In the minds of many people around the world, including in the United States, the term “capitalism” carries the idea of unfairness, exploitation, undeserved privilege and power, and immoral profit making. What is often difficult to get people to understand is that this misplaced conception of “capitalism” has nothing to do with real free markets […]
When you type a website address into a browser, you might have noticed that the letters “http” appear at the front. “HTTP” stands for Hypertext Transfer Protocol. In typing a Web address, you are actually sending an HTTP command to transmit that website to you. Hypertext Transfer Protocol is the means by which information is […]
Some people are saying it is just what the doctor ordered. Others are saying that the cure is worse than the disease.The Affordable Care Act? Reengagement in Iraq? Tea Party bullying in the GOP?Not this time. Just as protracted in the corridors of Congress and the White House is the debate over the proposed reform […]
In 2012, money mandarins running the European Union chose stagnation over restructuring. Here’s a consequence of that choice: expectations for a self-sustaining economic recovery keep getting crushed.Two years ago, European Central Bank (ECB) chief Mario Draghi promised to do “whatever it takes” to hold the eurozone together. He bluffed nervous investors into believing in a […]
Picture the scene. It’s 2020. You’re at the checkout in a convenience store with a carton of milk. But you’ve got no cash and you’ve left your cards at home. No problem. You scan your right index finger; the green light flashes. Purchase approved and you leave. Easy.Is this a realistic vision of the future, […]
“In the beginning, all the world was America.” — John Locke“The Garden of Eden was a perfect place,” my friend Manuel explained. “Man had free will. He could live in harmony with nature and God — and everything would be fine. But if he defied God, the stain of original sin would be on his […]
After a week of reckoning about the American oil and gas boom… I’ve got to get something off my chest.I can’t stand it when a coworker takes credit for something I did.Whether it’s a special report I wrote or just a little investing trick I found on my own — if someone takes it and […]
It might sound like the latest new product from Apple, but IPAB is actually the newest major legal challenge to Obamacare.Recently, a three-judge panel in the 9th Circuit Court of Appeals in San Francisco heard arguments about the Independent Payment Advisory Board, or IPAB, a 15-member panel created by the Affordable Care Act and empowered […]
Americans have come to believe that the IRS and the income tax are inevitable parts of our lives. After all, most everyone alive today has lived his entire life under federal income taxation.It wasn’t always that way. For some 125 years, the American people lived without having any tax imposed upon their income.The obvious question […]
Here’s a fun fact: Although we all hate the U.S. dollar, as it continues to hemorrhage wealth, its foothold as the world’s reserve currency isn’t going to disappear overnight.A Russian gas deal with China won’t change that — as we’ll highlight below.But before we get to the nitty-gritty, let’s dive into a story that’s right […]
Franklin Delano Roosevelt famously used the term “forgotten man” in a 1932 speech to describe those at the bottom of the economic pyramid who, he felt, government should aid.But the originator of the phrase “forgotten man” had a whole different meaning in mind. He aimed to expose the seeming good intentions of government to reveal […]
“As the nation’s central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding […]
The Keynesian disaster recovery plan has been to lower rates, force people to take more risk in search of yield, and entice others to borrow and spend and, magically, more jobs will be created. If people won’t buy stocks, central banks will.Back in 2011, Ben Bernanke, when asked if QE2 was driving up stock prices, […]
In September 2009, when President Obama made a primetime speech pitching his not-yet-passed health care overhaul, he made the following promise: “I will not sign a plan that adds one dime to our deficits — either now or in the future. Period.” To prove his seriousness, he further promised that “there will be a provision […]
Whatever your views on the role of government, one thing is clear: There will be no way to pay for it if the economy doesn’t grow. And I’m not talking by a measly percentage point or two. If we can’t find our way back to 5% annual economic growth or above soon, America’s accumulated federal […]
According to the Bureau of Labor Statistics, consumer prices are rising at a 2.1% annual rate. This suggests to us that the current stock market boom will die with a bang, rather than a whimper.Fed economists say they don’t think inflation rates are rising. They think the most recent reading is a fluke. But why […]
Real progress happens through real people, ideas, and innovations. Not by legislation argued and debated in Congress. Right now, one of the most influential technologies is changing the way people do business. And reinventing the future in the process.
