29 May 2011

Labor unrest and labor markets

From p. 224 of A Renegade History of the United States:
Though many labor leaders were radical anti-capitalists, only a tiny fraction of the rank and file was associated with a left-wing organization. Virtually all the strikes of 1919, even the few that were led by radical labor leaders, were carried out to demand higher wages, shorter hours, better working conditions, or union recognition- and nothing else. Not one significant strike was carried out by workers with the goal of taking control of their industry.
This pattern accords with what one would expect under market conditions. Contra the typical leftist belief in capitalist exploitation, entrepreneurs do serve a vital function vis-a-vis workers- they assume the risk that investments won't pay out and pay workers today for production that won't bear fruit until tomorrow.

But workers also play a vital role for entrepreneurs- they, you know, make stuff. The market for labor is a highly competitive one, and becomes more competitive as one moves down the skill ladder, with the market for labor that can be performed by any able-bodied adult as near to perfect competition as we get in the real world. The more competitive a market is, the more individual sellers are price-takers, and only by collusion can price-takers command higher prices. I don't have a problem with collusion so long as it is done freely and without compulsion, and in the strikes of 1919, which Dr. Russell was describing above, workers were freely colluding the raise the market price of their labor. What was the result?

The usual. Government raids, mass deportations, repression of dissent, and troops deployed against strikers. The state always serves its master.

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