Why liberals think libertarians hate unions: they raise wages and improve working conditions for their workers at the expense of profits.
Why most libertarians I know who hate unions actually hate them:
Why isn't everybody doing this, since the technology works and has been proven overseas? There are legitimate concerns to be weighed. Unless the toll road already has high transponder market share, some fraction of cash customers may simply stop using the toll road if the cash option is eliminated. There are also real costs (staffing and technology) involved in video license-plate recognition and billing. And there is the problem of what to do with all the now-redundant toll collectors, especially if they are unionized.
We should not be prevented from implementing productivity enhancing improvements that make everyone better off, because a handful of people would rather be paid inflated wages to do it by hand. Yet more and more often, this is at the heart of union disputes--the infamous dockworkers strike a few years ago was centrally a dispute not about wages, but the fact that the ports no longer needed to employ so many dockworkers. Or look at all the workers that the Big Three auto workers are forced to pay to sit there on the off chance that they might someday be needed. Obviously this is not the only thing unions fight about--witness the current writer's strike. But to me, the central problem with unions, to the extent that there is a problem, is not that they demand higher wages, but that they reflexively oppose productivity enhancing change.
I'm really glad you brought this up. Because conceptually, it makes no sense to me for libertarians to be opposed to unions. Shouldn't being in favor of a truly free market mean being in favor of members of labor organizing to improve the conditions of their employment? As a matter of consistency, it drives me absolutely bonkers when people support corporate rights but not union rights. There are special legal protections that enable businesses to incorporate. I cannot imagine a libertarian being opposed to them. So why so much opposition to special legal protections for unions? I simply refuse to take someone seriously when they want free markets that are free from labor organizing but not from powerful organizations that defend corporate interests. I don't want to hear about labor monopolies if you aren't willing to also condemn companies like Microsoft.
Here's what it really is for many: when libertarians and other economic conservatives say they are in favor of the free market, what they really mean is they are in favor of large corporations. Look believe it or not there are actually times when the free market would benefit someone who is not, in fact, in a position of economic dominance. But you can read long and far before you will ever find something written from a libertarian standpoint that defends anyone who is not in a position of affluence or power.
And that's the single most frustrating aspect of libertarianism for someone like myself: the almost exclusive support for the economically powerful. I think if you just were to consult this blog and its comments, again and again you would see the laurel awarded by self-described libertarians to whoever was in an economically privileged position, in any dispute. I can't understand that. I know some will say "we merely stand on principle, and if that principal results in us arguing in favor of the rich and powerful, so be it." But I just can't find that satisfactory. Surely principle would benefit the powerless every once in awhile. I do think that there is something in the libertarian temperament that predisposes one to always support the wheels of power.
Which is weird, to me.
Megan is right to an extent, I expect. I couldn't use my EZPass for years at the Baltimore tunnel on I-95, and I have always assumed this is because the unionized toll-takers in Maryland, a state where unions are powerful, blocked it. But EZPass works there now - the unions (if that's who it was) just delayed it a few years.
Is that so horrible? I don't think tapping the brakes on some productivity-enhancing technological changes - until a way can be found (maybe) to distribute some of the resulting productivity gains to the affected workers - is too high a price for unionization. It's just part of their labor cartelization, and I support that. I recognize that's exactly what libertarians DON'T support.
I dislike unions because I've always done better negotiating for myself than a union has negotiating for me. And I don't charge myself union dues!
Eh. Businesses oppose productivity-enhancing change, too, when they have protected markets; just look at the US shipbuilding industry (what's left of it) and the Jones Act, or at the Big Three automakers and their presumptions of perpetual dominance among American consumers.
I think most liberals would agree that the good thing about unions is that they always demand higher wages, while the bad thing is that they sometimes oppose productivity enhancing change. Most forms of social organization have their good and bad sides. The good thing about CEO competitiveness is that it can make businesses more efficient; the bad thing is that it makes CEOs scarf up too much of their businesses' revenue. At the moment, we're looking at a society where the top 1% has taken most of the productivity gains of the last 30 years. We need a force to counteract the power of the rich to seize productivity gains for themselves. Unions are part of that.
Freddie,
You misunderstand how libertarians look at unions. Your argument would be correct if libertarians also supported corporations being able to intimidate workers into not joining unions. But they don't (big business conservatives are a different matter). Instead, libertarians believe that the goverment should not get involved on either side. There should be no protections of a non existent "right" to collectively bargain, just as there should be no protections of the equally non existent right of corporations to prevent workers from unionizing. Libertarianism is at heart the belief that the government should not get involved in peoples lives except when needed to prevent one person from violating person's rights. Therefore the government should not get involved on either side. So if the workers want to organize, fine. At the same time if a company does not want to hire union labor, then fine too. Instead of the goverment forcing the company to negotiate with the union, let the union and the company compete for the workers. The companies who do not want to deal with a union would offer workers raises or better working conditions while the unions would attempt to demonstrate for workers that they can improve pay, benefits and working conditions. Either way, workers gain. If either side attempts to use coercion (not offers of pay raises which some union organizers have called coercive in the past) to get what they want, then the governement can step in, but only to prevent the acts of coercion and nothing more.
Your comparison to laws that allow corporations to incorporate is flawed. The concept of incorporation is primarily an issue of liability. Incorporation is not some carte blanche giving corporations unlimited power (or any power) over others. All it does (or at least is intended to do as there may be tax consequences) is remove personal liability of owners of the corporation by transferring that liability to a new separate entity, the corporation.
Freddie - What about libertarians' fervent opposition of the war on drugs, which disproportionately affects the poor? What about their opposition to the war on terror and the patriot act? What about their support of gay marriage? The libertarian literature I have read does not limit support of that concept to wealthy gays.
On the flip side (using principle to deride the big guys), you have libertarians constantly advocating that barriers to entry be removed for all industries, from the auto industry and the big 3 to the sugar industry (I think Hit and Run had something about the sugar industry just yesterday) to big farming. I assume you support those concepts, despite the fact that they would probably cost some American jobs in the short run.
Freddie,
The laissez-faire argument is a good one. If libertarians basically say "leave people alone and let them do whatever they want, as long as they negotiate with others freely, not through coercion." - then surely that implies that people should be free to unionize, voluntarily, and free to strike, voluntarily. Why Microsoft, but not UAW?
Well, my first rebuttal would be that Microsoft isn't actually free to do whatever it wants. We do have anti-trust and anti-collusion laws to prevent monopoly abuse. Perhaps they don't always work perfectly - and I'm sure libertarians would be happy to tell you all day about the imperfection of government enacted regulations - but they show that we've already accept the principle of preventing monopoly abuse, when it's a corporation doing the abusing. So why not prevent labor monopoly abuse? If fair is fair, and you expect to equate corporations and unions, then let's see our labor anti-collusion or anti-trust protections. If Microsoft actually had the power to "strike" - "We're entering this secret code that will shut down all your Windows XP computers until you buy Windows Vista and renew your support contract!" - you better believe there would be hell to pay.
Secondly - and this is a problem that often comes up when arguing with libertarians - "I find X very distasteful and don't intend to support them. I intend to speak out against them, as I think they're making the world worse." isn't the same as "We should make a law to stop X." I don't believe Megan was advocating the legal prevention of unions, so much as expressing hatred of them. That's perfectly consistent with libertarianism - go over to slashdot and you'll see no end of libertarians ranting about the horrible DRM practices of big corporations. Being a libertarian doesn't mean liking everything corporations do, it just means believing that the government isn't the way to fix those bad things.
This shouldn't be too unfamiliar, as liberals are rightly fond of "I disagree with what you say, but will defend to the death your right to say it."
Lastly, a minor logical rebuttal - "I can't understand that. I know some will say 'we merely stand on principle, and if that principal results in us arguing in favor of the rich and powerful, so be it.' But I just can't find that satisfactory."
Well, try harder. This is the way the world actually works. If Hitler says 2+2=4, and Ghandi says 2+2=5, this doesn't not make it 5. As with the free speech quote above, the principle stands independently of whether the good guys or the bad guys are using it. That's in fact most of the reason why libertarians prefer market systems over government rule - it works even when you introduce bad guys to the system.
Eliminate the "union shop" and the "agency shop". Then, let's talk about unionization. Let's also talk about government units which discriminate against non-union companies (eg,. Maryland and WalMart).
They hate unions because they fight for the welfare of their members? Shouldn't they be celebrated for their Randian fight for naked self-interest?
It's one thing to hate them if they use underhanded tactics and the like, or to resent them if they do their job too well -- but seriously, what is labor supposed to do when management decides to sack everyone?
Libertarian opposition to unions mainly arises from the compulsions typically associated with unions. If union membership (and dues payment) were entirely voluntary, then I suspect most libertarians would not oppose unions. Of course, free rider problems make it difficult to maintain unions that are entirely voluntary. So the real issue for libertarians is whether they have a consistent view on when it is appropriate for government to compel behavior to address collective action/free rider problems.
what is labor supposed to do when management decides to sack everyone?
Put another way, what is management supposed to do if they don't have enough income to pay their employees? What is management supposed to do if an advancement in technology makes it cheaper for them to operate without as many employees?
Nobody is arguing that unions shouldn't fight the "Randian fight for naked self-interest." We're just saying that the other guy in the ring shouldn't have his hands tied behind his back.
It's a point well taken about the differences between corporate organization and labor organization. I do think that libertarian hatred for unions is outsized in comparison to the degree to which unions actually hinder business.
As far as the question about principles-- I didn't mean to suggest that I find consistency with principles unsatisfactory. I meant that I don't think that is the only animus behind libertarian tendency to support whoever is in a position of affluence or power. It just always seems to me that there should be more scenarios where I find myself agreeing with libertarians on economic issues than I do, and it seems to me that part of the reason why there isn't is because of that tendency. That in and of itself isn't right or wrong; there's nothing inherently righteous about privileging the less powerful over the more powerful. And I recognize that anyone could turn the question back on me and ask why I always seem to side with the less powerful or rich. In simple human terms, though, I do find it strange.
