Under the independent contractor system, workers are considered to be tiny businesses responsible for their own expenses and taxes. A key feature of an independent contractor relationship is autonomy. According to the Internal Revenue Service, a business that hires an independent contractor is not entitled to dictate how or when the contractor performs a job. This limits a company’s power to train and schedule its workers.
.. “This is M.B.A. 101 stuff,” said M. Diane Burton, a professor of human resource studies at Cornell University. “When people are your source of competitive advantage, it’s clear that a long-term employment relationship and what we would call a ‘good job’ is good for the workers and good for the companies.”
Mr. Walker, who is boning up on national security issues to address some Republican concerns about his preparedness for the presidency, was also asked on CBS about his past comments that the most important foreign policy decision of his lifetime was Ronald Reagan’s decision to fire air traffic controllers because it sent a message to the Soviet Union about his toughness. Mr. Walker, who returned from Israel on Thursday after a trip to meet leaders there and learn more about the Middle East, chose not to change or calibrate his Reagan answer; instead he said that the firing of the controllers was “peace through strength personified.”
The economic advantages to be had from professional organization were most concisely explained by Mark Twain, who in Life on the Mississippi described the riverboat pilots’ attempt to make themselves into a monopoly. At mid-century, when westward expansion caused the steamboat business to boom, the pilots’ pay unaccountably began to fall. The reason, as the pilots soon deduced, was that any fool off the farm could sign on as an apprentice pilot, increasing competition and depressing the market. A few of the pilots formed a guild, or “association,” asking an inflated wage. They slowly recruited members and agreed to exchange information about the river’s constantly changing snags and sandbars only with other members of the guild.
“Now come the perfectly logical result,” Twain wrote, with admiration. “The outsiders began to ground steamboats, sink them, and get into all sorts of trouble, whereas accidents seemed to keep entirely away from the association men.” nInsurance companies began to plump for association pilots; the steamship owners agreed to one wage raise after another, passing on the difference (and then some) in freight. Since no one could become a pilot without the recommendation of two existing pilots, the association could regulate its own competition. The pilots prospered until the entire, now overpriced industry was destroyed by the railroads and “the association and the noble science of piloting were things of the dead and pathetic past!”
.. “The skill must be difficult enough to require training and reliable enough to produce results. But it cannot be too reliable enough to produce results. But it cannot be too reliable, for then outsiders can judge work by its results.” Indeed, when historians try to explain why engineers have never become as prestigious and independent as doctors or lawyers, one of their answers is that the engineer’s competence is too clearly on display. (When a patient dies, the doctor might not to be blame, but if a bridge, falls down, the engineer is.)
.. That is anyone who brought the right educational credentials and could pass the entry test was certified and from that point on was shielded from further formal tests of competence.
.. During the first half century of intelligence testing, people with scores below 85 were known, in descending order of intelligence, as morons, imbeciles, and idiots.
.. Men could qualify for the deferment on the basis of their grades in school and their score on what was essentially an IQ test.
.. Eventually the IQ-test deferment evolved into the 2-s deferment that proved so catastrophically divisive during the vietnam War.
.. By the middle of the twentieth century differences in legal standing based on wealth and skin color were on their way out. The time was long past when a slave was legally three fifths of a man or only property owners could vote. Such distinctions had come to seem unacceptable—but not the idea that the state would scientifically seek out its most intelligent people and grant them extra rights.
.. What I find striking about this class is how few of its members are involved in the sort of creative economic efforts that nearly everyone now professes to admire. From college and graduate school I know lawyers, consultants, and analysts aplenty, but few people who have started their own businesses or created jobs for anyone besides themselves. There are exceptions, but most of the real entrepreneurs I know lack the track record of impeccable schooling and early academic success that is supposed to distinguish the meritocracy’s most productive members.
.. A liberal education is good for its own sake, and schooling of any sort can impart a broad perspective that can help in any job. Rather, the charge against credential requirements is that they are simultaneously too restrictive and too lax. They are too restrictive in giving a huge advantage to those who booked early passage on the IQ train and too lax in their sloppy relation to the skills that truly make for competence.
.. In theory, business is better positioned than the professions to resist the worst effects of a meritocracy. The professions depended for their creation and growth on credential barriers that kept people out; business depends for its survival on making the best and most flexible use of all its resources, including talent. Even dominant firms must face the possibility that somebody who may not have gone to the right school and may not have the right degree might still come to market with a better, cheaper product.
