Author Topic: A Little Economics Help Here; re: Unions  (Read 2771 times)

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Offline SSG Snuggle Bunny

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A Little Economics Help Here; re: Unions
« on: December 27, 2009, 09:05:43 AM »
MAJOR PREMISE: The free market depends on a market that is--well--free. Competition lowers prices. Which in turn requires the competing manufacturers to rise profit through increased sales volume leading to higher employment and economic activity through vendors etc.

MINOR PREMISE: Monopolies are bad for free markets because lacking competition a producer has no need to lower prices or employ more people or expand production capacity.

CONCLUSION: Unions are a monopoly on labor. Their sole strength lies in the fact that management cannot find competing labor elsewhere. Prices go up and instead of expanding production they retard production through lower demand for the goods and services produced ergo...lowering employment.

Where is my error?

If there is none it seems unions are not only bad for consumers...they're bad for the very labor market they presume to represent as the need for labor is reduced (never mind the fact the UAW is killing the domestic auto industry altogether).
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Offline djones520

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Re: A Little Economics Help Here; re: Unions
« Reply #1 on: December 27, 2009, 09:17:26 AM »
There is none.  Common problem I see with people like DUmmies is that they overlook the major flaws for the minor strengths when they are advocating something.  Unions do have SOME (not many, but some) benefits.  To them those few things are much more important then the health of the system as a whole.  But when you realize that everything to them is like that, it makes a bit more sense.
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Offline Chump

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Re: A Little Economics Help Here; re: Unions
« Reply #2 on: December 27, 2009, 09:37:31 AM »
MINOR PREMISE: Monopolies are bad for free markets because lacking competition a producer has no need to lower prices or employ more people or expand production capacity.

Minor fix:  Coercive monopolies are bad for free markets because there is no possible way for competitors to challenge the monopoly's stranglehold.  But, coercive monopolies cannot exist in a truly free market system; if one large competitor is operating inefficiently, that market becomes an attractive target for capital investment from other competitors.  If one large competitor is operating efficiently, and ensuring their complete hold via offering a good product at a good price, then that monopoly is good for the free market.  Coercive monopolies can only exist by manipulating government intervention in the marketplace, making that one more reason to remove said intervention by the government.

This changes nothing about your logical conclusion, however, as labor unions are coercive monopolies.  They are propped up by government regulation and intervention, and do nothing but increase inefficiency in the operations of the free market wherever they exist.  In the end, they decrease standard of living across the board, for everyone, while purporting to do the opposite.
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Offline SSG Snuggle Bunny

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Re: A Little Economics Help Here; re: Unions
« Reply #3 on: December 27, 2009, 09:50:34 AM »
Minor fix:  Coercive monopolies are bad for free markets because there is no possible way for competitors to challenge the monopoly's stranglehold.  But, coercive monopolies cannot exist in a truly free market system; if one large competitor is operating inefficiently, that market becomes an attractive target for capital investment from other competitors.  If one large competitor is operating efficiently, and ensuring their complete hold via offering a good product at a good price, then that monopoly is good for the free market.  Coercive monopolies can only exist by manipulating government intervention in the marketplace, making that one more reason to remove said intervention by the government.

This changes nothing about your logical conclusion, however, as labor unions are coercive monopolies.  They are propped up by government regulation and intervention, and do nothing but increase inefficiency in the operations of the free market wherever they exist.  In the end, they decrease standard of living across the board, for everyone, while purporting to do the opposite.
But what is to keep a monopoly from becoming coercive?

Unions didn't start that way but they evolved their coercive practices. A producing monopoly could just as easily force vendors to not sell to a competitor just as unions won't allow producers to hire scabs.
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Offline SVPete

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Re: A Little Economics Help Here; re: Unions
« Reply #4 on: December 27, 2009, 10:04:22 AM »
Now apply this reasoning to public schools ...
If, as anti-Covid-vaxxers claim, https://www.poynter.org/fact-checking/2021/robert-f-kennedy-jr-said-the-covid-19-vaccine-is-the-deadliest-vaccine-ever-made-thats-not-true/ , https://gospelnewsnetwork.org/2021/11/23/covid-shots-are-the-deadliest-vaccines-in-medical-history/ , The Vaccine is deadly, where in the US have Pfizer and Moderna hidden the millions of bodies of those who died of "vaccine injury"? Is reality a Big Pharma Shill?

