It seems that no matter what I do, I can’t beat my colleague here at TAI, Walter Russell Mead, into print on any significant news story. Walter does it fast and, almost invariably, does it very well. He did it again yesterday, early in the day too, on the news that the Michigan state legislature had passed two so-called right-to-work laws.Like Walter, my sense is that this is a big deal—a turning point in our national odyssey. Like Walter, too, I see the basic facts in the same way. But unlike Walter, my sensibilities about this are bit different, possibly owing to the fact that he is the son of an Episcopalian clergyman, and I am the son of a rare Jewish member of the Teamsters union. Walter does say that, “Labor needs representation and many of the values that drew millions of working Americans into the labor movement endure.” I would go a bit further than that: Collective bargaining is all that keeps large numbers of Americans at least clingingly in the middle class at a time when globalization and automation are undermining a hard-achieved, broadly egalitarian U.S. social structure. What Republicans in Michigan have done is to attack the viability of collective bargaining. If companies can hire as many non-union laborers as they like, it is obvious that union bargaining power will essentially collapse.Were that to happen, and were it to spread from Michigan to the rest of the nation, it might help some American businesses to keep their costs down and so better compete worldwide. That, arguably, might produce more jobs—if not necessarily more decently paying jobs. But at the same time, whether that happens or not, it will certainly produce more inequality and the social frictions that ultimately go with it, exacerbating a trend at least a quarter-century now in the making.When I read the news from Lansing, I immediately began to think of another key turning point in the history of the American labor movement. Since few Americans today know much about that history, let me tell you a little something about it. No doubt you will see many parallels with current circumstances even before I have the opportunity to point them out.Back around the turn of the last century, you’ll probably be surprised to learn, Paterson, New Jersey, was one of the fastest-growing and economically thriving towns in the United States. It was so because of the Totowa Falls, which supplied almost limitless power to a large number of mills specializing in making silk. By the 1890s, something like 30 percent of all the silk made in America came from Paterson. The mills attracted large numbers of immigrants––Irish, Italian, Jews, Poles and many others. Working conditions were not so good. Days were long, pay was modest, and health issues abounded, whether from the effects of the dyes or of lint dust getting into workers’ lungs.Some of the immigrant workers were socialists, carrying within their bosoms still the hopes of the failed revolutions of 1848. Way back in 1828 the first industrial strike in American history occurred in Paterson, but in the late 19th century and again in 1902 there were more strikes as labor unrest grew. These strikes never got anywhere, however, because they were not general enough. They targeted particular mills, but since there were so many other mills, the targeted owners could not give in to striker demands or they would go broke for being at a competitive disadvantage.But then, in February 1913, the mother of all strikes hit Paterson’s 350 silk mills. One of the reasons was a technological change, something rather reminiscent of automation. At the turn of the century, the basic ratio of loom to worker was one to one. But as the machines became more sophisticated, the owners turned to a ratio of one worker to two machines. By early 1913 rumors had begun to spread among the workers that the two to one ratio might soon become a four to one ratio. As the workers, some 25,000 strong, saw it, they were working harder than ever for the same pay while the owners made twice, and prospectively four times, the profits. They wanted an eight-hour day, not the 12–14 hour days they were working. They wanted a ban on child labor, defined as anyone younger than 14. And they wanted more money.The owners said no. And with that there descended upon Paterson, New Jersey, in all of their force and color, the Industrial Workers of the World—the Wobblies. Big Bill Haywood himself came to town. Elizabeth Gurley Flynn came, too, both at the invitation of the small and tottering IWW Local #152. Later on John Reed even showed up, though he of the pure “red” did not necessarily see eye to eye with the blacker syndicalist/anarchist Wobbly creed. The strike was effective in that it was general, aimed at all the hundreds of silk factories in town. Picket lines were set up, relief societies for striking workers were establishes, and lots and lots and lots of speeches were made. Most important, the mills were forced to shut down.The owners declared a lockout. They also detested the radical rhetoric that set them up as capitalists opposed to the workers, because the truth was that a great number of the owners had started out as the lowest of the low laborers in the same mills. They did not think of themselves as capitalists; they thought of themselves as hard-working successes. They tried to hire scabs to do the labor, but they were only moderately successful at that. They were eventually far more successful, however, at sending work to mills in southeastern Pennsylvania, to places like Easton and Allentown, where refugees from the anthracite coal mines were willing to work for even less than the silk workers of Paterson. In other words, the owners outsourced. A