‘Markets’ Obscure Questions of Justice

There is no ‘neutral’ or ‘free’ position: the market is regulated one way or the other. And in either case, there will be economic consequences, concrete distributions of wealth….The question, at the end of the day, is not whether to favor ‘freedom’ or ‘constraint’—in both cases, we are both freely and coercively imposing a legal regime with or without options. The question instead is to determine exactly who benefits and by how much, and more importantly, to assess politically and normatively the justice of those outcomes.

It is precisely that normative assessment that is prevented by faith in natural order and market efficiency. So long as the distributional consequences are viewed as the natural outcome of a natural order, they become far more normal and necessary.  Their assessment becomes practically futile, or at least beside the point, for it makes little sense to challenge the justice or appropriateness of such natural outcomes. It is only when we let go of the illusion of natural order that we truly open the door to a full and robust political assessment of those distributional consequences—as well as of the politically and socially produced norms and rules that regulate markets and shape those outcomes.

Barnard Harcourt, The Illusion of Free Markets: Punishment and the Myth of Natural Order

Robbed of the protective covering of cultural institutions, human beings would perish…

To allow the market mechanism to be the sole director of the fate of human beings and their natural environment, indeed, even of the amount and use of purchasing power, would result in the demolition of society. For the alleged commodity ‘labour power’ cannot be shoved about, used indiscriminately, or even left unused, without affecting also the human individual who happens to be the bearer of this particular commodity. In disposing of man’s labour power the system would, incidentally, dispose of the physical, psychological, and moral entity ‘man’ [sic] attached to that tag. Robbed of the protective covering of cultural institutions, human beings would perish from the effects of social exposure; they would die as victims of acute social dislocation through vice, perversion, crime and starvation. Nature would be reduced to its elements, neighborhoods and landscapes defiled, rivers polluted, military safety jeopardized, the power to produce food and raw materials destroyed. Finally, the market administration of purchasing power would periodically liquidate business enterprise, for shortages and surfeits of money would prove as disastrous to business as floods and droughts in primitive society.

Karl Polanyi, quoted in David Harvey, A Brief History of Neoliberalism.

“The community is not bound to provide…a subsidy for unconscionable employers”

I’ve noticed that even when people are sympathetic to the concerns of workers, many people still use the unspoken idea that employers’ right to exploit workers is natural whereas government action to prevent such exploitation is an interference that needs some special justification.  Part of this is a failure to notice what the baseline is, and that any choice of baseline is a political act, not one that can be justified by talk of what is ‘natural.’ That is, it is the same mistake that leads people to imagine that ‘redistribution’ is a coherent concept.  Thankfully, those who came before us equipped us to avoid such mistakes, if we would only listen.

Chief Justice Charles Evans Hughes:

There is an additional and compelling consideration which recent economic experience has brought into a strong light. The exploitation of a class of workers who are in an unequal position with respect to bargaining power and are thus relatively defenseless against the denial of a living wage is not only detrimental to their health and well being, but casts a direct burden for their support upon the community. What these workers lose in wages the taxpayers are called upon to pay. The bare cost of living must be met. We may take judicial notice of the unparalleled demands for relief which arose during the recent period of depression and still continue to an alarming extent despite the degree of economic recovery which has been achieved. It is unnecessary to cite official statistics to establish what is of common knowledge through the length and breadth of the land. While in the instant case no factual brief has been presented, there is no reason to doubt that the state of Washington has encountered the same social problem that is present elsewhere. The community is not bound to provide what is in effect a subsidy for unconscionable employers. The community may direct its law-making power to correct the abuse which springs from their selfish disregard of the public interest. [my emphasis]

The cost of doing business should, as a matter of course, include the cost of paying a living wage.  Companies have no right to impose costs on the rest of us to facilitate their ability to make money.

Don’t Mourne, Organize! : Harold Meyerson on the Labor Movement

Harold Meyerson has a substantial and important piece surveying the problems of the union movement, and the problems of a liberalism facing a disappearing union movement, in the Prospect.  It’s well timed, given the inspiring Chicago Teachers’ Union strike that happening as I type this.  Meyerson notes, as he has in the past, a pessimism among unnamed leaders of in the movement – although it seems clear this includes top people at SEIU (see below)

Coming on the heels of the failure of the Democratic Congress of 2009–2010 to amend the National Labor Relations Act so that private–sector workers wouldn’t risk their jobs by forming a union, the Midwestern setbacks struck a growing number of commentators as labor’s death knell. Losing jobs as technology transformed workplaces, losing both jobs and middle-class wages as globalization transformed the economy, and blocked by statute and employer opposition from expanding—unions, some concluded, were history.

