Conservatives love their "trickle down" economics, but as a tide that lifted all boats, I think the union movement is unsurpassed.

Economics 101--you learn just enough about economic to be completely economically illiterate about every single real-world economic problem. In addition, most economic theories begin with the words ceteris paribus (all other things being equal), when, as Kevin writes, there is never a real-world economic situation that satisfies the all other things being equal assumption. And Mr. Cowan wants to be taken seriously?!?

[Ahem] If you measure the size of the economy by GDP (Gross Domestic Product) you do not get the right answer, because GDP excludes any number of things that have economic value, such as a clean, healthy, safe environment. And the "environment" is not just our air, land and water. Workplaces are environments too, and clean, healthy, safe workplaces have economic value.

Not that I think it would be a good idea carried to this degree, but a monster progressive income tax (which oddly enough, also seemed to coexist with robust growth), turned into a wide variety of social benefits (health care, education, child care, elder care, transit, research) could even things out. You were wondering what else might work -- that might work.

I just re-read the quote from Mr. Cowen? What is the causal mechanism that he proposes to validate his causal claim?
As for the effect of unions on economic growth, there is strong evidence to suggest that what unions provide in training, expertise, job security, productivity, etc., actually boosts economic growth, especially in the long-term. I'd suggest that Mr. Cowen put down the Ayn Rand crack-pipe and actually learn something about labor economics. Sheesh!

"In fact, since middle class consumption is one of the main drivers of growth in modern economies, I suspect that boosting the wages of the middle class actually helps economic growth."

Absolutely. Historical factors in the 50s and 60s also contributed mightily to income equality and middle-class growth in the US-- the US's unparalleled position as an industrial producer and distributor of the world's leading reserve currency, to start, and the Cold War, which subordinated pure profit to social goals (namely showing that our system produced a better life for the average person than the Reds could) and made US industry willing to settle for very generous union contracts.

But unions had a major part of that redistribution (as did WWII, BTW) and an even bigger part in the income profile of western European countries.

If I ran a company that makes consumer goods (no matter where) and cared what the company would look like a few years down the road, the fact that incomes and assets are getting *so* concentrated in the contemporary US economy would be scaring the bejeebers out of me. A new Middle Ages will no none of us any good.

Like mrjauk, I've always wondered why anyone pays attention to Tyler Cowen.

Kevin said: "Considering the historically inverse relationship between union density and economic growth in the United States since World War II, I wouldn't be very inclined to grant that premise."

Maybe my reading comprehension is low today, but if there's historically an inverse relationship between union density and economic growth, then you're agreeing with Tyler.

On the other hand, will Ezra (and others) agree that unions are mostly detrimental to the rate of economic growth?

I agree with Tyler and it is difficult to refute him. Unions cause monopolistic control of labor which make it more difficult to fire workers even if when it is necessary either because they're too lazy or they are no longer needed. This causes business to spend more money (especially with the high wage that unions workers get) on wasteful labor and therefore causes more businesses to fail (due to the high cost of labor caused by unions) and therefore lowers economic growth.

Simple economic theory?

Simple Newtonian Theory says that there is no "speed of light". Certainly, Newtonian Physics are very useful. But the real world is more complicated than that.

"I'll agree to a proven fact (that just happens to be detrimental to my arguement) if you'll agree to a widely criticized theory (that just happens to help my arguement)."

You damn liberals just can't argue economic theory.

Unions cause monopolistic control of labor which make it more difficult to fire workers even if when it is necessary either because they're too lazy or they are no longer needed.
Posted by: Al on March 4, 2007 at 3:35 PM | PERMALINK

Red Herring.

How easy is it to fire Grossly Overcompensated, and Policitally-Connected Executives?

And given their golden parachutes, what good does it do from a "carrot-and-stick" perspective?

Businesses don't fail because longshoremen get paid $100 per hour. Businesses fail because Executives get paid $5000 per hour to run them into the ground.

The problem? Economic growth, as defined by the ruling class, is not just the first but the only measure of "good" in economic policy-making.

Why? Who is the economy for? Is there any other goal that we ought to have as a society other than 'economic growth?'

What about health, happiness, comity and sanity? What about sustainability over the long term?

What are we living for anyway?

Well,well, well.

Barack Obama appears to have done it yet again.

Today in Selma, Alabama, he attempted to insert himself into civil rights achievement there by stating: "I am the product of your legend."

Legend?

Is Obama suggesting that Selma is myth; that it is overblown?

If so, that certainly begs the question -- Is Obama a myth? is Obama overblown?

Businesses don't fail because longshoremen get paid $100 per hour. Wage levels are not as critical an issue as job classification and resulting stickiness.

