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Saturday, April 03, 2004

Comments

Scott Harris

Andrew,

I responded to your original critique of my article in your second post, and ironically touched upon unions. I do not share your animosity toward unions, but your conclusions that unions have become reactionary and counterproductive are correct.

I am trained as an Industrial Engineer, and studied industrial production, time studies, and the history of the labor movement was the topic of my thesis in college. In the early 1900's, industrialists would take the strongest man, and establish his work pace as the standard. Other men would literally work themselves to exhaustion trying to keep up. Also, child labor was common.

These practices were actually counterproductive to society because they elevated short-term productivity over long-term investment. Unions acted as a necessary counterweight to the excesses of management. They demanded that Human beings be viewed not as disposable machines, but valuable assets to the society at large.

Also, Unions demanded workplace performance. When unions were weak, the only way they could gain moral persuasiveness was to maintain internal standards of excellence. Hence they enforced internal quality standards, with the union steward taking responsibility for disciplining and even expelling workers who failed to produce according to union standards.

And some policies, like Social Security, which created a safety net, actually increased the likelihood of risk taking precisely because it reduced the individual risk. Society itself was taking on some of the risk of individual action. In the long run, this encouraged individual risk taking resulting in more development. (Of course there is a difference between reducing risk and eliminating risk.)

But then it went sour. Unions once had the moral high ground. And because of this, they achieved success in most everything they asked for. The height of union power came in the 60's and 70's. But this is also the same time that unions lost their moral relevance. Companies, at lost last, gave up the fight and surrendered to concepts such as workplace safety and education of workers. The 80's brought a quality revolution because of Japanese competition, which revolutionized management practices.

Today, management treats its workers as partners in the process of production. Workers are seen as assets. Where unions have gone wrong is that having gained dominance because of moral arguments, they now pursue dominance for its own sake. They are no longer partners in progress, but barries to progress. American society no longer sees unions as providing moral value to society, because management philosophy and practice has been transformed over time - in no small part due to the pressure brought by unions.

Rather than accept their success and move forward, unions have not adapted to incorporate the changes in management philosophy. As a car needs both an accelator pedal and a brake pedal, our society needs both the acceleration of creative destruction, and the moderating effect unions can have on the recklessness of new generations of management. But unions have adopted the posture of engaging the "brake" 100% of the time, not recognizing that no progress can be made that way.

You are correct to rail against the reactionary postions of modern day unions. But I would be hesitant to conclude that unions have no potential value. Just as I would not drive a car that had no brakes, discarding the moderating influence of organized labor in favor of management reckelessness is not necessarily wise.

The other thing that unions have not adjusted to is the increased quantity and quality of information. Management gets much better and much quicker feedback on bad decisions than in times past. And since management ultimately desires success, they will modify plans which are not successful much more quickly. Unions could have a very valuable role to play in this information feedback process, but instead they tend to ignore information instead.

Here is an article written by the Dallas Federal Reserve Bank you will find instructive.

http://www.dallasfed.org/research/ei/ei9801.html

This article discusses the philosophy of Frenchman Frédéric Bastiat who unsuccessfully fought against the socialist leanings of France in the mid-19th century.

On Protectionism:

"Bastiat argued primarily that those voting for protectionist policies were voting for scarcity over abundance. How is it ever possible, he asked, that the average person and, presumably, the nation can prosper by restricting the supply of precisely those things people need?

Allow me to emphasize this point, at the risk of repeating myself. There is a fundamental antagonism between the seller and the buyer. The former wants the goods on the market to be scarce, in short supply, and expensive. The latter wants them abundant, in plentiful supply and cheap. Our laws, which should at least be neutral, take the side of the seller against the buyer, the producer against the consumer, of high prices against low prices, of scarcity against abundance.

They operate, if not intentionally, then logically on the assumption that a nation is rich when it is lacking in everything."

On Income Redistribution:

"One policy in which governments routinely engage and that greatly troubled Bastiat is income redistribution, or what he termed plunder. He addressed this topic often, and his thoughts have great merit today:

There are only two ways of obtaining the means essential to the preservation, the adornment, and the improvement of life: production and plunder....[W]hat keeps the social order from improving is the constant endeavor of its members to live and to prosper at one another's expense....I will go still further. When plunder has become a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.

Plunder not only redistributes wealth; it always, at the same time, destroys a part of it."

