no third solution

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“Big Business” is the Problem

July 27th, 2011

If a workplace needs to be unionized, it’s already a problem that “seizing the means of production” can’t fix. The problem is “Big business” no matter who’s in charge and that’s why syndicalism or trade unionism doesn’t do it for me* . I object to any organization the aim of which is to monopolize a sector of the economy (and a very large union of would do precisely that).

If the unions are meant to be a counterweight to state-granted corporate privilege, the proper recourse is repeal, revoke, or nullify all the privileges in order to facilitate the the liquidation and distribution of the wealth they have amassed**. Whether this distribution may be achieved to some degree through the state’s legal apparatus is suspect, since the “law” is the capitalists’ primary instrument of oppression.

Although I am sympathetic to many labor causes, and not opposed to their means, I have reservations about their efficacy in achieving desired results.  As an equality of means brings about equality of opportunity, the real challenge is to equalize the means and I’m not convinced this happens.

  • If successful in “seizing”, the largest unions would control the “means of production”, employed thereafter for the benefit of themselves. They may be tempted to restrict membership to ensure higher wages, and by restricting membership, the union controls access to the means of production in much the same way that the capitalist-owner does: keeping employment safely out of reach for many.
  • Since all means of production are collectively held, a dissatisfied member can’t just walk off on his own because he can’t take his “share” of the cooperative capital when he leaves. Nor can he, or a group of others decide they are unhappy with the union’s stewardship, they probably can’t instigate a micro-“strike” and claim the product of their labor, or a homestead right to a share of the collective assets.
  • The individuals would be in a position much like the majority who live hand-to-mouth today: bound to the occupation by the necessity of hunger.  And if they choose to leave, they would leave with nothing***  whereupon they would ascertain that the only thing they have to negotiate with is their own labor power; they would be at the mercy of others.

On the contrary, in a free society with the means more-or-less distributed, the average man being unhappy with his station should have options:

If he has acted wisely and put some money away, if there is freedom to buy, sell, loan and borrow, he should have the financial wherewithal take some modest risks: he can go off on his own or join with co-workers and form a competing enterprise or start a new one altogether. Or he may choose to work for someone else; since there would be no workplace large enough or economically powerful enough to exert appreciable pressure on the markets for goods or for labor. In short there should be plenty of opportunities one could pursue.

What I hope we may one day obtain is an environment where no sector of the economy (including labor) is dominated by oligopoly.

I am all for abolishing the current order of things, but I do not want to simply put the power in another party’s hands (no matter which flag they’re waving). Instead I want to abolish that concentration of power which is so easily abused.


I am not suggesting  there is anything inherently wrong with labor organizations. Nor am I arguing against tactics advocated by labor organizations like the IWW (direct action, “If you need a break, take one”, etc.) nor am I fundamentally opposed sabotage, etc. If you want to argue for a syndic or a co-op of a dozen people or so who have a small shop and manage that endeavor “collectively”, be my guest. I am absolutely not debating that.
** In order to make an omelet you have to break some eggs. This is probably going to be a messy process.
*** Barring of course, any prior arrangements which may provide for severance pay, or other remuneration based on length of service, etc.

Dynamite: The Story of Class Violence in America

July 19th, 2011

As the old saying goes, “Desperate times call for desperate measures,” and there are few times more desperate for a majority of laborers living hand-to-mouth, than being put out of work en masse. Adamic’s well-researched, but surprisingly easy-to-read Dynamite: The Story of Class Violence In America demonstrates the desperate side of the labor struggle which is rarely, if ever, taught in classrooms.

Dynamite: The Story of Class Violence in AmericaAs strikes and “riots” are often portrayed in the media as unprovoked violence against the employers or scab workers, and haphazard destruction of the employers’ properties, Adamic will not let the reader ignore that in many (most?) cases, it is the the monopolists and the concentrated Big Business who are directly responsible for the opening salvo (i.e., hired thugs to bust the strikes, agents provocateurs, corrupt politicians, etc.). He also notes that while many attempts at labor organizing were demonized and even prosecuted as illegal interference with commerce, etc., the duplicitous nature of the American legal system often ignored equally heinous interference with commerce when done on behalf of organized Big Business.

Dynamite also presents a fairly compelling argument as to why organized laborers believe in a “right” to their jobs, which if you accept it, means that scab laborers would be guilty of violating that right and to some degree deserving of reactions as would any common criminal who violated you otherwise. This was an argument I had not previously encountered, but and it was definitely an “Aha!” kind of moment when I picked up on it.

