Greece, Twinkies, and the Fiscal Cliff

By now Hostess, as a company, no longer exists. The upper management of that company ran it into the ground and drove it into bankruptcy. A bankruptcy judge created a plan that would make Hostess sustainable for the near term, and it involved cutting the pay of the workers. One of the two unions balked at that, and Hostess, unable to continue operating, has closed down.

There is plenty of blame to go around, but once the impartial bankruptcy judge made his decision the union really had a Hobson’s choice, a "take it or leave it." And they decided to leave it. They decided it is better to not receive a bigger paycheck than it is to actually receive a smaller one, and they got exactly what they asked for.

Meanwhile, in the bankrupt country of Greece, every time there is an attempt to balance the national budget, or at least make it less unbalanced, the result is riots in the streets and a change in the national government. The fact that the money simply isn’t there does not deter the Greek people from demanding that they receive the benefits promised to them.

This demand for entitlement has reached a peculiar stage. It doesn't matter if the money isn't there, those making demands still want their checks anyway. Where the money comes from isn't a concern, that the money isn't there in the first place isn't a concern, that the checks are written against an account that does not exist isn't a concern. Explaining the math to those making the demands does not work. Apologists for the Bakers Union are left saying that it is the responsibility of Hostess to provide a job whether it can be afforded or not.

It is a situation analogous to the later parts of Atlas Shrugged. Hank Rearden had just been introduced to the Steal Unification plan, and when he points out that the plan cannot work, the response from everyone in the room is that he can make it work somehow. They do not know how, and they do not care to hear his explanations of how it cannot work.

The United States is heading down that road. So many people have their tiny portion of the Federal Budget as their subsidy, and they do not want it cut. They each have allies that do not want their own parts cut, and they work together to protect the whole. The politicians know that something needs to be done to avoid national bankruptcy (either by default or by inflation) but cannot work together to solve the problem.

There is little reason to worry about the Fiscal Cliff. If one still believes in government, those currently in office are too afraid of the cliff to happen. They will find the way to kick the can down the road for a few more months until it finally becomes impossible to do so any farther. Then those who scream every time there is a threat of cuts will discover that the money really isn’t there, and their choice to not receive a larger check instead of actually receiving a smaller check will be granted. If one doesn't believe in government then it is apparent that it is nothing more than a minor adjustment that won't have any real effect except to kick the can down the road for a few more months.

And eventually, like Greece and like Hostess, those screaming "all or nothing" will find out just how much "nothing" really is. Austerity doesn't come because it is chosen, it comes because the money is no longer there.

A Union Argument

Although it is abundantly clear that libertarians are not anti-union, and actually have no problem with unions in general, there still exists the belief that libertarians are against unions. It is because libertarians do not support special favors for unions that libertarians are accused of being anti-union. In order to prove this point, a peculiar argument is made.

In the past, there have been incidents of violence by the employers against striking union members. As a result Union leadership has sought special protection by the government against businesses that would commit such acts of violence. Libertarians oppose any special legislation for or against unions, so therefore libertarians oppose this special legislation as well, so therefore libertarians support when businessmen inflict violence against union members.

There are problems with that argument. The first of them is that union members have been known to use violence against scabs. While that is not an argument for or against special legislation, when an argument used in favor of a proposition can also be used against it that is a pretty good sign that the argument is not very sound.

The major flaw is that libertarians are against the violent crime of battery. If violence is used by employers against union members, that means violence is being used against individuals. Any libertarian that recognizes a purpose for government would insist that government use its power to defend the rights of individuals, especially the right to life and the sanctity of the body of the individual.

In such a minarchist system, a businessman who hires people to assault union workers, and any thugs who are employed by that businessman for that purpose, are all criminals. The government should therefore enforce the laws that already exist, and laws already exist to protect striking union members from being assaulted by the hired thugs.

If the laws are not being enforced in the first place, there seems a strange futility in calling for more laws to do what existing laws already cover. That is why it also seems strange that libertarians, who do not believe in assaulting union workers when they go on strike, are considered to be anti-union.

More on Unions

In order to prove that libertarians are hostile to unions in general, and not merely hostile to them receiving special favors or benefits from the government, a staunch progressive referenced an article by Professor William Hutt: Trade Unions: The Private Use of Coercive Power. In it, Professor Hutt makes the argument that the strike or threat of a strike is a coercive act.

That article is actually little better than a diatribe against the economic ignorance of unions, their members, and their leadership. While it is clear that Professor Hutt stops short of forbidding unions the right to act, and thus the article does fit in within the realm of libertarian thought, it is also clear that the article is quite far off base when it describes a strike as coercion.

