I’m reading, savoring actually, a fascinating essay on “guard labor” i.e. people paid to enforce the rules upon others. The TSA, those guys at the front desk of office buildings that check ID cards, the mall cops, the supervisors who’s only role is to be sure everybody keeps their nose to the grind stone, etc. etc. To first order guard labor is unproductive labor.
One fascinating story in the essay is about canning. Unsurprisingly cans used to be sealed by hand. That labor was skilled and scarce; and so they could organize to demand high wages during the short but intensive periods when the crops flowed in and had to be canned before they spoiled. Naturally the canners sought alternatives and inventors were happy to sell them machines that promised to seal the cans – converting a labor expense into a capital expense. Interestingly the machines didn’t work but the canners still bought them. Why? Because they could use, as a threat, to negotiate lower wages.
Look at this amazing photograph of a sardine canning factory.
These are packers, not can sealers though.
There is another fascinating story about long haul truckers. If you drive a truck, but you don’t pay for the gas, then you tend to drive faster so you can get the job done and go home. That tiny detail shapes the trucking industry. Owner operators (i.e. small businessmen) have a competitive advantage on long routes because they drive slower so their overall costs are lower. Well, at least that used to be the case. Once technology allowed the fleet owners to monitor the moment by moment trajectory of the truck they could automate the behavior. A lot of owner-operators went out of business.
That is, in effect, the same story as all of franchising. If you can create guards then you can roll up small businesses into a franchise chain. The guards might be technology based (as with the tracking computers in the fleet’s trucks), or they might be tight process and procedures (as with six sigma or some currently popular team programming methodologies), or they might be done with guard labor. In most cases you use a mix of all the above.
Like “coordination cost” the term “guard labor” (with it’s hint of unproductive and oppression) is a good tool to stuff in your tool kit. Enjoy the paper (pdf).
I need a pipe that directly pushes anything Samuel Bowles rights directly into my brain.
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