SNP makes its case for Independent Scotland with White Paper

[Bedlam]

To move the thread on a tangent when if ever do you think a section of a country has the right to cede from the rest of the country and should everybody in the country have the option to vote on this or just the ceding population? Does there have to be a history of disunity between the areas (in which case how long ago: we were a separate country 10 years ago, 50 years, 100 years, 200 years, 500 years?), does there have to be a cultural difference or can any area split from another if it so desires?

In every county there are going to be area's with more resources than others and areas that are generally richer than others (they may or may not be the same area). Now democracy (somewhat depending how you organise it) should have a certain smoothing effect in theory decisions should be made on the will of the majority so if a certain decision benefits the majority at the cost of the minority. At what point can the minority decide that this system is biased against them and cede.

To go with the bit about oil above would it be acceptable for a small island which happens to be near a major source of oil to have a referendum to secede for a larger nation so that the wealth of this oil is split between less people and should the rest of the population have the right to say no! its better for the majority if this wealth is split between everybody even if it means the locals get far less than they would otherwise?

[Simon_Jester]

Quite. But Option 3 is getting more and more difficult as technology improves. Just to pick one grimly apt example, back when I first had to apply for what we optimistically term Jobseeker's Allowance, the process required a quite large staff of call-centre operatives in a variety of locations around the UK. Nowadays you're expected to fill the whole immensely tedious and complicated form out yourself online instead of dictating your answers over a phone line after anything up to half an hour of listening to this on an endless loop. Better for the mental health of the claimants, undoubtedly, but a lot of extra claimants were undoubtedly created in the process.

Oh, and did I mention most of those call centres were situated in the North to provide some local employment opportunities while the private sector was otherwise occupied?

One thing we could do if we really cared to is create a large federally employed "social support staff." Say, we could have state-operated daycare facilities that charge on a sliding scale, intended to be revenue-neutral for prosperous parents, and possibly subsidizing poor parents.

This could employ vast numbers of people, and make it easier for others to seek private employment while still being responsible parents.

Since raising children is one of those things that cannot possibly be outsourced or automated with anything like foreseeable technology, unless you're prepared to accept much worse actual childrearing outcomes... win-win all around.

Some may call this statism, to them I reply that you already expect the state to run schools that serve as de facto warehouses for children while their parents are at work anyway, so at the very least they could scale up the system a bit.

There are problems with the idea, but it's an example of what we might try if we really wanted to.


Basically, the rise of automation means we need less actual man-hours of work per capita to make "external" needs happen. The logical thing to do is to devote more man-hours per capita to making "internal" needs happen- to taking care of ourselves and each other, and to encouraging means of employment that support that goal.

[energiewende]

The market already did that by itself. Services have long ago replaced manufacturing as the largest employers in all developed countries.

[Guardsman Bass]

It's what is happening in manufacturing in general, not just in the rich countries but also in places like China, India, and Brazil. The total number of people employed in that sector is shrinking, and it looks like it's eventually going to be something like agriculture (low employment, high productivity). Or it will if there isn't anything that really changes the economies-of-scale involved in going that way. I don't really see it as a problem, since human beings are really good at inventing new tasks to do (or breaking up the old ones into new specializations), and we might just end up spending a crap-ton of our income on entertainment, housing, and health care down the line.

But this is getting off-target from the Scotland issue. That oil's going to be a mixed blessing for Scotland, and I think it's partially why they're sticking around in the Pound Zone for now. By themselves, spending a significant chunk of that oil money could drive up the value of their currency, choking off the export of goods and services. But as part of a larger currency zone including the UK, that probably won't happen.

[Irbis]

The market already did that by itself. Services have long ago replaced manufacturing as the largest employers in all developed countries.

Explain to me, how is using brute force to destroy industry in the ideological crusade 'private good, nationalized bad' a market doing it?

