The Nature of Freedom in our Economic Discussions

Too frequently what happens when those on the left of the political spectrum debate or argue with those on the right is a dialogue that devolves into a shouting match. It’s understandable when so many of the issues are deeply personal and emotional, as the issues surrounding public unions are in Wisconsin. What I’d like to do here is pose a debate between what I see as the two dominant economic perspectives in American public discussion and work backwards to analyze the underlying assumptions and differences that too often go untouched. By doing this maybe we can gain a deeper understanding and basic respect for the other side and remember that very few people are truly unreasonable. I can’t claim to be perfectly objective here, though I respect what I understand to be each position. I welcome comments about whether you think I’m on the mark or if I’m missing important points. Here goes:

 

Left: Unions must exist to counterbalance the undue power that businesses have over workers. Capital is concentrated in the hands of few and those few determine the ability of many laborers to feed their families, access adequate healthcare, and lead their lives with basic human dignity. It is a fundamental right to be able to organize and voice opinions in the interest of human welfare. Unions are a right.

Right: Wait a second. Hold on. Where do you get this idea that businesses have undue power over workers? Are they forcing workers to take the jobs? Do they physically threaten workers to get them to accept lower wages? If they did, they would be breaking the law. The balance of power lies in the ability to freely choose. If a worker does not want to work for a particular wage, they may choose to go elsewhere with their services. If the wage is truly too low, then nobody else will accept it either, and the business will be forced to raise it. It’s a self-correcting balance that is only warped when one side is able to force workers to forfeit their wages in the form of union dues to support a cause they may not believe in, and force managers to make decisions that are not in the company’s best interest, which undermines the jobs of everyone involved. Not only do unions disrupt a perfectly fair balance of power between labor and capital, they reduce the freedom of everyone involved.

L: To claim that the power structure evenly supports both labor and capital through freedom to choose is to ignore the real world. In economic models, individuals may appear to have complete freedom to accept or deny based on price alone, but in reality individuals are living, breathing people. They need to eat, they need to have shelter, and they need to feel a baseline security in order to live with dignity. To equate the consequences of a waiting game between labor and capital would be to deny that laborers are human. That’s not to deny that owners of businesses aren’t human either, but by definition their position is one of accumulated resources, sources of credit and, in the current moment, an abundant and desperate labor force. If we don’t allow laborers to band together and create pressure commensurate to the pressure that accumulated resources can apply, there cannot be equality.

R: It’s easy to paint business owners as unfeeling and selfish hoarders of capital, but without individuals who take risks and put their livelihoods in the balance when organizing all the complicated factors involved in running a company we wouldn’t have the technology and quality of life that we have now. The stress and personal assets that are invested in making a business successful can’t be ignored just because it’s not convenient to think of owners as humans who are just trying to make their living. Besides, the way you describe the things that humans need to survive and be considered dignified human beings implies that each individual is owed these things by the mere fact of their existence. Who do you imagine should be required to provide these things for them, and by what right should they make that claim? Everyone should have an equal opportunity to earn the things they need, but they are not entitled to these things. The declaration of independence says that every man deserves the right to the pursuit of happiness, not the provision of happiness. If that were the case, then society and economy as we know it would break under the stress of an unproductive existence.

L: Claiming that workers have a right to be treated with dignity is not the same thing as saying that they deserve to be given something without earning it. It means that everyone has an equal opportunity to earn what they want. It is equality, not entitlement that workers demand. The pursuit of happiness referred to in the declaration of independence was a cry for equality in the pursuit of happiness. The poor and working class are simply much less able than the rich to pursue happiness. This is what needs changing through regulation, union bargaining and protections for the less powerful in society.

R: Workers already have equality in terms of opportunity and freedom; there is no need for unions to give them that. As I’ve already pointed out, workers are equally free to take an offered wage or decline it in favor of a preferable alternative. Unions decrease freedom, they don’t increase it. To say that pure equality is our goal, we could just take whatever hardworking and innovative people earn that put them ahead of the average and give it to those who have less. The problem with this kind of distributional equality is that it denies individuals the right to what they create and earn while rewarding those who do not contribute.

