Defenders of “right to work” laws often argue that unions are collusive and extortive in a way that is simply unfair to employers. Neither workers nor management, they say, should be forced to negotiate through unions, and “right to work” simply levels the playing field by ensuring that employees can always negotiate directly with management.
The whole point of labor unions, in the minds of RTW supporters, is to exploit the Wagner Act requirement that parties “negotiate in good faith,” thereby moving wages and benefits up in a way a free market in labor would never allow. Jason Sorens even compares unions with Mafia protection rackets in this regard (“Right-to-Work: An Inflammatory Analogy,” Pileus, December 17).
To describe this line of reasoning as selective would be a gross understatement. Labor is not the only interest engaging in collective bargaining. What about the individuals involved in the employing corporation? Aren’t these businesses effectively “capital unions” exploiting incorporation laws to achieve a better bargaining position relative to labor? Isn’t that why investors pool their resources and form businesses — to get better deals in the market through economies of scale? Isn’t that why they try to get investors rather than simply borrowing all the money for their start-up costs — to spread the risk and the reward?
Labor unions are only one side of this story. To emphasize collusion on the workers’ side is to leave another form of collusion totally unaddressed. Corporations are capital unions, organizations whose members work together to negotiate wages and benefits (and other costs, of course) downwards to get the best return for themselves. Why is one form of collusion wrong and the other not?
I’d add that, in historical comparison to labor unions, corporations are much more fully creatures of the state. While labor unions have existed for much of their history in legally unrecognized forms, arising from the spontaneous organizing efforts of workers themselves, incorporation has always been a government-chartered, government-privileged, and therefore necessarily statist activity. There’s nothing “free market” in the fact that corporations are dealt with on their own, special terms. Conferring limited liability, entity status, and other privileges on corporations is intervention to skew the market, a crime that can only be laid at the feet of the state and the capitalists that run it.
I view the RTW movement as not only the argument that capital should get to deal with labor in a privileged manner, but also as a defense of the entire balance of power between employers and employees. It’s about more than just authoritarianism and a system that favors capital over labor. It’s also about the legal codification of class distinctions inherent in the structure of production.
To the extent that capitalists decry so-called “class warfare,” they are glossing over the privileged terms on which they themselves do business — claiming there are no classes of consequence while entrenching their own class, allegedly deferring to the market, while actually ensuring that market always delivers the balance of power they desire.
If RTW folks truly believe that each and every worker deserves the right to negotiate individually with the capital union, why stop there? Why not also grant each and every shareholder, investor, creditor, and other owner of the corporate capital union the right to negotiate individually with the worker himself or his labor union? Why should both workers and owners be forced to deal with the extractive, exploitative management class as the exclusive agent of the corporation? If it’s unfair for the labor union to monopolize labor relative to a given employer, isn’t it equally unfair for the capital union to monopolize capital relative to a given employee?
The reason is that capital unions are politically and legally favored in labor negotiations, because they have always been favored. Our entire political economy is built around doing business on their terms. If you want a genuinely free market in labor, you can start by ridding yourself of the biased narratives that explain how collective bargaining is virtuous and crucial for those who have money, but unnecessary and evil for those who don’t.
Citations to this article:
- Jeremy Weiland, Some unions are more collusive than others, Deming, New Mexico Headlight, 12/24/12
"I’d add that, in historical comparison to labor unions, corporations are much more fully creatures of the state. While labor unions have existed for much of their history in legally unrecognized forms, arising from the spontaneous organizing efforts of workers themselves, incorporation has always been a government-chartered, government-privileged, and therefore necessarily statist activity. "
Exactly! I'd love to see a conservative or a right-wing "libertarian" attempt to refute that inconvenient fact.
Excellent article, Jeremy! I am so happy that C4SS is continuing to reveal the lies and hypocrisy behind the RTW movement. These are the facts. Your logic is unassailable. If pro-RTW "libertarians" at Reason (to be fair, some Reason columnists like Sheldon Richman are not in favor of RTW laws), CATO or other organizations were to be enlightened by articles like yours, perhaps they would become consistent libertarians. I won't hold my breath though, since these organizations would lose most of their big donors (corporations) if they revealed the truth about capitalism. Quoth AC/DC, "money talks, B.S. walks."
Great article. It touches on an idea that seems to fly right over the heads of many "pro-market" people in the mainstream, that the modern big corporation would/could not exist in a freed market. On the other hand, the modern big labor union would also cease to exist in a decentralized freed market.
attempt to refute: None, because he's correct. Corporations exist to remove liability from it's shareholders and other various perks. Most libertarians should, or would agree that corporations shouldn't exist or at least they shouldn't have special privileges (making their existence meaningless, anyway), they'd also agree unions don't deserve special privileges though.
-Signed, Voluntarist.
