NationStates Jolt Archive

In pretty much every country in the world it is illegal for businesses to get together and set prices together. The fear is that they would form a cartel that monopolises the sale of a good or service and get more profit at the expense of the consumer, at the same time causing a dead-weight loss to society due to the fact that their profits don't accurately represent the costs of providing the product.

But in most countries, industry-wide unions are allowed. In some they wield great power, both economic and political.

But if I go and work for someone, I'm selling my skills, time and effort (ie my labour) in return for a price, my wage. So I'm just like a company selling a service.

But I can now go and join a union. That union is essentially a cartel trying to fix prices and terms of sale by monopolising the supply of a given type of labour. As a result, my wages will no longer be as accurate a representation of my labour's economic worth.

Some of you may well conclude that that's not a real problem. Economic efficiency must take a back-seat sometimes to other matters. But then I have to ask you, would you allow price-fixing cartels in other industries too? If some guy who owns a shop meets with other shop owners and they all agree to sell vegetables at a 20% higher price, that would be a problem to you, right? But if the very same guy works in a factory and at their union meeting they agree to demand 20% higher wages or they go on strike, that's okay?

Why?

In pretty much every country in the world it is illegal for businesses to get together and set prices together.

have you heard of something called the recording industry?

also no shopkeepers agree on a fair compromise is something I would encourage because its small business and as such they generally have to at least try to support each other

as for factory strikes, I can say I would support if it is generally an unfair exchange of labor costs to goods costs

That union is essentially a cartel trying to fix prices and terms of sale by monopolising the supply of a given type of labour.


OR..... it helps protect you from being dismissed unfairly.

"You're fired."
"WHY?"
"Because. See ya".

one's legal and the other isnt?

one support the rights of the worker and one supports the wealth of the rich?

one is good for society and one makes it worse for everyone but the rich?

have you heard of something called the recording industry?
Are they allowed to set prices? Look, there are exceptions (like in the shipping industry), but I was making a general point.

also no shopkeepers agree on a fair compromise is something I would encourage because its small business and as such they generally have to at least try to support each other
What is a "fair compromise"? For whatever reason, they all together raise their vegetable prices by 20%, so now you have to spend 20% more if you want vegetables. Some poor people might now skip vegetables and go to McDonalds instead.

Any any other source of vegetables in the area would be scabbing.

as for factory strikes, I can say I would support if it is generally an unfair exchange of labor costs to goods costs
Define "fair".

OR..... it helps protect you from being dismissed unfairly.
So you'd support the insurance industry showing some solidarity and not allowing you to change providers?

I've asked this question before, but if you decide one day not to go to Wal-Mart but to some other shop without providing a solid reason to Wal-Mart, would you support them being able to sue you for unfairly no longer doing business with them?

What's the difference there?

Yes, industry-wide trade unions could be considered a cartel. But like all monopolies, it only becomes a problem when the position as a monopoly is abused. If a trade union demands unreasonable wages for its workers that is just as harmful as a monopoly setting unreasonable prices. But not all monopolies abuse their position and trade unions are an example of this.

What's the difference there?
One aims to protect workers rights, the other aims to protect profits.

Is it really that hard of a concept to grasp?

...the rich...
So everyone who owns, works for or is otherwise dependent on the success of a business for their livelihood is rich, are they?

But like all monopolies, it only becomes a problem when the position as a monopoly is abused.
Whenever the price charged by a monopoly is higher than it would be if we had a competitive market, it's an abuse of monopoly power and a dead-weight loss to society (diagram (http://www.rh.edu/~stodder/BE/MonopA1.gif)).

Do you, or do you not think that wages are higher with unions than without them?

Is it really that hard of a concept to grasp?
What is a "worker's right"? It's some benefit that accrues to the worker.
What is profit? It's some benefit that accrues to the recipient.

The difference seems to me very POV.

Yes, industry-wide trade unions could be considered a cartel. But like all monopolies, it only becomes a problem when the position as a monopoly is abused. If a trade union demands unreasonable wages for its workers that is just as harmful as a monopoly setting unreasonable prices. But not all monopolies abuse their position and trade unions are an example of this.

There have been workers in meat packing plants in the state I live that had a union and they had it great, they got a good wage and thus it was good for the local community. But then they got too greedy and kept demanding more and more until it was closed down and moved to Mexico

Man, you're so square.

You people who think Union workers are poor are hilarious. You know what starting wage is in a General Motors factory for a line worker? Around $75k a year. That job doesn't really require any real skill either. The Union (not just the UAW, but all Unions) are far more corrupt than any big business.

What is a "worker's right"? It's some benefit that accrues to the worker.
What is profit? It's some benefit that accrues to the recipient.

The difference seems to me very POV.

Compare unionised workers in Europe with those of say, a sweat shop in South East Asia.

While I'll wholeheartedly agree that unions can get too big for their britches some times, and can lead to unnecessary actions - they exist to protect the individual from getting shafted by their boss - while the cartel exists purely for profit, which is not always in the best interest of the worker because increased profits for the company/boss =/= benefit for the worker.

We also have laws that protect the rights of business owners. A union provides some rules to protect the rights of the workers in those companies. No problem as far as I see it. No one can just go in and shut down a company for no reason. You have to be fair about it.

...which is not always in the best interest of the worker because increased profits for the company/boss =/= benefit for the worker.
And vice versa.

So what you're really saying is that increased profits for the worker at the expense of the profits of the boss are okay, but not the other way around.

Are they allowed to set prices? Look, there are exceptions (like in the shipping industry), but I was making a general point.

well officially the recording industry doesn't set any prices, it just seems to of happened

universe seeks order I would hope but this probably isn't the case what with all that money on the table

What is a "fair compromise"? For whatever reason, they all together raise their vegetable prices by 20%, so now you have to spend 20% more if you want vegetables. Some poor people might now skip vegetables and go to McDonalds instead.

1) if shopkeepers make an agreement on a price increase generally its for a good reason (seeing as how their just bickering shopkeepers), the idea is that they don't end up undercutting each other and starting a price war (which whoever suggested the increase probably can't afford)

2) vegetables are cheaper than meat, the only way that could change would be in extremes cases in which case people would just go to the supermarket

Any any other source of vegetables in the area would be scabbing.

well local stores don't compete with supermarkets really, their location is what causes them business so people trade price for convenience

Define "fair".

as in they are reaching the expected standard of profits to the workers (which depends on the industry really)

So you'd support the insurance industry showing some solidarity and not allowing you to change providers?

insurance industries already have a gentleman's agreement on price, though you see one time offers these are just gimmicks all in all you end up paying roughly the same rate

I've asked this question before, but if you decide one day not to go to Wal-Mart but to some other shop without providing a solid reason to Wal-Mart, would you support them being able to sue you for unfairly no longer doing business with them?

What's the difference there?

I the customer have no obligation Wal-Mart nor do I see the connection really :confused:

Whenever the price charged by a monopoly is higher than it would be if we had a competitive market, it's an abuse of monopoly power and a dead-weight loss to society (diagram (http://www.rh.edu/~stodder/BE/MonopA1.gif)).

Do you, or do you not think that wages are higher with unions than without them?

That is why you have large trade unions the employers unite as well to enable their own form of collective bargaining. A dead weight loss will occur in this sort of market because only one buyer (or group of buyers) exists in most heavily unionised industries leading to a price which is either higher or lower than the market price depending on whether the balance of power lies with the employees or the employer.

And vice versa.

So you're saying a content and happy worker doesn't mean more output?

So what you're really saying is that increased profits for the worker at the expense of the profits of the boss are okay, but not the other way around.

I never said anything about increased profits for the worker. What I'm really saying is that a union protects those that are weak individually. The cartel, doesn't.

And vice versa.

So what you're really saying is that increased profits for the worker at the expense of the profits of the boss are okay, but not the other way around.

well done, you got there eventually.

how many modern unions get to set the wage level? they are essentially worker protection these days.

And vice versa.

So what you're really saying is that increased profits for the worker at the expense of the profits of the boss are okay, but not the other way around.

Labor pre-unions sucked. There's no way around it. Unionizing is the only check workers have against the power of their bosses. And individual worker is nothing but a fly to the factory big shots. He can be fired, abused and ruthless exploited, and the only recourse he has is to change jobs, and hope to god his next boss's compassion is stronger than the market drive for maximization.

But, if the workers band together, they can bargain a better deal with their bosses. Improvements in working conditions primarily came as a result of labor unions. And they've helped balance income distribution.

So everyone who owns, works for or is otherwise dependent on the success of a business for their livelihood is rich, are they?

not many poor businessmen get involved in price fixing cartels

I think big business is doing just fine. Why don't you worry about improving your situation? Under this system, they're getting rich and you aren't. Why leap to their defence when they don't need defending?

one is good for society and one makes it worse for everyone but the rich?

precisely what is wrong with unions. now where did i put my monocle and top hat?

Some of you may well conclude that that's not a real problem. Economic efficiency must take a back-seat sometimes to other matters. But then I have to ask you, would you allow price-fixing cartels in other industries too? If some guy who owns a shop meets with other shop owners and they all agree to sell vegetables at a 20% higher price, that would be a problem to you, right? But if the very same guy works in a factory and at their union meeting they agree to demand 20% higher wages or they go on strike, that's okay?

Why?

because the other matter isn't "what's good for hypothetical man who is both a boss and a worker"

if shopkeepers make an agreement on a price increase generally its for a good reason
It certainly is - to improve profits at the expense of customers.

well local stores don't compete with supermarkets really, their location is what causes them business so people trade price for convenience
You get my point though. Cartels band together to present one solid front to the other party, ie the consumers. Anyone who gets out of line destabilises this front, hence why unions aren't big on scabs.

as in they are reaching the expected standard of profits to the workers (which depends on the industry really)
So the Indian garment industry standard determines whether or not $1 per day is a fair return in a Gap factory?

I the customer have no obligation Wal-Mart nor do I see the connection really :confused:
You have the obligations outlined in the implicit sales contract, ie to hand over the money, notify them if the thing isn't fit for purpose and so on.

Unless your employment contract says something about needing a reason to terminate employment, the employer has no obligation to you either.

What I'm saying is that whether you work for Wal-Mart or you buy something from them, the transaction is the same. One parties sells, the other party buys. You just switch sides - but within that switch for some reason lies the secret to whether or not you're allowed to use essentially anti-competitive tactics to get an extra pay-off at the expense of the other party.

That is why you have large trade unions the employers unite as well to enable their own form of collective bargaining.
So you're saying that the existence of unions is cancelled out by the existence of employer associations, and therefore wages are not any higher than they would be without unions?

