The Instigator
Csavage472
Pro (for)
Losing
13 Points
The Contender
jathan
Con (against)
Winning
19 Points

Is There A FLAW In the so-called "Classical Wage Theory of Economics [Austrian School]???"

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Voting Style: Open Point System: 7 Point
Started: 12/14/2007 Category: Politics
Updated: 9 years ago Status: Voting Period
Viewed: 2,007 times Debate No: 449
Debate Rounds (3)
Comments (12)
Votes (8)

 

Csavage472

Pro

The Classical Wage Theory of Economics advanced primarily by the Austrian School states the following:

"Like ALL commodities, there is an INVERSE relationship between the PRICE & the Quantity DEMANDED of that given commodity [Law of Demand]. If LABOR is a given commodity in the Free Market, the WAGES offered to an individual seeking employment is the PRICE of Labor in the Market.

"Therefore, in the context of a 100% FREE MARKET with ABSOLUTELY NO GOVERNMENT INTERVENTION, the Law of Demand boldly implies to rational-thinking individuals that if there were an UPWARD PRESSURE of workers' wages by NON-governmental forces such as Labor Unions, the PRICE of Labor (as a commodity) will naturally go up, and likewise, the quantity of labor DEMANDED will go DOWN thus resulting in unemployment!!!"

In response and reflection to the Topic Question abovehand, I argue that there is, irrefutably, a fatal FLAW in this logic which has led Conservatives to take the position that Unions HURT the National Economy!!!
jathan

Con

I would simply start by saying that in a postulated free market, people either accept or deny the price (wage) being offered at the current market price which would determine a natural level of unemployment. There have been many arguments on the actual percentage of natural unemployment, but for my purpose I will simply state that it exists. So, the real flaw I see in your logic is the upward pressure postulate. Here is a short, and I hope fairly comprehensive list of shifters for supply curves: # of suppliers, technology utilized, input price, price of substitutes and complements, and expectations.

First, you contend that there is an upward pressure on workers' wages (which is a shift in the supply curve) by labor unions that do not receive the privilege of government sponsorship (that is to say union shop laws do not exist as they do now). The only perceivable method of affecting the price by means of a labor union would then be to decrease the number of suppliers (workers) and thereby drive up the price of labor (wages).

However, if this wage were determined by a free market the workers would be self-selecting. They would opt out originally if they believed that the wage was insufficient. If, while working, they believe the wage has become insufficient, they will seek employment elsewhere or perhaps collectively bargain.

Yet, the logic behind a labor union is useful only in so far as it can be enforced. The shortage of workers will drive up wages only if this shortage can be maintained. That is to say that no other individuals can replace the exiting (or striking) workers. This scenario is unlikely precisely because competing companies would be willing to pay slightly more if the current wage was under market equilibrium. The rationale is simply that companies are driven by profit motivation. If the worker's wage at one company is lower than equilibrium, another company will offer them more until (as always mc = mr) in an attempt to gain market share or greater profits (usually related). The usual exception to this rule is pure monopoly, which is hard to find anywhere except the government and perhaps some utilities. The other option, wherein the company simply hires other workers completely undercuts the goal of the collective bargaining. I would submit that rational workers, in a free market, will not collectively bargain if they can be easily replaced.

Currently, during labor union strikes there are severe limitations on companies to seek replacement workers that are not unionized. That is where the conservative argument comes into play. The unions, through the force of law, have created an artificially high wage for union workers because, and only because, union laws prevent companies from hiring others. This, in effect, reduces the number of supplies (legally), driving up the price, and ultimately resulting in fewer individuals hired (i.e. higher unemployment that would prevail otherwise).

I am no economist, but I believe that is the general idea.
Debate Round No. 1
Csavage472

Pro

Dear Jathan,

Thanks for your feedback. I appreciate it greatly. First and foremost, I would just like to clarify the PARAMETERS (boundaries) of this specific debate in context. In other words, I am NOT debating the "political side" moreso than it is the ECONOMIC side. Nevertheless, I have a QUICK comment on a legal ERROR that you made in reference to U.S. Labor laws:

(1) "by labor unions that do not receive the privilege of government sponsorship (that is to say union shop laws do not exist as they do now)."---JA

(a) This is a fundamental MISinterpretation of the labor laws. The United States has NEVER (in its history) passed COMPULSORY unionization laws where citizens are FORCED to join a union at the decree of the State. On the contrary, the "The National Labor Relations Act of 1938" (a.k.a. the "Wagner Act") that was signed by Pres. Franklin D. Roosevelt simply said that the Labor Relations Board of the Dept. of Labor would coodinate SECRET-ballot elections in all places of employment that were in the operation of "INTERstate commerce." If a simple-majority (51%) of each INDIVIDUAL worker voted to JOIN the union, then a Union would be organized (and recognized by Federal Law) and the employer was naturally obligated to collectively bargain and negotiate "in good faith."

