Thursday, 19 March 2015

The Unions Are Finished: Neoliberalism's Most Important Lie.

Alive And Kicking: In spite of having to function in one of the most hostile legal environments in the OECD, New Zealand's trade unions continue to represent more than 360,000 Kiwi workers. Were its legal shackles to be struck off by a "true Left Wing government", that number would increase dramatically.
 
ORGANISED LABOUR lost its influence for two reasons, both of which are global in nature and unstoppable:

Firstly, automation vastly improved industrial efficiency and reduced the need for manual labour. This process continues unabated and will impact generations to come.

Secondly, when China opened up its economy it added 50% to the global workforce, undermining labour rates across the western world.

So if you're hoping for a change in local politics to halt the demise of union power, you’re deluding yourself. Even if we voted in a true Left Wing government tomorrow, any attempt by it to return to the golden days of union power would snap the economy like a twig. In short order we would become the Albania of the South Pacific.
 
The above comment came in anonymously (don’t they always!) but I thought it worth quoting at length. Only rarely are the precepts of neoliberalism advanced so succinctly, so eloquently, or, with such superficial plausibility.
 
That the comment homes-in on the condition of organised labour is no accident. Stripped of all its fine ideological plumage, Neoliberalism has always been about smashing unions.
 
No other institution has done as much to advance the interests of ordinary people than the trade union. Without the power of organised labour, the historic shifts in political and economic power which characterised the 1930s and 40s could not have happened.
 
It was the union movement which, by redirecting business profits from the shareholders’ dividends to the employees’ wage-packets, lifted the living-standards of the working-class across the post-war world. Wherever unions became a force to be reckoned with, the power and prestige of the ruling-class (or the “1 Percent”, as we prefer to call them these days) dwindled. The recovery of that lost power and prestige could not begin until the unions were first tamed – and then destroyed.
 
A Clear Correlation: This graph, from the NZ Council of Trade Unions, illustrates in the most dramatic fashion the inverse relationship between union strength and the economic power of the top 1 percent of income earners.
 
Look back over the history of neoliberalism – especially at the years in which its key elements were being set in place – and you will encounter a series of epic industrial struggles. All of these were deliberately fomented by neoliberal politicians, and all of them had but one objective: the disarming of the new regime’s most dangerous enemies. The crushing of PATCO by the newly-elected Reagan Administration. The defeat of the National Union of Miners by Margaret Thatcher. These set-piece confrontations were intended to – and did – overawe and demoralise the forces of organised labour.
 
With the unions safely shackled by draconian anti-union legislation, the neoliberals were free to proceed to the next stage of their programme: the destruction of the unions’ greatest achievement – the Welfare State. Everything that followed; from the privatisation of public assets; to the introduction of student loans; to the sell-off of social housing. The whole sad saga of the 1 Percent’s triumphant resurrection of the injustices and inequalities of a Gilded Age the Left believed to be long dead and buried, was predicated on the destruction of the trade unions.
 
And so, of course, the neoliberals’ over-riding mission, following the restoration of plutocratic power, was to convince succeeding generations that trade unionism’s demise was not the work of a ruling class whose authority it had challenged, but simply the result of  forces that were “global in nature and unstoppable”.
 
Our anonymous commentator singles out automation and the opening of China to capitalist investment as the two principal reasons for organised labour’s loss of influence. But, a moment’s historical reflection reveals both of these arguments to be false.
 
The entire Industrial Revolution was about little else but automation – the replacement of human energy and dexterity by machines. Far from reducing the total number of jobs, the wealth generated by mechanisation not only led very rapidly to the creation of more jobs but also new jobs – indeed, to whole new industries. This vast expansion in the demand for labour was what drove millions to emigrate from the impoverished agrarian societies of Southern and Eastern Europe to the Americas and Australasia. It was out of these new immigrant communities that the mass industrial unionism of the 20th Century emerged to challenge the overweening power of capital.
 
Far from being branded the gravediggers of organised labour, the latest wave of automation and the proletarianisation of the Chinese peasantry should be seen the harbingers of the next great surge of progressivism across the planet.
 
