Markets not unions
Published by Yazad Jal September 1st, 2004 in EconomicsBusting some myths about trade unionism.
The shorter work week is entirely a capitalist invention. As capital investment caused the marginal productivity of labor to increase over time, less labor was required to produce the same levels of output. As competition became more intense, many employers competed for the best employees by offering both better pay and shorter hours. Those who did not offer shorter work weeks were compelled by the forces of competition to offer higher compensating wages or become uncompetitive in the labor market.Capitalistic competition is also why “child labor” has all but disappeared, despite unionist claims to the contrary. Young people originally left the farms to work in harsh factory conditions because it was a matter of survival for them and their families. But as workers became better paid—thanks to capital investment and subsequent productivity improvements—more and more people could afford to keep their children at home and in school. Union-backed legislation prohibiting child labor came after the decline in child labor had already begun. Moreover, child labor laws have always been protectionist and aimed at depriving young people of the opportunity to work. Since child labor sometimes competes with unionized labor, unions have long sought to use the power of the state to deprive young people of the right to work. In the Third World today, the alternative to “child labor” is all too often begging, prostitution, crime, or starvation.
Interesting.
In the Indian scenario a few things are required.
1.) For the government to get out of the way to let more enterprise flourish. Else you’re always going to have a condition of oversupply of labour who are willing to work for any price and in any conditions.
2.) Make it compelling for labour to send their children to school instead of using them for marginal addition to income.
This marginal income benefit should be somehow outweighted by an immediate benefit of education (not the perceived long term ‘baccha seekhega, daftar mein naukri karega’ kind) E.g. mid-day meals.
You wrote, “Moreover, child labor laws have always been protectionist and aimed at depriving young people of the opportunity to work.”
Not just child labor laws. It is quite well known that the enforcement of minimum wages causes significant teenage unemployment.
..oops, not “you”. I meant, the “writer” of the article wrote..
Thats correct.
Some points.
1. The definition of trade unions include not just employee unions but employer unions too. Carteling and pushing for forceful anti-market measures are wrong in any side, why look at the labor side alone?
2. Trade Unions these days are quite knowledgeable about free markets and its benefits. They don’t argue so much about the idea as its implementation. I’ve discussed with Trade Union leaders here in Kerala, they generally agree to capitalism, they just want regulations so that it isn’t misused. Like Coke in Sinaltrainal or Pepsi in Palakkad.
~Sat
You know what Sathish? Yazad has not called for government action to prevent unions from behaving like cartels of workers. So what makes you think that you can trap him into supporting government action to break monopolies and cartels?
I’ve discussed with Trade Union leaders here in Kerala, they generally agree to capitalism, they just want regulations so that it isn’t misused.
Riiiiight…
I’d like to sell you the Taj Mahal.
MadMan,
TajMahal is a symbol and I already possess what it represents, in plenty. :)
I had talked with one Elamaran Karim, CITU head and Ex-MLA of Kozhikode for abt an hour on the ‘activism’ of Trade Unions in Kerala. He said clearly that he is okay with private participation in business. He wanted good legislation and other such framework as a support for Labour.
He even went so far as to agree to the statement that rampant Trade Unionism hasn’t helped Kerala in attracting industries. This was b4 the elections. Shrewd politician that he is, I’ve no idea what he’ll say with so many MPs from Kerala now.
Ravi,
Do libertarians agree to having legislation (Sherman Act types) against cartels n monopoly? And is it okay if judiciary enforces it and not the government?
How kind of Comrade Elamaran Karim to be “okay with private participation in business.”
In what way should “good laws on regulation” be different from laws against fraud or cheating? I find anti regulation laws to be first and foremost an admission that basic laws against fraud are not be applied or enforced.
On anti cartel / anti monopoly legislation, the libertarian view is: is the existence of the monopoly due to some application of force like legislation banning competitors? Then remove the force. Otherwise let it be.
About the Sherman Act, Thomas DiLorenzo says it much better: The Truth About Sherman
What Yazad said.