Adamic is unabashedly anti-capitalist, so his character descriptions tend to favor the champions of labor, and make the enemies of labor seem characteristically repugnant. That said, he keeps a fairly even keel and is not afraid to highlight labors shortcomings, infightings, especially weak leadership, a “We’ll get ours and damn the rest” mentality (which he condemns as a byproduct of capitalism) , failures of the AFL as well as the politicking and racketeering scandals which plagued early labor organizations and it would seem, doomed them for the future.

Although Adamic does not explicitly endorse “dynamite” as a means to achieving labor’s goals, I think he is without a doubt sympathetic to its use; at least under certain desperate circumstances the majority of which cannot be blamed on the working classes.

If you’re a left-leaning libertarian or a big-L libertarian of the American persuasion, or even fancy yourself an “anarcho-capitalist” then this book will definitely give you pause to reconsider some of your positions. Otherwise I’d recommend it for anyone interested in the history of the American labor struggles, or anyone looking for an alternate account of this history.

Dynamite: The Story of Class Violence In America is available via

Who to Blame for the Big Three’s Epic Fail

December 13th, 2008

I’m sure you’ve seen the parody poster by now: “You didn’t want to buy our shitty cars, so we’ll be taking your money anyways. All the news outlets are saying that the White House might tap TARP funds to provide immediate assistance to the Big Three, since the Senate unceremoniously shot them down the other night. As a lifelong metro-Detroiter, I feel obliged to comment on such happenings.

Yes, a reorganization or a bankruptcy, a complete failure would be disastrous for the local economy in the short-run. But I’m not convinced that a bailout will make anything better in the long-run, and even if I were so convinced, I’d still be morally opposed to subsidizing abject failure.

On that note, GM would need to triple its 3Q sales volume in order to remain solvent. The plain fact of the matter is, it doesn’t matter how much labor commands in compensation, as long as they’re building cars that nobody wants to buy. As long as their lead time is 25% greater than the competition. As long as their defects per vehicle is 3x the competition. As long as they cost more than comparable vehicles from other manufacturers. IF YOU BUILD CARS THAT NOBODY WANTS TO BUY, YOU WILL QUICKLY FIND YOURSELF IN FINANCIAL DISTRESS.

Some people blame management for the mess. I am certainly not apologizing for, nor do I intend to absolve the Big Three for the errors of their ways:

GM’s management drove the company into the ground, by consolidating many of their suppliers under their umbrella: one problem this created was a concentration of power such that a single Delphi strike could shut down the General. Additionally, because of GM’s enormous market share, it’s possible that they could drive domestic manufacturing to total collapse. If one automotive supplier goes under, the manufacturers simply source from someone else’s stamping plant. If one manufacturer goes out of business, every single supplier under their umbrella takes a massive financial hit.

In all fairness, many of these independent shops should’ve long ago thrown in the towel, and they likely would’ve, had the Big Three not been the beneficiary of many state subsidies throughout the years. There’s an old saying that warns us about putting all the eggs in one basket. This is a big problem with State capitalism which does not merely permit, but actively encourages the oligopolization of industry, as we’ve seen with the domestic auto manufacturers over the course of the last century.

Other people like to blame labor, and the extravagant $73/hour that they all earn. Except they don’t make that much money, which would be about $150k/year. They make (on average) something closer to $30 an hour, or somewhere in the neighborhood of $60,000 annually. Add overtime and bonuses (when times were better, assembly-line workers were getting $20k at Christmas), and the average line worker can certainly be in the upper strata of “middle class”.

The $73 figure, as others have pointed out by now, comes from the current costs associated with retiree benefits. According to the NYT,

These are essentially fixed costs that have no relation to how many vehicles the companies make. But they are a real cost, so the companies add them into the mix

If this is not accounting chicanery, it ought to be. Why don’t the Big Three add their other fixed costs into labor calculations? Plant assets, capital equipment, etc., are all “fixed costs” in a true sense. In any event, the total cost of their compensation is about $55 an hour which is still “twice as much as the typical American worker makes, benefits included” and something like 20% higher than the rest of the domestic (foreign-owned) auto industry.

However, I want to put everything out in the open: The UAW is still a labor cartel, no matter how you want to romanticize it. By directly limiting membership, they are able to indirectly command certain levels of compensation, and control (at least to some extent) the amount of overtime available to them. Especially in Michigan, they have historically been anti-productive and anti-labor and anti-employment:

Unions prefer to keep many able-bodied workers unemployed in order to force their higher wages on their employers. Big Labor in Michigan is continually fighting to keep businesses out of the state.

If the UAW thinks General Motors is salvageable, let them put their money where their mouths are. General Motors real value is approximately zero. The UAW should let General Motors fail, they should be rooting for bankruptcy. The UAW should buy all of the debts and assets and obligations from the bankruptcy at pennies on the dollar. Anything else is just proof that they’d like someone else to subsidize their existence.

no third solution

Blogging about liberty, anarchy, economics and politics