Unionism Finds Support From Economists and Conservatives

 

 

Musing About How Unionism Finds Support From Economists and Conservatives

 

 

Up union a few years ago, the idea that unionism finds support from economists and conservatives would have been laughable. Expanding the brand, increasing the books I read (and The Book Review Series as a whole), and being more intentional about what I’m doing has been beneficial.

Let me explain.

Joining Reddit has been one of the most fulfilling things I’ve done since I set an initial goal in 2024 to grow this brand. I knew I needed to up the social media game (I only had personal accounts on Facebook and LinkedIn – and even LinkedIn was for professional reasons), but the forum structure Reddit presents has proven to be – at least right now – the single greatest growth mechanism for The Wealthy Ironworker.

Case in point: In a recent discussion, someone told me of an economist – Angus Deaton – who has recently changed his mind about unions. I quickly looked him up and read this piece in the International Monetary Fund’s (IMF) Finance and Development Magazine.

“Rethinking My Economics” is the title, and what follows is a brief (by my standards, anyway) synopsis of it.

 

Angus Deaton – Rethinking My Economics

 

There are quite a few statements he makes I want to touch on, starting with this nugget:

” We did not collectively predict the financial crisis and, worse still, we may have contributed to it through an overenthusiastic belief in the efficacy of markets, especially financial markets whose structure and implications we understood less well than we thought. Recent macroeconomic events, admittedly unusual, have seen quarreling experts whose main point of agreement is the incorrectness of others” – emphasis mine.

That is EXACTLY what Ha-Joon Chang said in “23 Things They Don’t Tell You About Capitalism.”

If you haven’t read that book, I highly recommend you get it. It has been THE most enlightening and influential book I’ve read in several years. Book review to come, but allow me to say it now: It’s likely to be the longest article by far – it’s that eye-opening.

 

He continues:

“Even so, economists, who have prospered mightily over the past half century, might fairly be accused of having a vested interest in capitalism as it currently operates.”

Hmm, this statement sounds as if he has his finger on the pulse of something that seems – well, kind of corrupt. Like insider trading, if you will. For my part, I believe he is right. Without doing a proper study that’s detailed and thoroughly researched, the economists (and their respective economic theories) that appear to be proffered are what Deaton himself has said. Indeed, it’s little wonder – if he is right – that unionism finds support from economists is a rare position for them to hold.

 

He duly notes that:

“We often equate well-being with money or consumption, missing much of what matters to people. In current economic thinking, individuals matter much more than relationships between people in families or in communities.”

Hmmm – Angus Deaton sounded like Ha-Joon Chang earlier; now he echos Peter Drucker, here:

 

“What is your critique [of Capitalism]?

I am for the free market. Even though it doesn’t work too well, nothing else works at all. But I have serious reservations about capitalism as a system because it idolizes economics as the be-all and end-all of life. It is one-dimensional.

For example, I have often advised managers that a 20-1 salary ratio is the limit beyond which they cannot go if they don’t want resentment and falling morale to hit their companies. I worried back in the 1930a that the great inequality generated by the Industrial Revolution would result in so much despair that something like fascism would take hold. Unfortunately, I was right.

Today, I believe it is socially and morally unforgivable when managers reap huge profits for themselves but fire workers. As societies, we will pay a heavy price for the contempt this generates among the middle managers and workers.

In short, whole dimensions of what it means to be a human being and treated as one are not incorporated into the economic calculus of capitalism. For such a myopic system, to dominate other aspects of life is not good for any society.”

 

The above was taken from Managing In The Next Society, written by Peter Drucker in 2002. You can find my book review here. 

 

Angus Deaton continues by saying:

“Keynes [a famous economist] wrote that the problem of economics is to reconcile economic efficiency, social justice, and individual liberty. We are good at the first, and the libertarian streak in economics constantly pushes the last, but social justice can be an afterthought.”

This seems fitting to end the one-dimensional perspective Drucker mentioned above. Indeed, free-market capitalism that has reigned supreme these past four decades has diminished the human being to whether you can contribute and to what degree – while we never truly consider someone’s humanity.

 

Deaton then notes:

“Like most of my age cohort, I long regarded unions as a nuisance that interfered with economic (and often personal) efficiency and welcomed their slow demise. But today large corporations have too much power over working conditions, wages, and decisions in Washington, where unions currently have little say compared with corporate lobbyists. Unions once raised wages for members and nonmembers, they were an important part of social capital in many places, and they brought political power to working people in the workplace and in local, state, and federal governments. Their decline is contributing to the falling wage share, to the widening gap between executives and workers, to community destruction, and to rising populism” Emphasis mine.

