[CriticalSection]

It's not much of a mystery to crack.

The chart starts in 1950 with 63.6%. In that year, one out of three American workers in the private sector were in a union. Today one out of fifteen American workers in the private sector are in a union. In the rust belt, the Wisconsin government has been waging a war against its unions, as it and other states become so-called right to work states.

Insofar as this "increas[ing] the risk of social instability", one reason for this is that more and more money is flowing to capital which doesn't even know where to invest it. The main reason so much capital is idle is due to existing overproduction (which you could also call underconsumption, it's the same thing). Workers/consumers are short-changed, so can buy less, whereas more money goes to capital, to build more products - for people who can't afford them. You can see what the main problem is. Consumer debt can solve this temporarily, but if the cut of the pie stays the same, it just postpones the crisis and makes it worse.

Things are fairly simple - there is an aristocracy of heirs who own rights to expropriate surplus labor time (which they call profits) from those of us who work and create all wealth. They are very well organized in industry, government, and media. They don't want the people who do the work and create the wealth, us (most of us), to be organized and as aware as they are. They say unions breed laziness, but these heirs have never worked a day in their life.

[bufordsharkley]

> there is an aristocracy of heirs who own rights to expropriate surplus labor time

As a Georgist, I tend to view Marxist critiques such as this as fairly superficial. We agree that something wrong is happening, but a Georgist is able to pin-point the point of unfairness and recommend a remedy, whereas the Marxist believes that any employment generates a "surplus value" (how?), which I'm skeptical is true much of the time.

In short, I see this line of reasoning as the result of conflating capital and land, at the expense of the honest employer.

Unions are clearly a powerful tool to allow for collective bargaining, and advance the position of labor. But I don't think it affects the fundamentals of the economy―what is being produced, where. I tend to think unions have declined in America largely because the efficiency of our economies have declined in the places they were most effective.

[defgeneric]

The theory of surplus value isn't really about fairness. It simply says that there must be some value above the "socially necessary labor time" required to produce commodities in order for the category of profit to exist. It's a critique in the sense that it takes the surface-level appearance of concepts like value and profit for granted as they are, then sort of reverse-engineers them to illuminate their conditions of possibility and the relationships between them. So surplus value isn't the same as profit, and in later stages of the analysis it's argued that for example "aggregate" surplus value can be transferred between industries based on those relative rates of profit without any "real" transfers taking place. It has been a little while since I really had a firm hold on the theory but if you're interested in how it's applied to describe conditions of overproduction and overproduction crises, Ernest Mandel's Late Capitalism has a good analysis of the 1980s.

[oxide]

The stuff we see in Wisconsin for example, IMO, is directly connected to the 1980's rhetoric and sentiment around unions that never went away.

While both sides have perfectly valid arguments for and against unionization, there is no compromise or middle ground to be found, only partisanship from the politicans who are charged with finding compromises, who have the power to make and break unions.

I do agree with your point about efficency declining, but I also smell a fish when it comes to partisan politics surrounding unionization of workers. Both sides seem too concerned with ultimatiums and heel-digging.

Surely there is a way to compromise, but if neither side will sacrifice you can't get anywhere at all.

[r00fus]

If you and another person are arguing over what's for dinner and the other person's position is "lets eat tires" - there is no compromise possible.

At some point, it's pretty easy to see that the anti-unionists simply want to destroy all unions and collective wage-bargaining. End of story.

[antisthenes]

Thank you for enlightening me about Georgism.

[RcouF1uZ4gsC]

Saying the price of labor in the 1950s was high due to unions is a simplistic explanation. Prior to that, almost every industrialized nation had been turned into rubble( see WWII) except the United States. In addition, labor participation especially for the high paying jobs was severely limited due to sex ( high proportion of single income households with with stay at home moms) and race discrimination.

So you have a high demand for labor coupled with a lower supply and thus increased wages. Labor was a contributor to it, but not the main driver. As other countries became industrialized and more people that had previously not been in the workforce entered, the supply and demand for labor in the United States changed and the industries that were heavily unionized got destroyed by the competition (see the auto industry)

[kesselvon]

Foreign trade was not a big component of the US economy until well after. Are unions the sole reason for high wages? No. But being able to negotiate as a collective instead of individually does drive wages up.

[a3n]

Corporations and the rich (according to some definition of rich) are doing fabulous. The "rest" of us are discussing the phenomenon of children being worse off than their parents.

I would (and already have, for myself) condense your post down to: Capital has figured out how, and decided, to keep a larger share of labor's product.

The so called recovery from the Great Recession included the paradox that corporations were recovering and thriving, but individuals didn't feel so. "But we're doing so well!" they say, as they gaze at the ticker. Well, not so much. Look down.

[toomuchtodo]

> The so called recovery from the Great Recession included the paradox that corporations were recovering and thriving, but individuals didn't feel so. "But we're doing so well!" they say, as they gaze at the ticker. Well, not so much. Look down.

"JPMorgan CEO Dimon says in annual letter that there's 'something wrong' with the US"

http://www.cnbc.com/2017/04/04/jpmorgan-ceo-dimon-more-busin...

It appears that business and political leaders recognize that a problem exists, but are not willing to concede that the solution might not be beneficial to corporations. Income inequality is not going to be fixed with the rollback of regulations and a reduction in the tax rate.

