I heart unions, unions are we

Ezra Klein tells me to go out there and tell people I support unions.  I do.  Alex likes unions too.  But we felt unions do not go far enough.  So we bypassed the capitalist altogether and started marginalrevolution.com.  (The sinister Jane Galt, on the other hand, rules over Winterspeak and Mindles with an iron fist and rakes in all that Amazon revenue for herself, surely they need to combine against her.)  MR is run solely by its laborers and when it comes to decision-making I can assure you there are no secret ballots. 

Labor-run firms are common in law, book agency, real estate, landscaping, and many other sectors; we even see them in airlines.  When labor in charge creates more value, labor starts its own firms or buys out the capitalist or buys greater control rights.  Growing capital markets make these evolutions easier all the time.  Cooperatives, which are governed by consumers, also are found.  Mutuals, non-profits, and yes unionized firms are common too.  I heart all of these organizational forms.  Keep in mind that if both workers and customers will be better off, yes it probably can happen; it is naive to think that liquidity problems are the major issues preventing workers from enjoying greater control rights.

In the short run, the mental model of the left-wing bloggers is a bunch of janitors trying to get better working conditions but opposed by employers.  In the longer run what is striking is the competition across different organizational forms.  It doesn’t always make sense to give labor residual control rights over capital goods, or the right to halt production. 

Comments

"Cooperatives, which are governed by consumers, also are found." Don't let your mental model exclude rural areas. Production and marketing cooperatives run by farmers have long been a feature of agribusiness. And rural electric and telephone cooperatives existed before the New Deal. (Part of the New Deal was putting government authority and money behind co-ops, which usually suffer from free-rider problems.) But like any legal organization, co-ops depend on the favor of the law. And the competition among different forms of organization can occur in the market place, or on Capitol Hill as it makes the laws that define the market place.

I concur with SA

So do I. Brilliantly put (as always).

Great answer -- I've been working at a labor-run firm for most of my professional life (a firm, in fact, that has no employees who are not also equal owners). So it's hard to see how anybody could be more 'labor-correct' than I am. Cool ;)

The ABA isn't so much a union (an organization of workers designed to act as a designated 'go-to' group to negotiate with management over the terms of employment - essentially, if workers were farmers, unions could be cooperatives) as a guild (an organization of tradespeople designed to limit entry into the profession - some modern trade 'unions', especially in the building trades in the north, behave this way also. They are also basically guilds.). The 'union' in law TC has in mind is the firm, with its vested partners. The AMA is the samekind of critter, with the same issues, as the ABA, except worse because the government has less place in medicine than it does in law, which is, after all, a creature of the state.

Employee run firms, such as law partnerships and consultanting firms, are most common where "the assets go down the elevator every night" -- most of the assets are human capital.

I worked for a large company that had bought a consulting firm and I was asked to analyze its performance. I found that in the years when the consulting division made a profit, the consultants won big bonuses on the threat of quitting that ate up much of the profits that were supposed to go to the parent corporation. But in the years when the divisio made a loss, the consultants never paid back any of their bonuses from the good years. So, we found a slightly lesser fool corporation and sold the consulting division to them at a loss over what we had paid for it, and we were glad to see them go.

In pro golf, the players took control around 1970. Previously, the American male golf tour was run by the Professional Golfers Association, which is numerically dominated by local teaching pros. A rebellion of the star touring pros took place about 35 years ago, and effective control was tranferred to a new Tournament Players division nominally still under the PGA, so the PGA Tour name was kept, but the players largely choose their own management.

One change that predictably followed was that the touring pros made it easier to stay on Tour -- previously, only the to 60 money-earners were granted free entry into all the tournaments the following years, and the others had to shoot their way in at a Monday qualifying round. This was boosted to the top 125 money-earners, leaving only about 25 openings in the typical tournament field of 150 for everybody else to struggle over.

Steve's exactly right that worker-run firms are mainly found in industries with low capital intensity. At the same time, I think Tyler's claim that there are worker run airlines is mistaken. Unions own a substantial stake in United, but they don't run it. They currently have only 2 of 12 seats on the board of directors.

I think that there are fundamental obstacles to labor-run firms in capital-intensive industries because of monitoring costs. Lenders to worker-run firms would have a hard time keeping the workers from "stealing" the capital, in the form of high wages or something similar. Even in traditional firms, lenders and owners can barely keep the CEOs from pocketing the capital.

But these capital-intensive firms are precisely the ones that tend to have monopoly power. They're precisely the firms where there are rents to be extracted, and the only question is how big a share the workers get.

Steve sailer makes some stimulating points. Indeed, unions seem to be a context specific reaction to a larger problem that corporations(or some variant thereof face) and it's employees face. Whether the unions as we knew them in the 20th century will be up to the task in the 21st century is a moot question. One thing is certain, owners and employees will be always be in conflict-maybe explicit or implicit whether it be in the 18th century or the 21st. Unions were a good answer when large tracts of the US businesses were economies of scale monopolies and it was a faustian bargain between employees and owners. But today when capital and labour are much more mobile, i don't know if it actually makes sense for employees to opt for a private sector union when it's highly uncertain whether a business entity will be around 20 years from now. My guess is that unions performed some very important roles that are somewhat removed from the role that people most focus on-nemly wage bargaining. Workplace safety, risk pooling for medical insurance and pensions are some of the few. If we see individaul level solutions emerge to these problems it is possible that the unions in their current form may cease to exist.

Right, the NFL is rather different, especially in players' rights. Your son would be much better of in baseball or basketball than in football, where players are burned up fast physically and long term contracts aren't honored.

資金を増やそうとするのに不動産投資をするのが手っ取り早い。日本で不動産で東京 賃貸をさがすのはきわめて難しくシステム開発は日本の会社が良い。

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