectively own it. I want to explain why this is a terrible idea. 

Suppose I'm a worker for one of these worker-owned firms. I earn an income from my company. I also have a substantial wealth holding that's tied to the value of the firm. (What is "the value of the firm" under this system? Hard to say. We don't have financial markets buying and selling stock in the firm, so we probably don't have good estimates of the firm's future profits.) What happens if the firm suddenly becomes unproductive? Perhaps some key inputs to our production have skyrocketed in price. Maybe we're some kind of diamond dealership, and diamond mining has completely dried up so the raw materials are hard to come by. Or perhaps people have simply stopped buying whatever it is we produce. Maybe we're that same diamond dealership, but the diamond-buying public has caught on to the "blood diamond" problem and has made a moral decision to stop supporting the slave labor that produces them. Or maybe you're some kind of butcher shop, and plant-based meat substitutes are getting more convincing and cheaper. You can probably think of a thousand legitimate reasons why a company can go out of business, even under socialism. Under this system of worker-owned firms, you lose your income and a substantial portion of your wealth if the firm goes under. I'm sure the socialists who favor worker ownership would say something about the social safety net that's in place to catch workers who are temporarily put out of work, but it's still the case that these workers have been needlessly placed in economic peril. They could better diversify their risks if they could sell off their holdings and buy other assets (stock in other companies, real estate, bonds, whatever). My reading of Burgis is that he is insisting that every worker gets an equal share of whatever firm he works for, including voting rights and a claim on future profits. Mere wage labor, he insists, should be illegal. This is deeply misguided. If all workers suddenly found themselves holding equal ownership shares of the firm that employed them, it would be merciful to allow them to sell those shares off and diversify their portfolios. Anyone with a rational approach to financial risk would want to hold stock in other firms. 

Suppose you now find yourself as this unemployed worker. The company you worked for no longer made economic sense, so it went out of business. You want to get back to work.* You knock on the door of another worker-owned firm and ask for a job. 

The workers at this other firm now have to decide whether or not to hire an additional worker. In an economy of wage labor, the decision is fairly simple. Offer a wage or salary that's commensurate with the value produced. In practice, this usually means setting a pay scale for different kinds of positions. If, upon assessment, the worker seems capable of producing value for the firm that's roughly in line with the worker's pay, hire him. The worker-owned firm has a much harder decision to make. They aren't just paying this new worker a salary. They're giving him a claim to the firm's future earnings and a vote in decision-making. If there are currently X workers sharing Y value (where Y is the total value of the firm), they must now contemplate reducing their wealth from Y/X to Y/(X + 1). Clearly there is a hesitancy to hire workers, a hesitancy that doesn't exist in a free market system. Labor markets would be far less flexible under this system, and unemployment would be a worse problem. A growing business, in which it makes sense to expand operations and hire more workers, would be reluctant to do so. The loss to existing workers due to share dilution seems pretty substantial, if you take some plausible values for X and Y.** 

There are conditions under which worker ownership is a good idea. Law firms are often owned by a few partners, each of whom has a residual claim to the firm's profits. But they also employ non-owners: secretaries, janitorial staff, paralegals, junior lawyers. It would make little sense for them to make everyone a partner. Clearly some of the "workers" bring in more revenue than others. The partners are better positioned to make executive decisions about the firm, because they typically know the subject matter of the business much better. Likewise, doctors are often given ownership stake in the practice or hospital they work for. (Or they have the option of buying shares, and option not offered to other employees.) It works pretty well when you have a small number of individuals making executive decisions. "Share dilution" may be offset by acquiring substantial talent or insisting on some kind of buy-in. It works less well when you have hundreds or thousands of workers with an equal vote, most of whom have no acumen for making business decisions. 

I should be very clear that I'm not disparaging anyone who wants to hold a greater ownership share of the company they work for. Maybe the janitor really does want to hold voting rights and a share of the firm's future profits. Maybe he just really believes in the company. If that's where a worker wants to park their savings, that's fine. I just think that most don't want to do this, and at any rate it's a mistake to force them to do so.