So you're saying a content and happy worker doesn't mean more output?
It does in the same indirect way that a more profitable business will mean better work conditions and higher wages.

I never said anything about increased profits for the worker. What I'm really saying is that a union protects those that are weak individually. The cartel, doesn't.how many modern unions get to set the wage level? they are essentially worker protection these days.
We should probably make this clear: there is no difference between winning a higher wage and winning some non-wage benefit (ie unfair dismissal protection, sick leave or health insurance). They're all transfers of surplus created by the value chain from one party to the other.

well done, you got there eventually.
The question is: why the hypocrisy?


Labor pre-unions sucked. There's no way around it.
Labour pre-technology sucked. I'm all for crediting unions for transferring surpluses, afterall, that's what they do. But the fact that we don't have to jump into running machinery to clean it or work long days has as much to do with technological progress as with unions.

And individual worker is nothing but a fly to the factory big shots. He can be fired, abused and ruthless exploited, and the only recourse he has is to change jobs, and hope to god his next boss's compassion is stronger than the market drive for maximization.
I've got to ask you - have you ever had the pleasure of working in retail or hospitality, and getting face-to-face with customers?

It's no different. They're being arseholes, knowing fully well that the business depends on them and trying to exploit that as much as they feel comfortable with. One part of that is constantly looking for lower prices, driving them down and threatening the firm's standing against its competitors and its creditors.

It would only make sense to present a united front against these ravaging hordes, wouldn't it? Next time someone complains about a $10 pizza being crap, I could tell them to bugger off. And they can't do jack about it because we agreed with the competition to all sell crap pizzas for $10.

not many poor businessmen get involved in price fixing cartels
But if they did, you'd be okay with it? Would that also go for a company that's making a loss, or not enough profit to keep up with other companies of the same size and industry?

In pretty much every country in the world it is illegal for businesses to get together and set prices together. The fear is that they would form a cartel that monopolises the sale of a good or service and get more profit at the expense of the consumer, at the same time causing a dead-weight loss to society due to the fact that their profits don't accurately represent the costs of providing the product.

But in most countries, industry-wide unions are allowed. In some they wield great power, both economic and political.

But if I go and work for someone, I'm selling my skills, time and effort (ie my labour) in return for a price, my wage. So I'm just like a company selling a service.

But I can now go and join a union. That union is essentially a cartel trying to fix prices and terms of sale by monopolising the supply of a given type of labour. As a result, my wages will no longer be as accurate a representation of my labour's economic worth.


For the same reason that it's OK for companies to buy shares in each other or even buy each other out.

These things aren't absolute. It's about the organization's capacity and inclination to operate in ways that are harmful to society. If organized unions contribute to the growth of the middle class and a more affluent and educated public, then let it be. When it starts to become a dead weight on the economy by raising the price of labor higher than the profit that can be made off of that labor, then they get broken up.

Same thing with corporations joining up. If they get too big and start acting like racketeers then they get broken up. Sometimes the promise to behave is enough to forestall this punishment, like when Netscape sued Microsoft. So it's not really about whether it's OK for groups to come together to reduce competition, it's about how society as a whole is affected by that group becoming more or less competitive.

Of course, political climate has a lot to do with it too. AT&T got broken up in an anti-trust phase of our political climate, now it has reformed as at&t in the Bushite one. Unions were pretty powerful under Carter and have been getting weaker since Reagan came in, because all the Presidents since him (Clinton included) have looked more to the interests of the corporation than the individual.

Define "fair".


So you'd support the insurance industry showing some solidarity and not allowing you to change providers?

I've asked this question before, but if you decide one day not to go to Wal-Mart but to some other shop without providing a solid reason to Wal-Mart, would you support them being able to sue you for unfairly no longer doing business with them?

What's the difference there?Well, a significant difference is dismissal without a reason is illegal, while not shopping at Wal-Mart is legal. So there is a difference.

Of course, I bet what you really want is for me to subscribe to your notion that people sell their body to companies the same way that companies sell their goods and services to consumers. You are only able to sell your one company at a time (aka you can only be at one place at any given time), while companies are perfectly able to service many consumers simultaneously(aka they tend to have more than one employee). So if a person loses their business deal with their employer for no reason, they are fucked for no reason. If a company loses a customer, they are still going to lose income, but not there entire income as companies can provide to more than one consumer at a time. Basically, a person can only have one job, while a company can have potentially infinite consumers. This gives companies an unfair advantage in selling their services over employees, and these rules aim to rectify this.

You people who think Union workers are poor are hilarious. You know what starting wage is in a General Motors factory for a line worker? Around $75k a year. That job doesn't really require any real skill either. The Union (not just the UAW, but all Unions) are far more corrupt than any big business.Starting wage in my union (around $8.30 an hour) is less than what you can make begging on a highway intersection.

Some of you may well conclude that that's not a real problem. Economic efficiency must take a back-seat sometimes to other matters. But then I have to ask you, would you allow price-fixing cartels in other industries too? If some guy who owns a shop meets with other shop owners and they all agree to sell vegetables at a 20% higher price, that would be a problem to you, right? But if the very same guy works in a factory and at their union meeting they agree to demand 20% higher wages or they go on strike, that's okay?

Why?

I'd be fine with that cartel of shop owners getting together to raise their prices if the alternative was they can't make rent, start to loose their leases, get whittled down to the last one or two most auspiciously placed shops and then get to raise their prices as much as they want anyway.

Likewise it's fine if those factory workers get together and demand higher wages. Because however powerful those unions get they are never likely to raise the price of labor so high that the factory workers receive unreasonably high wages.

Back in the 70's an entire family could life off the salary of one blue-collar breadwinner. Now that's almost impossible. Why? Because unions aren't strong anymore and individuals were never competitive.

It does in the same indirect way that a more profitable business will mean better work conditions and higher wages.

Exactly. Bar those pesky sweat shops. Why oh why, do those sweat shops continue to burst that bubble of a point.


We should probably make this clear: there is no difference between winning a higher wage and winning some non-wage benefit (ie unfair dismissal protection, sick leave or health insurance). They're all transfers of surplus created by the value chain from one party to the other.
.... in your opinion.

To me (and the vast, vast, vast majority of workers out there - union or no union) there's a BIG difference between having the Union stand beside you if you're fired because you complained about working 19 hour days for $2 a day to your boss, and having a cartel where only the richest members of the group benefit.

And if you can't see that difference, you're in trouble.

Of course, I bet what you really want is for me to subscribe to your notion that people sell their body to companies the same way that companies sell their goods and services to consumers.
You don't sell your body. You sell the product of it working in conjunction with your mind. Sometimes you only sell the product of your mind with minimal physical activity.

Basically, a person can only have one job, while a company can have potentially infinite consumers. This gives companies an unfair advantage in selling their services over employees, and these rules aim to rectify this.
Any given good or service can only be sold to one person at one time. You can make more of them and sell them to others, but you can't sell the same jar of honey to two people.

In the same way, you can't sell the same hour of your labour to two companies (sometimes you can, but it's unusual), but you can sell different hours to different companies. But you're right, there is a limit to how many hours there are in a day.

But, I don't buy into the myth that losing one's job must actually be significant. You just go and work for someone else - if what you do is worthwhile, there is nothing that can stand in your way, just like a good product will always end up finding another customer. The problem is that our way of looking at the labour market is horribly distorted. Even the fact that we allow anti-competitive, anti-social cartels to exist contributes to it. We have been taught all our lives that we as employees are victims at the mercy of some ruthless employer. We don't sell labour to grateful customers, we "seek jobs". It undermines the confidence of people in themselves.

That's where alienation comes from. If we see what we earn as alms thrown to us or as loot from our last successful strike action, how are we supposed to be proud of our work? How are we supposed to be proud of our posessions?

Back in the 70's an entire family could life off the salary of one blue-collar breadwinner. Now that's almost impossible. Why? Because unions aren't strong anymore and individuals were never competitive.
No, it's because blue-collar work in the US is becoming less and less productive compared to other types of labour.

Exactly. Bar those pesky sweat shops. Why oh why, do those sweat shops continue to burst that bubble of a point.
Hence "indirect". Much as a happy, well-paid but nonetheless lazy worker.

.... in your opinion.
No, that's not opinion. The statement that any concession is a transfer of surplus one way or the other is not a matter of opinion.

What you think about it may be.

To me (and the vast, vast, vast majority of workers out there - union or no union) there's a BIG difference between having the Union stand beside you if you're fired because you complained about working 19 hour days for $2 a day to your boss, and having a cartel where only the richest members of the group benefit.
See, that's an opinion. And far be it from me to prevent you from having this opinion, I just want to know what makes it a valid basis for public policy that produces dead-weight losses by transferring wealth from one side to another.

I don't know why you even bring up these questions, NL.

No, it's because blue-collar work in the US is becoming less and less productive compared to other types of labour.

No. Blue collar workers have only gotten more productive since the 70's, and the profit that can be extracted from a man-hour of labor has increased too. But the share of that gross profit that goes into the laborer's paycheck has only decreased because with weakening unions the laborer's bargaining power has gone down. And however much a laborers work is worth, no employer will pay more than he thinks he has to.

I don't know why you even bring up these questions, NL.
More than anything to get people to think. But there's also the hope that there might be a good reason for these things out there somewhere.

I hate the idea that this entire world is build on nothing but unfounded opinions. I hate the idea that no one's sense of justice seems to get offended at the thought of treating one group of people differently to another group. I hate the presumptiousness that all this is based on.

Come to think about it, I'm probably just venting. ;)

No. Blue collar workers have only gotten more productive since the 70's, and the profit that can be extracted from a man-hour of labor has increased too.
But not as much as with white collar labour. I'm giving you the benefit of the doubt here, assuming that you would be able to produce figures to support your claims if you had to.

But the share of that gross profit that goes into the laborer's paycheck has only decreased because with weakening unions the laborer's bargaining power has gone down.
More than anything the supply of blue collar labour has increased, both domestically and globally. It's the same as with many products - people catch up with the inventors and produce their own, often cheaper. The price goes down and the buyers have an easier time.

We realise today that letting US car companies get together and into bed with the government wasn't a good way of dealing with the fact that cars could be made cheaply in other countries. But you propose that getting labourers together is somehow better?

What do you think will happen if US labour unions get more powerful? Companies will exercise their freedom to move overseas and therefore break the unions' monopoly. Stopping them would be no different to beating a scab to death.

But all these are practical matters. I'm interested into why people are willing to be hypocritical enough not to call a union a "monopolistic labour price-fixing cartel". A few weeks ago an Australian paper company was hit with a record fine for price-fixing with a competitor. And the minute after that hit the news, a union-funded ad complained about individual workplace agreements. It just hit me in the face then - the two are one and the same thing.

