Coercion is a really difficult concept to define. When theorists say things like “the workplace is a site of coercion” what does that mean, and what should we do about it? One way of understanding coercion is in a non-moralized way. This strategy says that an act is coercive if it has a certain form (e.g. physical force or threats of force) and whether it is wrong is a separate question. The moralized way of understanding coercion says that insofar as an act is coercive, it is pro tanto wrong, the concept itself builds in the moral stuff.

On either definition, the paradigm case of coercion is when a mugger threatens ‘your money or your life.’ Similarly, we can imagine a workplace where an employer announces ‘work here or starve’ or ‘do X or I will fire you’ or makes any other kinds of announcements where the employee must either comply or face terrible consequences. But does the workplace’s similarity to the paradigm case settle that the workplace is coercive? Consider another case. An organ match is willing to sell you a lifesaving kidney for $5,000. He says, ‘your money or your life,’ in a sense, but has he coerced you? Like the paradigmatic mugger case, someone threatens to do something (withholding a kidney) that will kill you unless you pay up, but here our intuitions are different.

Japa Pallikkathayil’s wonderful essay about coercion can help us settle some of these questions without tackling the definitional project. Rather than seeking necessary and sufficient conditions for an act to be coercive, she asks what it is about the mugger case that can explain why a) these kinds of cases are generally impermissible, and b) these kinds of threats mitigate victim’s responsibility. She then explains that coercive acts typically have these features because they impair the victim’s normative authority.

When the mugger threatens ‘your money or your life’ he makes it impossible for his victim to genuinely consent (or to exercise any of her normative powers) because he constrains the victim’s options without giving her ‘veto power’ to end the interaction entirely. Coercive acts like the mugger’s impede our ability to “exercise our authority to make discretionary changes in the permissions and obligations of others.” Importantly then, for an act to be coercive the victim must antecedently have the authority to reject whatever the coercer proposes. In the paradigm case Pallikkathayil writes, “The mug­ger’s victim is… entitled to veto power with respect to his intention precisely because it is an intention to wrong her.”

But not all cases are like this. In the kidney case the match doesn’t threaten to wrong you because you are not entitled to his kidney, so he does not threaten to do anything impermissible by announcing that he won’t donate his kidney unless you pay him (some egalitarians might disagree with this). For this reason, you are not entitled to veto power with respect to the match’s intention.

In her account, Pallikkathayil helpfully addresses the asymmetries between the mugger case and the workplace. (11) She considers a case where an employer threatens to fire an employee if she continues to show up late and commit other fireable offenses:

Although the employer constrains the employee’s options, since he does so through the announcement of an intention that it would be permissible to act on, we have no reason to think that the employer impermissibly constrains the employee’s options. This, I suggest, is confirmed when we examine how to characterize the moral objection to the way in which the mugger constrains his victim’s options…. when we focus on the impermissibility of the mugger’s announced intention, the sense in which the victim is owed veto power becomes clear. (12)

In other words, there is a very real way that the employer’s threat deprives the employee of control over her options. But unlike the mugger case, the employer permissibly constrains the employee’s options. The employer is entitled to carry out her threat and the employee does not have the authority to reject the employer’s proposal that either she shows up on time or is fired.

Still, in some cases, employment does seem intuitively like wrongful coercion. Pallikkathayil considers sexual harassment, where an employer says “I will fire you if and only if you refuse to have sex with me.” She argues that this is wrong in some cases when the employer has “insti­tutional or contractual obligations to fire the employee only on certain grounds.” (18) However, where there is no pre-specified job description, then sexual harassment must be wrong either because a) proposing to pay for sex is wrong or b) radically changing a person’s job description from (e.g. from secretary to prostitute/maid/babysitter) is wrong.  That is, the employer’s threat must be to do something that is independently wrong. (19)

My intuition is that something like (b) makes sexual harassment wrong. In these extreme cases employees do have the authority to decline certain tasks that employers demand. In this case the employee may say ‘you lead me to believe that the job did not require prostitution, so I have been deceived.’ Because it is wrong to deceive people, it is wrong to radically change a person’s job description, and so threatening to fire someone for refusing to comply with an impermissible demand is also impermissible.

Pallikkathayil’s account enables us to address the normative issues that are raised by coercive acts like the muggers without settling whether the word ‘coercion’ refers to any acts that limit a victim’s choices or only acts that wrongfully limit choices. So when people say things like ‘the workplace is a site of coercion’ either they mean that the workplace constrains employees’ choices (obviously true) or that the workplace impermissibly constrains employees’ choices. On the either reading, I have suggested, following Pallikkathayil, that the workplace only impermissibly constrains employee’s options when employers impair employees’ normative authority. If employees do not have the authority to decline certain tasks or reject being fired then the workplace isn’t impermissibly coercive.