waiting game of chicken ensued, until finally the strike collapsed. Workers went back to their jobs without winning a single concession from the owners. The Wobblies were finished.Again in 1924, about 20,000 silk workers tried to stop the four-loom system, which by then had become technically feasible. They failed again, but their disruption persuaded a number of Paterson’s silk manufacturers to leave town. By 1935, there were only about 4,000 workers in the silk industry left, and with the advent of synthetic fabrics the industry subsequently diminished to the point of near nothingness. Patterson did make a comeback as a fabric dyeing industry town, but those operations, too, eventually moved elsewhere to both domestic and foreign production platforms offering lower-wage costs.What’s the moral of this story? There’s not just one.First, changes in technology drive changes in the relationship between capital and labor. They always have, and they always will. If it hadn’t been for advancing technology that made the looms more efficient, the labor disruptions in Paterson might not even have occurred. Technology also accounted later on for the problems owners faced when silk was largely displaced by synthetics. Some owners managed to make the transition, and they were far better placed to adjust than workers. But technology challenged everyone in due course, capitalists and workers alike. It is still doing so, whether we notice or not.Second, union power depends on a variety of circumstances. One of those circumstances is the relative immobility and absence of porosity in labor markets. If the owners couldn’t send work to eastern Pennsylvania, the strike might have ended differently. At the same time, competition is real; workers get no ultimate benefit from driving their employers into bankruptcy. Owners recognize and deal fairly with unions only under two conditions: when the circumstances of competition make that economically viable, and when they acknowledge the dignity and humanity of their labor force. This latter is a very important point, often neglected in narrowly economic analyses—which I will return to in just a moment.American industrial and trade unions today (and I deliberately exclude from this discussion public service unions because, as I have written before, they are of a qualitatively different nature) face both rapid technological change and the availability of lower-wage platforms that ownership can seek out and employ. It is no wonder, therefore, that the clout of labor unions has so dramatically diminished over the past three decades. It is true, as Walter said, that the leadership of American unions has not been particularly sagacious or effective in recent years, but I’m not sure it would have mattered very much. The ground simply disappeared from beneath their feet, and it is still doing so today.What can be done about this? Logically, there are only two ways to restore the power of labor and protect the leverage afforded by collective bargaining. One way is to close down the economy with a wall of protectionism. The country would be poorer as a whole, just as the theory of comparative advantage holds, but we would be more equal among ourselves.That is a tradeoff some would make and some would reject. Personally, am I willing to pay more for a good or a service if I know that doing so helps a fellow American to get and keep a decent job and helps stabilize entire deteriorating communities? Damn right I am. To me, that is part and parcel of what being a patriot means, and so I “buy American” when I can. Aren’t I concerned at all about the foreigners whose low-paying but still critical jobs would be eliminated as a result if lots of people did what I do? Yes, but I care more about the well-being of other Americans than I do about foreigners. I know that view is not fashionable among the anti-nationalist Left, but I am not a member of the anti-nationalist Left.The other way is to transform a race to the bottom into a race to the top by exporting, so to speak, trade unionism to other countries. If labor in other countries were more powerful, and wages therefore higher, the competitive disadvantage of American labor would diminish. This is what the international division of the AFL-CIO used to do back in the Cold War, when Lane Kirkland was around. We have not seen his like for many years. I believe that industrial and trade unionism is the best pedagogue for a budding democracy. I would take an effort to create a genuine union abroad over a marquee election any day. Unfortunately, our government doesn’t see things this way anymore, and that includes Democratic administrations as well as Republican ones. Over at the State Department there is a Bureau called DRL for short. The acronym stands for democracy, human rights and labor. Again unfortunately, no one seems to remember anything about the “L.”Let me not leave you in any doubt: Neither one of these alternatives is remotely practical these days. We are not going to close down our economy behind a protectionist wall, and we are not going to be successful in seeding vast numbers of new labor unions in China, Bangladesh, Vietnam, the Dominican Republic, Niger, Bosnia, and so on.The only hope, therefore, is that American corporations will gain comparative advantage through the scientific and technological innovations we have always been so good at, and that they in turn will have the competitive elbow room to recognize their labor forces with the proper sense of dignity workers deserve. Collective bargaining expresses basic fairness; companies by their very nature as partnerships concert their negotiating assets, so labor should be able to do the