Labor Roundtable: Why Market Anarchy Favors Labor

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Mark of New Jersey

Mark is a Founding Editor of The League of Ordinary Gentlemen, the predecessor of Ordinary Times.

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39 Responses

  1. Thanks for making explicit what I should have done, Mark.

    Just based on the work C. Wright Mills and G. William Domhoff have done on the composition and structure of the state, it seems obvious to me that most of the “progressive” legislation passed in the 20th century — Wagner included — benefited workers at best as a side-effect of its primary purpose. The primary purpose was in some way to serve the interests of the faction of organized capital behind it.

    It never ceases to amaze me when I see people solemnly stating that democracies go bankrupt because of majorities voting themselves largesse out of the public treasury — as if the main constituency for Food Stamps was the powerful and tightly organized voting block of welfare moms, rather than the agribusiness interests in Bob Dole’s Kansas.

    Most “progressive” stuff that the state has done was primarily because some richbastard or other wanted it.

    Lest I seem to absolutist in this, I at least leave open the possibility that 1) the state can respond to outside pressure from the working class, and 2) the state may even on occasion be “contested terrain” in which the working class’s representatives compete.

    But in the case of 1), the actual machinery of the state is mainly an ExComm of the ruling class, and the response to pressure takes the form that the ruling class sees as most compatible with its interests.

    And in the case of 2), the working class representatives will be subject to Michels’ Iron Law of Oligarchy and become a major component of the ruling class, finding areas of common interest with the older coupon-clipping components.Report

    • Avatar Brandon in reply to Kevin Carson says:

      Do you have a SINGLE empirical study done by any experts, especially credible economists, showing that your pie-in-the-sky utopian “mutualism” has worked anywhere or even been TRIED as of yet anywhere in the world with success?? Call me when that actually happens, instead of wasting time over at the CSS theorizing about all kinds of wacky shit that’s got only about a 1% chance of ever becoming reality, especially in our lifetimes.

      Me, I’m a pragmatist. I have ideals, but I’m not gonna waste time theorizing about the ABSOLUTE BEST scenario and strive to only go for that extremely-high standard. I’m going to work with what we’ve got to make things better and use baby steps to get where I wanna go. THAT is how you make change. You may not like it because it’s “too slow” or whatever, but the change you advocate won’t happen for a LONG-ASS time, dude.

      Your views are incredibly defeatist on the side of progressives, in my view. You basically just wanna GIVE UP on using the government to our advantage to help the little guy because, “It doesn’t work” or “It might help big business and the rich as a side effect” or some other BS rationale. Just because government screws up a lot, you don’t just GIVE UP and say, “Well, what we really need is a stateless society.” As bad as things are NOW, a stateless society, I can assure you, would just make things at least 10x worse.Report

      • Avatar El Cid in reply to Brandon says:

        It wouldn’t fall into the category of “mutualism”, but theories about the ability of the corporate community to act in an organized fashion to pursue influence over the state and an advantage against labor and middle classes are entirely based on empirical studies if you were to follow up the reference to Domhoff.

        The passing of most of the most significant liberal legislation was a combination of liberal corporate initiative, political conditions, organizing by forces such as unions and other civic groups, and other factors.

        Domhoff gives a fairly detailed summary of how the program known as Social Security began in large part from planning groups representing some of the wealthiest corporate interest making sure that when governments began backing pension plans, they followed an outline favorable to their interests and corporations. And it looked pretty much as it ended up as.

        None of which changes the HUGE impact of such pressure movements as the Old Age Pension plan pushed by Townsend and the tens of thousands of Townsend Plan clubs throughout the country.

        http://www.associatedcontent.com/article/6190904/oldage_pension_first_proposed_by_dr.html

        Such class-based domination of US politics means that *overall* those uppermost classes *tend* to win over time; and the fact that at any time they can lose, and sometimes lose very badly, by the laws and powers of the government, motivates them to involve themselves intricately in the US political system.

        http://sociology.ucsc.edu/whorulesamerica/power/social_security.html

        Nothing’s ever about who dominates every time or absolutely. But it would be enormously surprising if the routine winners of class-related political matters were not the uppermost classes.Report

    • Avatar Brandon in reply to Kevin Carson says:

      If we got rid of the state and all governmental authority, just WHO would back up unions and collective bargaining rights for workers against these huge corporations??? Who would get in the way of workers being screwed over?