PS: Check out Matt’s related post about the ethics of sweatshops here, and his work on these kinds of topics here and here

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  • Bill Hoffman

    Isn’t whether (or for what reasons) it is permissible for the employer to fire her employees a big part of what this debate is about? I haven’t read Pallikkathayil’s paper, but it’s not clear from the excerpt you provide what how she accounts for which reasons are permissible for firing an employee.

    • Jessica Flanigan

      This is totally right, but in this post I just was trying to explain what it is about coercion that is wrong. Saying something is coercive dosent settle much on the normative end, what we care about is authority and entitlements. 

  • M Lister

    Two points: I’m far from sure that it’s right to say that someone who refuses to give you his or her kidney “kills” you, even if you need a kidney to survive, and the persons’ kidney would do.  (For one thing, too many people would be killing you in such a situation.)  It doesn’t seem to change matters to me if the person in question knows that their kidney could save you.  There are unclear cases in the area of this example, of course, but this doesn’t seem like one to me.  If that’s so, then the person asking for money for her own kidney doesn’t seem very relevantly like the mugger to me. 

    Secondly, in the sexual harassment case, this seems like a perfectly good case for us to set societal default rules such that this sort of action is presumptively wrong.  Given the relative levels of power between employer and employee, and what people are likely to find reasonable, this seems plausible.  Perhaps we allow people to contract around this in certain cases- I’m not sure which ones, but maybe in some.  But, default rules are not part of nature, and not setting them explicitly is just to let the more powerful set them.  This seems like a case where we have good reason to set the default rule for protection.  This follows the reasoning of your option b, but in a way that makes it easier to work and more likely to provide real protection than if the relevant facts had to be argued in court each time, for example. 

    • Jessica Flanigan

      First, I agree that the kidney match doesnt kill you, because I think that the distinction between killing and letting die and doing and allowing is moralized. So it’s true that the kidney case is not wrong and the mugger is, but they both take the structural form of coercion, a threat to act in a way that will result in someone’s death with the intention of making money, but the difference is that one is wrong. I’m afraid the point of the post wasnt that exciting, just to say that calling something coercive doesnt take us anywhere on the normative question. 

      Second, I think that the social default thing can also explain the wrongness, as a part of b), the but whatever makes it wrong, it must be that the employer is doing or threatening to do is impermissible, calling something coercion won’t settle it either way. 

  • http://www.realadultsex.com figleaf

    I think some of the difficulty arises from defining “ideal” coercion as the demand a mugger imposes on his or her victim.  Regular old-fashioned waterboard type torture would be a better example of “pure” coercion. Torture might be a better example anyway since, according to John Woo and Joseph Stalin, anyway, it’s not subject to moral judgment.

    For the purposes of this conversation, though, better place to start with coercion would be the Godfather earworm of “an offer he couldn’t refuse.”  That might might complicate your premise in the sense that it would include both a mugger saying “I won’t kill you if you don’t give me all your money” and a potential kidney donor saying “I will let you die if you don’t give me all your money.”  Or, say, “If you don’t sleep with me, Mrs. Gump, I will keep your son Forrest out of regular school.”  But it carries with it the general tenor of duress wherein what is demanded of the victim is both something they would ordinarily refuse to do do and also something another person “of ordinary courage” would also refuse to do.

    But in the context of employment coercion of the “offer you can’t refuse” form would also comfortably include “Since I have maxed out my contributions I will fire you if you don’t donate to the Young Socialist Alliance PAC” or “I won’t hire you unless you let me fill out your vote-by-mail ballots.”  As well as “if you want to keep your job you won’t say anything about us putting melamine in the baby formula” or even “no bonus for you unless you load our customer’s CDOs with toxic assess so we can hedge against them.”

    Better still, though, Godfather-style “offers you can’t refuse” coercion would not cover “if you’re late one more time you’ll be fired” or “putting melamine in the baby formula is a firing offense” because unlike previously mentioned impositions they’re the sort of thing people of “ordinary courage” might prefer not to do but wouldn’t refuse.

    figleaf

    • Jessica Flanigan

      All those examples were examples to me of requests to do something impermissible, why do we need the spinning wheel of coercion or ‘offer you can’t refuse’ to make sense of why these kinds of contingency announcements are wrong? 

      • http://www.realadultsex.com figleaf

        Because in both common and legal use coercion usually implies that that which is coerced is also wrong.  One could label a requirement that we drive on the right side of the road “coercion,” particularly if that requirement is enforced by laws other than Newton’s.  But typically we don’t because driving on the right side of the road generally isn’t considered wrong.  Even if the occasional driver seems to really, really want to exercise that ability.  (Though, admittedly, not once they’ve sobered up.)

