Komrads, alvays shoppe die Union Label, Da?
Posted on 12/21/2005 9:16:01 AM PST by Marxbites
The Union Myth Thomas J. DiLorenzo
In Human Action, Ludwig von Mises wrote that labor unions have always been the primary source of anticapitalistic propaganda. I was reminded of this recently when I saw a bumper sticker proclaiming one of the bedrock tenets of unionism: "The Union Movement: The People Who Brought You the Weekend."
Well, not exactly. In the US, the average work week was 61 hours in 1870, compared to 34 hours today, and this near doubling of leisure time for American workers was caused by capitalism, not unionism.
As Mises explained, "In the capitalist society there prevails a tendency toward a steady increase in the per capita quota of capital invested. . . . Consequently, the marginal productivity of labor, wage rates, and the wager earners’ standard of living tend to rise continually."
Of course, this is only true of a capitalist economy where private property, free markets, and entrepreneurship prevail. The steady rise in living standards in (predominantly) capitalist countries is due to the benefits of private capital investment, entrepreneurship,technological advance, and a better educated workforce (no thanks to the government school monopoly, which has only served to dumb down the population). Labor unions routinely take credit for all of this while pursuing policies which impede the very institutions of capitalism that are the cause of their own prosperity.
The shorter work week is entirely a capitalist invention. As capital investment caused the marginal productivity of labor to increase over time, less labor was required to produce the same levels of output. As competition became more intense, many employers competed for the best employees by offering both better pay and shorter hours. Those who did not offer shorter work weeks were compelled by the forces of competition to offer higher compensating wages or become uncompetitive in the labor market.
Capitalistic competition is also why "child labor" has all but disappeared, despite unionist claims to the contrary. Young people originally left the farms to work in harsh factory conditions because it was a matter of survival for them and their families. But as workers became better paid—thanks to capital investment and subsequent productivity improvements—more and more people could afford to keep their children at home and in school.
Union-backed legislation prohibiting child labor came after the decline in child labor had already begun. Moreover, child labor laws have always been protectionist and aimed at depriving young people of the opportunity to work. Since child labor sometimes competes with unionized labor, unions have long sought to use the power of the state to deprive young people of the right to work.
In the Third World today, the alternative to "child labor" is all too often begging, prostitution, crime, or starvation. Unions absurdly proclaim to be taking the moral high road by advocating protectionist policies that inevitably lead to these consequences.
Unions also boast of having championed safety regulation by the Occupational Safety and Health Administration (OSHA) over the past three decades. The American workplace has indeed become safer over the past century, but this was also due to the forces of competitive capitalism, not union-backed regulation.
An unsafe or dangerous workplace is costly to employers because they must pay a compensating difference (higher wage) to attract workers. Employers therefore have a powerful financial interest in improving workplace safety, especially in manufacturing industries where wages often comprise the majority of total costs. In addition, employers must bear the costs of lost work, retraining new employees, and government-imposed workman’s compensation whenever there is an accident on the job. Not to mention the threat of lawsuits.
Investments in technology, from air-conditioned farm tractors to the robots used in automobile factories, have also made the American workplace safer. But unions have often opposed such technology with the Luddite argument that it "destroys jobs."
Mises was right that unions have always been a primary source of anti-capitalistic propaganda. But since he wrote Human Action, American unions have also been at the forefront of lobbying efforts on behalf of the regulation and taxation of business—of capital—that has severely hampered the market economy, making everyone, including unionists, worse off economically. The regulation of business by the EPA, OSHA, FTC, DOE, and hundreds of other federal, state, and local government bureaucracies constitutes an effective tax on capital investment that makes such investment less profitable. Less capital investment causes a decline in the growth of labor productivity, which in turn slows down the growth of wages and living standards.
In addition, slower productivity leads to a slower growth of output in the economy, which causes prices to be higher than they otherwise would be; and fewer new products are invented and marketed. All of these things are harmful to the economic well-being of the very people labor unions claim to "represent." (Incredibly, there are some economists who argue that unions are good for productivity. But if that were true, corporations would be recruiting them instead of spending millions trying to avoid unionization.)
Mises also pointed out that as business becomes more heavily regulated, business decisions are based more and more on compliance with governmental edicts than on profit-making. American labor unions continue to call for more regulation of business because, in order for them to survive, they must convince workers—and society—that "the company is the enemy." That’s why, as Mises noted, union propaganda has always been anticapitalistic. Workers supposedly need to be protected from "the enemy" by labor unions.
However, the substitution of bureaucratic compliance for profit-making decisions reduces profitability, usually with little or no benefit to anyone from the regulations being complied with. The end result is once again a reduction in the profitability of investment, and subsequently less investment takes place. Wages are stunted, thanks to self-defeating unionist propaganda. The well-paid union officials may keep their jobs and their perks by perpetuating such propaganda, but they are harming the very people who pay the dues which are used to pay their own salaries.
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Thomas J. DiLorenzo is the author of How Capitalism Saved America (2004) and senior scholar of the Mises Institute (tomd@mises.org).
Dyan French was right. It was an ISM...Capitalism.
Komrads, alvays shoppe die Union Label, Da?
DiLorenzo is a little off base. Under a system of pure capitalism, we'd still have child labor because they wouldn't be any legislation prohibiting it. It's not that people suddenly said, hey, let's voluntarily end child labor. As the article state, kids went to work for a reason and employers hired them for a reason as well. Cheap labor.