Lots of manufacturing businesses fail because collective bargaining established rigid job classifications in an earlier age, and businesses could not adapt to new technologies and competition when union members were unwilling to consider structural changes, and managements were compelled to compete under the handicap of an obsolete manufacturing structure. So entire industries have decimated domestic production, as emerging economies won the manufacturing. Individual members looking at their short-term personal interests lost sight of their long-term interests, and the interests of the labor movement as a whole.

Another example is the failure of the Pennsylvania Convention Center in Philadelphia, entrenched and well-connected unions have raised the cost and hassle factor to the point that the Center has very low repeat business, and has become a classic white elephant.

Unions have many beneficial effects, but it has proven difficult or impossible to sever the disfunctionalities from the benefits. We have to make a choice about the level of unionization that prevails, because it's a package deal, take the bad with the good.

On the other hand, will Ezra (and others) agree that unions are mostly detrimental to the rate of economic growth?

What a pile of stinking offal.

Unions increase the rate of economic growth for labor and decrease it for stockholders and management. They restore the balance of power.

The problem with Tyler Cowen is that he's not just wrong, he's ignorant.

A wage increase of 20% goes directly into the economy.

An increase of return to investors may be simply wasted when they invest it in some boondoggle or swindle. They may simply pull the money out of circulation- at one time, a millionaire in eastern Washington owned a dozen empty skyscrapers in downtown Seattle. He simply didn't care about making any more money. Investors may choose to spend their money buying crooked politicians.

In fact, the single biggest lesson from history is that the more money goes to the lower classes, the more vibrant and strong the economy will be. The more money that goes to an oligarchy or landed aristocracy, the more likely it is that the society will be eclipsed by another society with a more vibrant economy.

As witness thereof, notice that wealthy people seem to think it's worthwhile to keep Tyler Cowen afloat. A total waste of money.

Extradite Rumsfeld--

There is a speed of light in Newtonian theory. It was measured by Ole Rømer in 1672.

That light travels at a finite speed tells you nothing about Relativity.

Here's an idea I want to toss out. One thing that anti-union types say is that unions make it harder for small businesses and entrepeneurs because they drive up labor costs for them. And given that heavily unionized Europe seems less entreprenuerial than the U.S., this could be true.

But as Kevin points out, unions bring about a greater numebr of middle-class earners. What really distinguishes middle class earners from their working class counterparts is ownership of property. They are homeowners instead of renters. And as Hernando de Soto points out in The Mystery of Capital, property ownership in the West is the real engine of entreprenuership. A mortgage on one's home is by far the most popular way for a person to start their own business.

So I wonder if a unionized labor force, getting paid well enough to own their homes, actually spurs the formation of small business? In other words, it causes people to migrate from being employees to being business owners?

This seems opposite of standard conservative rhetoric. They will say that the dynamic environment of mass layoffs, off-shoring, easy hiring and firing, etc., give workers incentive to start their own businesses. You get laid off, you open a shop. Etc. But the missing ingredient in this picture is capital. Most people in financial distress (due to layoffs) don't start their own businesses because they don't have the assets or credit to do so. But people who are doing pretty good and have substantial access to capital due to their home ownership can start businesses. So a unionized labor force might be more dynamic in business creation than a non-unionized labor force.

I don't know if this is true, but would be interested to hear other's thoughts.

The overwhelming less of economic history is that countries that concentrate wealth in a small elite are economic cripples compared to economies that spread wealth and opportunity out to as much of the populace as is possible, as long as you do so without paralyzing the system with a command economic structure.

This is not even a question of "all other things being equal." The productivity at all levels of a economy with distributed opportunity can easily be an order of magnitude greater than that of an economy with restricted opportunity.

Further, under any sort of government, political and economic power tends to concentrate into the hands of a self-defined and self-restricting oligarchic elite. By sharing wealth and political power with labor, the middle-class protects itself and labor from aristocracy, whether defined by birth, land, militarism, or cash value.

It any human culture, no one likes sharing control over their little segment of the economy, whether it is a corporation, a farm, or a hot dog stand. Owners of businesses and property always wish to consolidate power in themselves. It simplifies their decision-making process and is emotionally more satisfying. After all, it isn't really true that every man is a king in his own castle, but most people enjoy being the dictator of their daily affairs. The owning segment of the economy, therefore, tends to deal politely with more powerful economic players, like contractors, major customers, and important vendors, and tends to treat low-wage workers as their inferiors. Unions bring social equality to these exchanges. They also provide a political base for wage-laborers to use the law to protect their livelihood from arbitrary actions by business owners. When workers cannot concentrate their political strength through unions, they have no counterbalance to the political strength of business owners, and the laws will change in ways that deprive them of wealth, dignity, and quality of life.

Per the Judeo-Christian tradition and the basic philosophy of capitalism, the economy exists to serve human beings. Without unions, the laws and customs change so a large number of human beings exist to serve the economy.

