For me, one of the most frustrating aspects of contemporary political debates about economic matters is the conflation of pro-market and pro-business (specifically pro-big business) policies or principles. I’ve written about this a bit before, but I wanted to bring it back up in the context of the current contention over “right-to-work” legislation in Michigan. In general, debates over unions seem to be one of the major places where “pro-market” and “pro-business” get very muddied. In theory, pro-market should mean freedom of contract – all exchanges are good, since they are (presumed) voluntary, and individuals would never make a voluntary exchange that was not in their interests. But, we can imagine unions as a kind of nexus-of-contracts (just as corporations are a nexus-of-contracts in modern legal understandings and financial theory). So why is it that Republicans, the supposed champions of the free market, as so anti-union? Well, because they aren’t actually pro-market, they are pro-business and, at least in the short run, weaker unions means less bargaining power for workers and thus higher profits for business. And, as Paul Krugman has recently noted, the share of national income going to wages has gone down and the share going to profits has gone up lately, probably reflecting increased monopoly power produced by corporation concentration – just what you’d expect without the countervailing power of unions to force the redistribution of some of that profit to workers.
All of this brings us to the “right-to-work” law that was just signed in Michigan. What is right-to-work? Most simply, it’s a restriction on what kinds of contracts are allowed. Here’s how HuffPo summarized it: ”Right-to-work laws forbid contracts between companies and unions that require all workers to pay the union for bargaining on their behalf.” That’s right, “right to work” is actually a government restriction on what kinds of contracts private actors can make. Why is this a Republican position? Well, because it weakens the bargaining power of workers and because it cripples a major base of Democratic financial support.*
Now, of course, we can step back and remind ourselves that corporations – and unions – are actually creations of the state, and that markets in general exist because of, not in spite of, state action. But sadly that’s a whole different rhetorical ballgame, and one neither major political party is excited about. For the moment, let’s just remember that “pro-market” is a rhetorical move as much as a substantive claim, and that the “right-to-work” of the person who doesn’t want to pay union fees for their representation is at once the elimination of the right for employers and unions to sign union shop agreements.
* I should note here that I am a union member in the state of Michigan, so all this is quite personal.