Also, things like this confuse me:
Nobody is arguing that unions shouldn't fight the "Randian fight for naked self-interest." We're just saying that the other guy in the ring shouldn't have his hands tied behind his back.
I have to say that I'm frankly baffled when people feel that corporate interests just can't get a fair shake, or something. I mean unions haven't been as small and depowered as they are since, well, since the American labor movement began in earnest. The idea that corporate interests are hamstrung in this country just doesn't seem supportable, to me. (Although admittedly I don't have a particularly high amount of information on the subject.)
ZH:
Your argument would be correct if libertarians also supported corporations being able to intimidate workers into not joining unions. But they don't.
So you (or libertarians in general, depending) are in favor of the government writing laws that define acts of intimidation, institute punishments that would actually be severe enough to serve as a deterrent for large corporations, and set up an investigative and enforcement bureaucracy. I don't see that anything less would have the effect that you claim you want to see.
And if you're going to go that far, then I think that one of the acts of intimidation you've got to be willing to attempt to stamp out is for a company to fire an employee who is attempting to get other employees to join/form a union. Unless you think that the firing of individual pro union employees isn't an effective union fighting technique that most companies would use if they felt they had the choice.
It's easy to imagine that a large company and an existing union are on more or less equal terms with one another, and most of your thinking seems to assume this is the case. However, until the union is actually functional, there is still a power disparity between the employer and the individual employee, and if the employer is allowed to take advantage of that, it's hard to see how the transition from unorganized to organized gets made.
This kills me. Here you have answered Freddie's concerns succintly and reasonably. Anybody who feels as Freddie does about the libertarian position on labor unions can get the arguments for that position right here, starting with ZH's.
And yet, if you ask Freddie--or any others who feel as he does--tomorrow what problem they have with the lassiez-faire approach to labor cartels, their answer will not have changed one whit. You cannot reason a man out of a position he did not reason himself into in the first place.
And yet, if you ask Freddie--or any others who feel as he does--tomorrow what problem they have with the lassiez-faire approach to labor cartels, their answer will not have changed one whit. You cannot reason a man out of a position he did not reason himself into in the first place.
I'm sorry, what are you saying, again? The fact that someone has come up with a reasoned argument means that I have to abandon any objection? I'm sorry, let me explain: the fact that someone is capable of expressing an argument does not make that argument compelling. See?
Who helped you log on?
Freddie: "The idea that corporate interests are hamstrung in this country just doesn't seem supportable, to me."
Unions seem to have driven the domestic auto industry to the verge of bankruptcy.
Now you could argue that it was bad management that drove them to bankruptcy, and I would say your are partly right. But I don't ever recall the UAW striking to protest ill advised business decisions. i.e. poor gas milage, poor quality control, etc. etc.
If the UAW had struck rather than build the Cadillac Cimaron or the Ford Pinto - I'd have a hell of a lot more respect for them.
Well, while I was writing this the conversation has moved on. I'm posting it anyway, for what it's worth.
Shouldn't being in favor of a truly free market mean being in favor of members of labor organizing to improve the conditions of their employment?
Only to the extent that it would mean favoring the same rights for businesses. In any voluntary exchange, each side gains something (or else they wouldn’t do it voluntarily, right?) The trick in any negotiation is go gobble up the maximum amount of the benefit of the exchange for yourself and leave the least amount for the other party. Occasionally businesses try to do this by conspiring to withhold their goods and services until consumers pay a given pre-established price. Prosecutors call this “price-fixing” and sue them. On the other hand, a strike is basically the same practice, but we legalize it.
More than legalize it, we mandate it. That is, when a majority to workers in a given job category vote to be represented by a union, the union becomes the exclusive bargaining representative for the workers in that category and all of these workers must pay union dues, whether any given worker likes it or not.
Gosh, what an intrusion on a worker’s autonomy, right? Well, kinda. Actually there are a number of so-called “Right to Work” states which have elected not to adopt this exclusionary policy. These states are also states without effective unions. A moment’s reflection should lead you to the conclusion that if an employer can circumvent working with a union simply by choosing to work with un-unionized employees, the union will collapse.
So we get to pick our public policy: We can have laws that give workers an option to join effective unions, but only if we compel workers in organized workplaces to join. Or we can have laws that defend a worker’s right to opt out of joining a union, but that worker (and his co-workers) won’t have the option to join an effective union.
Unions seem to have driven the domestic auto industry to the verge of bankruptcy.
The German and Scandinavian automakers are both a)some of the most highly-regarded and most profitable car manufacturers in the world, and b)more completely and comprehensively unionized than any American automakers. A company like Mercedes is very successful, and yet has a union that is more powerful and more supported by the government than its American counterpart.
But I don't ever recall the UAW striking to protest ill advised business decisions. i.e. poor gas milage, poor quality control, etc. etc.
Indeed, compared to the heavily-automated Japanese manufacturing model, our labor-intensive model is one of the causes of many quality problems.
I don't see that anything less would have the effect that you claim you want to see.
What about the existing criminal and civil court systems, arbitration boards, etc? If you don't think those will work, maybe we should discuss reforming them to meet our needs, rather than adding more government agencies and systems that will, in all likelihood, also not meet our needs.
There are special legal protections that enable businesses to incorporate. I cannot imagine a libertarian being opposed to them.
I can. Those “special legal protections” boil down to government telling each of us that we lack the right to seek compensation from people who finance activities that hurt us. Talk about statist actions that impinge upon individual property rights! So the next time someone professes to be a libertarian, ask what they think of this.
[S]ome will say "we merely stand on principle, and if that principal results in us arguing in favor of the rich and powerful, so be it." But I just can't find that satisfactory. Surely principle would benefit the powerless every once in awhile.
Presumably it does. The idea is that the powerless – who are the majority of us – benefit from libertarian ideas in myriad, quiet ways. When the US reduces its tariffs, a factory can open overseas and hire local peasants, who can then escape starvation and the control of their tradition-bound societies. To be sure, the owner of the factory will benefit, too, while the displaced US workers will suffer. But there are both winners and losers among the powerless.
The larger issue is this: How should the benefits of productive change (especially globalization) be distributed? As others have remarked, globalization has transferred a huge percentage of the nation’s wealth to a very narrow percentage of the population. Unions strive as best they can to extract a portion for others.
Do unions impose a cost in terms of lost opportunities for productivity enhancements? Only to the extent that employers are unwilling to share the benefits of those enhancements with their workers. Yes, conceptually this could even involve laying people off and paying them not to work. If the productivity enhancement is so beneficial, why not?
Well, it’s mostly a cultural problem: we fetishize work. Many people (some self-described “libertarians”) take offense at people being paid to do nothing, even if that is a mutually-agreeable outcome for employer and employee alike. So instead, we have to disguise these arrangements in terms of “buy-out offers” or make-work programs. These arrangements don’t offend people’s “Work = Good/No Work = No Good” sentiments.
Finally, if we conclude that union negotiations, posturing and strikes impose a drag on the economy – and I expect they do to some extent – then we might seek more efficient alternatives. One obvious alternative is to free firms from having to deal with unions, but then to tax the firms more heavily and distribute the benefits to workers through social programs and reduced taxation on the lower classes. Arguably the minimum wage is a form of government-imposed union contract for the lowest classes. People who bitch about the burdens of unions, but also bitch about the burdens of providing substitutes for unions, really betray their colors.
Freddie, you said "conceptually, it makes no sense..." and now you are telling us that though you have read "a reasoned argument" you do not find it "compelling".
Do I need any other proof of what I said, that you will still feel the reasoning "makes no sense"? It makes perfect sense, you simply do not agree with it.
Libertarian thought is pretty simple, really, and it doesn't require a great deal of imagination to hazard a guess at what reasoning may lie behind these positions. Yet time and again I see the most basic and--though you may not agree with them--logical positions dismissed as making "no sense". Exactly as you have done here.
It's interesting that you bring this up now, seeing how the DARPA Urban Challenge (driverless cars on city streets) wrapped up with some success a few days ago.
No comment yet from the Teamsters...
Yes Freddie the German auto industry is highly unionized. I can't speak to the specifics of how it is unionized but I can compare prices. A Mercedes costs a lot more than a Ford.
So if you prefer that we should all be forced to drive $60,000 cars instead of $20,000 cars why didn't you just say so?
PS Freddie,
I've been inside of German automaking plants. Have you? Everything is done by robots with just a handful of employees standing around.
Not sure how things are done in the US though...
>>what is labor supposed to do when management decides to sack everyone?
>Put another way, what is management supposed to do if they don't have enough income to pay their employees?...
They negotiate or fight (strike/lockout). Neither side should be expected to roll over, which apparently is what union-hating libertarians think labor should do.
Unions have had little to do with the demise of the American auto industry. A far simpler and more convincing explanation is available: US automakers build second-rate cars.
Freddie,
Regarding the perceived libertarian defense of the rich and powerful, it seems a fairly logical outcome of the principles in question. Imagine it like a football game. Andrew is a big football fan. Two teams start playing football. Team X has excellent passing, and gains a commanding lead. in the third quarter, team Y throws up their hands and says "Screw you! This is a dumb game! You shouldn't be allowed to throw the ball! You should only be allowed to run! I'm taking my ball and going home!"
Andrew, the true football fan, watching from the sidelines, cheers for team X and condemns team Y. You can condemn Andrew for "always cheering the winners" or "being mean to people who are losing", but the truth is that he's really just supporting the game itself and the rules involved. Naturally, those who are winning the game are served better by support of the game, and those who are losing are most likely to want to play a different game. But it's not an emotional aversion to losers driving the fans to cheer the winners. It's that the winners are the ones playing and supporting the game.