Preservation of Labor: On Restricting Machines to Promote More Employment of Labor

In Bastiat's time, as in ours, the fallacy that technology destroys jobs was prevalent in public debate. The French government (among others) routinely passed legislation that "promoted labor" by restricting the use of capital. All such schemes are, ultimately, self-defeating if the goal is increased production and wealth, although such restrictions can benefit narrowly defined interest groups.

"To get at the root of this problem, one need only remind oneself that human labor is not an end, but a means. It never remains unemployed. If it removes one obstacle, it turns to another; and mankind is rid of two obstacles by the same amount of labor that used to be needed to remove only one....to maintain that a time will ever come when human labor will lack employment, it would be necessary to prove that mankind will cease to encounter obstacles. But in that case, labor would not be simply impossible; it would be superfluous. We should no longer have anything to do, for we would be omnipotent...."* (Bastiat's emphasis)

The story of a Western engineer observing the construction of a railroad line in China provides a modern example of this same fallacious thinking: "You ought to use explosives to clear the way instead of all those men with shovels," the engineer informed the Chinese manager.

"If we did that," the Chinese manager responded, "many would be thrown out of work."

"Ah," replied the Westerner, "I thought you were building a railroad but, given your goals, you should take away their shovels and give these men spoons!"

—From Economic Sophisms, 18–19.

Unions have moral grounds and provide societal value when protecting the integrity and safety of the American worker. But they lose that moral ground when they impede progress for solely economic reasons. And Protectism is a self-defeating policy. It is workers who gain from free-trade because every dollar saved in purchasing cheaper products is worth about $1.82 earned.

Andrew Schouten

Bravo!

Thanks for the link. I must confess my ignorance of Frédéric Bastiat. Who would have known that a Frenchman could make such sense? He must have really had considerable trouble pushing laissez-faire policies at that time.

And now, on to the polemic!

You're right about the Labor Movement, of course. It did serve to end a number of atrocious labor practices. But I would never ascribe some kind of "corruption-by-power" fall-from-grace scenario to Organized Labor.

My point was that Unions are ultimately counter-productive to everyone's interests. They use a labor monopoly to coerce a sphere of influence by litigating better working conditions and making organization attractive to more workers. The more workers that they have, the more lobbying and negotiation leverage they have. It's not that they're do-gooders that went wrong, it's that the entire structure of Organized Labor is a parasitic carbuncle on the @ss of society that is eventually going to introduce sufficiently onerous (and artificial) obligations and obstacles on every enterprise that any economy will stagnate. They will always be focused, as you say, on plunder, at the expense of every one else.

It just happens to be the case that the artificial, political/sociological, and ultimately anti-economic reforms they introduced into Labor Laws a hundred years ago were, on the whole, pretty darn good. And, as an unintended (but very welcome) consequence, today employers view their employees as partners. (I say "unintended" because hostile conditions between labor and management are always to the Unions' benefit, manufactured or otherwise.)

Look at the Airline industry. Southwest and Jet Blue are kicking the sh!t out of everyone else because they don't have inflexible, unproductive, and unyielding Unions constraining them, if not leading them down the path to bankruptcy.

Or, you can use the example of those Grocery Workers. Up to what point must I tolerate them actively making by trip to the supermarket as unpleasant as possible? Is there anything more obnoxious than a picketline? Any organization that actively tries to appear as unsympathetic as possible to the people that generate the revenue that pay their checks should just go away.

Unions are over not because they became greedy crackpots and abandoned the needs of the workers (née proletariat), but because they inhibit growth. Period. They had their time. They served their purpose. Just like everything that was innovative in the 1800's, they should go the way of the buggy whip and gracefully fade away into obsolescence. And take other anachronistic fossils like Michael Moore with them.

This is a case of Unions, looking out for the "little guy" is just the way to screw people.
http://www.mercurynews.com/mld/mercurynews/news/local/states/california/peninsula/8256787.htm

In a major victory for farm workers, a federal judge has ruled that one of California's largest vegetable producers must reimburse laborers for thousands of hours spent traveling on company vans to and from the crops they picked.
D'Arrigo Brothers Co. could end up owing $13 million or more in back wages and penalties to more than 3,000 laborers, according to a March 16 summary judgment by U.S. District Judge Jeremy Fogel of San Jose. Fogel will determine exactly how much money the Salinas-based agricultural giant owes after April 5, the deadline for both sides to submit time sheets and other data.

