I can’t believe I’m having to write this, but after a number of emails, twitter back-and-forths, and this fabulously stupid article by John Stossel at Reason, apparently it is in fact a thing that needs writing.
Critics of unions get easily worked up over the so-called “monopoly” that unions “enforce” in workplaces–their characterization of the requirement that upon a vote of employees, an employer must deal with an exclusive bargaining representative (i.e., a union) and may not cut individual deals. Basically, they say, if you work somewhere that is unionized, you are forced to join the union (this is technically untrue; at most, you are forced to pay an agency fee since the union is required by law to represent you); it is, they call it, “forced” rather than “free” association. Therefore it is the inverse of free association–and therefore it violates one of the most hallowed American rights, found right there in the First Amendment. Unions, unlike firms, get this “monopoly” power that they abuse to force people to pay dues. Outrageous.
Like so many reactionary arguments, it is elegantly simple and obvious until you spend an extra moment to think past the sloganeering.
Yes, in a superficial way unions act like monopolies–the sole “seller” of labor–in a single workplace or for a single employer. But that is only because the employer is a monopsonist–the sole “buyer” of labor. If you’re looking just at a single company, of course there is a sole “buyer” of labor–the single workplace. And if you’re in a situation where there is a single buyer, it only makes sense to allow the sellers to act like a single “seller”–that’s the only way they have equal bargaining power.
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America’s big cities (and major metropolitan areas) are the laboratories of policy, if states are the laboratories of democracy. In metro areas and cities, universities, professional organizations, and trade associations and economic alliances are capable of exerting outsize influence and try to implement to approaches to social and economic problems that, again, are more easily identified and addressed because of high population concentrations in relatively small geographic areas.
Tell the nation! Draw near all ye with David Brooks columns bookmarked for other than hate reading purposes: Chicago and America’s big cities have achieved post-partisanship! The very post-partisanship our President talked about on the campaign trail. As the post-partisanship machine takes firmer hold of our cities, it will move upward, capillary-attraction speed, to the states, until finally–finally!–we achieve the post-partisanship paradise pundits prattle on and on about.
What does that post-partisanship look like? Let Mick Dumke and Ben Joravsky tell you:
Welcome to part two in our ongoing series on the mayor’s millionaire’s club, in which we pore over the mayor’s daily appointment schedule with the aim of shedding light on how the mayor prioritizes his time–and his far-reaching connections…
[O]nce again, we found that his days were loaded with rich guys, campaign donors, powerful contractors, union busters, charter-school supporters, City Hall insiders, aldermanic brownnosers, and other favor seekers.
But during these three months Emanuel found time for another type of visitor: major funders of conservative attacks on President Obama. As such, the mayor’s calendar offers a glimpse of what passes for bipartisanship in Chicago–and shows the ways in which wealth and access, at least as much as party identity or ideology, have come to command the attention of politicians, leaving everyday people out of the conversation.
As a whole, appointments with neighborhood groups or community leaders were largely missing from the mayor’s schedule. [Amisha] Patel says her group’s requests for a meeting with the mayor have been ignored. She notes that Emanuel continues to find job subsidies for profitable corporations and developers at the same time he’s cutting library hours, neighborhood services, and public-sector positions. “Let’s talk about job creation but let’s do it in a full way.”
In fact, like many up-and-coming Republican stars, the mayor has shown a willingness–some would say an eagerness–to take on organized labor, especially the teachers union. He’s also an avowed supporter of charter schools, paying them about as many visits, and arguably more attention, as he does regular public schools.
Post-partisanship means staying away from the organized (and thus cantankerous) disaffected and powerless, and hew to the already powerful and wealthy who must know what’s best.
If this were just a Chicago phenomenon, it may be dismissed as yet another quirk of Chicago’s sui generis politics.
It’s not though! Phew, right? Post-partisanship lives to fight another day! In the form of…
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Privatization has been accelerating at break-neck speed (and in ludicrous ways) the last thirty years or so, in part because of the decline in government revenues and the general growth of the neoliberal consensus that assumes the profit motive brings with it ideal efficiency. It is also an efficient means of weakening the labor movement, because employees of a government contractor are covered by a different, considerably weaker, set of labor laws than employees of a state actor.
But privatization isn’t new; in fact, privatization of public services was quite common back in the day, and by back in the day I mean ancient Rome.
The late Roman Republic grew quickly as a result of conquests and voluntary ceding. There was no time to inculcate Roman civic values and grow the necessary institutions to ensure administration along Roman lines. Instead, what the Roman Senate, Consuls, and other governing bodies did to guarantee the provisioning of necessary public services and the gathering of taxes was to contract powerful local men, called Publicans, to provide these services and gather these taxes.