(b) However, if a majority of the INDIVIDUAL workers voted AGAINST joining the union, a union could NOT be formed.

(c) Nevertheless, the CURRENT law is based on a revision (fatally-flawed in my judgment)to the "Wagner Act of 1938" when the Republican Congress override Pres. Truman's veto of the infamous Taft-Hartley Act of 1947 (a.k.a. the "Labor-Management Act"). While this law did NOT completely repeal the "Fair Labor Standards Act of 1938," but simply DE-Federalized it by allowing each individual State to "opt out" of jurisdiction of the Federal Law by becoming SO-CALLED "Right to Work" States. It also gave the Federal Government via the President the power and authority to put an injunction (stop) on a strike by workers in the FREE MARKET for 30 days. Ummm! So much for the illusive "free market," right?! I mean, how is it the perogative of the FEDERAL GOVERNMENT to intervene in a contract dispute between to individual citizens??? This is nothing more than CORPORATE Socialism!!!

cf. http://en.wikipedia.org...

cf. http://en.wikipedia.org...

(2) "If, while working, they believe the wage has become insufficient, they will seek employment elsewhere or perhaps collectively bargain."--JA

Here, your reasoning and logic is CIRCULAR. In other words, on the one hand, you are saying that if wages at a given place of employment is SUB-standard--[i.e. "Sub-standard" defined as BELOW the standard of living (inflation)], the employees can simply organize and "collectively bargain" with the employer for a livable wage. However, on the other hand, you are tending to support the notion that States have a right to pass so-called "right to work" laws which pretty much NULLIFIES any power that workers have in collective bargaining. For example, in "Right to Work" states like Colorado, Arizona, Alabama, etc., all the employer has to do when workers are striking is hire a truckload of ILLEGAL immigrants from Mexico or somewhere to break the picket line and work for $3-$5 an hour. Nevertheless, it is not even PRACTICAL to say that workers can very easily find a job being offered by the Competition that pays "higher wages" b/c (remember) workers OUT-number the employer like 100 to 1 and the stiff competition amongst workers will AUTOMATICALLY drive down the cost of labor (wages) to the point that they will eventually ALL receive SUB-standard wages.

(3) "The unions, through the force of law, have created an artificially high wage for union workers because, and only because, union laws prevent companies from hiring others. This, in effect, reduces the number of supplies (legally), driving up the price, and ultimately resulting in fewer individuals hired (i.e. higher unemployment that would prevail otherwise)."--JA

(a) First and foremost, you are confusing yourself by not understanding the specific NATURE of the Current labor laws (cf. #1). Nevertheless, I do admit that the "Classical Wage Theory of Economics" is, irrefutatbly, RATIONAL but there is a FUNDAMENTAL FLAW in that logic, nonetheless.

(b) Case in point: If there is "no flaw" as you insist, can you explain the HISTORICAL FACT that when the Unionization Rate of American workers was at its PEAK at 35% in 1944, ironically the UNEMPLOYMENT RATE was at its LOWEST in American History at 1.2%???

SOURCE: cf. Historical Statistics US (1976) series D-86 (http://en.wikipedia.org...)

SOURCE: cf. http://www.commondreams.org...

Ironically, today, ~60 years AFTER the passage of the Taft-Hartley Act when the Unionization rate is roughly 14%, the Unemployment Rate is nearly 5x HIGHER at ~5%?!

best,
Christian
jathan

Con

Nice post, but I think I need to clarify some things.

In your original posting you referenced the conservative argument. I do not know how else to approach this except as a political and economic debate, not to mention that I am now debating Hamilton :).

(1) "by labor unions that do not receive the privilege of government sponsorship (that is to say union shop laws do not exist as they do now)."---JA

a) The right to work laws exist precisely because of what I stipulated above. Before these laws it was a requirement of employment to join the union if a union existed at the company you were applying to. Right to work laws end this requirement...hence the name. That information comes from the same wikipedia sources you mentioned above.