Within the labor movement, a number of leaders and activists quietly shared the same pessimism. They had invested in organizing with little to show for it. They had invested in politics but found that the Democrats they’d helped elect could not—or worse, would not—come to their aid. In 2008, they had seen the entire edifice of deregulated capitalism totter and almost collapse, plunging the nation into its deepest and most intractable recession since the 1930s. But unlike the ’30s, when workers flocked to unions, the current recession has only intensified labor’s downward spiral and business’s ascent. “What would it take for labor to come back?” one senior union staffer asked earlier this year. “This was the crisis we were waiting for, and it didn’t do it.”

But has the investment in organizing been substantive or symbolic?  I think it’s been real for some unions, but for the union movement as a whole it hasn’t been the case.  In part this is because in a time when union membership has been declining for over a generation, there is declining funds, and these are going towards electing Democrats who have repeatedly failed to bring about labor law reform that (supposedly) justifies these expenditures.  As Meyerson notes later:

In 2008, SEIU spent more than $60 million in its campaign for Barack Obama and congressional Democrats. This year, labor is likely to spend about $400 million on the election.

That’s a lot of money–money that isn’t being used to organize.  Whether unions should be involved in electoral politics isn’t the issue –it’s the relative magnitude of the resources involved.  I simply doubt that most are spending anywhere near as much on organizing as they are on elections.  Again, SEIU is instructive.

In an even more radical move away from organizing workers, SEIU last year suspended its unionization drives and instead invested tens of millions of dollars in community–organizing projects in 17 cities. The union hoped to create a massive network of minority voters that could move American politics leftward, but the campaign proved largely unsuccessful.

But there are examples where individual unions have seen increases, both in membership and even more crucially to my mind, in density.  Some are discussed in the piece. And there are examples of political strategies that have seen great success as well – Meyerson discusses the role of Miguel Contreras, of the Los Angeles County Federation of Labor and Madeline Janis of Los Angeles Alliance for a New Economy (LAANE).  The activities of LAANE are particularly important because they have successfully challenged the notion that many corporations are getting returns based simply on “the market”.

Janis’s thesis was that businesses that operate on government-owned or -assisted properties or that have government contracts should repay the city by bettering the lives of the workers they employ and the communities in which they operate. LAANE’s first major victory was persuading the city council to require cleaning companies with which it had contracts to pay their workers a living wage—a sum several dollars higher than California’s minimum wage (or a bit lower than that if they provided their workers with health coverage). Over the years, the scope of such ordinances was broadened to encompass card-check unionization at hotels and sports arenas that received redevelopment funds; local-hiring requirements for developers of major projects; and clean-air standards for trucks at the Port of Los Angeles. Some of these ordinances have served as models for living-wage and other laws in more than 140 other cities. “A bank that makes an investment wants a return for its money, and so does the public,” Janis says. “The returns to the public should include good jobs, child-care centers, cleaner air, affordable housing.”

Ultimately, I’m not as pessimistic as some of Meyerson’s sources are about what’s possible, but I do fear the impact of that view.  Labor law change is important (and for many workers who aren’t covered under federal labor law, could be achieved at the state level where that’s possible, even without scrapping the NLRB, one of the options discussed in the piece.) But that doesn’t mean it’s necessary to move forward.

One last point: An idea Meyerson neglects is the idea of  making labor organizing a civil right, which it should be noted, could also be done at the state level for those not currently covered by federal labor law. That should definitely be part of this conversation.

Agreeing with Hayek: ‘Interference’ is Incoherent

The question whether the state should or should not ‘act’ or ‘interfere’ poses an altogether false alternative, and the term ‘laissez faire’ is a highly ambiguous and misleading description of the principles on which a liberal policy is based. Of course, every state must act and every action of the state interferes with something or other.

Friedrich Hayek, The Road to Serfdom via Bernard Harcourt

Laissez-faire is a Utopian Dream

The dependence of present economic conditions, in part at least, on the government’s past policy concerning the distribution of the public policy concerning the distribution of the public domain, must be obvious. Laissez-faire is a Utopian dream which never has been and van never be realized.

Robert Hale