Unions exist to counter one of the most pernicious side effects of a free market. Free markets are price driven, and without morality. If we can buy something cheaper the fact it is produced by people in slavery or something a step or two above doesn't matter to many of us. We go for the cheapest goods with the level of quality we seek.
Early in the development of the market this may not be a problem, but in any successful niche as more companies move into the niche, the harder it becomes to maintain market share. If you aren't clever enough to find significant improvements in the product or the production process, or if the product is so well developed there is no room for improvement, your only strategy is to cut cost and wages are usually the place you can cut the most costs.
Once one company has taken this step it forces others to do the same. Companies are in a race to the bottom - so see who can come the closest to treating their employees as slaves.
It is sort of working right now, because the income disparities around the world are so enormous their are populations who are happy with even a slavish job, and the rich world has the wherewithal to minimize the impact on their workers, believing they are just experiencing a down part of the business cycle and unemployment will go down and everything will be wonderful once the business cycle picks up. Maybe. But what happens as the expectations of workers in poor countries rise? What happens when all workers expectations reach parity? And there are no more countries to export jobs to at lower wages?
If we continue to build our hopes on the unfettered free market are we are setting the table for enormous, world wide strife in the future? Worldwide Unions clashing with governments and companies? If we are so smart can't we find a system that avoids the sorts of clashes we have seen repeatedly down through history?
Friday, August 12, 2011
Subscribe to:
Posts (Atom)