Second, well, duh, service sector is the largest - as these days of increased productivity in agriculture and industry it's often the only job sector available. But that's not the point. The point is, in Germany, for comparison, 30% of workforce is employed by industry. In Scotland, thanks to Thatcher's crusade, 21%. In a region that used to be the most industrialized country in the world.

[Simon_Jester]

The market already did that by itself. Services have long ago replaced manufacturing as the largest employers in all developed countries.

Yes, and this does seem to be the natural direction for the market to go in. What I am therefore proposing is that this is a logical place for the state to generate mildly subsidized employment, because of that. It is in an industry that market pressures are likely to keep around for a while. Instead of trying to prop up a failing industry, let's prop up a thriving industry instead!

Also, child care is especially significant in that trying to get cheaper costs by cutting back on the service can have disastrous long term consequences for the whole society, which is yet another reason to subsidize it.
_________________

Hm. A thought. In the era when manufacturing was the largest employer, a large fraction of all women were stay-at-home wives instead of being members of the workforce.

Working women don't consume more physical goods than housewives in most ways. but the fact that all those women are working creates demand for socially necessary host of services that would previously have been done without pay by those women (e.g. caring for all those children while the women are at work).

I wonder what the service-industry-agriculture balance looks like if you treat all those unpaid 20th century housewives as unpaid service workers. Although 19th century housewives would mostly be farmwives, who count as somewhere in between service and agriculture by that standard I think.

It may be that our traditional counts are ignoring women's role in the pre-feminism economy, which would grossly skew everything.

The market already did that by itself. Services have long ago replaced manufacturing as the largest employers in all developed countries.

Explain to me, how is using brute force to destroy industry in the ideological crusade 'private good, nationalized bad' a market doing it?

Second, well, duh, service sector is the largest - as these days of increased productivity in agriculture and industry it's often the only job sector available.

But that's not the point. The point is, in Germany, for comparison, 30% of workforce is employed by industry. In Scotland, thanks to Thatcher's crusade, 21%. In a region that used to be the most industrialized country in the world.

Was this purely due to Thatcher's efforts to de-industrialize the North? Or might other factors have been in play, such as Scotland (and all of Britain) having a relatively obsolescent industrial base dating back to pre-WWII, while countries like Germany and Japan were forced to purchase the latest and most sophisticated tools in the '50s and '60s, and thus began to outcompete all British industry, not just the industry in that area?

Of course, even there, Thatcher might well have effectively blocked Scotland from modernizing and updating to keep its industry current and competitive.

[Guardsman Bass]

Second, well, duh, service sector is the largest - as these days of increased productivity in agriculture and industry it's often the only job sector available. But that's not the point. The point is, in Germany, for comparison, 30% of workforce is employed by industry. In Scotland, thanks to Thatcher's crusade, 21%. In a region that used to be the most industrialized country in the world.

The German percentage is down near 20%, too. And that's with a trade surplus and a world-recognized manufacturing-for-export sector.

Was this purely due to Thatcher's efforts to de-industrialize the North? Or might other factors have been in play, such as Scotland (and all of Britain) having a relatively obsolescent industrial base dating back to pre-WWII, while countries like Germany and Japan were forced to purchase the latest and most sophisticated tools in the '50s and '60s, and thus began to outcompete all British industry, not just the industry in that area?

There was an interesting segment in Tony Judt's post-World War 2 history of Europe - Postwar - that talked about the issues that befell British industry after the war (and to some extent before). He says that even before the war, Great Britain's industry had already picked up a reputation for inefficiency and under-investment. After the war, they fell into a cycle of managerial cautiousness* and underinvestment at a time when they desperately needed restructuring and investment, and when the costs of importing raw materials and food were hitting hard despite a highly valued British currency (which in turn hurt their industries' capability to export). There's an anecdote from the famous Keynes where he muses about how the problem might be solved if the US air force were to accidentally annihilate all the British factories in an air raid while only the management and Board of Directors were present in the buildings, but he wasn't sure what else would help.

