Your memory is exactly the same as mine, and since mine is from the 2010s it's a sign that things have not improved at all. I was taught all the same things about the "Gilded Age", that the excesses of capitalism were the sole cause of the Great Depression and that FDR, the New Deal and WW2 saved everyone from it. I was taught that "The Jungle" was historical fact that proved without regulation we'd all be poisoned to death by now. Needless to say I was very alarmed when I learned economics and did my own research (the horror!).
I am not a professional economist but I'm often struck by the illiteracy of (perhaps most) MSM economics journalism on the subject of capitalist billionaires. The received view (and not just on the Left) is to inveigh against the extreme concentration of great wealth as if this is a zero-sum thing. As if the billionaire's billions is wealth that has somehow been 'taken' from the rest of us. The fact that every cent of the billionaire's billions ends up as someone's wages - whether in building their yachts or cleaning their apartments or capital investment in the company that employs them etc etc - this understanding seems lost on most.
I’m so jaded by bad academics that I’ll happily believe a clay tablet claiming Over educated midwits probably caused the Bronze Age crisis and led to the downfall of the Roman Empire
Thank you for responding. Labor is a complicated issue. I was watching an interview on Yahoo News with Don Schulman former president of PayPal who has different view on labor. Its refreshing but how much of it is real I can't say. I don't know anyone from PayPal. Mr. Schulman says that employees are an important part of the process of running a company. That profits and purpose go hand in hand.
Its a short interview and worth watching.
You point out some of the deficiencies of labor, unfortunately you are preaching to the choir as they say. I fought for union justice, I saw how they protected their drinking buddies and screw ups whom they depend upon to vote for them. I paid a steep price for trying to promote a better person than our alcoholic business agent who was power obsessed. I was unsuccessful. I have quite a story to tell about my experience during the construction phase of a nuclear plant. 30 years ago (I'm retired) I spoke at a union meeting about our failure to keep up with the times. I demonstrated that the US occupational outlook handbook stated that over 2 million workers in my profession would be needed. I said that in particular that we need to keep up technology which would be the mainstay of our profession. Fastforward to today, what I said then has come to pass. Our membership has dropped 35% while it should have doubled. The Washington DC office did its own study, while graft and corruption has always been a problem, believe me I am not minimizing this at all. It was our failure to keep up with the times and train our people in the right way. Unions today can be and have been their own worst enemy. I differ with your analysis that Unions have been a reason for reducing labor. Any business strives to minimize a labor force. Its just intrinsic survival. The fact that Unions have higher wages and benefits motivate employers to offer better or similar pay and benefits. Otherwise this would not happen.
In closing, what the future holds with automation and AI is certainly scary. People in the future will simply not be needed. Then what? Technology will be the master of the future if it isn't already. This coupled with maybe 9-11 billion people. This what we should be thinking about.
Suggestion: if you haven’t already, a copy of this piece should be sent to the current editor of this history textbook, along with an offer to provide whatever links are needed to allow him to better educate the students exposed to his textbook.
I am a member of one of biggest unions in the country. Yes Unions have their issues in particular their leadership, however without unions there is nothing for the worker. Apparently you are really unaware of the working conditions that brought about the uprising in labor in the United States, although you seem to mention only a few of them. One of the reasons if not the chief reason we have a "border crisis" now going on 80 years, is the desire for the rich to have cheap labor, keeping people repressed has been the MO for as long as history has been recorded. You make an obvious rhetorical question "Why do the immigrants keep coming?" Number one back in the day they couldn't read or didn't you know that, number 2 no communication or didn't you know that, number 3 language barriers or didn't you know that? So definitely education is necessary in particular for you. Uprisings through history were caused by several factors, religions declaring their god said so, power in the hands of violent people like Ghengis and Attla, and cruel and abusive treatment in particular for labor. I suggest you do a little more research and you will find that unions brought about the middle class we have today. Now the right wants to take that away and diminish what remains for the common people. I suggest you need some help in this (which you desperately do) so let me know.
Maybe a brief summation in right wing capitalism might help, so let me help you out:
right wing capitalism in a nutshell
the acquisition of resources by government decree free of charge this after taxpayer was used to do all the prep work (like the staircase national park)
the access to cheap labor
the access to abundant clean water
the access to transportation ie roads, rail etc built with taxpayer dollars
Maximized profits with little interference from the government like regulations, working conditions, environmental laws.
