Author: Brishen Rogers

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American “exceptionalism” and the beautiful game

Regardless of what happens in today’s U.S.-Germany match, we can expect more heated discussion of whether soccer will ever really catch on here.

Granted, that may already be changing. Sunday’s U.S.-Portugal match netted over 25 million viewers, well above the average for the last NBA finals or World Series. More and more of each new generation of American kids are brought up in the game, a trend likely to continue as football’s concussion crisis pushes parents to opt-out of that sport. And as my colleague David Post notes in a wonderful analysis over at Volokh, the growth of interest in the beautiful game has been phenomenal over the past two decades.

Yet, as Post observes, “we will not engage in a sustained bout of national soul-searching and self-doubt if our team does poorly.” Italy, France, England, Argentina, Brazil…not so much. Post is undoubtedly correct here. But why? There are some stock explanations, none of which quite hold water for me.

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Treating Car-Hire Services as Public Goods

I love Emily Badger’s Wonkblog piece about Uber’s effect on the taxi industry. Badger addresses many different sides of the issue, discussing the likely impact of Uber on medallion owners, on drivers, on medallion management companies, and on consumers. She is non-dogmatic throughout. She moots a few different potential outcomes, recognizing that much will depend not just on the “market” itself but also on the strategic behavior of the different institutional players. I wish all economic journalism were this good.

I do want to expand on Badger’s treatment of taxi deregulation, and to say a little more about my idea, in my last post, that regulators “treat car-hire services as public goods.” In retrospect, that post jumped too quickly from that idea into a broader argument about distributive policy and politics. That was unfortunate, I think, because the possible regulatory approaches here warrant deeper consideration.

On the first point, Badger notes that various Sunbelt cities deregulated their taxi industries in the 1970s and 1980s, with decidedly mixed effects. Supply went up, but fares also went up, and service seems to have declined. Drivers refused short trips and trips to poorer parts of town more often. Airports became a sort of bazaar.

Why did this happen? Some economic models of the traditional taxi industry suggest that it has pervasive information asymmetries. In the absence of set prices, consumers don’t know how much a standard ride will cost, and may not want to haggle with drivers. Riders and taxis also face high search costs, especially in relatively low-traffic areas. Another peculiarity of the taxi market, related to search costs, is that excess supply (in the form of vacant cabs) can affect demand. Intuitively, if consumers have difficulty finding cabs because cabs are scarce, they may tend not to search for cabs.

Uber has solved both problems, at least for the wealthier users who can utilize it. It dramatically reduces search costs, and its standardized rates prevent price gouging. It also solves a collective action problem among telephone-dispatched drivers. A potential client may take another vacant cab that passes by, and a cab headed toward a call may pick up another fare on the way and never arrive. Under Uber’s watch, though, riders trust that their cars are going to arrive, and drivers can’t take one another’s fares. +1 for private regulation.

None of this means, however, that regulators should allow Uber to continue competing directly with traditional taxis. Regulators should also keep in mind what Uber means for drivers, and what it means for the poor.

First, on the poor. Badger notes that the basic tradeoff within the cab sector has long been restricted entry in exchange for equity-oriented regulations. Medallions grant an exclusive license to operate, but drivers must follow a fare schedule, accept short trips, and not discriminate on the basis of race or neighborhood. Badger also notes that the current structure of the industry—in which drivers lease cars from medallion owners or medallions management companies—actually exacerbates some of the problems faced by the poor in getting service. Drivers have little incentive to answer calls in poorer areas of town, and regulators don’t discipline them often.

Uber might further exacerbate that dynamic. The poor are less likely to have iPhones or other devices needed to e-hail and Uber. More importantly, if UberX drivers continue to work selectively during the most lucrative shifts—when wealthier consumers are coming home on weekend nights—then cab drivers will need to make up that lost income. One natural response will be for cab companies to lobby for higher fares to offset their lower utilization rate. On net, then, Uber would enhance wealthier consumers’ welfare but reduce poorer consumers’ welfare.

Now, I think there are ways to ensure decent service for the poor, but first let me address how to ensure equity for cab drivers. In particular, since entry and price controls seem necessary for a street-hail market to operate, regulators might tweak licensing requirements and property rights to help drivers to capture more of the rents created by those controls. Here are some potential ways of doing that.