Of course, such an outcome is, quite literally, inconceivable to our anonymous commentator. In his eyes, any attempt to restore a modicum of justice and decency to the workplace, or pay working people a living wage, can only end in disaster:
 
Even if we voted in a true Left Wing government tomorrow, any attempt by it to return to the golden days of union power would snap the economy like a twig. In short order we would become the Albania of the South Pacific.
 
In progressive ears, however, those words sound very differently:
 
Only when we vote in a true Left Wing government, and the golden days of union power return, will the power of the 1 Percent be broken and ordinary working people recover the confidence to snap neoliberalism’s unjust and unequal society like a twig. In short order we will become again the Utopia of the South Pacific – and the envy of the World.
 
This essay was posted on The Daily Blog and Bowalley Road of Thursday, 19 March 2015.

25 comments:

Guerilla Surgeon said...

I seem to remember a column Chris, where you introduced the idea that situation we are in at the moment as regards paid work is at least partly due to the introduction of Chinese workers to the global market?

Olwyn said...

This is a thought that has crossed my mind over a few of your posts, and I hope I can put it concisely.

It sometimes looks as if capitalism has vanquished its opponents - that it is now effectively the emperor, with liberalism as its pontifex maximus. King, church and organised labour have in turn been either kicked to the kerb or modified to fit. Except historically, both capitalism and liberalism have thrived in relation to an existing establishment.They do not appear to have the prerequisites for forming a solid establishment for themselves.

Despite having apparently "won" they seem more interested in ensuring that alternative systems can't flourish than in establishing anything stable. While this way of thinking about the world has increased its grip over 30 years, there surely has to be a time-limit as to how long it can continue without modification.









Guerilla Surgeon said...

http://www.theatlantic.com/magazine/archive/2015/04/why-workers-wont-unite/386228/?utm_source=nl__linkfeatures3_031815

Brendan McNeill said...

“No other institution has done as much to advance the interests of ordinary people than the trade union.”

Chris, I suspect that many ‘ordinary people’ would place the efforts of Stephen Tindall and ‘The Warehouse’ well above unions for advancing the interests of ordinary people.

At least they can now afford shoes for their kids, and rugby boots if they need them.

With unemployment down to arround 5%+ ordinary people who want to work are working and can now afford to purchase the basics for their kids that previously as a result of tariffs and union activity, were priced out of reach.

Even for those people on welfare benefits, ‘stuff’ is much cheaper now than it has ever been back when unions controlled the work place.

Chris, I’m sure the feudal lords resented the day when their tenant farmers walked off the land and joined the industrial revolution. They had a good thing going with their ‘closed shop’.

Thankfully, unions have gone the way of feudal lords and we are all the richer for it.

Chris Trotter said...

Oh, Brendan, you really would be better advised to just read these postings. Every time you leave a comment you only reveal how bereft you are of real historical understanding.

The "feudal lords" you refer to weren't the victims of history, they were its drivers. They drove their tenants off the land deliberately in order to enclose it. They owned the mines down which their former agricultural labourers were forced to descend in order not to starve. They also owned a large chunk of the shares in the factories that were springing up all around their coalfields.

Read some books, man!

The unions have been temporarily overpowered by a Capitalism that is now fighting for its life - being only one or two more economic crises away from terminal collapse.

The GFC very nearly killed the present economic system, and its very fragile "recovery" is more apparent than real.

The insistence of the banks and industrial giants that they were "too big to fail" has only put off the evil day when Capitalism discovers to its horror that it is too big to save.

Davo Stevens said...

Oh dear Brendan here we go again. Steve Tindall did more to destroy the economy by forcing small retailers out of business than any other did. Those small retailers were the major employers and paid a decent wage to their workers. Steve replaced those workers with minimum wage jobs that no-one could ever survive on without Govt. help.

Unions made sure that their workers got a decent wage to live on and also made sure that people could spend time with their families by penalising bosses who wanted their workers to work all kinds of god's hours.

Unions also made sure that at least some of the profits that were generated by the workers was spread throughout the economy and not disappearing overseas or into the pockets of the very rich.

Unions time will come again.

Brewerstroupe said...

Chris, I wonder if it would be possible to put an indicator near the comments button beneath your articles when Brendan comments. This would warn folk not to lift the coffee cup while turning the page.

