Reclaiming the system: An interview with Lisa Herzog

by Udit Bhatia

Prof. Lisa Herzog is Professor of Political Philosophy at the University of Groningen. She works at the intersection of political philosophy and economic thought, and is the author of Inventing the Market: Smith, Hegel, and Political Theory (OUP, 2013). Her publications address the philosophical dimensions of markets, liberalism and social justice, ethics in organisations, and the future of work. Her current work focuses on workplace democracy, professional ethics, and the role of knowledge in democracies. This interview by Ideology Theory Practice co-editor Udit Bhatia is based on Lisa Herzog’s latest book, Reclaiming the System: Moral Responsibility, Divided Labour, and the Role of Organizations in Society (OUP, 2018).

Udit Bhatia: Your first book looked at conceptualisations of the market in the work of Smith and Hegel. How did you move from this onto moral responsibility and division of labour in complex organisations?
 
Lisa Herzog: While I worked on Smith and Hegel, the Global Financial Crisis happened. I read a lot about it—all this stuff about synthetic financial products, risk models, conflicts of interests, “Chinese walls”, insane bonuses—and the repercussions in the broader economy. When thinking about it, two things emerged for me. First, what had gone morally wrong in this crisis had to do with markets, no question – but it also had to do with things going wrong within organisations, in this case, financial organisations. And second, my assumptions—including what I had learned in my studies of economics—about organisations were probably about as wrong and one-sided as the assumptions I had held about markets before I delved into the history of ideas to sort out some of these assumptions and arguments about them. I also realised that philosophy had not very much to say about organisations, despite the fact that they shape the daily life of millions of people. So, I decided that I wanted to understand what it means to be an ethical agent when you’re a “cog in the wheel” of a complex organisation—and whether there could be something like “ethics for cogs in wheels” (that was my informal working title).
 
UB: Reclaiming the System gives us a rich account of organisations as spaces where individuals—cogs in the wheels, as you describe them—can act as responsible agents and it explores organisational conditions that can facilitate this. One response, which you challenge in the book, is that we should focus on structural questions about the way markets are organised rather than the internal aspects of business firms. Could say a bit more about the relationship between the two approaches?
 
LH: Both are crucially important to keep an economic system morally on track. Without them, it can easily spiral out of control and become the kind of moral monster that we see in many countries, with so many injustices and the exploitation of humans and of nature. Both are coupled—in the sense that how one level is regulated impacts what happens on the other—though not in a strictly deterministic way. Even if we had excellent market regulation, this would not exclude the possibility of internal problems within business firms (and the same goes for other organisations and their respective regulatory frameworks). On the other hand, even if regulation is deficient and there are dysfunctional pressures on organisations, that does not mean that they have no wiggle-room whatsoever. For example, business firms may find market niches in which they can sell ethically-sourced products with a premium, and the practices they develop there might one day be mainstreamed. That doesn’t mean that the legal framework should not be improved, but it means that we shouldn’t overlook the moral responsibility that businesses can nonetheless have.
 
UB: You point out that suitable legal regulation could protect responsible businesses from dying out for the wrong sort of reasons in a market dominated by an orientation towards profit. Are there grounds for optimism here? Do you have any examples in mind where regulation of this kind has been initiated or implemented? Has the left, in particular, been successful in successfully advancing this cause in a systematic fashion?
 
LH: Well… I live in Europe, and while I’m not super-optimistic, I see at least certain steps in the right direction (though all too often they seem to get thwarted by lobbyism). Often, you need international agreements, because one country—especially a small one—going it alone is not the most effective strategy (though it might be important in the sense of sending a signal to others). One example of regulation in the past, where such international collaboration has worked reasonably well, was the effort to ban hydrofluorocarbons, which had caused the hole in the ozone layer. What we need today, very urgently, is regulation with regard to CO2 emissions, which is much harder because our whole material economy depends to a great extent on CO2-based technologies. There is also a third factor that one shouldn’t underestimate: the role of customers, especially relatively well-off customers in the Global North. If they paid more attention to the climate footprint of products, that could make quite a difference for businesses that try to reduce CO2 emissions. But I think in the end we need regulation as well, to correct the perverse incentives businesses face at the moment.
 