Now, as it turns out, I know a little something about how ludicrous this case is. First, back in tha day, farm hands could live in houses close to the fields, owned by the ranchers. But, because the United Farm Workers though it was "too exploitative" this practice was zoned out, opening the way for motels and city police to exploit the agricultural workers.

So, the workers start carpooling out to the fields. After a couple of accidents, the CA state assembly -- at the urging of the UFW -- passed mandatory requirements for transportation. The multi-passenger vans had to meet some obnoxious OSHA standards (not paid for by the state) and if the rancher decided that he was going to pay for the transportation he had to get fleets of buses, something prohibitively expensive for all but the most wealthy agribusiness.

So, the UFW's legislative minions created the situation which D'Arrigo Bros. now finds itself in: they have to pay for the transportation out to the fields, because the workers can't live out there, and now they have to pay them for the time that they spend on the buses.

The judgment may give the 27,000-member United Farm Workers, which coordinated the lawsuit, more clout in organizing workers. D'Arrigo employees voted to unionize in 1975 but still don't have a union contract.
"They have the thinking that 'We can do with our work force whatever we want and get away with it,'" said Efren Barajas, UFW second vice president. "But not any more. We will take them to court."

As for how ridiculous the OSHA rules have gotten out in the fields, a rancher will be fined $1000 is the toilet paper in the Porto-Potties is not on the little roller handle thingie. If the toilet paper roll is there, but not on the thingie, they get fined. A worker could be responsible for taking the TP off the thingie, and the rancher would get fined. So the rancher has to pay someone to go around and make sure that the TP rolls are configured according to regulation.

This ain't child labor. That was then, this is now. Some unions are nothing more than Democratic Party money and muscle, but even in their function as looking out for the little guy, they show a hostility and downright lack of understanding how they are making agriculture too expensive in this country (even with undocumented workers). There isn't even a hint of partnership here. And those 13 million that D'Arrigo Bros. are going to pay will probably mean that less workers will get hired the next year, because they won't have enough capital to farm as much land.

So you can see, that even when acting on sufficiently "moral grounds and provide societal value when protecting the integrity and safety of the American worker" unions act against business, and therefore, against consumers and employees.

Which goes to show that, when it comes to sticking it to everyone else, the Union motto is "¡Sí, se puede!"

Scott Harris

I don't disagree in principle, but I think unions provide a moderating effect on the excesses of capitalism. However, public employ unions ought to be banned, and the government should try to stay out of labor disputes as much as possible.

Incidentally, the Grocery Workers Union is the only union I was ever a member of. In high school, I held a produce clerk job, and was required to join the union in a closed shop state. I am also against closed shop laws. Unions should be made to compete just like any other interest group.

That unions get government support is an indictment of government, not unions. Government should remain neutral except when threats and violence are used.

Scott Harris

One more thought. Bastiat mentioned that the ways to advance oneself economically was through either production or plunder. You mention that unions are seeking advancement through plunder.

I don't disagree. When unions use political clout to gain advantage over management, plunder is exactly what they are about.

But management is no stranger to plunder either. Witness outlandish executive compensation plans. The way these work is essentially, "We all went to Harvard together, so let's sit on each others Boards and vote ourselves higher pay. Workers and stock-holders alike be damned." This is nothing more than legal theft.

Executives are mostly glorified employees, some of whom are demonstratably incompetent. Yet they enrich themselves at the expense of workers and owners alike. How is it possible to justify laying off 5000 workers, and then give the CEO a 500 million dollar bonus - roughly $100,000 per laid off employee.

In many cases, any potential savings in expense are more than offset by executive bonuses, and it is impossible to argue that the company is any better off for losing its trained staff.

These very employees end up going to a competitor, or starting up new businesses which destroy the old company. Also, morale of remaining employees is destroyed when they see such injustice.

You might argue that this is self-defeating and it is for the owners/stock-holders. But for the glorified employee executive, he has a good chance of getting hired at the new company to start the plunder process all over again.

I am not implying wide spread conspiracy. Wide spread conspiracy is not required. Only a sense of entitlement is required. "We all went to Harvard and we are due." So management is just as likely to suffer from greed as unions. The key is for our system to set up a level playing field that prefers neither the union nor management so that abuses can be punished and weeded out.