No responsibility for any human or environmental damage
This kinda describes the coal industry for one.
So tell me more about these leftist interferences just curious
I hope this helped. For sure take some courses in the history of labor and maybe you'll have a better insight to reality
Speaking on behalf of Mr. Caplan I can assure you that he would be very pleased to support the idea of voluntary trade unionism, but would be extremely critical of their performance.
Perhaps the most pertinent fact to consider is Union membership.
US is down to around 11.5% and only about 6% in the private sector.
Europe is down to 22% and that is largely because of the higher rates in the Scandinavian countries, and mainly through the public sector.
Australia has fallen from 41% to 12.5% in the last 30 years.
The economists term of revealed preferences seems to be in operation quite strongly.
There is abundant literature about the correlation between union membership and single factory towns in the UK during the Industrial Revolution. Low levels of worker mobility led to capital being able to exploit wages and conditions. However as capital competition increased so did the competition for skilled workers. Ironically many of the initial union wage increases and strikes led directly to increased focus on labour saving devices.
Many other studies of union based negotiations have shown that the union has a strong preference for wage rises and less concern for employment levels. This is a classic public choice dilemma where the union will preference short term gains versus long term labour stability.
While there are always a plethora of examples of bad behaviour by capital the fact that union membership has fallen so sharply would seem to indicate they are not fulfilling the needs of their members.
Often you can see comments that unions help the working class. They don’t. They represent their constituents and will work vigorously to help ensure people are unable to get work by forcing up wages. The same for your border example. People from South America often relish a chance to work in the US. They earn more and most importantly they acquire skills. This is the same in Australia where we have unions hostile towards foreigners from the Pacific coming to Australia to pick fruit and then return home. There is often a shortage of pickers, the work is hot and arduous, and so makes it hard to attract labour. Many Australian unions have been quite hostile to the idea of allowing these people easy access to our country. Also if they receive a work visa then they automatically receive free medical healthcare, so the social safety net is also very attractive versus where they live.
Lastly the wages of many union’s leaders are egregious compared to the people they represent. We have had countless scandals pertaining to the misuse of union funds and members pension benefits.
Capital is not motivated to pay higher wages or provide better conditions due to altruism. It does it because it is forced to die to the need to compete for workers. And once they have employed them they have a strong incentive to retain them.
Lastly please consider that civility and courtesy is free.
AP US History is the second most widely taken AP exam in the US. Most ambitious college bound students in the US take it. It is thus a filter that indoctrinates our elite students into a pernicious view of economic history, and economic reality, before college. Addressing this one issue should be a higher priority within the free market economics community than any of the countless attempts at "economic literacy." As long as the predominant moral narrative is based on false economic reality, but presented with the academic legitimacy of the College Board AP exam system, a little summer camp here and there won't have much impact.
In Oz we have seen a large number of restrictive work practices abolished. Things like only a member of a certain union could operate a given machine. Overall workers have been given more flexibility at work, this makes them more valuable, and importantly, they can often negotiate their pay down to an individual level.
On the WHS side a lot of the reforms and awards through legal action has continued to improve the quality of work. What is mysterious to me is how workers in say coal mines were unable to get better support to prevent black lung. The other odious event we had was mesothelioma from the asbestos mines. Despite having unions, government departments and other regulatory bodies, the problem grew worse over many decades. The company also hid the problem. From a simple moral perspective not sure what went on in the heads of the company leadership. Again probably poor incentive structures as bonuses would have been paid on short term results. Also what were the unions doing as the mines back then would have been 100% unionised.
We have seen directors liability extended but lots of bad behaviour still persists.
Your memory is exactly the same as mine, and since mine is from the 2010s it's a sign that things have not improved at all. I was taught all the same things about the "Gilded Age", that the excesses of capitalism were the sole cause of the Great Depression and that FDR, the New Deal and WW2 saved everyone from it. I was taught that "The Jungle" was historical fact that proved without regulation we'd all be poisoned to death by now. Needless to say I was very alarmed when I learned economics and did my own research (the horror!).
Let me help you out Sean, have wages kept up with inflation?
