Friday, February 25, 2011

Democrats Against Democracy?

Tibor R. Machan

Am I alone in finding the Wisconsin Democrats who have been AWOL anything but democratic? Sure, they weren’t doing anything illegal like soldiers who go absent without leave. But that’s a legalism that makes little difference here. What counts is that these Democrats refuse to join their Republican colleagues in an effort to sort out how the state might be brought to its economic senses.

Just think of it like a household where enormous debts have accumulated because some members have spent and committed for future payment way more than the family resources and now something needs to be done so as to put the family back on some kind of manageable budget, which will entail reducing allowances and restricting what can be spent on food, household goods, entertainment, education and the rest. So some of the family call a meeting to discuss just how this should be accomplished but, alas, half of them refuse to show.

Except in Wisconsin it’s worse. In a household the few members who do stay to try to deal with the situation are usually authorized to make decisions without those who refuse to take part but in Wisconsin the rules of the process make this approach impossible--a quorum is required to do anything at all.

Now I believe those who take advantage of this and block the work by going AWOL are not serving their constituents properly at all. Because, remember, you cannot get blood out of a turnip. The coffers are empty. The only alternatives are to default or to impose such high taxes that it will kill Wisconsin’s economy--unemployment will increase, investments will vanish, shops and firms will close by the droves. And who wins? It is the Democrats who seem to have only one objective, namely, not to be legally associated with making cuts that will impact public workers. Why? Because by their lights the constituents are too stupid to realize that, well, you cannot get blood from a turnip! So these citizens will not see the effort to make cuts as a means to save at least some elements of the system, to make substantial retirement payments still possible. No. If you just reduce these retiree’s payments, they will certainly retaliate by voting you out of office.

It is at this point that one can raise the question, where is there some leadership around here? Why don’t the Democrats come back and teach their constituency some elementary accounting, like that one needs to makes cuts when one has no funds with which to keep paying the hefty pensions. Indeed, this is one of the more reasonable roles of politicians, to explain public finance to voters instead of to keep promising to deliver what cannot be delivered!

But the Democrats have chosen another path, at least for a long period until finally the Republican colleagues managed to come up with a few adjustments. As reported in The Washington Post,

“In Ohio, Republican lawmakers agreed to modify a bill that would have banned collective bargaining, allowing state workers to negotiate on wages. Michigan's GOP governor offered to negotiate with public employees rather than create political gridlock. Indiana Gov. Mitch Daniels (R) called on GOP lawmakers to abandon their "right to work" bill that would have made it a misdemeanor for an employer to require workers to become or remain members of a labor union.

“Even in Wisconsin--where more than 60,000 demonstrators have camped out at the Capitol for the past week to protest a budget plan by Gov. Scott Walker (R) to end collective-bargaining rights for public employees--Republicans and Democrats took a small but significant step toward resolving their clash....”

It was about time. What is still a mystery is just how all these phony obligations to public workers, obligations that were known as impossible to fulfill from the git-go, seem acceptable to make in the first place. If you work for me and my budget goes to a certain level but you demand I pay you a lot me, is it not fraud for me to promise that I will pay you way beyond it? How come something like that isn’t the focus of the debate? Why is it even permissible to make such promises? It would seem to me even illegal to do so, no?

But it looks like politicians are held to a far lower standard of negotiation than we ordinary citizens are when we deal with one another. And the Democrats in many states would appear to be willing to corrupt their precious democracy itself so as to try to avoid the problems with their evidently reckless public finance policies. But then they have corrupted the idea of limited government all along, so this isn’t a stretch for them.

Tuesday, February 22, 2011

Are Public Unions Unjust?

Tibor R. Machan

Bona fide Labor unions work within a free market system where firms compete for customers who are normally able to switch from sellers of wares and services if they want to. Public works are noncompetitive, however. Workers who belong to public unions conduct their labor negotiations without their employers facing any competitors. The USPS, for example, has a monopoly over first class mail delivery; teachers at public schools are working for monopolistic employers--students must attend school and the funds are confiscated through taxation and not obtained through voluntary exchange. So, as the saying goes, public workers have the taxpayers over a barrel--there are no alternatives and in most cases one cannot refuse to deal with these workers.

So public workers unions are not genuine free market agents. As such they are able to have their terms met by the taxpaying public basically at the point of a gun. The public must deal with these workers otherwise they face legal sanctions. There is nowhere else to go apart from moving out of the state to another where the same situation obtains, where once again public unions possess monopoly powers and costumers have nowhere else they can turn to get a different deal or to avoid dealing altogether.