"I suspect that many ‘ordinary people’ would place the efforts of Stephen Tindall and ‘The Warehouse’ well above unions for advancing the interests of ordinary people"
....cost me a keyboard.

Guerilla Surgeon said...

Brendan, the only time peasants walked off their land voluntarily was after the great plague of 1348 (or thereabouts depending on where you were.) This caused a huge labour shortage and gave them some bargaining power, which of course gradually disappeared until the advent of unions :-). Even today, peasants rarely voluntarily join the urban labour force. Not in any huge numbers anyway.
Interesting that right-wingers are quite happy with associations of farmers, employers, business people - just about everybody but workers. I wonder why?

Brendan McNeill said...

Ok, I admit I was being somewhat ‘tongue in cheek’ when comparing feudal lords to union shop stewards, although I did enjoy the parody.

Unions are both patronizing and paternalistic. Their underlying premise is that you are not sufficiently capable of negotiating a fair and reasonable outcome with your employer. At their worst, they prevent wage growth for the diligent and the expert, and subsidize the indolent and the lazy.

I was a labourer when I left school at 17. I was forced to join a public service union when I subsequently worked for the NZPO as a trainee technician. I have lived life on both sides of the fence. None of my employees were unionized. They didn’t feel the need to be. We were all better off without unions and their interference.

Having the State meddling in employer - employee relationships is already one more third party than is necessary.

Guerilla Surgeon said...

Brendan, you don't actually know if your employees wanted to be unionised or not. Some don't, particularly those in areas of skill shortage, but many do but just don't tell their bosses because it could lead to discrimination. Why do you think I don't use my real here? Anyway, give us an honest answer – if your workers had asked to be unionised what would you have done? And why is it permissible for employers to have associations but not employees? Not holding my breath mind.

Anonymous said...

In fact it might be conceivably possible that the Labour Neoliberals - Roger D etc - actually acted in an illegal way when they turned their back on the party's stated philosophy and did their own thing.

I assume they were signed up - and therefore agree to carry out the principles of the Labour party.

They did not, and were never called on this.

Anonymous said...

In fact it might be conceivably possible that the Labour Neoliberals - Roger D etc - actually acted in an illegal way when they turned their back on the party's stated philosophy and did their own thing.

I assume they were signed up - and therefore agree to carry out the principles of the Labour party.

They did not, and were never called on this.

Brendan McNeill said...

I have no problem with voluntary unionism. People are free to associate or not and that's how it should be.

It's compulsion I object to. (and so should you).

It is permissible for employees to have associations. No employer associations are compulsory.

I'm sorry you are in an employment situation where you believe you would be compromised because you comment on Chris's blog. Why do you stay there?

Guerilla Surgeon said...

Brendan, you have obviously been insulated from the harsh realities of life. No doubt by your own hard work and enterprise :-). I stay where I am because there is at the moment at least nothing else. And of course I need to buy food. This is the situation for a lot of people. A little less so in New Zealand than in other places perhaps but there you go. And you still haven't answered my question directly. What would happen if your workers had wanted to join a union?
There are also places, and firms where people are intimidated into not joining a union. That is why compulsory unionism – perhaps with an opt out clause – though I don't think that would work properly, is necessary.

Brewerstroupe said...

Brendan.
Your posts on this topic indicate a very narrow view of industrial relations based on an "either or" model which is long out of date. Highly successful industrial nations like Germany and Japan have used a Co-determination model for years. Here is a starter pack:
German lessons: Co-determination and employees on Boards

Co-determination in Germany – A Beginner’s Guide

Economic Democracy and Codetermination: Harnessing the Capitalist Engine

Brewerstroupe said...

Second link again:
http://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CB0QFjAA&url=http%3A%2F%2Fwww.boeckler.de%2Fpdf%2Fp_arbp_033.pdf&ei=OrwMVbL-I8WE8gW5h4CYCQ&usg=AFQjCNEDRaoVmDerqBVUp0DT8fxX_uDsQA&sig2=MbVzakZ_-3_3CwXdK1VEIQ&bvm=bv.89060397,d.dGc

Its a pdf so didn't open as hyperlink. Copy and paste into browser.