Sorry if my metaphor is weak or confusing, but the point is that: while I consider myself fairly libertarian (not 100% - I've never seen any belief system that doesn't seem completely crazy when carried 100% to its extreme conclusion) - I do not arrive at that position from an affection towards the powerful. There's several powerful corporations that I hate, and plenty of disadvantaged or downtrodden people that I feel great sympathy for. But I like this "game", even when one team is winning 70 to nothing, and I'm not going to root for the underdog just because they are the underdog. If they're cheating in an attempt to catch up, and the current winner is playing fairly and excellently, then I'll back him us just as surely as I'd oppose him if he started cheating while the underdog played fair.
And if you really have trouble with the human, emotional, intuitive feel to it all, then stick with your illustrative example of choice: Microsoft. Try to imagine the scenario I mentioned above, where Microsoft "goes on strike". As ludicrous as it is already, imagine the company with crippled computers goes out to buy Apple instead, and Microsoft employs some of the anti-scab techniques that unions enact against those who suddenly choose to hire non-union employees. Even short of the strike scenario, just imagine a couple guys in the office decide to get a Mac, and imagine the parallels to the union world.
There's plenty of well-founded complaints about Microsoft's anti-competitive or monopolistic practices, and their non-standard, proprietary lock-ins. But all of it absolutely pales in comparison to even the mildest of unions. So if you feel the need to see things not as a matter of rules and principles, but rather as a class struggle between the good and the bad, you'll have to pick a better bad guy than Microsoft.
Unions seem to have driven the domestic auto industry to the verge of bankruptcy.
Now you could argue that it was bad management that drove them to bankruptcy, and I would say your are partly right. But I don't ever recall the UAW striking to protest ill advised business decisions. i.e. poor gas milage, poor quality control, etc. etc.
I believe these issues qualify as “management prerogatives” that are beyond the scope of matters upon which unions may strike and receive protections under the National Labor Relations Act.
A union would have to be suicidal to drive a firm into bankruptcy. The real problem with the auto firms and the airlines arises from unfunded health obligations for retirees. Basically, employers (perhaps with a wink and a nod from union negotiators) agreed to give all kinds of retirement benefits to be paid in the future in exchange for labor to be provided in the present. The boss looked like a hero, the negotiator looked like a hero, and nobody worried about how to pay the bill a generation into the future. In 1974 Congress passed ERISA; it’s hard to summarize, but roughly it requires firms to start funding any retirement benefits that they promised arising after that date. But the unfunded obligations that accrued before then were left unfunded, a trainwreck in the making. And Congress created the Pension Benefit Guaranty Corporation to bail out underfunded pension plans, and deposited woefully inadequate funds in it. So the train is finally coming due.
Employees are understandably upset that they provided all this labor and are now expected to surrender the benefits for which they bargained. And they’re even more upset when libertarians who claim to value contracts blame workers for this predicament.
Freddie,
As I understand it, the success of the German unions stems from their seats on the boards of German companies. As such, when Lexus, Infinity and Acura entered the US market, the boards (including the union reps) of Mercedes, BMW, AUDI(aka VW) were briefed on the situation and what changes were needed in order to compete. Consensus was reached and changes were implemented.
The UAW has never stuck to get a seat on GM's board. One would think with everything riding on the continued viability of their employer, the unions would want some control of the company.
Again, if they had struck to prevent poor business decisions I'd have more respect.
I'm always amazed by how ignorant liberals are on the libertarian position on unions. The former always try to fit it into some "pro-corporation" "anti-worker" formula, as if the criterion is "does it help the corporation? okay, then we're for that".
The libertarian position is pretty simple:
"People have the right to associate with each other or not, based on whatever reason they choose, subject to previous freely-made contracts."
This means:
-Workers have the right to form unions.
-Employers have the right to fire them on that basis.
-Neither side has the right to use violence against the other based on the other's decision, except to enforce property rights.
To cram it into the liberal framework:
-In the sense that corporations can fire for unionizing, it's "pro-corporation".
-In the sense that corporations can't drag workers to the job and compel them to work, it's "pro-worker".
-In the sense that corporations have the right to expel strikers, it's "pro-corporation".
Finally, discussions about the "right to strike" are inevitably confused. No one has ever argued against the right to strike as such. To strike, all you have to do is collectively not show up for work. To my knowledge, libertarians, conservatives, and liberals all agree this should be legal.
When people talk about striking being illegal, what they really mean -- though rarely make explicit -- is something like:
-Striking *while physically on the premises* is illegal.
-Striking will eliminate the government's recognition of the union, when means it will no longer compeill the corporation to follow certain rules.
Any questions?
A Mercedes costs a lot more than a Ford.
Have you heard of a car called the Volkswagen?
Henry Evans has it exactly right: as a libertarian I "hate" unions because they harness the power of the state to require compulsory contracts. If 51% of the workers vote to join a union (or, under Democratic proposals, 51% can be intimidated into signing a card), the employer is required by law to bargain with that union. The employer cannot choose to bargain individually with the other 49%, or seek workers willing to offer a better deal, or even offer payment in exchange for an agreement to not join a union.
Unions do all sorts of pernicious things because they have the power of the state behind them.
Freddie, you actually don't have to look particularly hard to find examples of libertarian opposition to powerful interests. One has already come up: the war on drugs, which harms a lot of poor people. Another would be libertarian opposition to eminent domain abuse, something used by wealthy developers and big corporations to coerce individual homeowners and small businesses to engage in forced transactions.
More generally, the sheer amount and number of regulations act as an artificial economy of scale, benefitting larger corporations at the expense of small ones. A Mom & Pop grocery store has to comply with nearly as many regulations as, say Wal-Mart, but it has to pay for compliance expenses with the revenue form a single store. Larger enterprises spread the regulatory compliance costs around more, and of course they are better situated to play the political game and shape regulations to their benefit.
I'm pretty sure that if libertarian (or more nearly libertarian) rules were adopted, the average size of businesses would actually go down, not up.
Regarding the perceived libertarian defense of the rich and powerful, it seems a fairly logical outcome of the principles in question. Imagine it like a football game. Andrew is a big football fan. Two teams start playing football. Team X has excellent passing, and gains a commanding lead. in the third quarter, team Y throws up their hands and says "Screw you! This is a dumb game! You shouldn't be allowed to throw the ball! You should only be allowed to run! I'm taking my ball and going home!"
Andrew, the true football fan, watching from the sidelines, cheers for team X and condemns team Y. You can condemn Andrew for "always cheering the winners" or "being mean to people who are losing", but the truth is that he's really just supporting the game itself and the rules involved. Naturally, those who are winning the game are served better by support of the game, and those who are losing are most likely to want to play a different game. But it's not an emotional aversion to losers driving the fans to cheer the winners. It's that the winners are the ones playing and supporting the game.
I find some merit in this analogy.
But take it further. Who sets the rules for sports, and why? Mostly, the rules are set FOR THE BENEFIT OF THE FANS. Sports rules change over time – football passing, the designated hitter rule, basketball hoop heights and the three-point shot, larger tennis rackets. Were these innovations created for the benefit of the winning players? No, they were created for the benefit of the fans. And certain rules – the player draft, salary caps and revenue sharing – were explicitly created to ensure that teams would remain competitive and games would remain exciting as a result. After all, if it weren’t for the spectators, the games wouldn’t go on.
Similarly, it makes perfectly good sense to establish social rules designed not to favor dominant firms, not to favor small firms, but to favor the society in which the firms operate. People who whimper that progressive taxation and anti-trust laws “merely punish the winners” don’t understand this dynamic.
nobody.really: I agree that GM et al should be held to their promises. In fact, I've held -- and I don't know why this is even controversial -- that pension obligations should be treated as superior to all of GM's debt for purposes of allocating assets in bankruptcy and determining creditworthiness.
Nevertheless, when you talk about the blame for this ... seriously, when you accept this deferred compensation, you are becoming a creditor, whether your like the term or not. Creditors have the obligation to make *some* effort to verify that the debtor (GM) has some means of paying the debt. The union basically said, "Okay, we'll accept this long-deferred compensation because we're like SUPER SURE you'll be REALLY profitable and can afford it then, even though you won't fund it all and we have no way of verify how much you've set aside for it."
Morally, yes, they're entitled to the pensions, but that was still monumentally stupid.
Volkswagons cost more than Fords too. A quick price comparison shows you can get a Ford 4 door sedan for the same price as the VW equivilant of a Geo Metro.
The question I'm left with after what Geoff said is whether or not my desired changes to the game are so fundamental that this kind of discussion isn't constructive. I have no problem being in the minority, but I would hate to be obstructionist.
I think part of the problem is that this discussion is almost totally about principle, and I think it's meaningless to consider the principle without also considering the consequence. And I mean, look, a lot of what you guys are suggesting seems to be refuted by a simple "reality check": corporate interests in America are incredibly powerful, perhaps more powerful now than ever, and there seems to be very, very little standing in the way of their profitability. Unions, meanwhile, have never been more threatened and reviled than they are. I know that doesn't mean much of anything, as a matter of logic, but it does seem odd the way that people talk about unions, in comparison to their actual prevalence or power.
Getting back to the football analogy, I guess the thing to say is that no one can opt out of this game, whereas you can just not sign up to play PeeWee football. And since we are in effect compelled to play, I don't think it's wrong to try and change the rules of the game, if we do so in a way that represents a public good.
If I could just define my support for unions, it's pretty simple: in our (capitalist) system, every avenue to power is secondary to financial power, which means that corporate entities will always carry the big stick. Also, I believe that there are certain rights and privileges that the members of labor have a legitimate desire for-- living wages, safe working conditions, reasonable (not absolute!) job security, a cap on hours worked in a week, etc. Since corporations/management will always have the upper hand because of their superior financial resources, I don't have a problem with unions using their one chip, their own labor power, to leverage what they want. I hate to again devolve into a moral argument, but I do, on an elementary basis, think that people have a right to organize to get those basic amenities from their employers. And if you believe, as I do, that the financial strength of management co-opts (corrupts?) the political and judicial levers of power, I don't think there is much recourse but for union power.
