These nice people wanted a piece on the writers’ strike in Hollywood.
Source link: http://blog.mises.org/7391/hollywoods-workers-and-peasants/
Hollywood’s Workers and Peasants
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Qu’ils mangent de la brioche
Excellent Piece Mr. Tucker! This isn’t the only place where the writers run their scams. This is how it works in Hollywood as I’ve heard from a friend in the industry:
You work as a cameraman or carry a boom stand or something for about a year making really high wages as those jobs do. Then, you quit your job, go on unemployment the whole year. What do you do while you’re unemployed? Why write of course while the tax payer pays your bills thanks to the unemployment! Then the next year you get a job doing camera work again, make some money on all the writing that you did during your year of “unemployment” and then repeat cycle. You can make quite a lot of money doing this while being “unemployed”. These people disgust me
Under a system like the one Mr. Vuk describes, it’s no wonder that the quality level Hollywood entertainment has gone so appallingly downhill.
While Vedran’s story is interesting it is impossible in reality. Unemployment benefits only last a maximum of 26 weeks, the worker must be unemployed through no fault of their own (how do you orchestrate a lay-off every year?), carrying a boom stand is not a high-paying job, if you can make a living writing you wouldn’t want to stop and carry a boom anyway, and if you are a cameraman you are probably an aspiring cinematographer not an aspiring writer.
On the strike itself, it is really a lockout masquerading as a strike. The studios and the networks want a strike. It boils down to a battle over New Media. The writers want a fair residual rate for internet downloads. They realize that the internet will soon be the dominant way to access the product they produce and thus want to be compensated when a viewer sees the fruits of their labor. The media conglomerates want the status quo and a three year study of the issue with no promise of payment ever.
Of course, the free market solution, at least for feature writers would be to focus on creating new companies outside the AMPTP that pay fair profit participation. The studios could just distribute for a flat distribution fee or find new distribution methods altogether.
As for unions in general there was an interesting discussion in Dr. Hulsmann’s new book where Machlup sends a letter to Mises asking him to “bless his evasive way of addressing pro-labor-union audiences.” Machlup writes: “I will have no choice but to say that monopoly wages are the only purpose of labor unions, and that strong labor unions mean unemployment and inlfation and lead to an authoriatian state. Can an honest man avoid such statements? Are there any alternatives?” Mises responded that he would tell the audience to liberate themselves from false ideas, to study economics, and go on to convince others. But, he emphasized: “I reject any outlawing or limitation of the liberty of association. No liberties shall be abolished, only coercion.” (Mises: The Last Knight of Liberalism, p.860-861)
Mike,
I believe it has something to do with the single gig nature of working on movies and commercials. You don’t have to be hired to a film company for years. Often people work a movie and then switch to another movie project. You sign on to do the Brad Pitt movie for 6 months and then the Nicholas Cage movie for six months. You don’t work for the same company necessarily. So when the filming of the movie is done your employment is over. I think this process has something to do with that. Also, side note, everyone in the movie business makes tons of money (well not tons but for not having a college education and very little experience, one can make a decent living). People like 2nd camera assistants easily make 20-25 an hour. With writing, you have to also consider that it’s a hit and miss sort of thing hence someone would want some background constant income to keep them stable (probably one of the reasons the union wants higher percentages on videos sole…..higher residual income). Very few writers are able to consistently pump out hit after hit. Every writer doesn’t have to make money on writing. Suppose, I’m just getting into it. This would be a nice route. I’m not sure of the specifics involving all of this. Perhaps, I’ll call up my friend tomorrow and get the details.
Yes, and “the single gig nature” or 28 day film shoot or any limited employment contract makes it impossible to collect unemployment benefits in the first place.
Your first scenario is a fantasy.
And anyone who was able to retrieve unemployment benefits on a continuous basis would soon find himself unemployable in the future.
Mike,
Here is a link from the California department for unemployment, specifically explaining for actors and writers when their contracts are considered employment and when they are not considered employment:
http://www.edd.ca.gov/uibdg/ut105.htm
There seems nothing fantastical about these distinctions to me.
I’m a bit puzzled at the kudos this intellectually lazy hit piece has received.
