In The USA: the Next Revolution

[Dayuhan]

Originally Posted by Fuchs

The status quo wages and salaries are not justified by market principles as 'right' wages and salaries simply because market distortions (power asymmetry, principal agent problem) are in effect.

They just happen to be wages, there's no reason to see them as best or 'right' and resist influences on the market for reason of market efficiency, for market efficiency is not given in status quo.

If the absence of unions is perceived as a market distortion, what would you call the presence of unions that are capable of shutting down an employer who doesn't give them what they want... perhaps looking at Britain in the late 70s as an example? Is that not an equally distorted market?

Would a the power of labor in a non-distorted market be the ability to leave and seek work elsewhere, not the ability to not only stop working, but to apply coercive force to prevent anyone else from taking over the job? That seems like a fairly severe distortion in its own right.

Nobody complains about the impotence of American unions when unemployment is low and jobs are plentiful: if you don't like your job, you don't need to strike, you quit and go work somewhere else. In those conditions unions seem largely irrelevant and the dues start to seem like an imposition, especially since American unions have not always handled their money responsibly, to put it mildly. Of course when unemployment is high, all that changes.

Similarly, when we go into bubble mode neither the populace nor the government has anything bad to say about the financial industry: they cheer the business on, tap into the bubble as much as they can, tell themselves how smart they are to be "winning". When the bubble pops and nobody seems quite so smart, all the fingers point to Wall Street. It's a bit like passengers in a car screaming "faster, faster" and handing the driver drinks, then filing lawsuits for negligence when there's a crash.

[Presley Cannady]

Originally Posted by Dayuhan

If the absence of unions is perceived as a market distortion, what would you call the presence of unions that are capable of shutting down an employer who doesn't give them what they want... perhaps looking at Britain in the late 70s as an example? Is that not an equally distorted market?

You can't really call either a market "distortion"--the term Fuchs is actually grasping for is "inefficiency"--without additional context. We would first need some measure over a nest of transactions to determine how far they deviate from some maximally efficient allocation of goods and services. Given your particular example, we'd have to:

1) determine some wage that is optimal for both employer and employee, and

2) examine how far we stray from the optimum incident to some regime of collective bargaining.

The first step is hard, because calculating maximally efficient allocation of goods and services is an exercise in highly conditional, subjective teeth pulling. The second step is comparatively elegant (provided the math holds up, which is what the folks in Stockholm apparently believe).

[Fuchs]

Originally Posted by Dayuhan

If the absence of unions is perceived as a market distortion, what would you call the presence of unions that are capable of shutting down an employer who doesn't give them what they want... perhaps looking at Britain in the late 70s as an example? Is that not an equally distorted market?

It is. Power asymmetry can go both ways.
Countries can balance the powers or employers and labour unions through legislation, jurisdiction and culture, though. I think that's what all developed countries should strive for - and it's an everlasting challenge.

Btw, slightly related to topic (UK, not U.S.):

[slapout9]

Originally Posted by motorfirebox

That's largely because you're too much of an ass to bother with. I honestly don't know why Fuchs continues to engage with you. You seem to utterly lack the ability to present facts in any context, choosing instead to simply respond with insults to anything anyone says. You're an idiot and a troll, and the sooner you get bored and wander off to perform your idiot troll antics for some other audience, the faster this thread will return to being something worth reading.

I agree this has gone beyond anything I ever intended this thread to be. I am trying to get a Mod to lock it for good. Thanks to all who contibuted some serious food for thought. Later Slap

[davidbfpo]

I have locked this thread after Slap's request and the tone has slipped somewhat into sniping and more. If I had more time tonight I'd prefer to remove many of the latest posts.

Meantime the USA will move towards a revolution without SWC.

Updated 27th November 2011

The thread was unlocked after extensive pruning of posts and some editing. This came about after an exchange of unpleasantness that was ancillary to the discussion.

If repeated the thread will be locked again and closed.

[markcnelson]

I do agree with the first part of the original post - that Washington (both sides) are completely out of touch with "us".

Still, I think the next revolution will be one of "whining and complaining" as the number of entitlement recipients is strategically increased to a critical mass.

Just like any junkie, once you're on the drug (in this case the dole) then the pusher owns you. You think whatever and do whatever to keep the supply coming cuz' cold turkey ain't no fun at all.