As for the left, it had sort of forgotten this basic principle—the “primacy of politics”, as it has been called in the social-democratic tradition—during the height of the “neoliberal” era, when free markets were seen as a kind of panacea for social problems. So, there is a lot of rebuilding that needs to happen. 
 
UB: The kind of market regulations necessary for facilitating responsible business would presumably require considerable collective action at a global scale. But with the rise of populism and rising hostility towards ideas of global justice, do you worry about the future regulation of global markets?
 
LH: The short answer is, I do. But I’m nonetheless cautiously optimistic that multilateral action remains possible, and with a Biden administration in the US much more than with a Trump administration. We see an asymmetry here in the sense that vested interests—e.g., the major international corporations in a specific industry—will have an easy time coordinating their lobbying efforts, because their shared interests are at stake. The question is: where is the counterbalance in terms of the representation of the public interest, and the interests of the weakest individuals and communities, and maybe even of non-human life on earth? To be sure, this is also a question of how active NGOs and civil society organisations are—and here, we can all make a difference. And we can also do so by voting for parties that are willing to engage in international agreements to rein in global markets.
 
There is also a connection to the rise of right-wing populism here, I think. If individuals feel that the traditional left parties do not protect them from the ups and downs of global markets, if they don’t have a voice at work and no safety net, it becomes all the more attractive to look for strong “leaders” who claim to offer better protection. This is maybe not even so much about people on the lowest rungs of the social ladder, but about people in lower and lower-middle class positions who feel the threat of economic precarity.
 
UB: Your work points out the epistemic problems involved in the ethical management of firms. Knowledge available to parts of the machine remains unavailable to others in a system of divided labour. But one might worry that the epistemic problem facing firms runs deeper than that. Even if firms were better at synthesising dispersed knowledge, ideological frames through which social and economic problems are approached may pose barriers for responsible agency. How promising a strategy do you find the restructuring of firms’ organisational structures in addressing this challenge?
 
LH: This is certainly an additional challenge—if all employees believe in a narrative that is all about profits, and not at all about moral responsibility, then it’s not enough to better address internal knowledge problems. But on that front, I think we are at an interesting moment and there is reason for hope: more and more people become aware that we cannot go on with the economic ideology that has reigned for the last few decades, without any attention to the wellbeing of human beings, the environment, or the planet. What these individuals struggle with is how to carry these responsibilities into their working lives, and that’s where organisational structures matter.
 
UB: The book points to the importance of organisational culture in addition to the formal rules that govern organisations. You note that the former shouldn’t be seen as merely an epiphenomenon of the latter. This, no doubt, makes organisational culture hard to amend in ways that help reorient businesses’ values. How do we deal with this elusiveness of organisational character? Then there’s also the worry about how much organisational culture can change from within when it remains embedded in a capitalist economy centred overwhelmingly on profit motives.
 
LH: This is a topic I want to do more research on, together with social scientists. I find the ways in which the formal (structures) and informal (culture) sides of organisations interact quite fascinating, and I am convinced that culture makes a huge different for moral outcomes. Just think about the way in which different university departments—though similarly structured, all facing more or less the same (partly dysfunctional) incentives—can have such different cultures, for example with regard to the inclusion of minority voices. Individual personalities certainly play an important role for that (and to the extent to which this is the case, the practical implication might simply be: make sure that you don’t hire narcissists or jerks, because one bad apple can infect the whole barrel). But I am pretty sure that there are also some factors that go beyond that, such as communicative structures and patterns of participation. My hypothesis is that a fair distribution of benefits and burdens, and a supportive, participatory culture are also contributing factors to a good organisational culture. If this is true, then one can make an indirect argument for fairness and participation in the workplace: namely, that this is our best bet for creating the kind of culture that are needed to keep organisations morally on track.
 