        Same with requiring an employee to mop floors, do cold calls, complete paperwork, or wash their hands after returning from the bathroom.  Those might be requirements of employment but since those requirements aren’t recognized as wrong either by convention or law they don’t meet the commonly or legally accepted meaning of the coercion.

        There’s still plenty of gray area — urine testing, for instance, in most cases but particularly in cases where there aren’t external mandates requiring all employees be treated like criminal suspects without cause.  It’s not strictly illegal to make that requirement most people still feel it’s coercive because they feel it’s wrong.  (Wrong in the same non-moral sense most libertarians mean when they object to government-required urine testing.)

        Hope that helps.

        figleaf

        • Jessica Flanigan

          Hi figleaf! First, I just wanted to mention that I really like your comments most of the time. I think we agree on this. I’m just saying that if you think coercion is pro-tanto wrong it is because it violates our rights, or if you think coercion is just defined as limiting choices then it isn’t pro tanto wrong but is wrong whenever we were entitled to make those choices for ourselves. Either way, calling something coercive doesnt settle the question of right or wrong because what is really driving the permissibility of coercion is the scope of our rights. If it’s permissible to require urine testing for employment it’s because we don’t have a right to get jobs without providing a sample, but if urine testing is wrong because we do have a right to keep the contents of our pee a secret. I have no idea what a non-moral sense of the word ‘wrong’ would be, and I also think that whether or not something is illegal has nothing to do (in most cases) with whether it is morally permissible. 

    • IAmADipshit

       “Someone of ordinary courage” = “someone who agrees with my ethics and morality”.  Nice question begging.

  • 3cantuna

    Thanks Prof. Flanigan. This post adds clarity to previous discussions on coercion. It still looks like taxation violates permissibility and individual normative authority.

    • Jessica Flanigan

      What about taxes? Taxes will only violate normative authority if people have property rights over their money that gives them the authority to resist taxation. I go back and forth on this, I think people have some authority over their money, but full authority? I don’t know, I struggle to figure out my settled views on property rights.. 

      • 3cantuna

        I am not settled on property either. Just when the NAP is on the greatest ascendancy in common thought– here come the intellectuals undermining its legitimacy.  Thomas Kuhn, call your office?

  • http://twitter.com/KevinCarson1 Kevin Carson

    IMO workplace authoritarianism approaches wrongful coercion when it results from reduced bargaining power of labor, which results in turn from state action in the larger economy on behalf of employers that artificially restricts the range of competing alternatives available to workers.  For example, when Enclosures and other nullifications of ordinary people’s property rights eliminated competition for labor from self-employment, and the Combination Act criminalized collective bargaining and strikes, workplace conditions in the Industrial Revolution were clearly coercive.  And I would argue the state still erects serious barriers to self-employment, makes land and capital artificially scarce and expensive, and raises the costs of comfortable subsistence in ways that make workers artificially dependent on wage labor.

    • Jessica Flanigan

      This is exactly the view I am trying to reject, insofar as it’s permissible to ask an employee to X, the relative position of the employee given he alternatives doesn’t change the permissibility of asking her to X. Bad bargaining positions may be bad for other reasons, but citing coercion won’t get you there. 

    • 3cantuna

      Enclosure is not so easily defined, is it? It looks like the process took several centuries. Often the struggle between Parliament and the Crown was reflected at the local level. The lesser peasants were not always the losers, were they?  The Combination Acts were based on anti-cartelization precedents and provided  restraints on antimarket collusion, especially ‘labor’.  Are you justifying guild behavior?

  • Damien S.

    Then there’s this form of workplace coercion: making it okay to fire women for using birth control.
    http://www.aclu.org/blog/reproductive-freedom/use-birth-control-youre-fired

    • Jessica Flanigan

      ugh, that is awful. 

      • Damien S.

        But it’s so libertarian!  Don’t like it, just find another job with a less intrusive employer!  Nice and easy in today’s economy!
        *cough*

        • 3cantuna

          Your way of thinking– state management, intervention, regulation– led to this economy.

          • Damien S.

            Bubbles and bank runs happen in free markets on a gold standard.  And a lot of deregulation went into making the current crisis.

          • Damien S.

            Bubbles and bank runs happen in free markets on a gold standard.  And a lot of deregulation went into making the current crisis.

  • geoih

    “If employees do not have the authority to decline certain tasks or reject being fired then the workplace isn’t impermissibly coercive.”

