Hi, Ric:

I have some questions and a comment.

Why do you suggest that collective bargaining is an institution? Isn't 
it more accurate to call it a special legal right granted by the State 
to a representative of the MAJORITY of employees of a particular 
organization? By virtue of his being elected by the majority, the union 
boss receives the legal right to prevent the free exchange of work for 
pay between those who do not wish to be represented by the elected union 
officials and the employer.

Moreover, why do you call this "collective action through a democratic 
process?" Suppose that a majority of firms in an industry agreed through 
a cartel to raise price. And suppose that the law permitted the cartel 
boss to dictate industry price even to competitors who sought to 
undercut the cartel price. Would this also be an example of collective 
action through the democratic process?

One might justify allowing a union boss this special privilege on the 
grounds that employers had previously succeeded in restricting free 
exchange. I am not discussing what is right or wrong here. I am only 
suggesting that you might wish to use other terms.

Commons viewed the trade agreement that results from collective 
bargaining as between unions and industry. One side wants higher pay and 
restrictions on bosses; the other wants lower pay and a freer hand. That 
is not the issue in dispute in Wisconsin, as I understand it. My 
understanding is that the legislature, on the basis of a recommendation 
from the governor, aims to alter the rules regarding the kinds of 
bargains that are allowable between a union and the representatives of 
local governments. The local government officials have not tried to 
restrict employees from expressing grievances individually or 
collectively. On the contrary, the State of Wisconsin has a variety of 
protections for individuals worker against arbitrary treatment by 
supervisors. Rather than a "fight for collective bargaining," it would 
seem better to call it a "fight for the wealth and income of Wisconsin 
taxpayers." A more appropriate reference than Commons might be Mancur Olson.

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

http://books.google.com/books?id=W0fGAAAAMAAJ&pg=PA605&lpg=PA605&dq=%22John+R.+Commons%22+%22collective+bargaining%22&source=bl&ots=-g0rIhtd65&sig=7OL5UGltywRUhtDYTgbo4KA6jF4&hl=en&ei=ZtVhTbnUK4G2tgf8mtC8DA&sa=X&oi=book_result&ct=result&resnum=7&ved=0CEEQ6AEwBg#v=onepage&q=%22John%20R.%20Commons%22%20%22collective%20bargaining%22&f=false


Best wishes,


On 2/19/2011 3:23 PM, Ric Holt wrote:
> It is a little ironic that the fight for collective bargaining today is
> taking place in Madison, Wisconsin where John R. Commons taught for
> years. Street  (1966) observes that Ayres agreed with Veblen on the
> negative effect of ceremonial activities and institutions, calling them
> a “persistent drag.” But a very different view of social institutions
> emerges from the work of John R. Commons, who saw collective action
> through the democratic process as reshaping institutions to improve
> society and individual freedom.
>
> Commons was the source of many landmark social innovations
> (institutions) that helped to soften the clash of social interests in a
> modern capitalist economy and improve the standard of living of the
> average worker and citizen. Variations of his workers compensation
> program, devised for Wisconsin, were rapidly adopted by other states
> (Street 1973) and the unemployment insurance and pensions systems became
> models for the New Deal.  This was all based on his view that
> “collective action within a responsive democratic framework of
> legislation and judicial interpretation can transform existing legal
> arrangements into more effective instruments to promote development.”
> (Street 1974).
>
> As some of you know I’m starting to work on a book that focuses on Post
> Keynesian economics and Social Justice. One issue I’m exploring is
> whether there are conditions needed for true freedom and what are they.
> Let us take a case where you have a worker in Bahrain where his
> situation is to work long hours in a terrible and unsafe environment or
> starve. Some would say that he has liberty and freedom since he has a
> “choice.” No one is coercing him to work at this place.  But freedom
> should mean much more than just having the freedom to make a choice, but
> having “meaningful” choices in one’s life that will truly make one’s
> life better off and happier. Since the choice the worker has is not a
> “meaningful” choice, similar to “take your life or your money” then
> in many ways he is a “victim” and his choice and freedom is being
> coerced.
>
> Liberty, then, is not just dependent on being able to make choices, but
> something much more, which is being able to make meaningful choices in
> one’s life. In this case the choice of working or starving is not being
> imposed by a particular individual, but by the type of social
> arrangements that exist. If we change those social arrangements which
> might include the right to bargain, provide unemployment compensation
> where being unemployed is not equal to starving, or educational
> opportunities to learn new skills for other job opportunities, then
> these change in social arrangements has significantly increase the
> liberty and freedom of this individual in a meaningful way. So
> following, in many ways, the ideas of Commons the type of social
> innovations that we put into place can dramatically increase our
> individual freedom and lead to less conflict and more harmony in society
> which will increase overall social welfare. Economic development has
> both quantitative and qualitative changes that can increase liberty or
> restrict it.
>
> Ric Holt
> Southern Oregon University
>
>

-- 
Pat Gunning
Professor of Economics
Melbourne, Florida
http://www.nomadpress.com/gunning/welcome.htm