The View From 1776
Sunday, September 06, 2009
Labor Day: A Tribute To Highway Robbers
Labor Unions are a throwback to the days of travel by horseback, when highwaymen fell upon lone travelers, beating them and robbing them of their possessions. Unions still have the ambivalent status of thugs, to their victims, and Robin Hoods, to their supporters.
Crafts labor unions evolved out of the medieval system of crafts guilds, which used an apprenticeship system to restrict the number of craftsmen in every skilled trade and thereby to set prices and limit competition. After the start of the industrial revolution in the early 1800s, the crafts guilds morphed into unions of skilled workers, such as carpenters, electrical workers, metal workers, etc.
Todays industrial unions of unskilled workers such as the United Auto Workers, longshoremen, and steelworkers have a somewhat different provenance. Their inspiration was Karl Marx’s several Socialist Internationals, which in different incarnations were headquartered in Europe and in the United States. Marx envisioned cooperation among all workers - the employed and unemployed - in labor unions as the means to destroy what he called the despotism of capitalism. It is such unions that bankrupted the automobile and big steel producers in the United States and reduced the port of New York to secondary status. (See Labor Unions: Socialism’s Shock Troops)
Marx was active in the 1864 formation of the socialist First International, formally named the International Working-man’s Association, headquartered in London. The International’s primary aim was to force employers to pay the same wages for a shorter working day. This aim was based upon Marx’s labor theory of value, in which value is only the amount of labor input in every product or service. This implies that management and capitalistic owners and investors are not entitled to share in the profits of a business, that all the so-called surplus value produced by the workmen should go to them.
Product design, innovation, managerial skill, and investment of large amounts of capital to finance new businesses count for nothing in the socialist system of liberal-progressivism. People in that end of society are “the rich” whom liberal-progressives propose to tax to the nth degree to support the welfare state.
This is redistributive economics aiming at socialism’s holy grail, equality of income and consumption, which explains liberal-progressives’ support for labor unions, without regard to the damage they do to the vast majority of citizens, those who are not union members. Higher wages and feather-bedding, extorted with industry-wide strikes, raise industry costs and sale prices, taking money out of the pockets of non-unionized citizens and giving it to union workers.
Those higher business costs and rigid work rules prevent business from rapid price and production cost innovations necessary to survive against high-quality, aggressive foreign competition. Labor unions’ aggressively anti-business bias is directly responsible for the loss of hundreds of thousands of jobs in the United States, jobs that have been outsourced to other countries, as well as jobs in companies that have been forced out of business by union tactics.
Industrial unions of this sort attained power, free from the restraints of anti-monopoly regulations, in the 1930s with the passage of the Wagner Labor Act under President Franklin Roosevelt’s New Deal. Labor unions became a key part of the Democrat/Socialist Party’s coalition. Not only were industrial unions big election supporters, but they were quintessential elements in the scheme of international socialism.
Norman Thomas, head of the Socialist Party in the United States and its presidential candidate from 1928 to 1948, wrote that socialists had a greater role in building and inspiring the labor union movement than many people now are willing to admit. He also noted that, after the New Deal, the Democrat/Socialist Party incorporated nearly all of the Socialist Party’s election platform.
It is also true that the resolutions of “Aims and Tasks of Democratic Socialism,” adopted at periodic meetings of the Socialist International proclaim that labor unions are a fundamental part of social security and industrial democracy, i.e., the welfare state and union representatives exercising a counter-vote to management in private industry. The latter is one element proposed by President Obama for General Motors and Chrysler in the Federal bailout.
Public employees’ unions, now the largest and fastest growing segment of labor unions, have a particularly insidious effect on the well-being of taxpayers and upon the survival of the United States.
The Democrat/Socialist Party’s heavy dependence upon labor unions for election campaign support has shifted their stance from support of free trade to high-tariffs and environmental regulations designed to foreclose foreign competition. (See Labor Unions: American Nazis)
In the short run, this may protect union jobs in a few industries, but in the long, as we saw with General Motors and Chrysler, it bankrupts those industries. Meanwhile American consumers, to the extent cheaper and high quality foreign products are excluded from our markets, have restricted choices and pay higher prices to support labor unions. That’s highway robbery.
Of particular relevance to our current economic recession are the rigidly maintained, no-concessions union contracts that necessitate more workmen than needed, at well above market wages, coupled with gold-plated health and retirement benefits. The inescapable consequence of labor unions is making a recession deeper and more prolonged than necessary.
As we have seen, President Obama’s stimulus program, founded on throwing more money at consumers, has failed to reduce unemployment. Literally the only way to an economic revival is the cost-cutting, inventory-clearing path that will enable businesses profitably to produce and sell products at the lower prices and smaller volumes that the market will support. Democrat/Socialists and labor unions stand athwart that path, screaming hand over your money.
Labor unions would rather squeeze the last nickel out of dying companies than to reduce their extortions to reasonable, market-based rates.