And on your last point: I zoom out, at the end of the book, to discuss the need for better regulative frameworks to reign in capitalist markets, and the need for giving workers more voice. Ultimately, we need to gain democratic control over the economic system, on so many different levels. But that’s a longer process, it won’t happen overnight, unfortunately. While we are—hopefully—on that path, questions about the responsibility for an organisational culture don’t go away.
 
UB: Would we need to think differently about spaces for agency available in new forms of business in the gig economy? Do you worry that platforms like Uber, for instance, may undermine some of the social interaction and solidarity between workers that might support collective action?
 
LH: Yes, this is a challenge—not only the one-sided narratives about autonomy and individuality that these platforms like to maintain, but also the fact that you hardly meet your “colleagues” (formally, they’re all independent contractors, not co-employees). Think about the history of the labour movement: people shared intense, often physically demanding, working experiences; they spent long hours together, and often also lived in the same neighbourhoods. That can create a level of trust and solidarity that is probably very difficult to create among those who work for the same online platform, but hardly ever meet physically. As I’m writing this (in February 2021), many of us have a lot of experience with the “home office” because of the pandemic—and you realise how much is missing if all the informal contacts and interactions that happen at workplaces are cut down to a few minutes in a digital room before or after an official digital meeting. There is something about physical closeness that the digital realm simply cannot replicate, and it matters for the ability of workers to organise. Right now, there is a lot of debate about the extent to which we’ll continue working in home office, and whether there should be a legal right to that. But maybe we also need some kind of right to spaces where those working for the same company (in whatever legal form) can physically meet and share their experiences.
 
UB: I’d like to now move to some questions about methodology. Reclaiming the System draws on your ethnographic work, connecting this to normative questions you raise in the book. Could you tell us a bit more about the relationship between the empirical and the philosophical aspects of your work?
 
LH: I started doing this ethnographic work—mostly interviews, then also some longer observational periods in one organisation—because I felt that I did not have a good grasp of what was actually going on, morally speaking, “on the ground”, i.e., within the kinds of organisations I was interested in. The interviews provided me with fascinating material, and a lot of food for thought—but it took me a while to figure out how to turn these insights into something that would “count” as philosophy, and how to connect them to existing discourses. I first thought that I might conceptualise the interview material as an expression of a kind of practical moral expertise—but colleagues quickly pointed out that this might be problematic, because the interviewees’ views might be distorted by having to act under very non-ideal circumstances. I ended up using the material as heuristic for typical moral challenges in organisations, choosing episodes from the interviews that stood for something more general, something about organisational structures as such. There were those moments when I realised that someone working in public administration, for example, was telling me something about procurement rules that was quite similar to something an interviewee from a chemical company had told me about safety rules—so I started realising that there was something about the nature of organisational rules here that I could analyse in more general terms.
 
UB: In a paper with Bernardo Zacka, you’ve suggested that an ethnographic sensibility can help political theorists revise the questions they use to approach a certain field. Did something like this happen during your research for the book?
 
LH: Oh definitely! What was most eye-opening to me was the way in which knowledge and ignorance, and speaking up and remaining silent, were at the core of many moral issues in organisations. Questions about who knows what, when, and why, shape the contours of many moral problems—and they co-determine which issues are seen as moral issues at all! I did not have this on my initial list of questions, but it became a whole chapter in the end. And in my current book project I try to draw out the role of knowledge for democracy on a broader scale, beyond the realm of organisations.
 
UB: What advice would you have for political theorists considering or engaged in ethnographic work?
 
LH: If you show genuine curiosity and openness, and also humility in the sense that you don’t assume that you know everything from the start, people often open up very quickly, and it is possible to have very deep conversations. So, don’t weigh the pro’s and con’s forever, just give it a try and see how it goes! Take the opportunity when unexpected occasions arise, e.g., when a friend knows someone who works in a certain field, or when you meet someone on a train (when we’re not in a pandemic, at least). And don’t give up if it doesn’t seem to pay off immediately. It can take a while to find the right people, who can then connect you to more interview partners. It can be a very rewarding experience—I’ve certainly learned a lot, both intellectually and also in terms of moral role models.