Hell, if they'd just been more aggressive about public planning and investment after nationalizing most of the "commanding heights", they might have still set better things in motion for British industry (it helped with the French in that time period). But instead industry drifted for the most part even during good economic times for Britain after the war, until Thatcher.

* Why they were so cautious is anyone's guess, although Judt speculates that it might have been a combination of the sheer divisive labor situation they had to deal with in terms of the number of craft unions (dozens in a single factory that might have to be negotiated with), the privileged access they had enjoyed pre-war to raw materials from territories in the British Empire (which allowed them to stay less efficient than their competitors), and the highly valued pound (which made British exports in general less competitive). It was pretty tempting for management just to keep on with what they had, instead of risking anything with major changes.

[energiewende]

The market already did that by itself. Services have long ago replaced manufacturing as the largest employers in all developed countries.

Explain to me, how is using brute force to destroy industry in the ideological crusade 'private good, nationalized bad' a market doing it?

Second, well, duh, service sector is the largest - as these days of increased productivity in agriculture and industry it's often the only job sector available. But that's not the point. The point is, in Germany, for comparison, 30% of workforce is employed by industry. In Scotland, thanks to Thatcher's crusade, 21%. In a region that used to be the most industrialized country in the world.

Rather, because Scottish unions engaged in mutually assured destruction with their employers for decades, leading Thatcher to eventually pull the plug on zombie industries, while German works' councils co-operated with management to achieve mutually satisfactory agreements. If all industry collapses because subsidies are removed this means it failed the market test a long time ago already.


Guardsman Bass: I suspect he got confused with sectoral compositions as % of GDP, where the split is roughly 20% vs 30%. But it's a good fair point that these numbers aren't actually that different - services dominate in both countries - and it's at best unclear why industry should be preferred to services anyway (unless you want to start a war).

[K. A. Pital]

Rather, because Scottish unions engaged in mutually assured destruction with their employers for decades, leading Thatcher to eventually pull the plug on zombie industries, while German works' councils co-operated with management to achieve mutually satisfactory agreements. If all industry collapses because subsidies are removed this means it failed the market test a long time ago already.

So you suggest that German industries would be viable without subsidies? "Mutually satisfactory agreements" often include a greater deal of protection, including legal protection, on part of the state, and Germany's labour regulations are certainly a lot more strict and average worker-favorable than those of the English-speaking world, including US and UK. It is hard to see why German worker lobbying did not destroy industries but British and American unions suddenly did. Perhaps I'm missing something, but this debate cannot go on without some statistics to back up the statements that you made above.

[Simon_Jester]

It's actually very much possible for worker lobbying to be harmful to industry in one country and non-harmful in others- it's all a matter of how labor is organized.

Suppose you have two factories that both produce gizmos.

In factory A, there is a single organized body which represents all laborers in the factory: the loading dock workers, the cafeteria staff, the electricians, the production-line-machine-maintainers, the janitors, the bolt-tighteners, and the casing-polishers. If there is a problem with the working conditions on the loading dock, the first recourse is to this unified body.

In factory B, each of these separate professions/trades/crafts is part of an entirely different union, which operates on national lines and is only vaguely affiliated with the other craft/trade unions that work in the same building. If there is a problem with working conditions on the loading dock, it goes up the chain to the National Union of Loading Dock Workers, whose only recourse is to threaten to shut down the whole plant with a strike on the loading dock.

Which factory is likely to enjoy higher efficiency in terms of its labor relations, higher morale and solidarity among the employees of the factory, and higher "duty cycle" in that it spends less of its time immobilized by strikes?


Now, this thought experiment may not be precisely like the difference between German and Scottish labor- but it nevertheless might shed light on the true nature of the difference.

[madd0ct0r]

Hm. A thought. In the era when manufacturing was the largest employer, a large fraction of all women were stay-at-home wives instead of being members of the workforce.