Almost without exception, true entreprenuers have a totally different mindset to these plundering executives. They feel a sense of responsibility for their employees and experience real sadness when economics requires anyone to be laid off.

Don't get me wrong. I am a laissez-faire type of guy. But honesty compels me to recognize that union members are no more dishonest than members of management. As a member of management myself, I cannot arrogantly elevate myself as "better" than my workers.

We are partners together in production. When we stoop to acts of plunder, we end up only hurting each other in the long run. But both sides have the capacity to plunder, not just unions. And management must take the lead.

When management undertakes policies of plunder, no one can rightly blame employees for attempting to retaliate in like manner. But when management leads the way in policies of production, and shares the proceeds in an equitable way as in examples like Southwest Airlines, then labor has no good incentive to engage in plunder.

Just remember that it was the despotic policies of management that led to the union movement. It was not created from nothing. And a recurrence of despotic management will lead to a resurgence in unionism. And this is where the value of unions today comes into play. It is the threat of unions that keeps management honest. That threat, more than any specific union policies or goals, is why I still think unions have value.

Andrew Schouten

Scott:

That unions get government support is an indictment of government, not unions. Government should remain neutral except when threats and violence are used.

Too true. It is, as you say, an indictment of government. But democratic government will always appeal to the whims of the electorate, an inclination that unions (and other interest groups) exploit to their advantage.

I simply don't agree with you vis-a-vis the "excesses" of capitalism. Market economies are inherently self-correcting and comprehensive -- by definition they don't allow for "excesses" or plunder. Any "excesses" attributed to capitlaist enterprise stem from a non-economic view of "how things should be".

A perfect example of this came from a BBQ I attended this past afternoon. One of the guests kept going on and on about "profiteering". I was going to ask him if he meant "profit-seeking", and then it struck me, he wouldn't know the difference. Profiteering assumes a "fair amount" of profit (which, I might add, is always trumped by the greed of the businessman); profit-seeking assumes that the entrepeneur seeks every little bit of profit out there, and is recompensated accordingly (much like a shark, an entrepeneur dies when he stops moving forward).

Capitalism, and especially corporations that raise money by the exchange of shares of future earnings, corrects for mistakes. When a CEO (or other company officer) gets an inordinately high amount of compensation, this is no big deal, as such. But, when compensation gets sufficiently out of hand that shareholders begin to voice their displeasure, either at annual meetings or selling their stock, then market forces will converge to change the status quo.

Consequently, the idea that CEO pay is out-of-hand is not necessarily borne out by the market. Obeservers (educated and uneducated), regulators (hostile or sympathetic), and individual shareholders might believe that such compensation is undeserved. And this might very well be true. But, aggregate decision-making based on the future expectations of informed and self-interested shareholders is really the best measure of what is appropriate.

If in the (all-too-often) case that these entities screw up, the market will make the correction.

Market corrections are not pleasant, to say the least. In fact, market corrections are politically undesireable. Citizens lose jobs, 401(k)s, etc., which means that "something-must-be-done!"

Any reason provides the ground for a criticism of economic phenomenon that is not intimately related to the example -- in an economic relation -- is never a question of economics, rather, invariably such considerations are political. Anti-trust legistlation and litigation provides a clear-cut case of this point.

Capitalists never "plunder". They do make the most of competitive advantage, but never "plunder". The very concept carries with it an unfortunate connotation that any generated weatlh is unearned, somehow inauthentic, which is alien to the rough n' touble logic of economics.

Please allow me to put it to you like this:

Q: What's a dollar worth?
A: Whatever you can get for it.

The idea that management can engage in policies of plunder is a fiction. Because what "you can get for it" is the only price/cost/value that we can really speak of -- anything else is imposed and political.

Now, seen from this perspective, what we find is that the creative destructive forces of capitalism will balance the books, so to speak. It's not pretty, nor will it necessarilly be "fair" in any context other than the particular, concrete economic situation which precipitates the market correction. The competition in the marketplace is, in-and-of-itself, the corrective to outlandish compensation (and other unwise management decisions).

What is ultimately troublesome for most is that this "fairness" does not operate according to any sense of justice other than a constantly produced, market-driven function market forces. And this is where unions develop -- as a response to the percieved excesses of capitalism.