    It appears to me that you are fine with coercion that goes the other way. All you’re stating is that the employee has veto power, but the employer does not. Firing somebody because they refuse a task is simply modifying a voluntary employment agreement that both parties have the right to modify at anytime. The employee is not the slave of the employer, nor vice versa.

    Your whole concept is based on a static view of the workplace. Conditions are always changing. It’s called the market. To state that an employee has a perpetual right to their present employment is just silly. If an employer wants to change the job tasks that an employee is unwilling to agree to (whether it’s cleaning toilets or providing sex), then that employee is free to end the employment agreement. An employer wanting to make task changes most people would consider unreasonable does not suddenly give the employee some right to enforce the old agreement against the will of the employer. This is just coercion from the other side. If an employer wants employees to perform tasks that are illegal, then that is a separate issue, but it doesn’t result in the employee now being able to coerce the employer to follow the previous employment agreement.

    Employees do not own their jobs, nor have special rights to keep them beyond what an employer has agreed to, anymore than an employer owns the employee or the employee’s labor.

    • Jessica Flanigan

      I also think that the employer has veto power over the whole interaction, and I don’t think the employee does insofar as the employers contingency announcement is permissible. I think we agree? 

  • alanwertheimer

    A small clarification re a moralized account of coercion.  On my view, it’s not so much that coercion is pro tanto wrong, but that what makes a proposal coercive is that it proposes to violate the target’s rights if he does not acquiesce.  I argue that only threats constitute coercive proposals, but that the distinction between a threat and an offer is based on the target’s rights-defined baseline and not the target’s status quo.  A proposal to make the target worse off than he has a right to be is coercive even if the target would be better off than his status quo if he acquiesces, and a proposal to make the target better off than he has a right to be is not coercive even if that would leave the target worse off than his status quo if he does not acquiesce (as when a prosecutor proposes to take a defendant to trial if he does not plead guilty).  

    • Jessica Flanigan

      This is very helpful and I should have been more precise when I linked to your work. Namely, I should have just left out the ‘pro tanto wrong’ part and just said that the concept builds in the moral stuff and is more than just a formal relationship between two actors. 

      Still, if a proposal makes the target worse off than he has a right to be but better than the status quo it can still be pro tanto wrong but nevertheless not all things considered wrong right? Or in any case, that is how I read your work, but perhaps I misunderstood? Maybe I am building in an assumption that it is always pro tanto wrong to violate a right. 

      I really admire your work, so I especially regret that I wasn’t more clear in discussing it. I read your view as very friendly to Japa’s, you both seem to agree that what we really are after is whether an interaction violates people’s entitlements. Where we might disagree then, is in the scope of rights or entitlements. 

  • Nick Wilson

    Let’s not forget that health insurance is likely the biggest factor in limiting employment mobility. It’s far harder to leave a bad work situation if you or one of your family members will lose health coverage, and it’s usually significantly more expensive to buy your own than it is to get it through work. The Left understandably use this as a reinforcing argument for single payer healthcare, while we libertarians propose removing the tax advantages for employers in place of market alternatives, including insurance cooperatives or resource pools (that could balance out for individuals the advantageous bulk-buying powers of corporations.) This topic cuts across to the other topic of the week (employer-provided contraception coverage).

    Regardless of which side you’re on, the idea that employment and health insurance should be tied together (and mandated by government) is a frustratingly terrible one, and the PPACA only made the connection worse. I’m able to buy car insurance without my employer buying it for me, yet my risk of injury or wreck is higher due to my daily commute. I thankfully have yet to hear anyone seriously advocating for employer (or state) provided car insurance. The difference is when I lose my job, I still have continuity with my car insurance and I’m glad I wouldn’t have to buy a temporary plan of unknown length to drive to job interviews. 

    Like many, many areas which progressives claim to care about, this is one case where their benevolence with other peoples’ money has unintended negative consequences for the people they’re supposedly trying to help.

    • Damien S.

      PPACA makes things better, not worse, by weakening the need to have employment to have good insurance.  The core reforms bring to the individual market the same benefits already enjoyed by group plans: guaranteed issue and community rating, i.e. being able to buy insurance at a standard price no matter one’s health condition; the individual mandate offsets the system-gaming potential thereby created.  In the current system, a person with problems holds onto their job-with-insurance for dear life, because without it they’d be screwed.  (Or on COBRA, which is expensive and itself another government mandated safety net.)  In 2014 when ACA really kicks in, that person will be able to quit their job and try self-employment and still be able to get affordable good insurance.

      Really, the only reason for employers to still be involved after ACA is to hide the public financing of it, relative to explicitly raising income taxes and handing out subisdies to all low-income employees, or putting everyone on Medicare.