Tucker complains that unions aim to “cartelize themselves against competition from other workers” to the detriment of “other writers and consumers.” So what? This is not a problem qua libertarianism. ‘Pro business’ libertarians like Tucker don’t complain when employers act to the detriment of employees by squeezing as much work out them as they can while paying them as little as possible; nor does he complain when employers strategize to convince the buying public to pay more for their product than they might otherwise do. Employees have the same types of interests that employers do, and they have every right, in a consistently applied libertarian ethical system, to act in a way which maximizes their personal income even if that results in higher costs for the employer or consumer.
Tucker also complains that union members are themselves “victims of the union” because the union members, in return for voluntarily agreeing to join the union, have obligated themselves to follow certain rules of conduct that maximize collective strategies for success. Again, this is not an issue qua libertarianism. Tucker doesn’t complain when employees make contracts with their employers that limit their freedoms (of association or otherwise); and in fact it seems patently clear that employers (especially absent a collective bargaining agreement) wield significantly more power over the liberties of an employee than any union ever could. And in fact, unions are far more restricted from engaging in arbitrary punishments of their own members than employers are from punishing their employees. Absent a collective bargaining agreement with a ‘for clause’ termination provision, your employer can fire you for almost any reason – a union, not so much.
Tucker ridicules the demands of the union members, but again, so what? This is not an issue qua libertarianism. I don’t ever recall seeing Tucker rail against the contracts of highly paid executives, even though their demands are far more outrageous than .3% adjustments to the home video residual formula. Employees, whether they be unionized writers or highly paid executives have every right to negotiate, collectively or on their own, whatever contract terms they want.
Now, I completely agree that the National Labor Relations Act and its amendments have interjected an additional un-libertarian element of State-coercion into an already warped employer-employee relationship. It may be true that the elimination of the NLRA would lead to a further decline in the influence of unions in the United States – but repealing the NLRA is not going to turn the heavily regulated business environment of the US into a truly free market. The Administrative/ Regulatory state, which consistently skews the employment market in favor of large-scale, capital intensive industries is still going to exist, and as a result employees are still going to be selling their labor in a buyer’s market that has been artificially cartelized by an American government which has been “pro business” rather than “pro liberty” for a hundred years before the New Deal.
And as a matter of law, while it is true that under the NLRA the employer has an obligation to negotiate with the union in ‘good faith,’ even while the union is on strike, Tucker is VERY WRONG when he suggests that the employers can’t simply replace the striking union workers with replacements. In fact, THEY CAN. The US Supreme Court held, way back in 1938, that during an economic strike, the NLRA does not prohibit employers from replacing their entire striking workforce with non-unionized replacement strikers, and that those replacement workers can then become permanent even after the strike has ended. (The cite is NATIONAL LABOR RELATIONS BD. v. MACKAY RADIO , 304 U.S. 333). Why don’t the employers do this? Obviously they think their unionized employees are worth the potentially billions in losses that could result from a strike. Maybe there is something to this solidarity thing after all…
John Hays
I don’t see that a detailed response to the above is necessary. If readers can’t see all that is wrong with what Mr. Hays says, I suggest taking a look at Hutt’s Theory of Collective Bargaining.
On the other hand, I have never seen Mr Tucker rail for corporate subsidies etc, and I am sure he is consistent in his opposition to all state intervention, including that in favour of business.
Jeffry:
Your evasion is both transparent and ridiculous. Even if one accepts the central economic argument of Hutt’s “Theory of Collective Bargaining” – that wage gains made by unionized workers can only come at the expense of the exclusion of other workers in the industry and via increasing pries for consumers generally – there is no libertarian justice argument that follows from this. After all, people have every right to organize and collectively bargain for increases in wages REGARDLESS of what effect it has on their employer, other employees in the same field, and consumers. Hutt did not because he was a consequentialist libertarian and SUPPORTED the use of State violence to break up consensual private organizations that he felt weren’t in the ‘public interest.’
(See John Egger’s “The Contributions of W.H. Hutt – http://mises.org/journals/rae/pdf/R71_5.pdf)
Of course, as a consistent libertarian, you should know better – and you should oppose, in contrast to Hutt, the government’s use of Anti-Trust laws (or any use of force) to break up consensual private organizations that seek to ‘restrain trade’ for their own benefit – whether they be employers or unions.
