Tag Archives: supply side economics

An Idea Whose Time Is Returning: Trade Unions and Worker’s Rights

300px-1912_Lawrence_Textile_Strike_1You know things are getting serious when a staid, proper business journal as the Business Insider goes forth about the need for trade unions.

Business Insider for trade unions?

Don’t take my word for it – check it out for yourself: http://www.businessinsider.com/we-may-need-labor-unions-after-all-2012-12

As the Business Insider put it so aptly (and frankly, we couldn’t say it any better):

...we’ve developed inequality so extreme (within the United States) that it is worse than any time since the late 1920’s. Contributing to this inequality is a new religion of shareholder value that has come to be defined only by “today’s stock price” and not by many other less-visible attributes that build long-term economic value.

Like many religions, the “shareholder value” religion started well: In the 1980s, American companies were bloated and lethargic, and senior management pay was so detached from performance that shareholders were an afterthought.  But now the pendulum has swung too far the other way. Now, it’s all about stock performance–to the point where even good companies are now quietly shafting other constituencies that should benefit from their existence.

Most notably: Rank and file employees.

Great companies in a healthy and balanced economy don’t view employees as “inputs.” They don’t view them as “costs.” They don’t try to pay them “as little as they have to keep them from quitting.” They view their employees as the extremely valuable assets they are (or should be).

Most importantly, they share their wealth with them.  One of the big problems in the U.S. economy is that America’s biggest companies are no longer sharing their wealth with rank and file employees.

Okay, excuse us while we pick up our jaws and brains from the floor.

What’s next? The Wall Street Journal spouting on about the need for universal healthcare? Forbes magazine calling forth for a worker’s socialist revolution? The dead rising from their graves!? Cat’s and dogs fornicating!?!

In retrospect, this should not come as a total surprise. The notion of having ‘happy employees’ is something business schools are increasingly expounding. Personally, we’re still waiting for a school of business thought based upon Sir Ernest Shackleton’s practice of teamwork. Shackleton was the Antarctic explorer whose ship was destroyed by their incessant iceflows of the South Pole and during the course of over a year, he and his band of explorers trekked across the frozen wastelands and eventually found help – and all without losing a single man as Shackleton believed his first priority was to his team and not just to an abstract goal of reaching the South Pole. As a result, Shackleton enjoyed tremendous loyalty and respect both amongst his peers and especially amongst his supporters and team members.

Wow; the notion of company loyalty and true teamwork; imagine that – what a radical idea,…!

A company is more than just its sales and product: somebody’s gotta make things, program software, deliver packages – and most of all, buy things as workers are more than just budgetary drains: workers are also buyers.

It’s this last point that’s been consistently overlooked for the past 40 or so years. You cannot have a capitalistic democratic representative society without a viable middle class. Without a middle class that’s able to buy things, pay for college, support their local government through property taxes and whatnot, well, you’ll just wind up with feudalism – or potentially, fascism (as Lenin put it more bluntly, “fascism is merely decayed capitalism”).

And naturally, at this stage of the discussion, the hairy old chestnut of ‘supply side economics’ comes to the fore – i.e., those who have the money will spend it to keep things going. Think again: it simply doesn’t work. The studies are numerous (but here’s a quickie that’s worth reading: http://en.wikipedia.org/wiki/Economic_policy_of_the_George_W._Bush_administration).

Bottom line: those who have money did so by undertaking what they thought best – through inheritance, wise investment policies, outright fraud or other tactics – and as anyone who’s familiar with human nature will tell you, those have money are not as willing to part with their money because, quite frankly, how do you think they got rich in the first place?


Supply side economic fails on the single vital point of human nature: one doesn’t get wealthy by spending their money, so what makes you think they’re going to be willing to spend money just to benefit others?

So where do we go from here? In order for any trade union to work it needs members – and right now, the problem facing many trade unions (or unions in general) is the fact that existing (as well as potential) members are afraid and intimidated. Union membership has declined dramatically over the past thirty years or so and the actions of larger entities (WalMart, for example) aren’t helping matters any by forcing employees into difficult choices – like, do what you’re told or you’ll lose your job.

To be blunt, in order for a trade union to function effectively, it needs active and energized members. Right now, people just aren’t quite angry enough to ‘man the barricades’, so to speak. Many folk are passive/aggressive: cowed into misery thinking there’s little they can do – and yet frustratingly, they have the option to make things better for themselves if they were to come together, focus, plan and act in a coordinated manner. The power of a ‘forced’ negotiation is something one cannot overlook: consider the impact of what Mahatma Gandhi or Martin Luther King, Jr.,…

Protesting tactics and organizational actions aside, one example of a viable trade union approach worth viewing in this regard is Europe – more specifically, the economic powerhouse of Germany, where trade union’s do not simply represent the workers: they also hold positions of prominence within corporate board directorships, participating with the captains of industry regarding day-to-day corporate governance and activity. In this manner, a win-win situation is attained: workers are represented at a higher corporate level while corporations have a better sense on what’s going on with the rank and file and are thus able to avoid work shortages, disputes or better still, develop mutually agreeable policies and procedures enabling businesses to ultimately be far more competitive in the worldwide marketplace.

And in another sense, through this approach the trade unions also have their hands dirty with regard to corporate activity as well, creating a sense of shared responsiblity (or guilt, depending on how you look at it).

And it seems to work.

We’re in this together; unless and until we recognize that fact, others are going to be eating our lunches – and breakfast and dinners – in the worldwide marketplace.