Working women don't consume more physical goods than housewives in most ways. but the fact that all those women are working creates demand for socially necessary host of services that would previously have been done without pay by those women (e.g. caring for all those children while the women are at work).

I wonder what the service-industry-agriculture balance looks like if you treat all those unpaid 20th century housewives as unpaid service workers. Although 19th century housewives would mostly be farmwives, who count as somewhere in between service and agriculture by that standard I think.

It may be that our traditional counts are ignoring women's role in the pre-feminism economy, which would grossly skew everything.

that's an brilliant point. I'm off to do some research.

[madd0ct0r]

and done:

http://imgur.com/a/uSQ1o

even as recently as 1971 it results in the tertiary sector being 10% bigger. Good paper in this for a proper historian.

[Guardsman Bass]

Rather, because Scottish unions engaged in mutually assured destruction with their employers for decades, leading Thatcher to eventually pull the plug on zombie industries, while German works' councils co-operated with management to achieve mutually satisfactory agreements. If all industry collapses because subsidies are removed this means it failed the market test a long time ago already.

So you suggest that German industries would be viable without subsidies? "Mutually satisfactory agreements" often include a greater deal of protection, including legal protection, on part of the state, and Germany's labour regulations are certainly a lot more strict and average worker-favorable than those of the English-speaking world, including US and UK. It is hard to see why German worker lobbying did not destroy industries but British and American unions suddenly did. Perhaps I'm missing something, but this debate cannot go on without some statistics to back up the statements that you made above.

The "collaborative" aspect of the German labor movement was a major factor, along with relative consolidation - even tighter labor agreements can be okay if it avoids serious disruption to business activity. In the UK, as Judt points, it wasn't just labor strife but labor divisiveness - you could have dozens of trade unions working in a single factory, all of whom would have to be independently negotiated with. Combined with other factors, it would be tempting just to coast on what you have, and avoid any changes that might involve labor conflict and negotiation difficulties even if it meant your firm was going to decline in the long term.

We saw an example of that with the Hostess bankruptcy a few months back, where the company went bankrupt because only one of several unions active in the company refused to go along with the restructuring necessary to keep the company alive for longer.

[energiewende]

Rather, because Scottish unions engaged in mutually assured destruction with their employers for decades, leading Thatcher to eventually pull the plug on zombie industries, while German works' councils co-operated with management to achieve mutually satisfactory agreements. If all industry collapses because subsidies are removed this means it failed the market test a long time ago already.

So you suggest that German industries would be viable without subsidies? "Mutually satisfactory agreements" often include a greater deal of protection, including legal protection, on part of the state, and Germany's labour regulations are certainly a lot more strict and average worker-favorable than those of the English-speaking world, including US and UK. It is hard to see why German worker lobbying did not destroy industries but British and American unions suddenly did. Perhaps I'm missing something, but this debate cannot go on without some statistics to back up the statements that you made above.

German unions were built on the Bismarckian social collaboration model whereas libertarian British unions ruthlessly and exclusively pursued their private interests in an attempt to counter-balance capital's ruthless exclusive pursuit of its interests. In the long run that was a bad idea since the unions also had themselves exempted from most of the market mechanisms that kept capital in check, but the people running these organisations were not very sophisticated.

Talking about 'labour regulations' is 2013 mindset that has pretty much nothing to do with the important issues of 1973 or 1983. At that time, British unions would strike to stop the government modernizing its own nationalized industries out of fear of job losses. This sort of policy would not be regarded as a 'labour protection' today but it was a direct result of union power and was devastating to British industry in the long term. My point isn't at all that German industry is more successful because German unions gave up 'labour regulations' British unions insisted on, but because they did not pursue other, much more damaging aims.

It's like the difference between a thug saying he will leave you alone if you hand him $100 on the one hand - ok, you lose out, but you still keep some money, and he gets enough to satisfy him - and him demanding every penny you have, being refused, and deciding to set you and your wallet on fire out of spite.

