Friday, February 18, 2011

Labor Unions are Part of Capitalism

Because a cowboy governor in Wisconsin is attempting to eliminate collective bargaining for Wisconsin's public employees, and because Speaker John Boehner thinks it's better for America to eliminate a hypothetical 200,000 jobs if those happen to be Federal jobs, the US has witnessed a small labor rights resurgence. Conservative politicians continue to rail against the idea of workers' rights and labor unions as they more or less always have; but now we have some newsworthy examples.

So now would be a good time to inform conservatives that labor unions and collective bargaining are part of capitalism, not ancillary to it.

Conservatives love market competition, except when market competition provides challenges to corporate interests.

When corporations see an opportunity to gain an advantage over a competitor, they take it. Or at least, says Capitalism, they should. This is one reason why larger corporations sometimes merge with or overtake smaller corporations: sometimes acquiring a greater market share, or a more nimble production process, or a novel idea through a merger or acquisition can yeild a competitive advantage. By the same token, corporations don't like it when mergers between competitors freeze them out or set them at a disadvantage. When these things happen in business--when winners and losers emerge from tactical business decisions--it's not always about who has the best and cheapest product, or who produces the greatest demand; it's also about who controls the means of production, and who has the capital and the organization to deliver on novel ideas or products.

One kind of capital is human capital, or labor. Just like a paper company pays a price for the trees it turns into paper and the machines that process the trees, it also pays a price for the people it employs to run the machines that turn the trees into paper. If there's a scarcity of trees, the paper company pays a higher price for trees. If there's a scarcity of labor, the paper company pays higher wages for labor.

Well, strategically speaking, if people want to earn a higher price--a higher wage--for their labor, they can develop ways of making labor scarce, or of inflating the cost of labor: they can unionize and collectively bargain, threatening to refuse their services if their price isn't met.

Businesses do the same thing with each other. When a business has something that lots of people want, it raises the price. When a competitor produces something similar that lots of people also want, both prices come down. That's when businesses buy up or merge with competitors to expand market share and drive prices back up. Or, that's when businesses employ any number of other strategic means of outwitting their competitors. This is competition.

But when workers employ strategies to achieve common or collective employment rights goals, pro-business conservatives don't like to call it competition. They prefer to let businesses compete, but not workers, blaming labor unions for creating the same kinds of market inefficiencies that businesses create every day by the same basic practices.

This is called hypocrisy.