So, what's wrong with Libertarianism?

[Mise]

Besides, as a Libertarian, surely you should be more against professional associations like the ACCA and Law Society, who keep their wages artificially high through government fiat, than by labour unions, who come to an agreement based on mutual consent? White collar professionals absolutely do not "command high wages and working conditions from the market" -- they do it by using professional associations to lobby governments and employers, restricting access to middle class jobs through laws and regulations, and distorting the market in their favour. They do exactly what labour unions do, except they do it in such a sophisticated way that people like you don't even realise they're doing it. They restrict supply to keep wages up, by lobbying governments to pass laws restricting the number of accountants, engineers etc to only those who have paid dues to their respective professional association and have been accredited by that association. That is not "commanding high wages and working conditions from the market". That is commanding high wages and working conditions by distorting the market. This happens in law, accounting, banking, management, engineering, medicine, teaching, nursing -- vast swathes of middle class professions. That is not a free market. That is a [wiki]Closed Shop[/wiki].

 

[Tahuti]

Well, yes, they become off limits to people who are not middle class. This benefits middle class people. Duh.

Please mind your tone.

The main problem of this statement is what are we to understand as benefiting the middle-class anyway? Your understanding seems to be completely opposite of that of TF, which is the viability of the middle class. Short-termist agenda's held by professional associations certainly threaten that.

Besides, as a Libertarian, surely you should be more against professional associations like the ACCA and Law Society, who keep their wages artificially high through government fiat, than by labour unions, who come to an agreement based on mutual consent?

Here's a surprise: I'm being fair, and I'm not a Libertarian.

 

[Mise]

Short-termist? You can't be serious... There's a reason they lobby governments to pass laws restricting supply, rather than relying on wage agreements with employers, you know. Laws don't have to be renegotiated every few years.

Anyway, your response to his criticism leaves yourself open to a hell of a lot more criticisms, so I'm not sure I'd go too far down this road if I were you. Professional bodies are middle class unions. Or modern day guilds, whichever way you want to look at it. I would not rest your argument on the false notion that the middle class professions divine their wages from the unimpeachable logic of the free market, when in fact they have actively and persistently acted collectively to distort the market in their favour for at least as long as working class unions have.


Oh and you're definitely a libertarian.

 

[Traitorfish]

Between unions, professional associations and business associations, just about the only people who don't have anyone gunning for them at all are the poor, so it seems a bit topsy-turvy to say that they're the only ones who benefit from these kinds of associations.

 

[Mise]

Hah, indeed.

We really need a "Like" button

 

[Part_Time_Civer]

Short-termist? You can't be serious... There's a reason they lobby governments to pass laws restricting supply, rather than relying on wage agreements with employers, you know. Laws don't have to be renegotiated every few years.

I believe (correct me if I'm wrong) that the reason that professionals such as doctors don't form trade unions because they don't sell there services to a couple of large entreprises (employers) but rather to individual customers.

Also, I think that the reason they try to influence government to get them to restrict access to their lucrative business, though intended to secure high incomes, is not directly related to the absence of trade unions.

Anyway, your response to his criticism leaves yourself open to a hell of a lot more criticisms, so I'm not sure I'd go too far down this road if I were you. Professional bodies are middle class unions. Or modern day guilds, whichever way you want to look at it. I would not rest your argument on the false notion that the middle class professions divine their wages from the unimpeachable logic of the free market, when in fact they have actively and persistently acted collectively to distort the market in their favour for at least as long as working class unions have.


Oh and you're definitely a libertarian.

I agree they disturb the market, and I have 2 questions about this:
1. Don't we all (libertarians and others alike) agree they disturb the market?
2. What does it have to do with the merits (or lack thereof) of libertarianism?

 

[Mise]

To be clear, I wasn't arguing that professional associations distort the market in the absence of trade unions for those professions. I'm arguing that professional associations are trade unions in those professions. I see little real difference between a trade union and a professional association. The only difference is in the "status"/"repute" of the organisation, and the means by which they achieve their goals.

