When scientists develop new antidepressant drugs they first administer them to rats. This means initially inducing depression in the poor rodents. No physical pain is involved. Rather, for a prolonged period the animals experience unpredictable negative changes to their environment, such as wet bedding, dirty sawdust, the sounds of predators, or changes to the cycle of light and dark. Eventually, the rats slide into an apathetic state, ceasing to groom themselves or build nests, and not bothering to use their exercise wheels.
In Lab Rats, a book that is by turns funny and frightening, Dan Lyons likens the plight of modern workers to that of these experimental rats. Constant change, whether it be office layout, new technologies or new methodologies, is producing a workforce that is increasingly stressed, depressed, and sometimes suicidal. Three other factors contribute to decreasing satisfaction with work. The first factor is money; or, specifically, the lack of it. Over the last few decades the incomes of ordinary workers have fallen, whilst those of the wealthiest have boomed. Secondly, workers are increasingly insecure. The third factor is dehumanization, whereby people are increasingly used by technology, rather than vice versa.
According to Lyons, there are two key reasons why modern work has become so much worse. The first is the shift from stakeholder capitalism to shareholder capitalism. For much of the twentieth century, company executives often recognised that they had responsibilities to employees and the wider community, as well as to investors. However, a significant change in attitude occurred when Milton Friedman, a University of Chicago economist (later to be awarded the Nobel prize), promoted the idea that the only responsibility that companies had was towards their shareholders. Aided by anti-trades union legislation, Friedman’s ideas led to a more ruthless form of capitalism, in which jobs were cut or moved abroad, wages slashed, and work frequently outsourced to the lowest bidder. The gig economy developed, in which organisations assembled a body of contract employees, people who were in fact often classed as “self-employed” so that they didn’t have to be awarded the kinds of benefits, such as paid holidays and sick pay, enjoyed by regular employees. The development of the Internet served to speed up these processes.
The second key factor identified by Lyons is the rise of Silicon Valley. Indeed, in the American edition of Lab Rats, Silicon Valley is explicitly identified in the subtitle. Once upon a time, Silicon Valley was full of hippies who grew up in the counter-culture of the 1960s. Companies like Hewlett Packard were a model of how to treat employees well. However, with the advent of shareholder capitalism the hippies were replaced by ruthless oligarchs (e.g. Jeff Bezos, Mark Zuckerberg, Travis Kalanick and Elon Musk), an army of wannabes desperate to get rich quick, and a bunch of venture capitalists who hold out the hope that this can be achieved.
The lack of morality in modern-day Silicon Valley is surely best exemplified by the following example. The rise of the tech oligarchs and their billion-dollar campuses, such as the Googleplex and Apple’s space-ship campus, have pushed up housing prices so far that these tech installations are now fringed by neighbourhoods where people live in camper vans, tents, or simply on the sidewalks. In 2016:
a bunch of rich techies came up with their own solution, sponsoring a ballot proposition that would let police forcibly remove homeless people from the sidewalks. Homeless people would get twenty-four hours to either move to a shelter or get a bus ticket out of town. If they didn’t comply, the cops could seize their tents and belongings. (p.36)
The proposition was passed.
But back to the venture capitalists. In Lyons’s words, the Valley has become a “casino”. The ambition of the modern ‘techie’ is to create a start-up business that attracts sufficient money from venture capitalists such that they are able to get rich by floating the business on the stock market (essentially, getting taken over by other monied interests). Lyons refers to these business start-ups as “unicorns”. Along the way, these businesses typically lose heaps of money, which is why their employees are treated so poorly. But no matter – if all goes to plan, the start-up bosses flog off their outfits, then write a best-selling book about how to run a ‘disruptive’ company. Outside of Silicon Valley, many CEOs – fearful that their organisation is at risk of stagnating in the new economy – lap up this guidance on how to do things a new way. Yet, to quote Lyons:
Silicon Valley has no fountain of youth. Unicorns do not possess any secret management wisdom. Most start-ups are terribly managed, half-assed outfits run by buffoons and bozos and frat boys, and funded by amoral investors who are only hoping to flip the company into the public markets and make a quick buck. They have no operations expertise, no special insight into organizational behavior (p.45)
Why is it that CEOs are so ready to seek out the guidance of business gurus? It seems that the simple truth is that no-one really knows how to run a big company. Lyons writes:
The business world has a seemingly insatiable appetite for management gurus. You probably can’t blame CEOs. It may be that no human is really smart enough to run something as vast and complex as a corporation. Yet someone has to do it. Clinging to a system, any system, at least provides the illusion of structure. The system also gives the boss something to blame when things go wrong. Managers grasp at systems the way that drowning people reach for life jackets.