[K. A. Pital]

Like I said, I'd like to see statistics. Lost man-hours, failed modernization projects.

[energiewende]

Quick comparison of days lost due to strikes UK vs Germany. The difference is often a full order of magnitude.

[Simon_Jester]

On the other hand, energiewende, note that there are countries on the list which have just as high a rate of workdays lost to industrial disputes as Britain during part or all of the period (Japan, the US), which did not undergo a total collapse of industry. Though you could make a case for this happening to the US with the Rust Belt.

Anyway, I do think you can credibly support the point that poor labor relations and persistent bickering between labor and capital are going to be bad for the economy in the long haul.

Talking about 'labour regulations' is 2013 mindset that has pretty much nothing to do with the important issues of 1973 or 1983. At that time, British unions would strike to stop the government modernizing its own nationalized industries out of fear of job losses. This sort of policy would not be regarded as a 'labour protection' today but it was a direct result of union power and was devastating to British industry in the long term. My point isn't at all that German industry is more successful because German unions gave up 'labour regulations' British unions insisted on, but because they did not pursue other, much more damaging aims.

To be fair, I recently read a science fiction story that can be summarized as fantasizing about "a pox on both your houses" as an approach to the Big Labor and Big Capital of the mid-20th century, particularly labor. The objection was chiefly to labor unions which resisted automation, demanded that the same number of workers be paid regardless of whether there was actually anything for them to do, and would engage in extensive sabotage and terrorism to prevent any such automation from entering the workforce.

The problem we now face is that labor is effectively unprotected in certain countries, with very little leverage to improve its situation by controlling the supply of labor. The labor unions lost and were broken because they tried to stand in the path of an oncoming glacier, but in many cases, nothing has replaced them to secure the standing of the average citizen in their role as an employee.

It's like the difference between a thug saying he will leave you alone if you hand him $100 on the one hand - ok, you lose out, but you still keep some money, and he gets enough to satisfy him - and him demanding every penny you have, being refused, and deciding to set you and your wallet on fire out of spite.

I would argue that the thug analogy is inappropriate, because it is stupid for a business to view all the money taken in by the business as the personal property of the corporation, without recognizing what it means to offer a share of prosperity to the workforce.

I'm not going to deny that unions can devolve into thuggery and enforcement of bad business practices, but it's greatly oversimplifying to see the unions as just a thug demanding money from the mild-mannered and innocent owners.

[Guardsman Bass]

For some reason, US laws concerning unionization seem almost designed to provoke conflict and confrontation. You can't unionize lower management, can't have "company unions" (hence the issues that some German companies have had in trying to set up workers councils in some of their US factories), don't have labor representatives sitting on the board in most cases, and so forth. I'm tempted to think that was deliberate on the part of corporations and big labor, since in the short term it served both of their interests.

I don't see why you couldn't have more collaborative corporate-labor relations in the US with the right set of laws. It could even be something like unions using their pension fund investment money to buy shares in the companies they work for (as long as it doesn't cross over into monopolistic territory if they're in every company in a sector), and using that to get union representatives on the board of directors.

[K. A. Pital]

Thanks for that table, energiewende. Strangely enough Canada and the US seem just as bad, but their industries are still running.

[energiewende]

Thanks for that table, energiewende. Strangely enough Canada and the US seem just as bad, but their industries are still running.

What prompted this debate was sectoral breakdown and how much of GDP was produced by industry. In that regard the outcomes are fairly consistent between UK (21%) and US (19.1%). Canada is a bit of an outlier on 28.6%, but note that a lot of that is natural resource extraction. Norway has 38.3% of GDP from industry which is almost all oil.