I mean look at the WGA strike. You can either think that the WGA has a legitimate beef or not. I do; I think it's absurd that they aren't getting appropriate residuals for DVD and Internet traffic. Since I think that's the case, I think they should be able to organize and strike in order to get a fair contract. Since there is always going to be more supply than demand for entertainment writing, I understand that the union will in effect freeze people out who would perform the service without the DVD and internet residuals. And I can understand objecting to that on libertarian grounds. But I think the collective good for entertainment writers as an entity is large enough that it overwhelms those concerns. If indeed the picket lines were crossed, and scabs were simply hired to write, yes, for those individual writers, their would be financial benefit. But for entertainment writing as a profession, it would be a large setback. And again, by default, the beneficiary would really be the management.
Brooksfoe:
"Unions have had little to do with the demise of the American auto industry. A far simpler and more convincing explanation is available: US automakers build second-rate cars."
But why do they build second rate cars?
We'll the UAW benifits package adds thousands of dollars to the cost of a GM, Ford, or Chrysler. So, if you have a 25k Chevy vs. a 25k Toyota - with a $3000 union premium Chevy can only spend 22k on the car. Toyota is able to spend that $3000 on higher quality parts, higher quality materials, better engineering, more testing and R&D.
The unions are the American cars suck.
The Service Employees International Union is almost three times as large as the UAW, and it's a lot more agressive when it comes to strikes. I wonder what the libertarians posting on this site think of the SEIU.
We'll the UAW benifits package adds thousands of dollars to the cost of a GM, Ford, or Chrysler. So, if you have a 25k Chevy vs. a 25k Toyota - with a $3000 union premium Chevy can only spend 22k on the car. Toyota is able to spend that $3000 on higher quality parts, higher quality materials, better engineering, more testing and R&D.
Why, you’re right. And those benefits packages include health care. Golly, if we’re going to compete in a global market we’d better start providing health care the same way the Japanese do. Glad to have your support on this.
nobody really: Honda and Toyota provide health coverage to US employees. They just provide a more typical policy than the UAW.
If the UAW wants it's healthcare plan they need to work that much harder than Toyota and Honda employees to justify it.
Or they need to allow Ford and GM to impliment the kind of technology that will allow each UAW memeber to contribute enough to the bottom line to justify making 150k a year (including benifits).
Any questions?
Sure.
"People have the right to associate with each other or not, based on whatever reason they choose, subject to previous freely-made contracts."
Here's my question: considering that the management will always be more powerful than the workers in almost every sense in our system, what mechanism can the workers have to get basic amenities at their workplace? If you're answer is just "They can't, tough noogies," I'm sorry, that's not good enough for me. I think it is perfectly right and appropriate in a civil society for workers to have certain expectations of what employment should provide, and I think that they should have the ability to organize in order to procure those expectations.
As far as the auto companies, look-- unions are a shibolleth, when it comes to Detroit. They are blamed for everything that is wrong with the American auto industry and given no credit for anything that is right. Usually this contention is made just through assertion. I talked to a very smart man once who was an unapologetic free market capitalist. And he said that unions are no different from any other problem a corporation has to work around-- it's up to management to figure it out. He said that unions are unique in that they are an excuse which people will always accept. If a company does poorly because of a weak dollar or tariffs or an unusually slow quarter, etc., that is never taken as a compelling excuse for a CEO. It's his job to work around it. But when it comes to unions, for some reason, they are always considered a compelling excuse for failure. Detroit management has to acknowledge the union element and find a way to make the company work, just like any other problem in any other industry.
Volkswagons cost more than Fords too. A quick price comparison shows you can get a Ford 4 door sedan for the same price as the VW equivilant of a Geo Metro.
That's irrelevant. The question is whether a unionized company can be profitable. Again (and again and again) you hear it said that Detroit is in trouble because of the unions, that unions keep the companies from being profitable. But I think that is at least partially undermined by the fact that German and Scandinavian automakers are much more comprehensively unionized than American automakers, and are among the most profitable in the world.
nobody really: Honda and Toyota provide health coverage to US employees. They just provide a more typical policy than the UAW.
The reason that Honda and Toyota pay employees at their American factories significantly more than they pay their Japanese employees is because of the threat of their American employees joining the UAW. Unions don't just drive up wages for their own employees.
And, yes, to me workers making a living wage is an absolute good. I do in fact privilege a system that has less profitability but provides its employees with a wage that they can raise a family on.
I've held -- and I don't know why this is even controversial -- that pension obligations should be treated as superior to all of GM's debt for purposes of allocating assets in bankruptcy and determining creditworthiness.
I like the sentiment. But if we adopted this policy then no one would lend money to or otherwise invest in GM anymore, and the firm would die overnight. Ok, more specifically, the firm would enter bankruptcy protection wherein new infusions of cash would be protected from the claims of old creditors, defeating the purpose of your proposal.
Nevertheless, when you talk about the blame for this ... seriously, when you accept this deferred compensation, you are becoming a creditor, whether your like the term or not. Creditors have the obligation to make *some* effort to verify that the debtor (GM) has some means of paying the debt. The union basically said, "Okay, we'll accept this long-deferred compensation because we're like SUPER SURE you'll be REALLY profitable and can afford it then, even though you won't fund it all and we have no way of verify how much you've set aside for it."
Morally, yes, they're entitled to the pensions, but that was still monumentally stupid.
I largely share the conclusion, but I don’t like the sentiment. Honestly, health care cost projections and pension fund obligations are the domain of actuaries with years of complex mathematical training. It would make more sense to blame an average shareholder in Enron for failing to understand that firm’s operations than to blame an average GM line worker for failing to understand the risks of having deferred compensation with the largest corporation in the world. Yes, each of these people had an interest in scrutinizing the situation, but neither really had any effective way to do so. Ultimately they were both scammed by people who took the money and ran, and any hope of remedy must come from government intervention.
I dislike unions because they are not voluntary organizations: they apply coercion, often violent coercion, to maintain their control on their own members.
Honda and Toyota pay employees at their American factories significantly more than they pay their Japanese employees
Wrong!
"Depending on the yen rate, Toyota's workers bring home around $58k in salary and bonuses."
http://www.risingsunofnihon.com/2007/03/car_buyers_give_japanese_auto.html
Wrong!
Yes, what an unbiased, even-handed source you've cited there.
"we’d better start providing health care the same way the Japanese do. "
So we should cut the benefits of the union auto workers? Or are you proposing the expensive benefits that the UAW gets should be the norm in the US? Because now your health care plan costs a LOT more than Hillary, etc. claim it does.
To review:
1) When CEOs demand nine-figure severance packages as the price of their resignation, that's just the way of the market, and you're just being envious if you get riled up about it.
2) When toll collectors exercise whatever bargaining power they have to get some kind of employment accommodation rather than being discharged on the spot, we hate them.
Really? The failure retiring to his private island with a truck filled with stockholder money gets a "whatever," but we're supposed to start hatin' on the toll collectors?
I tend to think that shoulder-shrugging pragmatism is probably about the right attitude to take to both of these situations, but it could be applied a little more evenly by our libertarian friends.
Freddie: Then we differ on factual rather than political or moral issues. You believe that the reason compensation (and a good work environment is a form of compensation) increases is because of the threat of unions. I disagree; if compensation is added only because of the threat of stikes, this causes purchasers of labor to systematically discount the value of that labor in the future, so it necessarily comes at the cost of compensation later, and works directly against the other mechanism by which compenation increases: gains in labor productivity. Because you are unware of the secular cause of wage increases, you are unlikely to agree with this position.
nobody.really: But if we adopted this policy then no one would lend money to or otherwise invest in GM anymore, and the firm would die overnight. Ok, more specifically, the firm would enter bankruptcy protection wherein new infusions of cash would be protected from the claims of old creditors, defeating the purpose of your proposal.
So? Investers put money in an insolvent firm that they should have known was insolvent. That's what happens. If you disagree with that method, you basically believe that a corporation should be allowed to e.g. pay a dividend in bankruptcy. Violating the order of payment rules (which is what under-ranking pension obligations does) would allow all kinds of fraud and uncertainty in securities markets.
I disagree that it would mean zero new investment. For one thing, people today buy GM stock, despite having a negative net book value. If GM needs funds, it can draw it from these suckers through a secondary offering.
Honestly, health care cost projections and pension fund obligations are the domain of actuaries with years of complex mathematical training. It would make more sense to blame an average shareholder in Enron for failing to understand that firm’s operations than to blame an average GM line worker for failing to understand the risks of having deferred compensation with the largest corporation in the world. Yes, each of these people had an interest in scrutinizing the situation, but neither really had any effective way to do so.
I disagree. First, the pensions were part of a massive negotiation in which unions could have easily collectively hired outside advisors. Second, it doesn't require intricate actuarial understanding to know that it's a bad idea to bet your entire retirement on one firm's ability to generate superior profits. Third, the *least* educated workers are the *best* off because they're the least likely to "understand" (!) the value of deferred compensation such as a pension. They would have either negotiated for upfront cash instead of a pension, or acted as if they weren't going to get it. To be rooked by an unfunded pension you have to be smart enough to think about the future, but stupid enough not to ensure your debtors can repay you.
nobody.really: One more thing: while a single-payer policy might help firms in the future (though I doubt this), I've never understood what it would do for firms like GM. All a single payer policy does is guarantee a minimum level of health coverage for all. It does nothing about GM's contractual obligation to pay for the level of health care it promised, and workers have no reason to stop using this.
If what you mean is "The federal government should void GM's contractual obligations", say so. But that has nothing to do with national health care.