The somewhat humorous thing for me is that, if the business corporation existed in a stateless society, it probably would look and act a lot more like a labor union–at least the first labor unions that were spontaneously organized from the bottom up. Why, you ask? Simple: beyond limited liability and tax privileges, the basic privilege of a corporation is the way the state compels us to recognize it as a coherent, relevant entity in the first place.
Imagine if Monsanto's stockholders, managers, etc. ran a business in a stateless society, without a government to certify and enforce their doing business as a legal unit. They certainly could contract amongst themselves and call the nexus of capital and contracts thusly created "Monsanto", divide the profits, invest, hire, etc. But everybody else not party to those contracts would be under no obligation to recognize the "entity" they created, and would be able to address torts directly to the people who acted on the "entity's" behalf. What good is the entity if it's not an identity that can be managed, sold, bought, disciplined as a unit?
So the corporate entity's very existence becomes a matter of market economics: when dealing with third parties, one must always attempt to convince everybody that they'd prefer to do business with Monsanto AS Monsanto, and not as the several individuals involved, since people always retain that prerogative. This is very similar to labor unions at their genesis, when just convincing people that they were coherent and relevant was a struggle.
Limited liability is an important privilege, but it presumes there's an entity that actually exists to which the privilege can be conferred. The entity status of corporations is the primary privilege, in my view, since it is the most basic expression of the statist nature of the entire mode of business.
I've thought about this quite a bit over the past few days, and I think I have to disagree with the point that a corporation in a stateless society couldn't assert its own existence. The fact that people can always address torts to individuals is due to the existence of a power greater than themselves that will take up their cause if their tort is found to be legitimate. In our society, this is the state. In a stateless society, there would be no universal backer to guarantee everybody's right to bring torts to anybody or anything, and all torts would be matters of negotiation framed by local social mores and often with significant power asymmetry.
In this way, a corporation in a stateless society is simply like a clan in many societies. The privilege of individuals to defer torts upward depends partly on other recognizing the legitimacy of doing so, but also on the corporations willingness and capability to stand up for its members when they cause trouble. If the group is powerful and loyal enough to its members, it could assert that nobody has the right to punish its members except itself, and that anybody attempting to attack its members directly will be retaliated against.
Certainly there would be a lot fewer corporations, and they would look a lot different in a stateless society. I don't think Monsanto as it exists has the loyalty to its employees to function as a sort of commercial clan. But neither would corporation-like commercial entities be completely impossible, even without greater social recognition. This is especially true in the case of foreign corporations from far more advanced societies.
What you describe sounds more like a clan (or even a state) than a corporation, indeed. But whatever it is, it doesn't derive its existence and identity from legal fiat, but from its relevance to the people. A clan is, of course, quite relevant to people's day-to-day. An agglomeration of assets and contracts? Not so much.
If an employer, who owns the productive means, require that, as a condition of employment, the candidate must join the union (consisting of every other worker in the company) & pay union's dues, then:
(1) to be allowed to use the employer's productive means, the candidate must join the union & pay union's dues, or
(2) the candidate can just always go & apply to work somewhere else.
Thus said, the "Right To Work" law clearly interferes with employers' RIGHT NOT TO HIRE some people from using productive means owned employers. It's state-sanctioned welfare for scabs.
Conservatives & Right-"libertarians" are highly inconsistent when they attack unions for driving out scabs on the ground that the employer have the RIGHT TO HIRE scabs to replace striking workers, they simply ignore the employer's RIGHT NOT TO HIRE scabs. Meanwhile, conservatives & "right" libertarians, objectivivts rant & rave against Title II of the Civil Rights Act, because Title II violates employers' RIGHT NOT TO HIRE candidates which employers dislike.
We can therefore concluded that conservatives are Big-Government statists (they always are) & right-"libertarians" & objectivists are actually Big-Government statists. For them, pro-union employers have no place in their conception of the "free market" & must comply with Big Government to provide welfare for scabs, because conservatives, right-"libertarians," & objectivists hate their foes, those unions, so much that scabs are their friends, & when the State provides welfare for scabs the state becomes conservatives, right-"libertarians," & objectivists' Friend also.
Last words, unions had been so much restricted by the Wagner's Act issued by the state, which prohibits "wildcat strikes, unannounced one-day walkouts, and secondary sympathy and boycott strikes" (Kevin Carson). Taft-Hartley, against issued by the state, even imposes more restrictions on workers' striking tactics. In this context, many "pro-union" employers had actually been privileged enough thanks to state-interventions into the market (without Wagner & Taft-Hartley, imagine how much strikes can cost employers that they will be forced to negotiate, because boycott strikes will eliminate the effectiveness of hiring scabs [how can employers make profits from scabs' labor when they cannot sell scab-made goods]?). "Right To Work" law is clearly another statist intervention which benefits scabs at the expense of pro-union employers, whom conservatives, right-"libertarians," & objectivists think as traitors to the employing class (O Most Holy "Individualist" Collectivistic Conformity!)