What unions didn't do in the US or Canada was compete directly with the government for control of the country, and the industries themselves were not nationalised in those countries. The second one is particularly important: if companies are privately owned, the worst unions can do is bankrupt the company. It will then be replaced by a new, at least initially non-unionised company. Nationalised industries consume subsidies and eventually become vampires on the rest of the economy, which is what lead to the unique mess the UK found itself in during the 80s.

[energiewende]

Talking about 'labour regulations' is 2013 mindset that has pretty much nothing to do with the important issues of 1973 or 1983. At that time, British unions would strike to stop the government modernizing its own nationalized industries out of fear of job losses. This sort of policy would not be regarded as a 'labour protection' today but it was a direct result of union power and was devastating to British industry in the long term. My point isn't at all that German industry is more successful because German unions gave up 'labour regulations' British unions insisted on, but because they did not pursue other, much more damaging aims.

To be fair, I recently read a science fiction story that can be summarized as fantasizing about "a pox on both your houses" as an approach to the Big Labor and Big Capital of the mid-20th century, particularly labor. The objection was chiefly to labor unions which resisted automation, demanded that the same number of workers be paid regardless of whether there was actually anything for them to do, and would engage in extensive sabotage and terrorism to prevent any such automation from entering the workforce.

The problem we now face is that labor is effectively unprotected in certain countries, with very little leverage to improve its situation by controlling the supply of labor. The labor unions lost and were broken because they tried to stand in the path of an oncoming glacier, but in many cases, nothing has replaced them to secure the standing of the average citizen in their role as an employee.

Both labour and capital are protected by the market. Saying labour is unprotected from capital because of lack of union power makes as much sense as saying the supermarkets are unprotected from consumers because they are not allowed to form a cartel to fix prices. Unions disappeared (at least in the English-speaking world) because legally-enforced cartels impose huge social externalities and this increasingly became clear to a lot of the working class as well. The German system was set up to permit cartels provided they didn't push it too far; this was not ideal in many ways but much less harmful in the long run than allowing truly dangerous independent cartels to form that were not subject to any external restraints.

Of course many countries do not have functioning markets; it's true to say that labour is unprotected in, say, North Korea. But here their rights are being infringed by state slavery.

It's like the difference between a thug saying he will leave you alone if you hand him $100 on the one hand - ok, you lose out, but you still keep some money, and he gets enough to satisfy him - and him demanding every penny you have, being refused, and deciding to set you and your wallet on fire out of spite.

I would argue that the thug analogy is inappropriate, because it is stupid for a business to view all the money taken in by the business as the personal property of the corporation, without recognizing what it means to offer a share of prosperity to the workforce.

I'm not going to deny that unions can devolve into thuggery and enforcement of bad business practices, but it's greatly oversimplifying to see the unions as just a thug demanding money from the mild-mannered and innocent owners.

It's indeed much more polite than that, like how a business cartel might meet in a marble-clad ball room while it decides how best to mug you. Except when it isn't.

[Guardsman Bass]

They only dissipated in the US, not the whole English-speaking world. Union density in Canada did not deteriorate like it did the US after the peak in the 1950s, and union density in the UK is still quite high (it only looks low in comparison to the peak in the 1970s).

Private sector unions dissipated in the US for a variety of reasons, but the biggest was the concentration in manufacturing (an industry going through shifts I mentioned up-thread that reduce employment requirements), and the difficulties involved in organizing the Service Sector jobs that have come along since the mid-twentieth century in the present legal environment. Taft-Hartley (1947) particularly hurt them bad with the bans on secondary boycotts, sympathy strikes, and wildcat strikes, although they got that because of the rampant strikes and labor actions in 1946 (something like 10% of the US workforce withheld labor at some point during 1946).

. . . But even with that, you're seeing slowly plodding unionization of the Service Sector in the US (the fastest growing union in the US is the Service Employees Industrial Union (SEIU)). It's just not happening fast enough to replace the losses in manufacturing unions (and now public sector unions). Give it some time, though, and things may eventually change. It took decades to get the unionization levels in the 1940s. In the mean time, you're seeing sporadic wildcat labor action anyways.