Yeah I'd say real income has slightly increased since the 19th century.
I am not a professional economist but I'm often struck by the illiteracy of (perhaps most) MSM economics journalism on the subject of capitalist billionaires. The received view (and not just on the Left) is to inveigh against the extreme concentration of great wealth as if this is a zero-sum thing. As if the billionaire's billions is wealth that has somehow been 'taken' from the rest of us. The fact that every cent of the billionaire's billions ends up as someone's wages - whether in building their yachts or cleaning their apartments or capital investment in the company that employs them etc etc - this understanding seems lost on most.
It's a combination of envy and ignorance.
I’m so jaded by bad academics that I’ll happily believe a clay tablet claiming Over educated midwits probably caused the Bronze Age crisis and led to the downfall of the Roman Empire
Completely agree. The literature on the minimum wage borders on criminal. The automatic machines at McDonald’s are testimony to that.
Should an academic person have a duty of care to broader society to ensure their work is accurate and to the extent it can be done free from bias?
your lecture link is broken
https://econfaculty.gmu.edu/bcaplan/e321/lab2.pdf
As is the negative side effects of labor market regulation and unionization link.
Recommendations for history books that we can read with our children?
Time for Bryan to write a high school U.S. history book.
Hi Mark,
Thank you for responding. Labor is a complicated issue. I was watching an interview on Yahoo News with Don Schulman former president of PayPal who has different view on labor. Its refreshing but how much of it is real I can't say. I don't know anyone from PayPal. Mr. Schulman says that employees are an important part of the process of running a company. That profits and purpose go hand in hand.
Its a short interview and worth watching.
You point out some of the deficiencies of labor, unfortunately you are preaching to the choir as they say. I fought for union justice, I saw how they protected their drinking buddies and screw ups whom they depend upon to vote for them. I paid a steep price for trying to promote a better person than our alcoholic business agent who was power obsessed. I was unsuccessful. I have quite a story to tell about my experience during the construction phase of a nuclear plant. 30 years ago (I'm retired) I spoke at a union meeting about our failure to keep up with the times. I demonstrated that the US occupational outlook handbook stated that over 2 million workers in my profession would be needed. I said that in particular that we need to keep up technology which would be the mainstay of our profession. Fastforward to today, what I said then has come to pass. Our membership has dropped 35% while it should have doubled. The Washington DC office did its own study, while graft and corruption has always been a problem, believe me I am not minimizing this at all. It was our failure to keep up with the times and train our people in the right way. Unions today can be and have been their own worst enemy. I differ with your analysis that Unions have been a reason for reducing labor. Any business strives to minimize a labor force. Its just intrinsic survival. The fact that Unions have higher wages and benefits motivate employers to offer better or similar pay and benefits. Otherwise this would not happen.
In closing, what the future holds with automation and AI is certainly scary. People in the future will simply not be needed. Then what? Technology will be the master of the future if it isn't already. This coupled with maybe 9-11 billion people. This what we should be thinking about.
Suggestion: if you haven’t already, a copy of this piece should be sent to the current editor of this history textbook, along with an offer to provide whatever links are needed to allow him to better educate the students exposed to his textbook.
Hi Mr. Caplan,
I am a member of one of biggest unions in the country. Yes Unions have their issues in particular their leadership, however without unions there is nothing for the worker. Apparently you are really unaware of the working conditions that brought about the uprising in labor in the United States, although you seem to mention only a few of them. One of the reasons if not the chief reason we have a "border crisis" now going on 80 years, is the desire for the rich to have cheap labor, keeping people repressed has been the MO for as long as history has been recorded. You make an obvious rhetorical question "Why do the immigrants keep coming?" Number one back in the day they couldn't read or didn't you know that, number 2 no communication or didn't you know that, number 3 language barriers or didn't you know that? So definitely education is necessary in particular for you. Uprisings through history were caused by several factors, religions declaring their god said so, power in the hands of violent people like Ghengis and Attla, and cruel and abusive treatment in particular for labor. I suggest you do a little more research and you will find that unions brought about the middle class we have today. Now the right wants to take that away and diminish what remains for the common people. I suggest you need some help in this (which you desperately do) so let me know.