Indeed, although Lyons doesn’t mention this, even the Harvard Business Review has previously noted that CEOs who run highly successful corporations frequently fail to repeat that success when they move to another company (with correspondingly vast salary). It is as though success occurs despite the CEOs’ presence rather than because of it.
Lyons traces a rough history of business systems, beginning with the work of “shameless fraud” Frederick Taylor (“He fudged his numbers. He cheated and lied”) in the 1890s. Taylor claimed to have devised a scientific method to optimise the efficiency of any process. In reality, he ramped up the quotas until staff began to leave. Taylor was subsequently fired from the company where he did his “research”. Despite his work being thoroughly debunked, Taylorism became almost a religion. Since Taylor, we have had Peter Drucker (who coined the term “knowledge worker”), Michael Porter, Jim Collins, and countless others. The business fads that we’ve been sold include the ‘Five Forces Framework’, ‘Six Sigma’, Lean Manufacturing’, ‘Lean Startup’ and ‘Agile’.
Some space is devoted to description and discussion of ‘Agile’, which is perhaps the most recent fad to be widely adopted. In 2001 a group of software developers authored a ‘Manifesto for Agile Software Development’, an idea that was subsequently pounced on by others and expanded far beyond its original domain of application. Lyons describes the business application of Agile as:
a management fad that has swept the corporate world and morphed into what some call a movement but is more like widespread mental illness (p.55)
Like other fads, Agile is really just another version of Taylorism. All these ideas basically boil down to trying to do more with fewer people for less money. The authors of the original Agile manifesto have sought to distance themselves from what Agile has become, saying they can no longer make sense of it.
Sadly, one particular group of workers may find themselves particularly at risk:
The pressure is extra high on older workers, who are experienced enough to realize that this is bullshit, and that Agile usually fails, but wise enough to realize that the real point of Agile may be to create an excuse to fire older workers, and so the smart thing to do is to shut up and go along. (p.59)
Lyons does hold out some hope for better things, and the final section of his book is called “The No-Shit-Sherlock School of Management”. He points out that Fortune magazine’s list of ‘Legends’ are companies that are incredibly successful and treat their employees exceptionally well. Elsewhere, a number of businesses have sprung up in Silicon Valley that are reacting against the spread of shareholder capitalism by not only treating their staff well, but doing good for the community. One venture capital firm, Kapor Capital, engages only in “gap-closing” investing, putting money into companies that are “serving low-income communities and/or communities of color to close gaps of access, opportunity, or outcome” (p.201).
It also seems that increasing numbers of students are drawn towards business courses that have more of a social emphasis. Elsewhere, workers have rediscovered the value of becoming organised. For example, Google employees succeeded in getting the company to abandon its involvement in a military drone programme, and a number of gig economy workers have successfully organised to challenge their working conditions and contracts.
Lab Rats is an eminently readable book that will both amuse and horrify. To be sure, Dan Lyons’s emphasis is on reforming capitalism, which may seem a little optimistic for some on the left. Indeed, I felt possibly he might have been viewing the pre-Friedman economic era through slightly rose-tinted spectacles. Also, whilst he holds up Starbucks as a company that treats their employees very well, he omits to mention that they have also been criticised for using legal mechanisms to minimise the tax they pay in the countries where they operate (Lyons does criticise Apple for the same thing). However, CEOs who are looking for a business reason to treat their employees well might note the work of the psychologist Dan Ariely, who found that companies where people felt physically and emotionally safe tended to outperform the stock market.