So far I've been explaining why we should expect worker ownership to be a generally bad system. I want to step off of this approach and make a different kind of argument. I don't actually have to convince anyone that worker ownership of the firm is a bad idea, because the option is wide open and the marketplace has soundly rejected it. Note that "worker ownership" is a perfectly legal form of incorporation. You can start a worker's co-op wherever you like. The trick is getting others to join you. It's worth noting that almost all employment in the U.S. economy is wage and salary labor, with a small fraction of employees holding major decision-making rights and claims on the firm's profits. 

There is an open glide-path from the world as it is to a world that's dominated by worker-owned firms. The path from here to there is clear of obstacles. If the workers actually wanted it, that's the direction we would move. I've seen Ben Burgis and Richard Wolff both make lame attempts to dodge this point. In their Soho Forum debate, Gene Epstein repeatedly pointed out to Burgis that workers could start their own firms if they wanted to. David Friedman also debated Wolff and Burgis, and he made this same point on both occasions. Their denials are weak. Both say something about how financial markets won't back worker co-ops, insurers don't know how to insure them, and so on. I call this a lame dodge because capital markets are backing new products and new ways of doing things all the time. Suppose workers co-ops are more efficient for some reason. (Socialists often claim their system is more economically efficient, not just that it's morally superior.) Maybe they save hugely by cutting out the dead-weight in upper- and middle-management. Or maybe they are intrinsically better at making decisions, being democratic in nature. If there are excess profits to be had, then there should be no problem at all finding start-up capital. 

We can even indulge some paranoid theories of grand conspiracies against co-ops, and it still appears that the path is wide open. Suppose the capitalist class acts as a unified interest group. They successfully conspire to withhold capital from worker co-ops, which would threaten their interests. (Is this the actual charge? That capitalists are all working in concert?) This still doesn't matter. Workers could easily save their earnings for a few years and set up their co-ops without help from wealthy capitalists. Contra popular conceptions of "inequality", the purchasing power of the lower and middle classes is vast. Collectively they can easily outbid "the rich". Supposing they forego consumption to build up their savings, they could easily start buying up capital and setting up workers co-ops.*** Wolff and Burgis are somehow blind to this possibility. In fact I'd say they've willfully blinded themselves to it, as people keep pointing it out to them (notably Gene Epstein and David Friedman). I want to pull them aside and say, "C'mon guys. There isn't one eccentric billionaire who's willing to bankroll this idea? Is it really so hard for a handful of workers with significant savings to purchase some capital and start a business together?" After all, there was the guy who paid all his employees $70,000/year (including himself). There was also the case of Chobani giving shares to its employees.**** There is some propensity to implement socialist egalitarianism in the marketplace. It already has a foothold, a sort of beach head. It just doesn't manage to take off, because it's (usually) a bad idea. 

It's worth pointing out that it has never been easier for workers to themselves become capitalists. If you can save up $1,000, you can open a Vanguard account. That is, you can easily purchase shares in companies and acquire a claim to their future profits. If you own shares of the stock itself, you can exercise voting rights. People like Burgis and Wolff might contend that workers are so thoroughly under the boot that they can't afford to save up even the meager amount required to open an index fund account. Actually, this is exactly wrong. If capitalists are really earning such a huge excess by exploiting labor, then the workers can't afford not to become capitalists. I managed to grow my savings when I was a minimum wage worker, when I earned ~$20k/year as a grad student, and when I began my professional career at around ~$50k/year. And I did a lot of stupid spending on things like alcohol and trips to the mall. There was plenty of room for me to save even more. I presume a lot of workers are in a similar situation. They just fail to realize what options they have available to them, or they decline to exert any discipline in their spending and saving decisions. (Would critics of capitalism counter this point by claiming that the truly excessive profits aren't "democratized" by the open stock market? Are privately held companies raking in much larger returns, and the common investor lacks the connections to buy into these firms? This seems wrong to me. The massive fortunes of Warren Buffett, Bill Gates, and Jeff Bezos are mostly due to the extremely high value of the companies they started, which are publicly traded.)

