The Selfish Capitalist on Labor Unions & More

From Elbert Hubbard’s “A Message to Garcia”

Labor Unions harm our economy and weaken our society. There was a time where it could be argued that labor unions were necessary organizations to combat the ‘greedy capitalist’ but today many, if not most, are out of place. I believe that labor unions harm our economy by raising prices for products/goods that would otherwise cost less to produce. The fact is that many employees are receiving pay scales they do not deserve ($18/hour for a DMV clerk with a G.E.D.??) and would be unable to attain if it weren’t for their labor unions.

Should all employees receive equal pay? Should lazy sluggards (like many government employees) receive the same as the few who truly excel? To a large degree labor unions reward stagnation… there is another system that does that: communism–and it FAILED.

The worst part of this is that it is UNFAIR to entrepeneurs and corporations… yes, it is unfair to the SELFISH CAPITALIST. As far as I know, most states are “at will” employment states. If you don’t like the pay, or the benefits, etc. LEAVE! Go somewhere where they will pay you what you deserve. If you cannot find a place then the market has spoken! Many labor laws are necessary but being forced to negotiate with labor unions (granted after an election) is not just for the employee.

As Hubbard continues:

So here’s one to the selfish capitalist!

i agree, except communism is when all of the workers own the factory, not the centralized incompetent beaurocracy. if you live in a town and tell your fellow townsmen that we should build a factory with our own hands and make the product ourselves, instead of letting one stranger build it for us and provide a smaller number of more efficient jobs at his discretion, i believe thats what communism really is.

as it is, its a war between the one guy who wants efficiency and the larger number of people who want whatever they feel like. if you put the mass of people in the same position as the owner, then they will be responsible for deciding the exact balance between profits and worker comfort. has that ever happened and then failed? no. socialism failed, not communism.

I am back and I have been converted to socialism.

thirst4metal

I have to disagree with your assertions. They are simply false.

Your arguments reflect the fundamental flaws in capitalist thinking, and I will expose them one by one.

  1. without employers, the workers will all be homeless and hungry.
  • even with employers, workers are still homeless and hungry. The reason workers these days are not hungry and homeless, is largely due to the achievements of the trade union movement, whose struggle has ensured the security of workers’ rights and working conditions in modern day capitalist society.
  1. Labor Unions harm our economy and weaken our society. are out of place. by raising prices
  • without trade unions in opposition to capitalist advances, our society and its moral fabric would be torn to pieces. A society exists as a collective, citizens exist as a collective entity, not as pecks of desert sand, scattered and divided. Capitalism promotes individualism which leads to isolationism, which without the intervention from trade unions would destroy our society.

trade unions push to increase wages for the working class, while the capitalists push to lower wages. The process of industrial bargaining is a game. If you think it is uneconomical for someone to be paid $18, then why employ that person? The fact that the person has been employed, goes to show that that person is generating for s/his employer surplus value.

  1. Trade unions and stagnation

The primary objective of any trade union is to fight for an equitable working condition and pay for the workers who contribute the surplus value to the employers. Robust economic growth come out not from exploitation of workers, but through meaningful discussion and co-operation with employers by the existing industrial barganing channels.

  1. The worst part of this is that it is UNFAIR to entrepeneurs and corporations (add: TO EXPLOIT THE WORKERS?)

  2. If you don’t like the pay, or the benefits, etc. LEAVE!

  • What happens if you have no where to go? what happens the world is run by capitalists and you’ll never receive the pay you are entitled to, unless you fight for the surplus labour values generated by you.
  1. If you cannot find a place then the market has spoken!
  • So basically, the weak should succumb to the will of the strong. or the puny farmer should succumb to the demands of the mob. what is the market? is it fair for 1% of population who are the market, to control the lives of 99% of the citizens of the state?
  1. employers employed incompetent oalfs.
  • yet, you wrote " It is the survival of the fittest", if the employer does not know how to employ the workers, then he is not fit enough to remain in business. why are you shedding tears for those whom you refuse to shed tears for?
  1. REMEMBER, IF WORKERS NEED EMPLOYERS FOR WORK. THEN EMPLOYERS NEED WORKERS TO RUN THE BUSINESS. BOTH OF THEIR NEEDS ARE MUTAL AND DEPENDENT.

finally,

HURRAY TO THE AUSTRALIAN LABOR PARTY[/b]

Not false… but perhaps exaggerated… let’s review your positions and my own:

I made a lot of generalizations in my first post and I can see some of your points. However, I have very little (almost no) pity on the homeless. If I suddenly went brankrupt and all my possessions were seized I would do everything to return to a comfortable living state. NOTHING could stop me from obtaining shelter and food. The hungry and homeless people (other than those with mental illnesses or other physical limitations) have no excuse!

I will grant that labor and trade unions have largely managed to make SAFER working conditions but they have gone too far in many areas.