I think this is an argument that is not worth having. Demonstrating statistical correlation between union membership and the performance of the American economy is a fool's game - we simply don't have the tools to prove it one way or the other. What we can prove is the qualitative improvement that unions have made in the lives of the common worker. From the five day work week, to the eight hour work day, to defined benefit pensions, to medical coverage that formerly was only available to the privileged few, unions have been the great equalizer for the American middle class. Who gives a rat's ass if union membership has made a small quantitative difference in GDP plus or minus? Unions have made a huge qualitative difference as it relates to social justice.

Barack Obama appears to have done it yet again.
Today in Selma, Alabama, he attempted to insert himself into civil rights achievement there by stating: "I am the product of your legend."

Legend? Is Obama suggesting that Selma is myth; that it is overblown?

If so, that certainly begs the question -- Is Obama a myth? is Obama overblown?

You are using the wrong definition of "legend." Babe Ruth was a legendary baseball player, but that doesn't make him a "myth," which you appear to equate with "fake" or "false."

Obama is a smart, well-read sort. I'm sure he knows as well as anyone--better than most people--that he would never have risen to where he is today without the civil rights movement.

I doubt that absolute private sector union membership would be a good indicator.

Unions have much greater leverage when:

1)They are strategically situated (transportation and shipping, for example).
2)They can sympathy strike.
3)The president is unable to intervene.

Unions in the United States could become substantially more powerful while reducing levels of participation. Which is to say that absolute percentage of union membership is possibly a poor gauge of union power.

You can cut through all the noble speeches on unions and the rights of the Working Man.

If you want to know why liberals and Democrats are so hard over on unions, you don't have to look any further than this.

As a sidebar, multiply the number of Wal-Mart employees by the annual union dues paid by the average member of that employment class, and you get a pretty good idea of why the Left is so hard over on Wal-Mart, too.

Steve S,

That's how I read it too. Is that a misprint, or am I just reading it incorrectly?

I remember when it was a violation of god-given human rights for the Poles in the '80's to be forbidden to join free and independent trade unions, and the Reagan administration -- the same administration that broke PATCO -- took every possible opportunity to so remind the world of it, including spending American money to make it come about.

Now it's the the first step towards the destruction of The American Way of Life for American workers to have the same option.

I guess American workers are shit out of luck, and won't have the support of the US government in their efforts to unionize until they are prevented from doing so by an oppressive, authoritarian state.

There is a speed of light in Newtonian theory. It was measured by Ole Rømer in 1672.

That light travels at a finite speed tells you nothing about Relativity.

No, there isn't a speed of light in Newtonian Relativity, there isn't a speed of anything. The fact that light did have a set speed was one of the holes in Newton that people kept picking at and finally led to it's unraveling.

You can cut through all the noble speeches on unions and the rights of the Working Man. If you want to know why liberals and Democrats are so hard over on unions, you don't have to look any further than this.

Sorry, Bob, if you want to demonstrate that Democrats only like unions for their money, we also need to see the evidence that they would not support unions if they were not getting their money.

That would require quite a bit of study, analyzing the beliefs of dozens or hundreds of important Democrats to show that they didn't care about unions until they needed their money. For evidence from personal histories, you could analyze their writings and biographies to show them as being anti-union before they got into politics. For current beliefs, you would have to investigate their private comments for evidence that, they are, in fact, anti-union when not speaking in public.

Since you denounced the entire party, one or two examples won't really do, but you could minimize the reseach load by checking out consversations at Democratic gatherings, committee meetings not open to the public, etc., to get some insight into the true feelings of the Democratic leadership, at least.

Anyhow, that is much help as I can give you on this project. When you have enough actual evidence to make an argument in support of your claim, I'm sure Kevin will be happy to post it.

Ah, Kevin.

So Kevin Drum wants to take us back to the 1970's of stagflation: lines of cars for miles at the pump, malaise indexes and Jimmy C(F)arter trying to legislate that all Americans wear cardigan sweaters at home instead of using heat.

Yeah, Kevin. Perhaps next time you could ask us to return to the Midevil Ages.

Periods of increasing and decreasing union membership show no correlation to overall economic growth. There was huge economic growth after the Civil War and little unionization. There was a recession after WWI culminating with the fall of the Wobblies. Thereafter, the 20's were boom times until '29. There was huge economic growth after WWII and a concurrent increase in union membership. Union membership declined the most after 1960, and the economy grew.

Union membership does however, correlate with increasing and decreasing income equity. After union membership declined to about 25% of the workforce, middle and lower middle wage began to stagnate. Since then, union membership has further declined and worker wages have not kept up with the growth of income for the upper percentiles. Americans may not like to think of themselves as union labor, but they were better off when they were.

Berken:

Nice try. Would be fun to see that argument tried with corporate donations to Republicans without getting laughed out of the room.

Of about a billion dollars in donations from the top 100 donors since 1989, unions account for about $345 million.

In politics, money talks, and very little else. The data shows that unions do most of the talking in this country.

