Friday, October 20, 2006

Unions & Guilds & Distributism & Chesterton

This in from John Peterson, Chestertonian Extraordinaire. Thanks John. Dedicated to Tom and all other Union workers: for your reading pleasure.

Reprinted from The Distributist, 5-1, September, 1995

Distributism and Labor Unions

John Peterson


“Trade Unions are confederations of men without property, seeking to balance its absence by numbers and the necessary character of their Labor.”
~ G.K. Chesterton, A Short History of England.


Two of today’s economic-political movements are unconditionally dedicated, at least conceptually, to the welfare of workers: Distributism and Organized Labor. And yet, with the exception of this shared purpose, the two movements signify almost nothing in the way of common theories and practices.

What may seem a paradox is, however, very easily explained. Distributism’s solution to the plight of workers is based on the natural affinity between the ideas of business ownership and work. Unionism’s solution is based on the natural antipathy between business ownership and work.

The purpose of the following discussion will be to suggest that Unionism would be strengthened, and its prospects brightened, if it would abandon its traditional belief in the incompatibility and unavoidable antagonism toward business ownership and work, or—to use a traditional phrase—between Capital and Labor.


Read more of JP's article

The Anti-Ownership Posture of Unions

Organized Labor exists because wage-employees are easily replaceable components in a fractionated production process. As individuals they have no bargaining power, and are subject to the whims of business owners and to cyclical swings in the demand for Labor. As a matter of simple justice, integral to the right of self-defense, workers can and must protect themselves from the inequities of the employment system: deficient wages, unjust dismissal, abuse from supervisors, job insecurity, and inadequate opportunity for occupational advancement. Under the right of assembly (and the right of self-defense), hired workers can and must band together for Collective Bargaining and other types of mutual support. Because Work Stoppage is the single effective threat a hired worker has, the Right to Strike is as fundamental as the Right to Organize. None of this can be denied, given the overwhelming predominance of wage-employment, and the attendant lack of business-ownership for workers in our society.

The main problem of Organized Labor has always been that in order to address the problems inherent in wage-employment, Unions have accepted the idea that workers and owners are natural enemies. Unions have accepted as normal or inevitable the state of affairs in which Capital and Labor are at opposite poles—with divided interests, conflicting motives, and antagonistic aims.

In the era of Robber Barons and Sweat Shops, the classic model of Capital-versus-Labor undoubtedly helped workers put a stop to unconscionable practices of exploitation and injustice by rapacious Owners. It was impossible for workers to own the means of industrial production, and the Owners knew it and took full advantage of the fact. But there are fundamental problems with the continuing use of that adversarial model today. First, it presupposes the idea that human work is a commodity and is subject to the same supply-and-demand analysis that is applied to the purchase of lumber, steel, or phosphates. In so far as workers and their Unions are immersed in this zero-sum struggle, they will be forced to justify their demands to the Capitalist-Owners on a competitive basis against the cost of raw materials, leases, equipment, overhead, marketing, and profits. In bargaining with owners for benefits, even with the coercive threat of the Strike, Labor tacitly admits that the value of work is defined by what can be won at the bargaining table. This degrades and dehumanizes Labor.
It must also be said the Labor-versus-Capital model is sanctioned by a discredited Marxism and the notion that class conflict is an inescapable historical process leading to the inevitable Workers’ Utopia. The historical affinity of Trade Unionism for Communism and Socialism cannot be denied, and may have served a useful purpose at one time—that can be argued pro and con. What is important to acknowledge now is the failure of Marxism as a convincing economic theory and as a viable economic system. The collapse of the Soviet Union has called into question not only the practical applications of Communism, but, as well, the atheistic-materialistic-deterministic philosophy on which it was based. Those who would continue to tie Organized Labor to the Marxist notions of class warfare or to the demonization of private property, are merely recommending exploded theories and failed policies that lead nowhere.