I couldn’t have said it better myself.

Oh, wait – I’ve been talking about this here at The Wealthy Ironworker for years, now. In fact, one of my last Musings – The Positive Ripple Effects of the UAW – touches on much of this. Nevertheless, Angus Deaton is right. What’s particularly distasteful is how corporations and their lobbyists use propaganda to say unions contribute millions to political campaigns – ALL WHILE CONTRIBUTING BILLIONS.

Double talk much?

 

Propaganda and doubt – the one-two punch combo anti-union forces LOVE to use

 

Rounding out what Deaton wrote:

“I also no longer defend the idea that the harm done to working Americans by globalization was a reasonable price to pay for global poverty reduction because workers in America are so much better off than the global poor.”

“I used to subscribe to the near consensus among economists that immigration to the US was a good thing, with great benefits to the migrants and little or no cost to domestic low-skilled workers. I no longer think so.”

This is an interesting observation and change from Angus Deaton. Immigration is a tough subject for many; it’s also one of those complex subjects people distill down to easy-to-understand soundbites. Consider, for example, that EVERY developed country in the world has declining birth rates. Many people don’t intuitively know this. There are several reasons for this – declining fertility rates, affluence leading to not having kids, some – like Peter Zeihan – claiming that kids are more expensive in this age than when they were free labor on farms; and, of course, there is the conspiracy theory that the decline is intentional and its attempt is to depopulate the planet.

Whatever the reason, the fact is the populations ARE declining in numbers, and many of those countries are turning to immigration to help solve their problem.

However, there are side effects to this approach.

Economically, tight labor markets are preferred so that your citizenry can earn a wage that isn’t under the poverty level. Bring too many immigrants in, and you increase the supply of workers, lower the wage, and increase the strain on social safety nets.

Culturally, many countries have brought in too many immigrants too fast, and they don’t assimilate. Europe is perhaps the best example of this. There are countries where pockets of immigrants refuse to assimilate, there are cultural clashes, crime can increase, and this adds to the host country’s problems overall.

The obvious question to ask, then is this: Who does benefit from all of this?

Globalists do. They are the enemy of unionism, populism, and working people in general. Do you know who else mentioned their preference for tight labor markets?

 

 

American Compass – Workers Deserve A Seat At The Table

 

Interesting is this social consortium – American Compass – who believes workers deserve a seat at the table. Long-time readers will know the name; I’ve written about them before. Even so, this musing wouldn’t be complete without talking about them.

Among their members are current Florida Senator Marco Rubio and former Attorney General Jeff Sessions, both prominent conservative politicians. Here’s a little snippet of their brief so you can see what I mean:

 

“The defense of markets, though, has at times made us overly solicitous of businesses. As we advocate for owners and managers in their pursuit of profit, and celebrate the enormous benefits their efforts can generate for us all, we must accord the same respect to the concerns of workers and ensure that they too have a seat at the table. In a well-functioning and competitive market, participants meet as equals able to advance their interests through mutually beneficial relationships.”

 

“Rather than cheer the demise of a once-valuable institution, conservatives should seek reform and reinvigoration of the laws that govern organizing and collective bargaining for three reasons.”

 

I mentioned tight labor markets earlier and their stance on them. Here is their statement:

 

“We pursue and celebrate tight labor markets because we know that the result is beneficial to workers and their families and communities; likewise, we should support institutions that reinforce those effects through economic agency and self-reliance, rather than retreat to dependence on redistribution.”

 

You can go over to this website to read the rest of the brief for yourself. It isn’t long, and it’s educational.

 

Some believe this isn’t genuine or sincere; instead, believing it’s propaganda, a misdirection tactic, or some other sleight of hand. This, of course, could be entirely true. It’s also possible that they see a rotten cancer on the culture and are addressing it, recognizing their constituents, countrymen, and fellow citizens (even locally) are exploited – and they KNOW it. Perhaps I’m optimistic, but I’m for the latter explanation here.

I’d love to see them put their money where their mouth is. Time will tell what happens.

 

 

What Does This All Mean?

 

You can only bury your head in the sand for too long; ignoring a problem doesn’t make it disappear. Instead, it festers for too long, and when forced to deal with it, the damage has exponentially grown. This, I posit, is where we are now.

I find it fascinating unionism finds support from economists like Angus Deaton and American conservatives and are speaking out about our decades-long plunge into “free-market” capitalism. It has done tremendous damage overall, and perhaps these odd sorts speaking out about it will garner more attention. I’m hopeful, at least.

 

The sooner we understand there is no such thing as the “free market,” the sooner we can make substantive, real, and impactful changes to our economic model – that will benefit more than just those at the top.