Innovation can change the world… if the world lets it. Unfortunately, society’s gatekeepers make it a point to constrain, regulate, and control these ideas. But their power is limited, and the power of innovation is too great. Unfortunately for regulators, there are some technologies they can’t control.
“Everything is proceeding as I have foreseen.” — Emperor Palpatine, The Return of the JediJon Stewart made great comedic hay during the Bush Administration out of the enormity of Dick Cheney’s “Sith Lord” malevolence. Events in Iraq in the past week have made especially palpable Cheney’s Palpatine-like quality.As Iraq unravels, you may suspect that Cheney might now […]
Entrepreneurs are high-tailing it out of the United States, and it’s the politicians’ faultThe U.S. government is driving some of its most productive citizens abroad. The only beneficiaries are countries such as Singapore and Switzerland, which offer sanctuary to Americans fleeing avaricious Uncle Sam.Three years ago Eduardo Saverin, one of Facebook’s founders, joined 1,780 other […]
Politicians love raising the minimum wage because they don’t have to ask voters to pay more in taxes. They just dump the costs onto shop owners. But they don’t act like politicians and go into debt to pretend like they have all the money in the world. They face real world situations. And sometimes that means replacing workers with more affordable options...
A cushy job in Hawaii that pays six figures. A beautiful girlfriend/boyfriend. Job security and professional experience that gives you plenty of future opportunities. Would you throw that all away to do what you think is right? Last year, one government contractor did just that. And now you see the world the government tried to hide from you.
As the world gets more digital, people forget about the benefits of transacting in cash. And government officials know that.
Regulation is supposed to keep you safe and make the economy function smoothly. At least that’s what they tell you in the news. But there’s another cost to regulation. One that you won’t hear about unless you have to deal with directly. And for the people in the economy who do, they’re the ones who have to pay the final cost.
The experts will tell you the recession is over, but they’re only torturing the data to hide the truth. The economy never recovered from the downturn it experienced. But the downturn happened in 2000, not 2008. The country’s been in the middle of a 14 year recession and hardly anyone knows the truth.
All paper currency has a shelf life. It could be 5 years or 500 years, but at some point, the value of any paper currency eventually reaches zero. That's why, for centuries, people have turned to one shiny metal to safeguard their personal store of wealth. And, as Jim Rickards explains, you still have that option. Read on...
Edward Snowden’s one year visa in Russia expires at the end of next month. With only a few weeks left before he finds himself without a safe country to live in, he sat down to give an exclusive interview. Here are the most important things he wants you to remember from his recent sacrifice.
At the second presidential debate, President Obama trumpeted the accusation, “Governor Romney said we should let Detroit go bankrupt.” It was a reference to a 2008 New York Times editorial by Mitt Romney in which he argued against a government bail out of the auto industry and for the alternative of bankruptcy. Thus, the uncompetitive automakers could re-negotiate labor agreements that added a then-estimated $2,000 to each car. Eliminating the “modern union” would be far preferable.
Obama’s subsequent mega-billion bailout is usually criticized either as crony capitalism or as a payoff to the unions. It was both. The interests of Big Business and Big Labor may clash on specific terms that are negotiated but those interests are fundamentally the same. They both oppose the genuine rights of workers.
WHAT IS THE MODERN UNION?
In a free market, a union is nothing more than a collective by which workers protect and secure common interests through negotiation or other forms of persuasion, such as boycotts or strikes. Workers assign their right to contract to the collective but no one is forced to join, pay dues or remain. Employers are free to decline negotiation and to hire replacement workers.
The current paradigm is rooted in the New Deal legislation of President Roosevelt, especially the Wagner Act, which established the legal “right” of workers to unionize if a majority within an business voted to do so. These unions were handed legal privileges such as collective bargaining.
The result is anything but free market. For example, a modern union receives government certification to engage in collective bargaining. In other words, the government authorizes it as a sole representative of labor and legally requires the employer to provide it with a seat at the negotiating table. This monopoly shuts out other labor groups and individual workers from negotiating their own contracts. Individual workers may choose not to join a union but nevertheless they remain bound by its contracts and they must pay its fees. Thus, the modern union constitutes a forced transfer of authority and rights from individual workers to a government-created collective.
