Monday, May 12, 2014

The Problem with Jeff Tucker's View on Employee-Employer Relationships

By Nick Badalamenti

In the course of both reading & watching the comments in regard to the following post I feel it important to both dispel a myth floated by Tucker and briefly show how this myth in the form of humanitarianism is dangerous on a larger level if its followers hold it over the NAP:

"However, a business that is humane and seeks the flourishing of its employees and aspires to generally higher ends will be more successful in the long run."

This is categorically false in its attempt to be universal (unlike the NAP). RW points this out in his line by line dissection, especially in his reference to Goldman Sachs, but I wanted to highlight this point with the above sentence and expound just a bit further. 

Humane: "having or showing compassion or benevolence."

Let me be the first to tell, disappointing to many I'm sure, that there are many business environments under which a certain set of people are successful because their conditions are NOT 'humane'-in fact, to use a Tucker term, they are 'brutal'.

Now before I became a small business owner I was a sales manager for a company much larger than my own. I've been in sales in one form or another for most of my adult life. Rarely could I ever consider my working conditions in some of the more profitable firms as "humane". In fact, I'd say for those who didn't perform, they were especially the opposite. Further, this was a motivator for certain types of people, the people Tucker apparently would label as 'Brutalists'.(Also known as productive people, but I digress.)

I was originally going to end my rant with a link to "Glengarry Glen Ross", not only to give you an excellent reference point for the nature of voluntary association, but do so in a Brutalist way. 

But, not wishing to offend the delicate sensibilities of our left leaning 'libertarian/humanitarian' brethren in the hopes they might get the message, I decided to end instead with a link from "Boiler Room", which sends the same message in a less "Brutalist" fashion:


RW note: Nick's post brings to mind a comment made by the basketball great Bill Russell. After Red Auerbach retired as coach of the Boston Celtics, he made Bill Russell the player-coach. In one of his books, I forget which one, Russell wrote that one thing he didn't like about the way Auerbach coached was the way he yelled at certain players, such as Celtics legend Tommy Heinsohn. When Russell started coaching, he was going to treat every one "equal." But he soon realized that Heinsohn would never hustle in practice. One day Russell yelled at him and Heinsohn got into gear. Russell then realized that some players needed a boot in the behind to get them going.  Russell wrote, "It was as though from that point on I would look at my watch at some point during practice and realize, it's time to yell at Heinsohn."

There are some people that are self-driven and others who need a tough task manager. On the free market both opportunities are available. People eventually find the spot where the environment suits them. 

I have a side business that involves internet advertising sales. It is now run by a sales manager, but when I first launched it, I managed the four sales people. They were all on commission and I thought that would be enough to motivate them. But that wasn't always the case. Of the four, two I considered exceptionally good salesmen. One was self motivated and brought in huge sales numbers regularly. I left him alone to do his own thing. The other didn't come close in sales until I got on him. Then he exploded as a sales person, but he still needed that occasional kick in the butt.

In addition to different types of sales people, there are different types of sales techniques.

For self-driven sales people selling a quality product, I think Harry Browne's book is the best for learning how to sell (SEE: How to Get a Wall Street Job in One Hour) but it is not for everyone.

But further, some people just need that good kick in the butt before they reach top performance. Tucker apparently has a problem with this, but this is a failure on his part in recognizing that people are different. There are many, many different types of people in the world and they are looking for different degrees of support and supervision---from no support to aggressive support. Tucker is looking at the world from the perspective of the way he wants to be treated and somehow has jumped to the conclusion that everyone wants to be treated this same way. On a deeper level, I think Tucker also fails to understand that the boss/owner/investor gets to call the tunes. Tucker may not always be happy with this fact, but, of course, the simple solution is to move on if you have a conflict with your boss/owner/investor, rather than attempt to convert the world to a "humane" view that is in conflict with a particular boss/owner/investor and with reality.


  1. I have been a small business owner for almost 30 years -- sometimes so small as to just be me, but I've had as many as 12 employees. I always try to treat people decently. I have found, however -- over and over again -- that if you make a policy you think will help people, a certain subset of your employees will find a way to screw you with it to their own self-advantage. They will do so even when the policy was clearly not meant to be used the way they used it. Upon which, the "I'm trying to be a good guy" policy got terminated. Years ago I stopped trying to go above and beyond to make it great for employees; they're too abusive of such policies.

    It's easy to see why many of the top-managers in the country are assholes (and I've met some very high-level managers over the years). You almost can't run a business and not be -- at least at times -- a major asshole. The poor, "downtrodden" employees will run all over you if they smell weakness.

    1. Just so you don't make the mistake of thinking "manager" is just another term for "full-time asshole." Too many managers couldn't lead their way out of a paper bag, but oh how they love the asshole part.

    2. It is foolish to think that the same people are not taking advantage of you when your an asshole also, in fact, fear based management usually keeps good employees from voicing good ideas.