The second problem of the Capital-versus-Labor model has to do with the emergence of what might be called an “Ownership Vacuum” in the modern business corporation. Today’s typical large business is owned by an army of anonymous shareholders: holding companies, pension accounts, mutual funds, insurance trusts, individual investors, other corporations, and foreign interests. A modern manufacturing and service company like IBM, for example, lists over 700,000 different owners of common stock. These “owners” do not manage the firm and have no voice in setting policy. Fewer than five percent of formal stockholder initiatives ever succeed. And while owners of large blocks of shares may have a representative on the Board of Directors, command of the enterprise is really in the hands of the Chief Executive and his cronies who control the board. The ascendancy of this elite class of all-powerful professional managers, who have taken the mantle of business power from the old-style Capitalist-Tycoon-Entrepreneur, makes any talk of Capital-versus-Labor irrelevant. The Capitalists (that is to say the shareholders) do not come to the table.

Because the business executives do not own the corporations that employ them, but do exercise total control over the policies and resources of these corporations, the motives and aims of these men must be considered apart from the business goals of the enterprise. In brief, the personal aggrandizement and self-promotion of the manager who is not an owner boils down to:
A) Short term thinking, which jeopardizes the long term business health of the enterprise (example: siphoning money from employee pension funds to improve short term profits).
B) Cronyism, which robs the enterprise of the best leadership and which institutionalizes incompetence.
C) Self-awarded privileges and payoffs beyond the dreams of rapacity: multi-million dollar paychecks, golden parachutes, perks that would make any self-respecting emperor blush.
D) Merger mania in the quest for expanding personal power (as opposed to the quest for sound business results).

The dispersion of Ownership has permitted this self-indulgent management style to flourish unopposed. But this “Ownership Vacuum” should suggest an unprecedented opportunity for Organized Labor. All that is required is that Unions consider a view of the business corporation in other terms than the old Capital-versus-Labor model.

The Pro-Ownership Posture for Unions

The Labor Movement’s vaunted power in the political and economic fronts has uses that can never surface so long as Labor continues to demonize Ownership. We all know that Labor Unions have fought Employee Ownership Stock Plans (ESOPs), Capital Credit, and other forms of worker ownership with the excuse that workers should not have divided loyalties. We also live with the mentality of government legislators and regulators who feel worker ownership of the businesses for which they work is a conflict of interest. (As an aside, this writer was once offered stock in a privately-held company where he was employed, until the IRS voided the offer with the warning that too high a percentage of the employees were becoming shareholders in the firm.)

We are dealing with a pervasive mind-set that that Capital and Labor are incompatible. This may well be because of the history of merciless exploitation to which Owners subjected Labor in the early stages of Industrialization, and it may also be because of the fashionable Marxist theory of an inevitable class struggle. But clearly, and regardless of mind-sets, once the idea of worker-ownership is examined, it becomes extremely suggestive for Organized Labor both tactically and strategically. Consider just the fact that it is the shareholders and the workers who are most united in purpose—to assure a healthy, prospering business enterprise for growing profits and expanding employment. This goal is not the first priority of the professional managers or government regulators who may come to the bargaining table. Therefore ownership and Labor have natural affinities, and the time for taking advantage of them is long over due.

Here are a baker’s dozen of ideas.