And however much a laborers work is worth, no employer will pay more than he thinks he has to.
Just like any buyer of anything would.

Because workers need it. Workers are much more numorous than companies, and so are replaceable. Unions make you UNreplaceable, because you are "sold" as a package of thousands of workers. Simple.

Because workers need it.
Ooh, have you ever read any Ayn Rand? You should, if anything it will make you want to avoid certain ways of putting an argument.

Anyways, if Wal-Mart starts tanking on the share market and doesn't bring in the sort of profit growth that is expected by shareholders, then you could certainly say that Wal-Mart needs to fix its prices with other supermarkets around the country, in the sense that a failure to do so will cause it to cease existing or at least be severely compromised, just as a worker would be who earns very low wages.

In the worker's case you'd be happy to shift the pain from him to his employer by way of a transfer that causes a dead weight loss to the economy. But there are many consumers, and most can certainly afford to spend a few dollars more on the various items they buy from Wal-Mart. Wouldn't it be only fair then that Wal-Mart be allowed not only to demand higher prices, but also protect itself against consumers choosing to shop somewhere else, by forming a cartel?

Ooh, have you ever read any Ayn Rand? You should, if anything it will make you want to avoid certain ways of putting an argument.

Anyways, if Wal-Mart starts tanking on the share market and doesn't bring in the sort of profit growth that is expected by shareholders, then you could certainly say that Wal-Mart needs to fix its prices with other supermarkets around the country, in the sense that a failure to do so will cause it to cease existing or at least be severely compromised, just as a worker would be who earns very low wages.

In the worker's case you'd be happy to shift the pain from him to his employer by way of a transfer that causes a dead weight loss to the economy. But there are many consumers, and most can certainly afford to spend a few dollars more on the various items they buy from Wal-Mart. Wouldn't it be only fair then that Wal-Mart be allowed not only to demand higher prices, but also protect itself against consumers choosing to shop somewhere else, by forming a cartel?

The great thing about this, is just like price-fixing by Wal-Mart would be ultimately ineffective, so is unionization by workers. Unionization doesn't create more wealth, and where one union realizes gains, others suffer.

Try telling a longshoreman that his union is a cartel on Bloody Thursday.

Unions generally only spring up in industries where there is chronic abuse of workers' rights. Happy workers generally don't unionize, as there is no need to do so, since the whole point of a union is solidarity to be strong enough to stand up to management when workers are being trampled on.

Therefore, any company whose workers unionize deserves all the trouble it gets as a result, since it wouldn't have happened if the company had been fair to its employees.

one's legal and the other isnt?

True.

one support the rights of the worker and one supports the wealth of the rich?

Nah. One claims to support the rights of the worker. The other doesn't claim to support anything. Both wind up supporting the same thing - the people in power of the organization.

one is good for society and one makes it worse for everyone but the rich?

Nah. Either one can have a positive or negative effect on society; blanket generalizations do not fit here. Even I have to admit that, and I dislike the concept of unionization.

It is about balance of arms in a negotiation. Unionless workers have very little bargaining power, whereas unionized do. They tend to be less mobile, which also undermines their bargaining power. They are rather spatially stuck. So, the effect of a union is rather small and positive for society, as negotiations get more fair (which I can try and define if you want) when parties are equal. A burger flipper does not negotiate much at McDonalds. He is a price-taker. If burgerflipping is all he can do.

Price-fixing cartels happen to be okay, legally, as long as they are very small. And do accordingly not distort competition very much.

As for the title question, the difference is that of effect on competition. You don't see many US blue-collars moving to India.

Some of you may well conclude that that's not a real problem. Economic efficiency must take a back-seat sometimes to other matters. But then I have to ask you, would you allow price-fixing cartels in other industries too? If some guy who owns a shop meets with other shop owners and they all agree to sell vegetables at a 20% higher price, that would be a problem to you, right? But if the very same guy works in a factory and at their union meeting they agree to demand 20% higher wages or they go on strike, that's okay?

Why?Because capital is more mobile than labor, and therefore labor should be given some other advantage.

The Union (not just the UAW, but all Unions) are far more corrupt than any big business.Proof?

That's where alienation comes from. If we see what we earn as alms thrown to us or as loot from our last successful strike action, how are we supposed to be proud of our work? How are we supposed to be proud of our posessions?Why would we (or should we) be proud of our work?

NL: That's a very interesting question.

A related situation that irritates me is when any of the EU's leadership (or of their supporters) calls for "harmonisation of taxes" across all of the EU's member-nations so that businesses won't consider moving from high-tax nations to lower-tax ones (whom those politicians claim are "taking an unfair advantage" of the situation): What's that if not a cartel for fixing the price of government, despite the fact that the EU is [mostly] anti-cartel when it comes to business enterprises? Why should every nation's people have to pay taxes at the same rates as the people of the EU's most spendthrift &/or inefficient national government?

NL: That's a very interesting question.

A related situation that irritates me is when any of the EU's leadership (or of their supporters) calls for "harmonisation of taxes" across all of the EU's member-nations so that businesses won't consider moving from high-tax nations to lower-tax ones (whom those politicians claim are "taking an unfair advantage" of the situation): What's that if not a cartel for fixing the price of government, despite the fact that the EU is [mostly] anti-cartel when it comes to business enterprises? Why should every nation's people have to pay taxes at the same rates as the people of the EU's most spendthrift &/or inefficient national government?
Tax harmonisation will only happen when all EU governments agree to it, and if that happens (in the words of The Nazz) I'll swan dive into a diarrhoea waterfall.

So you're saying that the existence of unions is cancelled out by the existence of employer associations, and therefore wages are not any higher than they would be without unions?

No, I'm saying that the wages will be higher if the unions have more bargaining power than the employers, or lower if the employers have more bargaining than the unions. Without unions, wages would certainly be lower, but if wages are at market price or below market price getting rid of the union will increase the deadweight loss.

Tax harmonisation will only happen when all EU governments agree to it, and if that happens (in the words of The Nazz) I'll swan dive into a diarrhoea waterfall.

Complete tax harmonisation would be too large a step towards eliminating national sovereignty for most governments to agree on. Partial harmonisation might work though, setting a minimum/maximum level.

Effect on businesses: they compete on the merits of their products and services, rather than waste time and money shopping for tax discounts. Resources better spent on improving what they do.

Maybe the difference is intent. Business' seek to maximise profits, hence price-fixing would be one way of enforcing an unfair cost onto the consumer whilst making maximum profits. As such, a cartel could theoretically, if they controlled a necessity (eg Oil) set a price well beyond what is reasonable but still consumers will be forced to pay.

Unions, on the other hand, seek to maximise benefits for it's members. They seek to set a price for labour that gives their members the best deal, while at the same time doesn't lead to Business going bankrupt due to outrageous wage costs (since becoming unemployed due the business going bankrupt is hardly an ideal situation or maximum benefit for the Union's members). Good Unions know they are limited by what Business can afford. Cartels aren't limited in the same way. Hence their illegality.

also no shopkeepers agree on a fair compromise is something I would encourage because its small business and as such they generally have to at least try to support each other

as for factory strikes, I can say I would support if it is generally an unfair exchange of labor costs to goods costs
While I don't personally agree with the OP I thnk that what's "fair" is probably too subjective for an absolutist approach to it...

http://www.theadvocates.org/library/libertarian-faq.html#Lib.FAQ.12

It's kinda like how there they say that "It must be asked, if the minimum wage is such a good idea, why not raise it to $200 an hour? Even the most die-hard minimum wage advocate can see there's something wrong with that proposal.

The only "fair" or "correct" wage is what an employer and employee voluntarily agree upon. We should repeal minimum wage now."

Maybe the difference is intent. Business' seek to maximise profits, hence price-fixing would be one way of enforcing an unfair cost onto the consumer whilst making maximum profits. As such, a cartel could theoretically, if they controlled a necessity (eg Oil) set a price well beyond what is reasonable but still consumers will be forced to pay.

Unions, on the other hand, seek to maximise benefits for it's members. They seek to set a price for labour that gives their members the best deal, while at the same time doesn't lead to Business going bankrupt due to outrageous wage costs (since becoming unemployed due the business going bankrupt is hardly an ideal situation or maximum benefit for the Union's members). Good Unions know they are limited by what Business can afford. Cartels aren't limited in the same way. Hence their illegality.
Now this, however, I would agree is a much more valid point.

If some guy who owns a shop meets with other shop owners and they all agree to sell vegetables at a 20% higher price, that would be a problem to you, right? But if the very same guy works in a factory and at their union meeting they agree to demand 20% higher wages or they go on strike, that's okay?

The difference is already obvious from your own example: The shop owners can get together, fix prices, and the next day vegetables are 20% more expensive. Workers, on the other hand, can't just get together, decide they want a raise, and make their wages go up by 20% the next day. They have to demand higher wages and go on strike to obtain them.

In other words, it takes considerable time and effort for workers to "fix prices," and in most cases they have to negotiate with the bosses and reach some sort of compromise. A regular cartel, on the other hand, can raise prices instantly and doesn't have to negotiate with anyone. This is because owners have much more market power than workers.

...........
The only "fair" or "correct" wage is what an employer and employee voluntarily agree upon. We should repeal minimum wage now."[/I]

"voluntarily" is not as simple as it sounds though. Extreme example: Gimme the money or die!

Accept the wage or don't feed your family?

"voluntarily" is not as simple as it sounds though. Extreme example: Gimme the money or die!

Accept the wage or don't feed your family?
Ah, no, don't put words in my mouth. I SPECIFICALLY said "It's kinda like how there they say..." that, I was referencing a quotation, that wasn't my own, from another site, as an example of what I considered a similarily absolutist approach to what is fair except obviously on the opposite side; I said nothing about agreeing personally with the quotation.

Ah, no, don't put words in my mouth. I SPECIFICALLY said "It's kinda like how there they say..." that, I was referencing a quotation, that wasn't my own, from another site, as an example of what I considered a similarily absolutist approach to what is fair except obviously on the opposite side; I said nothing about agreeing personally with the quotation.

Didn't put words in your mouth (or letters on your fingertips). That wasn't the intention at least, sorry if I did.

More like... reflecting on the logic, whose ever it is.

Didn't put words in your mouth (or letters on your fingertips). That wasn't the intention at least, sorry if I did.

More like... reflecting on the logic, whose ever it is.
Meh, "putting words in one's mouth" is just the more common figurative phrase so I decided to use it for communications' sake.