      • Nick Wilson

        PPACA is an infected band-aid for a government-created wound.  Government fostered, tax-advantaged and finally forced employer-provided healthcare for decades. Government has driven up the cost of care by, for one of countless examples, blocking interstate competition for health insurance dollars – forcing insurance companies to maintain 50 different bureaucracies.

        I would think the Left would be livid that government would force people without cash flow to purchase a megacorporate product they might not need. This proposal is frankly very right-wing, bordering on fascism. It’s a mandatory transfer of wealth from the non-employed to insurance bosses and stockholders (vs. a voluntary one). I mean, at least single payer makes sense on paper.

        The idea that forcing insurance to accept all-comers at no difference in cost and provide more coverage, and then somehow we can expect healthcare costs to go down is frankly ludicrous and dismissed at face value.

        If the government fundamentally broke the connection between employers and healthcare and removed all the unnecessary elements driving up cost, people could buy one plan while they’re healthy and potentially keep it for the rest of their lives, never having to reapply because they “lost” coverage. Alternatively, individuals can sign up with a bulk purchaser (maybe a non-profit) that will shop their pool for the lowest rates or the best coverage (depending upon their target consumer).

        • Damien S.

          AIUI interstate competition in health insurance is limited to allow effective state regulation and prevent a race to the bottom.

          The Left is rather more livid about letting people die for lack of resources, and considers the notion that people don’t need health insurance to be a bad joke.  The proposal is in fact literally right-wing, coming from the Heritage Foundation to protect “markets” and insurance companies; the Left would rather just have Medicare extended to all, if not a full NHS-like system (perhaps from expanding the VA hospitals.)

          You’re wrong about the transfer of wealth; PPACA basically simulates single-payer with more friction and market intrusion.  The non-employed pay premiums to the companies, yes, but if they’re poor (being unemployed) they then get subsidies from the government to pay those premiums, and those subsidies come out of progressive income tax.  Instead of everyone paying income tax to support single payer with the rich paying more, everyone pays the same premums, but then the rich pay the poor via subsidies.

          “The idea that forcing insurance to accept all-comers at no difference
          in cost and provide more coverage, and then somehow we can expect
          healthcare costs to go down is frankly ludicrous and dismissed at face
          value.”

          Unfortunately for you, that seems to be exactly what’s happening: http://www.theatlantic.com/business/archive/2012/03/pssst-romneycare-is-working-dont-tell-romney/254411/

          “people could buy one plan while they’re healthy and potentially keep it
          for the rest of their lives, never having to reapply because they “lost”
          coverage”

          Until they lost coverage because the company canceled their plan, or raised premiums until they couldn’t afford the plan, or found a mistake in your application or some little detail you’d failed to mention to invoke ‘fraud’ and drop you.  This is real world behavior in the individual insurance market; one estimate was that really sick people had a 50% chance of getting kicked or driven off their insurance.

          • Nick Wilson

            “AIUI interstate competition in health insurance is limited to allow effective state regulation and prevent a race to the bottom”

            Who cares, if buying more affordable insurance from Delaware instead of my native Texas would save me a lot of money. As a consumer, it should be my right to voluntarily trade off coverage for lower cost. If I want to buy max coverage insurance as regulated by Massachussetts, I should also have the right to. And besides that, the 50 bureaucracies required to operate nationally undoubtedly drive up insurance costs anyways, which now the government is trying to fix via magical economics.

            “the Left would rather just have Medicare extended to all”

            And you realize that Medicare is paid for via regressive payroll taxes – not standard income taxes, right? For the record I consider flat rates “regressive” because 8% cuts far deeper into the nondiscretionary income of a person making $15000 a year than someone making $15m a year. Not to mention that it’s capped so the very wealthy contribute even lower rates than the poor.

            “The non-employed pay premiums to the companies, yes, but if they’re poor (being unemployed) they then get subsidies from the government to pay those premiums”

            Yet even with subsidization, the unemployed poor are still required by law to transfer more wealth than they otherwise might have to corporations for a product they may not need. And from a government cost perspective, I’d rather gamble that some healthy but uninsured 25-year olds might have to use the emergency room than subsidize insurance for all healthy, uninsured 25-year olds.

          • Damien S.

            The end point of your logic is a right to not buy insurance at all, but that doesn’t work with the other constraints on the system, including public reluctance to just let people die for their bad decisions.

            I would be happy to fund Medicare out of progressive income taxes.  But even a flat income tax is more progressive than premiums, which would amount to a poll tax, and your numbers are off.  Most of the 8% goes to Social Security, not Medicare, and the Medicare portion is no longer capped by income.  SS is 6.2%, Medicare is 1.45%, double that for the self-employed, and there’ll be a Medicare surtax on high earners in 2013.