First, regulators might make it impossible for third parties to own medallions. Toronto recently took that step. Drivers could then directly capture monopoly rents. Second, cities could permit third-party medallion ownership, but require that owners directly employ any third-party drivers rather than leasing them cars. Such drivers could also unionize— as current drivers cannot—and then press both cab companies and cities to ensure decent rates for drivers.

Third, regulators could literally turn cab service into a public good. A public authority could own or lease cabs and employ drivers to operate them. Those drivers might in turn unionize and force the authority to share any monopoly rents with them.

Now, none of these options are optimal. Drivers who hold medallions could become a classic cartel. A public authority may become corrupt or bureaucratic. A cab drivers’ union might become a partner in ensuring mediocre service. Moreover, any regulations that increase consumer costs will drive consumers toward Uber, threatening a downward spiral in the traditional street-hail sector.

But the alternative may be a cab sector that goes under or fails to serve poor communities. This is why, as I noted in my prior post, I suspect cab drivers are going to need transfers to keep their heads above water, particularly if they depend more and more on poorer consumers.

The real advantage of these three options over third- party medallion systems is that they would enable such transfers without thereby subsidizing medallion owners. The public option might be best, since it would also enable public authorities to more easily direct drivers toward poorer areas of town, supplementing public transit systems more effectively—as is common in Europe. Of course, whether it is possible to create such a public system given vested interests’ power in the industry is another question entirely.

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The Uber Wars or: Why We Need a New Politics of Distribution

Uber is sparking Silicon Valley’s first major labor conflict. With the exception of online news, past “disruptive technologies” like file-sharing, internet search, and Apple’s various innovations haven’t had a major direct effect on working class jobs. But Uber is now permanently altering the cab industry, which has many visible workers already living close to the economic margins. With electric cars, autonomous cars, and 3D printing on the horizon, this may well be a harbinger of things to come.

As a result, it is worth thinking about how to address the distributive conflicts that are emerging. Current debates around Uber pose choices between regulation and markets, and between producerism and consumerism. In this post, I argue that the former is a false distinction, and that the latter doesn’t begin to capture the complexity of the issues. Spoiler alert: I don’t have any ready solutions to these challenges, though I do believe we need to start thinking about them differently.

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Governing Global Garment Production (Pt. 2)

In my last post, I argued that the two Bangladesh fire and safety agreements reflect the failures of existing legal regimes, both public and private. The agreements intend to impose some basic standards on the Bangladeshi garment industry; rather than competing (almost) entirely on the basis of cost, as existing law encourages them to do, brands will collaborate to ensure that suppliers’ factories are safe. In this post, I’ll defend the Accord (signed between most major European brands and various unions) as substantively preferable to the Alliance (an agreement among U.S. brands), because the Accord has the potential to reshape the political economy of global garment production and governance.

To see why, note that both agreements invite a question common in the sociology of law: what explains the emergence of particular legal regimes at particular times? As Professor Alan Hyde has pointed out, this question is surprisingly understudied in the international labor field. Hyde proposes that transnational labor governance institutions emerge to solve coordination problems when all participants “would gain by cooperation but will be disadvantaged if their rivals defect.” That theory has some traction here. Nations have a common interest in minimizing child labor, but no nation can do so alone; brands have a common interest in ensuring minimally safe factories, but must cooperate to do so. Once the failures of existing governance regimes became clear after the Rana Plaza and Tazreen Fashions disasters, brands needed a new system. So they built one.

But such an account is incomplete—as Hyde would surely agree—for it disregards the need for a prime mover to build trust among disparate actors. I’ve addressed this question in the context of domestic labor organizing, arguing that organizers actively shape workers’ preferences and build solidarity, in part by creating moral crises (read: strikes) in which workers rely on each other out of necessity. As it turns out, unions and workers’ rights NGOs played a central role in the shaping of the Accord, and then, by extension, the Alliance.

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Governing Global Garment Production (Pt. I)

Again, I’m very happy to be guest-blogging at Co-op this month. For my next couple posts, I’d like to focus on the situation of garment production in Bangladesh, which raises fascinating issues of global governance.

