Why Government Regulations and Unions Do Not Work

By Joshua Scott Hotchkin

I wrote this piece in April of 2010. While most of it is still relevant, there are parts I might change or add to, given my own intellectual growth and understanding since then. But I have decided to leave it in its original form.

In my discussions with friends from many ends of the political spectrum a few arguments always come up that are used to justify increased government involvement in business. While on the surface many of these arguments appear to have merit, they are often riddled in chicken/egg scenarios. To get at the larger issue, let us explore the argument that government support of labor unions and the resulting regulations have improved the position of the laborer.

In the dawn of America’s industrial revolution many laborers were treated abhorrently by employers. These same employers were indicative of the kind of business philosophies that promoted slavery and state sponsored sexism, and did so fallaciously under the banner of free markets. In the early years of modern industrial labor it became an imperative of the workers to respond likewise through associations known as unions so as to advance their cause. Labor unions struggled in their first century, largely in part to the inherent racism and sexism of flawed union policies. Then something happened that shaped the environment of organized labor as well as popular opinion and political attitude in this country forever- The Haymarket Affair.

For those not already familiar I suggest a more thorough study of the event. On May 4, 1886, August Spies gave a public speech in downtown Chicago on behalf of organized labor, although a large crowd had gathered to hear his plea, by all accounts the speech entailed no incitements and the gathered remained attentive and calm. Police had also gathered and when they eventually began to peacefully disperse the crowd a small explosive was thrown from an unknown member of the crowd, killing one officer and injuring others. The scene quickly became chaotic and bullet ridden resulting in more tragedies on both sides of the law. Although the bomber was never identified, August and other fellow anarchist labor organizers became scapegoats of a reactionary local justice system. The resulting national publicity of these events created a sour political and public climate for labor unions around the country.

Four years later the American Railway Union organized a strike of 125,000 workers in several states which resulted in a standstill of railway transportation vital to commerce. The federal government responded by invoking the Sherman Anti-Trust Act. Although in all appearance the act appeared to have been created earlier to break up monopolies and cartels on behalf of the general populace as well as laborers, its first usage was to forever weaken the position of unions. Although the union members decided to ignore the federal injunction to return to work, the government responded by refusing postal service and sending US Marshalls and the US Army in to forcibly end the strikes. The strike was eventually broken and organized labor quickly learned that legislation intended to regulate big business was to be used ironically to foil the attempts at free market labor associations.

In the future labor unions would instead turn towards government itself in order to gain political clout, but these concessions would always be accompanied by legislative acts that could be used on behalf of big business. Specifically those whose financial support of political candidates earned them special privilege; given both on the barrel and under the table. In this way government itself became sort of a big business that continued to grow itself through regulatory means. Each new sub-sect of government creating a niche for the elite, where wealth, power and privilege became centered on a growing oligarchy that masqueraded itself as free market democracy.

There is nothing inherently bad about big business; free markets are an extension of human nature just as are the gaps in peaks and valleys of individual success. The problem itself lies not in big business, but in business tied to government through the act of regulation. Though on the surface, acts of legislation appear to work in the interests of free markets and the general populace, they can always later be reinterpreted or misdirected to work towards special interests. Regulation is not the answer to preventing the potential atrocities of big business, such as human rights and environmental issues. The growing response to the latter has created large markets for eco-friendly businesses whose good practices alone have caused their success. Human beings, for all of their flaws, generally want what is best and will naturally support those things through the independent distribution of their own resources and wealth. This is how we were able to shape our civilizations in the first place.

It is inevitable that there will always be those who have a natural need for power, wealth and privilege. That alpha nature is also a part of our biological success and evolutionary heritage as a species. Civilizations and all of it failures and glories has given us full spectrum of history to see that if we allow ourselves to succumb merely to the whims of these alpha oriented humans than our modern societies become riddled in inequality on all playing fields. We cannot expect self replicating associations of these individuals to coercively pass our wealth, our planet and our future through their hands and get a fair product in return. It is not in their nature, but that is not what worries me. What worries me is it in the nature of ordinary humanity to be led willingly into a fools bet for our liberty, lives and the future of our species?

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