            “unemployed poor are still required by law to transfer more wealth than
            they otherwise might have to corporations for a product they may not
            need”

            The really poor will be on an expanded version of Medicaid.  As for “may not need”, how do you decide that?  Anyone can have a dangerous accident.  Anyone can turn out to have cancer.  Anyone can get an infectious disease.  There is no one who can say they don’t need medical care, just people gambling they don’t — and when they do, they turn to the public coffers for help, because life trumps principle for almost everyone.  Also, being sick is often a *reason* for being unemployed and poor.

            “healthy but uninsured 25-year olds might have to use the emergency room
            than subsidize insurance for all healthy, uninsured 25-year olds”

            By definition, insuring healthy 25 year olds is relatively cheap.  Conversely, making the employed 25 year olds pay into the system helps support a system they’ll make use of later.  Also conversely, ER care is expensive and should be reserved for actual emergencies.

          • Nick Wilson

            Perverse incentives naturally result in negative outcomes. Yes, I’m human and I don’t want sick people dying out on the streets any more than anybody else. But healthcare in this country is and has long been a patchwork of subsidies, exceptions and regulations that encourage the poor not to bother to buy health insurance. They have always been able to get healthcare via one form or another without it. Now, we decided to “fix” this problem by forcing them to buy (heavily subsidized) insurance.

            Like most other forms of income-based welfare, this is the wrong direction, coddling the poor, and thus incentivizing their poverty. I think turning poverty into a benefit  is as anti-progressive as possible.

            If you want to expand health coverage there are only two logical ways to do so:
            1.) single payer, which expands coverage simply and universally at great cost to society, and where cost control involves government limitations on care or massive interference into our personal decisions, or
            2.) convert to a true free market, where costs are minimized via competition, creativity and deregulation, where inefficiencies are disincentivized, where contracts are enforced by tort and every individual makes the best decision for themselves and takes responsibility for their own bad decisions. 

            If you want a constitutional “mandate”, allow hospitals to turn away people without basic insurance. It sounds mean at face value, but everyone will naturally start buying it when free emergency care is no longer available. If the price drops to the minimum with deregulation, buying it will be affordable, and charities or the insurance pooling non-profits I propose can help the very poor pay deductibles.

            I must also note that I support replacing all taxes and welfare with land value taxes with an income-neutral citizen’s dividend. This dividend would grant the poor a more level playing field to afford things like catastrophic insurance, and guarantee a minimum quality of life.

          • Damien S.

            1. “great cost”.  Actually it’s the US system that involves great cost, with 16% GDP spent on heath care, instead of the more usual 8-10%.  Britain’s NHS is one of the cheapest systems in the world, given their income — too cheap, probably.  Ironically the Conservatives want to make it more like ours.

            2. Kenneth Arrow on why health care markets don’t work: http://stevereads.com/papers_to_read/uncertainty_and_the_welfare_economics_of_medical_care.pdf
            Also, what about children?  If their parents didn’t get watertight insurance, do we let them die?

            “everyone will naturally start buying it when free emergency care is no longer available”

            The ER mandate comes from EMTALA, which was passed in 1986.  Your logic would mean that before then, everyone was buying insurance.  I think you’ll find that to be false.  Oh, I guess you’ll blame lack of interstate competition.

            And note the ER mandate only requires urgent care and stabilization, not preventive care or ongoing drugs.  “The poor have always been able to get health care” is false.  Especially false for the only somewhat poor, with too many assets for Medicaid and not enough income to afford real care.

            “buying it will be affordable”

             How do you know this?  Why would it be the case?  Why wouldn’t the free market decide that some people were too poor to live?

          • Nick Wilson

            “Unfortunately for you, that seems to be exactly what’s happening”

            Actually that only addresses some of the points I made. I have no question it is possible to improve medical outcomes and expand coverage. However, it neglects to mention that health insurance costs have jumped 7.5% every year since (and that’s including shoddy price control attempts by the state) and medical bankruptcies have skyrocketed. Many insurers have left the market. So now people are required to pay for a product that is growing more expensive every year at over double the rate of inflation. And that’s not going into health execs pockets – for-profits have to compete on a cost basis with breakeven non-profit providers, whose proposed rate increases due to increased costs are being rejected by the state left and right.

            You can have one or two, but never all three. It’s the same magical economics where Obama claimed we could increase spending, decrease taxes and balance the budget all at the same time when he was campaigning.

