Compliance Capitalism

How Free Markets Have Led to Unfree, Overregulated Workers

Sidney Dekker

• Publisher: Routledge
• Year: 2021
• ISBN:
  9781000416312
• Edition: 1
• Topic: Commerce
• Subtopic: Gouvernance d'entreprise

In this book, Sidney Dekker sets out to identify the market mechanisms that explain how less government paradoxically leads to greater compliance burdens. This book gives shape and substance to a suspicion that has become widespread among workers in almost every industry: we have to follow more rules than ever—and still, things can go spectacularly wrong.

Much has been privatized and deregulated, giving us what is sometimes known as 'new public management, ' driven by neoliberal, market-favoring policies. But, paradoxically, we typically have more rules today, not fewer. It's not the government: it's us. This book is the first of a three-part series on the effects of 'neoliberalism, ' which promotes the role of the private sector in the economy. Compliance Capitalism examines what aspects of the compliance economy, what mechanisms of bureaucratization, are directly linked to us having given free markets a greater reign over our political economy. The book steps through them, picking up the evidence and levers for change along the way.

Dekker's work has always challenged readers to embrace more humane, empowering ways to think about work and its quality and safety. In Compliance Capitalism, Dekker extends his reach once again, writing for all managers, board members, organization leaders, consultants, practitioners, researchers, lecturers, students, and investigators curious to understand the genuine nature of organizational and safety performance.

1

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The freedom to make more rules

In 1986—I was 16 and soon headed into my last year of high school—I got a summer job with the Netherlands Railways. The Railways at that time were a semi-government organization. For a number of weeks, I was assigned to various surveying teams. These went out to survey—measure in all kinds of ways, really—locations for the country’s ever-expanding railway network, which included a bridge west of Gouda, a marshalling yard in Rotterdam, a bend where tracks were going to be doubled south of Amsterdam, etc. My job was mostly to saunter into the corners of the site and hold up a little mirror mounted on a yellow-and-red pole, so that various vertical and horizontal angles could be measured with a theodolite operated by a surveyor on the other end (safety shoes, it seemed, had not yet been invented, and I actually don’t know what good they would have done). Train traffic wasn’t halted when we were working, so one of us would be designated the safety person. His or her job was to keep watch and yell ‘treintje!’ (the Dutch love to use diminutives, particularly for things that are actually big and quite dangerous, like an oncoming train). We would then step out of the way and let the train (the ‘little train’) pass.

Even though the Netherlands is not a large country, a fair amount of travel was involved in getting to these sites. Train tracks are pretty agnostic or oblivious about what they run through, as long as there is a good bed of track ballast to hold them up. That meant that we could be in everything ranging from a field with black-and-white cows in it, a densely populated urban residential area, an industrial estate, banks of a river or canal, a piece of forest, or a peat swamp. Getting there almost always took time. Previously, railway surveyors used trains themselves, taking a bicycle with them to get from the closest station to the place where measurements are needed to be taken. In 1986, these means of transport had been replaced by white vans, which had all the surveying equipment in the back. I typically arrived at the railway headquarters at eight in the morning (by train, with free duty travel), and figured out what team and location I’d been assigned to. By that time the boss’ clock was ticking, so there was little point in rushing. At least, that is what the surveying teams showed me. First there was a cup of coffee, maybe two. Then we headed out to the site. It could take up to the middle or even end of the morning before we were set up to actually start doing some surveying.

