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Post By
neil

In Reply To
mtyoung

Subj: Re: How isn't it?
Posted: Wed Dec 26, 2007 at 11:09:57 pm EST
Reply Subj: Re: How isn't it?
Posted: Sun Dec 23, 2007 at 10:58:08 pm EST

Previous Post

> > I've always hated the writer's strike, being a free market guy myself.

> OK, I've often heard variants of this sentiment regarding lots of unions, and I'm lost -- how exactly are unions not part of a free market? They aren't governments, they're simply a particular kind of labor structure in which an employer contractually agrees to hire only members of a particular organization in exchange for the perceived benefits in trained talent and good PR; workers sign up for unions and pay dues because they're paying for advocacy and negotiation. It's no different than hiring a contract lawyer to protect you in negotiations.

A free market is where ideal equilibriums are reached between buyers and sellers without interference from outside sources.

Wage equilibriums are not reached for various reasons, such as minimum wage laws, efficiency wages, and unions.

A union is a worker association that bargains with employers over wages. They often raise wages above the level that would prevail without a union. This in turns creates an above-equilibrium wage, which is not ideal, which goes against the free market.

For a believer of the free market of capitalist, basically, anything that limits the number of players in an economy is bad.

Also, the free market wants individual contracts for each person, paying each person what they deserved without regard to collective bargaining.

My apologizes for not explaining it well.

> And as ;long as you don't contract witha union to create a closed shop -- i.e., as long as you don't voluntarily enter into that contractual agreement -- you don't have to hire union workers. If unions use PR tactics in response to that to harm your business's reputation...well, your competitors also use advertising and viral marketing to put you down and boost themselves.

One problem here is that corporations have to negotiate with unions because unions often restrict the labor force. They artificially restrict supply of a product (labor). Unions manipulate the supply, and the free market hates manipulation.

> I'm just not seeing how a free market philosophy can claim that certain kinds of voluntary associations (corporations) are good and others (unions) are bad. In a free market, aren't voluntary association and exclusivity of contract both linchpins of the system, and available to all individuals?

well, companies are seen as single entities/players, not as an association. The free market is defined by voluntary associations/deals, but you can't define a business working with unions as voluntary.

The idea of a free market is against anything that will restrict the number of players in an economy. So the free market is against barriers to entry, government interference of any kind, and unions.

Here is a pretty good, but simple explanation of how the unions (the writers strike) violates the idea of a free market.

http://www.dailydem.com/articles/2007/12/04/opinion/opinion1.txt



> A free market is where ideal equilibriums are reached between buyers and sellers without interference from outside sources.

Omar knows what a free market is, by definition - so well, in fact, that he's able to point out that unions don't violate their spirit. A union is not an 'outside' source - they're a corporation of sellers, and their product is labor. The company is the buy of that labor - so there are no 'outside sources', here. (Or maybe I'm just point out that 'outside source' is incredibly relative...)

> Wage equilibriums are not reached for various reasons, such as minimum wage laws, efficiency wages, and unions.

...just as 'equilibrium' is relative. In fact, I'd go so far as to say that it's entirely meaningless - there never is an equilibrium. Or else the market wouldn't fluctuate from minute to minute, would it?

> A union is a worker association that bargains with employers over wages. They often raise wages above the level that would prevail without a union.

And companies will often offer wages that are below the market-average when a union isn't there to protect them. So why isn't that destabilizing the equilibrium?

> For a believer of the free market of capitalist, basically, anything that limits the number of players in an economy is bad.

So what do you think of monopolies? They're the logical extension of a free market system without controls.

> They artificially restrict supply of a product (labor). Unions manipulate the supply, and the free market hates manipulation.

There's actually no reason that Nintendo has had a Wii shortage for the past year - except that they've been carefully controlling the production numbers so as to keep demand at a high level. And it seems to be working. So why doesn't the market hate this sort of manipulation? Or are you just being arbitrary with your application of the rhetoric?

> well, companies are seen as single entities/players, not as an association.

'Seen', sure, thought not in actuality - but by that logic, unions in negotiation with corporations are also functionally single entities.

-neil


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