Such perception views economic behavior through a non-economic lens. Why we feel the need to transpose the non-economic into the economic is a fascinating psychological question, and one that is too lengthy to enjoy an adequate treatment here.

What Unions do is interject non-economic reasoning into an economic context. It's because of this that they are so problematic: while companies are "checked and balanced" by market forces and pressures, no such thing exists for Organized Labor. And this is why they inhibit the growth of the private sector: they are like the brown tree snake (Boiga irregularis) in Guam -- they have no natural predators in the marketplace, and what's more, the government protects the rapacious little [email protected]

Unions don't compete with the entities they purport to constrain. In fact, they don't compete at all!

I'm all for challenges to private sector enterprises -- to all things, really -- and this is exactly what Unions don't allow: challenges to themselves and challenges to workers.

Still, it (somehow) seems to border on intellectual dishonesty to assert that Unions haven't been beneficial to laborers. But that's only if we think economics un-economically and personally. If we think from the perspective of despotic management, this quickly shows itself as nothing more than fiction. Yet anybody will tell you that management is always up to no good, or that management is terminally greedy, or some such objection. It seems breathtakingly navie to adopt the corporation's position uncritically, even as we do the same, without the slightest qualm, to the worker's position vis-a-vis corporate policy.

Wilt Chamberlian once said that "Nobody Cheers for Goliath", which I take to articulate a thought similar to that of Bastiat:

"When plunder has become a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.

It's not the big guy which is engaged in "plunder", for his success is self-evident and needs no authorization; it's the little guy that has to invent reasons and fantasies to justify why he should win and not the big guy (e.g. "level playing field"; "If I was born rich, I'd have it made, too", etc.). Following this logic, unions go bad once they become corrupted by their power (i.e. become big guys and stop being lil' scrappers).


As for your last point, the "empty threat of unions":

And this is where the value of unions today comes into play. It is the threat of unions that keeps management honest. That threat, more than any specific union policies or goals, is why I still think unions have value.

What good is an "or else" if there is no specific threat? Put in another way: Is there such a thing as a general, non-descript threat?

Or is this just some reason to rationalize the continued need of a very real institution despite its obsolescence? Is it not the case that once society/culture has met the needs that come out of a precipitating need, the crisis is resolved? If, as you say, unions were not created from nothing, responding to arbtitrary management policies, why are they still necessary? Or valuable? Haven't they run their course? When an engine needs lubrication, and it recieves it, is the can of WD40 still necessary for the operation of the motor? In the future yes, but only insofar as it specifically deals with a specific issue.

From a 2002 article:

In fact, records from the Department of Labor's Office of Labor Management Standards, show that various labor union officials have been indicted for corruption, fraud and financial misdeeds at a rate of 12 new indictments and 11 convictions every month for the past four years.

So, let me ask you this, what kind of a society are you advocating in which the gadfly/watchdogs are more corrupt that those people that they purport to watch?

Scott Harris

Andrew,

The distortion in the system is the creation of corporations. Corporations are primarily mechanisms for avoiding accountability (read liability.) I am involved in a lawsuit where a corporation owes me $50,000.00. My contact was not with the "corporation", but with the CEO and others who essentially have violated a trust by breach of contract. It has come out that this is a standard practice of this corporation to attempt to stiff its non-core vendors.

Many suits are filed against them each year, but many others simply write off bad debt. Because this company does have the money to pay, we will collect out money. The lawyer I am using has sued the company before, and collected. But this CEO gets away with personal dishonesty by claiming "its just business." And although he owns 100% of the stock in the company, he is personally shielded from liability because of his corporate standing. This is what I refer to in plunder by management.

The situation grows worse with large established corporations because management is not equivalent to ownership. Owners look at things differently than managers. In a true market system, we would have owners and employees, not managers and employees. The market corrects for plundering managers, but the managers themselves are not directly punished - the owners are.

I understand the need to shield business owners from predatory lawsuits - another form of plunder. But in my case, I simply am dealing with a very dishonest man who ends up increasing cash flow by reniging on commitments, and can get away with it because of the protection of a corporate umbrella.

Corporations are artificial constructs. I have no problem with owners getting filthy rich - even owners who are simply majority share holders under the current construct. And I understand that the other benefit of Corporate structure is the ease of raising market capital through the issuance of shares without losing control of the company. It helps accelerate growth in many cases.