Millions now living should have died. Anti-Covid-Vaxxer ghouls hardest hit.

Offline Carl

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Re: A Little Economics Help Here; re: Unions
« Reply #5 on: December 27, 2009, 10:24:59 AM »
Unions of today exist in a typical liberal vacuum of reality.
They assert that wages can forever rise without there being a corresponding change in the cost of the product produced.


Offline thundley4

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Re: A Little Economics Help Here; re: Unions
« Reply #6 on: December 27, 2009, 10:58:10 AM »
Unions of today exist in a typical liberal vacuum of reality.
They assert that wages can forever rise without there being a corresponding change in the cost of the product produced.



They believe wage raises should come from the corporate profits, not from customers.

Offline SVPete

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Re: A Little Economics Help Here; re: Unions
« Reply #7 on: December 27, 2009, 11:06:29 AM »
As pols believe that taxes on corporations come from corporate profits, not customers.
If, as anti-Covid-vaxxers claim, https://www.poynter.org/fact-checking/2021/robert-f-kennedy-jr-said-the-covid-19-vaccine-is-the-deadliest-vaccine-ever-made-thats-not-true/ , https://gospelnewsnetwork.org/2021/11/23/covid-shots-are-the-deadliest-vaccines-in-medical-history/ , The Vaccine is deadly, where in the US have Pfizer and Moderna hidden the millions of bodies of those who died of "vaccine injury"? Is reality a Big Pharma Shill?

Millions now living should have died. Anti-Covid-Vaxxer ghouls hardest hit.

Offline Carl

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Re: A Little Economics Help Here; re: Unions
« Reply #8 on: December 27, 2009, 11:32:27 AM »
It is one of the things about primitives I can`t even begin to understand.
Life and its implications isn`t that difficult to figure out yet they seem to honestly believe there is a huge stash of wealth that is instantly replenished when consumed waiting somewhere but being denied to them.

How does one think that?

Offline bkg

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Re: A Little Economics Help Here; re: Unions
« Reply #9 on: December 27, 2009, 11:32:54 AM »
As pols believe that taxes on corporations come from corporate profits, not customers.

had that argument with a friend last night. She didn't grasp it...

Unions are nothing more than legalized extortion... I could tell some fun stories about my Mom's union (nurse) and the union that eventually took over at the Nursing Home he ran for 20 years.
« Last Edit: December 27, 2009, 12:40:37 PM by bkg »

Offline SVPete

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Re: A Little Economics Help Here; re: Unions
« Reply #10 on: December 27, 2009, 12:27:29 PM »
Sowell refers to it as a failure to think beyond stage one:

* At stage one, pols raise taxes on corporations;

* At stage two, corporations raise prices, if they can;

* At stages three and beyond, consumers' $$ don't go as far, some businesses can't compete and go out of business (laying off Americans), some companies stay competitive by off-shoring key parts of their operations (laying off Americans), etc.

The consequences GM and Chrysler are experiencing now were predicted back in the 60s and 70s: sometimes the piper waits a while before presenting his bill. And the manglers who bought labor peace at the cost of the company's future are long retired or dead.
« Last Edit: December 27, 2009, 12:29:10 PM by SVPete »
If, as anti-Covid-vaxxers claim, https://www.poynter.org/fact-checking/2021/robert-f-kennedy-jr-said-the-covid-19-vaccine-is-the-deadliest-vaccine-ever-made-thats-not-true/ , https://gospelnewsnetwork.org/2021/11/23/covid-shots-are-the-deadliest-vaccines-in-medical-history/ , The Vaccine is deadly, where in the US have Pfizer and Moderna hidden the millions of bodies of those who died of "vaccine injury"? Is reality a Big Pharma Shill?

Millions now living should have died. Anti-Covid-Vaxxer ghouls hardest hit.

Offline Carl

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Re: A Little Economics Help Here; re: Unions
« Reply #11 on: December 27, 2009, 01:38:25 PM »
had that argument with a friend last night. She didn't grasp it...

Unions are nothing more than legalized extortion... I could tell some fun stories about my Mom's union (nurse) and the union that eventually took over at the Nursing Home he ran for 20 years.