I understand your points… a balance needs to be drawn; however, that is where the government comes in: much like the government intercedes on behalf of the small farmer with subsidies (in the U.S.). We have monopoly laws that prevent unfair practices and labor laws that prevent unfair practices (yes labor unions played a part) but I think that even without them a smart government would eventually protect the workers while still allowing companies flexibility to adapt to heavily competitive industries like the apparel industry, the auto industry, the steel industry, etc. Capitalism promotes individualism which leads to entrepeneurship which is the best opportunity to become self-reliant and self-sufficient. Look at how Carnegie forced his way to the top. I am certain that while Carnegie was once the richest man in the world he was not the smartest! Anyone with a brain and the will can find a way to make money and

Why are American manufacturers struggling? The unions have overpriced the employees–making it difficult for companies to compete against the cheap labor of other countries. Labor unions use their contracts and aggressive techniques to force employers to consent to higher wages instead of allowing employers to reward.

This is very important because employers will pay more to the best… in order to receive higher wages employees will work harder; in turn, more people will be rewarded which will drive more employees to work harder. This, in effect, is what would drive prices up.

As long as the company is willing to pay it then it should be acceptable; however, you forget how costly it is to have employers go on strike thanks to the prodding of labor unions. In U.S. law, companies have many barriers before they can fire employees for going on strike. Often, the cost of firing can be as costly as a pay increase–however, I would argue that this is forcing the companies hand through a threat of immediate losses versur long term losses.

This argument is basically reduced to the following: the employees are contributing AS MUCH to a company’s success as the entrepeneur, the managers, etc. This is not true, especially in union shops. I am not saying they are not an important part of the mix; however, they are not as important as the direction and will of the owners and operators. Economic principle: supply is up, price goes down. The supply of qualified workers is high but the price that labor unions demand is higher than the market price. Also, lazy employees greatly outnumber greedy capitalist. If these employees had the same drive and determination as the entrepeneurs they would be struggling against the unions: see Carnegie again.

The employees HELPED (in some part) to generate surplus but they most certainly have not been the majority cause (or anywhere near it). If you have nowhere to go you create a place to go–that’s capitalism.

If you cannot find ANYWHERE then the market has spoken and you are unfit for the marketplace. Your value to society is zero. Why should you be paid a dollar more than your value? Also, government laws would still intercede on this hypothetical person (the lazy sluggard) to prevent the market from being controlled in the manner which you have described.

I do agree that capitalist can take it too far, but that is when the government (in the U.S. we have a government of the people, by the people, and for the people). Labor unions just interfere causing unnatural fluctuations in the economic curve of supply and demand. The government’s intention is for all parties to succeed.

First: I did not write the quotes… read “A Message to Garcia” by Hubbard.
Second: I agree completely. A company that hires ONLY oafs should (and likely will) fail for they are unfit. However, some companies have barriers created by labor union contracts that prevent the company from firing the lazy sluggards. That is where I shed tears…

That is the flip side of the coin. However, if I start a company, it would be my capital (cash) on the line, my efforts (as a sole entrepeneur), and possibly my credit (loans now have personal guarantee clauses): I should have the right to make decisions on how to run my business–if I pay too little I won’t have the quality, if I pay too much I will be bankrupt. It is a balance act but labor unions interfere with that act.

I’ll drink to that! :wink:

thirst4metal

hi, I can see where you are getting at. But fundamentally, you are misunderstanding the aim and function of trade unions. and there are few things i’d like to point out to.

Limits do not exist only on the physical level as you have suggested, people are limited artificially. by that I mean, people have limits imposed on them by virtue of the fact that they were born even though as healthy individuals but into dysfunctional families, went to second rate stores, meet and befriend drug addits at an early age. No one chooses to be homeless and hungry. Their predicaments have been imposed on them by factors beyond their control.

  1. “a smart government would eventually protect the workers”

name one smart government which has done that. trade unions do not exist in isolation from the production process. they represent the workers. they represent a factor of production - labour.

  1. “Why are American manufacturers struggling? The unions have overpriced the employees”

the workers in third world are usually exploited for their labour. there are no trade unions in the third world, so the workers work in miserable sweatshops. while their employers get all the surplus value. the point here, is not to lower the wage of the average American worker, but to increase the wage of third world workers, for their wages have been kept artifically low to minise cost for the employers.
it is not that our workers are “over-priced” but that their workers are “under-priced”.

  1. efficiency and trade unions

you have misunderstood the function of unions. they exist not as obstacles to progress. but they exist by the will of the workers. they are merely a representative. people should be rewarded for hard work. if they don’t work, then they should be fired provided the employers go through an equitable sacking process. there are often negotiations between unions and employers on the issue of wage increase matched by corresponding increases in productivity.

  1. it is hard to fire workers

it is almost impossible to fire employers. the unions are not against firing employees as long as the employers follow an equitable process.

  1. “they are not as important as the direction and will of the owners and operators”

I made this point earlier, but without the workers, there can be no business. what’s needed is a cooperative compromise. also, industrial barganining is a game in many respects.

  1. “If you cannot find ANYWHERE then the market has spoken and you are unfit for the marketplace. Your value to society is zero.”

let me explain industrial barganing to you using the language of market economics. employers demand workers. unions supply workers. the value of wage is determined by the game that takes place in their discussion.

can you explain what type of market you are referring to?

in the market, there are few large buyers of labour (employers) and many small suppliers of labour (employees). it is very easy to divide and conquer the workers and exploit them. the unions grew out of England, in the 1800s, where workers in market economy are been oppressed by their employers. they lived like animals. the workers THEMSELVES formed the union and had a general strike. do you honestly want workers to work in the conditions of the 1800s?