[Irbis]

I wonder what the service-industry-agriculture balance looks like if you treat all those unpaid 20th century housewives as unpaid service workers. Although 19th century housewives would mostly be farmwives, who count as somewhere in between service and agriculture by that standard I think.

Yes, I agree, there was large 'invisible' sector that was performing what we today service functions (not unpaid - in a sense, working husband 'paid' his wife by funding the household). If we included these in statistics as hired help, it's possible that "rise" in services that prompted neoliberal crusade was largely illusory and destruction of industry was done by ignorants not understanding what they see.

Was this purely due to Thatcher's efforts to de-industrialize the North? Or might other factors have been in play, such as Scotland (and all of Britain) having a relatively obsolescent industrial base dating back to pre-WWII, while countries like Germany and Japan were forced to purchase the latest and most sophisticated tools in the '50s and '60s, and thus began to outcompete all British industry, not just the industry in that area?

Of course, even there, Thatcher might well have effectively blocked Scotland from modernizing and updating to keep its industry current and competitive.

Well, it's not like Germany got all these free. They had to pay war reparations, remember, while UK had both intact economy and reparations to strengthen it. They were in position to modernize industrial base with even greater ease - if they didn't, it's their fault.

As for these better industries, anything profitable was mostly sold by Thatcher below its actual value as private competition was getting handouts, or stopped being profitable as Thatcher crushed the workers, as it turns out you actually need people with money buying the products for factories to stay afloat. Funny that, their belief on insisting their paper changes will all work regardless of human factor reminds me of Soviet planners - equally ignorant to reality.

One example I had personal experience with was public transport, where profitable lines were used to keep less profitable ones afloat (that were nevertheless very important to economy, by letting people from outlying communities work and bring in more taxes than it costed to subsidize these). When Thatcher sold them, profitable ones were kept by private operators while secondary ones were closed - I saw what these communities looked like after 30 years, and it wasn't pretty.

It's actually very much possible for worker lobbying to be harmful to industry in one country and non-harmful in others- it's all a matter of how labor is organized.

Suppose you have two factories that both produce gizmos

...

Which factory is likely to enjoy higher efficiency in terms of its labor relations, higher morale and solidarity among the employees of the factory, and higher "duty cycle" in that it spends less of its time immobilized by strikes?

I am afraid it's not that simple. I can cite you a lot of examples where having one big union in factory is terrible. I think having 2-3 that compete with each other for quality of services offered and can't be corrupted all at once would be optimal.

[Simon_Jester]

Both labour and capital are protected by the market. Saying labour is unprotected from capital because of lack of union power makes as much sense as saying the supermarkets are unprotected from consumers because they are not allowed to form a cartel to fix prices.

Aaaand this is where you fail the socioeconomic equivalent of the Turing Test. Darn.

For a minute there, I forgot that you don't believe in market asymmetries, buyer's markets, seller's markets, or any of the other complications that make labor as a commodity quite a bit different from most others. Not entirely different, but different enough to be interesting.

I also forgot that you don't actually value what happens to citizens in a country per se, but rather have this weird robotic "THE MARKET IS TICKING OPTIMALLY FOR GREAT FREEDOM!" concept of what a good country looks like, which is utterly impersonal. And which honestly reminds me of Soviet or Chinese central planning boards' assessment and planning targets, the ones that are totally out of touch with reality and which measure the well-being of the nation purely in terms of how well it's lining up with their ideological preconceptions.

Well, it's not like Germany got all these free. They had to pay war reparations, remember, while UK had both intact economy and reparations to strengthen it. They were in position to modernize industrial base with even greater ease - if they didn't, it's their fault.

I do not for a moment deny that the UK could have easily pushed industrial modernization if the country had made a methodical effort to do so.