To answer your questions:

1) I don't know. A lot of people don't realise how they distort markets or even their mode of operation. A lot of people don't even seem aware that they exist at all! It is surprising how many times I hear engineers, lawyers, doctors etc criticise unions for doing the same things that professional associations to which they belong do.
2) It depends on whether your particular brand of libertarianism "allows" them or not. Do you like unions, professional associations, closed shops, and so on? Do you set up laws to abolish them, or to protect their right of association? I don't think that these problems are peculiar to libertarianism as a philosophy, but certainly a lot of libertarians would, individually, find answering those questions problematic.

 

[Part_Time_Civer]

To be clear, I wasn't arguing that professional associations distort the market in the absence of trade unions for those professions. I'm arguing that professional associations are trade unions in those professions. I see little real difference between a trade union and a professional association. The only difference is in the "status"/"repute" of the organisation, and the means by which they achieve their goals.

To answer your questions:

1) I don't know. A lot of people don't realise how they distort markets or even their mode of operation. A lot of people don't even seem aware that they exist at all! It is surprising how many times I hear engineers, lawyers, doctors etc criticise unions for doing the same things that professional associations to which they belong do.
2) It depends on whether your particular brand of libertarianism "allows" them or not. Do you like unions, professional associations, closed shops, and so on? Do you set up laws to abolish them, or to protect their right of association? I don't think that these problems are peculiar to libertarianism as a philosophy, but certainly a lot of libertarians would, individually, find answering those questions problematic.

I see what you mean. The main difference between trade unions and professional cartels is that the latter generally rely on government regulation to exist. So realization of the libertarian aim of stripping the state as much as possible (keeping only an army, a constitution and some police forces) would certainly make live harder on professional cartels.

 

[Tahuti]

Oh and you're definitely a libertarian.

There is a major difference between accepting a great many libertarian analyses, and being a libertarian. Like libertarians, I feel that most instances of government intervention I've encountered have been counterproductive, but unlike Libertarians I do not think that these prove that government intervention itself is essentially counterproductive. I don't think zoning laws are helpful, but I do think governments can provide welfare and aid with scientific research and cultural pursuits, to name a few. In same way, markets can lead to exchanges that are not beneficial, and regulation may fix that, but that doesn't invalidate the very concept of exchanges either nor that it would have been fixed eventually without regulation.

I don't think that a free market is inherently superior to a planned economy, or vice versa. It simply changes who is calling the shots. And that simply depends on the person(s) in charge what outcomes they lead to. Both unlimited free markets and centrally planned economies are fundamentally the same in that they are led by humans, and their outcomes are dictated by humans. Humans make errors. I believe in thinking in terms of agency and responsibility and avoiding thinking in "systems", much less their strengths and weaknesses. That makes it quite understandable to be labeled a Libertarian, but is really a misunderstanding.

 

[Hygro]

Collective bargaining greatly raises middle class wages because the nature of non differentiated labor (i.e. anyone without monopoly power) is that the wages tend toward a wage-survival floor. When one firm's labor demand is forced higher by collective bargaining, or if that firm has jobs for a wage level higher than that minimum, it pulls wages up for the entire market. The more bargaining there is, the stronger the rollover is in to the rest of the economy. We discussed this just over a week ago in the Ask a Red.

 

[Defiant47]

This all depends on how you regard people and labour.

Are they a commodity to be used as necessary? Then collective bargaining unjustly inflates the price of the commodity. After all, you don't see anyone lobbying for "oil prices are too low" (unless they have a financial interest), since oil is an inanimate commodity. It doesn't have feelings and nobody cares in that way what the oil is traded at.

Are people worthy of dignity and a living standard? Then collective bargaining is just, since it would inflate the price of labour to a level higher than market forces would identify as ideal. This would result in inefficiency in the allocation of capital: now you have to allocate more capital to purchase labour than it's actually worth*. But the idea is that this inefficiency is worth providing living wages to the human beings behind that labour.