same. (Some fool once tried to persuade me that unions never had any moral purpose or standing, but were just ethnic gangs organized to keep outsiders from certain job categories…how pathetic.) Collective bargaining is also good for corporations, and intelligent corporate leadership looking out for the long-term success of their enterprises knows that. Corporations should want workers with high morale and loyalty, because that boosts productivity more than any other factor. So-called right-to-work laws that undermine unions will produce precisely the opposite.Let me close with reference to the Bible. (“Say what?” I hear you ask. Please, bear with me a moment.)The Hebrew Bible evinces a particular attitude toward this general question. Most people reading the text of the Torah in English may be excused for thinking that slavery is okay according to the law. But this misreads the text. Remember that the text of the early parts of the Hebrew Bible at least, the Torah, is predicated on a tribal division of the land in an agricultural and animal husbandry context (later books and later laws, including a few retrojected into earlier texts, reflect a far more specialized economic environment). In those days, tribes leading down to clans leading down to extended families owned agricultural and pasture land. People worked together in family groups, with elders usually calling the shots. The notion that a person would work in a subordinate role for wages for someone to whom he was not related was strange, something akin to an unnatural act.Nevertheless, such things happened, and provision for them is made (I won’t go through the specific verses; you can find them for yourself if you’re interested). But these relationships did not describe a condition of slavery. They describe a condition of what we would call at most indentured servitude—and temporarily so at that, given the laws related to jubilee years. There are different laws pertaining to war captives, whose situation more closely resembles that of a slave. But the idea that one Israelite would literally enslave another is quite foreign to the sense of the text.It is easy for modern readers to miss this distinction, promoted by clumsy translations, since so many of us work for other people to whom we are not related. What in biblical times was thought very unnatural we take to be utterly natural. If we work for others as trade or industrial workers, we are involved in what Marx once called wage slavery. Obviously, in civilized countries what goes on nowadays does not deserve such a brutal descriptor. Nevertheless, we would be wise to ponder the fact that the structure of modern industrial economies is based on inherently unequal relationships between those who have capital and those who work for those who have capital. The reason this matters ultimately is that it contradicts the egalitarian democratic mythos we live by. We say, and to our credit we mostly believe, that all men are created equal; but for all practical purposes the very structure of our economy says otherwise.Barring some very improbable mass return to a more egalitarian and self-sufficient pastoral life, or a leap forward to a comparable situation where people in much greater numbers work for themselves, there is nothing to be done about this. It just is what it is. (Attempts to eradicate the problem by having the state play the role of capitalists, whether in “soft” Left socialist or “hard” Left communist terms, haven’t worked out so well, and indeed they didn’t even solve the basic problem.) A work contract within any for-profit enterprise, even in America today, is still essentially a form of indentured servitude, though for the vast majority of us it is so very mild a form that the term doesn’t feel right: We can quit and seek work elsewhere on pretty short notice or no notice, we can get severance pay, we have certain rights of redress, we can get government unemployment benefits if one party or the other breaks the contract, and so on and so forth. All the same, no one who does not work for himself or within an integral family unit is truly free and “at liberty” the same way that someone who does work for himself is.This is so simple and obvious a point that it is rarely made explicit or recognized at all these days. But it is important precisely because in the absence of the radical liberty afforded by self-employment the only thing that makes this condition morally tolerable is the extension by an employer to an employee of the unambiguous acknowledgment of workers’ inalienable dignity. Yes, the very act of employing someone instrumentalizes that person; the employer cares more about what a person can do than who a person is. That is natural, and the larger the enterprise and workforce, the more natural it is. But that is not a sufficient basis for a stable and mutually beneficial relationship. What that means, among other things, is that understanding capital-labor relationships, and understanding the role of unions as well, requires more than economics.And that, finally, is what is really disturbing about what the Republicans in the Michigan state legislature have done. Whatever their thinking or their actual motives—and I’m not thereby giving them the benefit of the doubt—they are instrumentalizing people. They are in effect enabling the withdrawal or the diminishment of the acknowledgment of workers’ dignity. They are encouraging the breaking of a bond far more important and precious to a society than a mere labor contract. They have done something that is both wrong and ultimately foolish.
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Published on: December 13, 2012What’s the Matter with Michigan?