- John Hays
John, I find it frustrating when libertarians attempt to spin out all truth from a priori axioms. It’s easy to make mistakes that way. Maybe you just need to read up on the history of the New Deal: the modern union as we know it was created by the state. Hardly a surprise to realize that. You see people in the streets of LA blogging and they are being denounced for breaking the strike. A good indication of state involvement is the persistent presence of coercion as opposed to mutually beneficial exchange. When workers see the boss as the enemy yet continue to demand to work there and get paid more, there is a clue.
Jeffrey,
I find it frustrating when libertarians attempt to justify their personal prejudices by ignoring fundamental a priori axioms — but hey, here we are. Of course, you’re being disingenuous here. You’re trying to apply the same axioms that I’m applying – if you weren’t, you wouldn’t be appealing to the Non-Aggression Principle by making continuous (and incorrect) references to “coercion.” You’re just not applying them properly because your anti-union prejudice apparently dominates your capacity for critical thought.
For the record, I am pretty well versed in New Deal labor law – as I am a law student who has made a formal study of the topic. You should be careful about lecturing me on the importance of the subject matter when it was your demonstrated ignorance of the Mackay Radio doctrine that led you to mistakenly claim that ‘Hollywood’ couldn’t simply just replace all the striking workers.
You continue to utilize ‘coercion’ in an ambiguous ans misleading manner. Are you suggesting that “denouncing” people is coercion? Not by any standard that I’m aware of. Strangely enough, I doubt that you would consider it ‘coercive’ for an employer to fire an individual employee. Why should it be coercive for a union to exercise their bargaining power in a similar way by conditioning membership in their organization on adherence to strike rules? I can guess – an irrational double standard.
Finally, you misleadingly argue that there’s something illibertarian about employees having a relationship with their employer that is adversarial, as ‘opposed’ to mutually beneficial. This is, quite frankly, absurd. In fact, the vast majority of business transactions are both adversarial AND mutually beneficial. If a small business owner is looking to rent a space to locate his business, he’s going to have to deal with a commercial landlord. Both parties have something to gain from the relationship, a business space for the owner, and a lessee for the landlord. Both, however, have an adversarial interest in extracting as much benefit from the other party as they can for the least price. The landlord is going to want a high rent; the business owner a low rent. The landlord may want a long lease; the business owner a short lease. The business owner may want the landlord to pay for initial improvements to the space; the landlord may want the business owner to bear those costs. These kinds of adversarial bargaining positions are wholly consistent both with libertarianism AND with the principle of a mutually beneficial arrangement. And there is absolutely NO REASON WHATSOEVER why the employment relationship should be held to a different standard.
Why should it be coercive for a union to exercise their bargaining power in a similar way by conditioning membership in their organization on adherence to strike rules? I can guess – an irrational double standard.
The above is not at the heart of unions’ coercive power, rather it is that they forcibly prevent non-members from filling the jobs they have walked away from.
Mikey:
That is untrue. As I’ve stated twice already, under the US Supreme Court’s decision in Mackay Radio, employers are NOT prevented under the National Labor Relations Act from replacing all striking workers with non-unionized replacement workers during an economic strike (which the writer’s strike is). If an employer does that, she is under NO OBLIGATION to fire those striking workers to make way for the unionized workers in the event that the strike is finally settled. The studios could, if they so desired, replace EVERY SINGLE UNIONIZED worker who is out on strike right now with a non-unionized replacement worker, and then bargain the union to a stalemate until it eventually capitulates.
Why don’t the studios do this? Well, because the studios feel that the writers who have agreed to join the union for their own protection are WORTH SO MUCH MORE than those non-unionized replacement workers that they could replace them with that it’s actually in their interest to sustain millions of dollars in strike losses than lose them. The quality of their product, as perceived by their employers, makes the strike a loss worth bearing. That’s bargaining power for you.
- John
John- couldnt agree more. But this is a rare event.Generally unions get above market wage rates by excluding non members from competing, the type of labor is much more elastic,supply wise, than the kind involved in writing good scripts.Workers trying to cross a picket line are usually met with violence and threats, these acts rarely are prosecuted. In my view this strike will be over soon, with the studios capitulating.