Soccer balls and stick shifts

I remember one team in particular. As others, it was made up of two guys, who’d worked with each other quite a bit. I had been paired with these two for a couple of days, and it didn’t take me long to figure out that the work of surveying was incidental to their days. On the first day, in some forgettable little town, I had gone to the assigned corner of the first site we had to work, and held up the mirror as instructed. We were not actually on or near a train track, so one of the guys had nothing to do. He sat by the side, smoking. The other was behind the theodolite. It would have been around 11 in the morning. After 20 minutes, the measuring was done. I honestly believed that we’d pack up and drive to the next site, even if still in the same pointless town. But that didn’t happen. When the two guys had piled the equipment into the van, they ducked back out—one of them clutching a soccer ball under his arm. Soon a match had erupted between the two of them, leaving me stupefied on the sideline. An hour or so passed, with them increasingly frenetic and panting and eventually worn out. Then, of course, it was time for lunch. Because surveyors go to godforsaken places, they have to take their own lunch. I had as well. They sat in the van and ate theirs, and smoked some more. I sat on a log and ate mine—probably in three minutes (a boy of 16, right? Always hungry). Then there were 90 more minutes to go. Of lunch time, I mean. It was super tedious because I had nothing to do and the little town offered nothing in the way of distraction or diversion. Moreover, I was under the impression that I was still on the boss’ clock and supposed to work, or at least be ready to report for more work.

There never was any more work that day. After the soccer match and extended lunch break, the guys called me over. We piled into the van, three abreast on the front seats, and started driving. We drove straight to railway headquarters, where we parked the van without any haste, went upstairs to where the surveyors had their offices and archives, and had more coffee. Then I clocked off and we all went home. The next few days with this team were pretty much the same. We’d been talking about driving cars for a few shifts, since I was 16 and learning how to do that (on private land, mostly airfields, since I was too young for lessons in the Netherlands back then). At some point, I decided to try to learn something new (and redeem my day that way) and asked whether it was possible to shift gears in a manual car without depressing the clutch. You probably see where this is going. ‘Yes,’ it was possible, I was told. As we’d pulled to a stop before a traffic light on the way back from a grueling measurement session (it must have been 40 minutes of work and lots of soccer), the surveyor who was driving said he’d demonstrate it. I was sitting, as usual, in the middle, wedged between the two guys. When the light turned green, he pulled the Netherlands Railways van up sharply in first gear. Then he let up on the accelerator and yanked the tall gear handle hard back into second gear without depressing the clutch with his left foot. The groaning crunch underneath me, of engineered parts being compelled to do things they weren’t designed for, was painfully palpable. Yet the van (with a diesel engine) shuddered and soldiered on. The surveyor who was driving looked at me with an accomplished grin, the other one laughing and shaking his head. When we got back to headquarters at the ‘end’ of our day, we’d delivered half an hour of tool time, and an abused van.

This may not have been a typical crew, for sure. But you’d think that there would be a better way to work. A more efficient way, a way that would get the organization more tool time. That way, indeed, has long been known as outsourcing, and in this case privatization. Take the job to the market, ask for bids, get the best bid, and make them do the work. Let competition in, let private entities and entrepreneurs compete, and get the best job at the lowest price. The belief is that organizations like a state-owned railway shouldn’t be in the business of surveying in any case. Perhaps they shouldn’t even be building or maintaining track themselves, nor purchase or operate trains on it. That can all be best left to the market. Today, the Netherlands Railways doesn’t employ surveyors, nor does it have surveyor vans that carry soccer balls or vans that get abused by guys shifting gears without clutching. The railway surveying department is gone; it was put out to market. Today contractors do this work. Maybe the guys were asking for it, you’d say. If the guys play soccer and have lunch all day and drive around abusing company vans, then outsourcing their work could feel justified. If they deliver so little tool time, so little value for money, the guys shouldn’t be surprised that their jobs will be farmed out at some point. Maybe the whole organization was asking for it. Maybe it never had the incentive to match surveying needs with available manpower and capacities in a manner that produced anywhere near ‘full deployment’ of surveyors internally—at least not vis-à-vis the timelines they themselves applied to those jobs. So, you can be sympathetic to the belief that markets can do this ‘better.’