(2) "If, while working, they believe the wage has become insufficient, they will seek employment elsewhere or perhaps collectively bargain."--JA

a) Let me clarify. I did not say the wage was substandard nor did I say it was substandard because of inflation (which if you read mises you know who is responsible for inflation, but that is an entirely different debate). I simply stated that if workers believe their wage had become insufficient they would logically attempt to rectify the situation. The conservative argument that you mentioned in your first posting is logical only in the context that a state is not a right to work state and thus employees are required to join the union. That is where the "power" of the union comes from. As I mentioned above and you kindly referred to, if the employer can legally hire other individuals, collective bargaining is not a smart idea. You are at once stating that labor laws do not protect unions or require new employees to join them (which they do and which right to work legislation is written specifically against), but at the same time states that do not have these laws are harming labor unions. I would say it is logically absurd to state both, that labor union laws do practically nothing to protect unions and that without them unions are impossible.

b)"Nevertheless, it is not even PRACTICAL to say that workers can very easily find a job being offered by the Competition that pays "higher wages" b/c (remember) workers OUT-number the employer like 100 to 1 and the stiff competition amongst workers will AUTOMATICALLY drive down the cost of labor (wages) to the point that they will eventually ALL receive SUB-standard wages."

I will simply state that I, myself, have been offered a higher wage from a competing company (and when I was doing menial labor). You should be aware that the money gained in the transaction between customers and a company is used to pay all employees. The relative numbers of employers to employees is a managements issue and in no way related to whether or not companies can hire employees. Stiff competition among workers is a result of excess supply or minimal demand, not a cause of it. Finally, that race to the bottom logic implies the progress of the last 200 years is in the end a farce.

(3) "The unions, through the force of law, have created an artificially high wage for union workers because, and only because, union laws prevent companies from hiring others. This, in effect, reduces the number of supplies (legally), driving up the price, and ultimately resulting in fewer individuals hired (i.e. higher unemployment that would prevail otherwise)."--JA

(a) Again, right to work legislation would not exist in certain states if the above was false. Wikipedia right to work and you will read exactly that.

"Nevertheless, I do admit that the "Classical Wage Theory of Economics" is, irrefutatbly, RATIONAL but there is a FUNDAMENTAL FLAW in that logic, nonetheless."

I played along earlier, but you need to identify what the fundamental flaw is. The only flaw I could possibly think of, if it is a flaw, would be the fact that wages tend to be "sticky" (a la Keynes). Although, I do not see that playing a big role in this debate.

(b) "Case in point: If there is "no flaw" as you insist, can you explain the HISTORICAL FACT that when the Unionization Rate of American workers was at its PEAK at 35% in 1944, ironically the UNEMPLOYMENT RATE was at its LOWEST in American History at 1.2%???"

We were fighting World War 2. That should be sufficient explanation. Besides I am hardly stating that all unemployment is due to unions. I already referenced a natural rate of unemployment earlier.
Debate Round No. 2
Csavage472

Pro

Thanks, J, for your rebuttal. I appreciate it greatly.

(1) "The right to work laws exist precisely because of what I stipulated above. Before these laws it was a requirement of employment to join the union if a union existed at the company you were applying to. Right to work laws end this requirement...hence the name. That information comes from the same wikipedia sources you mentioned above."--JA

(a) Well, actually, if you read the wikipedia links, you read them very CURSORILY (or you simply "perused" them). The so-called "Union Shop" that existed in places of employment PRIOR to the Taft-Hartley Act of 1947 was a direct RESULT of the union being organized by a 51% majority of INDIVIDUAL workers in a secret-ballot election. In other words, if a MAJORITY of the INDIVIDUAL workers voted AGAINST joining a union, neither the power of the "Union" nor the "government"(State) has "ONE penny in this nickel," so to speak.

(b) In fact, this was the case with Wal-Mart in which a majority of the INDIVIDUAL workers voted AGAINST the union b/c Sam Walton "campaigned" by insisting that if they were to vote "Yes," he would have taken the 25% Profit-Sharing plan from the employees. Therefore, in pursuit of the workers' own economic SELF-interest, joining a union was UNNECESSARY. I support this kind of "union busting," if you will, by employers.