Mikey:
Just so we’re clear, there’s nothing wrong, per se, with excluding non-union members from competing. There are certainly tactics by which this can be achieved which are illegitimate by libertarian standards, and tactics which are perfectly legitimate. I FULLY AGREE that violence and the threat of violence are completely illegitimate tactics. What this has to do with the current writer’s strike is beyond me, however, as there has not been, to my knowledge, violence committed against anybody in relation to it. And even assuming that individual strikers had engaged in or threatened violence against others, the illegitimate actions of some cannot transform the wholly legitimate activities of others – and going on strike with your union is a perfectly legitimate activity – into illegitimate actions.
Given the context, I find the specter of violence to be pretty unconvincing. I mean, this is the Writer’s Guild – hardly at the Teamsters. These people write “The Daily Show.”
- John
We are arguing at right angles.One question tho,
if the supply of good writers is tight, competition between studios should bid up the wages to market levels, assuming they now are currently below. Your thoughts?
The Hollywood unions are set up to force anyone with talent to come into their collectivist-fascist groups before they can work on a major studio set. That is why such garbage comes out of that smog-trap. Creative unions are a contradiction in terms.
@Mikey
re: “if the supply of good writers is tight, competition between studios should bid up the wages to market levels, assuming they now are currently below.”
Negotiation of terms is part of the transaction process and, hence, the market.
Are you implying that sellers ought only passively accept or decline deals and never assertively negotiate with a potential buyer, merely so long as more than one potential buyer exists?
And…
1) If so, do you apply that dictum universally, or just in the case of labor deals?
2) If so, AND if you limit that view solely to the labor market, then I must ask what (in economic terms) is so special about labor?
If so, AND if you apply it universally, then I must say you’re really doing yourself a disservice when it comes to selling a home or car.
Brad- + Are you implying that sellers ought only passively accept or decline deals and never assertively negotiate with a potential buyer, merely so long as more than one potential buyer exists?
No, not at all, however, negotiate or no, there is no way to sell anything, including labor,for more than the highest bidder is willing to pay.
And…
1) If so, do you apply that dictum universally, or just in the case of labor deals?
The same economic laws apply to labor that apply to any economic good.
2) If so, AND if you limit that view solely to the labor market, then I must ask what (in economic terms) is so special about labor?
See above.
If so, AND if you apply it universally, then I must say you’re really doing yourself a disservice when it comes to selling a home or car.
As I said, there is no way to sell anything for more than the highest bidder is willing to pay.
Good marketers can change peoples minds about how high they will bid, alas I am not one of them.
Mr. Hays,
To your first post I will respond as I responded on the Left-Libertarian group in Yahoo. Comments inside (mine will not feature consecutive or broken >’s).
> Tucker complains that unions aim to “cartelize themselves against
> competition from other workers” to the detriment of “other writers and
> consumers.” So what? This is not a problem qua libertarianism.
Well, yes, you’re correct it is not a problem qua libertarianism, but libertarianism and the Mises Institute are not necessarily always going to coincide. As far as I’m concerned, the Mises Institute dedicates itself to Austrian Economics (which is against Unionization based on economic arguments, not on moral or politically philosophical ones) and though Austrian economics largely coincides with libertarianism, the two are NOT the same thing.
Austrian economics = Economics.
Libertarianism = Political philosophy.
One may criticize unions based in in their uneconomic principles as an economic agent while still acknowledging that they are morally legitimate.
>’Pro
> business’ libertarians like Tucker
Oh come now… Was that really necessary?
> don’t complain when employers act
> to the detriment of employees by squeezing as much work out them as
> they can while paying them as little as possible; nor does he complain
> when employers strategize to convince the buying public to pay more
> for their product than they might otherwise do. Employees have the
> same types of interests that employers do, and they have every right,
> in a consistently applied libertarian ethical system, to act in a way
> which maximizes their personal income even if that results in higher
> costs for the employer or consumer.
Again, this is a philosophy debate, but you’re implying it to an economic point. I don’t think Tucker would have argued that unions are necessarily anti-libertarian.
> Tucker also complains that union members are themselves “victims of
> the union” because the union members, in return for voluntarily
> agreeing to join the union
OH PLEASE!!!!!!! Voluntarily? VOLUNTARILY!?! You must know a little more about unionization under state-capitalism than that!