On this we are in full agreement,look at public education.
We could spend every last nickel we could gather and in its current form will always be a failure because there is no incentive to achieve or fear of ineptness.

Offline bkg

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Re: A Little Economics Help Here; re: Unions
« Reply #12 on: December 27, 2009, 01:42:23 PM »
On this we are in full agreement,look at public education.
We could spend every last nickel we could gather and in its current form will always be a failure because there is no incentive to achieve or fear of ineptness.

100% correct.

Offline SVPete

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Re: A Little Economics Help Here; re: Unions
« Reply #13 on: December 27, 2009, 02:22:36 PM »
There were multiple reasons we chose to homeschool our kids K-12. The academic state of PSs was the first major reason.

Edit: And we started in the mid-80s.
If, as anti-Covid-vaxxers claim, https://www.poynter.org/fact-checking/2021/robert-f-kennedy-jr-said-the-covid-19-vaccine-is-the-deadliest-vaccine-ever-made-thats-not-true/ , https://gospelnewsnetwork.org/2021/11/23/covid-shots-are-the-deadliest-vaccines-in-medical-history/ , The Vaccine is deadly, where in the US have Pfizer and Moderna hidden the millions of bodies of those who died of "vaccine injury"? Is reality a Big Pharma Shill?

Millions now living should have died. Anti-Covid-Vaxxer ghouls hardest hit.

Offline DumbAss Tanker

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Re: A Little Economics Help Here; re: Unions
« Reply #14 on: December 28, 2009, 09:41:24 AM »
MSB, the problem with your scenario is that it is overly simplified.  Before going into it, let me say that while I am not a fan of them, they nevertheless did a lot of good before becoming too much of a good thing, and becoming an obstructionist artifact of an unregulated labor market.

Unions actually do compete with each other for workers, and even the 'No union' option, in most states, though this theoretical competition is bounded by great consolidation into federations like the AFL-CIO which discourage it, and also be Federal labor laws that tip the scales strongly in favor of union representation (Because, after all, labor unions bring a whole lot more voters to the table than management organizations do, and ulitmately votes count).

As far as free markets go, the labor market is a market too, and except in quite extraordinary times (Like plague or total war) it is one where all the economic bargaining power was on one side before the advent of unions, and hence was an innately coercive situation.  Government having largely asserted itself to curtail the coercive abuses like company stores and payment in company scrip (Thanks, it must be said, to unions), as they presently exist, they have swung the pendulum to the opposite extreme in this country...which is why not much of anything common that you buy will say 'Made in USA' on it, nor even made in an EU country where the same disease has progressed even further.  
« Last Edit: December 28, 2009, 09:58:05 AM by DumbAss Tanker »
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Offline Oceander

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Re: A Little Economics Help Here; re: Unions
« Reply #15 on: December 28, 2009, 09:49:08 AM »
True enough; unfortunately, the federal government tipped the scales too far in favor of the unions, so now the situation is reversed.

The NLRA ought to be dumped and unions treated as no more, and no less, than the equivalent of a law firm or any other partnership of individuals who have banded together to pursue a common economic goal.  In other words, instead of being some sort of strange political entity with economic powers, wholly outside the realm of organically developed economic relationships, unions ought to be treated as a partnership amongst all the members (with the various levels of employee, non-equity partner, and equity partners) and with the same exposure to, and protection from, liability as is provided via a limited partnership (in which case, the rank-and-file would be the limited partners, with a correspondingly limited exposure to the liabilities of the partnership as a whole, and the union bosses would be the general partners, with full unlimited personal liability for the liabilities of the partnership).  Further, the "employer" for purposes of employment law, benefits, payroll taxes, and the like, should be the reconstituted union-as-partnership, and the relationship between, say, an auto manufacturer and the union/partnership one solely between the manufacturer and the union/partnership where the union/partnership agrees to provide the services of its members to the manufacturer in consideration of money (or other value) to be paid by the manufacturer to the union.  The union/partnership would then be responsible for paying the members who provided the services, for doing the tax withholding on their wages, for arranging for their benefits and whatnot, and would otherwise be the responsible "employer" for other legal purposes.

Offline SSG Snuggle Bunny

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Re: A Little Economics Help Here; re: Unions
« Reply #16 on: December 28, 2009, 10:05:41 AM »
DAT,

Yeah, I'm aware of abuses like company scrip and stores and the fact that what the boss charged for prices weren't covered by the wages he paid and I'm in absolute agreement with you that unions did good in this regard.