And my apologies for jumping the gun. Yeah I understand why you'd have wanted to rebutall that immediately, I disagree with it too actually, their level of focus on consent in general just seems detached from reality, like in their stance on prostitution; while I agree with legalizing prostitution because from what I've heard it's the more practical approach, it's not like children consent to being born to prostitute parents. It's just that I wanted to cite the analogy made by someone I disagree with to throw into the debate to refute a seemingly absolutist approach to what's "fair"...

You people who think Union workers are poor are hilarious. You know what starting wage is in a General Motors factory for a line worker? Around $75k a year. That job doesn't really require any real skill either. The Union (not just the UAW, but all Unions) are far more corrupt than any big business.
Yup, whatever you say. :rolleyes:

One aims to protect workers rights, the other aims to protect profits.

Is it really that hard of a concept to grasp?
Pretty simple concept to grasp indeed.

Complete tax harmonisation would be too large a step towards eliminating national sovereignty for most governments to agree on. Partial harmonisation might work though, setting a minimum/maximum level.

Effect on businesses: they compete on the merits of their products and services, rather than waste time and money shopping for tax discounts. Resources better spent on improving what they do.

Maybe, but _

Firstly, the various suggestions about such matters that I can remember details of from newspapers & broadcast news through the years have all involved harmonising "upwards" to the highest levels of taxation that any of the national governments involved consider necessary rather than "downwards" or towards the average level, which would
A/ Almost certainly require those companies to raise their prices in order to continue making what they'd consider reasonable profits (and, before anybody leaps into this discussion with a diatrabe about "filthy capitalists" and how making profits should be forbidden, please remember that in many cases the companies are owned by numerous shareholders, amongst which pension funds and insurance companies are quite often prominent, rather than just by a few plutocrats...);
B/ Mean that any company which also did significant amounts of business in nations outside of the EU might actually find it worthwhile to move its production completely out of the EU -- rather than just out of some of its members -- altogether.

Secondly, at least some of those suggestions that I remember haven't just been about taxation that affects business directly, such as taxes on its profits and the offering of tax breaks to attract industry to specific areas: They've also wanted to "harmonise" those taxes that influence business indirectly, by affecting the cost of living for its workers -- and thus the levels of wages required -- and the other costs of employing people (such as employers' contributions towards welfare systems, and towards pensions) too... I can actually remember one such eurocrat considering it a matter for complaint that Britain did not charge 'VAT' (i.e. 'sales tax') on childrens' clothes!

Compare unionised workers in Europe with those of say, a sweat shop in South East Asia.
Night and day.

while the cartel exists purely for profit,
Especially the oil cartel!!!

Maybe, but _
......
[cut for brevity]
....


It's a balancing of interests act. I am now balanced against any tax harmonisation, main reason being the implied centralisation of policy-setting, and loss of plurality. Thanx.

It does in the same indirect way that a more profitable business will mean better work conditions and higher wages.
You don't really believe that do you?

Secondly, at least some of those suggestions that I remember haven't just been about taxation that affects business directly, such as taxes on its profits and the offering of tax breaks to attract industry to specific areas: They've also wanted to "harmonise" those taxes that influence business indirectly, by affecting the cost of living for its workers -- and thus the levels of wages required -- and the other costs of employing people (such as employers' contributions towards welfare systems, and towards pensions) too... I can actually remember one such eurocrat considering it a matter for complaint that Britain did not charge 'VAT' (i.e. 'sales tax') on childrens' clothes!
VAT is the only tax which there is any vague chance of harmonisation. Income and corporation taxes (including National Insurance/Social Security) differ too much across the EU, and eastern European states will not want to give up their low flat taxes. On the other hand, VAT ranges from about 15%-20% and there is already a lot of intergovernmental cooperation over collection for goods traded across the EU, so that might be possible, but still unlikely.

Try telling a longshoreman that his union is a cartel on Bloody Thursday.

Unions generally only spring up in industries where there is chronic abuse of workers' rights. Happy workers generally don't unionize, as there is no need to do so, since the whole point of a union is solidarity to be strong enough to stand up to management when workers are being trampled on.

Therefore, any company whose workers unionize deserves all the trouble it gets as a result, since it wouldn't have happened if the company had been fair to its employees.

Bingo. The company I work for has a rather complicated situation. Full time "lifetime employement" contract employees (almost all Japanese - 1 exception) have a "union shop" agreement, and the union is corrupt and controlled by the Yaks. The non-Japanese and non-lifetime employees have an "open shop". However, Numbers have gone from 0% union to roughly 10% union in the last 3 years. The primary reason was the company's drift from treating employees right to ignoring employee concerns.

Not long after I joined the union, I ran into a former head of foreign personnel at a co-worker's party. An issue at the time related to overtime came up. The former management person pointed out that when he'd been working there, the issue would have been quashed as stupid. Instead, the current management types saw only the bottom line and not the human relations.

As for the OP, I view my union - a small and relatively independent union - as a legal and power balance to the organizational power of the company I work for. If the company can, in effecxt, pool a large amount of resources, why should my co-workers and I not be able to do the same? Why should company management be able to have greater access to leagal counsel due to pooled resources than I do, for example?

Why?Unions do not form monopolies in the economy, while cartels do. Unions have to face the "We can just shut down the company" card whereas a cartel, particularly one that produces essential goods, has nothing to stop it.

Try telling a longshoreman that his union is a cartel on Bloody Thursday.

Unions generally only spring up in industries where there is chronic abuse of workers' rights. Happy workers generally don't unionize, as there is no need to do so, since the whole point of a union is solidarity to be strong enough to stand up to management when workers are being trampled on.

Therefore, any company whose workers unionize deserves all the trouble it gets as a result, since it wouldn't have happened if the company had been fair to its employees.

Much like riots in TW-Rome or Civilisation...

Unions do not form monopolies in the economy, while cartels do. Unions have to face the "We can just shut down the company" card whereas a cartel, particularly one that produces essential goods, has nothing to stop it.

Labour is not an essential production factor?

Labour is not an essential production factor?It is, but the union can only disrupt its company's ability to provide service/products to the market. The union itself doesn't wield the power of the company.

It is, but the union can only disrupt its company's ability to provide service/products to the market. The union itself doesn't wield the power of the company.

How about a hypothetical global union?

How about a hypothetical global union?Call me when there is one.

Call me when there is one.

A hypothetical one? Any time. Very strong, too. With huge funds. I'd say it has considerable market power, capable of affecting competition even more than Microsoft.

A labor union is effectively a staffing company that both fixes prices above market rates on its product (labor) and works to prevent their customers from seeking alternative suppliers (scabs).

If cartels are ‘bad’ because they boost the profits of their members at the expense of the consumer, why are unions ‘good’ because they boost the profits of their members at the expense of the consumer? Either way you have a group seeking to control the supply to benefit its members at the expense of everyone else.

Unions raise the price of labor above market rates, which reduces the competitiveness of the employer – so basically they exploit the employer’s need for labor to extort more money. The only way I could see a union’s monopoly power on labor being beneficial is to counter a company that has monopsony power over employment. Since (outside of communism, serfdom, or some other dictatorial regime with full authoritarian control of the economy) that does not exist, the monopoly power of the unions causes a loss to the economy. Show me employees that are prohibited from making money somewhere else (either with another company or being self-employed) and I will agree to them prohibiting an employer from hiring outside labor.

Because capital is more mobile than labor, and therefore labor should be given some other advantage.
And why do employers have to pay? Why does the voluntary choice of refusing to be as mobile as the factors of production together with which one is most productive mean that I now have the right to use extortion against my employer, against the unemployed and against society as a whole?

Why would we (or should we) be proud of our work?
pride
[...]
3. a becoming or dignified sense of what is due to oneself or one's position or character; self-respect; self-esteem.
4. pleasure or satisfaction taken in something done by or belonging to oneself or believed to reflect credit upon oneself: civic pride.
[...]

Work represents nothing but our ability to survive on the terms we choose. Whether I am Robinson Crusoe and I manage to make a fire, or I'm an investment banker and I manage to close a multi-billion dollar deal - there is no difference here. The greatest and most fundamental achievement we can make is to shape our environment in such a way as we want it to be, therefore allowing survival and the framework to live the life we want.

Is there anything else that would be worthy of pride if not that? And if we weren't proud of that which allows us to live, then we aren't proud of ourselves, and ultimately wasting our lives doomed to unhappiness.

Without unions, wages would certainly be lower, but if wages are at market price or below market price getting rid of the union will increase the deadweight loss.
Wages can't be below market prices unless there is such an employer cartel, which obviously I'm not in favour of. And if they are precisely at market prices (which right now they can't be, because the market is not allowed to function properly), there is no dead-weight loss. The chance that we somehow by chance are at market prices right now across all the industries in the economy is approaching 0.

Good Unions know they are limited by what Business can afford. Cartels aren't limited in the same way. Hence their illegality.
So a cartel will charge more than people can afford when they want to sell their products?

No, that's not the difference here. A cartel seeks to maximise its members' pay-off to the detriment of the consumers of product, a union seeks to maximise its members' pay-off to the detriment of the consumers of labour.

A regular cartel, on the other hand, can raise prices instantly and doesn't have to negotiate with anyone.
Of course they do. Whenever the company says "I will not sell it to you for less than X", it says "I will not do business with you unless you accept my demand for this change in our terms of trade". That is precisely the same thing as a strike.

It's alltogether less public, but since there are hundreds, thousands or millions of mini-strikes happening in this situation, the aggregate damage to the economy is no different.

You don't really believe that do you?
I believe it in the same way that I believe that only because a worker is well-paid and has good working conditions, he or she will be doing a good job.

Both of them are contributing factors and it would be foolish to rely on either to determine whether or not I can expect good work out of an employee.

The primary reason was the company's drift from treating employees right to ignoring employee concerns.
So if consumers mistreat a company, it has the right to seek cartel powers?

If the company can, in effecxt, pool a large amount of resources, why should my co-workers and I not be able to do the same? Why should company management be able to have greater access to leagal counsel due to pooled resources than I do, for example?
Look at Wal-Mart. It's a big, wealthy firm - but compare it to the aggregate spending power of its consumers. It's tiny, completely at the mercy of the evil people who do business with it. As I said, they're ravaging hordes, always looking for the best deal, the lowest price at the expense of poor Wal-Mart.

The consumer has all the bargaining power on its side. He can choose to go next door and buy his stuff somewhere else. Wal-Mart has nothing to offer but to hurt itself by cutting prices. How unfair!

Do you realise that whatever argument you can make in favour of a union can also apply to a cartel?