L: Workers do not have equality of opportunity because their choices are severely limited and controlled by systemic and environmental influences beyond their control. Influences that are much less limiting on the owners of capital. Additionally, your claim of pure distributional equality is not being proposed by anyone here. I also am arguing for the equality of opportunity to determine life outcomes. All workers want is to have the same power to decide for themselves how their lives will be shaped that those who have economic resources have. The rich don’t deserve to be more free than the poor just because they have more money. They may be able to buy more things, but their life chances need to be equal to everyone else’s. Without protections against the influence and power of those with resources the freedom of workers is threatened and limited.

R: Here’s where you’re mixed up. In the absence of physical force, the rich cannot ever be more free than the poor because intrinsically we are all equally free to choose between alternatives. Once we eliminated coercive and discriminatory practices by law, we saw to it that every person had equal opportunity to say yes or no to economic offers. Don’t want to buy a product? Don’t buy it. Don’t want to sell your labor at a particular price? You’re perfectly free to pursue alternatives of your choice. The rich may have more alternatives, but the freedom to choose between alternatives is absolutely equal across socioeconomic lines.

L: How can you say that freedom is equally distributed for all non-coerced people when you yourself point out that not all options are equal among people. If a poor person has two options; accept wages that keep them barely alive or reject wages and starve, how is that not coercion? How is that being able to ‘freely choose?’ If a rich person or a business owner faces the options to hire from a vast pool of labor or wait comfortably while skimming margins off of the accumulated assets that he or she has, how can we say that they are equally free? To claim that freedom and choice have nothing to do with the circumstances in which they occur is preposterous.

R: I can hardly believe that you do not accept that the basic definition of freedom is the ability to choose between alternatives without external coercion. The ability to choose freely between two options and the ability to choose between many options is philosophically identical. You seem to make freedom out to be a responsibility to provide the same options to everyone. Those who have not worked to earn their pay should have an equal right to buy what they want? No. Despite your attempt to define hunger as coercion, you cannot say that any external actor is imposing this choice. If you aim to show that if people choose certain actions that they may harm themselves, then you have proved nothing new. People are responsible for the actions that they choose, but as long as they were free to choose them, we have no further business intervening. Besides, we (especially through the government) tend to make things worse when we tell people how to use their resources.

L: First of all, coercion does not need to be perpetrated by an external, individual actor for it to be coercion. If there is a credible threat of harm or death that disproportionately affects one section of a population, even if it comes from a system rather than a dictator, then freedom of choice is not universal. You seem to ignore the fact that people are faced with widely varying life situations that sometimes preclude any realistic expectations that they can make good choices. Discrimination, historical injustices, poverty, nutrition and family situation are all factors that influence the ability of individuals to choose. Most of us agree that we should work against these influences that limit choice and freedom, but you seem to deny that poverty or affluence are legitimate factors to consider. The system is clearly unbalanced in favor of those with resources and the rights and protections for workers, consumers, the poor, and the marginalized are necessary to correct for the imbalance.

R: Well, I can’t deny you that the world is not fair. It turns out, however, that no matter what you try to do, you’re not going to make the world fair. If you try to warp the scales to support labor against capital, then it’s simply unfair in a different direction. What you’re claiming is that unfairness determined by some humans is better than unfairness determined by nature and individuals competing in a context of equal freedom. Humans have too many tendencies to abuse power over others to trust them with picking winners and losers. Better to ensure that there is no physical coercion and let everyone decide for themselves. You still haven’t given me an alternative definition for freedom, either. The beauty of freedom in the United States and an increasing amount of the world is that we can determine our own futures. Rags to riches is not just a fairy tale and there are countless examples of people changing their lives through making use of their freedom. As long as there are paths for every person to choose, we can’t be held responsible for those who don’t take them.