Really? The failure retiring to his private island with a truck filled with stockholder money gets a "whatever," but we're supposed to start hatin' on the toll collectors?
That's always been my question exactly. The visceral anger for people at the bottom attempting to make more is so weird.
I mean we're told again and again that the problem in such and such industry is "the people at the bottom make too much." Why isn't the sacrifice ever expected to come from management? "Management salaries aren't the cause of the financial problem." Uh, who says? "Management." Ah.
I still haven't seen anything to refute the idea that there is just a fundamental animus towards people at the bottom of the ladder from libertarians that has no grounds in any particular principle whatsoever.
>If what you mean is "The federal government should void GM's contractual obligations", say so. But that has nothing to do with national health care.
How long is the most recent contract the UAW signed? Surely it will expire in a few years, tops. And if some universal HC plan is enacted before then, I think the unions would be happy to renegotiate the contracts and trade HMO premiums for cash or pensions.
Freddie,
Yeah, it looks like we're coming up on that "agree to disagree" end of the argument.
Regarding "Unions, meanwhile, have never been more threatened and reviled than they are."
So what? Slave owners are also more threatened and reviled than they were 200 years ago. Groups do not have an inherent right to exist and be respected. If they are a group organized around a bad principle, then they should stop existing. I don't feel sympathy for their decline. If their principle is in the right, we should fight for it. If it's wrong, we should oppose it. But their relative size and strength should not be a factor.
You say "I think part of the problem is that this discussion is almost totally about principle, and I think it's meaningless to consider the principle without also considering the consequence."
I see some merit in that, as I always try to consider the consequences of my actions, and wouldn't advocate the implementation of any of these principles in a way that had devastating consequences - like, say, "end Social Security starting tomorrow. No more checks go out. Let them figure it out on their own."
But, the big argument that libertarians have with Democrats and Republicans alike is just this, an unwillingness to adopt and stick to good principles that will lead to an improvement for the society as a whole in the long term. Instead, each side chooses their "good guys" (entrepreneurs, god-fearing folk, farmers, home-owners, the poor, unions, spotted owls, etc) and tries to build convoluted, ill-thought out laws to aid their chosen group. "You oppose this law that steals from old people and gives to children, you must hate children!" - "No, you favor this law, you must hate old people!"
Meanwhile, the libertarians are saying "Stop making ridiculous laws! These simple principles will make things better, on average, for everyone. Stop trying to classify everyone into little groups, drawing territory lines, and claiming that your little group is better than everyone else's and deserves special treatment. Just give everyone these simple rights, then get out of the way."
Yes, this is of course vulnerable to the "rich and poor equally prohibited from stealing bread and sleeping under bridges" critique, but "damn the corporations" is just as ridiculous and unsustainable a principle for society building as "damn the workers". The real answer is "Stop damning groups and coercing people. Just let individuals all do the same things. Maybe they'll organize into corporations, maybe into unions, who knows. But stick to a decent set of principles, applied equally to all"
To me, that attitude seems the only sustainable way to produce improvement for all and a good end result. "Help X at the expense of Y" seems compelling to people who like X and hate Y, but just encourages us to carve ourselves up into sides X and Y and start wars (albeit metaphorical or legislative ones, not actual physical battles)
I still haven't seen anything to refute the idea that there is just a fundamental animus towards people at the bottom of the ladder from libertarians that has no grounds in any particular principle whatsoever.
Sure you have. You just don't want to consider those principles.
Libertarians believe government has no function in deciding whether the little guy is "good" and the corporate executive is "bad".
I think Person sets for a clear, coherent libertarian position.
I think that Freddie has accurately observed that Person’s position will logically lead to concentration of wealth in ever fewer hands. Freddie asks what people think about that.
It’s a tough questions.
Contemporary Americans have grown up in a world with a large middle class and relatively small upper and lower classes, and we kinda assume this is the natural way of things. But it is worth noting that this is an anomalous situation, both from a historical perspective and from a world perspective. The US middle class achieved its dominance after WWII with the benefit of massive government spending for the war, for the Marshall Plan, for social programs, for the GI Bill of Rights, for highways and infrastructure, for civil rights, etc. But recent trends have reduced the size of the middle relative to the two extremes.
Most nations have not developed a large middle class. We can look over history to find examples of nations with a small upper class and a large lower class. They don’t look very appealing to me. Moreover, they don’t seem very stable. They seem prone to violence – whether in Paris in 1789, Watts in 1965 or Myanmar last month.
The idea that we are all autonomous fails to take account of muggers. Yes, muggers offend my sense of autonomy. But they exist nonetheless. Arguably my goal is not to ignore them to my peril, but to minimize them. So I can pay “protection money” to every mugger I encounter, or I can pay the same money to create a society in which most potential muggers will find something better to do and the remaining muggers can be prosecuted.
We can (and will) argue until the end of time about how much to pay and how best to pay it, but the suggestion that we can ignore muggers because they offend our values system seems silly to me.
In short: The trick in not in finding fault with the way unions help shore up the middle class and reduce poverty. The trick is in finding a better way to achieve the same end. To accuse labor unions of being the worst organizations yet devise, except for all the others, is not much of a criticism.
Let's see what the French are up to:
Wrong!
Yes, what an unbiased, even-handed source you've cited there.
Um, can you site a source Freddie?
The problem, FRED, with what you said about the WGA strike. Writers are independent contractors within the studio system, not part of a labor force, which makes it particularly counterproductive to limit competition in this manner. By this I refer to the practice of requiring membership in the guild as a prerequisite to being hired by a studio, yet on the other hand, instituting guild wages being paid by a studio to a novice writer as a prerequisite to guild membership. It is a series of regulations aimed at stifling the growth of the industry and of competition in the field. This is no surprise considering the founder of the WGA was a Commissar of Comintern's Los Angeles branch for the Soviets (John Howard Lawson). It's fine to organize for better wages and what not, but the fact of the matter is that residuals has never been implied in what a writer is owed. And it just sticks in my craw as a struggling writer not in the guild yet that a bunch of show runners and affluent scribes are shutting me out from working because they want 4 more cents on the dollar so they can do a little less work in the fiscal year.
"We should not be prevented from implementing productivity enhancing improvements that make everyone better off, because a handful of people would rather be paid inflated wages to do it by hand."
I would look at this very differently. Being unemployed is a cost (finding new work etc). Unions are preventing employers from externalizing these costs. One way or the other, these costs need to be borne. I think that capitalism should be other than a game of sneak your costs unto others in a sleazy way. This is why I support taxes that go after externalities (e.g. carbon taxes).
No union is able to resist good severance packages. These make these changes expensive but the long term consequences of unstable employment is also higher wages (ala Adam Smith who noted this himself). So stable employment should, in general, be a method of trading stability for lower wages. Since workers value stability and employers value lower wages, this looks like a good deal.
It gets a little tricky with governments (as they are less responsive to market signals) and dysfunctional companies can fail in this regard like they do many others.
But unions can be positive force, depending on context, by making it efficient to work out contracts between an employer and a large pool of workers. This enables trades of value that leave everyone better off.
Alkali: If a CEO doesn't get hired because they don't pay what he wanted, another CEO is found.
If toll collectors go on strike, people can't get to work.
(Also, of course, when we expand this to other industries, CEOs aren't trying to limit the creation of CEO jobs to keep their own wages up - they're moer likely to start companies with the wages they've received in the past, than organize a "CEO Union" to keep demand and wages up by limiting supply.
This is, however, exactly how most unions work, in my understanding.
One reason union plumbers, for example, get paid so much is that they limit their numbers.
It's a great racket, if you've got an in. Combine this with Federal or State regulations that sometimes require unionized labor, and things get ugly real fast.
Perhaps part of the libertarian objection to American unions as-we-know-them is this very rent-seeking behaviour, and their special exemptions to anti-trust and conspiracy laws. [That and historical connections to Communism and Organized Crime. There's a reason unions are associated, if not synonymous, with corruption.])
1. Actually, under sections 1113 and 1114 of the Bankruptcy Code, it is very hard for a bankrupt company to get out from under union contracts and the benefits created pursuant to union contracts, unless the union agrees to modifications. So unions/employees/retirees are already substantially preferred ahead of general creditors.
2. The mistake the liberals make is in presuming that the libertarians want workers and "small guys" to be disadvantaged and end up on the bad end of transactions. That's precisely wrong. What the libertarians want is the best economy based on the sorting that naturally gets done by the market, which in the long run benefits everyone. Sometimes that will involve short-run disadvantage to "small guys," which usually happens because the small guys are creatures of the status quo and aren't adjusting to systemic change. Governmentally-enforced sclerosis might slow down some of the change that imposes the short-run disadvantages, but it won't eliminate them, and when the crunch ultimately comes, it's likely to be a lot more painful than it would have been if the sclerosis hadn't been imposed in the first place.
In the specific case of the UAW vs. the automakers, the current situation is heavily biased in favor of the UAW. The entire UAW can bring it's government supported force to bear on one of the Big Three at a time, forcing a contract. To be fair, the UAW should be negotiating with all of the automakers at the same time.
But I'm with the other libertarians... unions are fine as long as they don't have a bunch of government power behind them. Personally, I would be really pissed off if I worked at a company that went union by 51% and I was forced to join the union or quit my job.
In the long run, automation increases wealth, jobs, and productivity. It may dislocate workers and move jobs from one place to another, but delaying it out of some sense of entitlement for the workers is only harmful to the economy.
Personally, I would like to see shareholders suing boards of directors for violating their duty and/or negligence in negotiating some of these obscene compensation packages for executives, especially those that include huge bonuses for failure. Talk about perverse incentives.
EI
How many toll booth workers are unionized? How many toll road upgrades have been scuttled because of intransigent toll booth workers?