Wolff repeatedly brings up Mondragon. It's a Spanish firm composed of worker co-ops. It has an egalitarian pay scale that limits the salary differentials between the highest and lowest paid workers. It is Spain's seventh largest company. Wolff holds up Mondragon as a shining example of private socialism. So it's a bit awkward for him to claim that it's not possible (or that it's really hard) for private worker co-ops to establish themselves. Mondragon is an existence proof for Wolff's concept. But its existence also undercuts Wolff's (and Burgis's) claim that worker co-ops can't establish themselves in a market society. It would seem they face no hard barriers in getting started. They're just not as attractive to workers as Wolff and Burgis would like. 

I would also point to the Israeli kibbutzim as an example of private socialism, which gradually declined for all the obvious reasons. They began their existence with a very pure socialist ideology. The children were raised communally, with other children but separate from their parents. (This later changed. People like to raise their own children, and it turns out it's really hard to "reform" biology.) If you left the kibbutz, you forfeited everything you owned. (This also changed over the years, and deserters could leave with some kind of "savings" they'd built up over time.) Eventually, they began allowing members to work in the Israeli marketplace outside the kibbutz; they would contribute their earnings rather than their labor. In other words, they rediscovered comparative advantage. Why force a brilliant programmer to be a farmer when you could let him bring in a programmer's salary and use it to upgrade your farming capital? (And for that matter, why should you deny Israeli society the contributions of this brilliant mind?) They eventually brought in outside vendors and management expertise to run their commissaries and professionalize their production. The kibbutzim were apparently stingy with the purse strings with respect to retiree pensions. (Understandably, they thought the mutual aid intrinsic to the kibbutz way of life made a generous pension payment redundant.) They were forced by the Israeli government to offer more generous pensions to their retirees. As a percent of the population, kibbutz membership declined from a maximum point at around 7% to about 2% by the year 2000. If this were an attractive model for workers, it should have grown instead of shrunk. It should have expanded beyond the borders of Israel, having provided a shining example of what's possible. Instead it gradually became more capitalist as it acceded to the demands of its members, though not fast enough to stem the outward flow of its population. It is a noble (and ongoing!) experiment, but it has some fairly clear implications about the viability of workers co-ops on a grand scale. 

I've written this post to talk about Wolff and Burgis's bad prescription. But I want to point out that they and their co-thinkers are mistaken on a profound level. Their conception of the worker as being completely in the saddle, totally under the boot of their corporate overlords, is just mistaken. It ring completely hollow. It makes no logical sense that workers in a competitive labor market could be routinely exploited. Wolff references the tradition of ending a workday with "Happy hour...which is in contrast to all the previous hours." Certainly there are people who are miserable in their jobs. They work unpleasant hours, or they feel underpaid or underappreciated, or they find their work mind-numbingly tedious. This is not my experience, and in fact the vast majority of people I know take some kind of pride in their work and feel a sense of accomplishment for doing their jobs well. There are plenty of people who enter adulthood with a chip still resting firmly on their shoulder, but most mature out of these adolescent feelings of begrudgement. Contra Wolff, it's rare for a person's work life to be so miserable that they're eager to numb their mind with alcohol. And it's unlikely that such a malcontent would be happier if they had a "vote" in their employer's business decisions. 

Are workers being systematically underpaid by their employers? This is a standard claim of socialist ideology, but it's quite plainly implausible. Certainly there are individual workers who are underpaid. The talented go-getter who is overlooked for a promotion by their incompetent boss, the young ace who easily does twice the work of their older colleagues (who have racked up seniority pay without actually becoming any more productive), the factory worker who truly has no alternatives open to him (so his employer has monopsony power, in a limited, localized sense).  Sure, this happens. But these are random errors, not systematic biases that affect entire industries or classes of people. It's pretty absurd to think that any class of workers is systematically underpaid (or overpaid for that matter). If restaurant workers are bringing home $14/hour in wages + tips, is it remotely plausible that they are actually producing vastly more than that? Say you think they are really producing $20/hour, with their greedy boss simply pocketing the surplus. Wouldn't some restauranteur, with a just slightly lesser thirst for profits, open a restaurant that paid (on average) $15/hour? Such an employer could afford to be choosy and select the best wait staff, possibly even earning excess profits over his stingy competitors. What's missing from socialist griping about "underpaid workers" is any recognition that this market process exists at all. The sad reality may be that those workers are really only producing value commensurate with their low wages, and any attempt to artificially gin up wages is doomed to fail.***** 