(c) However, the so-called "right to work" states is nothing more than pure EMOTIONAL PROPAGANDA that feeds on people's feelings of "individualism." In reality, the "National Labor Relations Act of 1935" was "technically" a "Right to Work" law b/c it gives each individual worker CHOICE, collectively/democratically etc. Nevertheless, the so-called "National Right to Work" laws that are supported by Bush, McCain, and Guilani--[at the EXPENSE of Rep. Ron Paul; we can discuss this later (haha)]--are NOT respectful of "individualism" moreso than it respects pure ANARACHY. In other words, are you telling me that if 85-90% of INDIVIDUAL employees democratically/collectively vote to join a union, ONE "loosecannon" has a "right" to bust that union b/c he doesn't want to join??? Of course not!!!

That is NOT "individualism" but ANARACHY. In fact, one of the "Founding Fathers" and political supporters of the man that you herald the picture of (Thomas Jefferson), Thomas Paine, once penned the most revolutionary phrase:

"We are a Nation of LAWS and not of MEN!!!"

In other words, the PEOPLE (collectively/democratically) vote for a President and is his/her "boss," if you will. Nevertheless, does that imply that if the President is enforcing a law passed by Congress, that ONE "nutball," if you will, has a "right" to disregard and/or disobey that law??? Of course not!!! If you disagree, then you are an ANARCHIST and not a libertarian.

(2) "I did not say the wage was substandard nor did I say it was substandard because of inflation (which if you read mises you know who is responsible for inflation, but that is an entirely different debate). I simply stated that if workers believe their wage had become insufficient they would logically attempt to rectify the situation."--JA

(a) First and foremost, I apologize for confusing your words. And you are 100% accurate in alluding to the fact that the #1 cause of inflation is NOT the "upward pressure of wages by unions in the FREE MARKET"
more accurately than it has been the inflationary policies of the Federal Reserve since 1913 [the PRIVATELY-owned Central Banking cartel (monopoly) of the United States]. Here, we agree and that is precisely the reason that we are BOTH committed supporters of Ron Paul for President.

(b) Nevertheless, your reasoning again is CIRCULAR b/c how can the workers "rectify" the situation of being paying wages that are BELOW the rate of inflation ("Sub-standard," if you will) if you would turn right around and NOT support their right to organize and collectively bargain with their employer in the FREE MARKET??? You cite the "example" of ONE person ("you") getting offered a job in menial labor that paid higher wages than the other. Yes, that's great, but what about the 99 workers BEHIND you??? Like I said, it is IMPRACTICAL to suggest that if they all "quit" their jobs (and RISK the fact that they can't put food on the plates of their children and families) that they would very "easily" find a job at the competition paying a livable wage. Btw, when I say "livable wage," I just simply mean wages "at" or "above" the rate of inflation *De Facto* as opposed to the so-called "Living/Minimum Wage" set by the Government.

(3) "We were fighting World War 2. That should be sufficient explanation."--JA

(a) OK, first and foremost, I thank you for attempting to answer my question explaining how unemployment was ONLY 1.2% when the Unionization rate was ~35%.

Ironically, I can very easily refute that argument by citing a video documentary that was given to me by Mr. Brandon P. Adams of Facebook.com from the MISES' Institute (haha); btw, Mr. Adams--to be certain--is a likewise supporter of Ron Paul and AGREES with your position on Unions:

cf. http://video.google.com...

According to the Mises' Institute, America's entry into WWII did NOT (contrary to the view of historians) get us out of the "Great Depression." Therefore, World War II (according to the Mises' Institute) is NOT a "sufficient" explanation.

(b) Nevertheless, I will answer your critique "in good faith" b/c the Mises' documentary is irrational (on a lot of points) b/c historians are nearly UNANIMOUS in affirming that WWII is what got America out of the Depression. However, that actually PROVES my point in the beginning that there is a "FUNAMENTAL FLAW" in the Austrian School's "Classical Theory of Wages."

Ask yourself the following relatively simple question: if there were "no flaw," how could an unnatural example (WWII) NULLIFY the dogmatic and INFALLIBLE "Law of Supply & Demand"??? On the contrary, if there were no flaw, PRIVATE-sector unemployment would have remained at ~25% and grew even LARGER at the onset of aggressive unionization. The rapid demand for labor during WWII would have automatically created a VACUUM in which the State would have had to fill by NATIONALIZING (socialize) major industries in order to create the necessary employment to get us through the "second war to end all wars." Unfortunately, and thank God, it did not happen that way. In fact, America herald 1.2% unemployment DESPITE the fact that the TOP Tax Rate that Big Business was paying during the Roosevelt Administration was an UNBELIEVEABLE 90% in addition to the Corporate Tax Rate being around ~60-70%--until those tax rates were reduced by JFK!!!

