20. UNIONS: DISJUNCTION FROM THE GOOD LIFE
This book has described mostly the necrotic laws, decapitalizing America, which are found in the institutions of politics and finance. An examination of the labor movement in the form of unions reveals that it is also guilty of necronomics. In recent years, unions have failed to improve the lot of the members; the most prominent evidence is in the form of "paybacks",, blue collar unemployment and insolvent pension plans.,
Union short-comings are similar to those in politics and finance: The better life is pursued through symbols and not substance, and the hierarchies of union bureaucracy are beset with incumbency, despotism and nepotism. Reflecting the presence of the same old faces and ideas, the approach of unions has been one of more money without more production which has been to the detriment of the rank-and-file. This approach, of course, is an instance of the classical definition of inflation, receiving blame for initiating the so-called "wage-price" spiral.
The critics who rely on this explanation of inflation, however, fail to appreciate how management has consistently and inflationarily raised its own wages without ever having to strike, for the amount of production has not increased for management anymore than for labor. In other words, the criticism of unions as the cause of inflation is more appropriate for management, for both halves increase their wages without any additional production, but management increases its wages more and without having to strike.
Strikes: More Production Time Ownership? Or Symbols?
The strike has been the consistent tool by which unions have sought to improve the lot of the members. In effect, labor has told management that they want increased compensation for their time at production. The final gauge of whether the members increased their standard of living by striking would be whether they owned more of what they produced. For instance, suppose one produced 100 widgets in an hour and suppose his dollar wages was the equivalent of 10 widgets. Would the producer gain if his pay doubled in dollars as a result of a strike but the widget equivalent dropped to eight for each hour of labor? No.
If everyone went on struck for a ten percent pay hike and the strike lasted one month, would everyone gain or lose? At the minimum, prices would go up 10% across the board which would cancel the pay hike; there would be no gain in buying power. In addition, the larger take-home pay for everyone would be worth less than the smaller pay before the strike, since the total amount of goods and services (production) behind the money would be less. Probably, prices would go up more than 100% because of the sinflation factor.
Regardless of the amount or size of the figures scribbled on it, money is worth no more than the products and production behind it. In addition, the people would lose the buying power for that month of idleness. Of course, everyone has not gone on strike all at once. However, the economic effect of all the random strikes by the unions have had the same effects.
Unions have suffered increasingly from the illusion of gain when all they have received are symbols of wealth. A 10% wage settlement ends up giving them less buying power for each hour that they work. A 10% increase in your gross pay is no gain if it causes your standard of living to decrease by 5%? What matters? More figures or more buying power? If one strikes for the former, he won't have the latter.
No Control Of The Symbols Of Production
The union rank-and-file are symptomatic of how people lose compensation for their production time when they allow other people to manipulate the symbols of production. Consider the following parallels and the commonality in the pairings:
union officials and the rank-and-file, company officials and the rank-and-file, politicians and taxpayers, bankers and savers, stockbrokers and small investors and advertisers and consumers.
The above parallels consist of the producers of all the wealth (on the right) opposed by all the handlers, the manipulators or the cheapeners of wealth (on the left). Contemporary union officials are no different in their effect on workers than the other symbol manipulators.
There are many symbols which are presently beyond the control of the union member; wages are the most obvious example. Pension funds are another example in which the symbols of wealth are not manipulated by the people who supposedly produced and owned the wealth. The present system of union pensions works to the detriment of the members; frequently, the "left hand doesn't know what the right hand is doing." A simple example of this would be two corporations in which the members of union pension A own stock in corporation B and vice versus. Needless to say, the pension managers of each union would be working against the welfare of the other union as they sought to maximize dividends for the pension stock.
While unions frequently respect each other's strike lines, the nature of their pensions frequently subvert unions supporting each other. An analogous situation is an Employee Stock Option Plans (ESOP) in which the union members buys the company but keeps the same management and board of directors; under this arrangement, cases can be found of workers striking against the company that they own, e.g., South Bend Lathe. The flaw of ESOP is keeping the same old symbol manipulators in charge: "a provision allowing companies to name the ESOP trustees."
The present hodge-podge investment of union pension funds is similar to the hodge-podge of union strikes. Both are harmful to the workers and involve reliance on indirect symbolic control of wealth. Through strikes, workers attempt to increase their wealth through money whose value is manipulated by others; through pensions, workers attempt to increase their future wealth through another set of symbols not in their control.
The simplest solution to both wasteful strikes and pension funds is to direct all the present union fees into buying the stock of the corporations for which the union members work with worker control. The benefits of this simplification would not only eliminate bureaucratic waste but would improve the workers' attitudes, since they would own a piece of the action. With time and more stock purchases, the members would increase their ownership of their companies and their production time. Using the previous analogies of widgets, through buying stock in the company for which they work, the union members would not have to strike in order to see a rise in their wealth.
It is unlikely, however, that union officials will promote direct control of production by the workers through stock purchases in their own companies. If capitalism per capita were promoted so that each worker had his own portfolio, the need for a union bureaucracy would wither. Like all incumbent bureaucrats, the union hierarchy would never countenance changes that would eliminate their positions regardless of the benefits for the people who elected them. Of the various forms of union corruption, this self-preservation to the detriment of the rank-and-file and the labor movement is why unions, as an institution, will not be in the forefront of replacing necronomics with better economics.
