The Hierarchy Upon Us

Mind Your Head

18th-century slave shipThe vast social contract that binds us, rescuing us from a brute state of “warre of every one against every one,” nevertheless left us generous leeway to establish our own brutish hierarchies within it. They are graduated by prosperity. To work our way up, we must acquire wealth. This can incentivize a host of good qualities: vision, daring, ingenuity in creating a demand, skill in satisfying a need. Ascents can also reflect treachery, deception, acts of theft.

We assume a benign dynamic is at work that rewards industry, which we feel is fair. Any brutish aspects in the works are attributed to the maniacs at the top, who managed to accumulate inordinate wealth by taking it all a little too far. If we get brutally short-changed, they’re doing it. If we are victims, we are their victims.

This misperception soothes somewhat. We may be taking knocks, but it’s from someone way up there, like Jeff Bezos. The simple fact that he’s up there tells us he’s one extraordinary individual. That softens the blow. And we foolishly concede that his merciless work ethic has earned him his unwieldy take. So the hierarchy is explained, justified, and reinforced by the hundreds of millions who serve as its bedrock.

At least one of our assumptions is wrong. The people placing the punches are not that far away. Bezos doesn’t ruin the mortar-and-bricks retailer around the corner, we do. In choosing Amazon to deliver at substantial discounts, we are the ones dealing the deathblow to neighborhood bookstores, which have clapped shut like the books they used to sell.

This disorientation is understandable. The ranks in the hierarchy are fluid, the roles fuzzy. There is no gracious Virgil giving tours to explain what circle we’re in; certainly no one appears to tell us why. Opacity increases as we descend until we hit bottom, when epiphany occurs. No human cargo of an 18th-century slave ship, packed between decks and suffocating in its own stench, misperceived its station in the hierarchy. Yet those who achieve this calamitous distinction are powerless to do anything but howl the truth, which the top tiers are happy to call sour grapes from sore losers. Meanwhile, the rest of us luxuriate in our 21st-century elbow room, Internet, days off, grocery stores glutted with variety, and enough money to buy a dog to make us supreme in one hierarchy anyway. We can purchase an SUV, in fact, have done so, to glory in our invincibility for as long as we stay in that vehicle. How can we say we’re hurting? If there’s any injustice, it’s because of the eight great weights at the top. Right? Wrong.

Perhaps an example will illustrate.

A group of independent writers and editors worked very hard providing specialized services on a freelance basis to a prosperous client. The pay was good, the relationship satisfying, the work environment harmonious. When the client offered one of those freelancers a 10% commission to handle the group’s billing, that freelancer promptly established an agency to do so, stopped freelancing, and hired a friend to manage the paperwork. This arrangement obtained for many years until the client decided to reduce corporate headcount. It now asked the agency to hire the people it told it to and serve on paper as employer. The ex-freelancer rose to the occasion. His 10% billing commission swelled by a new margin, the difference between what the client paid the agency for work delivered and what the agency paid the freelancers. As neither this nor the billing arrangement had any impact on how the freelancers worked or what they earned, the change in relations was ignored as bureaucratic fuss. Soon thereafter, however, the ex-freelancer made the agency’s presence felt, and with a timing that showed idiotic insensitivity.

The financial crisis of 2007–08 and its aftermath had set in. Economies were in turmoil; work plummeted; the agency answered freelancers’ concerns with helpless protests that it did not know when things would pick up. During this anxious time, the freelancers received an independent contractor agreement from the agency. Up until then, the group had been working under a one-page nondisclosure agreement issued by the client. The new six-page contract contained a “Limited Restriction on Activities” section that stirred unease. It forbade freelancers from soliciting or accepting any work from any business that had any relationship with the client, the agency, or any of their affiliates or clients for up to one year after termination of relations with the agency. The agency’s single client had enormous global presence; the restriction effectively cut freelancers off from seeking work anywhere in the ecosystem in which they had specialized for years. So while the agency had no work for them, they were not to get it elsewhere. This seemed outrageous, callous even, but not sinister. They signed.

Work continued to lag badly. Anxious to know what they might expect in the coming weeks, the freelancers availed themselves of the project management system to generate a few dangerous statistics: how much work was coming into the agency and what they were getting assigned. There was a significant discrepancy, although they had no clue why.

At this time, the agency promoted to the position of director a woman who had fit in nowhere else. The move stunned. The woman’s addition a few years back had introduced the single source of friction in the otherwise congenial group. Due to her incompetence, she was quickly moved from one position to another until she finally settled in as a project coordinator, someone who assigned work to individual freelancers. A distressing new vocabulary came into play as she began referring to “my people,” presaging a puzzling favoritism she brought to bear on her work. Under her watch, some freelancers received no work, while “her people” had so much they were in a position to reject less lucrative assignments. When she asked a friend to join as editor, the friend protested that she knew nothing about the specialized subject matter. The woman reassured her that no knowledge was required: “They’re just words.” The woman was hired, increasing the count of “her people.”

It had now been some years since the freelancers outside the circle of favor had been starved of work and distressed by noncommittal forecasts, yet aware that work was out there. During one of the now infrequent conference calls, they again raised their concerns. The director became impatient. The agency had its in-house staff to keep busy, she scolded; it could only assign freelancers work when there was overflow. That came as a surprise. What in-house staff? The freelancers were the business, always had been.

Soon thereafter it was common knowledge that the agency had a hefty in-house staff scarfing up all the work the freelancers used to get. Also floated was word that the freelancers cost much more than the in-house staff. As pedestrian as this drawback may have seemed, it baffled all the same; the client covered all fees; how could “lower costs” have any relevance for the agency? Yet, they were repeatedly given to understand that it would be foolhardy for the agency to give freelancers work that in-house staff could do cheaper, and since there was in-house staff, it was obvious it had to be paid somehow. By this time, the freelancers had also learned the in-house staff was green and turning out rubbish. Still no sinister intent was suspected.

Then came the final jolt. Their single client, the huge cash cow, was asking all its agencies to submit portfolios of their resources based on which it would award future work.

The director revved up to ramming speed. She called on the expensive freelancers she no longer had use for to send in their resumes, polished to highlight the work they had been performing for the client for decades. She added that freelancers who did not comply could not be guaranteed work in the future, finding no irony in the fact that they hadn’t been getting any anyway. Freelancers ignored the irony as well. They felt a corner had been turned; the floodgates were to be opened again soon.

The director’s harvest was a bundle of resumes from specialists with 10, 15, 20 years’ experience doing exactly what the client needed. These she submitted as proof that her agency could best meet the client’s need and was awarded with privileged bidding status and fat contracts. But no floodgates opened for the freelancers. While collecting the ample fees the client paid out for the highly experienced freelance work featured in the agency’s glittering portfolio, the agency continued to channel work to its low-paid, now overworked in-house staff.

A corner had been turned for the agency. And it was now clear how “lower costs” had relevance. With the residue from those lower costs, the director, now VP, purchased a million-dollar home in an affluent suburb. The ex-freelancer was driving a Lamborghini. The agency Web site still says it puts a lot of effort into maintaining relationships with its freelancers because they are, after all, what makes it successful. Indeed. Or did. It doesn’t need them now.

What stinks is the absurdity of this business trajectory in today’s liberated “gig economy”: one company assisting another to replace skilled freelancers with a sweatshop to lower costs sufficiently to furnish those engineering the switch with a lifestyle they feel they fully deserve.

Just don’t think Bill Gates is ripping you off. Just don’t think you’re getting ripped off. This is the licit theft that our society calls business.

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