Market processes "give", and for that we should be grateful, but they can also "take away", which is why many look to law and collective bargaining to secure their past gains. Those people are wrong about a lot of things. They may be in for a rude awakening if productivity declines as benefits rise, but it's not as though they are behaving irrationally or immorally.
Under a system of pure capitalism, we'd still have child labor because they wouldn't be any legislation prohibiting it.
Look for the union label
When you're being evicted from your house.
Remember somewhere, a union's plotting,
as your wage is dropping - so they can
help elect a crook, a Democrat, a louse.
So remember, look for that union label
When your next coat, costs as much as an average house.
Remember somewhere, a Union Rep is moaning
'Cause your wages are not going
To feed HIS kids or to run HIS house.
Who works only 34 hours a week? Take govt. 'workers' out of the mix for a real number.
I believe there is a kernel of truth to what the Democrats say about Republicans being "all about profit". I also believe there is much more than a kernel of truth to what the Republicans say about Democrats being "a bunch of bleeding hearts"or basically commie in nature. There is a fine balance between the two parties' philosophies that makes for an optimum outcome. My opinion only, your mileage may vary.
Reread the article Jess. You are missing the main point - free choice, which unions obliterate.
I started working when I was old enough to push a mower from block to block.
I guess you'd have deprived me that?
Exactly...If this guy was any where near being close to right, we wouldn't have over 20 million illegal aliens in this country trying to go to work for these capitalists...And the capitalists wouldn't be chomping at the bit to hire them...
There is plenty of greed on both sides of the equation.
I do believe unions forced some good changes; workplace safety is one of those. I also disagree with the idea that businesses mostly made or would have made these changes on their own with only an economic motivation.
However, now that these things have been accomplished, I think the primary goals of labor unions are power, money and political influence. The economic effect of the labor union is the same as any other cartel/pseudo monopoly: higher costs.
The long-term net effect of modern labor unions is that prices are higher and quality is lower. Mediocrity is protected. Businesses are held hostage.
The day of the beneficial labor union is over.
BTW, Jess, pure capitalism equals the pure freedom our over-constitutional behemoth took from us beginning with the ICC's creation. All to guarantee the railroads a minimum profit to the detriment of the small competitors that were squeezing the profits their own over-extended Govt subsidized misallocations of capital created.
Add the Fed and the income tax in 1913. Inflation with fiat currency and egregious taxation permitted the massive Govt expansion and over reaching power ensued - the New Deal was the socialist tax and spender's icing on the cake, a central planner's delight. In fact an early 30's America was jealous of the "wonders" of Euro-socialism/fascism govts such as Mussolini, Hitler & Stalin. Have we not yet learned the lessons of the misery that the utopian idiocy of planned economies and society brings??
We are but a pale semblence of our pre-1890 America of limited Govt and maximum freedom. And I for one will never give up on it's restoration.
Well, you'd have to specify where and when. Is children's involvement in drug running and prostitution higher in the US because of child labor laws? That's doubtful.
You'd have a better case in talking about Third World countries. But consider a situation where kids have jobs in the Nike factory and their parents, poor farmers or fishermen don't. Then the kid hears about that there's more money and an easier life in running drugs or prostitution, so he or she goes that way. One could at least make the case that laws that kept the kids in school serve a purpose.
My father, RIP, was a union guy for 40 years but had a contracting business on the side. He worked extremely hard on both jobs. He railed against the union workers that were "loafers" and the fact the union protected them. He never saw {and nothing I could say would change his mind} the irony, in his position. The same could be said about his politics. Too bad, he was a smart guy, but FDR was his version of God. Forget logic, didn't work.
I give unions credit for much improvement in industrial safety. I worked over 5 years, in my first real engineering job, in a large chemical plant which never had a lost time accident. Then I moved to a high-tech electronics company, and in the first couple of weeks there a plant janitor got himself killed trying to cut open a barrel with a torch. This could NEVER have happened where I was before, because the janitor would never have been allowed to pick up a torch, and a welder would not have attacked the barrel until a safety man checked it out.
I'm not generally a union defender, but I did want to point out this area where they have been of service, unintentionally or not.
...and business goes offshore, which deprives Americans of jobs... and whole business sectors are hobbled (eg. manufacturing)... and incompetence is rewarded (eg. government employees)... and workers are forced to contribute to causes and candidates they abhor... the list goes on and on.
Ignorance is bliss eh?
What keeps illegals coming is corrupt Govt's refusal to enforce the laws it itself enacted, as well as the lobbying of communists and socialists.
If you are not a capitalist how is it you are American? Surely Castro's Cuba could better use a mind so well aligned with his own?
Without free markets, ie. capitalism you have no liberty, period.
Apparently academe has done a good job indoctrinating you all into the belief there is some softer middle ground between capitalism and communism. If such is the case, America is in far worse shape and further off our constitutional course than I feared already.
DiLorenzo is to economics what Newton was to physics, one of history's best, nuff said, I hope.
The Tycoons broke laws that politicians refused to enforce or were complicit in, period.
It is no more possible for an employer to hold you over a barrel than what you allow and the very nature of free choice.
Less Govt equals more jobs, always has, always will.
Read my previous please.
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