Unions do not form monopolies in the economy, while cartels do. Unions have to face the "We can just shut down the company" card whereas a cartel, particularly one that produces essential goods, has nothing to stop it.
Unions face the threat of the company being shut down the same way that the food producing cartel faces the threat of people starving to death. They know quite well that bancruptcy is in neither party's interest, so it's not a credible threat.

The very function of a union is to create monopoly powers in a given sector of the economy. That's how they create their bargaining chip. If they don't, that's because they're not doing a good job, not because it's somehow in a union's nature.

So if consumers mistreat a company, it has the right to seek cartel powers?


Actually, that was one of the motivating factors behind OPEC. They were also displeased at the price wars initiated by foreign oil companies during the 1950's and so formed OPEC as a way of counteracting what they perceived as the unfair actions of Western consumers and oil producers (as well as the Soviet Union).

.....................
The very function of a union is to create monopoly powers in a given sector of the economy. That's how they create their bargaining chip. If they don't, that's because they're not doing a good job, not because it's somehow in a union's nature.

Yes. To get this straight, are you asking why competition law does not apply to workers, only undertakings? And whether that is a good reason?

Bingo. The company I work for has a rather complicated situation. Full time "lifetime employement" contract employees (almost all Japanese - 1 exception) have a "union shop" agreement, and the union is corrupt and controlled by the Yaks. The non-Japanese and non-lifetime employees have an "open shop". However, Numbers have gone from 0% union to roughly 10% union in the last 3 years. The primary reason was the company's drift from treating employees right to ignoring employee concerns.

Not long after I joined the union, I ran into a former head of foreign personnel at a co-worker's party. An issue at the time related to overtime came up. The former management person pointed out that when he'd been working there, the issue would have been quashed as stupid. Instead, the current management types saw only the bottom line and not the human relations.

As for the OP, I view my union - a small and relatively independent union - as a legal and power balance to the organizational power of the company I work for. If the company can, in effecxt, pool a large amount of resources, why should my co-workers and I not be able to do the same? Why should company management be able to have greater access to leagal counsel due to pooled resources than I do, for example?

Exactly. As long as a company treats its employees fairly, they probably won't unionize. After all, if your company is treating you well, what is there to complain about?

No company ever got a union on their hands that didn't deserve it. I have no sympathy for corporations that have trouble with their employees' union, as if they had been fair employers from the start, they probably wouldn't have to deal with a union in the first place.

Revolutions often work the same way. Happy people generally don't revolt.

It always makes me feel important to be quoted... lol.

To get this straight, are you asking why competition law does not apply to workers, only undertakings?
Basically, yes.

There are certain reasons why we have competition laws. Those reasons apply to the labour market just as well as any other market, but the law makes an exception. I hate inconsistency.

Basically, yes.

There are certain reasons why we have competition laws. Those reasons apply to the labour market just as well as any other market, but the law makes an exception. I hate inconsistency.

Stop thinking economical, practical reasons, think macchiavelli, realpolitik, divide and rule. Then you get consistency.

Laws are made by government, government perceives a threat to its power from a huge big company, wants to hold power for self.... Standard Oil and Sherman Act.

Would Standard Oil have replaced government? I think so. Why not?

Unions are not really powerful compared to that. When there is a union with actual power, competition law will be extended to unions.

Besides, the law does not make an exception. It is not there to ensure there is competition, it is there to regulate business behaviour. It conveniently also curbs private power. Which is why BigBusiness wants competition laws removed.

Wages can't be below market prices unless there is such an employer cartel, which obviously I'm not in favour of. And if they are precisely at market prices (which right now they can't be, because the market is not allowed to function properly), there is no dead-weight loss. The chance that we somehow by chance are at market prices right now across all the industries in the economy is approaching 0.

The employers might not necessarily form cartels (although some collective bargaining takes place with several employer represented as one), but in many mature industries which are highly unionised the employer has monopsony power when buying labour. If the employees are not unionised the monopsony power of the employer would give them the ability to force down labour prices.

The employers might not necessarily form cartels (although some collective bargaining takes place with several employer represented as one), but in many mature industries which are highly unionised the employer has monopsony power when buying labour. If the employees are not unionised the monopsony power of the employer would give them the ability to force down labour prices.

There are always other employers - outside of authoritarian regimes and hypothetical situations, no employer has monopsony power. Sure, it would be hard if a factory suddenly closed down, leaving 30000 workers in a small town looking for to sell their labor elsewhere, but sudden temporary spikes in supply aside, there are always other jobs.

The employees can look for other work - there will always be someone willing to hire a good worker. You might have to look outside your little neighborhood, or think about changing industries, but deal with it. It might not be a cushy union job where you can sit on your ass doing very little and making absurd amounts of money (unless you go into government work), but there is always work to be had.

There are always other employers - outside of authoritarian regimes and hypothetical situations, no employer has monopsony power. Sure, it would be hard if a factory suddenly closed down, leaving 30000 workers in a small town looking for to sell their labor elsewhere, but sudden temporary spikes in supply aside, there are always other jobs.

The employees can look for other work - there will always be someone willing to hire a good worker. You might have to look outside your little neighborhood, or think about changing industries, but deal with it. It might not be a cushy union job where you can sit on your ass doing very little and making absurd amounts of money (unless you go into government work), but there is always work to be had.

Sure there are jobs. "Here, work 19 hours a day. I'll give you a 15 minute break, unpaid of course. And at the end you'll give the tidy sum of $2 to take home. Now doesn't that sound better than being unemployed? What's that? You want better conditions? Tough shit kid! You've no say in the matter!"

If cartels are ‘bad’ because they boost the profits of their members at the expense of the consumer, why are unions ‘good’ because they boost the profits of their members at the expense of the consumer? Either way you have a group seeking to control the supply to benefit its members at the expense of everyone else.All the more reason for everyone in the working class to join a labor union.

Unions raise the price of labor above market rates, which reduces the competitiveness of the employer – so basically they exploit the employer’s need for labor to extort more money.Yes, in a reverse of the way an employer exploits the worker's need for sustenance to extort more labor.

And why do employers have to pay? Why does the voluntary choice of refusing to be as mobile as the factors of production together with which one is most productive mean that I now have the right to use extortion against my employer, against the unemployed and against society as a whole?Capital can be electronically transferred. Widget manufacturing cannot. There's no choice of refusing to be as mobile as electronic transfers here.

pride
[...]
3. a becoming or dignified sense of what is due to oneself or one's position or character; self-respect; self-esteem.
4. pleasure or satisfaction taken in something done by or belonging to oneself or believed to reflect credit upon oneself: civic pride.
[...]

Work represents nothing but our ability to survive on the terms we choose. Whether I am Robinson Crusoe and I manage to make a fire, or I'm an investment banker and I manage to close a multi-billion dollar deal - there is no difference here. The greatest and most fundamental achievement we can make is to shape our environment in such a way as we want it to be, therefore allowing survival and the framework to live the life we want.

Is there anything else that would be worthy of pride if not that? And if we weren't proud of that which allows us to live, then we aren't proud of ourselves, and ultimately wasting our lives doomed to unhappiness.The vast majority of people in capitalist systems won't be paid to shape their environments in such a way as they want it to be, and never will be.
So again, why should they be proud of their work?

The vast majority of people in capitalist systems won't be paid to shape their environments in such a way as they want it to be, and never will be.
You know, I don't care about vast majorities. I care about each and every single person. They have a duty only to themselves to achieve something they can be proud of, and as much of it as possible.

Fact is that it's made very difficult to be proud of one's work if you have the wrong attitude towards the labour market. You're right that many people won't get paid big sums. But that's no reason not to be proud of an achievement.

The worst is when you are forced to join a labor union but don't see any benefit from it. I know people who are making minimum wage but still have to pay union dues because they work in a union shop.

You know, I don't care about vast majorities. I care about each and every single person. They have a duty only to themselves to achieve something they can be proud of, and as much of it as possible.

Fact is that it's made very difficult to be proud of one's work if you have the wrong attitude towards the labour market. You're right that many people won't get paid big sums. But that's no reason not to be proud of an achievement.

If you get paid a shitty amount, it clearly means no one values your labor and you therefore have no reason to be proud.

There are always other employers - outside of authoritarian regimes and hypothetical situations, no employer has monopsony power. Sure, it would be hard if a factory suddenly closed down, leaving 30000 workers in a small town looking for to sell their labor elsewhere, but sudden temporary spikes in supply aside, there are always other jobs.

The employees can look for other work - there will always be someone willing to hire a good worker. You might have to look outside your little neighborhood, or think about changing industries, but deal with it. It might not be a cushy union job where you can sit on your ass doing very little and making absurd amounts of money (unless you go into government work), but there is always work to be had.

You think government work is a lot of money? You think it's not a lot of work?

You are deluded in every single statement you made.

If you get paid a shitty amount, it clearly means no one values your labor and you therefore have no reason to be proud.

I don't care if anyone else values my work. I'm still proud of it.

The minute I'm not proud of what I'm doing is the minute that I move to doing something else.

If you get paid a shitty amount, it clearly means no one values your labor and you therefore have no reason to be proud.
Well, there's still some personal satisfaction. Some people like creating stuff with their hands, even if they might get paid shit as a builder.

But you're right, one reason to seek higher pay is to be able to take more pride, by knowing that you're doing others more of a service (if you're that way inclined).

By the way, regarding your sig, it would be "Im Himmel" rather than "In Himmel" and you don't need a comma. :)

There are always other employers - outside of authoritarian regimes and hypothetical situations, no employer has monopsony power. Sure, it would be hard if a factory suddenly closed down, leaving 30000 workers in a small town looking for to sell their labor elsewhere, but sudden temporary spikes in supply aside, there are always other jobs.

The employees can look for other work - there will always be someone willing to hire a good worker. You might have to look outside your little neighborhood, or think about changing industries, but deal with it. It might not be a cushy union job where you can sit on your ass doing very little and making absurd amounts of money (unless you go into government work), but there is always work to be had.

Indeed there is - a worker can often find other work. But can they find other work that they have been trained to do? Most union members are skilled workers and to have an immediate alternative option for work would require a form of employment in close proximity which is also looking for workers within that particular skill. Without this option the worker would either have to relocate or retrain. Either option is feasible over a certain time horizon but so is the option of the employer relocating or training unskilled workers. So over a longer time horizon the employer loses their monopsony but the union loses its monopoly.

A cartel does not negotiate its rate or prices but manipulates them.

A union collectively bargains wages and working conditions but has no power to force them. Their strongest weapon, striking, doesn't force what they want but rather is the only real tool they have to negotiate with. They are not fixing their price, they are collectively negotiating in the same way that the businesses are able to collectively negotiate the prices for other goods or services.