I think socialists are also missing an explanation of why employers are willing to shell out high salaries for some classes of workers. Why do doctors and senior actuaries earn north of $200k/year? Why can't capitalists keep them under the same boot as the low-skilled wage workers? If your answer has something to do with certain skill sets being scarcer and more in demand, or that these workers add more to their employer's bottom line, you're thinking like an economist. I'd encourage you to do more of this, and do so more consistently. 

Would workers benefit from a more "democratic" work place? Is the real gripe not so much the underpayment, but that they are mistreated by their employers? That they would benefit from having a say in management decisions? I seriously doubt this. Think of the most incompetent co-worker you've ever had, and now imagine giving that person the same decision making authority as your boss (or the CEO for that matter). Way back in 2012, Tyler Cowen gave an interesting response to this "liberate the workplace" screed at Crooked Timber: 

When I was seventeen, I had a job in the produce department of a grocery store.  They made me wear a tie.  They did not let me curse.  Even if there was no work at the moment, I could not appear to be obviously slacking for fear of setting a bad example.  They had the right to search me, including for illegal drugs.  I suspect that “contract indeterminacies” gave them other rights too.

The company kept each and every one of its promises to me and they paid me on time every two weeks.  The company also taught me a lot.  I honor that company to this day.  I also did my best to keep each and every promise to them.

What I did observe was massive employee shirking, rampant drug use including what appeared to be on the job, regular rule-breaking, and a significant level of employee theft, sometimes in cahoots with customers.

I don't think this is entirely atypical. I recall seeing plenty of shenanigan and horseplay when I worked in a less professional job setting. (I don't recall any on the job drug use, but then again I had one co-worker who was never seen again because of a very public DUI.) The problems is not a lack of workplace democracy. The problem is more often a lack of maturity, and a low-wage job is the only chance these people will ever get to learn a proper workplace etiquette. Expanding "workplace democracy" is not the right prescription for these workers. 

Some "problems" are really just features of the world that exist under any conceivable system of government. They get unfairly blamed on capitalism, but they would exist to the same extent (or perhaps even greater) under socialism. One recent example stands out. Bryan Caplan was recently on an NPR panel discussing socialism. At one point the panel takes questions from callers. One of them was a nurse who was not happy with her job. She had unpleasant hours and felt a lack of control over her life. Caplan wisely counseled that she should seek alternative employment. He pointed out that there are nursing jobs with more regular hours (say, a nurse in a doctor's practice, as opposed to a nurse in an emergency room). The socialists on the panel insisted that this would not do, that the nurse needed to organize and agitate for social change. My reaction was, Wait a minute, doesn't someone have to be an emergency room nurse? "Unpleasant work hours" are not some mean trick that a cruel employer is playing on its nursing staff. People get sick or injured in the middle of the night, and they need someone to tend to them. Suppose this nurse "successfully" agitates for change through political organization, what does success actually look like? Maybe she gets the cushy day job and someone else gets stuck with unpleasant hours. It's not at all clear that there would be a net reduction in the number of unpleasant night shifts or disrupted sleep patterns resulting in frazzled workers. (If there were "success" along this dimension, it would necessarily mean less care for sick and injured people during late hours, so more suffering and almost certainly more death.) I'm curious what fans of worker ownership think about these kinds of unpleasant jobs. They would still need to be done. Someone needs to haul garbage, or repair the pipes that carry shit out of your house, or spend long hours staring at computer code that's not working. At least under capitalism, there is a compensating differential for doing unpleasant work. If you can sustain unpleasant night shifts, boring hours of study, or dirty work, you will (all else equal) earn more than someone who can't. Would a worker co-op vote for such compensating differentials to make sure the unpleasant work gets done? Or would they just gridlock on who does the dirty work and therefore leave it unfinished? Would cliques form among the workers (crystalizing around the more senior workers or those with superficial charisma) and conspire to give all the dirty work to their least favored co-workers? Might they form a voting block that simply delegates all the perks to themselves and the shit work to their less favored colleagues? I don't think the dark side of office politics goes away under a system of worker ownership of the firm. Quite plausibly, it gets magnified.******

