Ayn Rand Was Right About Unions: Workers Need Unequal Bargaining

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In their battle to enslave us, the statists have, like The Shadow, the power to cloud men's minds.

The granddaddy of all their tricks, their one key sophistry, is the equation of economic power with political power. The power to produce is covertly lumped in with the power to destroy. The dollar is treated as a gun.

Ayn Rand is the one who cut through this fog:

"Let me define the difference between economic power and political power: economic power is exercised by means of a positive, by offering men a reward, an incentive, a payment, a value; political power is exercised by means of a negative, by the threat of punishment, injury, imprisonment, destruction. The businessman's tool is values; the bureaucrat's tool is fear."

Here's an example that I didn't cover in my article on the subject ("The Dollar and the Gun," in Why Businessmen Need Philosophy): unequal bargaining power.

Picture things as the Left sets them up: a poor, hapless Joe is at the mercy of Mighty Monolith Corp. Joe needs a job--he has to eat, doesn't he? But Mighty Monolith Corp. has 100 applicants for each position that's open, and it has billions in its money bin (Leftists always picture assets being held as cash in money bins, a la Scrooge McDuck).

So Joe is desperate to get a job from MMC. But are they desperate to get Joe's services? Not so much.

Horrible! they cry. Victimization! Level the playing field by equalizing the bargaining power! That's why we have "collective bargaining"--at gunpoint.

This Leftist scenario turns things exactly upside down. The true evaluation is: Wonderful! Beneficent! Leave the playing field alone to keep such huge gains open to people like Joe!

I'm not just being provocative: that's the way Joe has to see the chance of being "exploited and victimized" by MMC's power. He wants that job. He needs it. He's getting up early in the morning to be first on line for it.

The inequality here is not in firepower but in ability to benefit. MMC has more ability to benefit Joe than Joe has to benefit it.

It's the same as the unequal bargaining power that a beautiful, desirable woman has in dealing with the average male. She has a lot more to offer him than he has to offer her. Is she victimizing him? Hardly. Speaking for the male gender (something I like to do on occasion), we are very, very thankful that such women exist and are at least visible in the media.

It's the same with Joe's relation to MMC: they own something of value to Joe. Joe's relative powerlessness lies in the fact that he has little to offer them. Something to offer, presumably, but not much. I'm not insulting Joe: that's how the Leftists set things up. There are the "needy," the "have-nots," the "underclass," the "underprivileged," "the weakest and most vulnerable among us"--and that's who they keep pushing to center stage as the ones we should always be thinking of, concerned with, sacrificing to.

In reality, you actually want those with whom you deal to have bargaining power over you--the more the better for you. You badly need a job. Would you rather work for a struggling one-man company that just as badly needs you, because if it can't hire you, it will go bankrupt? Or would you rather work for a company that is very rich, secure, has lots of room for your upward career path, and a good pension program?

The first best thing for you is that you become wealthier. The second best thing for you is that there is someone else, whom you can trade with, who owns more wealth than you do - lots more.

It is not in your interest to have trading partners who are poor. You want to trade with people who are rich. The flip side of "I have but little value to offer them" is "They can pay me what is a lot, to me, without their even noticing it." It's the declining marginal value of money. It has been said that it wouldn't pay for Bill Gates to spend the time to pick up a thousand-dollar bill from the sidewalk.

It's great to have something that a lot of other people want so much they will pay a great deal for it. It's also great for others to have something that you want so much that you will pay a great deal for it. What's the alternative? Being surrounded by those with as little to offer you as you have to offer them.

Now the key thing here is ownership. Rightful ownership. Ownership earned through productive work to create the values in question. That's the kind of "unequal bargaining power" that benefits everyone in society.

On the other hand, if someone, call him Vladimir Putin, has acquired great wealth by seizing it with force, that person's existence is not a value to you. His coercive power is in fact a threat to you: he can just seize your goods, too. He's not operating on the premise of trade but on the premise of theft--the premise not of dollar but of the gun.

Trade is a win/win relationship. Each party enters a trade only when he expects to gain more than he gives. Barring a mistake in judgment, both parties profit from the trade. It happens every day, in every purchase you make--except those few purchases that you regret, after the fact.

Another's bargaining power is the power that comes from his having created something that you judge to be very valuable to you. He has created something you need and crave, and you are properly very glad he has created it. You would not be better off but worse off if he hadn't.

You'd be doubly worse off if he had created it, but the government seizes it or stops him from offering it to you--in the name of "leveling the playing field."

The only "leveling" that's moral and beneficial is the equality of rights, including property rights. Then each man is free to create--and offer in trade--as much value as his ability permits.


Harry Binswanger is an Objectivist philosopher, and was a close associate of Ayn Rand. He blogs at www.hbletter.com.  

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