            “Until they lost coverage because the company canceled their plan, or raised premiums until they couldn’t afford the plan, or found a mistake in your application or some little detail you’d failed to mention to invoke ‘fraud’ and drop you” 

            Contract-based shopping is a good idea. I know it sounds heartless, but I don’t have too much sympathy for people who don’t read fine print on contracts they’re signing or have a lawyer review it – especially when they’re shopping for a contract that will potentially affect them for the rest of their life (at least until Medicare kicks in). Moreover, once a company starts dropping sick customers, healthy customers should leave and find a better company to avoid the same fate. And finally, I’ve proposed a safety mechanism against this through private group pooling/cooperatives that will shop a mixed demographic for the lowest rates and administer guaranteed payouts for life (instead of personally buying insurance, use a middleman to obscure your personal health situation’s exposure – like your employer currently does.)

            My health care reform proposal is to allow perpetual FSA rollover, allowing the free market to incentivize both the creation of more clinics for minor ailments and checkups, and cheap, higher-deductible catastrophic insurance for true emergencies.

          • Damien S.

            Medical costs were already going up faster than inflation, and have done so in every other state, so that 7.5% means nothing outside of context.  As for bankruptcies — skyrocketing?  Googling finds one study from March of last year, which found they’d stayed about the same, and Megan McArdle said it wasn’t a good enough study to conclude anything from.

            And bankruptcies can come from people still being allowed to buy the cheap insurance you advocate.  There are tiers available, with the Bronze tier having the lowest premiums and the highest deductibles and out of pocket maximums — $5000 for an individual, $10,000 for a family.  If a family doesn’t *have* the extra $10,000 they’ll be looking at bankruptcy.  OTOH, there’s a significant difference between debts of $10,000 and debts of $50,000 or more that could come from uncovered medical bills.  But at any rate this can be seen as an argument for even stronger single-payer.

            “once a company starts dropping sick customers, healthy customers should leave and find a better company to avoid the same fate”

            Oddly this doesn’t seem to be working in reality.  You might wonder about why, rather than continuing to push an ideal that doesn’t work.

            The biggest pool and most mixed demographic is of course the public at large, in a national pool.

    • Damien S.

      Took me a while, but I figured out the fatal flaw in these pools you keep pushing: if I’m a sick person looking to obscure my health situation, why should a pool with average health greater than mine let me in?  I’d just bring down their premiums.  If I go with a middleman, why should one take me on, or why would an insurer offer low rates to someone obscuring a bunch of presumably sick people?  Why shouldn’t the healthy 25 year olds go off and form pool of their own, or just get individual insurance, or none?

      Employer group plans work because the average composition is random and inflexible with respect to age and health, and because tax-favored employer-paid premiums give an incentive to young invincibles to not drop out and cause a death spiral.  If you let groups form for any reason, they’ll be subject to the same adverse selection (key phrase) effects as individuals.

      Thanks!  I’ve wondered myself why the formation of plans is restricted (or simply not done, if it’s not restricted), and now I think I’ve figured it out!

  • Nick Wilson

    For a good analysis of the negative cost impacts of Mass healthcare reform:
    http://money.cnn.com/2010/06/15/news/economy/massachusetts_healthcare_reform.fortune/index.htm

    I don’t believe in bankruptcy or limited liability, as both are perverse incentives by government to be irresponsible (in that regard, I don’t believe in the state-provided corporate entity). People should buy insurance plans based upon their means, or find alternative means for healthcare, like health cooperatives and charity hospitals. The tax-exempt FSAs help, but because they don’t roll over perpetually, their effectivity is not as good as they could be in helping the working poor minimize health costs or save for future emergencies.

    The big problem is that I think you’re basing a lot of your assumptions about the poor not being able to afford insurance, about contracts being speculative and about general healthcare costs rising upon the conditions in the current system that are making everything significantly more complex. Insurance was already one of the most complex, regulated and least competitive markets before PPACA, and now it is moreso with government attempts at price control to fix the cost problems it created. Life in general is made more complex by the multitude of programs, regulations, incentives, disincentives, subsidies, taxes, etc. the government imposes to control us or “help” us, as they say. 

    Everyone (but especially the poor) would be far better off in a system where expectations, responsibilities and policies were clear, equitable and enforceable. That’s the beauty of the libertarian idea – it’s not simplistic (there would still be maximum amounts of choice available), but it is legally consistent and people and providers would be able to stop re-adapting to fickle  policymakers and poorly planned policies with unintended consequences. Laws are largely written by lawyers, whose goal is often to make things as obfuscated and complex as possible, most often to benefit lawyers and their campaign donors behind a smokescreen of legalese. This complexity doesn’t hurt the rich, who will always have lawyers, accountants and political connections to scratch out the best deal for themselves. It hurts everyone else.