L: I’ll tell you what’s wrong with your definition of freedom is: you’ve mistakenly attributed a binary quality to choice. You claim that there are two types of system: those that impose a single option on everyone and those that ensure at least two options for each person. Either you have freedom or you do not. Our world is not black and white, however. Freedom is a spectrum and we need to work towards equalizing the choices available to people, not just making sure nobody’s being forced into a predetermined life. Given that not all people are born free, it is our moral responsibility to shape the institutions that order our lives, especially our economic lives, in order to correct the injustices that are inherent in the world. My definition of freedom is the ability to live with the dignity that is due to all people. Dignity is equality of life chances and opportunities. To have the choice only between starving and working for unfair wages is not living with dignity. If you believe in equal freedom for all, then you must believe in human intervention to work towards it. Unless we base our policies in a movement toward equal opportunity and dignity, we will never achieve true freedom.

R: You’re wrong. Human intervention is not necessary apart from the promotion of equality exactly as I have defined it. If we take your definition to be the true one, then we will end up taking money from those who earn it and giving it to those who don’t. Charity is great when it’s the choice of the person giving it, but if it’s against someone’s wishes it’s closer to theft. We need to think of freedom in its most basic, stripped down, natural form because it is most reflective of the human condition. You say freedom is the ability to live with dignity, but I say that freedom is dignity, plain and simple. The good news is that we can promote freedom while simultaneously creating the most wealth and benefit for everyone. As the efficiency advantages that free markets have everywhere continue to undermine wasteful economic decisions across the world, more freedom spreads into the dark corners. By taking my definition of freedom and sticking to it, we will end up with what you claim to be the right of every person. But if we try to intervene to create the situation that you say we must, we will inevitably bungle the whole job. Unless we start with individual freedom, we cannot end with equal opportunity.

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2 Comments

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2 responses to “The Nature of Freedom in our Economic Discussions

  1. Bruce Walker

    A broader premise where the business owners are not only described as “…individuals who take risks and put their livelihoods in the balance…” but rather men and women who have clung to the treacherous precipice throughout this economic storm, sacrificing not only extravagances and wants, but needs and self while daring only to try to survive. These are people who have no pension and no health insurance, not trumpeting that it is some fictional “right” to have those things but even so, willing to give those same things to others—teachers, government workers—people who actually have much more monetarily than the business owner, all the while asking nothing in return but for the union worker to attempt to understand what the small business owner is enduring and to, perhaps, join him in his sacrifice so that he may find it easier to survive.

    Instead, to be branded as rich, bloated, uncaring, unfeeling, hoarders of capital that only exists to exert control over the victimized masses of laborers struggling to maintain their human dignity…well, it can get to be too much. Perspective is everything.

    I had a teacher tell me that a student asked her about small businesses as they related to this bill and she replied to him (and then relayed to me), “Well, I just won’t be able to shop with them if this happens.” She then went on to say that her husband was a stay-at-home dad and she did not want him to have to go out and get a part-time job. I will just bet that she didn’t.

    Throughout many images and interviews, two things have become evident to me.

    1 Those who had lived with the support of collective bargaining became accustomed to the benefits and were insulated from exterior realities to the point that they were singularly unprepared to give up that which gave them their quality of life. Their standard of living has fostered a mentality, a sense of entitlement where their earning and benefits are seen as a “right”. How many of these same people will choose the least expensive contractor to do their repair work and not comprehend the duplicity of their thinking? They have the “right” to earn what they do based on seniority not merit yet make daily choices based upon price alone. Like the teacher who said that she would stop doing business with small businesses because she would not be able to afford it, she lives in a bubble that she alone wants to have the right to full and total control. I would say that would be like me telling a customer what they must pay, and that they did not have the right to shop elsewhere. That scenario is not part of the world I live in.