1. A Union should aspire to the largest possible holdings in common stock in the corporations for which its workers are employed. Union pension trust-accounts should be so invested. Large minority owners of common shares in today’s corporations have an entree into the board room where key policies are formulated, including key policies affecting Labor.
2. As well, the Union should aggressively seek control over any employee benefit accounts (pension funds, for example) for the purpose of accumulating and controlling large blocks of shares in that corporation.
3. Labor should aspire to permanent membership on the Board of Directors, preferably not as a negotiated concession, but as the right of a major stock-ownership group.
4. Unions should get behind every manner of employee-ownership program, whether formal ESOP programs, Capital Credits, Leveraged Buyouts, negotiated profit sharing, subsidized IRAs or whatnot.
5. Union sponsored and employee owned (and risk-insured) stock-buying cooperatives or mutual funds should be originated.
6. To the extent that Union ownership of shares is impeded by laws and regulations, the political power of Unions should be brought to bear. Unions should sue for changes in business charters and lobby against laws and regulations that restrict Union ownership of common stock and the control that goes with it.
7. Unions should form alliances with other share-holder groups to pursue common goals.
8. It should go without saying that individual Union members should own at least a few shares in the company that employs them, for even individual investors have ownership rights that go beyond the monetary value of the shares, and large numbers of individual investors can mount a serious challenge to management under certain conditions.
9. Union lobbyists should work for business-friendly and Labor-friendly government regulation, rejecting the Democrats’ anti-Business politics and the Republican’s anti-Labor politics. Union lobbyists should not be permitted to reflect the Marxist doctrine of class struggle and Capital-vs.-Labor warfare, but should promote in every possible way the ownership of business corporations by Labor.
10. Union workers should return to the ancient ideal of the sanctity of work, entreating their members to Labor with pride, to work well, and to earn their pay with honesty and dignity. Unions should foster the pride of ownership that lends stature and purpose to Labor, increases productivity, and can serve Labor by invigorating feeble enterprises headed for oblivion and unemployment.
11. Unions should sponsor business education for their memberships, stressing how businesses create wealth and explaining the benefits and risks of ownership.
12. Unions should approach management from the point of view that the Union is an owner of the business, and that the executives bargaining with the Union are employees of the business. Today’s professional executives typically own very little stock in the firm, and what they own they were awarded by the Executive Board, which they control, in the form of very favorable stock options. No, these men are not Capitalists, not tycoons, and definitely not entrepreneurs. They have merely been sufficiently more clever or more ruthless than other professional managers at climbing the corporate ladder. They are essentially bureaucrats, and their sole concern is preserving their personal fiefdoms and expanding their empires. As such, they are the natural enemies of both Capital (the shareholders) and Labor. Without being crude about it, suffice it to say that wresting the perks from today’s executive team is a far more intimidating threat to them than the smaller menace of a Work Stoppage.
13. Unions should demand, at one and the same the same time, Labor concessions that are fair and business practices that are sound. This approach will benefit workers and shareholders more than conventional Union bargaining strategies (Wages versus Profits), and this is especially true if the workers and shareholders are to a significant extent the same people.

Whether or not most of these suggestions are feasible, or can be made feasible, has never been tested—and should be tested.

In the end, what may prevent the revolution may well be a dreadful and pervasive complacency. What is the recent record of Trade Unionism here in the United States? In 1960, one-third of the private-sector work force was organized. Today, the percentage is one in ten and declining. What there is of radical Labor activity goes unheralded today, except in small and exceptional pockets of geography like Decatur, Illinois, or in the worker-owner squabbles which frequently and meaninglessly erupt in the surrealistic world of Professional Sports. Otherwise, the Union movement seems to have slumped into a comfortable and nearly invisible limbo. Workers, to use the phrase of entrepreneur Jack Stark, are “the Living Dead”—submissive, alienated, and hopeless. Meanwhile, the Labor News is dominated by action on the Union-Merger front, an ominous sign that Organized Labor is taking on the coloration of the Professional Business Management Elite.

Just now the “Ownership Vacuum” in large corporations is a gaping opportunity for energizing the Trade Union movement. It is even conceivable that Organized Labor could bring a just, equitable, and final solution to the inequities seemingly inherent in industrialization. Labor could do so along revolutionary lines never envisioned by the great theorists of Distributism and through means those men would have thought impossible. We can now only dream of such a settlement in which the workers will own the great corporate enterprises for which they toil, will have their grievances redressed through Democratic processes, and will reap their share of the rewards of business success.

Perhaps the best that this kind of a brief paper can do is to suggest to all workers and Union members this simple but potent slogan: “Ownership Is Good!”

14 comments:

  1. I am not so sure that we are only “dealing with a pervasive mind-set that Capital and Labor are incompatible.” This really goes to the root problem of Capitalism, which is inherently flawed, as Chesterton and Belloc thought. If the only criterion of successful Capitalism is “profit”, regardless of the other factors, (concern for the worker, his family, his nation, his church, or society in general), than Mr. Peterson’s assumption, (and the assumption of other advocates or defenders of Capitalism, like Michael Novak), is only wishful thinking. Profit separated from the higher religious and moral concerns (like social justice and charity) is nothing more than sheer and sinful greed and idolatry, and there will always be antagonism between the Capitalist and the Worker.

    In other words, as long as there is “Gog”, there will be “Magog,” and both will have joined forces (as most unions eventually do), and the “Gogmagog” will have to be defeated together, just as the Scripture says.