I have no idea (and I wouldn't doubt it is a problem at some level), but these seem like very relevant empirical questions, no? The linked article doesn't say, but even so puts the union labor problem low on the list of impediments to these types of improvements it recommends. But it is seized upon reflexively by our libertarians as THE REASON WHY OUR HIGHWAYS ARE FAILING.
And why exactly do we need so many toll roads, anyway? Congestion control is one thing, but anyone who has ever driven through Delaware understands that it usually has very little to do with efficiency or safety and everything to do with who is tossing the quarters.
Sigivald writes:
Alkali: If a CEO doesn't get hired because they don't pay what he wanted, another CEO is found. If toll collectors go on strike, people can't get to work.
Putting aside the fact that libertarians also hate unions whose strikes don't inconvenience anyone (see, e.g., the snarky comments above on the TV and film writers' strike), it's also true that other toll collectors could be hired on extremely short notice if enough money were offered. Indeed, the likelihood that the turnpike authority might prefer spending a lesser amount of money to reach some kind of accommodation with the toll collectors is the whole point of the strike. Obviously this benefits the toll collectors and not the rest of us, but the same is true of the washout CEOs who take $100mm off to the Bahamas to write their self-fellating memoirs on the challenges of leadership. As I indicated above, neither situation really warrants getting your knickers in a twist.
"Putting aside the fact that libertarians also hate unions whose strikes don't inconvenience anyone (see, e.g., the snarky comments above on the TV and film writers' strike)"
Actually, I am a writer, not yet in the Guild here in LA ... the strike inconveniences me incredibly. If I should be lucky enough to be hired, and as the situation stands now, producers will be starving for material come January, the Guild will blacklist me for life. And no one knows how long the strike will last.
"I think that Freddie has accurately observed that Person’s position will logically lead to concentration of wealth in ever fewer hands."
I doubt that - at least as long as those hands are mortal. It's true that a Warren Buffet will keep on concentrating wealth as long as he's able to run his empire, but some day he will die, and his wealth will pass to heirs that have accomplished nothing I have ever heard of. The chances that one of them will turn out to be a great entrepreneur too and build more wealth than Warren did are low. It's far more likely that his heirs will live comfortably off of trust funds, maybe doing some good but nothing spectacular, and leave less wealth than they started with to be split among a larger second generation, and so on. The Rockefeller, Kennedy, and Hughes fortunes are nothing special anymore, and the Buffet fortune will decline similarly.
And that's assuming that old Warren isn't already so P.O.'d at his descendants that he has decided to leave the bulk of his money to charity. Hugely successful men tend to see their less ambitious descendants as worthless do-nothings...
Great corporations can be more lasting, as they may replace one great businessman with another without respect for blood lines - but sooner or later they ossify and lose their ability to respond well to new technology and changes in the market. IBM absolutely dominated computer manufacturing for thirty years, but when the leading edge shifted from mainframes to PC's, IBM couldn't even keep a leading market position in it's own invention. When I grew up, we didn't say "photocopy", we said "Xerox" - now, it's been a very long time since I saw the Xerox brand name on a photocopier. GM and Ford jointly dominated the auto industry for much longer, but they've been slowly declining for 35 years.
But there is a way that great fortunes can be preserved - you use a small part of the money to buy some politicians and get laws passed to restrict competition. In Europe, the laws once went much further than that, providing that a feudal lord's main estate had to be passed on intact to just one heir, so (as long as real wealth consisted of farmlands dominated by a castle) the main concentrations of wealth remained intact. What libertarians want most of all is to so restrict government that it is not allowed to do such things.
Peter: Without making light of your situation, being forced to choose among various alternatives, each of which have serious potential costs of benefits in terms of your career, does not seem to be something that libertarians ought to consider a public policy emergency.
Thirty years ago I was a UAW member and helped organize an auto parts plant where I worked. It created work for lawyers and professional union activists, but didn't get the workers anything. As a moderate libertarian now, I don't see a problem with workers in one company organizing to to raise wages and improve working conditions for their workers, but that's not what unions do in the USA.
They are socialist organizations, usually undemocratically managed, who seek monopoly power over the labor supply for many companies.
Union socialism tends to come out in an "everyone in the same job classification is equal" manner, protecting the incompetent at the expense of the competent worker - not that equality goes so far as to disallow officials from drawing six-figure salaries to represent $10/hour workers. Union socialism is also behind their justifications for violence towards "scabs".
They reach for monopoly to increase their bargaining power - and I don't see a big problem with that, except that when they reach a point where persuasion fails, they too often turn to violence, or to politicking for laws to improve their position. (For instance, laws often require building contractors bidding on government projects to pay union rates whether or not their workers are unionized.) And they have achieved laws that tilt things their way quite often. For instance, unions can donate to political candidates, corporations cannot. Unions can merge without worrying about antitrust laws, large corporations have to prove that the merger will not reduce competition. Libertarians dislike those restrictions on corporations, but it's certainly unfair to have different rules for corporations and unions.
Megan,
You really missed with this one.
Libertarians hate the use of state power to force employers to deal with unions, whether the employer wants to or not. We have nothing against people forming collective bargaining units, but they must do so without resort to coercive power of the state.
Freddie,
Libertarians are largely against special rights for corporations. If you like, I can point you towards the evidence this is true. You are being fooled by conservatives who call themselves liberatarian. Libertarians are against almost all coercive state power, including the granting of privilege to anyone.
Geoff:
Yes, this is of course vulnerable to the "rich and poor equally prohibited from stealing bread and sleeping under bridges" critique, [...]
A critique that you haven't addressed, I notice.
The real answer is "Stop damning groups and coercing people. Just let individuals all do the same things. Maybe they'll organize into corporations, maybe into unions, who knows. But stick to a decent set of principles, applied equally to all"
And the problem is that this will never ever happen in the real world. In the real world, the unwillingness of libertarians to sign on to government enforced priveleges for the economically powerless (or less powerful) amounts to a tacit endorsement of the existing and (sometimes) non government enforced priveleges of the economically powerful. But God forbid anyone criticize your principles.
alkali:
Certainly not a public policy emergency, just my personal problem, along with other writers with the WGA. For the layperson or even the economy, all it really means is that there may be reruns sooner than expected and an increase in reality TV shows. I've worked in loading, rubbish removal, and a number of other jobs in the past where I had experience with the kinds of union trouble more ubiquitous on these posts ... the WGA is just fresh on the page for me, as it were.
"We should not be prevented from implementing productivity enhancing improvements that make everyone better off, because a handful of people would rather be paid inflated wages to do it by hand."
Ummm....the workers are technically part of "everyone," so no, that isn't correct.
We should not be prevented from implementing productivity enhancing improvements that make everyone better off, because a handful of people would rather be paid inflated wages to do it by hand.
Megan, a libertarian should not be concerned by the motives of the union members. A libertarian should be concerned solely with a unions power.
Its power over its members, quite as much as its power over anybody else.
(I sometimes get the impression that many of the posters here believe that everyone with a blue collar has an undying love for unions. The fact that unions often work to benefit themselves, rather than their members, and never their non-members explains why it just ain’t so.)
what is labor supposed to do when management decides to sack everyone?
Would this not leave the company with no employees? Presumably you mean: “when management decides to replace every employee”. Why should these replacements not get the work – they clearly want it badly. Why do you want to privilege existing employees over potential replacements?
We're just saying that the other guy in the ring shouldn't have his hands tied behind his back.
I thought libertarians thought that no one in the ring should be allowed to hit anyone at all. The point is to prevent anyone from being vulnerable to injury from anyone else. A world free from coercion. The fact that the goal is not perfectly achievable should not prevent people from stating it.
Silly commenters, "libertarian" does not mean "favoring liberty" -- it means "a set of talking points to let idiot trust fund babies from the Atlantic sneer at people who have to work for a living."
In the real world, the unwillingness of libertarians to sign on to government enforced priveleges for the economically powerless (or less powerful) amounts to a tacit endorsement of the existing and (sometimes) non government enforced priveleges of the economically powerful.
I'm going to let you in on a secret that apparently only libertarians know.
Rich and powerful people always make sure that any laws written ostensibly to help out poor folk actully serve to solidify their power. That is, when you institute laws and regulations seeking to hamper the rich, the actual consequence is to inhibit the poor and middle-class from becoming rich. Why is this? Because rich people have teams of lawyers that can find the loopholes that the (lawyer) legislators left for them. Poor and middle-class people don't. It's really that simple. So when libertarians say they want to level the playing field by prohibiting the government from picking winners and losers, that's precisely what they mean.
Of course, you can continue to impugn the motives of libertarians and assume that really we're just part of the Machine, eager to perpetuate injustice. But really, if we were, we'd just call ourselves Republicans or Democrats.
Christina:
So when libertarians say they want to level the playing field by prohibiting the government from picking winners and losers, that's precisely what they mean.
Ok.
Rich and powerful people always make sure that any laws written ostensibly to help out poor folk actully serve to solidify their power.
So why won't they able to twist your efforts to create a true level playing field (which, of course, would not involve the use of government power) to their own ends? We're back where we started.
Of course, you can continue to impugn the motives of libertarians and assume that really we're just part of the Machine, eager to perpetuate injustice.
I think you believe it's possible to have a world where great economic power is held in check by ... something that definitely isn't government power but does the trick anyway, and that world doesn't seem to me to actually be achievable. Maybe you think the powerful will hold themselves in check for some reason, I don't know. That certainly doesn't seem likely.
Have you heard of a car called the Volkswagen?
Volkswagen is the bottom rung of the German auto industry. If you enjoy loud invective, ask anyone who has ever maintained a VW or Audi beyond the first 50k miles.
Their only physical advantage in the US is the availability of competent turbo-diesel powertrain options. Beyond that, they live on the fat of good-looking vehicles and solid marketing.
