Collective Conscious

Kevin Drum:

I am, fun­da­men­tally, old fash­ioned about this stuff: I think of the world as largely a set of com­pet­ing power cen­ters. Eco­nom­ics mat­ters, but power mat­ters at least as much, and I think that stu­dents of polit­i­cal econ­omy these days spend way too much time on the econ­omy and way too lit­tle time on the polit­i­cal. This explains, for exam­ple, why I regret the demise of pri­vate sec­tor labor unions. It’s not because I don’t rec­og­nize their many patholo­gies, or even the fact that some­times they stand in the way of eco­nomic effi­ciency. I’m all in favor of try­ing to reg­u­late the worst aspects of this. But large cor­po­ra­tions have their patholo­gies too, and those patholo­gies are far worse because there’s no longer any effec­tive coun­ter­vail­ing power to fight them. Unions used to pro­vide that power. Today nobody does.

So when Tim Lee writes that “Com­pet­i­tive labor mar­kets have steadily dis­placed top-​​down col­lec­tive bar­gain­ing,” I just have to shake my head. Com­pet­i­tive for whom? For the upper mid­dle class, labor mar­kets are fairly com­pet­i­tive, but then, they always have been. They never needed col­lec­tive bar­gain­ing to begin with. For every­one else, though, employ­ers have been steadily gain­ing at their expense for decades. Your aver­age mid­dle class worker has very lit­tle real bar­gain­ing power any­more, and this isn’t due to chance or to fun­da­men­tal changes in the econ­omy. (You can orga­nize the ser­vice sec­tor just as effec­tively as the man­u­fac­tur­ing sec­tor as long as the law gives you the power to orga­nize effec­tively in the first place.) Rather, it’s due to a long series of delib­er­ate pol­icy choices that we’ve made over the past 40 years.

It’s worth not­ing, by the way, that cor­po­ra­tions and the rich know this per­fectly well, even if lots of lib­er­als have for­got­ten it. They know exactly what the biggest threat to their wealth is, and it’s not high tax rates. This is why the steady ero­sion of labor rights has been, by far, their sin­gle biggest obses­sion since the end of World War II. Not taxes, unions. If, right now, you were to offer cor­po­ra­tions and the rich a choice between (a) pas­sage of EFCA or (b) a return to Clinton-​​era tax rates on high incomes, they wouldn’t even blink. If you put a gun to their head and they had to choose between one or the other, they’d pay the higher taxes with­out a peep. That’s because, on the level of raw power, they know how the world works.

The main dynamic cre­at­ing this prob­lem is the col­lec­tive power of cor­po­ra­tions. Cor­po­ra­tions are far from the free mar­ket ideal; in fact they thrive most when they can become con­trol­ling monop­son­ists in a labor mar­ket and can pay far lower wages than a true free mar­ket would allow. (For exam­ple, con­trast a Wal-​​Mart town with a place full of mom-​​and-​​pop shops who must com­pete for work­ers. Where are employ­ees paid more? Hint: Wal-​​Mart pays the legal minimum.)

Cor­po­ra­tions func­tion as ‘cap­i­tal unions’ which allow many peo­ple to coor­di­nate their eco­nomic power. But with­out labor unions there is no coun­ter­vail­ing force for labor­ers them­selves to reap the ben­e­fits of consolidation. This imbal­ance takes all the sur­plus income away from work­ers, who have no bar­gain­ing power — they are left with the real­ity of ‘barely get­ting by’ while cor­po­rate prof­its soar. The same is true at the polit­i­cal level. Cor­po­ra­tions are large enough and pow­er­ful enough to coop­er­ate and cre­ate mar­ket power, while non-​​unionized work­ers have no col­lec­tive rep­re­sen­ta­tion in Wash­ing­ton. The out­come is depress­ingly pre­dictable and familiar.

I think this way of look­ing at the imbal­ance between labor unions and cap­i­tal unions also helps make Kevin’s point here:

Matt Ygle­sias has a complaint:

I think labor-​​friendly writ­ers some­times don’t do the best pos­si­ble job of dis­tin­guish­ing between unions qua social and polit­i­cal insti­tu­tions and col­lec­tive bar­gain­ing as a labor mar­ket insti­tu­tion. Some­thing like EFCA is the only way to revive col­lec­tive bar­gain­ing as a major force in pri­vate sec­tor labor mar­kets. But I don’t think it’s cor­rect to see EFCA → union den­sity as the only con­ceiv­able form of polit­i­cally influ­en­tial mass mem­ber­ship organization.

Actu­ally, I’m pretty sure that most labor-​​friendly writ­ers are keenly aware of this dis­tinc­tion. But put that aside. It’s obvi­ously true that orga­nized labor isn’t the only con­ceiv­able form of polit­i­cally influ­en­tial mass mem­ber­ship orga­ni­za­tion. The ques­tion is whether it’s the only con­ceiv­able form of polit­i­cally influ­en­tial mass mem­ber­ship orga­ni­za­tion ded­i­cated to the eco­nomic con­cerns of the mid­dle class. Right now I’d say it is for the sim­ple rea­son that no one seems able to con­ceive of an alter­na­tive. But I sure wish some­one would.