But the unfortunate side-effect is that the corporate system can be gamed by unscrupulous managers, and even owners who seek short-term gain regardless of long-term effects. I don't know that I can come up with a better system. But I do recognize the downside of what we currently have in place.

There is a big difference between Michael Dell and Dennis Koslowski. Dell has an emotional stake in the success of his company. Koslowski was simply trying to enrich himself at everyone's expense. Dell is an entreprenuer - a builder. Koslowski is simply a mercenary.

In any system, there are going to be drawbacks. Fortunately for me, I will be able to collect from this particular dishonest man. But another customer, who is smaller, owes $20,000.00 and I will never collect the judgement I have against him because he is going to declare bankruptcy, and then re-open up his business under a new name. He has done it three times before.

You might ask why I even did business with these scoudrels. Well, the nature of my business is emergency response, so I have to respond just to make money. I have to factor in the potential cost of dead-beats. I have another customer who owes me $1000.00 and is simply a guy struggling to get by, not necessarily an intentional dead-beat.

But in all these cases, these men are shielded from personal liability for contractual decisions they made because of the corporate structure.

So I guess I'm saying that since "Management" operates under an artificial construct that distorts true market accountability, then "Labor" has responded to this through unions. Ultimately, Unions were created to respond to abuse and to problems. That response has created its own problems, as well.

But historically, management is to blame for the very existence of unions. And going forward, I do not give future generations of management the benefit of the doubt. Mankind is corruptible - all of us, management and labor alike. For a manager like me who would seek to avoid unionization of my business, I must recognize why unions came into being, and avoid causing problems which might justify the unionization of my workforce.

My viewpoint is more practical than theoretical. And harsh honesty is required. I can only control my actions in such a manner to influence the actions of others. If I pay attention to treating my employees properly, then I won't have to worry about losing control of my company to unions.

Andrew Schouten

Scott:

I do believe that your viewpoint is personal; it is not practical, nor theoretical. I make it a point not to address other people's personal issues, because it's very hard to engage them in a non-therapeutic and productive manner. For more on this subject, check out this article at techcentralstation.

Scott Harris

Andrew,

I gave some personal examples trying to illustrate the point that plunder by management was plausible. On a practical level, I am not rushing out to join a union, or seeking to have a union come represent my employees. On a philosophical level, my point is that plunder is not unique to any particular class or group of people. That's all.

My seemingly benevolent stance toward unions has to do with the extensive research I did into the issue during college. But to give one more example where unions can be beneficial, I have worked in the constructin industry. Some trade unions truly take care of tradesmen. Wages are directly paid to the union employee, but benefits including insurance and retirement are paid to the union which administers the benefits.

This has real value to the union members. When working on large multi-million dollar projects, several companies bid on the job, but only one actually gets the project. In many cases, all of the contractors draw from the same pool of union laborers. Because of the dynamics of the construction industry, i.e. winner take all on bid day, tradesmen end up working for whoever won the bid on the latest big project. The end result is working for several companies, sometimes multiple times during the course of a tradesman's career.

If benefits were tied directly to the employer instead of the union, then tradesmen would spend a significant amount of time becoming "eligible" for benefits with each iteration of employment with whichever big contractor he was working for this month. Having benefits tied to the union maintains seemless coverage for the tradesman, and alleviates worry. I know tradesmen who have been promoted into management, yet still maintain their active union status, and have the company pay their benefits allocation to the union.

This type of arrangement is especially important during lean times. If the local construction market will accomodate 250,000 skilled construction jobs, and 2000 companies vie for the projects, for the tradesman his security is in his skill, not in the company he works for. And for skilled labor unions, they also provide a value to the company. They train and test their members, and also provide a labor pool into which companies can dip as needed. This reduces the cost of wages when companies lose projects, and also reduces the waste associated with training workers who are essentially temporary from the company point of view.

It is possible for unions and management to have a cooperative arrangement. Antagonism is not necessary. When either side tries to game the system is when problems occur.

Andrew Schouten

*sigh*

Scott:

Speaking plainly, it seems as though I've not made my intent clear enough. At least, after reviewing your comments, I don't think I've done enough to clarify what I mean by "Misunderstanding America".