      Are you REALLY so naive as to believe that the chips will just “fall into place”, and everything will be hunky dory? Look, government is here to stay whether you like it or not. It’s been with us for THOUSANDS of years, and it’ll be with us for another several thousand. You’re never gonna get enough people, especially in a country as big as the U.S., to agree that we should just abolish the state.Report

    • Thanks, Kevin. I think this is an important supplement and caveat to both our posts, as well. The trouble of even long-form blogging is that it’s extremely difficult to do in a way where it doesn’t come across that you’re being either completely defeatist or completely exulted.Report

  2. Avatar Michael Drew says:

    Totally agreed. That point about the Wagner Act is remarkably profound. In retrospect, it seems remarkable that labor actually campaigned to have its hands tied like that (If I understand the history correctly — and I’m sure there are various explanations the make sense within the context of the path-dependncy of history). It inevitably focused all attention on their dcisions with regard to one binary choice, almost unavoidably rendering the public polarized about legitimacy in any given instance of its use. This, one might think, laid the basis eventually for things like PATCO, and for overblown claims about whether teachers in Wisconsin are “striking” when, as a court here found, they are simply in most cases at most in violation of regulations about the management of the use of personal time, or of abusing sick time. These are violations to be sure (especially for the miniscule minority of people who may have accepted false doctor’s notes from the idiot phsicians who went to the Square and did so much public relations damage to the cause they were trying to aid, not to mention violating their professional codes), but they don’t amount to an illegal strike. We’d know if they were striking.

    About my uncertainty as to the possibility of new laws that could aid in clarifying the rights and modes of negotiation with associations of laborers, I did mean to express only uncertainty, not conviction to the contrary, that repeals are the only useful approach going forward. That seems like a large claim to me, and it’s just that I can’t be sure of my ability in the immediate term (or at any time, without much leaning heavily on more sophisticated types) to think through all of the strategic and legal-philosphical implications of Kevins wide-reaching observations about existing legal structures there. It could well be the case that I’d ultimately agree to what I can’t, out of caution, agree to now.Report

  3. Avatar Jaybird says:

    Doesn’t this just prove the importance of having the right people in charge to enforce laws selectively?Report

    • Avatar Mark Thompson in reply to Jaybird says:

      Yes. As we all know, the only thing stopping us from having the right people in charge forever and ever is that the wrong people are evil and lie and the people who would vote for them are too stupid to know that these wrong people are evil and lie. The answer is simple – once we enlighten those stupid people, the right people will never lose.Report

  4. Avatar E.D. Kain says:

    Very good post, Mark.

    Here’s my problem. On the one hand, it’s quite true that there have been legal efforts to quash labor throughout the past century. This is a strong case for some sort of pro-labor libertarianism (left-wing libertarianism if you will) and I find that a very appealing position to take. Or mutualism.

    But there were plenty of extralegal efforts to quash unions as well, from the Pinkertons to company towns and so forth. Furthermore, it seems just as likely that the act of removing legal restrictions would be captured by the ruling class as imposing them would be. In other words, while I philosophically agree with you whole-heartedly, and find Kevin’s take on this all very compelling, in practice I wonder if it’s any more likely to benefit the working class than the progressive politics that lead to Wagner.

    But in the end, this is why I still think that libertarianism of a certain flavor and progressivism of a certain flavor can and should work together. Laws preventing free association, preventing unions and management from bargaining, and preventing sympathy strikes and so forth seem like the major obstacles in reviving labor in this country. But the majority of libertarians don’t really care about organized labor. So while I understand the antipathy here and in Kevin’s work toward progressive politics and the way perhaps well-intentioned ideas were captured by the ruling class, I can’t help but think that it’s the left that is still much more concerned with labor rights and these issues than any but a handful of heterodox libertarians, mutualists and anarchists.