So you really need to determine what people are (commodity or humanity) and what people are worth before you can even begin to contemplate the next part.

* EDIT: under the free market notion that worth is determined by supply and demand

 

[Hygro]

This all depends on how you regard people and labour.

Are they a commodity to be used as necessary? Then collective bargaining unjustly inflates the price of the commodity. After all, you don't see anyone lobbying for "oil prices are too low" (unless they have a financial interest), since oil is an inanimate commodity. It doesn't have feelings and nobody cares in that way what the oil is traded at.

Are people worthy of dignity and a living standard? Then collective bargaining is just, since it would inflate the price of labour to a level higher than market forces would identify as ideal. This would result in inefficiency in the allocation of capital: now you have to allocate more capital to purchase labour than it's actually worth*. But the idea is that this inefficiency is worth providing living wages to the human beings behind that labour.

So you really need to determine what people are (commodity or humanity) and what people are worth before you can even begin to contemplate the next part.

* EDIT: under the free market notion that worth is determined by supply and demand

Yeah, basically. Except once you factor in what allocation of capital is supposed to achieve--reinvested profits that create perpetual growth--and define a market victory as the most money/profit/growth/etc--the market optimal is actually in the capitalist system we have only achievable by use of politics (i.e. government intervention, or bargaining, somewhat, etc). The optimal growth path requires certain social equality, healthcare, high wages, education, welfare, education, social investment projects, education, etc, and did I mention education.

We have to always be smarter than our technology (hence even science fiction) to grow into our future possibilities.

So that's one of my complaints with certain brands of libertarian, is that they are predicated on assuming that inaccurate forms of social theory (like late 19th century economics) inform how to best achieve social bests. The social bests offered are not even the bests we can think of, and the methods to get there aren't even that good. A "free" market beats out monarchist agricultural slave states, sure, but is nothing compared to a social justice achieving, social welfare state. Caveat that there's social justice and "Social Justice" the ideology itself, which less obsolete than many brands of libertarianism, is still totally obsolete and has been since we stopped making those square semi-metallic modernist office towers.

 

[Tahuti]

This all depends on how you regard people and labour.

Are they a commodity to be used as necessary? Then collective bargaining unjustly inflates the price of the commodity. After all, you don't see anyone lobbying for "oil prices are too low" (unless they have a financial interest), since oil is an inanimate commodity. It doesn't have feelings and nobody cares in that way what the oil is traded at.

Are people worthy of dignity and a living standard? Then collective bargaining is just, since it would inflate the price of labour to a level higher than market forces would identify as ideal. This would result in inefficiency in the allocation of capital: now you have to allocate more capital to purchase labour than it's actually worth*. But the idea is that this inefficiency is worth providing living wages to the human beings behind that labour.

So you really need to determine what people are (commodity or humanity) and what people are worth before you can even begin to contemplate the next part.

* EDIT: under the free market notion that worth is determined by supply and demand

The problem may be that collective bargaining will only shift the problem by causing inflation on the whole economy and lower (real) wages on groups that don't practice it. That is a real problem. It may be in their interest, but not in the general interest if practiced all across the board. If collective bargaining is to be accepted anyway, it should only be an option for low-wage jobs. It's only beneficial if nominal wages rise faster than the inflation it causes. Because that cannot be guaranteed, I'm quite skeptical about the whole process.

I'm not a Libertarian and as such I don't have any ideological qualms about it. The only problem is that being skeptical somehow earns me this label, which is quite annoying.

 

[Defiant47]

The problem may be that collective bargaining will only shift the problem by causing inflation on the whole economy and lower (real) wages on groups that don't practice it.

Not really. If we have enough labourer practice collective bargaining, then the "free market" solution can apply in the reverse. If a worker's wages are getting lower, then he can either bring collective bargaining into the workplace, or choose to work somewhere where there is such collective bargaining. Companies will have no choice but to bring in unions if all the workers are going to where the unions are. Of course, this assumes that an enough number of workers are already protected by it.