Maybe I should have called it Re-Thinking America, because what is ultimately at fault in the Misunderstandings that I'm dealing with, are unacknowledged and uncritically assumed presuppositions which frame the debate in such a way that the more fundamental phenomenon of America is lost by closing down avenues for inquiry.

That I chose inflammatory language in my little polemic seems now like a poor decision. It seems to have taken away from my intent: if we look at the primordial foundations of the phenomenon that we call "America", we will find the principle of "creative destruction" hard at work. You agree with me on this. But agreement is not enough.

Where we disagree is on the question of unions. Protectionism and unions seek to ameliorate creative destruction even at the expense of the dynamic itself. From what I gather, you pull away from an exposition of the institutions of labor unions vis-a-vis a ground of creative destruction, and attempt to rehabilitate unions with reference to their traditional value, viz., selflessly working for the workers against greedy corporate fat cats, child labor laws, etc. Because this is the mythology which unions have built up over the years to justify their naked and brazen power games. It's like trying to defend the USSR by reciting their Constitution -- it proves nothing other than your naiveté.

This series is an exercise in revealing how it is that our presuppositions lead us into misunderstanding. I find in your comments crystal clear examples, the most clear being the cognitive dissonance that you seem to exhibit when it comes to value of unions for improving the lives of workers, even as you hope that your shop never gets unionized. You say that as a grocery worker it was horrible that you were forced to join the union as a condition of working there even as you extol the virtues of your extortioners!

In my opinion, sir, your "seemingly benevolent stance toward unions" has nothing to do with your academic research, but a naive acceptance of their agenda. Let me explain:

You assert that struggle and creative destruction is the source of America's strength, and yet you find that "having benefits tied to the union maintains seemless [sic] coverage for the tradesman, and alleviates worry". Great. Who cares? How weak is it to seek solace from life in the surety of benefits? That is to say, what sickness of the mind, of the spirit is present that needs to find certainty, security, predictability? And whatever sickness this might be, isn't it in direct opposition to creative destruction? Returning to the language of your initial article, aren't these benefits the most vicious narcotic that elites have found to mollify the collective honor of the working class?

No, wait, don't answer that, let me break it down for you: we fail to think things through to the (all-too-often) bitter end. That's because often we don't like what we see staring back at us. So we would rather run like children back into the comfort of soporific dogmas. This is true for either side of the partisan divide

Moreover, it is unfortunate that I picked up your concept of "plunder". I was leery of it, and now I see why.

On a philosophical level, my point is that plunder is not unique to any particular class or group of people

"Plunder" provides a wonderful example of presuppositions at work. The very word seems to indicate an "undeserved" gain: Pirates plunder. Hidden within this concept is not only a sense of "undeserved-ness" but also there is a moral valuation of "undeserved-ness" as well. How can we say that some wealth -- indeed, any wealth -- is undeserved? By what basis? By what criteria? Don't you see: your philosophical point rests on concealed assumptions which prejudice any arguments based on those presuppositions.

This is why I introduced the language of the economic vs. the non-economic. Because once you insert a non-economic term into the economic, you introduce a whole host of alien moral valuations into an economic order. Economies follow a logic of production, utility, and efficiency; unions follow a logic of fairness and a discriminatory view of the inherent worthiness of some kinds of work (hence the worker vs. suit divide). That's why sensible debates on so-called "living wages" are near impossible: the idea rests not on an economic logic, but a socio-political logic which has no bearing on the process of production itself. In an intellectually honest setting, any economic argument against a living wage fails because it does not follow "social justice" logic, and conversely, any social justice argument fails along strictly economic criteria. Thus, misunderstanding arises in the very form of a "living wage", and because these are empirical, ontic concerns that might be in concert with laborer's interests the fact that we're talking apples and oranges is overlooked -- for political reasons.

You see Scott, we're talking apples and oranges. When I'm speaking about these things, I'm attempting to reconfigure the debate to get at underlying and unidentified principles and presuppositions which have, up to this point, been left unsaid. It's frustrating as hell to me to sit here and see you reiterate the labor union mythology to me as though it were proof of something other than a reaffirmation of how vital it is that we reexamine all of the old "truths" and positions with a sober and somewhat ambivalent eye.

I think, Scott, that it's time for all of us re-examine our beliefs, so that we approach the 21st century with a robust, vibrant set of ideas that are not uncritically beholden to earlier doxa. We need to articulate new criteria to judge who we are and where we are going, and not just "willy-nilly" recycle obsolete mythology. Because, if you're right, and America is currently in a war of ideas with other cultures, we need to know what the measure of America really is other than "Apple Pie".

