It’s Chaos on the Shop Floor!

26 11 2012

For all but the smallest or most specialized of employers, a single employee’s refusal to work has a minimal effect. For all but a comparatively small portion of the workforce, an employer’s dismissal of an employee is devastating. These baldly true propositions underlie the basic, original organization of modern American labor policy.

I use the phrase “labor policy” because there isn’t a good term in popular use for what I’m trying to talk about. That belies a phenomenon we’ve noticed particularly over the last handful of years: increasing (visible) fissures on the political left between “neoliberals” or “left-neoliberals” and traditional progressives. That is, when labor or class issues crop up–Occupy, collective bargaining in Wisconsin, the Chicago teachers’ strike, the Hostess strike and bankruptcy, the Wal-Mart job actions–the former tend to be reflexively skeptical, the latter reflexively supportive, of the “labor position.”
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Labor Markets and the Jolly Monopoly

27 09 2012

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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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.

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Is There a Leftist Case Against the State?

6 08 2010

I feel the tension between liberals and the Left. Being on the political Left in the US puts you in uncomfortable position because the national conversation is extremely narrow, and liberals focused on day-to-day governance are pinched from both sides. Those on the broader Left–the “International Left”–come across as contrarians or as puritanical. Petty liberals–those who, broadly speaking, hew to the center-left line of the Democratic Party, embodied by the Brookings Institute, the Center for Budget and Policy Priorities, and public intellectuals like Matt Yglesias or Robert Reich, and politicians like Barack Obama and, formerly, Ted Kennedy–bristle as much at criticisms from the Left as they do to criticisms from the American right wing, and often are more defensive against those criticisms as they see them as coming from an attitude of “purity” or Utopianism.

Before getting to the problems with statism, it is useful to define what I mean by “liberals” and “the Left”.

It is hard to define terms in this debate, because the political spectrum is essentially fluid and the absence of ideological parties with specific manifestos confound categorization. In general terms, the petty liberal left is redistributionist and mildly statist; petty liberals don’t dispute that the foundations of American society are essentially just; rather, they seek to use extant institutions to address distributive problems.
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The One Thing To Know

7 05 2010

It occurs to me that there is only one thing you need to know to understand why unions and collective bargaining are good for the vast majority of people: the Black Death ended serfdom in England.

If that sounds, say, insane, bear with me.

After the last wave of the Black Death in England, by some estimates 60% of the population died. That’s more than one out of two people. The result was an immense labor shortage, allowing serfs to demand higher wages and outright buying their way off of the  land and into cities. Feudalism in England was essentially dead within two hundred years, and an incipient, mercantilist capitalism took its place.

It wasn’t entrepreneurial spirit, it was a catastrophic labor shortage that allowed people to reappropriate wealth downward by themselves through mutually consented to bargains. Not that there wasn’t a good share of violence–peasant uprisings and what not–but for the most part it happened incrementally. Feudalism didn’t explode, it decayed and crumbled.

The purpose of class-wide unionism is to give the widest number of people the ability to create artificial labor shortages for the purposes of bargaining. This is something that is regularly done by all different groups. For example, the academy creates standards for accreditation and subjects applicants–particularly doctoral candidates–to rigorous and often subjective evaluation by members. Electricians create standards and exams and often apprenticeships that are required for accreditation in order to ensure quality of the profession. Doctors do the same thing. In both cases (doctors and electricians), more people are qualified to perform these jobs than actually are able to practice them. That is what we want: otherwise you wouldn’t know if you were hiring some quack or pyrhomaniac.

Professionals and tradespeople therefore have an advantage in the employer-employee bargaining relationship that the rest of the economy does not have, while at the same time those professions and trades create the barriers to entry that ensure their value in the marketplace. The relative value of professionals and tradespeople also requires a large class of unskilled labor. Given that unskilled labor is a necessary condition of the economic model that so benefits these groups, it is unreasonable to deny them–either formally or in practice–any advantages they can get for themselves in bargaining.

Maybe an industrial unionist shouldn’t be comparing unionism to the Black Death. But in these dire times for unionism, we’ve gotta go with whatever we got.