> have obligated themselves to follow
> certain rules of conduct that maximize collective strategies for
> success. Again, this is not an issue qua libertarianism. Tucker
> doesn’t complain when employees make contracts with their employers
> that limit their freedoms (of association or otherwise); and in fact
> it seems patently clear that employers (especially absent a collective
> bargaining agreement) wield significantly more power over the
> liberties of an employee than any union ever could. And in fact,
> unions are far more restricted from engaging in arbitrary punishments
I don’t know what you’re arguing here exactly… Whether employees wield “more power” over their employers or not is particularly irrelevant to any debate – not to mention invalid due to the pure subjectivity involved in it.
Again though, Tucker is, as far as I know, arguing based on the belief that unions hamper the general equilibrium in price to be found, not that people ought not to exercise in their free will.
> of their own members than employers are from punishing their
> employees. Absent a collective bargaining agreement with a ‘for
> clause’ termination provision, your employer can fire you for almost
> any reason – a union, not so much.
>
> Tucker ridicules the demands of the union members, but again, so what?
> This is not an issue qua libertarianism.
Nor was it ever!
> I don’t ever recall seeing
> Tucker rail against the contracts of highly paid executives, even
> though their demands are far more outrageous than .3% adjustments to
> the home video residual formula. Employees, whether they be unionized
> writers or highly paid executives have every right to negotiate,
> collectively or on their own, whatever contract terms they want.
>
> Now, I completely agree that the National Labor Relations Act and its
> amendments have interjected an additional un-libertarian element of
> State-coercion into an already warped employer-employee relationship.
> It may be true that the elimination of the NLRA would lead to a
> further decline in the influence of unions in the United States – but
> repealing the NLRA is not going to turn the heavily regulated business
> environment of the US into a truly free market.
Please, lets not get into the nit-picky issues of give and take for the most pressing issues and the least. Its too wishy-washy for me to deal with.
All state intervention, ALL, ought to be abolished at the same time. I will not argue that abolishing one at a time will involve a better reaction, because it won’t and that is NOT the anarchist position.
—————–
For your second running up comment, I will reply to you here,
“Your evasion is both transparent and ridiculous. Even if one accepts the central economic argument of Hutt’s “Theory of Collective Bargaining” – that wage gains made by unionized workers can only come at the expense of the exclusion of other workers in the industry and via increasing pries for consumers generally – there is no libertarian justice argument that follows from this. After all, people have every right to organize and collectively bargain for increases in wages REGARDLESS of what effect it has on their employer, other employees in the same field, and consumers. Hutt did not because he was a consequentialist libertarian and SUPPORTED the use of State violence to break up consensual private organizations that he felt weren’t in the ‘public interest.”
I do not believe that you are adequately assessing the situation here at all, Mr. Hays. You continue to miss the point that there is a difference between arguing for something based on libertarian principles and arguing for something on economic reasoning.
For your accusations against Professor Hutt, I can only ask that you prove that the increase, or rather a higher wage rate than the GE would not result in some form of a displacement in economic wealth.
- On the other hand, that would imply that unions do not work within the framework of a GE in the first place, as I would personally argue. –
In any case, your rebuttals here are quite confusing, they jump all over the board between philosophy and economics, when one should really attempt to focus his energy on one subject, for the time being. I think this is a general problem for most frequenting message boards, however, so I do not blame you.
To highlight your misunderstanding of the concepts here,
“This is, quite frankly, absurd. In fact, the vast majority of business transactions are both adversarial AND mutually beneficial.”
You right here seem to give me a clear signal that you are not speaking directly to one issue as you use both a proper economic term – mutually beneficial – and a philosophical term – adversarial. The issue of whether the workers like their boss or desire better wages/working conditions/hours, is irrelevant to the economic position! If they decide to work for him, then in the economic sense the transaction is mutually beneficial, if they stop, then it is not, if they sit out side and chant slogans of “Hell No, We Won’t GO!” then well they indicate that this personal relationship with the employer is still mutually beneficial – or else they would not do it.
Now, I hope you realize that this topic, in large part thanks to the combined posts of yourself and Mr. Jeffrey – I have not read Mr. Mickey’s comments. I must stress, the issue we are speaking of is an economic one, not moral!