Tyler Cowen's Big Business: A Love Letter to an American Anti-Hero is a useful reference here. Cowen points out that for both consumer and employees, interactions with large businesses are often far more predictable and fair than dealings with, say, friends or family members. Who is more likely to lie? An interviewee for a job, or the employer? Who is more likely to short-change the other? Is it more likely that the interviewee exaggerates his skill-set, or that the employer underpays the worker compared to the promised compensation? What about a spouse? Is a spouse or an employer more likely to make unfulfilled promises? To be psychologically abusive? Cowen also presents some interesting data on when and where people feel most happy. A lot of people feel happier an more empowered at work than at home. You are probably less likely to experience violence at work than in the home (or anywhere else for that matter). Again, there is something deeply broken about the socialist vision of humanity as harmoniously communal and egalitarian in nature. They are simply wrong to depict market institutions as being corrosive to interpersonal relationships. 

I'll close out by saying I don't really find "worker co-ops" to be an attractive mode of employment for most purposes. They are a solution in search of a problem. Except in this case the solution is not an innocuous vitamin but the kind of bad medicine that you don't want to take. I don't begrudge anyone their right to form such a co-op. Maybe because they like the communal aspects of working among equals, for a greater social purpose rather than for a profit. If that's what you want, then go for it! I do begrudge people like Burgis and Sunkara who would impose this model on workers against their will. I resent that they would outlaw modes of employment that they don't approve of. The great mass of workers, voting with their feet, have landed on wage and salary employment. We should respect their wishes. 

______________________________

* Why do you want to get back to work? Maybe you're a civic-minded socialist who wants to contribute to society. Maybe you've absorbed the protestant work ethic of the surrounding society. Maybe the social safety net is designed to encourage unemployed individuals to find work. I do think this is a question that socialists and other advocates of the welfare state need to contend with. How do you make the social safety net soft enough to catch everyone, but not so cushy as to keep people on the dole? You have to acknowledge that there will be cheaters and slackers, and the incentives of the system need to take them into account.