Since business regards workers as a disposable commodity (you reveal it yourself with the 'well they can always find work elsewhere,' which only works if there are as many jobs as people-and that all wages are comparable. If you're suggesting a skilled laborer go work at McDonalds you don't know the realities of trying to survive on a low wage) the individual worker does not have enough power to negotiate wages or conditions. The only way that it can fairly be done is if the worker does it collectively. Thus unions. As they cannot fix wages themselves but only negotiate they are different from a cartel in very important ways.

Before unions there were unlivable wages and unlivable working conditions. Why are we pretending that without them employers would play nice now?

You people who think Union workers are poor are hilarious. You know what starting wage is in a General Motors factory for a line worker? Around $75k a year. That job doesn't really require any real skill either. The Union (not just the UAW, but all Unions) are far more corrupt than any big business.

Errrr... I belong to a union that has a rather high unemployment rate, and an extremely low average income. It is Actors' Equity Association. What my union DOES do for me is provide me with protections against unsafe working conditions, attempts to get me a living wage wherever possible, has an insurance plan and a retirement plan, makes sure that if I am working under a union contract my work is protected (for instance, a producer cannot film a play, then sell the film without paying actors) and so on. In the past actors were forced to do everything from paying for their own costumes to living in unheated barns while on the road. We had to perform dangerous stunts with no safety equipment, perform up to five performances a day, drive the truck with the set in it while on tour, teach classes for free, build the sets, sew the costumes, work as general unpaid labor at theatres, all with no guarantees of ever getting paid if the theatre suddenly decided to close the show. Our union has put a stop to many such abuses, with contracts that provide for safe and secure working and living conditions, specify our job descriptions, hold a bond against a theatre getting work out of us but not paying for it, and the like.

So no, unions are not all bad.

If you get paid a shitty amount, it clearly means no one values your labor and you therefore have no reason to be proud.

Wow. How sad for you that the only reason you might have to be proud of your own accomplishments is if other people pay you lots of money.

I am proud of what I do because I love my work, I do it well, it is good work, it is worth doing...

*snip*
I just want to know what makes it a valid basis for public policy that produces dead-weight losses by transferring wealth from one side to another.

You would like to know why it is OK to transfer the wealth from the side where one man has all the money and everybody else is living in poverty to the side where everybody has some of the money and nobody is starving?

How is that a difficult call?

That's where alienation comes from. If we see what we earn as alms thrown to us or as loot from our last successful strike action, how are we supposed to be proud of our work? How are we supposed to be proud of our posessions?


I don't see what I earn that way. If I join my union in striking and get better working conditions and a better wage out of it, I see it as my compatriots and I showing that we are worth more, and are willing to stand up and fight for it. The willingness to strike shows that we ARE proud of our work, and that we think what we do has greater value than we are being given, and we are willing to fight to get that value.

It is only the employer who would think that he is throwing loot at us for nothing. We know that we are producing good work, and that we want to be paid what it is worth.

........... and that we want to be paid what it is worth.
So you don't agree that worth is solely defined by willingness to pay?

The worst is when you are forced to join a labor union but don't see any benefit from it. I know people who are making minimum wage but still have to pay union dues because they work in a union shop.

That does happen... but it also happens that people in union shops who are not members of the union get the benefits of the union's work... better and safer working conditions, cost of living increases, health care and so on.

In my union, we have contracts that allow for union and non union employees to be working together, and the non union employees get all the same protections even though not members. As a supervisor (stage manager) I make sure that everybody gets the same scheduled work breaks, nobody works overtime without pay, safety issues are taken care of, etc. whether they are members of my union or not... but if not for my union, nobody would get those protections.

So you don't agree that worth is solely defined by willingness to pay?

Willingness? My work may be worth more than an employer steps up and says "HERE! TAKE THIS MUCH MORE MONEY!" for, so we have to negotiate a fair settlement.

And no, that is not the sole worth of my work. Personally, I get satisfaction from doing good work that is not realized in any monetary exchange. However, when I am doing such work, I do want to be paid for it.

You know, I don't care about vast majorities. I care about each and every single person. They have a duty only to themselves to achieve something they can be proud of, and as much of it as possible.

Fact is that it's made very difficult to be proud of one's work if you have the wrong attitude towards the labour market. You're right that many people won't get paid big sums. But that's no reason not to be proud of an achievement.All right, let's consider an individual case: you. Does your job allow you to shape your environment in such a way as you want it to be?

The worst is when you are forced to join a labor union but don't see any benefit from it. I know people who are making minimum wage but still have to pay union dues because they work in a union shop.It's not quite true that they don't see any benefit from it, but I agree that nobody in a union at any point should be making minimum wage.

A union collectively bargains wages and working conditions but has no power to force them. Their strongest weapon, striking, doesn't force what they want but rather is the only real tool they have to negotiate with.There are actually plenty of negotiating tools, but unfortunately too many unions are too hung up on strikes (and contracts) and don't really ever use them.

I am going to use an example that I know well. I use to work for Pepsico years back before I took out on my own. They paid well and it allowed me to get to where I am today. I have no problems with them at all.

There are Pepsi and Coke out there that take up the lions share of the soft drink market. They own not only the two flagship brands but between the two damn near every other alternative beverage out there. They don't get together to set prices but they do set prices in a sense. For example if we saw that coke raised the price of a 20oz case of soda in the convenience market by 50 cents Pepsi would also raise theirs the same. Coke would do the same if Pepsi raised prices on a certain package. This goes back and forth all the time. That is a form of price fixing. They don't get on the phone with each other but they know what the other company will do if they try and raise prices a bit. Since the two control 95% of the market they can just play off each other.

Their strongest weapon, striking, doesn't force what they want but rather is the only real tool they have to negotiate with.
If the union is any good, and secures enough monopoly power over the labour supply, then it does indeed force what they want. That's the reason for striking, and the reason unions don't like scabs.

Why are we pretending that without them employers would play nice now?
Why are we pretending that unions play nice now? Do you recall the strikes in France, Germany and Italy in the past month or so? None of these was particularly nice, none of them served anyone but the unions themselves and it was more obvious than usual too that they were hurting society as a whole in the process.

When do we have to step back and ask ourselves whether this hypocrisy based on our ideas of "economic justice" is going too far and causing more damage than it's worth?

You would like to know why it is OK to transfer the wealth from the side where one man has all the money and everybody else is living in poverty to the side where everybody has some of the money and nobody is starving?
I'd have to call that a strawman.

The willingness to strike shows that we ARE proud of our work, and that we think what we do has greater value than we are being given, and we are willing to fight to get that value.
But you're not getting this value voluntarily, because anyone other than yourself actually, honestly thinks your work is worth that money. You may choose to ignore that fact, but the money you get after that strike is no longer a representation of the value you provide to another person, it's a reflection of nothing but your ability to hurt and therefore blackmail the other.

It is only the employer who would think that he is throwing loot at us for nothing. We know that we are producing good work, and that we want to be paid what it is worth.
And I want to be paid $1 million p.a. for delivering pizzas. If I take a gun and rob every house I deliver to, should I be proud if I manage to get that cash together at the end of the year? Could I still kid myself into thinking it was my work as a delivery driver that got me all this money?

All right, let's consider an individual case: you. Does your job allow you to shape your environment in such a way as you want it to be?
In a small way, yes. But then, I'm not in my job yet, I'm just earning some cash to allow me to get there.

Any job allows us to change our personal environment though. Some jobs also have to do directly with changes to the world in general, but even if they don't - with the money I earn I can buy that nicer house and therefore change the way I live. Even if it's not a house but just a new TV I have done so, even if I'd have bigger wishes than just that.

Ultimately I just don't see the difference between the caveman wanting fruit near his cave and finding and planting seeds to get them, and me wanting a new set of tires and delivering pizzas in order to do so. It's a cause and effect relationship - my action is the cause, a change for the better is the effect. And I can, nay should, be proud of this series of events.

In a small way, yes. But then, I'm not in my job yet, I'm just earning some cash to allow me to get there.What of all the individuals who aren't in their jobs, and have no foreseeable way of getting there?

Any job allows us to change our personal environment though. Some jobs also have to do directly with changes to the world in general, but even if they don't - with the money I earn I can buy that nicer house and therefore change the way I live. Even if it's not a house but just a new TV I have done so, even if I'd have bigger wishes than just that.

Ultimately I just don't see the difference between the caveman wanting fruit near his cave and finding and planting seeds to get them, and me wanting a new set of tires and delivering pizzas in order to do so. It's a cause and effect relationship - my action is the cause, a change for the better is the effect. And I can, nay should, be proud of this series of events.If the action itself doesn't make you proud, then why should you be any more proud of it than the action of buying a lottery ticket and winning the lottery?

What of all the individuals who aren't in their jobs, and have no foreseeable way of getting there?
I don't think that's possible, short of perhaps me wanting to be an F1 driver. If you want something, it's not just enough to think about it, you have to express your want through action.

If the action itself doesn't make you proud, then why should you be any more proud of it than the action of buying a lottery ticket and winning the lottery?
Because the relationship between cause and effect is a lot clearer. If I get a $500,000 paycheck at the end of the year, I know that I got it because I delivered $500,000 worth of value to my employer. If I get $500,000 from a lottery, it's because of chance.

Furthermore, you don't plan to win the lottery and then just put the plan in motion, because it's such a random event. My big paycheck however is the result of a plan that I thought of many years ago and implemented rigourously. I set out to do something, and I did it.

..............If I get a $500,000 paycheck at the end of the year, I know that I got it because I delivered $500,000 worth of value to my employer............

Would your same work have been worth less if the employer had paid less? You're not substituting reality with economic theory, are you?

I'd have to call that a strawman.
I'd have to say the question I was responding to did little more to take reality into account. But ok.


But you're not getting this value voluntarily, because anyone other than yourself actually, honestly thinks your work is worth that money. You may choose to ignore that fact, but the money you get after that strike is no longer a representation of the value you provide to another person, it's a reflection of nothing but your ability to hurt and therefore blackmail the other.
The money I get after a strike or other negotiation (not all union actions involve striking, some are simply settled with a contract negotiation) represents the amount I am actually worth to an employer. If I were not worth that amount, the employer would not pay it. That is what negotiations are about. However, before those negotiations, I will necessarily be paid less, as the employer seeks to keep as much of his money as he can, and pay me as little as I can be forced to accept.


And I want to be paid $1 million p.a. for delivering pizzas. If I take a gun and rob every house I deliver to, should I be proud if I manage to get that cash together at the end of the year? Could I still kid myself into thinking it was my work as a delivery driver that got me all this money?
Errr... let me toss that strawman tag right back at you there, my friend.