    2 Unions care most about their own survival and seeking that end seems to justify any means, the workers being merely pawns to achieve that goal. Staged demonstrations, deliberate actions and misinformation to achieve nothing other than a posted soundbite on CNN that appears to support their percieved cause while the real goal remains hidden in the smokescreen. Union bosses (as a generalization) are about making money. Look at their salary. Unions give some 92% to the Democratic party and nobody involved wants that to end.

    I have listened to many people tell me what they think about this collective bargaining thing. Very few have had the courtesy to listen to me.

    • Thanks for the comment, Bruce! You bring a very important perspective to the debate. For those who don’t know (and couldn’t guess), Bruce is a small business owner (I worked for him for two summers) and is probably the hardest working person I have ever met. I can understand his frustration at feeling like those who don’t work as hard and likely receive more compensation, benefits, and job security are balking at losses of their take-home pay and collective bargaining rights. Bruce points out that if small business owners don’t get to collectively bargain and have to struggle in the tough marketplace, what makes union workers think that they’re so much better that they should play by different rules?
      I think a couple things are important to point out:
      1)I’m glad you brought up the variations in the supposedly homogeneous ‘business owner’ category. Small businesses are very different from ‘big business.’ Nonprofits and cooperatives are much different from for-profit firms. Finance is very different from construction contracting. Many details are loss in the generalizations that I too fall prey to. Still, as you’re surely aware, the idea that all business owners have been taking personal cuts, slashing their own benefits, or firing themselves before their workers is not in the least bit representative either. The point from the (moderate) left is not to vilify all business owners, but to point out that on balance, they have more power over their circumstances than laborers without bargaining rights. This is certainly still open to debate, but to make all business owners into heroes is as unrealistic as to call them all evil.
      2)The public unions are not making a fuss about cuts to take-home pay. They have accepted the cuts that will result in something like an 8% loss in income through paying a higher percent of their health care packages. What the real problem is has to do with their rights to collectively bargain and to exist as a union. Unions will have much less ability to influence their working conditions and compensation and will have to struggle more to even stay viable after this legislation takes effect. The debate is not about whether workers think they deserve to be paid more but whether workers deserve to band together to influence their working conditions and compensation. Is it selfish to want control over their working lives?
      3)In terms of the political interest question, I think that each side has enough to point out in terms of political contributions to make this facet of the debate pointless. Yes, unions are almost always Democratic. Does that mean supporting unions is a backhanded way to support the Democratic party through law? Is decreasing union power a backhanded way to take support away from the Democratic party? There is no way to answer these questions satisfactorily because they have to do with primary motives.
      4)I don’t think it’s contradictory for public union employees to shop around for the least expensive contractor because I’d bet that they want the contractor to be able to demand a fair wage and proper working conditions as well. The whole idea of unions is for workers to stand up for their rights. It’s not in the job description of business owners and managers to be on the side of the workers, just like it’s not necessarily the consumer’s role to make sure that they’re paying their contractors enough. They want the contractors to figure it out for themselves, and would probably not begrudge having to pay a higher price if they knew that the money was going for this purpose.
      5)We cannot fairly say that unions exist only for their own existence and that workers are a means to that end. I think just about any union member would say that the opposite is true, and there is no way to prove one way or the other. The causality is impossible to distinguish because reasons only exist in people’s minds. The real issue is the belief that either workers should have more power to determine their compensation and conditions or the managers and owners should have more power to determine it. So who deserves more power and who less? The argument is about control of the surplus value created by labor and management together (from what I understand of Marx, he says only labor has a right to the surplus value, but I’m not convinced). How should it be split and who should have a say in the process? These questions are so hard to answer because they deal with micro versus macro issues, short-term versus long-term issues, and probabilities. None of these dynamics have clear lines to delineate between right and wrong. Like most of economics the outcomes are different, not good or bad. It’s up to us to decide what outcomes we want.
      I have a question that I have not been able to figure out in this debate, and I would love to have others help me understand them: Why should public unions have the right to collectively bargain when their bosses have little to no incentive to lower pay or benefits? We’re talking about tipping the scales of power through collective bargaining, but what power are we tipping the scales against in the case of public workers?

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