    Legal clarity and efficiency, insistence on personal responsibility and minimization of costs would result in natural maximization of insurance coverage. Maximum coverage built on shoddy economics and government mandates merely drives up costs, if not for the very poor, for the middle class who will be the one stuck with the bulk of rising costs. Of course, the poor will be struck most brutally by government’s most politically convenient means of paying for the massive debt that will result: monetary devaluation.

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  • Sulla

    Great article, but isn’t there is an easier way of thinking about this: in each case you are being forced to make an exchange with, and for, things you already rightfully possess (your life and your money, your job and your sexual capacity). It’s not just that your choice has been constrained, though that is certainly a part of it, it has been constrained in a blatantly unfair way, since if you decided not to traded you lose something and if you do trade you lose something (and only get to keep something you already “own”).

    Take the mugger for example, he (or she, let’s not be gender specific) forces you to exchange your life for your money, but before the mugger approaches you both of these are already yours. This is also true for the work example: you have to trade your job for your sexual capacities, both of which are rightfully yours before Mr./Mrs. Spacely tells you to put out or get out. And unless sexual favors were part of the contract negotiations this isn’t part of your obligation to the employer.

    But coercion in the workplace usually (from what I can tell) centers on employee shirking, or the concern that the employee is not performing to the level actually promised when he/she was first hired. The astute reader would then ask, why does the employer even have to coerce to begin with? The answer to that mystery is found in the principal-agent problem, something I research and write about often.

    Thanks for the great article.

    Sulla
    MeshEcon.com

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  • jasonmarks

    Ms. Flanigan:

    (b) isn’t consistent with libertarian principles. assuming employer and employee haven’t made a formal contract with a set duration for the employment, you have an at-will employment situation where either the employee or employer is free to terminate the employment relationship at any time. essentially, every time a new task is assigned, the employee has the choice to do the task or quit. (the alternative, that there is an implicit contract and impermissible reasons to fire someone, can only be obtained by calling on state regulatory power outside of the two contracting parties.)

    thinking about this in a perfect libertarian world, employers who made demands of sex or other undesirable services from the employees would suffer economically as the more economically productive employees quit or refused to take jobs based on the employer’s reputation. but there would still be the opportunity for the lecherous boss to coerce less skilled/competent employees who lacked any better job opportunity.

    i personally find libertarianism to be a dead-end mainly because we have ample empirical evidence that regulated economies perform better. but it’s also the case that naked capitalism leads to social results (e.g., employees coerced into sex) that most of us abhor.

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  • Group C

    The argument of using the merits of differentiation betwixt coercive constraints in the workplace using an example of the kidney mugger fails to address the issue of one’s own self-interest or “skin in the game” ( cause for personal ethical behavior) in a particular coercive situation. For example, the situation with the kidney mugger does not address the intent of the mugger in the sense of his “bargaining power” but rather from the side of the victims need, and therefore entitlement of the kidney. Is it necessary for the mugger to receive the $5000 in order to fulfill his own (as Hayek would say) “coherent plan” that serves his own ends? and therefore, it is weighted against the victims ability to pay the $5000 to act in accordance to a “coherent plan of his own”. While Hayek would argue that the kidney mugger would necessarily have to use “threat of force or violence” in order to enforce this exchange of $5000 for the kidney, it would therefore be considered wrong according to Hayek, because it is essentially “bullying”.

    On a different point, permissible coercion can more accurately be defined (referencing Mill and Bentham’s utilitarianism) as the appropriate requisite of utility through just means, by confining the ability of the opposing individual’s normative rights in a manner in order to preserve the greater good or avoid a greater harm that supersedes the opposing individual’s respective interest. Acting in accordance with another individual’s coherent plan to serve the ends of himself allows for impermissible coercion, which Flanigan argues is essentially the “wrong” form of coercion in of itself because it conflicts with the exceedingly moral intent of the coherent plan of the opposing individual.

  • AWCooley

    While certain things are not stated explicitly in employee’s contracts, it seems impermissible to imply that a radical change in job description (e.g. secretary to prostitute) may be required by an employer. While some tasks have been a part of certain jobs for so long (e.g. secretaries getting coffee for their bosses) that they are implicit, requiring sex of an employee would not fall into this category and must be explicitly stated in the contract. I have to agree with Flanigan that if prostitution was an explicitly stated provision of an employees contract, then it would not be coercive –impermissibly constraining of employees choices — for the employer to request sex of the employee. Defining coercion as an impermissible constraint of employee’s choices seems more accurate than simply defining it as constraining employee’s choices.

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