Unions Are Corporations, Too
The rampant anti-corporatism in America today is somewhat infuriating to me. The notion that corporations can only prosper by cheating the people is as old (and illogical) as government itself. Successful businessmen will almost universally tell you integrity, honesty, and hard work are the keys to success. He who cheats his customers rarely has any repeat business and it is repeat business that drives long-term economic success, not short-term profits.
Unions Are For-Profit Entities
But that’s a rant for another post. The most maddening consequence of the anti-corporate movement, in my eyes, is the resulting pro-union bias. Everybody hates the big bad corporation but loves the labor union movement. Well, what’s the difference? Unions are corporations too. They are in the business of selling labor. Don’t believe me? Try not paying your union dues and see what happens. You think the union bosses will take pity on you let you stick around anyway? Fat chance. That is because unions are inherently for-profit entities.
“Huh???” you might ask? “But I thought unions were not-for-profit?” Well, that depends on whom you’re talking about. While labor unions have no outside shareholders, they do have well-defined stakeholders in the form of union membership, just like any other corporation. Also just like any other corporations, those stakeholders seek to maximize their own benefit. Take the United Auto Workers union, for example. The UAW union is no more or less a corporation than General Motors (GM), Ford (F), or Microsoft (MSFT). Ford, as everybody knows, seeks to maximize profit for shareholders both over the short- and long-term. Likewise, unions simply seek to maximize the welfare of its members, who are the union’s shareholders in all but name. Does the connection between shareholder and union membership seem a bit abstract and tenuous for you? It shouldn’t. There are many employee- and customer-owned corporations in America with a few of the most popular being Vanguard and State Farm Insurance. The structure of these corporations is legally, logically, and morally almost identical to that of most labor unions. Seen in this light, to be both anti-corporate and pro-union is an internally illogical position. They are one and the same.
The Same Rules Should Apply To Unions And Corporations Alike
Now I’m not arguing against the need for a mechanism for workers to bargain collectively and I’m in no way trying to diminish what unions have accomplished for all workers over the years (although said union accomplishments are far smaller than is often reckoned). What I am arguing, however, is that unions are no different than any other corporation and should be treated as such by the law. Anti-competitive and monopolistic behavior which would never in a million years be tolerated in the corporate sector are sanctioned by the government and form the basis of the very livelihood of many labor unions. Tomorrow, I will explore the problem of the monopolistic labor union and reveal exactly why these entities are harmful to the very workers they claim to fight for and indeed all of society.
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I agree. Labor unions are enjoying an political advantage, even as they threaten to bankrupt many industries in the current recession.
Yes. Unions, like churches and private schools, are entities aimed at bettering society, yet built for on the same grounds as a big business. They are just businesses with a different mask. I understand the importance of unions, but I believe that the philosophy behind unions has changed quite a bit since their inception. Proud union workers have turned into inconsiderate workers (not that I can’t name some really good union workers), working with the understanding that available jobs are endlessly at arms reach. Kinda like Terell Owens. There is no penalty for being crap to the industry, because wherever you look, you are welcomed with open arms.
Caleb
http://www.mefinanciallyfree.blogspot.com
Spot on, unions are businesses. Some are very, very lucrative. Do they have to register and pay taxes like regular corporations? I would love to know where to find that out. Also, I have a friend who is an employee of a union. I asked her if she is in a union. The answer was hilarious… the union that represents other employees will not permit its own employees to unionize. (I thought that was illegal, but could not prove it to her.)
Unions as corporations? Why not. But caveat emptor. I think it’d be a grand idea. However I think business would find that the supposedly unfair benefits (such as claim to monopoly) ascribed to unions is nowhere near as powerful or potent as the benefits of incorporation (including, ahem, “personhood.”) In fact, we need no laws; if it ever catches on to look at the issue, many smart unions will go register as corporations of their own accord, in the business of representation. And business will find, just as they do when having to deal with cutthroat agents who know how to drive a deal, the concessions they’ll find they have to make will have them longing for the good old days of “labor” and “management.”
You miss the point. Unions already ARE corporations by any reasonable definition of the word. The exact legal organization is irrelevant. And corporate personhood really isn’t a big deal. Not sure why everybody keeps bringing it up. I’m not sure what other “benefits” of incorporation you are referring to. There aren’t many.
Overall, a very thoughtful article… your ire at pro-union, anti-corporate sentiment is well articulated. Yet, I am curious if you find the anti-union, pro-corporate view equally irksome.
This argument “Unions are corporations, all corporations are identical, and therefore, a union is identical to any other corporate entity” has serious logical problems.
Unions, like city, state and national governments, are indeed a type of corporate entity. However, suggesting that there is little to no difference between, say, The Peoples Republic of China, Houston, TX, and Microsoft is a gross oversimplification.
Second, the “monopolistic” abilities that the author bemoans, are required by the obvious realities that arise from the way that very different types of corporatized entities behave in the real world. We do not say that Dallas is behaving like a monopoly because it is not also San Antonio, or that a contract between Enron and a local government should not be exclusive.
All forms of incorporation are not identical, and should not be treated identically by our legal system.
Eric, nobody made that argument so why are you trying to debunk it?
Kyle, it’s called a straw man attack. Very typical…
Just an observation: when you discussed the source of profit in paragraph 1, you only mentioned behaviors of business towards customers e.g. that a business that cheats its customers won’t prosper. Even if one assumes that your statement is universally true, you’ve only addressed a part of the dynamics of capitalism. There are others relations to consider. What about those relations inherent in production? Are the virtues of integrity, honesty, and hard work as clear there?
Another observation: Profit is a slippery word. There could be a significant difference in what profit implies that could create a distinction between labor unions and corporations. (I think anti-corporation is clumsy, but that is another topic) It may be more clear to say that both unions and corporations are very interested in making money. As you said, unions are interested in making money for its workers and corporations for their stockholders. Good analysis there. However, there could be a distinction in how that money circulates e.g. the use of that money. I’m going to make assumptions so forgive me. Money used by the worker and money used by the stockholder can be very different. In short, the average worker trades his or her labor power (as a commodity) for wages, which are in the end exchanged for other commodities. It’s a commodity for money for commodity flow. This is an oversimplification granted. However, money used as capital is different. Shareholders use money differently than workers. That type of money is used to purchase the means of production (resources, labor power, etc.) to order to produce commodities for sale to garner a return on the money initially invested. It’s a money to commodity to money flow. This isn’t to say that stockholders don’t buy goods and services for consumption or that workers don’t make investments, but only that while they are both associations of individuals united for a common purpose there could be further distinctions that would require separate treatment for each.