Only at the very end of the article does Professor Hutt actually get to one of the legitimate critique of unions expressed by libertarians, and that is their political activities to get them special favors or special benefits from the government.

But by calling a strike "coercion" he opens the door for asking for government intervention, the step he stops short of. If there must be a government, acting against coercion, acting against the use of force or the threat of force, is one of the few areas where it should act.

If there is a right to conduct business, there is also a right to not conduct business. It cannot be coercion to refuse to conduct business. There cannot be one without the other. That is what a strike is. And unions themselves are a right of free association.

The other factor is that he describes how unions hurt their own cause. Take any issue libertarians stand for, and it is obvious that libertarians have absolutely no interest in stopping people from hurting themselves. This is evident in every single moral issue on which libertarians and conservatives disagree.

The only redeeming factor in the essay is that Professor Hutt did stop short of advocating legal restrictions on unions. But he is truly straying beyond libertarian thought when he goes so far as to call striking or threatening to strike by the term "coercion."

Libertarianism and Unions

The array of arguments against libertarianism that have no source is always impressive. Just as the traffic light argument comes from an argument that no libertarian ever made, there is also a belief that libertarians are anti-union.

Given that unions are covered under the right of free association, it should be obvious that libertarians are not anti-union. It is well known among opponents of libertarians that libertarianism supports free association, to the point where the fallacious argument is made that arguments in favor of free association are actually a cover, in the form of eloquent verbiage, for racism.

Yet for some reason a philosophy whose greatest pride is its consistency is expected to abrogate the right of free association if the association is called a union.

Unlike the traffic light argument there may be a somewhat reasonable source for the union argument. Given the current state of affairs, where the government is a club to be used against ones opponents, not wishing for one side to have the club is considered by default to want the other side to have the club.

A hypothetical scene from the Lord of the Rings may best describe it, the characters being familiar enough so that twisting them into slightly new roles is possible.

Sauron (representing big business) and Saruman (representing unions) are both trying to convince Frodo (representing libertarians) to hand over the Ring of Power (representing power).

Saruman: Frodo, you must give me the ring, otherwise Sauron will have it. I only have your best interests at heart.

Frodo: But I want to destroy the ring.

Saruman: No, since you don’t want to give it to me, it is proof that you actually want to give it to Sauron.

Frodo: What? No, I want to destroy it because I don’t want anyone to have it.

Saruman: No, that’s just fancy words you are using to cover up your true desires. I’m tired of your hobbit double talk. You really support Sauron. Look, by walking to the Cracks of Doom, you are walking to Mordor, which shows you want to give him the ring.

Given that many are incapable of imagining one actively not wanting either side to have power, and the Manichean outlook produced by the two party system, a person can be forgiven for initially thinking that since libertarians don't support special government favors for unions that they must support special government favors for businesses, but only until they actually meet their first libertarian.

Employee "Free" Choice Act

Organized labor leaders supported Obama. They did not do so selflessly, but out of a desire to have a certain law passed that would greatly increase the strength and wealth of organized labor. They look forward to the passage of the Orwellian named "Employee Free Choice Act."

That act does not give employees free choice; it gives union organizers free choice over the employees.

Currently, if there is a drive to form a union, it is a two step process. First employee signature cards are collected to show sufficient interest, and then a secret ballot election is held to determine whether or not a majority of employees actually want a union. The biggest complaint of the union organizers is that employees who sign the check cards that leads to the election then vote against forming a union on their secret ballots.

The EFCA will eliminate the requirement for a secret ballot election. The employee check cards will be considered sufficient to form a union.

Allegedly this is done to prevent employer intimidation. The theory is that during the time interval between the collection of the signature cards and the balloting, a sufficient number of pro-union employees would be fired to ensure the election goes the way the employer wants, presumably anti-union. This flies in the face of currently existing employment laws which protect union organizers from being treated in this manner.

Also allegedly somehow employers would know how employees voted in the secret ballot and therefore punish those employees who support the union. The truth is that union organizers are disgruntled that they do not know how employees voted and therefore can not punish those employees who oppose the union. Some organizers even make the Orwellian suggestion that in the interest of fairness the ballot should not be secret.

Instead of being a protection for the employee, this EFCA is actually a way for unions to abuse employees. Signing the union card is a public act, analogous to registering to vote. Peer pressure can move people to act in ways that they wouldn’t act if granted privacy. The Employee Free Choice Act allows Guido and Nunzio to walk up to an employee and say "Youze gonna sign the union card? You don't want no 'accidents' to happen so youze gonna sign it."

For the sake of the employee, the EFCA should not pass.