THE LABOR MOVEMENT BEFORE THE MODERN UNION
19th century America was the heyday of labor activism. The most prominent labor federation was the Knights of Labor, established in 1869. By 1886, membership peaked at about 700,000 largely due to programs that aimed at empowering members both economically and socially. Through local chapters, worker-owned cooperatives were created, public education on labor issues was launched, and support networks were established to insure members against injury or ill health. Indeed, many labor organizations began as “benevolent associations” to care for the families of deceased or injured members. Although the Knights of Labor used pressure tactics such as boycotts, they did not emphasize strikes. Terence V. Powderly, who presided over the Knights from 1879 to 1893, openly opposed strikes, which he believed caused violence and increased conflict. He advocated peaceful negotiation instead.
With effective networks and diverse strategies, a grassroots labor movement grew in power; its threat to entrenched interests also grew. In 1877 and 1894, two massive strikes drove that threat home: the Great Railroad Strike which lasted 45 days; and, the Pullman Strike, which eventually involved about 250,000 workers in 27 states. In both cases, troops were sent to break the strikes.
By the 20th century the labor movement — notably, the Industrial Workers of the World or Wobblies – had become a significant political threat. Organized in 1905, the Wobblies had strong leaders who enthusiastically embraced strikes. With a large immigrant membership and socialist principles, the IWW also became a potent voice against America’s entry into World War I. This made them a prime target of the Department of Justice. In September 1917, 48 IWW meeting halls were raided and 165 leaders were arrested under the new Espionage Act. 101 went on trial; all were convicted and received sentences of up to 20 years.
Government had learned a lesson. An uncontrolled labor movement was politically dangerous, and bad for commerce.
THE MODERN UNION AS BUSINESS UNIONISM
In 1929 the Great Depression hit, with unemployment rising as high as 25 percent. Hundreds of thousands of people roamed across America, looking for work. A massive and migrating army of the unemployed is a formula for political labor revolt. Thus President Roosevelt offered a New Deal to American workers in an attempt to create stability. This is the context into which the modern union, or Big Labor, was born; it was a governmental response to labor upheaval.
Big Business also participated. No stranger to subsidies and legal privilege, Big Business saw advantages to regulatory stability and a controllable work force. It undoubtedly disliked some aspects of New Deal policy but Big Business had long favored Roosevelt’s general approach. And, so, some of the most vigorous advocates for modern unionism were leaders of industry, such as Gerard Swope, president of General Electric. By specifying who could negotiate terms and how strikes could occur, Wagner removed some of the labor movement’s most powerful tactics and made production more predictable.
How? Certification created labor monopolies and, so, eliminated the need for business to negotiate contracts with multiple groups or individuals. The monopoly union also acted as an enforcement arm, which policed its members’ compliance with contracts. The unions prevented wildcat strikes and it punished unsanctioned boycotts, work slowdowns, and the other labor tactics that had proven effective in the past. Modern unions offered Big Business more control over production.
Leaders of Big Labor were well aware of the benefits they offered to Big Business. John Lewis, president of the United Mine Workers of America (UMWA) from 1920 to 1960 assured employers that a contract with leadership “is adequate to protect against sit-downs, lie-downs, or any other kind of strike.”
Thus, the grassroots labor movement withered. One casualty was the National Federation of Mine Laborers, which had been the parent union of Lewis’ UMWA. The parent constitution had established a network of decentralized and largely autonomous “Lodges.” When Lewis became President, he did away with both the decentralized structure and the autonomy. The Wagner Act completed the centralization of control. It was a scenario that other Big Labor leaders were happy to play out.
Thus, at its creation, the modern union was an arrangement of shared advantage between Big Labor, Big Business, and Big Government. The relationships were not always cordial but they were basically convenient.
Among those victimized were smaller employers, the grassroots labor movement, and self-employed or non-unionized workers.
Could unions exist without legal privileges?
Voluntary unions have existed in the past and would almost certainly arise today if workers perceived a benefit to them. The clout of a voluntary union would come from members who freely assign their rights of contract. In modern unions the opposite transfer occurs. Even members who join freely cannot quit or negotiate later for themselves. Thus, the modern union strips individual workers of free association and the right of of contract. It should be abolished for the sake of workers’ rights.