The Publicans in turn grew immensely wealthy with these government contracts, and thus were able to flex significant political muscle in Rome itself, through the buying of tribal leaders in elections and the funding of foreign adventures for ambitious soldiers and politicians. It was a textbook rent-seeking loop.
The privatization craze may be leading to similar results in the U.S. (hopefully without the foreign adventures, although, you know; military-industrial complex). Stories have been popping up with increasing frequency indicating that privatizing the provisioning of public goods is creating wealth, but not, you know, provisioning public goods any more efficiently.
For all my discontent with “left neoliberalism” and its pervasive influence, it’s nice when you get some concrete specifics, as applied.
In my piece on the constitutionality of the individual mandate, I argued that the Affordable Care Act created a distressing precedent, whereby the government addresses inequality-causing market failures through broad requirements of consumers to protect profits as a precondition to regulations and requirements of capital. The administration’s thinking in creating the individual mandate was undergirded by left neoliberal preference for “market solutions,” as much as by an over-cautious political calculation whereby industry had to be placated before social ills could be addressed.
And lo and behold, unbeknownst to me, the Hon. Brett Kavanaugh, a D.C. Circuit Judge appointed by George W. Bush, was saying the same thing, although from the opposite perspective. In his dissent to the Fourth Circuit Court of Appeals’ decision upholding the Act’s Constitutionality, Kavanaugh characterizes the individual mandate as an example of legislative ingenuity in a new era of “privatized social services”:
The elected Branches designed this law to help provide all Americans with access to affordable health insurance and quality health care, vital policy objectives. This legislation was enacted, moreover, after a high-profile and vigorous national debate. Courts must afford great respect to that legislative effort and should be wary of upending it.
This case also counsels restraint because we may be on the leading edge of a shift in how the Federal Government goes about furnishing a social safety net for those who are old, poor, sick, or disabled and need help. The theory of the individual mandate in this law is that private entities will do better than government in providing certain social insurance and that mandates will work better than traditional regulatory taxes in prompting people to set aside money now to help pay for the assistance they might need later. Privatized social services combined with mandatory-purchase requirements of the kind employed in the individual mandate provision of the Affordable Care Act might become a blueprint used by the Federal Government over the next generation to partially privatize the social safety net and government assistance programs and move, at least to some degree, away from the tax-and-government-benefit model that is common now.
Courts naturally should be very careful before interfering with the elected Branches’ determination to update how the National Government provides such assistance. Cf. Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241 (1964); NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937). The significant implications of a Commerce Clause decision in this case – in either side’s favor – lead to this point: If we need not decide the Commerce Clause issue now, we should not decide the Commerce Clause issue now. I therefore would not strain to sidestep the Anti-Injunction Act.
In other words, Kavanaugh seems to be saying, the individual mandate may appear unconstitutional in the same way that the Civil Rights Act (Heart of Atlanta Motel) and the National Labor Relations Act (Jones & Laughlin Steel) did because it is novel, as they were. But novelty, or new-ness, isn’t proof of unconstitutionality; it may just augur a new era of legislative instruments. Kavanaugh, rightly I think, sees the Affordable Care Act as the first step in that new era: an era where the government, rather than redistributing wealth or restructuring economic relationships to address social ill, fuels capital’s ability to act on the assumption that the “spontaneous order” of consumer choice and entrepreneurial acumen will cure social ills.
You may believe this to be true, that it’ll work. But if you do, you have to contend with the fact that the empirical evidence for it is thin; for all the Great Society’s many failures, the replacement of tight regulatory regimes with preference for public-private partnerships and market mechanisms has seen an explosion in income inequality, economic insecurity, household debt, and the concentration of political power.
Barack Obama is presiding over the beginning of a process that will inexorably result in the privatization of our school system. That doesn’t mean of course that all of our schools will be owned by big corporations; rather it means that within the next five to ten years, our largest school systems will be enmeshed with the private sector, and the regulatory framework that encourages same will be defended vociferously by a new and fierce network of rent seekers. Within a generation, “public schools” will be public only in the sense that they will rely on primarily on government money–similar in that way to the defense industry.
This is bad. Despite the neoliberal fascination with en-marketing everything to appease the Market Unicorn, competition and market forces will not “fix” education (which, coincidentally, is only broken in those places where poverty is high). It will however do these things:
(1) Inherent Decline in Quality. In order to provide the market signals necessary for competition to operate, it will reduce education to quantifiable superficialities (i.e., “high stakes testing”), undermining critical thinking and creativity, particularly in poorer communities.