A smaller government

And yet… A little over a decade after my Netherlands Railways summer job, I was a fresh Assistant Research Professor at a university in Sweden. I went to meet the director of the organization that had sponsored my position at the university, which turned out to be the civil aviation inspectorate. Things had developed quickly during my nine years of studying at various universities in Europe and the United States. A movement known as neoliberalism had taken hold, even in Sweden where I’d moved for this job—a country known for its socialist high taxes and well-run, ever-present, broadly accepted, all-encompassing government. Neoliberalism supports and promotes the role of the private sector in the economy. It argues that markets and free trade are ways to get the best price for the best quality. It encourages governments to pull back and out of things they shouldn’t be concerned with, including the detailed regulation of industries. So, it was with the aviation safety regulator in Sweden. Aviation operators, the thought was, have a huge stake in flying safely, otherwise people won’t want to fly with them at all. Markets in fact force them to be safe. The same went for those building airplanes (e.g., Saab in Sweden).

An important consequence of neoliberalization was that the aviation safety regulator had less money to work with. One of the tenets of neoliberalism, after all, is smaller government, a lighter-touch regulator, and a reduced regulatory footprint. These reductions and deregulations happened at a time when the computer revolution had fully hit cockpits and other areas of aviation, making the task of meaningfully inspecting and regulating vastly more complex. Expertise was hard to find and hard to keep. The solution was to shift to what became known as systemtillsyn or system oversight. Instead of the regulator checking (or sampling) that all parts of the aviation system were up to specifications and regulations, it now asked the market itself to convince the regulator that they had the systems and processes in place to adequately do such checking themselves. The regulator, in turn, was going to look at samples of those systems and processes to get the confidence that the operators indeed had ways to keep their risks under control.

The problems I was confronted with early on in my job as Assistant Professor seem pretty intuitive and obvious today. But of course, when you’re in the middle of things, it is not as easy to look over the top of an emerging situation and see where it comes from or where it is headed. One problem was that the remaining inspectors, trained in the old-school examination of component parts, were at a loss on how to inspect or audit a ‘system.’ So, they simply treated the new ‘system’ as a collection of parts that could be inspected according to the old logic. An incident reporting system, for instance, with no incidents in it, or with ‘too many’ incidents in it, raised suspicions. Inspectors’ thinking was still driven by decomposition assumptions that once worked for the engineered systems they were trained to inspect. In those, the functioning (or failure) of the whole can be explained by the functioning (or failure) of (one of) its parts. But that of course doesn’t work for complex systems. Indeed, the inspectors’ approach remained far from what would, yet another decade later, become known as resilience: the ability of a system to recognize, absorb, or adapt to harmful influences, including those that fall outside of its design base. The kinds of ‘system inspections’ that were being done in the 1990s offered very little insight into resilience capacities such as anticipating, monitoring, responding, and learning (Hollnagel, 2018). They weren’t geared for them. Yet the market smelled an opportunity.

Two thousand years of reading

This was becoming obvious in the 1990s already. The director of the civil aviation regulator told me how aviation operators were throwing all kinds of things at his inspectors—things they thought the inspectorate wanted to see. The amount of ill-coordinated paperwork was overwhelming. Perhaps aviation operators thought (or were told by their legal counsel or consultants) that safe was better than sorry. So, they kept piling it on, in the hope that the regulator could make sense of it for whatever determination they needed to make. They couldn’t, not really. We were all in a newly opened-up, pioneering landscape of neoliberal governance, and few people knew what they were looking for or even needed to be looking for. Those who benefited most were those who traded in anxiety. Sell clients a safety management system that is bigger than what they need, because then chances are that they at least have what they need. And once you’d sold it, then finding the right thing, or making sure of its upkeep, was somebody else’s problem (or rather your new market opportunity). More was always better; more was always more. Lawyers, deployed ever more to advise company boards about their obligations, added to this anxiety and the considerable bureaucratic antidotes to it, added to the burden. There turned out to be plenty on tap. Company boards typically face liability under hundreds of laws and regulations—and most countries or states can’t even say exactly how many (Saines et al., 2014). And so, more internal rules are made to try to manage the liabilities and reduce exposure and uncertainties through webs of bureaucratic accountability strung across the organization. Deregulation thus became overregulation—no matter where the rules came from. There were always more. Deregulation meant more rules, more paperwork, more administration, and more bureaucracy—not less.

