Thursday, 8 December 2011

“Bloody aristocracies of industry” killing other people’s jobs


Striking Maritime Union “workers” at the Ports of Auckland have sent Maersk shippers to Tauranga instead, losing Auckland workers their jobs and Ports of Auckland 52 ship calls, 82,500 containers and nearly $20m in revenue annually. “Maersk have explained to us,” said Ports of Auckland, “that the possibility of further industrial unrest has been central to their decision to shift the service to Tauranga.”

This is on top of the damage caused by the strike itself, on which Ports of Auckland has put a $300 million price tag on the disruption to trade with about 4700 containers affected, and retailers fearing Christmas stock will be stuck on the wharves.

Another striking example (yes, sorry about the pun) of what industrial relations economist W.H. Hutt observed:

_quote Unions gain at the expense of other labour, not capital, and
the transfer reduces total output.” *

Or as Vedder & Gallaway put it in 2002:

    “Unions transfer income from the unorganized to the organized, and depress total income to such a degree that even organized workers are poorer.”

Yet still the strike threats continue, the latest threatened action slated for two 24-hour periods in the days leading up to Christmas, which will hurt retailers wanting to re-stock shelves for the Boxing Day and New Year's sale.

The Maritime Union don’t care who they hurt. Their basic premises are the same as every unions has ever been:

  1. the erroneous idea that workers own their job;
  2. the advancement of one group of workers at the expense of all others;
  3. the placing of the union’s interests above even that of its members…

Let’s consider these propositions.

Employees own their labour services. But they don't own their jobs.  The erroneous idea that workers do own their jobs is one leg of what gives unions their power to destroy.

Workers are certainly entitled to withdraw their services when they choose, but nothing in justice gives them the right to exclude others by from replacing them.  There is no right, in justice, that gives one group of employees the right to exclude others—especially not by force.

They do not own their jobs.

Yet law has been written that protects this non-existent right.  It is law that advances one group at the expense of many others, and places the interests of union leaders above that of of their members—who are all too frequently called upon to help destroy the very employers, customers and supply chains on which their own prosperity depends.

Don’t get me wrong. Folk should be free to voluntary join whichever organisations they choose. That is a genuine right worth protecting. But the extent to which industrial unions have been granted legal powers to forcibly exclude others from replacing their services—to wage strike action against employers and businesses, to run pickets shutting down companies and forcibly excluding supplies, customers and replacement labour—is the extent to which governments have given unions power beyond right to damage the welfare of everyone, including their own members.

William Thompson was a colleague of Robert Owen, and a founder of so-called “scientific socialism.” Which is to say that he was no friend of business. Yet he observed that the union’s “excluding system depended on mere force and would not allow other workers to come into the market at any price…”

  “Thompson can hardly be regarded as a biased witness against working-class bodies. He was, we are told, of the most kindly and gentle disposition, but when he considered the workmen’s combinations of his day he was moved to passionate condemnation of them. To him they were ‘bloody aristocracies of industry... [The] excluding system depended on mere force and would not allow other workers to come into the market at any price…It matters not,” he said in 1827, “whether that force…be the gift of law or whether it be assumed by the tradesmen in spite of the law: it is equally mere force.”
    “Gains [of the unionised few] were always ‘at the expense of the equal right of the industrious to acquire skill and to exchange their labour where and how they may.’ This  is the founder of scientific Socialism speaking - not an employer.” **

Antediluvian unions like the Maritime Union could not survive without the sort of “legislation beyond right” that protects their non-existent ownership of job placements. Yet today pro-union legislation remains a sacred cow—a set of destructive legal principles based on poor logic and ideological quicksand. As William Jevons pointed out in his 1883 book Methods of Social Reform and Other Papers:

Firstly. The supposed struggle with capitalists in which many Unions engage, for the purpose of raising wages, is not really a struggle of labour against capital, but of certain classes or sections of labourers against other classes or sections.
Secondly. It is a struggle in which only a few peculiarly situated trades can succeed in benefiting themselves.
Thirdly. Unions which succeed in maintaining a high rate of wages only succeed by PROTECTION—that is, by levying contributions from other classes of labourers and from the population in general.
Fourthly. Unionism as at present conducted tends therefore to aggravate the differences of wages between the several classes of operatives; it is an effort of some sections to raise themselves at the expense of others.”