When unions first started they were political entities. They came together as a political bloc to affect change.

But they morphed into economic concerns when they started charging dues. Not outrageous in and of itself but the opportunity for abuse came soon enough. The officers of these unions make a shit-ton of money and what they don't pocket they spread around for political power peddling.

But let's face facts: If you aren't UAW you aren't working at GM, ergo UAW has no incentive to compete by offering the best labor product.

If we are to keep unions (freedom of association says we must) I say we demand that unions be subject to the same anti-trust laws applied to any other business (equal protection says we must). If we can split up Ma Belle we can split unions. Allow the corporations to hire their labor from among several different unions splitting their contracts between 2 or three of them. Then the unions can fall over each other to attract the best workers and provide the best product at a lower cost.
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Offline Chump

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Re: A Little Economics Help Here; re: Unions
« Reply #17 on: December 28, 2009, 04:06:00 PM »
But what is to keep a monopoly from becoming coercive?

Unions didn't start that way but they evolved their coercive practices. A producing monopoly could just as easily force vendors to not sell to a competitor just as unions won't allow producers to hire scabs.

To put it simply, the free market doesn't allow for coercive monopolies.  They can continue to exist only through exploitation of government intervention, because a market dominated by one large, inefficient, exploitative (coercive) monopoly is a target for capital investment from competitors.

Labor unions, similar to coercive monopolies, cannot operate as they currently do without utilizing the force of government intervention.  How can a union "not allow" a company to do anything without utilizing force?
Political tags - such as royalist, communist, democrat, populist, fascist, liberal, conservative, and so forth - are never basic criteria. The human race divides politically into those who want people to be controlled and those who have no such desire.   ~Robert A. Heinlein

...let the cannibal who snarls that the freedom of man's mind was needed to create an industrial civilization, but is not needed to maintain it, be given an arrowhead and bearskin, not a university chair of economics.
~Atlas Shrugged, Galt's speech

Offline EastFacingNorth

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Re: A Little Economics Help Here; re: Unions
« Reply #18 on: December 28, 2009, 04:18:01 PM »
MAJOR PREMISE: The free market depends on a market that is--well--free. Competition lowers prices. Which in turn requires the competing manufacturers to rise profit through increased sales volume leading to higher employment and economic activity through vendors etc.

MINOR PREMISE: Monopolies are bad for free markets because lacking competition a producer has no need to lower prices or employ more people or expand production capacity.

CONCLUSION: Unions are a monopoly on labor. Their sole strength lies in the fact that management cannot find competing labor elsewhere. Prices go up and instead of expanding production they retard production through lower demand for the goods and services produced ergo...lowering employment.

Where is my error?

If there is none it seems unions are not only bad for consumers...they're bad for the very labor market they presume to represent as the need for labor is reduced (never mind the fact the UAW is killing the domestic auto industry altogether).

Tiny fix - technically a monopoly exists only when there is a single entity which controls a given market.  Since many labor markets have more than one union operating in collusion with one another to supply the same labor, the correct term in such a situation would be cartel, not monopoly.
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Offline Crazy Horse

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Re: A Little Economics Help Here; re: Unions
« Reply #19 on: December 28, 2009, 09:42:17 PM »
DAT,

Yeah, I'm aware of abuses like company scrip and stores and the fact that what the boss charged for prices weren't covered by the wages he paid and I'm in absolute agreement with you that unions did good in this regard.

When unions first started they were political entities. They came together as a political bloc to affect change.

But they morphed into economic concerns when they started charging dues. Not outrageous in and of itself but the opportunity for abuse came soon enough. The officers of these unions make a shit-ton of money and what they don't pocket they spread around for political power peddling.

But let's face facts: If you aren't UAW you aren't working at GM, ergo UAW has no incentive to compete by offering the best labor product.

If we are to keep unions (freedom of association says we must) I say we demand that unions be subject to the same anti-trust laws applied to any other business (equal protection says we must). If we can split up Ma Belle we can split unions. Allow the corporations to hire their labor from among several different unions splitting their contracts between 2 or three of them. Then the unions can fall over each other to attract the best workers and provide the best product at a lower cost.

Right to work laws do well.

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