If you take a gun and rob houses, you are not getting paid $1million for delivering pizzas. You are getting it for robbing houses.

I get paid for the actual work I do. And if the employer and I (or my union) have negotiated well, I get paid satisfactorily for that work. If we have negotiated poorly, then either I am not getting what I am truly worth, or I am getting too much and the employer is forced out of business.

Would your same work have been worth less if the employer had paid less?
Of course. The only measure of value we have is the market. That's what makes non-market valuation so difficult.

You're not substituting reality with economic theory, are you?
Either you can prove it wrong, or you can't. If you can, you may want to consider a career in academia, because your input would be much appreciated.

If I get a $500,000 paycheck at the end of the year, I know that I got it because I delivered $500,000 worth of value to my employer.

And what if, for that very same work, which was worth exactly the same value to your employer, he only paid you $25,000? What if you know your work is worth more, but he doesn't want to pay it? Do you accept that, or do you ask for what your work is worth?

What unions do is ask employers to pay what the work is really worth.

Of course. The only measure of value we have is the market. That's what makes non-market valuation so difficult.


Either you can prove it wrong, or you can't. If you can, you may want to consider a career in academia, because your input would be much appreciated.

Does oversimplified = wrong?

Of course. The only measure of value we have is the market. That's what makes non-market valuation so difficult.


The employer is the only arbiter of value?

Of course. The only measure of value we have is the market. That's what makes non-market valuation so difficult.
..........

Even if non-market valuation is difficult, there is still value. You will need something more than Excel to measure it. Qualitative measurements for example.

That is what negotiations are about.
I don't think they are. That's what negotiations were about if you were talking to him one on one. But if your union takes over, and has the possibility to strike and thus eliminate the labour supply, then the negotiations become about the employer trying to retain the ability to function as a business.

If you take a gun and rob houses, you are not getting paid $1million for delivering pizzas. You are getting it for robbing houses.
Look, there's a competitive market price for a type of labour, which reflects what would be paid if aggregate supply and demand for that labour meet and the market clears. Within that there will be many negotiations, but all between individual agents. Some will be skewed by unequal alternative options by either party, but only to a degree, because a free market for that labour exists and therefore creates these alternative options.

If now there is a union, which gains 100% membership and can destroy any business using that type of labour by refusing to work for it, and it pushes for better wages, we'd expect their level to increase beyond the competitive market price.

So now any wage is made up of three parts: the ideal, competitive market price, some value reflecting your personal skill and motivation as well as the relative negotiating power of you and your employer and some extorted value that is due only because of the monopoly power of the union and would not have been paid in any other scenario. The middle part might actually fall away, by the way, because unions tend to push for centralised wage agreements.

Much the same way I would earn $5 for delivering the pizza, and some additional value due to my ability to use what is essentially coercive force to make the other person write a check for all their savings out to me.

If we have negotiated poorly, then either I am not getting what I am truly worth, or I am getting too much and the employer is forced out of business.
But what are you truly worth?

My stance is clear - I cannot determine what my work is worth to those who would reward me for it. I can only determine whether or not their valuation is acceptable by choosing to work for them or not. If I only get $25,000 instead of half a million, I may well choose not to work for this person and go somewhere else. If I can't find anyone who will pay me my reservation price, I may choose to change industry. And if I can't find any industry in which my wages would reflect my valuation of my time, effort and investments, I would have to go and live in a cave, since the natural environment is the only scenario in which the value of my work doesn't depend on the opinion of others. It still wouldn't depend on my own valuation alone though.

Does oversimplified = wrong?
Well, either it applies or it doesn't. I'm leaving room for variations in there, but the trend should be clear. If you think it's not, and you can find some variation which is not random, then there's something wrong with the economic theory itself.

The employer is the only arbiter of value?
No, but as far as getting paid for your work by him or her is concerned, he or she is certainly the most important one.

It's the same as with a painting being auctioned off. The experts or the artist can give you any price they want - the one that matters is what you're prepared to pay.

Even if non-market valuation is difficult, there is still value. You will need something more than Excel to measure it. Qualitative measurements for example.
Well, I've done a course on Cost-Benefit Analysis, which depended heavily on trying to get valuations of things like externalities or market distortions. So you can get technical, if you want.

I agree that when there is market failure, prices may not accurately reflect the true transfer in welfare between the various parties and its effect on society as a whole. But I see no reason why I should suspect that labour markets are failing to any significant degree.

In college I was a member of a Union. I can say that I support unions and completely hate them without contradicting myself.

Unions, in principal, are a good idea. They streamline labor negotiations for large employers and are a network for workers to support one another in balancing the negotiations with a large employer. They give employees the ability to say 'no' when employer demands become unreasonable. (Nurses unions are good for this - like keeping the nurse/patient ratio reasonable)

However, unions have overgrown their intended purpose with weird quirks and legalism within. For example; I have seen assembly lines stopped for an hour waiting for someone to hit the 'reset' button - because the only guy the union had designated for that job was on lunch. If anyone else did it they would get fired.... BY THE UNION! nice.

I want to dispel the MYTH that unions somehow exist to cut into employer profits. This asinine argument is so ridiculous as to actually cross over into the territory of just fucking stupid.

Unions only determine profit to the extent that the employer is measured against other employers not affected by unions. (note; non-affected is not the same as non-union) It would be foolish for a union to be a detriment to profit as they would eventually drive their employer out of business and put themselves out of work. (This hasn't stopped some - google US steel manufacturers and US ship builders) Employers will always set their prices after they consider the cost of production (labor, materials, tax) within competitive ranges. If their competitors are also affected by unions then prices will simply be higher. Simple math kiddies.

If you want the REAL HARDCORE evidence that unions are not about cutting into unreasonable employer profits you simply have to look at union representation with the LARGEST EMPLOYER IN THE UNITED STATES; the government. Union representation within the US government ranges from 23% to over 50% (depending on federal, state, local, affiliated, etc)

Compare that to 12-14% in the private sector and it begs the obvious question ; if unions are about getting labor a 'fair share' of profits then why would government employees need unions? They wouldn't. Therefore there are other, and as evidenced by government participation ratios, MORE COMPELLING reasons why employees unionize.

I don't think that's possible, short of perhaps me wanting to be an F1 driver. If you want something, it's not just enough to think about it, you have to express your want through action.Certainly.
Of course, everyone isn't capable of all possible actions.

Because the relationship between cause and effect is a lot clearer. If I get a $500,000 paycheck at the end of the year, I know that I got it because I delivered $500,000 worth of value to my employer. If I get $500,000 from a lottery, it's because of chance.Why should you care more about delivering "$500,000 worth of value" to your employer than winning the same amount in the lottery? Why does your employer's opinion matter at all?

Furthermore, you don't plan to win the lottery and then just put the plan in motion, because it's such a random event. My big paycheck however is the result of a plan that I thought of many years ago and implemented rigourously. I set out to do something, and I did it.And yet, for most individuals, planning to get their job in a capitalist system would be exactly like planning to win the lottery.

/snipWow, what a moderate-sounding post. I applaud it. :fluffle:

....

Well, I've done a course on Cost-Benefit Analysis, which depended heavily on trying to get valuations of things like externalities or market distortions. So you can get technical, if you want.........
It is not just a matter of 'getting technical', it is a matter of reality. There is no such thing as a perfect competition, except in economic theory. Demand and supply being something that can be manipulated. To say that value of labour is exactly what someone pays for it is so inaccurate as to be wrong, it depends on a multitude of factors. Viewpoint, definition of value, etc, etc...

It would be more accurate to say that value of work (to the employer) depends on how much he can pay for it, and still make a profit.

Why should you care more about delivering "$500,000 worth of value" to your employer than winning the same amount in the lottery? Why does your employer's opinion matter at all?

In any exchange, regardless of dollar value, there is a consideration of value. You would want to deliver $500,000 worth of house if you were a seller. The same goes if you are the builder.


And yet, for most individuals, planning to get their job in a capitalist system would be exactly like planning to win the lottery.
No, it is not. In developed economies there is 13-14 years of free education plus subsidized education beyond that. There is no class or caste system which limits anyone from eligibility for a job. A person is free to choose their career, their work habits within, and even to work for themselves or someone else.
To compare that to a scratch-off is, to put it nicely, not very accurate.


Wow, what a moderate-sounding post. I applaud it. :fluffle:
Most people here would be shocked to find how moderate I really am. They just get so defensive when I shatter their golden calves that they lose perspective.

It is not just a matter of 'getting technical', it is a matter of reality. There is no such thing as a perfect competition, except in economic theory. Demand and supply being something that can be manipulated.
And if it gets manipulated, or there is a finite number of firms with some pricing power, that means that demand and supply no longer intersect?

The competitive price is not fixed for all eternity. It moves around with the factors that influence it, but that doesn't mean it doesn't exist, or that it somehow becomes more efficient to implement a monopoly instead.

To say that value of labour is exactly what someone pays for it is so inaccurate as to be wrong, it depends on a multitude of factors. Viewpoint, definition of value, etc, etc...
There is only one valid definition of value, and that is the one that actually exists in reality. I can say my toenail has a value of $1 trillion but no one would listen. How do you think we do non-market valuations? We go ahead and try to figure out what people would pay if there were a competitive market, by asking them or by observing what choices they do make.

A meaningful definition of economic value precludes an actual exchange, which must involve two parties. Therefore the view of those two parties are what determines value, and nothing else (unless there are externalities, which may make things more complicated). Though there are of course objective factors which influence the subjective valuations of those parties.

In a competitive market, we'll arrive at some wage level. If the wages are less than the product (and therefore value to the employer) of the labour, you will find that someone else will offer you a higher wage to do the same work. If the wages are higher, you will find that I will hire someone else to do the same work for less. Over time competitive wage levels therefore must reflect a narrow band around the actual product of the labour.

Now, if there is any part of the price that is actually paid that does not have to do with the labour or its product itself, then the price no longer reflects the value to either party. If I negotiate wages with a union rather than an individual, I'm not valuing that individual's labour, I'm valuing the threat of losing all my labour and having to shut down. So I end up paying a premium which goes beyond what the labour would actually be worth to the both of us if we allowed a fair negotiation.

It would be more accurate to say that value of work (to the employer) depends on how much he can pay for it, and still make a profit.
It's not more accurate, it's saying precisely the same thing.

And if it gets manipulated, or there is a finite number of firms with some pricing power, that means that demand and supply no longer intersect?

No, only that they weigh less.

The competitive price is not fixed for all eternity. It moves around with the factors that influence it, but that doesn't mean it doesn't exist, or that it somehow becomes more efficient to implement a monopoly instead.o.k.