    3. "I have found, however -- over and over again -- that if you make a policy you think will help people, a certain subset of your employees will find a way to screw you with it to their own self-advantage."

      That's true. The way around that is to have your employees have a say in who you hire. Most all my employees are related amongst each other and if I get real busy I have them bring in extra people making them responsible for the new employee's actions.

  2. It amazes me how Tucker and other "thick" libertarians seem to have no problem talking about how we should all "aspire to generally higher ends."

    WHAT higher ends? Who decides what my ends should be? What makes your ends better than mine? My highest end is my own rational self interest. If you desire to prevent me from aspiring to it, you are no better than the government's goons. We all identify for ourselves what ends we value highly and which ends we don't value highly. He is attempting to impose his own values scales on us. What makes this man different from a religious fanatic who burns heretics at the stake, other than a lack of matches and lighter fluid?

  3. It's a good post, but I think Tucker is appealing to feminists here and "working women" and the legion of corporate policies that make it easier for them to be employed (tax incentives, mandated maternity leave, fear of lawsuits), while shifting burdens to men.

  4. Another basketball anecdot but from Italy. The American coach Dan Peterson was head of Olimpia Milan in the 80ies. Dino Meneghin, the center, complained that he had been hurt and his mouth was bleeding. Dan's brutal reply in Italian with thick American accent was: "sputa il sangue e gioca" (spit the blood and play).

  5. I doubt their is anything in your article that Jeffrey Tucker would object too in how a business man should run his business. I fail too see how Jeffery aspiring people to be humanitarian violates the NAP. The NAP needs to be the starting point of any religious or philosophical world view and you haven't shown that Jeffrey has abandoned the NAP for humanitarianism or anything else. You also have written an entire story based on what you presume Mr.Tucker would do in certain situations based on pure speculation. Why don't you ask him instead of pretending to know his inner thoughts?

    As an anarchist I operate a horizontally run business. I pay may workers living wages so they don’t need to go out and find another job. They run my business like they own it and they work more productively. My business produces more which compensates for the extra pay they receive. My workers take responsibility for their actions and I’m not needed to micro manage the operation. Maybe it's my personality but I treat my employee’s like human beings. This method of doing business frees my time up so I can generate other streams of income from some where else. I never thought about it before but you could call this method of operation humanitarian but the reason I run it this way is because of profit.

    You mentioned that you pay commissions to some of your employee's and I do likewise. My sales guy make a scaled percentage based on how big the project is and time spent selling it. Some guys make a lot more then others depending how motivated they are. Some are semi retired and sales give them a little something to do to keep busy. Maybe my business is different but I don't push them because its only money out of my pocket if they actually sell something. If they underestimate the job then they eat it because what their selling is labor but that doesn't happen very often.

    I have a friend who works mid level in a firm and he told me he makes it a point not know the people working under him because he may end up having to fire them. That may sound brutaslist but that's probably humanitarian in the long run. Nobody wants to fire a friend.

    A more brutalsit way of running things usually involves an owner who pays one boss a lot of money to drive a bunch of low paid workers to produce. Their moping around wishing they were working some where else with “It’s not my job” tattooed on their heads.

    In a volunteerist society owners and workers organize themselves based on what free market forces dictate. It doesn't seem like a contradiction that such a society would flourish around humanistic tenets based on the NAP.

    Some posters here at the Economic Policy Journal wish Jeffery Tuckers to just implode. I'm not sure why anybody would wish anyone's business to not succeed.

    I love competition in my business. If my competitors are busy that means I’ll be working. I WANT them to succeed. Competition is good, for it allows the client to recognize value and it generates MORE economic activity within that community.

    It’s a win, win all around.

    1. Excellent points.

      Yeah, straight commission sales needs no hard ass management, the fact that the sales staff only eats when they make a sale, is itself the only motivation that really matters. Which is why straight commission industries like insurance, real estate, financial service etc- has such a high turn over. And if the sales force is a 1099 employee relationship, there is very little fear based management can do because they will tell a hard ass manager to take his job and shove it this is a 1099 relationship. They will say and do everyday.

    2. "You also have written an entire story based on what you presume Mr.Tucker would do in certain situations based on pure speculation. "

      I'm not sure if you are referring to me, or RW's comments in the piece above, but what presumption have I made other than use Tucker's own quote? When I read "You mentioned that you pay commissions to some of your employee's and I do likewise.", I can only assume you are referring to RW, because I made no such claim in my piece..but it'd be best if you can clarify for us.

      "As an anarchist I operate a horizontally run business. I pay may workers living wages so they don’t need to go out and find another job. "

      I find two things interesting about this statement.

      1. That you suggest that running your business "horizonatally" is a result of your anarchist philosophies. Could you explain specifically why?

      2. That you pay your employees "living wages". How do you determine how much they need to live? Do you think that market forces are not at play?