In a genuine free market place unionization would involve organizing workers in a firm that competes with others for costumers and with which costumers are free not to enter into trade. So the unions would not be able to engage in extortionist practices, making demands that must by law be met. If one’s child attends a public--or, as some prefer calling them, government--school, and teachers decide they want a higher salary or other benefits, the option of leaving the school doesn’t exist because one will be taxed to pay for it anyway. The same basic setup exists when it comes to any public work and unions. So for these folks to unionize is quite unjust.

Indeed, the rationale behind public works is not the same as behind private works. In the latter all the parties are involved so as to get the best deal they can find and bargaining occurs to bring this about. Public works, however, are supposed to amount to public service, something done not for profit but as a commitment to the public good or interest. Anyone who views public work as if it were the same as private work is suffering from a misconception or perpetrating a hoax.

Accordingly, all the people who work for governments, which are all supported through confiscatory payments--that is, taxation--are strictly speaking ineligible for unionization.

Public work in contrast to private business is something legally required and paid for involuntarily. So unlike going to the grocery store, of which there can be several in one’s neighborhood and which one can actually avoid if one decides to do with little food and household supplies, in the case of public services citizens are not free to deal with others or walk away from the providers.

Clearly, then, the original idea of labor organization into unions does not fit the public service situation. Unfortunately, this is rarely kept in mind. Thus when in Wisconsin or anywhere else for that matter public service employees are insisting on retaining the benefits they have obtained through bargaining with the government they were getting a very special deal. Public policy imposed their services on the citizenry and now the citizenry is no longer able to come up with the loot previously extracted from them via what comes to extortionist means. Yet, because much of the population--egged on by people who would very likely just as soon impose public services on everyone in every line of work (just check out Paul Kurgman’s column in The New York Times last Monday [2/21/11])--has sympathy for the usual laborer or worker when these are often dealing with powerful firms in a free market, the unions are getting a free pass in their current conflict with their employers.

This situation needs to be seriously reexamined. It may indeed imply that the entire idea of public service, let alone public service unionization, is misguided.

Sunday, February 20, 2011

Making versus Owning

Tibor R. Machan

Now it is obvious to most of us that one need not make something so as to own it, fair and square. No one made one’s eyes, kidneys, and other organs and limbs yet they belong rightfully to the person who has them, no one else.

Beyond this of course one way to come to own something is by creating it, like a table or musical composition. So often making something makes it one’s own. But that’s not the only way one can come to own something. One can receive something as a gift! It then belong to one, no one else. One can find something that’s been abandoned or that’s just out there in the wilds. Unless someone else has come upon it and laid claim to it, one can come to own it this way, as well. Certainly if I find a gold nugget on an unowned desert or mountain, I can come to own this and no one may thereafter take it from me with impunity.

While all this would seem to be plain common sense, it needs often to be reiterated because the failure to keep it in mind provides would be confiscators of private property the warped idea that they may get stuff from us if only we didn’t make it. This notion of the public ownership of unearned or unmade holdings has tyrannical consequences.

Those who spread the ruse that we cannot own what we haven’t produced hope to persuade us that they, on the other hand, can. This is, of course, fallacious thinking, the fallacy of the non sequitor--it doesn’t follow! But because ownership and production or creation are so closely associated in our minds, it sounds like there may be something to the idea. There isn’t! And it is vital to remember it because otherwise the notion can unleash tyranny, Draconian and petty, all over the place. The promoters of the notion that you must have made it so as to own it would like nothing more than have you hand over to them whatever you didn’t come by via earning or making it. But it is clear, once considered carefully, that nothing like that follows. They have no right to any of it, you do.

There is, of course, no reasonable doubt that when one makes something one is very likely its owner, although there are quite a few exceptions. If I hire you to be my scout for valuable resources and you come up with such, it is very like that these will belong to me, not to you. What belongs to you is the salary I promised you for your scouting services. But what you discovered will rightfully be mine. (I might also have lost all my investment in you had you come up empty handed!) Also, if you came across some valuable item in my backyard while attending one of my festivities, what you found would not be yours but mine, although you need not call to my attention that you did find it.

Let’s just conclude from these minimal reflections that ownership--the right to private property--can be a fairly complicated matter. While its foundation is simple enough in most cases, its elaboration in a complicated society required a nuanced legal system, with a solid tradition of property law. This is why it is vital that no legislature or court be tolerated when it distorts private property rights (e.g., via misapplied doctrines like eminent domain). And in order to prevent the corruption of the principle of private property rights in a complex society, the citizenry--via research and scholarly centers, schools, punditry, think tanks and so forth--needs to be vigilant. Otherwise the sophistic enemies of freedom will triumph.

And those sophists are not resting, believe me. All one needs to do is read some of the publications--journals, magazines, newsletters, blogs, etc.--produced by these sophists to learn just how diligent they are in their efforts to unravel the private property rights system that had been developed over time under the influence of the classical liberals.