CHAPTER THIRTY-ONE

The Job as Property Right

IN EVERY DEVELOPED NON-COMMUNIST country, jobs are rapidly turning into a kind of property. The mechanism differs from culture to culture; the results are very much the same.

In Japan there is lifetime employment for the permanent (that is, primarily, male) employee in government and large businesses. This means, in effect, that short of bankruptcy the business is run primarily for the employee, whose right to the job has precedence over outside creditors and legal owners alike.

In Europe, increasingly, employees cannot be laid off; they have to be bought out with redundancy payments. In a few countries, such as Belgium and Spain, these payments can be so large as to be equivalent to a full salary or wage over the remainder of an employee’s lifetime for a worker with long years of seniority. And the High Court of the European Community, in a decision which is considered binding in all member countries, has ruled that the claim to redundancy payments survives even an employer’s bankruptcy and extends to the other assets of the owners of the employing firm.

In the United States recent legislation has given the employee’s pension claim a great deal of the protection traditionally reserved for property. Indeed, in the event of bankruptcy or liquidation of the employing firm, employee pension claims take precedence over all other claims (except government taxes) for up to 30 percent of the employing firm’s net worth.

The various fair-employment regulations in the United States, whether on behalf of racial minorities, women, the handicapped, or the aged, treat promotion, training, job security, and access to jobs as a matter of rights. It’s getting harder to dismiss any employee except “for cause.” And there is growing pressure, including a bill before Congress, to make the employer responsible for finding the employee an equivalent job in the event of a layoff.

Jobs, in effect, are being treated as a species of property rather than as contractual claims.

Historically there have been three kinds of property: “real” property such as land; “personal” property such as money, tools, furnishings, and personal possessions; and “intangible” property such as copyrights and patents. It is not too farfetched to speak of the emergence of a fourth—the “property in the job”—closely analogous to property in the land in premodern times.

The property rights in the job, such as pension claims or lifetime employment, cannot be bought or sold, pawned or bequeathed. Nor can they be taken away from their “rightful owner.” And this was pretty much the way the law treated property in land in medieval Europe and premodern Japan.

This parallel is no accident, I submit. The emergence of property rights in the job does not result from union pressures or government fiat; neither, for instance, had much to do with Japan’s lifetime employment practices. Rather, what a Marxist would call the “objective forces of history” have dictated that first land and now jobs would be accorded the status of real property.

For the great majority of people in most developed countries, land was the true “means of production” until well into this century, often until World War II. It was property in land which gave access to economic effectiveness and with it to social standing and political power. It was therefore rightly called by the law “real” property.

In modern developed societies, by contrast, the overwhelming majority of the people in the labor force are employees of organizations—in the United States the figure is 93 percent—and the “means of production” is therefore the job. The job is not “wealth.” It is not “personal property” in the legal sense. But it is a “right” in the means of production, an ius in rem, which is the old definition of real property. Today the job is the employee’s means of access to social status, to personal opportunity, to achievement, and to power.

For the great majority in the developed countries today the job is also the one avenue of access to personal property. Pension claims are by far the most valuable assets of employees over fifty, more valuable, indeed, than all his other assets taken together—his share in his house, his savings, his automobile, and so on. And the pension claim is, of course, a direct outgrowth of the job, if not part of the job.

The evolution of the job into a species of property can be seen as a genuine opportunity. It might be the right, if not the only, answer to the problem of “alienation,” which Marx identified a century and a quarter ago as resulting from the divorce of the “worker” from the “means of production.”

But as the long history of land tenure abundantly proves, such a development also carries a real danger of rigidity and immobility. In Belgium, for instance, the system of redundancy payments may prevent employers from laying off people. But it also keeps them from hiring workers they need, and thus creates more unemployment than it prevents or assuages. Similarly, lifetime employment may be the greatest barrier to the needed shift in Japan from labor-intensive to knowledge-intensive industries.

How can modern economies cope with the emergence of job property rights and still maintain the flexibility and social mobility necessary for adapting quickly to changes? At the very least, employing organizations will have to recognize that jobs have some of the characteristics of property rights and cannot therefore be diminished or taken away without due process. Hiring, fi ring, promotion, and demotion must be subject to pre-established, objective, public criteria. And there has to be a review, a pre-established right to appeal to a higher judge in all actions affecting rights in and to the job.

Standards and review will, paradoxically, be forced on employers in the United States by the abandonment of fixed-age retirement. To be able to dismiss even the most senile and decrepit oldster, companies will have to develop impersonal standards of performance and systematic personnel procedures for employees of all ages.

The evolution of jobs into a kind of property also demands that there be no “expropriation without compensation,” and that employers take responsibility to anticipate redundancies, retrain employees about to be laid off, and find and place them in new jobs. It requires redundancy planning rather than unemployment compensation.

In the emerging “employee society,” employees through their pension funds, are beginning to own—and inevitably will also control—the large businesses in the economy. Jobs are becoming a nexus of rights and a species of property. This development is surely not what people mean when they argue about “capitalism,” pro or con. But it is compatible with limited government, personal freedom, and the rational allocation of resources through the free market. It may thus be the effective alternative to the “state capitalism” of the totalitarians, which, under the name of “communism,” makes government into absolute tyranny and suppresses both freedom and rationality.

(1980)