(4) (a) Ironically, the wage theory is perfectly rational as I said; nonetheless, here is the major flaw: when applied to the "real world," it can ONLY be applied to SMALL business and not "Big Business." That is why economists can effectively argue that the Minimum Wage law would create cyclical unemployment b/c the majority of businesses that actually pay "minimum wage" are either "Mom n' Pop" stores and independent franchises like McDonalds' etc.

(b) On the contrary, BIG businesses (e.g. Wal-Mart, Toys "R" Us, Ford Motor co., General Motors, etc.) are (literally) "big" enough to ABSORB the "extra costs" from pressure from Unions, strikes, etc. by "subsidizing" the price(s) of their products in the market and extra employees in the labor pool with the MILLIONS of Dollars in PERSONAL SAVINGS that they have stored away in Swiss Bank accounts all over Europe, and in banks, etc.

"WHY?," you or someone might logically ask. Well, the fact of the matter is that they will just simply "absorb the cost" because they know good and well that it will be IRRATIONAL and COUNTER-productive to reduce supply and production.
jathan

Con

Thanks for posting a great rebuttal.

Let me clarify, I stated that right to work laws allow an employee the option of joining a union. If a union exists, meaning that the vote you keep mentioning has already taken place before an employee is hired, he must join the union. In other words, they became a "closed shop" the instant the vote ended in favor of the union. I think it should be obvious from an individual point of view that a 51% yea vote should not determine whether or not I wish my labor to be represented by a union. It is my right to enter into a contract with an employer regardless of what my fellow employees demand of me. I am exchanging my labor for a certain wage, and unless my fellow employees are paying me, it is not their contract to determine.

(c) "In other words, are you telling me that if 85-90% of INDIVIDUAL employees democratically/collectively vote to join a union, ONE "loosecannon" has a "right" to bust that union b/c he doesn't want to join??? Of course not!!!"

I think the emotional argument is on your side. However, I would merely point out that if 85% wished to form a union then that 85% can form a union. It is wrong to force someone to join a union, which by the by involves paying union dues, if they do not so elect. I will answer your question directly, if one person disagrees with unionization, it should be possible that a union be formed by the other employees. I am merely stating that everyone has a right to choose to enter into a contract regarding their own labor. They do not have a right to make that decisions for others. If 49% of employees wished to form a union, then that 49% should form a union. You must respect the individual determination both ways if you truly value an individual right of contract.

"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned -- this is the sum of good government."
-Thomas Jefferson (I think this quote is more applicable to our discussion)

Which, in other words, means you allow the individual to choose what to do with his or her own labor.

"In other words, the PEOPLE (collectively/democratically) vote for a President and is his/her "boss," if you will."

No, sorry, I will not. The President has no Constitutional authority over my labor; The rest of your argument is non sequitur as libertarians obviously do not believe the government should regulate economic affairs between private citizens.

2)"more accurately than it has been the inflationary policies of the Federal Reserve since 1913 [the PRIVATELY-owned Central Banking cartel (monopoly) of the United States]. Here, we agree and that is precisely the reason that we are BOTH committed supporters of Ron Paul for President."

HEAR HEAR!

(b) "Nevertheless, your reasoning again is CIRCULAR b/c how can the workers "rectify" the situation of being paying wages that are BELOW the rate of inflation ("Sub-standard," if you will) if you would turn right around and NOT support their right to organize and collectively bargain with their employer in the FREE MARKET???"

I have never attacked their right to collectively bargain at all. I merely stated that it is up to each individual whether or not they should engage in collective bargaining.

"You cite the "example" of ONE person ("you") getting offered a job in menial labor that paid higher wages than the other."

I stated myself as an example because I am not an exception. I really have nothing special to offer when it comes to menial labor. I merely demonstrated that the logic holds in reality.

(3) "We were fighting World War 2. That should be sufficient explanation."--JA

First, on Mises interpretation, I honestly have never heard that before. I would merely say, again, that World War 2 was responsible for an anomalously low unemployment rate. As for the unionization, many people underestimate the power of a war to unite a nation. It may simply be that labor unions made few demands during the war and therefore applied little if any upward pressure on wages. It may also be due to the shortage of labor, i.e. many men (no sexism here, simple fact of the day) were fighting overseas, and thus there was a shortage of labor (in comparison to what would otherwise have been available).

