The Invisible Handcuffs of Capitalism

How Market Tyranny Stifles the Economy by Stunting Workers

by Michael Perelman

Mainstream, or more formally, neoclassical, economics claims to be a science. But as Michael Perelman makes clear in his latest book, nothing could be further from the truth. While a science must be rooted in material reality, mainstream economics ignores or distorts the most fundamental aspect of this reality: that the vast majority of people must, out of necessity, labor on behalf of others, transformed into nothing but a means to the end of maximum profits for their employers. The nature of the work we do and the conditions under which we do it profoundly shape our lives. And yet, both of these factors are peripheral to mainstream economics.

By sweeping labor under the rug, mainstream economists hide the nature of capitalism, making it appear to be a system based upon equal exchange rather than exploitation inside every workplace. Perelman describes this illusion as the “invisible handcuffs” of capitalism and traces its roots back to Adam Smith and his contemporaries and their disdain for working people. He argues that far from being a basically fair system of exchanges regulated by the “invisible hand” of the market, capitalism handcuffs working men and women (and children too) through the very labor process itself. Neoclassical economics attempts to rationalize these handcuffs and tells workers that they are responsible for their own conditions. What we need to do instead, Perelman suggests, is eliminate the handcuffs through collective actions and build a society that we direct ourselves.

“Workers, working conditions, and work itself rarely draw the attention, let alone concern, of employers or economists. Michael Perelman fills the void with this sweeping review of Procrusteanism—the economic institutions and practices that force people to accept the discipline of the market. His account of the degradation of labor gives us a sequel to Harry Braverman’s Labor and Monopoly Capital.”

—Richard B. Du Boff, professor emeritus of economics, Bryn Mawr College

“When so much punditry around us is devoted to finding market-based solutions to our current woes, this book is a blast of fresh air, reminding us that the market is an increasingly destructive institution. Perelman shows how the market, instead of serving humanity, is now a Procrustean monster, demanding imperiously that humanity fit to its own constraints. The market gives power to the destructive practices of business and finance while stifling the creative potential of labor to address urgent social needs. Perelman subjects to withering criticism both the market and the economists who pray to this false god—a tonic read in these times of economic disarray!”

—Paul Adler, Chair in Business Policy,
Department of Management & Organization, Marshall School of Business, USC