** Maybe it's worth playing with some realistic numbers here. Suppose there's a 10 worker firm, with each worker earning $50,000/year. (This is a typical middle-class salary in the United States, roughly corresponding to a full time job at about $25/hour.) The socialist story is that the capitalist owners are exploiting the workers, which we'll take here to mean they're underpaying them and pocketing the profits. Suppose the workers are getting $20,000/year in the firm's profits (which would otherwise be expropriated by their capitalist overlords). So the firm makes $200,000 in profits a year, let's discount this indefinitely into the future at a 10% interest rate, which comes to $200,000 divided by 0.1 (summing the infinite series), which is $2,000,000. Each worker currently has a $200,000 stake in the firm. Suppose they hired an additional worker who wasn't as productive as the rest of them. Perhaps this extra worker does some basic housekeeping and bookkeeping and generally lightens the load, but doesn't really bring in a the same revenue as the existing workers. (Diminishing marginal returns, anyone? At any rate, we can specify that in this example, the ten workers just want a lighter workload. Isn't that one of the benefits of workers exerting ownership rights? That they can decide to improve their working conditions, say, by dividing hard work among more workers?) Well, each worker's stake in the firm is going from $200k ($2 million divided by ten workers) to $182k ($2 million divided by 11 workers). To hire a new worker in this simplified example, each (or maybe just a majority?) of the existing workers needs to be willing to part with $18k. (In other words, in total the firm needs to be willing to part with $180k to hire this new worker.) Maybe in some cases it still makes sense to hire the new worker, because they really do add that much to the company's bottom line (though, again, we can specify realistic examples where this is not the case). But it's obvious that this will create a friction in the labor market. Moreover, this burden will be disproportionately felt by workers with a weaker job history and less impressive skills. Play with the numbers. Feel free to make the $20k figure larger or smaller. (I'm intending this number to be the amount that the capitalists are currently skimming from the exploited worker; the worker would retain this amount if they owned the firm.) Make it smaller, and the "exploitation" story withers away. (As in, what problem is "worker ownership" solving if the workers are already earning their marginal product?) Make it larger, and the worker-owned firms become more reluctant to hire more workers. And this doesn't even get into the issue of "What if we hire a dolt who makes terrible decisions and 'votes' us into bankruptcy?" Maybe the dilution is smaller if the firm is much larger, say 100 or 10,000 workers. So one could try to escape this problem by asserting that firms will be quite large. But don't socialists have soft spot for small, boutique businesses? And anyway, wouldn't workforce expansion decisions for such a firm be made, not at the individual worker level, but in terms of proportions? As in, a 10,000 worker firm isn't saying, "Should we hire Jimmy?" It's saying, "Should we expand our workforce by 10%". In which case, the above calculus still applies. Also note how this system would create job frictions from the standpoint of workers who wish to leave the firm. If one of the ten currently employed workers wants to find work elsewhere, is s/he surrendering their claim to $200k worth of company capital? (I'd think they'd have to, under a true system of "worker ownership of the firm".) I'm always hearing people make the (legitimate) point that American health insurance is a stupid system because it locks people into jobs that they're afraid to leave. Won't a system of mandatory worker ownership make this problem even worse? Won't you have employees languishing in jobs that they no longer want, desperately clutching their share of the firm? And doesn't this mean they would fail to create an opening for someone more eager to have this job? Also consider this: employers would be willing to offer a much higher starting wage if they didn't have to fork over a huge chunk of wealth when they hire someone. Is that the solution here? That wages are lower, but overall income is higher because the workers own capital? I would be very surprised if socialists endorsed such a "wages must fall" solution. Do employers even have a free hand to set wages, or does everyone have to earn the same wage, or be on the exact same schedule given seniority and position? I'd be happy to analyze this under a different set of assumptions than the ones I'm using above.

*** David Friedman makes this point to Burgis in their debate. Friedman says something about workers saving half their income for a few years and buying up capital. Burgis scoffs that workers today are barely treading water, so how could you ask them to save more? Friedman points out that historically workers have subsisted on far less, so there must be some excess consumption they could do without. (Burgis, in a particularly stark display of cluelessness, asserts that the massive growth in material living standards has no relevance to their discussion. Nonsense. If you transported some of today's workers to the past, they wouldn't promptly die. They would subsist on a much more modest level of material consumption. If follows, pretty plainly, that there is a surplus amount of consumption that could be converted to savings.) Friedman may have just as well pointed out that workers in other countries are subsisting on less. The option to forego some consumption is clearly available to most American workers. He also points out that people forego consumption in order to invest in their future earnings all the time. That's what people are doing when they go to college. Saving up to buy capital for a co-op would be similar, assuming such a scheme is likely to pay off. The fact that people don't seem keen to start such co-ops, even though the option is available to them, is quite telling.

**** Chobani gave away 10% of its shares to its 2,000 employees. Ten percent may seem paltry compared to what Burgis is proposing, but here's a question. Would the typical worker want a greater share right now? Or would s/he want Chobani to make a public offering, bring in additional capital, and potentially make their shares worth even more? You can argue that they'd rather have more than 10%, but they'd probably want less than 100%, even assuming they are merely trying to advance their own material interests. 

***** When someone like me makes this point about market forces operating on wages, someone often lobs the shallow retort that we're dogmatically assuming perfect competition. We're not! You don't have to assume perfect competition to point out that there's a massive, exploitable profit opportunity if employers are systematically, predictably earning $6/hour surplus on all of their workers! Imperfect competition will do quite nicely here. The workers in the example given here should see their wages getting bid up, maybe not all the way to $20/hour, but to $18/hour or so. 

****** I had a friend who was really screwed over by the labor union he was part of. He was pretty Marxist in orientation, but I think he saw the tendency of labor unions to favor their more senior members at the expense of new members (to say nothing of non-members, who are screwed over even worse by union policy-making). Is there some tendency in capitalist institutions to dump on the powerless? Sure, perhaps, but these tendencies can be even worse under non-market institutions.