“An effort of some sections to raise themselves at the expense of others.” So it is too with the minimum wage, which as Eric Crampton shows assiduously in repeated posts, raises wages for those in employment at the expense of those who aren’t, while reducing total incomes all round—yet raising the minimum wage is still a favourite of the likes of Matt McCarten’s Unite union, which is happy to impoverish those youngsters who a high minimum wage makes unemployable  just so Matt McCarten can advance his own power.

Hence the reason I have no time for Matt McCarten. Or the Maritime Union.

At the end of the day what the Maritime Union leaders want at the Ports is more power and prestige for themselves.  Yet for some reason those outside the Union whose incomes are reduced by their actions can still be heard offering support. They should listen to William Jevons, who concluded:

    “The Unionist overlooks the fact that the cause to which he is so faithful, is only the cause of a small exclusive class; his triumph is the injury of a vastly greater number of his fellow-workmen, and regarded in this point of view, his cause is a narrow and selfish one, rather than a broad and disinterested one. The more I
admire the perseverance, the self-forgetfulness, the endurance, abstinence, and a hundred other good qualities which English workmen often display during the conduct of a great trade dispute, the more sincerely do I regret that so many good qualities should be thrown away, or rather misused, in a cause which is too often a hurtful one to their fellow-men.”

At a time when jobs are scarce, money is short and everyone is having to tighten their belt, perhaps all sides might reflect on that.

Because as  these economists and social reformers remind us, the extent to which these unions and every other are successful in their successful in their demands and destructive in their means of achieving them, they harm every other group in society.

As they almost always do.

* (Paraphrased in John B. Egger’s biography of William H, Hutt, from Hutt’s 1973 book Strike Threat System: The Economic Consequences of Collective Bargaining)

* * Quoted in Hutt’s earlier book Collective Bargaining.


  1. We've got a BBQ coming from Indonesia on a container ship called the Cougar. The container that it is in is changed from the Cougar to another ship in Auckland, before then being delivered to Lyttelton Port of Christchurch. Needless to say I suspect it won't be making it before Xmas now. Though that will mean nor will a lot of goods for retailers in Chch they would have hoped to boost their Xmas sales. Trying to get back on their feet from the earthquakes, what 'right' does this union have to imperil their livelihoods?

    Puts the lie to the 'social conscience' of unions, and the Left, period.

  2. I'm pro-Capitalist but I'm failing to understand something: as the investor/employer seeks a return from his investment, i.e. profit from the Capital invested in the business, how does a organised union take from the non-unionised workforce instead of from the investor's profits?

    I've genrally opposed unions because of the fact supply and demand sets wages and that is the fair value of work and investors/employers deserve as high a return as possible to redeploy to create jobs and raise living standards, I'd viewed the unions as attempted to gerrymander wages up to a level not set by the value of their work at the expense of the investor.

    However you seem to be saying that they do so at the expense of their fellow non-unionised employees. How does this happen? Do employers reduce/maintain non-unionised employees wages to retain their rate of return?

    Just trying to connect the dots in my mind and I'm missing something.

  3. Given that the average wage of a Port of Auckland stevedore is $91,300 (plus generous benefits), these scumbags are nothing but whining, greedy pricks.

    I want to see PoA lock them all out, and only re-sign those who eventually agree to leave the union.
    (Fat chance of that, mind you).

  4. Normally I would stay out of this sort of debate but Cactus Kate's figures particularly the productivity figures convinced me to take a position despite my CENTRE left leanings.

    How about this for a workplace practice worker need a piss so worker gets out of straddle, radio for a van to pick him up and take him to the port HQ have a fag etc the gets van returned to the straddle climb in a resume work. The Port Company I gather wants to put in portaloo's. Go bloody figure.

    These guys are getting very good remuneration as Mark points out the unionised port workers don't give a toss about the minimum wage retail worker selling him a BBQ in Christchurch.


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