Union Corruption: The Short And The Long
The cost of corrupt, incompetent union officials is no different than the cost of corrupt, incompetent politicians. Both have short- and long-term costs to burden the rank-and-file and the tax-payers. Sometimes, union and political corruption go hand-in-hand; when a probe of one union pension fund collapsed, the investigating federal employees in the Labor Department were accused of "obstructing justice, sexual misconduct and maintaining ties to organized crime."
In both political and union corruption, the immediately direct short-term costs may hurt the citizens and members, but not as much as the long-term cost. No one bribes a union official or public official as an act of altruistic charity. Bribers intend to get some privilege--private law--benefiting the briber. Included within the privilege will be a recoupment of the bribe, money to cover the risk involved and an inflationary return. The long-term cost in both cases is inflation:
someone getting more wealth than they produce,
Bribes are inflationary in both the short- and long-term.
The similarity between union and public officials extends beyond the inflationary consequences of their corruption or incompetence. Both unions and politics are plagued with incumbency and cloning of the bad policy-makers. The conditions responsible for the present collection of officials still exist, and these conditions dictate that the future for the rank-and-file will not get better under present union institutions.
Adding fuel to the fires that makes a member's blood boil is the union president who chauffeured barbers to the headquarters to cut his hair. Or, how about the new jet which was bought so the union president could present himself more often to the members. The hierarchies are aware of impending lean times but are unwilling to "tighten belts" at union headquarters.
Seemingly upset by the state of their unions, many members have initiated actions against the unions and the officials. Lawsuits are on the rise in which the officials are accused of not representing the interests of the members, which can be interpreted as part of the growing schism between the hierarchy and members.
In light of the stepped up efforts to unionize other groups, a case can be made for union officials looking out only for themselves; all the effort and expense devoted to organizing new members merely maintains the flow of dues so that salaries and perks can be maintained. Are the problems of the existing members being ignored when a "union offsets 'significant' layoffs of members with sign-ups of new ones" and seeks more organizers? In finance or franchises, this modus operandi is known as a "ponzi" scheme or a pyramid operation; the dues of the new members are used to pay the wages of the old officials without any service useful to the existing, members being produced; the union officials aren't guaranteeing or providing any employment except the work of organizing more members.
The present union management is similar to the plot of Animal Farm: they rode to power on the premise of ending the suffering caused by the existing insensitive policy-makers. Yet, in their own ways, they have become another despotic set of self-serving bureaucrats who manipulate symbols. Their number one symbol is the historical value of unions in preventing management from depleting the earning and job opportunities of the worker. Today, unions fail to increase the earnings and jobs of the workers while draining dues and hope; they are a redundant bureaucracy impeding rather than improving the well-being of members. They no longer symbolize unions in the original sense, for people are not united for a better future through controlling their own fate. Rather, the organization is for the power and glory of the organizers. Union officials are a private counterpart of the modern, mercenary politicians.
The Poor-Before-Poorer Rank-And-File
Each day, the union rank-and-file are going faster on a one-way dead-end street. Each day is another day older and deeper in debt in which one owes more of his soul to a nebulous company store owned by the symbol manipulators: political, financial and union hierarchies. For a number of years the rank-and-file have been striking themselves out of buying power and jobs, blindly pursuing symbols of production rather than the reality of production: production time. Each year, the worth of their workhours has translated into fewer minutes of production time ownership. They have not gauged their mobility in reality but in symbols manipulated by habitual money-changers.
Union officials do not benefit the rank-and-file when they promote mere increases in numbers on paper or expensive fringe benefits that the rank-and-file could perform themselves. Union officials benefit the producers only when they promote increased ownership of one's production time and increased productivity per capita. Have the union officials done this recently? Will they? Can you see any union official putting control of the pension funds into the members' hands?
One day enough inflationary sufferers will wake up and form a union in the fashion of the Polish Solidarity movement. Only an American Solidarity of Producers will be better, for it will recognize capitalism per capita and one-man, one-vote democracy. The parallels between Poland and America should not escape the rank-and-file.
In Poland the people suffered from corrupt, incompetent politicians in government, incumbent and cloned. In addition, the established unions in Poland, recognized by the Polish politicians, were bedfellows with politicos; this is true of America. The American Solidarity of Producers will not stumble to a sterile collapse as the Polish Solidarity movement did, for the mistakes of the Polish will benefit America. Imagine, Lechs Walesa coming to America to talk to American union officials on how to run the Polish free unions. Does Poland need a mafia? Based on how union officials are elected, does America really have free unions? The poor naive Poles.
Because the union officials want to keep their own fiefdoms, they will not productively elucidate the short-comings of the other symbol manipulators: the politicians, the bankers and the stockbrokers. In other words, the union officials have more to gain by not rocking the boat than by vigorously cleaning the deck. In further words, the producer is all alone without any re-presentation anywhere. Decapitalistic and despotic unions cause more inflationary suffering than they resolve.
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