    And as always, how to get from point Z to point A when the super rich hold so much political clout. We may indeed need fewer laws, but we still need the government and some voice in the political class to push for those laws to be revoked, and to push for them to be revoked in such a way that they benefit workers not just corporations and the well-connected.Report

    • I’m wondering if you’re forgetting that the term “libertarianism” grew out of the socialist/anarchist movement in Europe at the beginning of the twentieth century. “Libertarians” were socialists/anarchists like Bakunin who opposed state socialism, and instead promoted voluntary association free from coercion. The term has retained much of its original meaning in the U.S., but has been co-opted by some with decidedly pro-corporate leanings.Report

    • But there were plenty of extralegal efforts to quash unions as well, from the Pinkertons to company towns and so forth.

      Sure. The point here is not that everything was and is all candy and roses in the absence of state intervention. It’s that except for a 20 year period, state intervention has tended to do more harm than good for labor, and even the positive effects of that 20 year period are heavily mitigated by the strong likelihood that much of the benefit of the Wagner Act was probably derived from the simultaneous removal of earlier state intervention in labor markets, combined with the fact that the structure provided by the Wagner Act was ultimately what allowed management to bust unions to an extent unheard-of even in the early 20th century. The lack of structure allows labor to make gains, to sustain those gains (see below), and to continue making more gains; it does not make everything wonderful overnight, but rather gives labor the tools to make, and continue to make, sustainable progress.

      Furthermore, it seems just as likely that the act of removing legal restrictions would be captured by the ruling class as imposing them would be. In other words, while I philosophically agree with you whole-heartedly, and find Kevin’s take on this all very compelling, in practice I wonder if it’s any more likely to benefit the working class than the progressive politics that lead to Wagner.

      Kevin’s most important insight, I think, is this: management’s first priority is and must always be order, and the more it can rest assured about the existence of order in any labor dispute, it will inherently have the upper hand because order permits it to act in a way that will protect its interests. Those who possess the capital have the ability to plan; those without capital do not, and the exception that proves the rule is that the small number of highly skilled unions (ie, professional sports unions, in which those skills are effectively a form of capital) have actually managed to do quite well for themselves over the last 60 years.

      The fact that management requires order is the single most important weapon that labor has, because labor’s single greatest asset is its capacity to create disorder. The threat of disorder, the threat of chaos, the threat of creating an unpredictable environment, is a powerful bargaining chip indeed. If management does not know how labor will come after it should it refuse to bargain, it cannot prepare for those attacks – will labor be coming at it with a slowdown? A picket line? A general strike? A secondary boycott? Sabotage (think here of the damage that could be done to management if the folks on the quality control line just “missed” defective products for a few days or weeks)? Vandalism (yes, this would be illegal under any event, but the point here is that the existence of a formal legal regime for labor disputes effectively takes actions of questionable legality off the table entirely)? And so on. Better still, not only does management not know what type of attack it will face, it does not know from whence it will come – will it be all the workers? Some of the workers? The workers at one of his suppliers’ or customers’ plants?

      And the results of this process are going to be more sustainable, as well. Management needs order both in the long-term and in the short-term. Outsourcing is not something that can just happen overnight for the most part – things need to get phased out and phased in. During that time, the ability of labor to create chaos is most important, because it has the ability to put management out of business in the short-term, before management can start accomplishing its long-term objectives. But if labor cannot create chaos, there is no way it will be able to credibly make this threat.

      Finally, let me make this much very clear: if there is one role of government which everyone outside of anarchists agrees as being a legitimate and appropriate role, it is that government exists to provide and defend order and stability. Management has a particularly vested interest in this; by contrast, insofar as we are talking only about labor’s relationship with management, labor’s interests are antithetical to the existence of order.Report

  5. Avatar E.D. Kain says:

    One last comment for clarity (hopefully):

    This and Carson’s piece are both very good. But – while I think that the core argument is true – that there are laws in place which hamper organized labor, and that laws are typically written to benefit management over labor – I do not think that the only solution is to repeal all those laws and imagine all will be well. What’s to stop corporations from simply outsourcing everything in this scenario?