ESaund >"Conservatives love their "trickle down" economics..."

Their love of the ability to urinate on others is what "trickle down" is all about

RWB >"...So a unionized labor force might be more dynamic in business creation than a non-unionized labor force..."

I would thinks so & it should be fairly easy to verify with a little research by someone that actually wanted an honest/real answer

Berken >"...Without unions, the laws and customs change so a large number of human beings exist to serve the economy."

Exactly

The Conservative Deflator >"...What we can prove is the qualitative improvement that unions have made in the lives of the common worker...Unions have made a huge qualitative difference as it relates to social justice."

Which is really the only measure that counts in a culture that claims to want peace and justice.

Mike >"...Union membership does however, correlate with increasing and decreasing income equity..."

Another indicator that should be easy to verify if someone actually wanted honest/realistic insight

"The power of accurate observation is commonly called cynicism by those who have not got it." - George Bernard Shaw

Here's a uncomfortable economic fact:

You're more likely to be poor if you have a college degree than if you belong to to a union (regardless of educational status).

Watch the conservatives chew and spew on that.

I am inevitably confused by economists who argue that the free market should be allowed to determine the optimal allocation of our resources regarding every topic known to man, and then turn around to denounce the leveraging of a group's market position to negotiate with an employer as an abomination.

How is this any different from what corporations do with each other every day when they negotiate volume-based price discounts or special terms? I realize that I'm oversimplifying here - and agree that unions have their ups and downs - but am extremely perplexed as to why economists get a free pass on this subject.

Geoff's points are all well-taken. I add another.

The 'free-market' people have a knack for obtaining 'free money' from the government. It comes in the form of special tax cuts, tax abatements and, most often, sweetheart contracts.

If unions are so great, why not eliminate compulsory membership and agency shops?
the auto and the ability to seek employment further than walking distance from home did far more than unions to improve the worker's lot.

Kevin, Kevin, Kevin, it's really very simple. Conservatives say unions are bad for the economy, and conservatives are always right about everything, and so unions are in fact bad for the economy. That being the case, there is no need whatsoever for empirical proof.

Kevin:
In fact, since middle class consumption is one of the main drivers of growth in modern economies, I suspect that boosting the wages of the middle class actually helps economic growth.

This is one of those things that everyone knows that just isn't so. Consumption doesn't drive long-term growth. It can't. It may drive deviation from the trend line (i.e., the business cycle), but the trend line itself is driven by improvements in labor productivity, which are in turn driven by technological improvements and capital investments. The problem with unions is that they tend to impede these things.

Tyler Cowen: typical, typical: someone for whom reality is simply something to be bargained over for rhetorical purposes rather than actually figured out for truth.

Ah, Kevin.

So Kevin Drum wants to take us back to the 1970's of stagflation: lines of cars for miles at the pump, malaise indexes and Jimmy C(F)arter trying to legislate that all Americans wear cardigan sweaters at home instead of using heat.

Yeah, Kevin. Perhaps next time you could ask us to return to the Midevil Ages

Posted by: egbert on March 4, 2007 at 6:02 PM

Egbert,

Stagflation of 1970's is generally shown to be a result of rising energy prices. Moreover many economists are beginning to fear that we may be heading again for stagflation, as key industries, such as the housing industry, begin to slow down. This slowdown is occuring as inflation continues to rise at a steady, and to Bernanke a disturbing, rate: in other words stagflation. And what would be the instigator of this stagflation: energy prices.

Next time, come up with a coherent argument and then speak up. Not the other way around.

Thanks Ann.
Edwards is a fag.

My daughter?
Not a fag!

Go fuck your liberal selves with a bottle of Breck shampoo!

There is a speed of light in Newtonian theory. It was measured by Ole Rømer in 1672.

That light travels at a finite speed tells you nothing about Relativity.

No, there isn't a speed of light in Newtonian Relativity, there isn't a speed of anything. The fact that light did have a set speed was one of the holes in Newton that people kept picking at and finally led to it's unraveling.

No, no, no, no, no.

Newtonian theory (as understood by Newton, and not Leibniz) is built around a global inertial reference frame, an absolute, universal, notion of what it means to be 'still' and 'in motion.' Speeds are perfectly well defined things in this framework: how fast am I moving? What's the rate of change of my position relative to the global inertial reference frame?

You mention Newtonian Relativity, by which, I assume you mean Galilean Relativity--the observation that, Newton's theory seems wholly independent of what the velocity of the absolute reference frame is.

What ended up killing Newtonian mechanics as far as Relativity was concerned was the observation that the Laws of Electricity and Magnetism, when interpreted through the lens of Newtonian mechanics, seem to not have any terms in the velocities of the global inertial reference frame, or the velocity of the source of a light ray.