(4) This point seems tenuous at best. I would merely submit that businesses will more than likely raise prices to absorb costs. This accounts for the inflation accredited to the minimum wage laws, as opposed to the mom n' pop stores that tend to go out of business as a result. This is exactly what happened in Colorado Springs as a result of the Colorado minimum wage increase (specifically mom n' pop restaurants).

Big Businesses tend to make their own deals with Congress. I cannot speak for every large business, but as long as Congressman can be purchased there is little reason to believe the free market paradigm applies.
Debate Round No. 3
12 comments have been posted on this debate. Showing 1 through 10 records.
Posted by Csavage472 9 years ago
Csavage472
[...]

The poorest labourers, therefore, according to this account, must, one with another, attempt to rear at least four children, in order; that two may have an equal chance of living to that age. But the necessary maintenance of four children, it is supposed, may be nearly equal to that of one man. The labour of an able-bodied slave, the same author adds, is computed to be worth double his maintenance ; and that of the meanest labourer, he thinks, cannot be worth less than that of an able-bodied slave. Thus far at least seems certain, that, in order to bring up a family, the labour of the husband and wife together must, even in the lowest species of common labour, be able to earn something more than what is precisely necessary for their own maintenance; but in what proportion, whether in that above-mentioned, or many other, I shall not take upon me to determine."

(2) Article from the New York Times discussing that it is practically PROFITABLE to pay workers wages above the Standard of Living and still make enormous profits.

cf. http://www.nytimes.com...

Thanks again.
Posted by Csavage472 9 years ago
Csavage472
[...]

"The masters, upon these occasions, are just as clamorous upon the other side, and never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combination of servants, labourers, and journeymen. The workmen, accordingly, very seldom derive any advantage from the violence of those tumultuous combinations, which, partly from the interposition of the civil magistrate, partly from the superior steadiness of the masters, partly from the necessity which the greater part of the workmen are under of submitting for the sake of present subsistence, generally end in nothing but the punishment or ruin of the ringleaders.

[...]

"But though, in disputes with their workmen, masters must generally have the advantage, there is, however, a certain rate, below which it seems impossible to reduce, for any considerable time, the ordinary wages even of the lowest species of labour.

[...]

"A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more, otherwise it would be impossible for him to bring up a family. and the race of such workmen could not last beyond the first generation. Mr Cantillon seems, upon this account, to suppose that the lowest species of common labourers must everywhere earn at least double their own maintenance, in order that, one with another, they may be enabled to bring up two children; the labour of the wife, on account of her necessary attendance on the children, being supposed no more than sufficient to provide for herself: But one half the children born, it is computed, die before the age of manhood.

[...]
Posted by Csavage472 9 years ago
Csavage472
(1) Here is what Adam Smith says in <Chapter 8: Of the Wages of Labor> in "Wealth of Nations" (haha)

--[cf. http://www.classicreader.com...]:

"We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform, combination, not to raise the wages of labour above their actual rate. To violate this combination is everywhere a most unpopular action, and a sort of reproach to a master among his neighbours and equals. We seldom, indeed, hear of this combination, because it is the usual, and, one may say, the natural state of things, which nobody ever hears of. Masters, too, sometimes enter into particular combinations to sink the wages of labour even below this rate. These are always conducted with the utmost silence and secrecy till the moment of execution; and when the workmen yield, as they sometimes do without resistance, though severely felt by them, they are never heard of by other people. Such combinations, however, are frequently resisted by a contrary defensive combination of the workmen, who sometimes, too, without any provocation of this kind, combine, of their own accord, to raise tile price of their labour. Their usual pretences are, sometimes the high price of provisions, sometimes the great profit which their masters make by their work. But whether their combinations be offensive or defensive, they are always abundantly heard of. In order to bring the point to a speedy decision, they have always recourse to the loudest clamour, and sometimes to the most shocking violence and outrage. They are desperate, and act with the folly and extravagance of desperate men, who must either starve, or frighten their masters into an immediate compliance with their demands.

[...]
Posted by Csavage472 9 years ago
Csavage472
MidgetJoe,

Thanks for your feedback. I appreciate it greatly. Yes, you are 100% right that a rational-thinking individual will automatically conclude that the Company's DEMAND for Labor will go down as a result of Unions (in a FREE MARKET) driving up the Price of Labor via wages.

