Can We Just Agree to Disagree?

26 04 2011

Thank you, minority associate, for writing up this stockphoto modeling contract.

Contracts have to be the answer. Nobody leaves a contract perfectly satisfied, but they’ve come to some agreement over their disagreement and walked away better off. If the goal is the most free and equitable human society, then contracts must be a primary medium in which it is accomplished.

Contract law is such a relief. Maybe because it’s a newish area of law, and so just feels more intuitive. Property law struggles under the weight of its feudal and confusing post-feudal roots, and so is full of terms of art (“enfoeffment” “covenant of seisin” “the rule against perpetuities”) and complex, non-intuitive rules. Torts deals with civil wrongs often not based on specific statutes and with extremely flexible or ambiguous rules (when is someone negligent? What constitutes a battery?). Criminal law of course is really ultimately based on social morals and mores. So, where once any felony got you a trip to the…I don’t know, head peeler–back in the day, now there are about seven levels of criminal homicide (murder in the first, second and third degree; manslaughter–both “heat of passion” voluntary manslaughter and involuntary manslaughter, which can be reckless or negligent).

Or this thing.

Contract law, though, is straightforward. Not that it isn’t complex, because it is, but rather its complexity is elegant. While facts can complicate just about anything, the rules in general make sense because all disputes ultimately lead back to one question: should the state enforce this promise?

Everything else is left to the individuals or organizations for themselves to decide. So long as the contract isn’t for something illegal (thus why bookies break legs but payday lenders garnish your wages) or made under fraud or duress (Cf., Johnny Fontane‘s personal service contract), the courts just try to figure out what people promised to one another and whether it’d be just to enforce those promises.

In theory, contracts can’t be literally one-sided. Part of the formula to determine whether a promise has been made at all is the doctrine of consideration, which basically means you can’t have a contract unless both parties are giving something up. Both parties also have to agree free of duress or fraud, meaning they were voluntarily giving something up. As far as human interactions go, this is pretty swell.

There’s even a rule that contracts that are egregiously one-sided should not be enforced. Yay!

At the same time, getting a contract is an adversarial process. Both sides are trying to get the best deal they can. Neither side gets everything, but they get something–they always end up in a better position than when they started. Nevertheless, there are two competing interests that must come to voluntary solution. So while negotiations can be competitive, even rough, their resolution must be satisfactory to some degree.

Its this simple fact that draws me to the labor movement as a solution for structural social inequality. Because while collective bargaining agreements don’t leave everybody perfectly satisfied, everybody is nevertheless still ahead–and got to their position through their own voluntary actions.

If the program of the left is to make sure people have truly equal opportunity for material security, it seems backward to wait until wealth has accumulated and then use the power of the state to force them to share it. Why not just take out the obstacles to ideal negotiation and let wealth be distributed by private parties by mutual agreement?

Libertarians believe that anti-trust legislation is unnecessary because individuals will naturally defect from the cartel to seek the advantage of offering a lower price. (The assumption being that monopolies will artificially maintain high prices). Thus their token support for collective bargaining in theory but opposition to it in practice: because unions can enforce a monopoly in a specific workplace, they bar individuals from defecting from the “cartel” to seek a comparative advantage. In practice, collective bargaining is probably impossible without that power.

Empirical proof of the instability of monopolies under natural conditions.

(Brief aside: I say “probably” because there is a school of thought that “minority unionism” is a meaningful alternative to enforcement of firm-wide unions. Minority unions would represent some number of employees who choose to bargain together, but then not the whole workforce would be covered by the contract).

Oh my god, we get it, it's bad or awesome

When the state takes property through its monopoly on coercive force, no matter how righteous its purpose, it’s going to perpetually piss people off. Typically the wealthiest and thus most powerful people. A program built on that policy will always be unstable. However righteous it may be to tax at a higher rate the people who benefit the most, it just isn’t a long-term solution. Two things happen: first, the highest-tax people exert influence to carve out undermining exceptions and loopholes for themselves, and second, they get tired of the charade all together and get their taxes lowered. Revenues decline, and it becomes necessary to finance social programs with debt. Then you get mind-numbing debates about debt ceilings, which is the real crime.

Still lots of Mr. Potters.

The thing is, even with ideal negotiating conditions, wealth wouldn’t end up anything close to evenly distributed, socialist-caricature style. When union density was at its highest in the 50s and 60s, there were still gigantic megacorporations and insanely rich people. There’s a very simple human reason for this: there is a natural hierarchy of ambition. People care about different things; and of the people who care most about wealth, some are more ambitious than others. Not everybody is willing to put in the effort to get wealthy because they’re satisfied at some-or-other amount of it. People make this cost-benefit analysis every day–is the extra work worth the workplace advancement?

To this end, we have Mondragon. There’s a lot of contentious scholarship around the Mondragon worker-owned collective giganto-corp that employs almost 90,000 people and whether it’s legit. By a lot of contentious scholarship of course I mean a handful of books read by the dozen or so people who pay attention to these things. The proof of the pudding seems to be in the tasting: Mondragon is huge and successful in disparate industries, dynamic, and competitive in a globalized marketplace.

One of Mondragon’s principles is “sovereignty of labor,” meaning essentially that the place is run democratically. As a result, it provides services like daycare and scholarships for children of employees and subsidized education for talented managers. In other words, even when workers actually do control “the means of production,” they’re still electing to better compensate the more talented and hard-working people. Again, it makes sense: they want to provide an incentive for people to work harder because not everybody wants all the extra freaking work. Some of us just want to get home and read a book and then make out with someone on our couches. Leave us alone.

If those willing to actually work harder can still be compensated better, I’m not really certain what the problem is. The people at the top of an actually worker-owned company make enormous sums of money that enable them to live in comparative luxury. So why is the right wing so adamant about the inhibition of collective bargaining?

Ostensibly because it violates the rights of the individual worker, but in reality because it serves their bargaining position.

The idea behind the former is that a simple majority of workers can bind the minority to association they may not desire. Ignoring that everybody tacitly accepts this when they take a job in the first place, it also ignores that this is exactly how shareholder governance works. The majority binds the minority, whose recourse is to either accept it or sell their shares, just as the employee can accede to the contract or choose work elsewhere (or nowhere; they could start their own business).

Mondragon demonstrates the extreme. In reality, collective bargaining on a mass scale would just lead to meaningful and binding worker participation in their workplaces, rather than full-on ownership and democratic control of the firm.

Neither party gets exactly what they want, but they walk away better off than when they started. They’re still adversaries in a sense, but they’ve agreed to disagree, and walk away happy, if not thrilled. Sounds like being a grown-up.

"I love my job as a stockphoto model, but argh! Bills!"



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