This has absolutely nothing to do with whether or not the speed of light existed and was measurable using Newtonian theory. Like I said, it was measured in 1672, using purely Newtonian concepts. It was measured in countless experiments before the famous 1905 Michelson-Morley experiment. What Newtonian theory could not explain was why it seemed impossible to gain ground on a light ray by running alongside it.

I'm a strong believer that unions are a huge benefit for workers -- indeed, that's why they are so strongly opposed by powerful forces.

But there is a dark side to unions that's not mentioned in this post. Over the last 100 years of the union experience, the iron law of oligarchy has consistently held true, meaning a small cadre gains control of the union, and tends to run it to serve their own purposes. Family members of union leaders end up on union payroll without justification. Competitive elections are extremely rare, and dissidents are treated worse than union organizers are by management.

The huge drop in union membership over the past 40 years has as much to do with failure of union leadership as it does with aggressive anti-union campaigns. They were slow to adopt women's rights, slow to champion minority rights, and were often just flat out corrupt.

A renewed unionization requires not just improved union certification election processes, but improved union democracy.

When unions become more about the workers than about political power, they might become more popular again.

bittergradstudent,

Glad you cleared that speed of light question up. I had a conversation with hubby just the other day about the speed of light. Here was one of our scenarios: You're up in space moving at 100,000 mi/sec, someone hits a tennis ball up and it passes you at a speed of 100,010 mi/sec. At what speed would you measure the tennis ball traveling? 10 mi/sec. Now for the weird stuff.
Still going at 100,000 mi/sec, what would you measure the speed of light to be? If you guess 86,000 mi/sec you'd be wrong. Light would still be measured as traveling at 186,000 mi/sec. Guess that's why it's called a 'constant.' I still don't intuitively 'get it' but that's what hubby says.

Unions did a great thing for this country: they created a public culture that increased the value of workers after they had long been treated as disposable resources. That being said, the unions of today are obsolete relics that do more harm than good. Collective bargains have helped drive the American automobile industry to it's knees. Unions often fight against embracing new technology that would allow companies to become more efficient for fear that some current union members might be downsized. This makes such companies less competitive as they cannot keep their labor cost down, and can lead to the destruction of such companies. Union pressure also contributes to outsourcing, as American companies can hire foreign contractors and pay them less than half of what they would pay an American. In such cases, instead of helping the working man, the unions lead to domestic layoffs and subjects foreign workers to substandard working conditions.

Unions that bully companies into only employing union members further exacerbate things by turning collective bargaining into extortion, as the employer is unable to hire other people even if they are willing to accept wages below union standards.

Unions also hurt the truly talented workers, as the collective bargain does little to reward greatness. I myself have turned down a number of union jobs because I can make considerably more money when I make my own bargain rather than turn over my negotiation rights to a collective.

If unions want any claim to contemporary benevolence and legitimacy, they need to start listening to their members, stop contributing union dues to political campaigns without asking each member for permission, and stop resisting new technology and automation. We have lots of fair employment laws to protect workers, so unions need to bring more to the table than simply pointing to to their glory years when they once managed to do some good during the onset of industrialization.

Wow. I was just trying to make a snarky comment about "basic economic theory". Not trigger a flame war on Newtonian Relativity. Jeez guys.

By the way; pj nails it.

I like your argument -- it's kind of like "dynamic scoring."

As for slowing economic growth -- as far as money is concerned, a yacht is as good as a swing set. That doesn't mean a yacht actually does as much good as a swing set.

Berken:

Nice try. Would be fun to see that argument tried with corporate donations to Republicans without getting laughed out of the room.

Hmmm . . . you're not making any sense here. You were accusing Democrats of doing something for monetary reasons rather than out of principle, which is what they publically claim. Therefore, you should provide evidence to prove this claim.

The Republicans (and Democrats) who take money from corporate donors have, for the most part, been supporters of business and the social class of business owners and managers all their lives, as would be obvious from any study of their bios. I know of no prominent Republican who has been accused of supporting big business and taking their money while secretly a socialist.

Taking money from corporations because you believe that corporations are the heart of our economic system and the best class of American citizens--which is what politicized businessmen have been claiming since Abraham Lincoln's day--in neither hypocrital nor unethical. I do not agree with that philosophy, but it exists and has long been a factor in American politics.

Taking money from unions because you believe that they are a working on behalf of the American wage earner and are seeking to improve their political decision is neither hypocritical nor unethical.

Taking contributions from someone who shares your beliefs is a fundamental part of our poltical system. Your claim was, quite specifically, that Democrats work on behalf of unions because unions give them money. You have to be implying that they would not do so unless they were given the money, or why would you bother writing the sentences?

Of about a billion dollars in donations from the top 100 donors since 1989, unions account for about $345 million.

In politics, money talks, and very little else. The data shows that unions do most of the talking in this country.