Maybe a brief summation in right wing capitalism might help, so let me help you out:
right wing capitalism in a nutshell
the acquisition of resources by government decree free of charge this after taxpayer was used to do all the prep work (like the staircase national park)
the access to cheap labor
the access to abundant clean water
the access to transportation ie roads, rail etc built with taxpayer dollars
Maximized profits with little interference from the government like regulations, working conditions, environmental laws.
No responsibility for any human or environmental damage
This kinda describes the coal industry for one.
So tell me more about these leftist interferences just curious
I hope this helped. For sure take some courses in the history of labor and maybe you'll have a better insight to reality
Glad to help and You're welcome!
James,
Speaking on behalf of Mr. Caplan I can assure you that he would be very pleased to support the idea of voluntary trade unionism, but would be extremely critical of their performance.
Perhaps the most pertinent fact to consider is Union membership.
US is down to around 11.5% and only about 6% in the private sector.
Europe is down to 22% and that is largely because of the higher rates in the Scandinavian countries, and mainly through the public sector.
Australia has fallen from 41% to 12.5% in the last 30 years.
The economists term of revealed preferences seems to be in operation quite strongly.
There is abundant literature about the correlation between union membership and single factory towns in the UK during the Industrial Revolution. Low levels of worker mobility led to capital being able to exploit wages and conditions. However as capital competition increased so did the competition for skilled workers. Ironically many of the initial union wage increases and strikes led directly to increased focus on labour saving devices.
Many other studies of union based negotiations have shown that the union has a strong preference for wage rises and less concern for employment levels. This is a classic public choice dilemma where the union will preference short term gains versus long term labour stability.
While there are always a plethora of examples of bad behaviour by capital the fact that union membership has fallen so sharply would seem to indicate they are not fulfilling the needs of their members.
Often you can see comments that unions help the working class. They don’t. They represent their constituents and will work vigorously to help ensure people are unable to get work by forcing up wages. The same for your border example. People from South America often relish a chance to work in the US. They earn more and most importantly they acquire skills. This is the same in Australia where we have unions hostile towards foreigners from the Pacific coming to Australia to pick fruit and then return home. There is often a shortage of pickers, the work is hot and arduous, and so makes it hard to attract labour. Many Australian unions have been quite hostile to the idea of allowing these people easy access to our country. Also if they receive a work visa then they automatically receive free medical healthcare, so the social safety net is also very attractive versus where they live.
Lastly the wages of many union’s leaders are egregious compared to the people they represent. We have had countless scandals pertaining to the misuse of union funds and members pension benefits.
Capital is not motivated to pay higher wages or provide better conditions due to altruism. It does it because it is forced to die to the need to compete for workers. And once they have employed them they have a strong incentive to retain them.
Lastly please consider that civility and courtesy is free.
Thanks,
Mark
triggered.gif
AP US History is the second most widely taken AP exam in the US. Most ambitious college bound students in the US take it. It is thus a filter that indoctrinates our elite students into a pernicious view of economic history, and economic reality, before college. Addressing this one issue should be a higher priority within the free market economics community than any of the countless attempts at "economic literacy." As long as the predominant moral narrative is based on false economic reality, but presented with the academic legitimacy of the College Board AP exam system, a little summer camp here and there won't have much impact.
Classic! I learned this at Uncle Eric's (Richard Maybury) knee (though I'm no longer the libertarian he wished me to be) :)
In Oz we have seen a large number of restrictive work practices abolished. Things like only a member of a certain union could operate a given machine. Overall workers have been given more flexibility at work, this makes them more valuable, and importantly, they can often negotiate their pay down to an individual level.
On the WHS side a lot of the reforms and awards through legal action has continued to improve the quality of work. What is mysterious to me is how workers in say coal mines were unable to get better support to prevent black lung. The other odious event we had was mesothelioma from the asbestos mines. Despite having unions, government departments and other regulatory bodies, the problem grew worse over many decades. The company also hid the problem. From a simple moral perspective not sure what went on in the heads of the company leadership. Again probably poor incentive structures as bonuses would have been paid on short term results. Also what were the unions doing as the mines back then would have been 100% unionised.
We have seen directors liability extended but lots of bad behaviour still persists.
In your view, which of the current legal regime of worker regulations is good? Should any of them been instituted earlier?