I agree with the undertone (implied by John Hays and Brad Spangler) of the argument of some (of course I’m not suggesting all) free-market types who seem to argue that for a passive nature for an employee. I have a book dealing with beginner legal issues and it admits that the employer/employee relationship employer/self-employed is based on the ye olde concepts of lord/peasant and lord/artisan relationships respectively. The first relationship was a hierarchical one where the lord would expect subservience from the peasant whereas the second is where a lord would view an artisan as a social near-equal and would expect to negotiate a deal for the work required.
After all, some have argued in a true free-market situations like the strike in question wouldn’t adventuate. But who’s to say that’s the case and the writers are merely exercise their bargaining power which would likewise occur in a free market?
@mikey
Regarding: No, not at all, however, negotiate or no, there is no way to sell anything, including labor,for more than the highest bidder is willing to pay.
That statement sort of misses the point — namely, that rhetorical efforts to systematically discourage assertive negotiation by one subset of transaction participants (under color of economic thought) are a misguided effort to cripple the market’s own discovery process for determining what “the highest bidder is willing to pay”.
Ironically, the Austrian school would seemingly indicate such efforts are ultimately doomed to fail. It just makes one wonder what the heck is going on when one sees that sort of thing on Mises.org.
Mikey,
You assume that what “the highest bidder is willing to pay” is a given, and that there are no systemic factors lowering the bids necessary to attract labor.
The argument that unions are cartels that disadvantage non-union workers by excluding them also ignores the rise in non-union wages when non-union employers are competing with a union employer. It ignores, likewise, the possibility that the overall effect of a highly unionized market is to raise wages at the expense of the rate of profit (not to mention management salaries), and that the current rate of profit is a rent from the depressed bargaining power of labor.
Your question of whether competition between buyers of labor should raise wages to their normal value gets to the heart of the issue: whether genuine free market competition is in fact allowed to operate. If the state intervenes to artificially reduce the number of firms competing for labor, i.e. if there is a state-created monopsony in the labor market, then wages will be depressed.
I agree with Brad and John that even in a free market unions would play a useful role in the discovery and negotiation process. But under state capitalism, unions are far more useful as a counter-economic institution for contesting the power of the state’s favored clients.
A few other points.
First. The Wagner regime did not strengthen labor. Before Wagner, the primary focus of organized labor was *within* the workplace, not strikes. Organized labor took advantage of the nature of the incomplete nature of the labor contract by regulating the expenditure of effort on the job. The sale of labor-power is a contested exchange, in which the terms of the incomplete contract are worked out after the fact by the relative social power of management and labor on the job. As most libertarians are fond of pointing out, the worker must accept the best terms that are offered at a given time, and either take a job or leave it, and it is the employer’s prerogative to define “a fair day’s wage.” The converse is also true: the employer must accept the maximum level of effort that workers in his labor market are willing to offer, and either take it or go out of business; and the definition of “a fair day’s work” is a convention that depends on the level of effort workers are willing to expend.
Anyone who considers workers’ attempts to minimize the effort expended for a given wage “immoral,” but does not consider immoral the mirror-image attempt by employers to minimize the wages for a given amount of work, thereby reveals that he does not truly consider the labor market to be an arena for free contract among equals. Rather, as Herbert Spencer pointed out over a century ago, the employer-employee relationship contains a good many cultural holdovers of the old master-servant relationship.
Second. Even when pre-Wagner unions did go on strike, part of their leverage in doing so resulted from the transaction costs involved in hiring and training a replacement labor force.
Third. The labor law regime deprives labor of many legitimate weapons for making the strike more effective. Wagner created a bureaucratic labor regime with the unions as enforcers of contracts against their own rank and file, actively suppressing the older model of direct action to reduce effort on the job, and deprived workers of any weapon *but* the strike. Taft-Hartley then outlawed sympathy and boycott strikes up and down the production chain, whose multiplier effects could make a strike devastatingly effective. Before Wagner, the great strikes of the CIO were planned as a general staff plans a theater of military operations, with strikes in an industry’s suppliers and retail outlets and teamsters refusing to carry scab cargo. With such coordination, it was unnecessary for all or even a majority of workers to walk off the job at any stage of the production stream. In today’s “just-in-time” market, the effectiveness of this strategy, which is an entirely legitimate withholding of labor from a free market standpoint, would be an order of magnitude greater. But Taft-Hartley prohibited it.