No, your own statistic proves just the opposite. The unions, who represent the political interests of millions of workers, provide only 34.5% of donations from the top 100 donors. Who provides the other 65.5%? Corporations, professional organizations, single-issue organizations, millionaires and upper middle-class activists? I would expect that almost all that money comes from sources who represent the views of no more than a few hundred individuals, a few thousand, or possibly a few tens of thousands (one important likely exception: fundamentalist Christians, a very well-organized popular faction).

You express the belief that money equals political power in this country. In that case, the concentration of political influence in the hands of a very small group of donors, whether liberal or conservative, is a serious threat to our principles of popular government.

The causes unions fight for, such as the minimum wage, regulation of working hours, workplace safety, and the prevention of abuse and bullying by management in all businesses, are supported by 80% or so of Americans, including fifty or a hundred million people who view union workers and organizers as little more than criminals. We are fortunate that the unions, in spite of their difficulties, still manage to keep up their 34% of that billion dollar total.

If unions are so great, why not eliminate compulsory membership and agency shops?

Because doing this would make it impossible to organize and run unions. That is the only reason this issue has been around for a hundred years. It makes it impossible for unions to do what they are there to do.

If I contract with a firm to pick up the garbage cans in a housing division I represent, every residence in the division helps to pay the costs. Everyone follows the rules for type of garbage, type of containers, and where and when the containers are put out.

This is a standard business practice. No one is allowed to use the service without paying the fee. No one is allowed to ignore the rules for containers and scheduling. No one is allowed to curry favor with the collectors by bribing them with money, baseball tickets, or sex.

Asking unions to contract for less than a closed shop is another way of declaring them socially illegimate, not entitled to the same basic courtesies and practical organizational rules other businesses insist on.

If unions want any claim to contemporary benevolence and legitimacy, they need to . . . stop contributing union dues to political campaigns without asking each member for permission

Do you also advocate requiring corporate PACS to ask each member for individual permission on donations? Would you require the AMA and other professional organizations to do this? Would corporate executives be required to poll their stockholders before handing out favors and lobbyist dollars to politicians?

Putting a restriction on one organization out of the many involved in contributing to political campaigns is simply another way of declaring unions illegitimate, not equal members of society.

Further, since the only practical effect of this law would be to harass and punish an organization whose political activities you disapprove of, it would almost certainly be unconstitutional. It certainly is un-American and borderline facist.

borderline facist.

Nothing borderline about it.

The unions, who represent the political interests of millions of workers, provide only 34.5% of donations from the top 100 donors. Who provides the other 65.5%? Corporations, professional organizations, single-issue organizations, millionaires and upper middle-class activists? I would expect that almost all that money comes from sources who represent the views of no more than a few hundred individuals, a few thousand, or possibly a few tens of thousands (one important likely exception: fundamentalist Christians, a very well-organized popular faction).

There's a couple of holes in this argument. If you can claim that the unions represent the political will of all their employees, then every union member in America must be a Democrat. Is this true? If you accept the premise that union leadership represents all the union members, why can't someone claim that Verizon represents all their employees by the same token?

Conversely, if corporate donations only count as being from the corporate leadership, than union donations only count as being from the union officers.

Actually, if you look down that list, a lot of the corporations have a much more balanced donation outcome than the unions do, reflecting a broader range of interests. Republican union members--and yes, there are some--are effectively shut out of the system.

That third of a billion is unions only. When you tally all the donors up, 60 percent of that billion went to Democrats, and 40 percent to Republicans.

Longshoremen only make about $28/hour. Any claim to the contrary is bullshit.

I'm family-ler with two unions, Teachers and Nurses. The big issue with my mom's teacher's unions back when was "binding arbitration." Seems that the union objected to management backing out of agreements and wanted some objective way of resolving disputes.

In my wife's nurses union, the biggest effect they seem to have is on the use of seniority for deciding vacations, etc. These type of union rules ensure fairness, clarity and consistency: the system is more efficient as a result.

I would challenge LDF to specify significant cases of unions opposing technology - backed with something other than management propaganda. I'd further note that here in Techno-land, most of the outsourcing affects non-union types. I doubt there is any correlation between outsourcing and unionization.

Over-all economic growth simple does not matter to the average American. It has no real impact on their day to day lives. It doesn't help the average McDonalds worker if the top 1% gets an extra trillion to split amongst themselves. As we've already all but eliminated our social safety net, even the impact on government revenuws would be negligible.

At some point, wage stagnation will lead to political instability. The alternative, a fascist and repressive regime, is not possible given the nations population desnity ratio. We simply don't have a large enough population ot cull the police force that would be needed to effectively control a nation of our size. This political instability (or terrorism in the case of repression) would retard growth much more heavily than union ever would. That's the problem with economics as a policy tool, it's something that only looks good on paper. In reality, it always falls apart due to circumstance.

It should be noted that in politics, considering the economy to be anything but the unemployment rate, inflation, and wages is outright retarded. Voters don't really care about anything beyond that. A few care about the stock market, but most don't even care about that.