(a) Commodification of Curricula It will thus give rise to a huge, and by necessity centralized, curricula development industry with a business model that incorporate rent-seeking by necessity.
(b) Institutionalizing Clout and Corruption as Market Advantage.It will encourage lobbying and market-exclusion behavior from the politically well-connected who can use political influence to design standards that benefit existing school-systems.
But I do hear a lot more from people who think of themselves as being “to my left,” who seem to me to spend a lot more time talking about the desirability of being more supportive of labor unions than they do talking about what concrete steps they want to take to achieve this mission. In a highly competitive market, there’s not much surplus for unions to get a share of.
It really, really annoys this man that anybody consider themselves “to [his] left.” He is determined to prove that anybody who does so is irrational or unserious.
This has to be one of the most profoundly frustrating things I’ve ever read on this topic that wasn’t in a comments section of Crain’s. Presumably Yglesias knows how labor markets and collective bargaining work, and he realizes that surpluses have precisely nothing to do with either the process of unionization or the right entailed by collective bargaining.
Ignoring for a moment the tone deafness of making his point about surpluses by using the socially necessary and universally identifiable world of craft beers, Yglesias says that cartelization of an industry (in this case, the beer market) makes unions stronger because they’re in a position to demand more of the rents. Yes, sometimes. So? Does that mean you can’t have competitive firms with heavily unionized workforces? For example, Southwest Airlines, or any of scores of other examples? Alternately, when single firms enjoy massive marketshare, does that make them somehow more amenable to unionization in the first place? I’ll pick an example out of the blue–Wal-Mart.
Wal-Mart is immensely profitable not thanks to any cartelization but in part because it is able to keep wages and benefits shockingly low while its competitors, particularly in the grocery markets, cannot–because they are unionized.
The argument being made here is that if unions go around unionizing small, barely profitable firms, they aren’t going to get much cash. Or that unions need cartels to grow. Or something. This misunderstands two key things: first, collective bargaining isn’t about skimming cream, it’s about a more even bargaining position for wage earners at firms, particularly large firms; second, it is getting to the point of collective bargaining–where the issues of profitability and “surplus” kick in–that is the hard part. When we talk about the need to grow unionization, we mean we need to make it easier to organize in the first place. The question of the competitiveness of unionized firms relates directly to the difficulty of unionization.
The problem labor has in competitive market places is not the lack of this “surplus,” it is the fact that firms whose union-busting is more efficient are able to force prices downward to a point that drowns their union competitors. Wal-Mart provides a perfect example of this, but you can look at any market. This was the entire concept behind SEIU’s infamous Justice for Janitors campaigns of the 1990s–going after the largest employers in a market simultaneously to prevent a situation where unionized firms were starved out of the market by union-busting firms. The lack of enforcement of collective bargaining rights on par with property rights puts union firms at short-term competitive disadvantages. But Yglesias starts his kvetch at the bargaining table, not the boss fight–in other words, after the hardest part is over. So when we–we loony, unserious, left-wing supporters of collective bargaining rights–talk about “concrete steps” that are “workable” what we mean is that we need to enforce worker rights as property rights precisely so that union-busting does not provide such a short-term advantage to firms. The reason SEIU went in and organized the largest employers in metropolitan janitorial markets all at once was to preclude the emergence of this comparative advantage for better union busters.
The right to unionize is not protected in this country–not by legislatures, not by administrative bodies, and not by the courts. That needs to change. How? Well, one start would be for people who claim they are progressives to stop talking about unionization as an abstract market strategy and realize that it is a fundamental human right. But more importantly, when unionization is easy, employers will no longer have such a strong pressure to bust unions, and the comparative advantage of staying union-free disappears. There are any number of big picture, fundamental reforms that progressive leadership could pursue–amending or abolishing the doctrine of at-will employment state-by-state, exactly as the right wing did with right-to-work; comprehensive reform of the Wagner Act; labor participation in corporate governance; funding for enforcement.
Here’s a start though: Democrats and their progressive enablers at think tanks could stop shrugging off every betrayal of workers’ rights–whether Striker Replacement, Employee Free Choice, or the creation of “free trade agreements” with nations that tolerate violence against union organizers.
I understand his point that unions can drive up costs (though this is a function of corporate governance as well), and that this puts union firms at a comparative disadvantage. But this takes as a given the difficulty of unionizing in the first place. The idea that unions need cartels to thrive, and with cartels we’d have no Rogue Ale, is simply not factual.