There is only one valid definition of value, and that is the one that actually exists in reality. I can say my toenail has a value of $1 trillion but no one would listen. How do you think we do non-market valuations? We go ahead and try to figure out what people would pay if there were a competitive market, by asking them or by observing what choices they do make.
Naturally the only definition economic theory will accept is that which is inherent in the theory itself.


A meaningful definition of economic value precludes an actual exchange, which must involve two parties. Therefore the view of those two parties are what determines value, and nothing else (unless there are externalities, which may make things more complicated). Though there are of course objective factors which influence the subjective valuations of those parties.
o.k.

In a competitive market, we'll arrive at some wage level. If the wages are less than the product (and therefore value to the employer) of the labour, you will find that someone else will offer you a higher wage to do the same work. If the wages are higher, you will find that I will hire someone else to do the same work for less. Over time competitive wage levels therefore must reflect a narrow band around the actual product of the labour.
Depends on the circumstances. It seems logical that the employer would use slave labour if that was legal. Given that he wants to minimize costs.


Now, if there is any part of the price that is actually paid that does not have to do with the labour or its product itself, then the price no longer reflects the value to either party. If I negotiate wages with a union rather than an individual, I'm not valuing that individual's labour, I'm valuing the threat of losing all my labour and having to shut down. So I end up paying a premium which goes beyond what the labour would actually be worth to the both of us if we allowed a fair negotiation.
Why are you not valuing the threat of losing all your labour and having to shut down, when negotiating with an individual?



It's not more accurate, it's saying precisely the same thing.

No, because there may be a difference between what is being paid, and what is economically viable to pay.

In any exchange, regardless of dollar value, there is a consideration of value. You would want to deliver $500,000 worth of house if you were a seller. The same goes if you are the builder.Sure, but why would you be proud of doing so, unless buying or selling itself makes you proud?

No, it is not. In developed economies there is 13-14 years of free education plus subsidized education beyond that. There is no class or caste system which limits anyone from eligibility for a job. A person is free to choose their career, their work habits within, and even to work for themselves or someone else.
To compare that to a scratch-off is, to put it nicely, not very accurate.Sure it is. Education is becoming increasingly immaterial. Having a high school education used to mean something in the market, nowadays employers barely bat an eyelash when someone applies for a job with only a high school education.
Because the class system exists, people who are richer go to better schools and thus are more likely to be the ones for whom education actually does matter.
To say that someone growing up in a lower-class neighborhood has a realistic chance of fulfilling their dream of becoming a lawyer is, to put it nicely, not very accurate.

If you want the REAL HARDCORE evidence that unions are not about cutting into unreasonable employer profits you simply have to look at union representation with the LARGEST EMPLOYER IN THE UNITED STATES; the government. Union representation within the US government ranges from 23% to over 50% (depending on federal, state, local, affiliated, etc)

Compare that to 12-14% in the private sector and it begs the obvious question ; if unions are about getting labor a 'fair share' of profits then why would government employees need unions? They wouldn't. Therefore there are other, and as evidenced by government participation ratios, MORE COMPELLING reasons why employees unionize.

Maybe that's because, as governments don't need to make profits, they're more likely than commercial enterprises would be to give in to union demands... and seeing those demands successfully made encourages more people to join the unions involved?

Naturally the only definition economic theory will accept is that which is inherent in the theory itself.
Look, come up with a better one. It's not like people haven't tried.

Depends on the circumstances. It seems logical that the employer would use slave labour if that was legal. Given that he wants to minimize costs.
Yes, but slave labour wouldn't exist in a competitive labour market. Either slaves are captured and held against their will, which would be the realm of politics or moral philosophy rather than economics, or they'd voluntarily sign up which they wouldn't do given the existence of alternative workplaces.

Why are you not valuing the threat of losing all your labour and having to shut down, when negotiating with an individual?
Because unless an individual is extremely important (and in which case the labour itself would have this characteristic), there is no chance that it will shut down the factory by absence.

No, because there may be a difference between what is being paid, and what is economically viable to pay.
And how can that be, unless there is some other interference that makes people choose not based on economic considerations?

A meaningful definition of economic value precludes an actual exchange, which must involve two parties. Therefore the view of those two parties are what determines value, and nothing else (unless there are externalities, which may make things more complicated). Though there are of course objective factors which influence the subjective valuations of those parties.

In a competitive market, we'll arrive at some wage level. If the wages are less than the product (and therefore value to the employer) of the labour, you will find that someone else will offer you a higher wage to do the same work. If the wages are higher, you will find that I will hire someone else to do the same work for less. Over time competitive wage levels therefore must reflect a narrow band around the actual product of the labour.

Now, if there is any part of the price that is actually paid that does not have to do with the labour or its product itself, then the price no longer reflects the value to either party. If I negotiate wages with a union rather than an individual, I'm not valuing that individual's labour, I'm valuing the threat of losing all my labour and having to shut down. So I end up paying a premium which goes beyond what the labour would actually be worth to the both of us if we allowed a fair negotiation.

I don't see why labor union negotiations dont reflect the value of labor to the employer. The union does add bargaining power to its members but the union can't get more value out of the employer then the value of their collective labor to the employer without the business tanking. There are still two parties negotiating. The employer can fire the union and relocate offshore or sell the business, liquidize its assets, and invest in another industry. They're hardly held hostage.

The employer can fire the union and relocate offshore or sell the business, liquidize its assets, and invest in another industry. They're hardly held hostage.
And the people who are faced with a price-fixing cartel can choose not to eat vegetables anymore, but BigMacs instead. Or go overseas to buy vegetables.

Somehow that line of argument doesn't work in court though.

And the people who are faced with a price-fixing cartel can choose not to eat vegetables anymore, but BigMacs instead. Or go overseas to buy vegetables.

Somehow that line of argument doesn't work in court though.

True. What have you against price-fixing cartels in a free market and why would people eat Big Macs instead of vegetables? Are big macs so cheap? Why not go for fruits and vitamens supplements? I thought you were against anti-trust laws.

In pretty much every country in the world it is illegal for businesses to get together and set prices together. The fear is that they would form a cartel that monopolises the sale of a good or service and get more profit at the expense of the consumer, at the same time causing a dead-weight loss to society due to the fact that their profits don't accurately represent the costs of providing the product.

But in most countries, industry-wide unions are allowed. In some they wield great power, both economic and political.

But if I go and work for someone, I'm selling my skills, time and effort (ie my labour) in return for a price, my wage. So I'm just like a company selling a service.

But I can now go and join a union. That union is essentially a cartel trying to fix prices and terms of sale by monopolising the supply of a given type of labour. As a result, my wages will no longer be as accurate a representation
of my labour's economic worth.

...


Not at all.

1.A union isn't a cartel: let's say there is union XZY and union ABC. It's not that workers from union XZY get 100€/month more than those from union ABC because union XZY has made a better contract: if there is the national collective bargaining, they will get the same wage, as will even workers who aren't in an union. Hence, unions aren't cartels.

2.The idea about law is defending the weak side from the excessive power of the strong side. When making a contract, enterpreneurs are stronger than workers, hence unions and collective bargaining are needed to have some balance.

3.It has been proved (in the '70s iirc) that a totally unregulated market cannot regulate itself via offer-and-demand laws.

4.Unions exists on the enterpreneurial side, too, and enterpreneurs' unions wield much economical and political power, too.

Look, come up with a better one. It's not like people haven't tried. Can't give a better one, am not an economist. But the fact that people have tried implies that there is some consensus that one is needed.


Yes, but slave labour wouldn't exist in a competitive labour market. Either slaves are captured and held against their will, which would be the realm of politics or moral philosophy rather than economics, or they'd voluntarily sign up which they wouldn't do given the existence of alternative workplaces.It is not an either/or situation. You're not either a slave or not. There are grey areas. Besides, slave labour is still labour, with value.

Who said anything about a competitive labour market? What is it, anyway?


Because unless an individual is extremely important (and in which case the labour itself would have this characteristic), there is no chance that it will shut down the factory by absence.Unless, exactly. Important in what way?


And how can that be, unless there is some other interference that makes people choose not based on economic considerations?
The answer is in your question. That other interference that makes people choose not based on economic considerations.

There is always a fly somewhere in the doctrinal ointment.

I'd like to hear your thoughts on the critique of homo oeconomicus, as explained in this article. (http://en.wikipedia.org/wiki/Homo_oeconomicus) Please?

It is not an either/or situation. You're not either a slave or not. There are grey areas.
No, there aren't. The whole idea of "wage slavery" for example depends on the gross distortion of both terms in order to score rhetorical points.

Slavery is defined by some very clear criteria:
1) No wages
2) No right to leave
3) You can be sold on to someone else, ie you are the other person's property

If any of these are not met, then whatever relationship you have is not slavery.

Besides, slave labour is still labour, with value.

Who said anything about a competitive labour market? What is it, anyway?
A market in which agents are able to freely choose their demand and supply prices and the parties they deal with and in which there are many buyers and sellers of labour.

So a competitive labour market doesn't feature slaves.

Unless, exactly. Important in what way?
Extreme rarity of the skill in question, and importance to the value chain (ie it wouldn't work without this type of labour).

The answer is in your question. That other interference that makes people choose not based on economic considerations.
And now think of what that might be.

- Any selfish, wealth-orientated criterion would be an economic consideration.
- Same goes for any non-selfish, wealth-orientated criterion.
- Even non-wealth orientated, voluntary criteria enter the person's choice when creating a reservation price, so they too would be featured in purely economic considerations.

So the only thing that is left are non-voluntary criteria. In other words: violence.

Not a good thing in my book.

I'd like to hear your thoughts on the critique of homo oeconomicus, as explained in this article. (http://en.wikipedia.org/wiki/Homo_oeconomicus) Please?
I think that people deliberately misinterpret the term "Homo Economicus". It basically means the model of man as used in economics. Back in the early days, that was an extremely simple model that could rightly be criticised.

Since then the valid criticisms (altruism, imperfect information etc) have been integrated into models. Utility functions can incorporate all of them without requiring any significant changes.

Of course it is a self-fulfilling prophecy...or rather, it's not a prophecy at all. It's a model, a representation. It is meant to reflect the actions of individuals in a situation of scarcity - and only in so far as we have previous information on the person's motivations beyond the ultra-simple assumptions can we use it to predict things.

The marxist criticisms are, as usual, dependent on the flawed and frankly horrific view of humans as malleable robots they can play with to their heart's content.

If you're interested in utility functions, by the way, check out a thread I made some time ago and in which I explain how they come about from the ground up. As such it also explains the basics of Homo Economicus: http://forums.jolt.co.uk/showthread.php?t=524908