This cuts to the heart of why libertarians and liberals don't agree on economic issues. Libertarians aren't scared of "economic power", since the exercise of it requires voluntary exchange. Even unrestrained by any regulation but the basic libertarian ones, a corporation cannot physically harm you, deprive you of any of your property or freedoms, or control how you vote.
One could point out that that "economic power" could be used to affect government policy (which can do any of those things above) via bribes, but in that case the government would be ill-suited to hold it in check, since officials would be using their discretionary powers to further the aims of those doing the bribing. Removing the discretionary power would be more effective, which is the libertarian solution. To the extent that we need to worry about "economic power" being able to engage in coercive behaviors, it is to the extent that we need to fear that the government will fall under its influence. And to the extent that government will fall under its influence, further expanding the government's powers will serve to enhance rather than check the damage because it would use that influence to stack the regulations in its favor at the expense of the rest of society rather than simply remove burdensome ones.
There are plenty of examples of this. Municiple cable momopolies exist for the benefit of the cable company at the expense of the community, despite the fact that they were ostensibly created to make sure that the cable company serves the community. Ag policy is largely an excuse to shovel money into the maws of the well-connected. I could give you hundreds more examples of regulatory powers being illegitimately used for the benefit of those being regulated if so inclined.
Simply, there isn't much you can do to twist a lack of a particular regulation via government power. For example, if you don't have a price control, you don't have a price control. If you do have a price control, it can be set to benefit the producer or consumer at the expense of others. The devil is in the details, but if you have no regulation, you have no details.
Um... I think the basic libertarian position is that great economic power should not be held in check except where it is used to infringe on basic rights. In other words, rich people who are rich through legal means should be able to do whatever they want with their money except kill people, steal from them, injure them, etc... and I don't mean "steal their dignity" or "injure them by not giving them money".
It would be much easier to eliminate a lot of rules and go with a smaller, less intrusive government to avoid corruption than to try to make a bigger government intrusive and somehow manage to make it not corrupt.
If life isn't going to be fair, I'd at least like it to be not fair and more free from government coercion/control.
I'd be okay with a big, powerful government as long as I was the one who made all the rules... but in reality, that would be more trouble than it was worth.
EI
Even unrestrained by any regulation but the basic libertarian ones, a corporation cannot physically harm you, deprive you of any of your property or freedoms, or control how you vote.
No, but utterly unrestrained it can fire you for refusing to sleep with your boss, or for being black, or because you don't work 80 hour weeks with no vacation or weekends even when deathly ill. Although I derided the notion that people have a "right" to be free from crappy jobs just for the health care in another thread, I'm comfortable saying that nobody should have prostitution shoved on them under the guise of "voluntary exchange."
Even libertarians (like me!) want at least some rules, enforced by government power.
Libertarians aren't scared of "economic power", since the exercise of it requires voluntary exchange.
Exactly!
So what if 90 percent of the country is owned by a total of 50 families and corporations?
If you don't want to "voluntarily" exchange your freedom for the bare necessities of survival by selling yourself into indentured servitude, you always have the option of starving to death!
Quit griping, moochers! TANSTAAFL!
A quick price comparison shows you can get a Ford 4 door sedan for the same price as the VW equivilant of a Geo Metro.
The difference being, of course, that VW will actually make a profit on theirs, while Ford will lose money. I'm sure national health care in Germany and Japan have nothing to do with it.
anony-mouse, the initial claim was that unions were behind low US car quality. The counter-claim was that German automakers are unionized and have high quality. The counter-counter-claim is that German automobiles are expensive. The counter-counter-counter-claim is that not all German automobiles are expensive.
Now you are saying that the German cars that aren't expensive are not high quality. Are you saying that Volkswagens have poor maintenance records because of unions? And why is it that expensive American cars (Cadillacs and Corvettes) are of low quality and have poor maintenance records, while expensive German cars (Mercedes and BMWs) are of high quality and have good maintenance records? Mercedes's maintenance records have deteriorated dramatically recently; did they suffer a sudden bout of unionization?
>>what is labor supposed to do when management decides to sack everyone?
>Would this not leave the company with no employees? Presumably you mean: “when management decides to replace every employee”...Why do you want to privilege existing employees over potential replacements?
No, I meant "sack everyone," just like I wrote it. The issue at hand was replacing people with automation (toll collectors/IPass transponders and assembly line crew/robots). And anyway, you're missing my larger point: people who "hate unions" according to the main blog entry seem to think that people should not take an interest in protecting their own jobs.
*I* don't want to necessarily privilege current employees, but I don't fault said current employees for wanting to.
My reason for disliking unions is simple: there isn't a union in the world that wouldn't cheerfully put me out of work if they could benefit their own membership by doing so. Unions don't represent the interests of workers; they represent the interests of MEMBERS. They're no more admirable than any other cabal of politically-connected folks out to enrich themselves at the expense of others. Why should I like that, if I'm not a member myself?
Brooksfoe, you are so clever. Able to parse a debate without citing anything close to a fact.
Show me the average worker salary for VW. Show me how many workers they employ per car they sell.
Show me the same for GM and then we can discuss.
expensive German cars (Mercedes and BMWs) are of high quality and have good maintenance records
That's at odds with both Consumer Reports and my own experience working on cars.
Totally OT, but if you want to avoid the Delaware tolls, it's very easy to bypass them by taking the last exit before the border and running around to the first entrance after it - in college I did this all the time, mainly because the $1.25 (ooh! dating myself!) ticked me off on principle.
If you don't want to "voluntarily" exchange your freedom for the bare necessities of survival by selling yourself into indentured servitude, you always have the option of starving to death!
Wow, Milton. Just wow. You really have the rhetoric machine cranked up today. Or wait. You probably have a union rhetoric shop, where 2 overpaid guys sit around generating poor quality rhetoric (see your comments above) while a few other overpaid guys sit around watching them and collecting a paycheck. That makes more sense.
Maybe this is why the republicans can always spin the issues so much better than the dems. The republicans use a rhetoric machine to cheaply generate high quality rhetoric while the democrats rely on union labor.
*I* don't want to necessarily privilege current employees, but I don't fault said current employees for wanting to.
I don't fault them, but I am not going to chear them on either.
Bill Gates’ ner-do-well brother Steve can’t keep a job, so Bill Gates gives Steve enough money to organize a corporation and buy a car. Surprisingly, the firm is hugely profitable. But all the profits get absorbed by the firm’s one shareholder, Bill, and Steve is still basically destitute. Then Steve crashes his car into you, leaving you paralyzed. It turns out Steve didn’t maintain any insurance on the car or on the firm. You have now lost your potential to earn an income and your car. You can seek redress from Steve and from the corporation, but both are broke. And you can’t get redress from the one person who enabled and profited from this whole thing, Bill, ‘cuz the government’s corporate laws say so. How, exactly, have you not been harmed by this corporation?
Corporations are an invention of the government whereby the government promotes investment by eliminating certain rights of individuals to sue investors. It’s a classic promote-social-welfare-at-the-expense-of-the-individual policy that libertarians generally oppose; I’m surprised more of them don’t.
Corporations don’t control how people vote? This may be true in some theoretical sense. But I’d be hard pressed to find anyone who follows politics in the US who would say that corporate interests have no influence on who gets on the ballot. (Admittedly, it is rich people who influence these things; the corporate form is incidental here.)
It’s always interesting to discuss with libertarians the degree to which money influences elections. Some will minimize the role of money in determining the outcome of elections, arguing that the merit of individuals and ideas trumps financial considerations. If this were true, what conclusion should I draw about libertarians’ limited success in winning elections?
Quite so. And if you have no regulation of violence, government can’t abuse its regulation. And if you have no regulation on fraud or the enforcement of contracts, government can’t abuse its regulations. And if you have no regulation on externalities, government can’t abuse its regulation. And if you have no regulation on price fixing, government can’t abuse its regulations.
Yet oddly, at some point people seem to be less concerned about government oppression and more concerned about oppression arising from other quarters. I sense even libertarians agree on the need for social regulation of force, fraud, and market failures.
BUT once you agree on the need to regulate these things, you also must acknowledge that private parties will engage in rent-seeking behavior both in adopting AND IN REFRAINING TO ADOPT such regulations. Yes, people who want government to provide them with parks for free will lobby to preserve certain areas for their benefit, and at public expense. And at the same time, parties who want to dump toxic waste in those areas will lobby to stymie all limitations of use for that area. There is no a priori reason to assume that government action OR INACTION is free from the influence of rent-seeking behavior.
The army reminds us that “Freedom isn’t free.” We need economists to remind us that “Free markets aren’t free.” Both circumstances require social interventions to create and maintain. People who image that their autonomy and efficient transactions are a result of nothing but their own merits, and that all problems trace to government action and none to government inaction, simply fail to recognize these dynamics.
Bill Gates gives Steve enough money to organize a corporation and buy a car. Surprisingly, the firm is hugely profitable. But all the profits get absorbed by the firm’s one shareholder, Bill, and Steve is still basically destitute. Then Steve crashes his car into you, leaving you paralyzed. [...] How, exactly, have you not been harmed by this corporation?
I can't think of any way in which you've been harmed by the corporation. The corporation's got nothing to do with the car at all. The car is owned by a guy who *works* for a corporation which is owned by an entirely different person. The only connection is that the corporation happens to be owned by the same person who gave Steve the money to buy a car. How on Earth does that make the corporation even the tiniest bit responsible for having harmed anyone? You could make a tenuous argument that Bill has some responsibility, in the sense that when I give a homeless man money for food I'm indirectly responsible for him defecating on the sidewalk later that evening, but other things OWNED by Bill have no bearing on that responsibility.
Corporations are an invention of the government whereby the government promotes investment by eliminating certain rights of individuals to sue investors. It’s a classic promote-social-welfare-at-the-expense-of-the-individual policy that libertarians generally oppose; I’m surprised more of them don’t.