450px-Dhaka_Savar_Building_Collapse

About a year ago, major garment brands in the E.U. and U.S. announced separate and competing initiatives designed to prevent a recurrence of the horrific 2012-2013 Bangladesh factory disasters. The “Accord on Fire and Building Safety in Bangladesh” (“Accord”) was negotiated between various unions and most major European garment brands, as well as some American brands; the “Alliance for Bangladesh Worker Safety” (“Alliance”) was developed by U.S. brands, in particular Gap and Walmart, in conjunction with industry associations in Bangladesh. Under both, brands commit to source from Bangladesh for a period of time and to institute comprehensive systems of factory inspection and remediation.

A year in, the media has begun to report on tensions between the two groups around factory inspections, as well as other growing pains. A recent report from the NYU Stern School also criticized both agreements for doing too little to combat unauthorized subcontracting, arguing that their similarities outweigh their differences. While the press and academics should of course try to understand such tensions, and should point out each agreement’s structural weaknesses, I would argue that the Accord has transformative potential as compared to the Alliance. This point should not be lost in discussions.

In this post, I’ll outline the structural conditions that led to the agreements, and why they represent an important step forward in global labor standards protection. It is a sort of “explainer,” with apologies in advance to those already immersed in the details of the agreements. In a follow-up post, I’ll discuss the importance of the Accord in particular, arguing that it could be the template for a new global labor governance regime.

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On the dangers of believing the worst

Thanks to Dave Hoffman and the Co-op gang for having me back here. I’m planning to blog about global labor issues, starting with some thoughts on the recent news that Nicholas Kristof’s source for some of his anti-trafficking columns – the high-profile Cambodian activist Somaly Mam – “fabricated at least some parts of her own story and the dramatic, heartrending stories of girls she said were sold into sex slavery.”

Now, I can’t deny a bit of shadenfreude here—not because I harbor any malice for Mam or her organization, but rather because of Kristof’s know-nothing column of February insisting that academics should be more engaged in policy debates. The thing is, certain law professors have long argued that criminalization-based global regulatory approaches to sex trafficking can be downright counterproductive, and Mam’s organization seems to have been exemplified some of those trends. In particular, it seems to have thrived by casting trafficking as a wrong perpetrated by particular bad actors rather than a complex social phenomenon rooted in extreme economic and gender inequality. I’m oversimplifying, of course–sex trafficking is obviously a terrible practice, and those who perpetrate it are certainly bad actors. Nevertheless, this approach helped lead, some have argued, to “abusive crackdowns on the people [Mam] claimed to save,” rather than more nuanced efforts to prevent trafficking and assist its victims in the first place. Kristof might have called a law professor before embracing Mam’s work so uncritically.

This affair echoes a broader disturbing trend in public debate around global labor issues, particularly for unskilled production workers and the vast majority of trafficked workers who are in the domestic, agriculture, and garment sectors: namely, many activists’ and consumers’ uncritical belief of terrible stories of labor or other exploitation in the Global South.

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Unions as Bottlenecks?

As I noted in my first post, Bottlenecks suggests that equality of opportunity requires substantial economic equality. I read Fishkin’s second principle as doing a lot of work here. A sufficiently robust set of welfare and income supports would make a far more diverse set of life plans realistic for citizens, and would reinforce families’ and individuals’ diverse views of the good.

What policies does this require? In addition to substantial tax-and-transfer redistribution, Fishkin also notes that opportunity pluralism might support public and private efforts to limit salary differentials within particular firms (p203), though he doesn’t develop the idea in detail. In this post, I’d like to pick up that line of argument, and suggest that opportunity pluralism would support quite robust wage-compressing institutions that limit pre-transfer income inequality. I’m thinking here of unions, which have traditionally been a very effective means to greater economic equality.

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Opportunity Pluralism, Class, and Distributive Justice

At the outset, let me say how happy I am to be a part of this symposium, and how much I’m looking forward to our conversation. Joseph Fishkin’s Bottlenecks strikes me as an important and urgent addition to thinking on equal opportunity, particularly in a liberal egalitarian vein. I’m planning at least two posts. This first post will summarize Fishkin’s argument (as I understand it), then raise some questions about the relationship between opportunity pluralism, class, and distributive justice. Another will consider whether opportunity pluralism supports or even requires more robust wage-compressing institutions, in particular labor unions. Time permitting, and depending on other commentators’ interventions, I may also post some thoughts about opportunity pluralism and employer responsibility under antidiscrimination law.

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