    Not to mention, there are a number of workplace laws in place that still do benefit workers (safety regulations for example). And last, even if all of this is true and the legal regime is the primary issue (ignoring historical private union-busting, Pinkertons, etc.) then it still is only commentary on whether a specific set of laws benefits labor or management and says very little about market anarchy in general, or about the usefulness of the state in many other capacities (i.e. healthcare, education, defense, etc.) Ya dig?Report

    • Avatar James K in reply to E.D. Kain says:

      What’s to stop corporations from simply outsourcing everything in this scenario?

      The foreign exchange markets. Lets say that tomorrow The League of Baby-Eating Capitalists got together in their secret underground lair and decided to offshore all of America’s jobs (except the ones producing non-tradeables of course, because those can’t be offshored). So now, apart from a few hairdressers and taxi drivers America is unemployed, now what?

      Well, all those offshored jobs are making things for American consumption, and the US of A has just one thing to pay for them: US dollars. But the thing is that since the US now has no exports, what are those US dollars good for? Sure some countries use them, but there’s a finite demand for that, and at some point people will work out that using the money of a country that doesn’t produce anything as a reserve currency is a pretty dumb idea. So everyone’s sitting on a big stack of worthless US dollars, everyone wants to sell and no one wants to buy so the exchange rate will fall to zero, or very close.

      So what does that do for economic opportunities in the US? Well, if a business were to start up in the US and start exporting (or competing with importers) they could pay their workers with worthless greenbacks, instead of Chinese or Indian workers who demand expensive currencies like the Yuan or Rupee. That would make US workers very cheap to hire, so all those evil capitalists (who love money above all, even above loyalty to The League of Baby-Eating Capitalists) and all those offshored jobs would come flooding back until equilibrium in the financial markets was restored.

      On top of that, there’s the Law of Comparative Advantage, but I thought I should cover off the 18th Century arguments against the proposition that offshoring causes unemployment before I moved on to the 19th Century.

      Now theoretically its possible that through sufficiently aggressive action, US labour could reduce its Marginal Product of Labour down to zero (or even negative) marginal product, at which point no one would hire them at any wage, but that would require something pretty spectacular, and frankly at that point they’d have it coming. But barring ridiculous special cases people will be paid at or about their marginal product of labour. If a market is fairly uncompetitive then unions may be able to secure some of the monopoly rents from the firms benefiting from weak competition (and I sincerely wish them all the best), but if the underlying market is pretty competitive then unions can’t do much beyond going after the employers who are acting like assholes for no good reason, and while that’s a good reason to have unions, it’s a more limited service.

      In fact the more I think about it, the more I think that this is the reason US unions have wilted. In the highly uncompetitive environment of 1970s America, there were a lot of monopoly rents lying around so workers had a lot to gain by organising so they could grab their share. Also when it was hard to start up new businesses, it mattered more if exiting firms took a dislike to you so union protections were more important. It’s telling that the one sector that is still heavily unionised in the US is the one that is by its nature highly monopolistic – government.

      If this theory is true then unions are probably never coming back, but it also suggests that the reason they’ve declined is because they’ve become obsolete, so on balance its probably no big deal.Report

  6. Avatar Pooh says:

    Is it too simplistic to say that the legal regime is essentially immaterial once the concentration of capital reaches a certain point? Or to put it another why, the legal regime necessary to maintain any sort of balance between labor and capital given such a concentration is far more antithetical to any reasonably defined strain of libertarianism than would be the regime necessary to prevent such an accumulation in the first place?Report

  7. Avatar Brandon says:

    Herein lies the problem between you and I: You see the government backing up unions against big business trampling workers’ rights as “involvement of the State in labor-management relations.” I see it as the government stepping in as a mediating 3rd party to HELP unions get the power they need to fight back and level the playing field. You can’t always assume that just because the state gets involved, things would be better off without it.

    What bills or types of recent legislation do you know of that would “decrease labor regulation” but also empower unions? I’d REALLY like to know. That sounds pretty fucking contradictory if you ask me.Report

  8. Avatar Brandon says:

    Simply put, you’re not operating in the realm of reality, it seems. You’re comparing reality with some stateless utopia or ideal that has a VERY slim chance of ever becoming reality.