My point is simply that West Germany was forced to do so, whether it wanted to or not, and there were at least some resources available to do so. This is not to diminish how much the West Germans gained by good governance, or for that matter how much the British lost by bad governance and poor relations between labor and capital.

I am afraid it's not that simple. I can cite you a lot of examples where having one big union in factory is terrible. I think having 2-3 that compete with each other for quality of services offered and can't be corrupted all at once would be optimal.

Good, I'm glad you pointed out a way in which it is not that simple. My example was deliberately simplified to illustrate one of several different issues to Stas Bush, by removing all the other variables and asking "all else being equal, which is going to result in more efficient, smoother labor relations, one big unified union or dozens of tiny insecure ones each of which must be appeased to stop the whole plant from being shut down?"

However, I'm not sure what you mean by competing unions. Dozens of small craft unions don't compete with each other directly, because people in each trade are represented separately, so I'm not sure that's desirable either.

Do you mean the idea of, say, having two or three unions that all seek to organize the same body of workers, but compete with each other for membership?

[Irbis]

him demanding every penny you have, being refused, and deciding to set you and your wallet on fire out of spite.

Funny that, you describe not the unions, but Thatcher. Since when "my way or I will send military to crush you" is called 'negotiations'?

Yes, UK unions might have behaved irresponsibly, but if Thatcher was anywhere near as competent as German managers, after forcing them to submit she would have restructured the economy to have it perform better. She didn't, she just sold the choicy pieces to her cronies, then destroyed others in her ideological crusade, relying on mining and finance sectors to stay afloat. Too bad it was later tried in countries without these by other ignorant pro-Thatcher crowd - and failed terribly due to lack of that cushion.

http://newleftreview.org/static/assets/ ... 2large.jpg

Quick comparison of days lost due to strikes UK vs Germany. The difference is often a full order of magnitude.

Cute picture. Until you realize that their 'averages' are completely pointless (look at UK ones, 8 out of 10 years are below "average"...) and that terribly looking 1130 days lost in practice amount to 1.13 day per worker. That is about 10 hours per year, how these poor companies deal with loss with that magnitude??

Seriously, take the chart showing UK GDP growth, take these 2 years that drive the average of days lost sky-high, and try to find any big difference to surrounding years. I bet you wouldn't notice them on graph without prior knowledge on that table.

and it's at best unclear why industry should be preferred to services anyway (unless you want to start a war).

Why? let me tell you why, as it's basic Economy 101 - most services piggyback on two sectors producing real goods, agriculture and industry, either by processing/distributing their output, or by being kept afloat by money spent by these. Did you ever happened to take a look what happens to services when industry takes recession hit? And why it never happens in reverse? You're asking "why we need foundation in a house, all it does is increase costs". Really?

The only services that can be considered industry independent, information services, are these days excluded by most economists from service sector, the tertiary one, and counted as their own, quaternary one. It's secondary and quaternary sectors that produce staying wealth, develop new technologies, and make economy strong regardless of recessions, not services. You can run economy without hairdressers, good luck doing it without both of the above.

Both labour and capital are protected by the market. Saying labour is unprotected from capital because of lack of union power makes as much sense as saying the supermarkets are unprotected from consumers because they are not allowed to form a cartel to fix prices.

You know, there is failing Economy 101, as above, and there is living full on in Wish Fairy land. Market protects labor? The same market that drives payment for every service granted towards minimum price? The same market where capital would have crushingly stronger position than labor without state regulations? And it's not like you can say "we don't know that" - it was tried in Victorian predatory capitalism model, and in US Gilded Age - so it takes special ignorance of history to say that.

Even sector requiring special skills, the IT sector, is now facing enormous pressure from capital to shift it from well paid specialist market to something resembling badly paid worker assembly line - and that is something where you can't just fire people and hire new ones from the street. Any claim market protects workers in any way is completely laughable. Consumers can't exploit supermarkets, supermarkets can and will exploit their workers.