Thursday, November 22, 2012

Economics for Occupiers pt 4 - Unions

In part 3 we examined the concept of labor as a commodity and how the market prices labor, and strategies that the worker can use to improve marketability. Most people on the left, including the Occupy crowd, should be howling about this concept of labor, ready to demonstrate how the market doesn’t treat labor the way we’ve defined, and are therefore ready to dismiss the whole proposition. In this part, we’ll examine the role of labor unions and how they inhibit the labor market to the detriment of both the laborers and the employers who buy the labor.

It was once observed to me that companies that become unionized usually deserve it. This sage observation reflected the general sentiment that a company that cares for its workforce, pays them fairly and provides them with competitive benefits packages usually doesn't have to worry about collective bargaining.

Unions have their roots in the early days of industrialization, when the principles of socialism were generally accepted as a potential solution to some of the obvious problems that workers experienced in those days. Before industrialization, most productivity was either unskilled or closely controlled within guilds, which provided an entry barrier to the job market and basically set up each trade as a sort of cartel, thus protecting it from the pressures of competition. Acceptance into a guild was by invitation only, and recruits had to serve an apprenticeship to learn the trade before they could practice in the market, be it carpentry, weaving, tailor, mason, smith or any other skilled endeavor. 

Read more about this in chapter 5 of Economic for Occupiers, now available on

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