Monday, February 06, 2012

Indiana right-to-work, breaking the Union of the 1%.

Indiana just passed right-to-work legislation. The standard labor argument (against Mitch Daniels) is that all workers benefit from the actions of a worker's union, so they should all contribute. I'm not sure if that is true. There are some cases of overlap I'm sure, but one of the most important benefits of being in a union is protection from being laid off "unfairly". If a worker declined to pay union fees and didn't join the union, they face that risk. It's a calculation that any individual would need to make - but clearly, if the benefits of unionization are so great, theres no need for a law that forces a worker to join. I am always for greater individual freedom, so I definitely side with Mitch Daniels on this issue. Workers have the right to organize and join unions, but unions shouldn't have the right to force workers to join.

On a somewhat related note, consider what the essence of unionization is: it is undeserved economic influence; economic power at above-market rates. In a union, a collection of individuals organize within the framework of a larger group such that, by virtue of that organization, they become more influential than the sum of their parts. They increase their economic power not by increasing productivity, but by pressing political advantage into economic gain.  Obviously, this leads to less efficient labor markets - and many others are hurt in consequence, including non-unionized workers.

Now stop and consider the entrenched financial and corporate elite in this country.  The "1%" generally is a very productive group, and in a genuinely free market they would be compensated handsomely for their efforts.  However, by virtue of their connections to politicians and their virtual ownership of government in general, the financial and corporate elite have been able to press their advantage.  They have built a system from the inside that favors them unfairly.  They are no different than factory workers who unionize and demand outrageous or unearned pay.

Wall Street and many entrenched corporations have economic power beyond that which their productivity deserves.  Tax-payer bailouts and implicit government backing of too-big-to-fail institutions.  A tax code, written by armies of lawyers and voted into being by bought politicians, which is insanely complex and riddled with loopholes that benefit the authors.  Entrenched corporations (think: unionized workers) with their lobbyists buy themselves government subsidies and tax breaks; these are advantages that their smaller or newer competitors (think: non-unionized labor) don't enjoy.  The power of the financial and corporate elite, like unionized workers in a factory, is greater than the sum of their parts.  This is the Union of the 1%.

While Democrats are funded by traditional middle-class unions, Republicans are backed by the union on Wall Street - and as the financial crash in 2007 showed, the latter is more detrimental to the economy.  So:  want to do some union busting, and make our economy more competitive?  Fine.  Lets not stop with the middle class unions. We need to end corporate welfare. Simplify the tax code.  Break up any company or bank that is implicitly backed by the taxpayers because it is too big to fail.  Stop government subsidies and tax breaks to entrenched corporations.  End attempts at regulating the internet.  Re-write our ridiculous patent laws which have been woven into place by entrenched companies to keep out the competition.  THAT is how you revitalize the American economy.

This is what Occupy Wall Street is all about.  Americans have gone along with the de-unionization of the middle classes for decades, and the promised gains in living standards have absolutely failed to be realized.  Now its time to end the union of Wall Street, of the entrenched interests, of the elites who own Washington.

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