The idea that the biggest threat to workers right now is right to work legislation and not that NGDP is something like 8% below trend is completely insane.
I have mixed feelings on labor law. I like that it's an efficient way to express worker preferences. I can't see how it's unfair to corporatize labor after we've let capital corporatize. And I don't like the idea of forcing open shops on people engaged in voluntary bargaining that might include another arrangmenet.
But I really can't see how people get so excited about this right now relative to other issues.
Michigan's problem is not the decline of unions.
Michigan's problem is that people don't buy things from Michigan anymore.
Wednesday, December 12, 2012
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"I can't see how it's unfair to corporatize labor after we've let capital corporatize."
ReplyDeleteThat's a brilliant sentence!! I'd never thought about it that way!
As Tyler Cowen says, a "sentence to ponder"
"I can't see how it's unfair to corporatize labor after we've let capital corporatize."
ReplyDeleteWe do allow the "corporatization" of "labor"... it's called a "corporation". And they are voluntary associations.
What you are calling "corporatize" is actually "cartelize" and I think that's a bad idea for labor AND capital. I think we even have so-called "anti-trust" laws which claim to combat cartelization of capital. The track record on this activity being done on behalf of actual consumers rather than less effective crony competitors seems pretty terrible, but you get my drift.
Corporations are legal entities created by the government with special privileges.
DeleteSo, you're trying to say that joint-stock companies wouldn't exist in a free market?
DeleteI agree that corporate law (as run by the state) currently does give special immunities and privileges to corporate entities, which I obviously don't support, but that doesn't mean that such a thing (a corporation) could not exist in the absence of a state.
You would have to include all the terms that they are currently granted by law with everyone they do business with. It's conceivable you would have some, but there would be much fewer. Corporations are a legal fiction. They are worth having around IMO, but they are not a creature of the market.
DeleteI'm sure they could exist in some form, but unions could too. But I'm not sure what the difference is between a corporation with no legal protections at all and a partnership is.
DeleteYou'll have to explain to me how this helps John, though. Corporations are labor? Sounds Orwellian.
Daniel, I am differentiating between state favor and the condition of many multiples of people owning stock in one company. The former is certainly not a market action, the latter most certainly is (and thank goodness for this, because it increases the efficiency of capital). There's a pretty clear distinction between the two, and that is the immunities and privileges provided by the monopoly government entity is present in one case, but not the other. However, take that portion (state favor) away and they are nearly identical in substance.
DeleteA corporation is a legal construct, as you all note. But what composes a corporation is people. Individuals. I have a company. It's people. We're all working. The entity is simply a bundle of agreements that reduce our transaction costs. Now, we could have shareholders who contribute their capital to the firm, but that is merely stored labor (savings, remember?). So a corporation is the "corporatizing" of labor. That's my point. It's not orwellian. It's just disaggregating these terms and looking at what's actually going on.
ReplyDeleteThere is no such thing as "labor", the aggregate. It's a construct.
When discussing hiring and firing, workers compete with each other. A labor union is thus an anti-competitive cartel. It's a price-fixing arrangement. Hence the focus on "solidarity". The legal regime which "right to work" seeks to undo is the ability of such cartels to legally coerce or exclude individuals which do not wish to be in the cartel and instead would like to compete with it to do so. An individual corporation is not a cartel. The company is not, inherently, a set of competitors ganged together. It's individuals brought together so that they my collaborate without the extra costs of contracting each and every deliverable and interaction, all in the process of creating a specific output.
I have no problem with unions as an entity. I have no problem with collective bargaining. The deal made between worker and employer is a two-way deal. It is a relationship built on mutual gain and mutual trust at some level. If an employer doesn't uphold their part of the bargain, workers can and do have the right to take action. Strikes are fine, even healthy, so long as they don't violate property. I'm not a union-hater. But I am opposed to legalized cartels, which of course is something our government LOVES to create.
I have a big problem with legally-reinforced cartels that can extract rents through barriers to competition. Those in the union movement who think the ultimate solution is to unionize everyone should get acquainted with the "fallacy of composition" as well as recognize that they'd be creating a monopoly. In general, people who don't actually have businesses or any experience with hiring people seem to not appreciate how hard that process is and how any good business owner deeply values their productive employees.
I think you're focusing too much on the language used. I'm happy to substitute "capital owners" for "capital" - I thought that was understood. Of course corporations are composed of people. I don't think anyone is confused about that, John.
Deletere: "When discussing hiring and firing, workers compete with each other. A labor union is thus an anti-competitive cartel."
If your definition of a cartel is simply that people come to a bundle of agreements that reduce transaction costs (which is what a union does), then corporations and a host of other useful institutions are cartels too. That's our point.
re: "The legal regime which "right to work" seeks to undo is the ability of such cartels to legally coerce or exclude individuals which do not wish to be in the cartel and instead would like to compete with it to do so. An individual corporation is not a cartel."
OK, but using that logic I could say that laws of incorporation undo the ability of workers to deal separately with managers or capital owners.
re: "It's [a corporation is] individuals brought together so that they my collaborate without the extra costs of contracting each and every deliverable and interaction, all in the process of creating a specific output."
And what the hell do you think a union is John!!!!
Right to work laws limit the sorts of agreements that the government lets employers and unions come to. It seems to me we should have a presumption against laws like that. I'm not as outraged by right to work laws as some people are, but I recognize it for what it is.
I don't agree with these complaints about corporate form. Limited liability is something that everyone knows about. When a person does business with a limited company that person knows that they are taking a risk because of that limited liability. That argument that limited liability infringes freedom is dubious. I'm not sure it's relevant either, how would anything apply differently if we only had sole owners and partnerships? (I could discuss this more if anyone is interested).
ReplyDeleteConsequently, I don't oppose unions or corporations in principle. Nor do I believe that the government has the right to force either to be "democratic" (as the UK has with unions).
Daniel claims that a union is an organization devoted to reducing transaction costs, that's wrong. Unions are about raising wages by threatening the withdrawal of labour. That has nothing to do with transaction costs. It's not the case the striking individually has higher transaction costs than striking as a union, rather striking individually doesn't work. Forming a corporation or another sort of group business like a partnership as a cartel has nothing to do with transaction costs either. The difference is though that businesses are likely to take on a group form to reduce transaction costs and benefit from division of labour. In general, we have reasons to give businesses the benefit of the doubt, but that's not the case for unions.
I agree with John that the important question about both is their ability or lack of to break other laws. Their ability to damage the person or property of others. Most of that can the dealt with by prohibiting picketing and flying pickets as was done in the UK.
Those who oppose corporate form should notice how it affects pickets. In the UK labour unions were excluded from corporate responsibility in the 1920s. That meant that any actions of their members were merely actions of private citizens. Intimidating blacklegs and so on was effectively legal because the specific union members who did it couldn't be traced. During the 1984 miners strike when some welsh miners killed a taxi driver who was ferrying workers too and from a mine by dropping a concrete block of his taxi there was no way to prosecute the union.