Posted by: pj on March 4, 2007 at 8:03 PM:
The huge drop in union membership over the past 40 years has as much to do with failure of union leadership as it does with aggressive anti-union campaigns. They were slow to adopt women's rights, slow to champion minority rights, and were often just flat out corrupt.

I don't know about other unions, but The UAW were an early champion for minority rights. Their leaders marched hand-in-hand with civil rights leaders. Blacks were paid fair wages in Detroit, which was why so many migrated there from other parts of the country in the 40s and 50s.

Berken: The unions, who represent the political interests of millions of workers, provide only 34.5% of donations from the top 100 donors. Who provides the other 65.5%? Corporations, professional organizations, single-issue organizations, millionaires and upper middle-class activists? I would expect that almost all that money comes from sources who represent the views of no more than a few hundred individuals, a few thousand, or possibly a few tens of thousands (one important likely exception: fundamentalist Christians, a very well-organized popular faction).

Bobwire: There's a couple of holes in this argument. If you can claim that the unions represent the political will of all their employees, then every union member in America must be a Democrat. Is this true? If you accept the premise that union leadership represents all the union members, why can't someone claim that Verizon represents all their employees by the same token?

Bobwire, that's an unreasonable and absurd characterization of Berken's statement. Berken never implied any such thing. So you just made stuff up so you could argue with something silly. Do you always argue this way?

Dear readers, there's a thing you ought to understand: it's called "prisoners' dilemma." Applied to a situation like labor unions or the Civil Rights Movement, it means that requiring everyone to act as an individual allows a concentration of power--such as a firm, or the segregationist power structure--to break the movement by threatening those who actually join. Since the benefits are shared by nonmembers or nonmarchers, there's a strong incentive to stand by and see which way the wind blows.

The allegation that unions brought the auto industry to its knees is a myth made up by the dinosaurs who actually run it. Unions didn't fight every effort to reduce emissions or improve safety. Unions didn't inflict hideous styling and horrid design. And look at the competition! The best cars in the world are made in Sweden, Germany, or Japan; all countries with far higher levels of unionization than the USA.

As for corruption and inflexibility of unions: this was an inevitable outcome of the union busting tactics that ultimately won out. First, the idealists were red-baited, with ample government assistance. Second, the surviving leadership was harassed by the State Department into supporting its anti-labor policies in Latin America. So if you want to talk about union political activity that's not sanctioned by the members, well, let's talk.

Most of the problem of labor inflexibility or irrational opposition comes from restricted union membership and the "insider-outsider dilemma." This refers to the tendency of a resticted group, with a monopoly on negotiating power, to take a progressively harder line as its position becomes progressively more costly. So, for example, if only master electricians are unionized, then they might demand a contract so high that the quantity of their labor demanded will decline, causing members to lose their jobs at the margin... which will cause the surviving members to demand even higher wages, since the marginal employees are now gone.

The labor market distortions are caused by anti-union activity.

From Kevin Drum:

"strong unions sure didn't seem to hurt economic growth much in the 50s and 60s. Conversely, the decline of unions did seem to bring middle class wages to a virtual standstill in the 80s and 90s -- and without the upside of returning us to earlier economic growth levels, either"

Correlation does not equal causation. You always see this comparison to the 1950s and 1960s, but that period coincided with the end of the Great Depression and the Second World War. It was also a period in which the United States was an overwhelmingly dominant industrial power since the most of the rest of the industrial world was rebuilding following the war. Did unionization cause or enhance this great growth? I see no reason to believe this. How would growth have been in the absence of the Wagner Act? We do know from economic theory and experience that the less flexible a labor market is, the less capable of growth the economic system is.

In regards to the second part of Kevin's quote, I see no reason to believe that stagnating wages were a resulf of the decline of unionization in the private sector. In fact, I think there are several, better explanations of this observation: (1) the increase in equity ownership by the average worker, direct and indirect, has replaced some of his wages with returns to capital- (2) the worker has also received a greater portion of his compensation in other benefits like healthcare- (3) no one has yet demonstrated that workers are actually no better off than they were in the 1960s, even if one accepts that wages have been stagnant- all the available evidence shows that Americans are far better off than they were 40 years ago.

If unionization were so beneficial to growth, you would expect that those industries and companies that are the most highly unionized would be the most successful and profitable today? Is that true? Or is it the case that those industries that are the most unionized are the sickest industries in the United States?

And here you find the fundamental flaw in most peoples' thinking, including Drum's, when it comes to the generation of wealth. From Kevin Drum:

"In fact, since middle class consumption is one of the main drivers of growth in modern economies, I suspect that boosting the wages of the middle class actually helps economic growth"

Consumption does not cause growth. What causes growth is capital accumulation. When you increase consumption, you decrease real savings, and you decrease the amount of capital invested. This leads to less goods and services being produced in the future, and it leads to lower consumption in the future. If you don't understand this basic principle, then your understanding of economics is entirely hopeless.