    The English legends of the giants Gog and Magog, like the one that has made them the traditional guardians of the City of London, is most interesting. Did Chesterton say or write anything about Gog and Magog?

    http://en.wikipedia.org/wiki/Gog_and_Magog

    As the Wikipedia cartoon says, can Gog and Magog really give Paddy a lift out of the mire?

    Wild Goose

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  2. I am bewildered by the suggestion that I am one of the advocates and defenders of Capitalism. I can find no such advocacy in the article I wrote for "The Distributist" and that Nancy was kind enough to reprint on this web log. In fact, I wrote a monthly column on Distributism for the Chesterton Society from 1988 to 2002, and I defy anyone to find in any of these 1,500 plus columns a single kind word for Capitalism. I don't know what else to say.
    ~ John Peterson

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  3. While admirably attempting to work from our current system, I worry that some of your proposals misrepresent and even work against distributist ideals.

    Some of the proposals here treat labor as just another collective, a big-L labor.

    Certain ESOP programs are desperate attempts on the part of the corporate board to restore solvency. The perpetually bankrupt United Airlines has been one of the first things that comes out of people's mouths when I have suggested ESOPs as an alternative path.

    I'd also like to question the equivalence of stock-ownership and property ownership. The kind of individual ownership Chesterton and pals supported cannot, I think, be focused upon paper assets. Stocks are more easily devalued than concrete, physical property.

    Real, substantive property encourages men to be independent, vigilant, and critical, knowing that a misstep on their part can cost them personally. The kind of collective ownership advocated in ESOPs and the rest, being remote from the individual worker, encourages more complacency.

    Stock ownership only allows for representative, rather than direct, influence upon economic structures and exchanges. Stockholder voting power can be as nominal as a single vote in a political election, a tenth of a tenth of a percentage point. Stockholding union members can be as derelict in their stockholder duties as the apolitical non-voter without immediate penalty.

    Finally, here's a quotation from Caleb Stegall on a distributist-type movement skeptical of mere slivers of power:

    "Ligutti fouded and directed the National Catholic Rural Life Conference and was a passionate defender of agrarian life and advocate of widespread ownership of land. “The farm is the native habitat of the family” Ligutti maintained. Working primarily in the 40s and 50s, Ligutti declared that “no man who owns a cow can be a communist” and further argued that the surest path out of poverty was a family cow. It is important to note the singular in Ligutti’s argument, “a cow” as opposed to “heads of cattle.” For Ligutti all the necessary virtues could be inculcated in a man through the ownership of a cow: thrift, rootedness to a place, pride of ownership, sense of peace and an end to restless alienation, hard work, orderly use of time, and a strong incentive to have children. Most importantly, perhaps, the family cow provided self-sufficency in that it produced a large amount of food for the family. In Ralph Borsodi’s terms, this represented a level of freedom and independence far greater than that created by ”the infinitesimal fraction of political power represented by a vote.”"

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  4. I concede the cogency of your arguments. The two general approaches to recommended solutions to our problems are 1) to describe the ideal and contrast that with the actual situation we find ourselves in, showing thereby the superiority of the ideal, or 2) to begin with what we have and try to see if there are ways to make things better, though not ideal. For a sample of (1) we have Chesterton's "Outline of Sanity." For practical remedies, we have Belloc's "The Restoration of Property."
    ~ John Peterson
    ~ John Peterson

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  5. Hello Mr. Peterson,

    I am certain that you have the best intentions and that you are truly trying to improve the workers’ situation. Still, what you are suggesting is only a short term band-aid solution that may temporarily help, but the problem goes a lot deeper, as I said in my post. Most (or all) unions are leftist/socialist oriented, and they also seek only a short term improvement, not a radical change. (The radical change they seek is socialism, which is even worse.)

    If you read Mr. Novak’s Introduction to the Outline of Sanity (Ignatius Collected works vol. V), you will find that Chesterton and Belloc were staunchly opposed to Capitalism, they wished to “destroy” it (Footnote 7, p. 18), because it was inherently flawed and could not have been reformed. They saw Distributism as a revolution which will overthrow Capitalism. (ibid.) Why? Because of the inherent immoral “piracy” and immoral profit-seeking of the system that cannot be reformed in any way!

