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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Location: Northwest Arkansas, United States

Wednesday, July 19, 2006

You Won't Have Your Sweatshop Employers to Kick Around Any More

Chris Dillow at Stumbling and Mumbling cites a call for "the development of strong democratic labour unions in the emerging low-wage industries of the developing world as a way of responding to the exploitation of workers in these countries."

Dillow asks:

This seems sensible and humane. Or does it?

Put it this way. Capital flows to low-wage countries are small, despite their cost advantage. One reason for this is that companies are scared to invest in poor countries because they regard property rights as insecure. They fear profits will be low or negative, despite low wages, because they'll lose money to higher taxes, riots disrupting production, the need to pay bribes, or even outright revolution.

The danger is that the emergence of strong trades unions could add to these fears. Companies might regard a strong union movement as a precursor to redistributive politics. It might, therefore, deter them from investing and so reduce growth and jobs.

Well, arguably the capital that does flow to the Third World from the West skews its economic development toward centralized, capital-intensive, export-oriented corporate industry, when a better model for their development might be small-scale, more labor-intensive industrial production for local markets. And if this is so, perhaps the mobilization of investment funds from the small properties of the domestic populations of Third World countries (this assumes that their property isn't expropriated by ruling oligarchies of crony capitalists and landlords, and that previously expropriated property is returned), a la Hernando de Soto (or Proudhon). Third World governments ought to be promoting rural land reform and regularization of urban squatters' land titles, and at the same time promoting bottom-up finance centered on things like microlending, cooperative banking, LETS, and the like.

The best path to Third World prosperity might be the distributive ownership of subsistence farms, using the most productive modern techniques of labor-intensive cultivation, with income from surplus production used to introduce intermediate scale technology into the village economy. And the best path to a consumer goods industry might be that described by Jane Jacobs in the case of the Japanese bicycle industry (and Jesse Walker in a comment on Emilia Romagna): starting out with small local repair/recycling centers for the goods made by Western-owned companies, progressing to the small-scale machining of replacement parts, and gradually evolving into small-scale manufacture of competing goods for the local economy. One big obstacle to this approach is global intellectual property law, which stifles the emergence of competition through such adaptation of Western firms' designs for local production.

In the comments, dearieme argues that

But strong labour unions are bad anyway, since they are just licensed monopolies whose purpose is the short term enrichment of their members by the impoverishment of their non-members, achieved, usually, by violence or coercion, and without redeeming virtues.

Well (again) arguably, the most potent form of labor struggle is not the enforcement of a union monopoly against scabs during conventional strikes, but the practice of on-the-job direct action. The model of unions focused mainly on conventional strikes and the exclusion of replacement workers is largely the creation of corporate liberalism. And the central purpose of corporate liberal labor policy, embodied in the Wagner Act, was to promote such a focus by the organized labor establishment instead of direct action on the job. Bosses, for obvious reasons, prefer unions that organize against non-members to unions that organize against bosses. But big labor's New Deal with the devil was a bad one; unions that have lost conventional strikes have sometimes proceeded to force concessions from the bosses through the "deliberate withdrawal of efficiency" while on the job.

And in an economy characterized by state-enforced special privileges for the propertied classes, and reduced bargaining power of labor, the main benefit of union activity is not the enforcement of monopoly privileges against those not in unions; rather, it's the increase of the workers' bargaining power against the owners. To the extent that profits are inflated because of the artificially weakened bargaining power of labor, successful labor militancy can shift some of the monopoly profit to wages.


Blogger Larry Gambone said...

"But strong labour unions are bad anyway, since they are just licensed monopolies whose purpose is the short term enrichment of their members by the impoverishment of their non-members, achieved, usually, by violence or coercion, and without redeeming virtues."

This is a common right-wing fallacy. In reality 3 things occur historically 1. The higher wages and shorter work weeks of the unionized minority form the basis for mass consumer industry plus new "leisure" industries. These new industries, in turn hire more workers. 2. Workers are inspired by the example of the unionized minority and unionize themselves. 3. This leads to pressure for higher wages and better working conditions throughout society. In the same way that "an injury to one, is an injury to all" in reference to boss attack on workers anywhere, " a victory for one, is a victory for all" The pie expands, it is not a matter of redistributing a shrinking pie.

July 19, 2006 8:16 AM  
Anonymous Anonymous said...

Why wouldn't a boss consider "the deliberate withdrawl of efficiency" basically the same as a strike?

July 19, 2006 2:55 PM  
Blogger Kevin Carson said...


Good point. I've seen the "proofs" from Hazlitt and Rothbard that wages are determined by productivity in a free market, and that unions only make monopoly gains at the expense of non-union workers, till they're spewing out of every orifice in my body. Those arguments would be real relevant if we HAD a free market. As it is, union activity sometimes benefits labor collectively at the expense of capital, and reduces some of the latter's monopoly profits.


He probably would. But it's a situation of asymmetric warfare. It's a lot easier to do effectively when you're on the job, and you know all the low-risk ways to withdraw efficiency. All the boss knows is that he's facing a guerrilla campaign, he's surrounded by hostile faces, and all his costs are going up.

On the other hand, going on strike is like marching in formation with red uniforms and targets on your backs. It's fighting a pitched battle in parade-ground formation.

Once workers figure out how the guerrilla method works and get pissed off enough to do it, the outcome of the war has already been decided.

July 21, 2006 10:28 PM  
Blogger Joel Schlosberg said...

A good quote by Lucy Parsons:

"My conception of the strike of the future is not to strike and go out and starve, but to strike and remain in and take possession of the necessary property of production."

July 22, 2006 8:00 PM  

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