    You seem to forget that it was STATE INVOLVEMENT that empowered unions in this country in the first place! Before then, workers were kicked around and treated like shit if they even dared to unionize or threatened to. They had no rights to bargain collectively. That’s why the state had to get involved and tell businesses, “No! You must negotiate with them on a level playing field and stop treating them as illegitimate.” Do you fail to realize this, or is there some parallel universe you’ve been to where your theory actually works that I’m not aware of?Report

  9. Avatar Sam MacDonald says:

    “But there were plenty of extralegal efforts to quash unions as well, from the Pinkertons to company towns and so forth”

    I guss my question is, what sort of “anarchy” are we talking about here? Let’s say I have a factory and my guys strike. Are you suggesting that I SHOULD be allowed to hire replacement workers at my discretion? What about the strikers themselves? Would they be allowed to stand in front of the factory and keep the replacement workers from walking through the door? Would they be allowed to use my property for these purposes? Should workers who block public streets be arrested like anyone else who blocks a public street?

    I am not asking of the Pinkertons would be a llowed to come in with pipes and guns. I am just curious as to whether your vision of “a strike” allows unions to actually “strike” in the sense that I am accustomed to it. And in my mind, “strike” evokes images of workers walking around in front of the factory with placards, and management facing some hurdles with regard to hiring replacements.Report

  10. Avatar Mike Schilling says:

    Somewhat off-topic: There is upcoming “labor strife” in both the NFL and NBA because their collective bargaining agreements will expire. In all the reporting on this, which is mostly unfavorable to the “overpaid” players, I haven’t seen one piece make the simple point that the players would be much better off if they they were free to negotiate with all of their potential employers, and that the entire point of the agreements is to restrict this, so that an owner can hire a player without, in most cases, having to outbid all of his competitors. Not that the media is hostile to labor, of course…Report

  11. Erik: Re outsourcing, I don’t see a free market labor agenda as operating in a vacuum. I’d also like to remove all the subsidies, protections, and artificial property rights that big business depends on so there’d be fewer larger corporations and a lot less globalization in the first place. If the “outsourcing to Shenzhen” and “warehouses in container ships” model wasn’t heavily subsidized by the state’s pro-globalization policy, it would make a lot more sense to produce stuff closer to home.

    Also, the outsourced model depends to a large extent on “intellectual property” law. When the actual production is contracted through independent job shops, trademarks and patents are the main thing enabling TNC headquarters in Delaware and New Jersey to retain control of it. I’d like to see the job shops in China start making knockoff versions of Nike sneakers and Apple personal electronics, and market them to the local population minus the brand name markup. In the meantime, similar job shops could undertake micromanufacturing at a local level in the U.S. Cheap CNC machine tools offer the potential of flexible, networked manufacturing by garage factories sited close to the point of final consumption.

    Incidentally, while my end goal is replacement of the state with voluntary associations, I don’t (contra the obnoxious troll who shall go unnamed) see it as an all or nothing thing, or rule out the possibility of intermediate stages. Quite the contrary. And on a gradual path toward abolishing the state and devolving it into society, I think we should focus on abolishing the forms of state action that are most centrally important to exploitation and privilege first, and saving the ameliorative stuff like genuine worker protections for last (when they’d be moot anyway).
    Free Market Reforms and the Reduction of Statism

    Finally, I recognize that a strategy focused on legislative change of any kind may be futile or counterproductive. In the long run, our real efforts should be focused on building alternative ways of doing things below the state’s radar (the kind of decentralized darknet economy Daniel Suarez describes in Freedom ), and on combatting the state’s ability to enforce privilege:
    Attack Tyranny at Its Weakest Link: EnforcementReport

  12. Pooh: My gut instinct is that the concentration of capital would evaporate fairly quickly without ongoing state intervention to maintain it.Report

  13. Avatar MadRocketScientist says:

    Open question: what kind of legal environment would, in your opinion, create a dynamic where labor could fairly negotiate with business, & business could freely contract with labor?Report

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