Companies are Private Governments

And Basecamp has just slipped into Autocracy

The philospher Elizabeth Anderson is responsible for the concept that businesses run as ‘private governments’, lacking democratic principles that we expect in our ‘public governments’, made up of people we elect to office and the laws and policies we enact through them. In her book, Private Government: How Employers Rule Our Lives (and Why We Don't Talk about It), Anderson explains how we have conserved pre-democratic governance within the business as a holdover from preindustrial practice. As the publisher wrote about her book,

One in four American workers says their workplace is a “dictatorship.” Yet that number probably would be even higher if we recognized most employers for what they are—private governments with sweeping authoritarian power over our lives, on duty and off. We normally think of government as something only the state does, yet many of us are governed far more—and far more obtrusively—by the private government of the workplace.

I was reminded of Anderson’s work by the recently posted Changes at Basecamp, in which Jason Fried announces that Basecamp, like Coinbase, is banning political discussion on the company’s internal communication platforms. When considered along with the five other changes announced, it feels more like a rejection of being a democratic organization, and is instead demanding that the company exists to make products, and not to be a community of people:

1 | No more societal and political discussions on our company Basecamp account. Today's social and political waters are especially choppy. Sensitivities are at 11, and every discussion remotely related to politics, advocacy, or society at large quickly spins away from pleasant. You shouldn't have to wonder if staying out of it means you're complicit, or wading into it means you're a target. These are difficult enough waters to navigate in life, but significantly more so at work. It's become too much. It's a major distraction. It saps our energy, and redirects our dialog towards dark places. It's not healthy, it hasn't served us well. And we're done with it on our company Basecamp account where the work happens. People can take the conversations with willing co-workers to Signal, Whatsapp, or even a personal Basecamp account, but it can't happen where the work happens anymore.

Retrenching after a period of growing polarization within company discourse, perhaps? And anyone that does discuss these things will be shown the door, at least if it happens on the company Basecamp, we can suppose.

So, they are saying to leave your whole person at home. And get ready for another five rules that drastically cut back on employee voice and autonomy. The five can be considered stepping back from past decisions that were making the company more than a network of individuals, and which added cultural overhead:

2 | No more paternalistic benefits -- they aren't doling out a wellness allowance, a continuing education allowance, or other social benefits. Just hard cold cash and profit-sharing.

3 | No more committees -- putting decision-making back in the hands of the founders and the managers that they deputize to own decision-making in designated domains. Specifically, he writes:

The responsibility for negotiating use restrictions and moral quandaries returns to me and David. A long-standing group of managers called "Small Council" will disband — when we need advice or counsel we'll ask individuals with direct relevant experience rather than a pre-defined group at large. Back to basics, back to individual responsibility, back to work.

When we -- the founders -- need advice we'll rattle your cage. Get back to work!

4 | No more lingering or dwelling on past decisions -- Basically, outlawing discussion about how the company operates since that would involve reviewing past decisions. So, if someone thinks the diversity and inclusion program isn’t broad enough? Don’t bring up the decisions that led us here!

He seems to be calling for a return to autocracy:

It's time to get back to making calls, explaining why once, and moving on.

And who is making those calls? The founders and designated managers. Alone. And if you don't like those decisions? Tough.

5 | No more 360 reviews -- Like all other social decision-making, power is being concentrated in direct reporting relationships. Who cares what your team members think.

6 | No forgetting what we do here -- which is:

We make project management, team communication, and email software. We are not a social impact company.

So this is a company that doesn't want to be involved in working toward social good, with the exception of whatever good that the products do for customers. Fried says,

Employees are free to take up whatever cause they want, support whatever movements they'd like, and speak out on whatever horrible injustices are being perpetrated on this group or that (and, unfortunately, there are far too many to choose from). But that's their business, not ours.

Except, presumably, creating a movement within the company to counter these policies.

And he makes it all very clear who has called this return to the bronze age:

Who's responsible for these changes? David and I are. Who made the changes? David and I did. These are our calls, and the outcomes and impacts land at our doorstep. Input came from many sources, disagreements were heard, deliberations were had. In the end, we feel like this is the long-term healthy way forward for Basecamp as a whole — the company and our products.

I wish them luck, but I wonder. Will they just encourage an out-migration of those who were seeking to move the company in a less libertarian direction? We'll have to see.

Elizabeth Anderson makes the case that we have internalized a fiction from the economist Adam Smith, that workers are free to leave an employer if they are unhappy with the work practices there. To some extent it is true, and I am wagering that some of Basecamp’s developers might in fact vote with their feet, since they will not be able to vote with their mouths, anymore. However, many may not be as free to leave and will have to accept a more autocratic workplace.

And of course, this will have a chilling effect on other democratic workplaces, where CEOs contemplating similar moves may think of themselves as libertarian liberators, cutting through the bullshit, rather than autocrats that want to stifle dissent and push back any striving for more co-determination in the workplace.

These are indeed dark times.