Time to slim down aviation’s ever-expanding rule book

Having been a professional pilot for 23 years now,

De Wannemacker (2020) laments, I’m sure that most will agree with me: rules, regulations and procedures in our job are only ever increasing. Many colleagues will recognise the weekly torrent of company notes, effortlessly sent to you by digital means. Certainly, some events like the 9/11 terror attacks, accidents where human error was involved, and now the COVID-19 pandemic merit additional regulation. But from my own experience, I reckon that in those 23 years, the number of rules, regulations and procedures governing my job has easily doubled. That doubling has taken place despite the fact that we are flying aircraft that have hardly evolved, on operations that haven’t changed all that much either. That leads you to ask several questions. Is this mountain of rules justified? Do they add value? Looking at safety statistics, as far as Western countries are concerned, airline transport was safe 20 years ago and still is today.

If that’s the case, do we need more regulation? I believe extra rules aren’t always the answer and can be counterproductive. Don’t get me wrong, rules are a necessity, but there is a limit to their effectiveness. Rules are born from experience, but also from imagination. Things can go wrong. We create rules to avoid a repeat. We also try to imagine what could go wrong, inventing rules that will hopefully avoid undesired events. We humans understandably try to create a zero-risk environment. We don’t like risk. In the same way, aviation authorities and airline companies try to control every imaginable scenario, whether a normal or a non-normal situation, to create their own zero-risk paradise.

An ever-expanding rule book, especially for us as pilots, is considered the price we have to pay; the logical path to heaven. Consumers have the same attitude, always eager to point out things that didn’t match up to the perfect experience. The press is on a constant hunt looking for when things become messy. We have to accept we will never live in a zero-risk world—even with unlimited rules. We should understand that human beings are not computer programs: you can’t just drop in another line of code to fine-tune them. Instead, rules should provide a framework to help us cope with the complexities of everyday operations up to full-scale emergencies. But it is just that: a framework, not an endless user’s guide the human memory will struggle with. Call me cynical, but it is very convenient for the authorities and airline management to transfer all responsibility to the flight crew for not doing exactly as described in book three, chapter 12, paragraph 21, subsection b.

Let’s fix the balance. Get rid of the fat that has crept in our rules and procedures. Make them healthy again, designed to help us pilots. Have faith in human beings and their cognitive abilities. After all that’s what we human beings are good at: we can observe, analyse, act and adapt in an ever-changing environment. This attitude is far more efficient than endlessly asking what the book says. It is a more satisfying and motivating working environment too. Pilots should be trained this way too. Make them resilient. Don’t turn them into automatons, programmed to simply execute a set of rules. Train them to take healthy decisions, to cope with the complexities of daily operations, to get on top of hairy situations. The books are important, but they are a starting point. Don’t think they will always give the answers. Over-reliance on them can be dangerous too, giving a false feeling of full control.

Now that aviation is in this unprecedented crisis, I fear we are yet to experience another significant expansion in rulemaking. Faced with the coronavirus, every country seems to be coming up with its own plan to make flying safe again from a medical point of view. Airlines in overdrive for another round of extra measures. As we all know from the past, new rules are born very easily but soon become etched in stone. Even when the crisis is over, we consider them ‘indispensable’ without stopping to think why.

Please don’t cripple us with yet more regulation.

In the example above, much of the new rulemaking actually didn’t come from the regulator. It came from the airline organization itself, and from the swirl of industry stakeholders (suppliers, contractors, clients, and insurers) around it. In fact, some aviation regulators have acknowledged that writing more rules is neither desirable nor feasible in many situations (Mark, 2020). Amalberti (2001) even spoke of the ‘paradox’ of almost totally safe transportation syste...