Guerilla Surgeon said...

I don't think Brendan accesses links that conflict with his worldview. Because if he'd read the article I placed a link to he would have known about the German situation.

Brewerstroupe said...

Hey GS.
I've been meaning to ask you if you were related to Lindsay. He was a friend to my mother. Sure you will know of whom I speak.

jh said...

Stephan Tindal always reminded me of the precept :"there's no such thing as a free lunch" - what will they want we have?
Ans: our land and lifestyle.

jh said...

Remember the role of Labour and it's open border mentallity. I see Brian Gould posting on the "lump of Labour fallacy" (I'm fairly sure Krugman disagrees).

Guerilla Surgeon said...

Sorry Brewerstroupe, the name means nothing. As far as I know I have no Lindsays and my family tree :-).

Brewerstroupe said...

GS:
https://www.teawamutu.nz/community/people/lindsay-rogers/

Guerilla Surgeon said...

LOL – yes of course. Years ago, when I was looking for a username when I 1st got into that there inter-webby thing I kept having what I thought were perfectly good and very witty names rejected because somebody already had thought of them. So I looked over on my bookshelf and grabbed the nearest short title. It beat out such titles as "Ten blocks from the White House", "Anyone here been raped and speaks English?", "The glass teat." And "Plain tales from the Raj." All of which I thought were a bit too long :-). I was so relieved when it was accepted for that particular site that I've kept it for everything else just about.

Davo Stevens said...

For the Brendan's of this world they need to read this. From Karl Marx's 'Das Capital' describing the deprivations of Victorian England.

https://www.marxists.org/archive/marx/works/1867-c1/ch10.htm#S3

The conditions today are only better because the Unions fought so hard and some members even died to stop it from happening again. Now we have the Conservative mindset who wish for it to return.

Charles E said...

A fine speech Chris, but I fear you are preaching to swine and if you got your revolution then it would consume you first.

Returning to the only really interesting and intelligent comment here, Olwyn said this below which is a fine debating point. There is a lot here:
'It sometimes looks as if capitalism has vanquished its opponents - that it is now effectively the emperor, with liberalism as its pontifex maximus. King, church and organised labour have in turn been either kicked to the kerb or modified to fit. Except historically, both capitalism and liberalism have thrived in relation to an existing establishment. They do not appear to have the prerequisites for forming a solid establishment for themselves.
Despite having apparently "won" they seem more interested in ensuring that alternative systems can't flourish than in establishing anything stable. While this way of thinking about the world has increased its grip over 30 years, there surely has to be a time-limit as to how long it can continue without modification.'

More like 150 years Olwyn.
To me on the centre right my first thought Olwyn & Chris, related to unions and Chris' claim they were the most important institution for ‘ordinary people’ (not universal franchise democracy?) is that capitalism and liberalism (new or old) are not institutions, not 'things' at all, and not the reason unions have declined in importance for ‘ordinary people’. The success of capitalism & liberalism is the result of a high degree of freedom proving popular, and 'working', unlike late unionism. They are a result of humans choosing 'whatever works' and once successful unions began not to work, literally, they were going to decline, even under socialism.
That is what annoys some of you bloggers on the left isn't it? You think you know better than the collective human voice which has elected politicians who have allowed, democratically, the rule of law, property rights and yes FREEDOM, to rule rather than union bosses. Yes, yes, imperfectly ... but you know the answer to that...
Now I realise, as Olwyn perceptively writes, this freedom & liberty thing could be overdone, over blown, over sold, over the top (even just over) and many more clich├ęs but then again just as the masses vote with their wallets and buy stuff at the Warehouse, how are you going to explain to them you know better than they do and you will take that away from them? It is the way we are now and bringing it down, as some want to do (on the hard right too btw), could be a lot lot worse.
I'm reading about the debate between Burke & Paine in the late 18th C. Guess who won that one historically in my view? Yes I agree with Burke. Revolution usually does way more harm than good.
So I suggest the left tries to improve capitalism & liberalism, not replace them, because we the people vote for gradual progress not a return to being told what to do by people who think they are smarter like you sorry lot of pretenders (our host excluded).