[devoply]

Not only that, but those people as you noticed don't even know what to do with the wealth. The best thing to do would be for the government to come in expropriate that wealth, and give it out as universal income to stimulate consumption. And then for the labor to unionize again so they can keep a fair share of that wealth. To keep the engine of the economy running... as right now it's stalling under their supposedly "efficient care". At the end does such a class even need to exist, I don't really think so. The world would shed a little tear if these sorts of people disappeared tomorrow.

[branchless]

Nope, hand out $1000 BI a month and rent will go up by that amount, leaving the very poor even worse off.

Why take from the rich to give to the poor when the way they get their money is flawed (in the main). Address the root cause: fiat issuance against land.

edit: I cannot reply to you as yet again the faux HN "you're a georgist submitting too fast" has come out so here is my reply:

Not that many jobs are going to disappear overnight in a step change. BI alone is totally flawed as a concept because it utterly fails to comprehend credit issuance against land as the driver of "money" creation and the effect that has on rents.

[dragonwriter]

> Nope, hand out $1000 BI a month and rent will go up by that amount, leaving the very poor even worse off.

If housing were monopolistic in supply, and completely inelastic in demand, that would be remotely plausible.

> Why take from the rich to give to the poor when the way they get their money is flawed (in the main).

Doesn't the "when" part of that answer the "why" part?

[dllthomas]

> If housing were monopolistic in supply, and completely inelastic in demand

Right, and we should bear in mind that housing competes not only against identical units in similar places but also longer commutes, alternative living arrangements, and leaving the area entirely.

[mpweiher]

> hand out $1000 BI a month and rent will go up by that amount

Evidence?

[bufordsharkley]

Bay Area rents have risen to match the ability of tech workers to pay. There's a general collusion of landlords, insofar as they target what other units are renting for in the neighborhood (which of course has nothing to do with marginal cost).

[mpweiher]

Does that really look comparable to you? After all, SV is one of the most desirable/sought after property markets in the world, with extremely limited supply and the tenants there generally not exactly candidates for BI.

Generalizing to all property markets, particularly ones not as supply-limited seems a stretch at best.

Furthermore, I see no evidence that SV landlords manage to soak up all the income of their tenants, not by a long shot, or where are all the fancy cars, motorcycles, planes, etc. coming from, never mind all the high tech gadgets?

[bufordsharkley]

> Generalizing to all property markets, particularly ones not as supply-limited seems a stretch at best.

Oh, absolutely. But so many of the cities in high demand are supply limited. I wouldn't expect this to hold in a Houston, Atlanta, Phoenix, or a rust belt city.

[devoply]

If lots of jobs disappear we will no longer be having this conversation. As this conversation is dependent on the amount of discretionary income people have.

[stuaxo]

Exactly the cash only goes in one direction, it needs to go back to the bottom of the economy so those people have enough to spend and the economy can work better.

[branchless]

This just seems to lack a coherent narrative. You talk about unions first, then go on to say wages are too low leading to an inability to pay, masked over in the short-term by credit issuance.

Okay, let's imagine we unionised. Unions fight for better pay and they win. Wages go up, labour captures more of the surplus value they add. Disposable income is up.

Are happy days here? No. Our system issues credit against land. People have more money now, they can pay more for land. Banks, literally 2 days after your unions get their victory, start lending more. How do they know how much more to lend? They are going to saturate all that extra income with the cost of carry of debt.

How can we stop this? Land value tax. Tax land not income. Stop the speculators who know that our current system funnels all productivity gains into land.

And in fact if you did this you would let labour save again and they would be able to refuse to work for a pittance or for a bad boss. We would still need unions, but labour would be less oppressed because we have solved the problem at the root rather than seeking to counter a side effect of the main problem: rentiers exploiting a flawed system.

[malandrew]

This. So much this.

My older either used to be a professional chef working at top restaurants in NYC. One day I asked him what the most important thing a restaurant owner can do to be successful. His answer: "own your land or else your landlord takes all the value you create by raising rents to the most they can get before you call it quits."

[branchless]

Not according to HN readers! Guess the SV kidz know more about business? Downvotes abound for questioning the system.

[metaphorm]

> Our system issues credit against land.

as far as I understand it, no, it doesn't. the currency issued against NOTHING except "the full faith and credit" of the Federal Reserve. the only thing backing the currency is the principle that loans made by the Federal Reserve will be paid back, with the stated interest, no matter what.

[bufordsharkley]

That's true for currency from the government itself. But for the stuff we actually use, that's issued from private banks, constrained by partial reserve banking.

It's true that to some extent, their assets are land (real estate is a common collateral). It's not shocking that land busts and banking crises tend to coincide.

[metaphorm]

the land (and house, usually) are used as collateral in home mortgage lending, which is a major category of lending but not nearly as foundational as Federal Reserve lending, which is the basis of the entire fractional reserve banking system.

there are many other categories of credit that rarely use land as collateral. small business loans don't (or almost never do, in any case). corporate bonds don't either. consumer credit (including student debt) is totally non-collateralized.

[branchless]

https://bankunderground.co.uk/2015/06/30/banks-are-not-inter...

Banks create mony when they lend. Fed doesn't constain this.

[rmah]

The "money" banks create when they lend is the same sort of "money" you create when you deposit cash into your checking account. The problem with money conspiracy theorists is that they conflate different types of money (M0, MB, M2, etc) into one pile they call "money".

[mpweiher]

> Banks, literally 2 days after your unions get their victory, start lending more.

Evidence?