If we have strong economic growth, but most people see their wages stagnant, then that's worse for the majority that weaker economic growth with rising living standards for most.

Yancey Ward wrote: Did unionization cause or enhance this great growth? I see no reason to believe this.

Of course you don't, Yancey.

Alright, Gregory, show me the causation link between the two events.

You're right, Yancey -- having your loony libertarian beleifs challenged doesn't get under your skin at all.

Don't forget the heavily unionized airline industry, and the healthy, thriving successes they are.

Gregory,

You haven't challenged them at all. I asked you to demonstrate that unionization caused or enhanced growth in the 1950s and 1960s; and, as usual, you resort to comments empty of content and substantive debate. Do you have anything more, or should I just ignore your childish comments as usual?

So the argument is that the median rises but the mean drops? Better wages for people who need it, but less stuff overall?

I think I'll take that tradeoff. And I think it's the core tradeoff between liberals and conservatives. Which one should we maximize: median or mean?

You haven't challenged them at all

Oh, sure I did, Yancey, and you took the bait -- despite your earlier denail, you posted right afterward.

as usual, you resort to comments empty of content and substantive debate.

I'm sorry, Yancey, haven't I made it clear? Asserting that your blinkered loony libertarian beliefs prevents you from seeing any correlation just proves, yet again, that you aren't worthy of "substantive debate" (not that your own assertions of your silly loony libertatian beliefs themselves contstitute "substantive debate" in the first place, any more than the rantings of a flat-earther has any place in a discussion of geography or a Young Earth Creationist has in biology).

Besides, pointing out that your admission that your loony libertarian faith preventing you from seeing any correlation is as much a comment on your own silly (but ruggedly individualistic!) worldview as a comment on any data is, I would submit, substantive -- it goes to the fact that you have no decdibility, Yancey, as regular readors of this forum know.

And furthermore, I'm too busy laughing at you -- for such a rugged individualist sooooooo sure of his Mighty Debating Skillz (who still manages to get his ass kicked every time he tries "substantive debate" -- "are you comfortable with Iran having a nuke"! ROFL! -- you have a mighty thin skin.

Do you have anything more, or should I just ignore your childish comments as usual?

You mean, like you did at 1:05 pm today?

I have plenty more mockery for you, Yancey -- which is all that you deserve, and feankly, you're lucky to have your silly worldview validated by that much acknowledgement -- but I may or may not deliver it here.

Meanwhile, I mock my own typing...tsk, tsk.

Gregory,

Mock is all you do. To actually challenge something, like what I posted above, requires you to offer some proof that growth is caused or enhanced by higher rates of unionization. It is not enough to point to the 1950s and 1960s and claim the issue is settled.

In any case, I am done with you once and for good. You have clearly demonstrated, time and again (and I have numerous times asked for you to offer more), with me and others that you have nothing to offer but immature comments- and comments that would be embarassing to a twelve year old.

Mock is all you do

To you, yes. Didn't I make that clear?

Again: You don't deserve anything but mockery, let alone "debate" (and, I remind you, when you try, it's a debacle like the Iranaian threat in which you so pathetically failed to demonstrate Iran as a threat thay you were reduced to pewling about if we were comfortable with an Iranian nuke -- an appeal to emotion that falls far short of the "evidence" you claim, falsely, to cherish. There's no swaying you from your loony libertarian faith, so why bother?

Coming from someone who is plainly unembarrassed by your own comments, Yancey, what can I say...I'm crushed.

Between the mid-60's (with John Muth) and the late '90's (with Edward Prescott & Fin Kydland), a preponderance of economic scholars maintained that economic growth was wholly a function of capital accumulation plus technological gains. An elaborate set of theories have been cultivated to validate this in the face of a damaging statistical record (David Sheffrin, Rational Expectations, 2005). But for the most part, the tools of Real Business Cycle Theory (RBC) have been applied to new operating assumptions.

Mr. Ward, part of the reason Gregory resonds to you the way he does is, when you say things like this:

What causes growth is capital accumulation. When you increase consumption, you decrease real savings, and you decrease the amount of capital invested. This leads to less goods and services being produced in the future, and it leads to lower consumption in the future. If you don't understand this basic principle, then your understanding of economics is entirely hopeless.

it causes people who actually do have formal training in economics to despair. You're insisting that THERE IS NOTHING MORE TO KNOW beyond the idealized world of "Econ 101."

Yes, I have had courses in the ideology of Prescott, et al. And unlike most of my classmates, I also dabbled in heuristics of economics. And that's why I refer to Prescott's writings as ideology, since they simply represented an angry, arbritrary, and doctrinaire dismissal of all the reasons why we got rid of neoclassical economics back in 1936.