    Perhaps you wish to dissociate your views from Mr. Novak, (who, it seems, totally misunderstood what Chesterton and Belloc considered Capitalism to be), but what it really comes down to, as I said, is whether Capitalism can be gradually changed towards a newer and better “worker and family oriented” system or whether it has to be opposed and overthrown. What do you say? Can it be reformed/coerced, or do we have to condemn it and chuck as it is, even though, for now, we may have to unhappily live within it?

    And there seems to be another paradox, since Chesterton advocated a “revolution”, and he also realized that it would have to be a gradual process. (Footnote 18, p. 21) Still, it does not mean that he wanted an “evolution”, as Novak says, which is a direct contradiction to Chesterton’s “revolution.” (Unless Novak believes in some nonsensical revolution by evolution.)

    Turning workers into owners won’t help a bit, unless these new “owners” will also realize that they cannot continue the piracy. (Perhaps you have addressed this crucial thing is some other essay, but the mention of this key point is totally lacking in this one.) And even if they realize it, and want to work according to some new “moral” rules of conduct, they won’t be able to, until the rest of the society (and the world, thanks to global capitalism) denounces the widespread cheating and piracy and accepts this new moral conduct in all spheres of business life, from stock investing, banking, to unions.

    Wild Goose

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  6. Perhaps we should call the gradualist approach "Fabian Distributism."

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  7. Thank you Nancy, John and everyone else for your comments here.

    Today's unions are not adversarial at all. My union, the UAW, once one of America's most virtuous unions now attacks solidarity and promotes dog eat dog competition. And like the corporations it serves, it is not
    going to be reformed.

    As for Decatur being the only point of radical labor activity today I'd suggest that the more hopeful fact is that good and radical workers are in every workplace in the world.

    But where do they go?

    I just returned from a Catholic Worker conference in Iowa - my first. I thought that in some ways they are suffering from the New Left. They held some positive views of the big unions but admitted those views come from connections with big union reps in the distant past. The folks I talked to understood that modern unions don't stand for much that's good.

    John Paul II did a nice job for us in "The Priority of Labor".

    Belloc did us a service with "The Restoration of Property".

    Dale Ahlquist speaks and writes to the Distributist key for the battle for a virtous, common sense, happy world. It would be terrific if we could somehow organize a conference for all workers to listen to Dale and meet ourselves. The world would be better for it.

    Tom

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  8. Unfortunately, this debate seems to be over. I admit I goofed by carelessly adding one word, “other”, that offended Mr. Peterson and made him look bad, and I apologize for that. I did not mean to say that he defends Capitalism, (as I said, I think he really means it well), I meant that there are “other” Christians and Chestertonians who defend Capitalism, like Mr. Novak. The sentence should have read:

    If the only criterion of successful Capitalism is “profit”, regardless of the other factors, (concern for the worker, his family, his nation, his church, or society in general), than Mr. Peterson’s assumption, (and the assumption of advocates or defenders of Capitalism, like Michael Novak), is only wishful thinking.

    Wild Goose.

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  9. Goose, I hope the debate has just begun.

    You write: "Most (or all) unions are leftist/socialist oriented, and they also seek only a short term improvement, not a radical change. (The radical change they seek is socialism, which is even worse.)"

    Modern unions and their big, fat federation, the AFL-CIA, are capitalist and opposed to socialism. If anyone doubts this, I can put up any number of top porkchopper, pro-capitalist statements. Generally, the big unions contain socialists and communists in their appointed positions, typically "education" and communication positions. I think that is mainly to keep tabs on the various left groups and rank & file rebels.

    Tom Laney

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  10. Perhaps you are correct Tom, many unions in the US may seem to be pro-capitalist. Unions in other countries (Europe, South America, Asia, etc.) may seem to be more pro-socialist

    But that point is arbitrary and rather irrelevant.

    “But there is no such thing as ideal Capitalism; and there is no such thing as Capitalist ideal. As we have already noticed (though it has not been noticed often enough), whenever the capitalist does become an idealist, and especially when he does become a sentimentalist, he always talks like a Socialist. He always talks about “social service” and our common interests in the whole community.”

    (Outline of Sanity, Collected Works vol V., p. 79)

    Wild Goose

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  11. Nuts! Somehow I lost my response to this and I'm pressed for time.