However, if you read MY part of the debate, I argued very effectively (in my judgment) that there is a fundamental FLAW in this logic: namely, explain why in 1944 when the Unionization rate was 35%, the Unemployment Rate was ONLY 1.2%??? Ironically, today when unionization is ONLY 14%, the Unemployment rate is nearly 5x greater at ~5%.
Posted by midgetjoe 9 years ago
midgetjoe
I think the original questioner misunderstood the concept, and the challenger forgot about it and focussed on unions. Very simple, if wages go up, the amount of employees a company can hire go down thus decreasing demand. we're looking at THE COMPANIES DMEAND FOR EMPLOYEES, NOT the employee's demand for the job.
Posted by Csavage472 9 years ago
Csavage472
"Workers ABSOLUTELY should have a right to organize and join a union to best represent their interests in bargaining in a Free Market!!!"
---Rep. Ron Paul (R-TX), Republican Presidential Candidate in the CNBC/Wall Street Journal "Your Money/Your Vote Republican Debate"

Vs.

"I'm from a Right-to-Work State, and I support an individual worker's right NOT to join a union!!!"
---Sen. John McCain (R-AZ), Republican Presidential Candidate in the CNBC/Wall Street Journal "Your Money/Your Vote Republican Debate"

cf. http://youtube.com...
************************************************************

P.S.: For a more BALANCED and accurate view about the banking and monetary system, I recommend the ~3 1/2 documentary entitled "The MoneyMasters" narrated by William Still:

cf. http://video.google.com...

Also, "The Monopoly Men (Federal Reserve Fraud)" [~47 min.]

cf. http://video.google.com...

And again, "Money is DEBT" (~47 min.):

cf. http://video.google.com...

Thanks again.
Posted by jathan 9 years ago
jathan
Ah, yes I did misinterpret that statement rather badly. I think that is really an issue of if you participated originally. If so, then you made an agreement and would be bound to follow it. Otherwise, if you entered after the agreement was made, it would be harder to decided whether or not those that proceeded you had a moral right to decide for you. This really is a difficult philosophical question of the social contract. Does it apply to you if you were brought in after the fact? I honestly don't think there is a hard and fast rule for this situation, but that does not disqualify the labor agreement as each time you agree to trade your labor for a wage you are making that contract solely with the employer (not with the union).

PS
Watching the documentary now!
Posted by Csavage472 9 years ago
Csavage472
P.S.: Jathan, as for the Mises' interpretation, watch the ~42 min. documentary entitled "Money, Banking, and the Federal Reserve" and the narrator briefly counters the historical analyis that WWII got us out of the Depression. Thanks again.
Posted by Csavage472 9 years ago
Csavage472
"In other words, the PEOPLE (collectively/democratically) vote for a President and is his/her 'boss,' if you will."--CS ("me")

Vs.

"No, sorry, I will not. The President has no Constitutional authority over my labor; The rest of your argument is non sequitur as libertarians obviously do not believe the government should regulate economic affairs between private citizens."--JA
************************************************************

First and foremost, J, I humbly thank you for engaging in this debate dialogue with me and we can just "AGREE to disagree"(haha). However, I just wanted to QUICKLY comment that you MISinterpreted my quotation.

I NEVER said that the President had "constitutional authority" to regulate economic affairs OR that the President was in control of your and my labor. On the contrary, to be more clear, I meant that the PEOPLE are the PRESIDENT's "boss" since we vote for him (or her, if it is "Hillary Clinton").

However, my point of analogy was that while WE are President Bush's "boss," if you will, does that give either one of us to defiantly DISOBEY or disregard a law that his office enforces (assuming that it passes constitutional muster, of course).

Thanks again and take care.
Posted by jathan 9 years ago
jathan
Jones1, I could not agree more!

Csavage472, I did realize it was joke lol. You were hardly spouting Hamiltonian government ideals in your argument.

I would merely point out that Jefferson would argue against the laws in the first place as the Federal government has no authority here as given it by the Constitution. Populist is a bit far to go as Jefferson did not approve of the idea of regulating most economic affairs. He did approve of universal education and the right to vote for all men (which was bold in comparison to the then land-holding only vote), but I do not believe that to be contrary to libertarian ideals. Again, it is hard to tell as he lived in the agrarian (and slave-holding) South, but at least he seemed to favor a meritocracy.
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