  1. on minimum wage in the age of globalisation

the reason for the collapse of American manufacturing is largely due to the different set of minimum wages existing in our global community. the minimum wage of America is substantially higher than the minimum wage of a third world country. does that mean the working class in US should get paid the same for doing the same work? yes and no. yes, for same work = same reward. no, not yet because no one can live on $1 in US unless that person goes off to live in Mexico. if employers do not want to pay, then they can just move their operations off-shore like what they are doing right now.

finally, unions do not exist as an institution on their own. they exist, as a result of the will of the workers. the unions represent the supply side of labour economics.

Hi Pinnacle, below is your post followed by my comments.

I was born into a dysfunctional family (my stepfather was a wife-abusing alcoholic) in one of the poorest neighborhoods in the United States where drugs, guns, and violence were the norm. Even though these “predicaments” were “imposed” on me I have not failed to carve out a very good living. I am no one special. I have not great talent nor I am a dimwit; however, I survived gangs, drugs, violence, poverty, near starvation, disaster, and trouble at home. If I can do it, so can anyone else. The key difference between me and some of my loser x-friends that became gang members and drug addicts is simply WILL. Where there is a will there is a way.

The U.S. government… it eventually protected its employees. And it will continue to do so. The U.S. has gotten a lot of issues wrong for decades (slavery, civil rights, abortion, etc.) but it eventually ruled in favor of reason.

The third world employees work for a low wage for a combination of reasons but two major ones I will point out: 1) They live in a third world country with a government that fails to protect its people. 2)The third world laborers are NOT worth more than they are getting paid. Why should they get a raise?

I think that if they were worth more they would earn more. Some friends that emigrated to the U.S. tell me of their educated family members that manage a decent living in their respective third-world country.

I agree that workers should be allowed representation (just like anyone); however, the function of a labor union is to use numbers for strength and not the content (content meaning each employee is represented on his individual merits).

Most often labor unions negotiate an initial pay increase for all employees followed by an annual increase for all employees. Also often, a pay scale is negotiated. If all employees 10% hard workers and 90% lazy sluggards are mixed in they all get the benefit and that is the part I think is unfair (even if you reverse the numbers it is unacceptable). In the United States almost every state is “at will” employment. Theoretically, all employees could be fired with no reason. The fact is, my company, my money, my management, MY DECISION. I agree that it would be unfair (and unlawful) to fire an employee for discrimination, etc.

Why should anyone but management (group designated to RUN the company as best they see fit) decide or set the guidelines for termination?

Simply not true… there would be sole proprietorships. These sole proprietors would compete. Some would fail… those that failed would likely become employees of those that succeeded. That is why everyone does NOT run a company.

Laissez faire–The free market (granted, the U.S. does not exactly practice this but it is pretty close). That is what is described above in italic text and underlined.

In actuality, employees outnumber the employers by a lot (that is why supply is higher than demand which brings the price down).

I am not saying that there has been exploitation but governments (typically not third-rate governments) wise up and realize their citizens are being exploited. Governments will protect the people or the country will become the next Somalia, Thailand, where the employees and the quality of living is much lower than the U.S.

Hi thirst4metal, good to hear from you again. here is my reply,

You have managed to pull yourself out from poverty by the power of your will, and I admire and congraduate on you effort. I am actually in a similar circumstance to yours, but I have a completely different view. perhaps I was influenced by Christianity. Fundamentally, not everyone has the same strength of will as yours. Think of it this way, if you were born into a loving, wealthy family, with good friends, with the strength of your will. maybe you’d be the president now. and not simply be earning “a very good living”. but are you responsible for you not being president? a socialist believes in meritocracy for all good samaritans.

the US government was once racist, sexist. it is no longer that way, due to pressures exerted by the civil rights movement. the reason workers have rights today is a direct benefit from the struggles of the trade unions in England and else where in the 1800s. their rights were Fought for. the US government was forcifully Illuminated by reason.

Workers in third world do not have 1) trade unions, 2) oppression by big business. if someone made a product selling in Australia for $10, and gets paid 2 cents, shouldn’t they get a raise?

why would they emigrate to US if they are fine where they were? obviously, they get better living standard in US.

people work in teams, surely some people do more work than others and should be rewarded for their individual effort. but if they work in factories and should get paid the same. an individual worker can be easily oppressed, unions aims at grouping workers together to give them a more powerful voice. because even though workers may contribute different levels, they are still workers and deserve some fundamental rights which is the objectives unions try to establish for all workers.

Your suggestion that 90% are lazy is simply false. you are getting too abstract and idealist. labour unions aim at negotiating increases for workers doing similar jobs. if my productivity is 50 and some one else is 51, should that person get compensated for 1 more productivity, if yes how? you are not being practical.

in that case the employer IS the employee. still you have employee. can mcdonald survive without its work force?

but the power of each employee is puny compared to the employer.