    Here's a note I sent to some autoworkers:

    I'm trying to condense just what it is you think would make sense to the best fighters you know at work about a revolt for common sense, WINNING strikes and democracy?

    What do you think it would take to inspire those fighters to connect themselves in bigger and bigger fighting units? Why do you think this has not happened?

    Here's what I know from quite a few years of organizing in my local:

    1. Most people believe in God, Family and Country.

    2. Most people form very profound friendships in their neighborhoods and on their jobs.

    3. Most people believe in their right to say what's on their minds.

    4. Most people want to see a better world for everyone including this country and every other country.

    5. Most people have a problem with big business and big government.

    6. Most people think our job situation is hopeless but those who do try to do something are immediately subjected to a lot of BS about why communism is a good alternative to capitalism and thus, every revolt is compromised when good people walk away.

    7. Most people are not going to join anything unless it agrees with their fundamental beliefs and common sense. When activists try to organize them into communist organizations they leave. When activists cannot figure out what they stand for and therefore form coalitions with others who believe in dictatorship, the people we need to connect with lose interest and leave.

    8. When activists get frustrated with their inablility to lead people where they do not want to go - against their truest and most profound beliefs - the activists call the people apathetic and shrink themselves into tiny, elitist communist groups, thus aggravating the problem.

    I know this from 40 years of experience and it upsets me to see good people making the same mistakes over and over and over.

    I want to write a flyer for the good folks in my factory that would encourage them to join a conversation about how we might win jobs for all, the common good and a better world.

    How to do this I think is to see just what it is that's commonly true and good about all the best people we know and then to try to focus all this in what we know to be true and good about the traditions and past virtues of the trade union movement. And then to call for a conversation about how we defend our families, our country's production and help everyone else in every other country to do the same.

    Help me out here.

    Tom

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  12. Hello Tom,

    A union that does not serve its members and their wishes is useless. Most of them are. Certainly for major issues. They will only get you some small benefits and advantages, but don’t expect radical changes that will change or overthrow the system within which the unions stay alive and keep prospering. The problem is they (the leadership) work with the system, so they are not interested in any radically new solutions.

    You are lucky most members in your union still believe in God, Family, Country, Basic Freedoms, have Solidarity and the sense of Social Justice. Take that and build on this. It is a far cry from the leftist unions I am familiar with. Try to convince them why Socialism and Communism are an even worse choice than Capitalism. Use Chesterton’s arguments. Communism is dead everywhere except in starving countries like North Korea and Cuba. Socialism may sill seem like a prosperous system in Scandinavia or Sweden, and many lefties bring this up as an argument for socialism. Try to argue why such socialism goes against all the values your members believe in. You can calmly try to stand up to shouting activists. Briefly tell them why they are wrong, publicly, in front of the membership. Engage them in a public debate and try to win it. But, ultimately, you need to convince the majority of the membership, and this is not likely to happen inside the union.

    I don’t know enough details, but you could try to form something like a local Distributist or Chesterton society. Give some handouts to your members, offer to discuss this privately over some beer and food. Most likely not all those who believe in God are Catholics, but I think more and more honest Christians are becoming open to Catholicism, to the pope, and to the ideas of Catholic social justice. Make your movement a part of the cultural war we are currently engaged in. It will be tough to replace the UAW with a different union, but if your group has enough power, it may significantly affect the negotiations and outcome.

    Wild Goose

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  13. Sorry Goose but I just lost another post here somehow. I wonder where they go?

    Anyways I agree with you but the UAW is not recoverable.

    Agree with the need for the Distributist committee or caucus or whatever. I think we should start a newsletter for the workplaces of the world that would fully explore Guild prodcution and answer the free market promoters. What you, John, Nancy and others have already said here should be in front of a larger audience!

    More later.

    Many thanks,

    Tom

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  14. Hi Tom,

    Sorry to hear you are heaving computer problems. I guess you are one of the many frustrated computer users. (See the latest technology post.) It is better to type your comment in a word processor or a text proccessor, save it a few times as you type it, and then just copy & paste it into the blog comment window. This way you will not loose what you have typed. Some word processors have an auto-save feature which saves your work automatically every so often.

    I saw your long post in the above Cow thread, I'll read it and respond.

    Wild Goose

    ReplyDelete

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