Labor Unions and Countervailing Power

Shortly after World War II ended, John Kenneth Galbraith coined the phrase “countervailing powers.” Here is Ezra Klein:

You rarely hear the term today, but it’s time to bring it back. It’s key to understanding the debate playing out in the Democratic primary.

….Galbraith believed that in an advanced capitalist economy, the inevitability of bigness needed to be recognized, even embraced. “People want large tasks performed,” he wrote, and “large tasks require large organizations. That’s the way it is.”

Once you accept that premise, the implications are clear. Bigness can only be checked by bigness. A healthy economy was one in which these countervailing powers balance each other. An unhealthy economy is one in which one or more of these powers was left to run roughshod.

We are, today, in an unhealthy economy.

That’s for damn sure. Since 1980—that is, the era in which labor unions were more or less powerless—the incomes of the rich have gone up nearly 200 percent. The incomes of the rest of us have gone up 15 percent.

This is, by a mile, the biggest reason that liberals should fight to restore the power of labor unions. Sure, unions help to raise wages. They bring more dignity to work. They support the middle class. But even if none of that were true, it would be enough that they are the only countervailing power sufficient to rein in the power of big business.

Organized labor is far from perfect. About as far away as big business, I’d say. If there were an alternative, I might support it. But there sure doesn’t seem to be, and this means that unions deserve liberal support no matter what issues you might have with them. Are they crude? Sometimes corrupt? Do they introduce inefficiencies? If they have real power, will they represent workers in ways that sometimes make college-educated lefties uncomfortable? Yes to all of the above. They are, after all, human institutions. You can say the same and worse about big finance, big auto, big retail, big tech, and every other form of big business.

I wonder how many Democrats understand this? Back during Jimmy Carter’s presidency, a key piece of pro-labor legislation failed even though Democrats had a filibuster-proof majority in the Senate. Everything went downhill from there. The lesson from that failure is obvious: in 2021, even if Democrats win back control of both the Senate and the presidency, and even if they eliminate the filibuster, they still won’t be able to pass serious pro-labor bills unless they stick together. Most likely, it will take only a small handful of defectors to torpedo any kind of serious labor agenda.

But labor is the foundation of liberalism. Republicans understand this with crystal clarity. They will have no trouble mustering unanimous opposition to any labor legislation, no matter how small—which means there’s no point in small measures. We might as well either go big or go home. The only legislation that matters would be legislation that makes it possible to organize the service sector with the same power and efficiency that unions organized manufacturing back in the first half of the 20th century. That means wiping Taft-Hartley off the map. Passing card check. Outlawing right-to-work laws. Appointing an NLRB that will vigorously enforce labor rights.

This is one area where there’s really no point to compromise or centrism. Half measures will accomplish nothing, so you need to commit to the whole agenda or nothing. Maybe then we’ll get back to this:


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