Deirdre McCloskey says the theory that union "struggles" are necessary and are behind improvements in workers' incomes and conditions is magical thinking.
Photo: Instituto CATO
Most people think that we workers can improve ourselves by "fighting back". Form a union, for example, and fight to force the bosses to give us more money. Or fight to get the state to pass a law that wages must be higher than minimum wages. Or to get better working conditions, well, by fighting.
My colleague Leon Fink, a brilliant historian of the American labor movement, once told me, "Without unions, we would still be working 12 hours a day." "No, Leon. We got the 8-hour day not because of struggle, but because workers became so productive, and therefore so rich, that they no longer wanted to work 12 hours a day." He laughed and walked away. McCloskey is so conservative. She's anti-worker. It's obvious that we got the 8-hour day by fighting, striking, campaigning, petitioning, voting, and protesting, right?
No. The theory behind "struggles" to improve wages or working conditions is that the bosses have a big pile of gold in the back room. The job of the unions or the state is to force the bosses to give up some of the gold and give it to the workers. For example, if you force the bosses to give you six weeks of maternity leave, the gold comes out. If you go on strike to demand higher wages, the gold comes out. If a law is passed to make the working day 8 hours, the gold comes out.
But of course, it's a crackpot, even childish theory. It's the theory you had about your father's wallet when you were six years old: there's an unlimited amount to ask for or to fight for. It's magical thinking. But a lot of people believe it.
The bosses don't have the gold. They get the money to pay you by selling what you make to customers. If they raise your salary every time you work hard, the customers will pay. And, of course, they will soon stop paying.
So how do workers improve? Through innovations that make them more productive, so bosses can pay them more and stay in business. Wages and working conditions are determined by supply and demand. Supply is what gets paid. Demand is productivity. There is no struggle. Just a deal.
This article was originally published in Spanish in Instituto CATO.