Regardless, the downside that "collective bargaining helps workers so much, that workers that don't engage in it get disadvantage" isn't really that valid a criticism against CB. I mean, it's kind of the point.

That is a real problem. It may be in their interest, but not in the general interest if practiced all across the board.

Wait, how? If it's practiced across the board, then there is no more problem. It's in workers' best interests to have it practice across the board. If it helps workers at one company, then it will help them at all companies.

Heck, it's a problem if it's NOT practiced across the board. Then capitalists can continue to sweep up labour at a nice cheap price wherever there isn't CB.

If collective bargaining is to be accepted anyway, it should only be an option for low-wage jobs. It's only beneficial if nominal wages rise faster than the inflation it causes. Because that cannot be guaranteed, I'm quite skeptical about the whole process.

We're assuming competent CB negotiators here who know the difference between nominal wages and real wages. Employees should permanently be paid a rate higher than their market value, if their market value does not provide an adequate standard of living. If that means 5% increase in one year and 8% increase in the next to keep up with inflation, then so be it. Eventually companies will smarten up and realize that the price of labour is fixed and cannot be manipulated with price-inflationary measures. We can get government onboard with this too.

 

[Hygro]

The problem may be that collective bargaining will only shift the problem by causing inflation on the whole economy and lower (real) wages on groups that don't practice it. That is a real problem. It may be in their interest, but not in the general interest if practiced all across the board. If collective bargaining is to be accepted anyway, it should only be an option for low-wage jobs. It's only beneficial if nominal wages rise faster than the inflation it causes. Because that cannot be guaranteed, I'm quite skeptical about the whole process.

I'm not a Libertarian and as such I don't have any ideological qualms about it. The only problem is that being skeptical somehow earns me this label, which is quite annoying.

Inflation happens at the kink when you invest more dollars while productive capacity like labor is being used to its fullest. Collective bargaining won't add to inflation unless the economy is at real capacity, something the US is about $2trillion GDP short of.

 

[Tahuti]

Inflation happens at the kink when you invest more dollars while productive capacity like labor is being used to its fullest. Collective bargaining won't add to inflation unless the economy is at real capacity, something the US is about $2trillion GDP short of.

What about MV = PQ?

 

[Part_Time_Civer]

Collective bargaining was 'invented' in an era when employers had all the bargaining power. There was few employers, and employees had nowhere to go (think of Homer Simpson's Springfield, where the only place you can work is the power plant).

That made collective bargaining (again, in that era; late 19th century) an effective tool to create a fair playing field. Nowadays, employees can change jobs and even move to other cities. So from a effeciency standpoint, collective bargaining doesn't have any raison d'etre. Plus, it's highly unjust towards outsiders who can't find jobs because insiders (trade union members) force employers to hire suboptimal amounts of employees.

 

[Hygro]

What about MV = PQ?

yes the velocity and therefore the quantity of money can change. This is one reason that central banks err on the side of inflation.

Collective bargaining was 'invented' in an era when employers had all the bargaining power. There was few employers, and employees had nowhere to go (think of Homer Simpson's Springfield, where the only place you can work is the power plant).

That made collective bargaining (again, in that era; late 19th century) an effective tool to create a fair playing field. Nowadays, employees can change jobs and even move to other cities. So from a effeciency standpoint, collective bargaining doesn't have any raison d'etre. Plus, it's highly unjust towards outsiders who can't find jobs because insiders (trade union members) force employers to hire suboptimal amounts of employees.

With 7 billion people on the planet to consider, most of whom not living with much wealth or income, it makes sense to meditate on the system as a whole. As a whole, we lack free mobility from country to country, but we have global capital flow and trade. Employers have quite the upper hand.

 

[ParkCungHee]

Moreover, mobility of labor was hardly unheard of in the 19th century.

 

[Hygro]

Moreover, mobility of labor was hardly unheard of in the 19th century.

Arguably greater than today.