Wagner, in effect, told the militiamen at Concord: “Come out from those rocks, put on these bright red uniforms, and march in parade-ground formation like your enemies, and we’ll make sure you don’t lose *all* the time.”
Then Taft-Hartley told them: “Oops. We’ve decided you’re still winning too much of the time.”
If I run a grocery store and hire workers at 10 dollars an hour and someone else runs a union grocery store at 15 an hour, why the hell would I raise my wages to “compete” with the union grocery store. You have to remember that unions are selective about who gets in and often people are kept employed in larger numbers than necessary. As an employer, the union wage doesn’t effect me at all. Go ahead get a job at the union if you think you can. I doubt you will and when you fail, I’ll be paying 10 an hour as usual. Union members love staying at their jobs forever and it’s difficult to fire them. Their isn’t enough turn over to cause enough competition with anyone else.
Brad- thanks for sifting thru my horrible misuse of HTML tags.FWIW,I have been a union member for 35 years. I have also been studying economics on my own (mostly Austrian) for the same time.I have never felt that I was being discouraged, by what I was reading,from doing any assertive negotiating
when I had something to sell, including my own labor.Just the opposite in fact.It made me realize that if I had more scarce, more desirable
job skills to sell I could ask for and recieve even higher than scale.
I do understand what you are getting at. But I don’t think its that easy to stop people from finding out what their labor is worth.Up here in Alberta, the hot economy has actually pushed non union wages higher than union wages in some cases, ask anyone in the affected trades if they are aware of this, they’ll think you’re joking!
I think again it is necessary to distinguish between free markets and what currently prevails… in that context, worker organization is nowhere near as pernicious in a mixed economy, even if it might be in a freer society, if it is so at all.
It ignores, likewise, the possibility that the overall effect of a highly unionized market is to raise wages at the expense of the rate of profit (not to mention management salaries), and that the current rate of profit is a rent from the depressed bargaining power of labor.
Kevin-Would you include the mental effort on the part of the entrepeneur as being part of the labor involved in production?
Vedran Vuk,
I think the idea is that employers raise wages to reduce the threat of a union organizing drive (which would at least be disruptive and increase turnover even if the employer were confident he could defeat it). In addition, the lower training and replacement costs for a union shop with low turnover may be a competitive advantage, in which case competing employers might seek to imitate that advantage without actually having a union, by improving wages and working conditions and thereby increasing the job rents of their workers. At any rate, I believe the general phenomenon of higher wages in job markets with unions is fairly widely accepted.
mikey,
I definitely regard entrepreneurial efforts as a form of labor. But the effect of corporate capitalism, as organized by the state, is to replace genuine entrepreneurship as much as possible with rentier incomes from artificial scarcity. The natural tendency in a free market is for entrepreneurial profit from a particular innovation to be short-lived, as it is universally adopted and drives down average production cost. The corporate state rigs the game to prevent this from happening, so that privileged actors can derive perpetual incomes from past innovation while greatly restricting the rate of new innovation.
“The natural tendency in a free market is for entrepreneurial profit from a particular innovation to be short-lived, as it is universally adopted and drives down average production cost.”
I would reword that a bit, Kevin.If production costs are falling, it doesn’t follow that profits
fall.Rather it is competition between sellers that push prices down(but not neccessarily profits),
as more companies adopt the more efficient technology.Some companies profits can rise even as they are able to sell more cheaply- ie Henry and his Model T.
Your arguments against ‘corporate capitalism’ summarize the case made by Gabriel Kolko in “The Triumph of Conservatism.”
This book has been cited over the past 40 years by free market proponents.He has a good diagnosis,
but a bad cure. He is a lifelong Marxist.
Mikey,
Totally agree with your assessment of Kolko’s “cure.” In fact, I think he stated flat-out that he resented the free market libertarian use of his work as evidence that the best way to eliminate monopoly was to remove the state intervention it depended on. He struck me as a relatively sophisticated Marxist, though, being friendly to decentralization and worker control rather than the typical vulgar Marxoid forumla “big”+”centralized”=”progressive”
By “profits,” I simply meant entrepreneurial profits or producer rents.
Kolko should consider it flattery.
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