You're confused about what libertarians believe. Corporations are a two-way street -- they both provide both protections AND liabilities to investors. Let's say the manager at a Ford plant, eager to increase profits, orders several of his workers to dump a bunch of toxic waste into a river, poisoning a thousand people. "Ah," you cry, "the law is protecting Ford's investors from being prosecuted!". Not so fast. There's no basis for prosecuting the Ford investors, because they did nothing illegal. The only people who actually did something that harmed innocent human beings are the workers who dumped poison in the river.
But because those workers were part of a corporation, ordered to do something by their supervisor within that corporation, the law holds the CORPORATION responsible for the dumping as well. It will be fined, and those investors will lose money. If there wasn't a corporation the investors would lose nothing -- you've have no basis for prosecuting them or suing them. You might not even have a basis for prosecuting the manager who ordered the dumping, since he can say "I told them to do it, but they could have chosen not to do it".
And that, "nobody", is why libertarians aren't bothered by corporations. They don't let people evade responsibility -- they just change people's responsibilities.
You can seek redress from Steve and from the corporation, but both are broke. And you can’t get redress from the one person who enabled and profited from this whole thing, Bill, ‘cuz the government’s corporate laws say so.
In the circumstances you describe, a court would "pierce the corporate veil" and allow you to collect from Bill, given that the corporation was clearly both undercapitalized and a sham designed to evade liability. And I'd bet Steve wasn't too careful about maintaining his board meeting minutes, either.
you've have no basis for prosecuting them or suing them.
In the circumstances you describe, even in the absence of a properly organized corporation, the employer (including investors) could still be held responsible for the dumping under the doctrine of respondeat superior.
So now both nobody and Dan have gotten one wrong.
Am I the only lawyer here?
Probably not pertinent, but there was an assertion made about Scandinavian auto companies. Uhh, no such thing. Volvo and Saab are owned by Ford and GM, respectively. Oh, and their owners don't make any money from their operations. Expect Volvo to be sold soon. Saab may hang on but only if GM can start making money with it.
Rob, I believe respondeat superior is part of the same body of common law that allows the recognition of things like corporations, isn't it?
Maybe I phrased my point badly. What I'm getting at is that the notion that people who haven't actually broken the law or done anything wrong are liable AT ALL because their employees did something wrong is part of the same legal constructs that say that those people aren't 100% culpable for 100% of what those employees do. So it is unreasonable to bemoan the fact that the law "protects" investors when the law's the only thing holding investors accountable in the first place. Morally, it is hard to see how they're accountable at all (since they neither approved of nor knew of what their plant manager was doing).
Corporations are historically created by direct Acts of Parliament and/or Congress, and thus are not part of the common law. Modern corporate creation has been standardized and made systematic, again by statute rather than common law.
Respondeat superior is a doctrine from the common law of torts (well, from Leviticus when you get right down to it) which vastly predates the notion of limited liability. It applies to pretty much all employees; if your nanny hits someone with a car while taking your kid to swim lessons, you pay (unless you can claim she was an independent contractor...)
Certainly you're right that these rules are somewhat arbitrary and don't have to be the way they are.
Dan, I should be clearer here than I have been. I agree with your broad point: the law giveth (respondeat superior) and the law taketh away (corporate limited liability). The two are interconnected and its easy to forget that.
Speaking even more broadly, the law of torts usually gives the right answers in theory (what a jury will do is anyone's guess). The basic framework is as old as the Bible; the details as we know them in our system have been getting filled in for the last 600 years or so. Most of the rules are sensible, wise, and time-tested and contain appropriate exceptions. There is usually a reason for the way things are. This is underappreciated by overeager reformers searching for someone to punish.
I should have been clearer myself.
Most libertarians are really big on personal responsibility, but for the most part it has to be voluntary, conscious responsibility. For example, if I shoot you, I'm responsible. If you sneak into my backyard and drown in my pool, not only am I NOT responsible, but your estate arguably owes me money for the damages your negligently drowning in my pool inflicted on me. Similarly, if I ask you to harm another person and you do so, its all on you. You should have said "no". Needless to say, the law doesn't actually work that way. The law has its roots in a lot of realities of human nature (such as "people usually follow orders even when they shouldn't"), whereas much of libertarian thinking is rooted in ideology ("people are responsible for their own behavior, not that of other people"). The notion that you might be entitled to my money just because I am part-owner of a company whose managers hired a manager who hired a driver who -- against company policy -- smoked a bunch of crack and ran over some kids, is ridiculous from that personal responsibility perspective.
So in that view, if you're insisting that I become responsible for another person's wrongdoings just because I indirectly have a contract with him, granting me benefits in return is the least you can do. That's what I was getting at in trying to explain why laws protecting investors don't bother most libertarians (although they tend to bother the crypto-anarchistic Ron Paul types).
Bill Gates gives Steve enough money to organize a corporation and buy a car. Surprisingly, the firm is hugely profitable. But all the profits get absorbed by the firm’s one shareholder, Bill, and Steve is still basically destitute. Then Steve crashes his car into you, leaving you paralyzed. [...] How, exactly, have you not been harmed by this corporation?
Steve Notgates gets a job washing dishes at Granny's Kitchen restaurant in Vanderbilt, Michigan. He saves $200 from his paycheck and buys a barely running junker. He can't afford insurance but goes out on the road anyhow and crashes his car into you, leaving you paralyzed.
So, are you going to sue the elderly couple that own the restaurant?
So what if 90 percent of the country is owned by a total of 50 families and corporations?
Maybe you didn't read my post about how and why concentrations of wealth are limited in a free market. Or do you think you can find an example where wealth became that concentrated in the absence of governmentally imposed monopolies or other regulations that helped the rich get richer?
Or do you think you can find an example where wealth became that concentrated in the absence of governmentally imposed monopolies or other regulations that helped the rich get richer?
Why, yes. Wealth in Somalia is highly concentrated.
As for functioning societies with governments, the problem is that you cannot find one without some governmentally imposed monopoly, or other regulations which you no doubt would argue help the rich get richer. This is that libertarian non-falsifiability problem I've noted before: since there is no society on earth that meets my criteria, my contention that such a society would be superior in every way cannot be disproven.
Brooksfoe: Somalia isn't a society without government, but a society with a number of would-be governments (warlords) sometimes fighting and sometimes coexisting in an uneasy truce. Get rid of government and every gang leader will see the profit in becoming the government. I expect that wealth is concentrated in the most successful warlords - when the first use of wealth is to hire a private army, and there's nothing to keep you from using that army to steal, wealth will become concentrated - but that's also the usual behavior of an unelected government in a society that doesn't expect the rule of law.
So, I'll amend my statement: Given the rule of law, the less government meddles in the economy, the more concentrations of wealth will dissipate once the founders die or retire.
"since there is no society on earth that meets [libertarian] criteria, my contention that such a society would be superior in every way cannot be disproven." That's true to some extent, but there are variations in what is regulated and how much, and we should be able to draw conclusions by comparisons between those societies. How many large corporations are there in the USA, as compared to (far more socialist) Great Britain or Germany? We've got a greater spread between rich and poor, but if you define "rich" as exceeding a certain level of income or wealth, we've got many more rich families in proportion to our population.
I suspect that it's that gap between rich and poor that really bothers you - but we were talking about wealth concentrations becoming hazardous power concentrations, and the poor are powerless except for their voting power in any case.
Or look through history. 18th and 19th Century England started out with great wealth concentrations propped up by ancient laws and customs - the estates of the nobility - and some monopolies granted by the crown, but most of the market was free. Over those two centuries, wealth grew greatly in the free market segments, while the entailed noble estates became economically irrelevant. I am not sure where to verify this, but I haven't seen anything to indicate that the new wealth was concentrated in a few corporations and families, and a lot to indicate that much of it was spread out among many separate enterprises. E.g., the steel-producing region around Sheffield was not the home of one big steel company, but of many independent plants. Some English industries are now highly concentrated, but AFAIK these consolidations started in industries where large government contracts required large contractors (e.g., the WWI defense industry giant, Vickers), and then accelerated when Britain became socialist.
In 19th Century America, the government always was involved in the economy through having great swaths of undeveloped land to sell or hand out. The first notable wealth concentrations were the canal and railroad corporations - and the successful ones were the ones with sponsors in the legislature to award them rights of way, and often also gave extra land. E.g., the transcontinental lines received alternate sections (6 mile squares) on each side of the lines, or about half the land that was now much more valuable because it was within a few hours of the railroad stations by horsedrawn freight wagons. Railroads are natural monopolies and needed to be regulated by the government, but selling farms and town lots was what made most railroads rich, not just carrying freight and people.
Standard Oil became an overwhelmingly great corporation by getting mineral rights from the federal government at a pittance. (The feds retained mineral rights on the land they gave away in homesteads, etc.) Standard also formed sweetheart arrangements with railroads to make it difficult for competitors to ship oil.
Carnegie's US Steel may be an exception - I don't know how it attained dominance, unless it simply was that much better at everything. But I wouldn't be surprised if much of it's advantage was having the size to negotiate at an advantage with railroad monopolies and mining companies.
So what if 90 percent of the country is owned by a total of 50 families and corporations?
That's a cute rhetorical trick, lumping together "families and corporations". The two things are, of course, entirely different from one another. Anything owned by a corporation is "owned" by its shareholders -- and largest corporations in the country are directly or indirectly owned by tens of MILLIONS of different people.
But of course, it doesn't sound alarming when you say "90% of the country's wealth is owned by a mix of wealth families and millions of individual stockholders". You'll never scare people into supporting you if you phrase it like THAT.
Dan, in terms of concentration of power, large corporations are as bad as super-rich families - and often far more amoral in their use of their power. Not that giving the government more power to meddle in the economy has ever done anything but increase the concentration of wealth and power, usually by impoverishing everyone but impoverishing those without political connections more...
Hello, you have on your [b]search[/b]?
A very uncomfortable all the time to search for information manually.