Scott Harris

Ok, Andrew.

My point is that evil is common to all men. A better word for management Plunder that I refer to is FRAUD. Labor Plunder is EXTORTION. In my exposition above, management is just another class of Labor, and just because it is not unionized does not mean it is exempt from trying to game the system for its own selfish benefit. I distinguish between owners and management.

In business, there are customers, owners, management, labor, and regulators. As long as all operate honestly and above board, a teamwork can develop. Do I have a lot of use for modern day unions? No. But I also do not share your hostility toward them either. You seem to interpret my lack of hostility as cognitive dissonance.

I was just trying to provide a different perspective. The substantive difference between my POV and your POV is only attitude.

Scott Harris

Andrew,

One more thing. The Internet Bubble was built upon corporate Fraud and widespread management dishonesty. In mid-1999, I opted out of the market and put all my money in Bonds because I just couldn't justify chasing stocks in companies based only on promises, not a real track record of sucess. My father-in-law lost $350,000 and is no longer a millionaire. My neighbor across the street lost $860,000 and is no longer a millionaire. My sister-in-law lost $150,000. I initially lost out on about $50,000 of paper profits over the course of the next 12 months, but ended up not losing any principle and gaining about $20,000 overall. This practical experience was based on a mistrust of management blowing smoke up our collective asses.

I am well aware of the abuses of labor. I know about Jimmy Hoffa, and the organized crime ties to the Longshoreman's unions. I have dealt with lazy no-good sit-on-their-ass-all-day-long-and-collect-a-paycheck union idiots, as well. I have worked in environments where young engineers, who could learn from the experience, were not allowed to gain practical technical experience because it might violate some assinine union contract.

But I would have much prefered to act before the "market correction" of the last few years. My wife is a CPA for a private equity firm, and her twin brother is the compliance officer VP at the largest public brokerage in the Southwest. I have witnessed management malfeasance up close and personal, and have no illusions about the inherent honesty of management.

And I have also worked in companies where a true spirit of teamwork existed on all levels of the company, and everyone was on the same page. That company has been on Forbes Top 5 list of Best companies to work for in America since the list was started 10 years ago. I have seen the bad and the good.

I do have a practical personal experience, and it has taught me that responsibility and accountability are two-way streets. Management earns the trust of labor by virtue of honesty and openness. In this environment, laborers will reward management with Trust, and unions become superfilous.

As a manager, the only thing I can control are my own actions. And this is where a benevolent attitude toward labot becomes practically valuable. If I have a hostile attitude toward labor, it will come out, and the Trust relationship will not be established. The responsibility to initiate the Trust relationship falls squarely on my shoulders precisely because I am management. Labor has the responsiblity to RESPOND, not INITIATE. Whoever has the authority bears a greater share of responsibility. I am not blind to the abuses of organized labor. But my experience teaches me that hostility doesn't solve the problem.

Andrew Schouten

Scott,

Do you think you could tell me just how your comments bear on the subject matter?

Seems to me like you're talking loud and saying nothing.

Scott Harris

Andrew,

We are essentially in agreement. Go back and read the first paragraph of the first comment I made in this thread. Also, I agree with the article I referenced about Frederic Bastiat.

What we got sidetracked on was whether management was capable of plunder as well, not whether unions are essential. My main point in the rabbit trail debate is that unions rose up out of a response to management abuses. As long as managers avoid those mistakes going forward, there is no impetus for unions - no moral underpinning. And as a manager, I want to keep it that way.

Unfortunately, I do not have the faith you have in the virtues of managers, for the reasons I stated in my examples. And thus, I think unions will continue to plague us.

My other point in the rabbit trail debate is that in some cases, under the right conditions, unions can provide benefits to both management and labor.

Other than my teenage job in Illinois, my entire professional career has been in a right to work state. Perhaps if I lived in a closed shop state, I would feel more animosity towards unions. This probably gets back to unions exercising political power. In my state, unions are politically anemic, and can only attract membership by providing real benefits outside of government intervention.

As to going down the rabbit trail, it appeared that only you and I were debating the issue, so I didn't feel compelled to stay on topic. Maybe that's just my adult ADD kicking in. :}

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