WEBVTT

NOTE Major Episodes in American Labor History: An Austrian Reevaluation, Part II

1
00:00:00.000 --> 00:00:12.000
Last time we went through the sort of dry section, which was just to go over some of the principles that are enshrined in law by certain pieces of legislation pertaining to labor unions.

2
00:00:12.000 --> 00:00:25.000
And now I want to go into, you know, maybe some more arguments that might help to disabuse us of, you know, of myths that even free market people, I think, in the deep down have.

3
00:00:25.000 --> 00:00:30.000
Does this really work? Don't we actually need this or that to protect workers?

4
00:00:30.000 --> 00:00:33.000
Isn't it true that people had to work long hours in the past?

5
00:00:33.000 --> 00:00:36.000
I want to try to address all that as best I can.

6
00:00:36.000 --> 00:00:41.000
But just to recap from last time, the key thing that I want to note is that originally,

7
00:00:41.000 --> 00:00:47.000
that is up until really the 1930s, you had a system of freedom of contract between workers and employers,

8
00:00:47.000 --> 00:00:52.460
Lawyers, so that employer and employee alike were free to make and then to accept or to

9
00:00:52.460 --> 00:00:56.260
reject any offer of remuneration.

10
00:00:56.260 --> 00:01:03.220
With the 1930s comes the principle of an exclusive bargaining agent decided on by a majority

11
00:01:03.220 --> 00:01:09.740
of the workers that would then be applied to all workers in that bargaining unit.

12
00:01:09.740 --> 00:01:14.360
We get a legal order in which it becomes very difficult to stop union violence even while

13
00:01:14.360 --> 00:01:15.360
it's underway.

14
00:01:15.360 --> 00:01:44.360
Unions are very hard to impose injunctions to stop it. Employers have difficulty speaking against unionism or making statements about unionism around the time of the campaign for the certification election because then they can be accused, even under the 1947 amendments, of engaging in speech that involves threats of reprisal if the workers decide to choose for a union.

15
00:01:44.360 --> 00:01:49.360
And by the way, also if they promise benefits to the workers, if the employer says that,

16
00:01:49.360 --> 00:01:54.360
you know, look, I'll give you this wage increase right now, just don't unionize.

17
00:01:54.360 --> 00:01:58.360
Well, needless to say, you get severely punished for that.

18
00:01:58.360 --> 00:02:05.360
So the freedom of speech of employers is curtailed under this new order, this new legal order.

19
00:02:05.360 --> 00:02:12.360
Employers can be found guilty of failing to bargain with this designated bargaining agent, this union.

20
00:02:12.360 --> 00:02:36.360
In practice, what it has meant is that employers have come to the conclusion that the only way they can prove that they're bargaining in good faith is that they've had some give and take, so they begin by making absurdly unreasonable offers because they feel like that will then provoke bargaining.

21
00:02:36.360 --> 00:02:52.360
Massive strikes, even dominated by complete strangers, who are in no way associated with a particular firm, become permitted, and strangers are permitted to come onto private property to agitate among the workers.

22
00:02:52.360 --> 00:02:58.360
So this is definitely a very, very different legal order than had existed in the past.

23
00:02:58.360 --> 00:03:03.360
Now two little points before I go on to my big point.

24
00:03:03.360 --> 00:03:10.360
One little point is I want to make note of Morgan Reynolds who wrote a book called Making America Poorer

25
00:03:10.360 --> 00:03:14.360
and the subtitle is The Cost of Labor Law. It's worth reading.

26
00:03:14.360 --> 00:03:24.360
But he listed seven distinct ways in which he believed labor unionism imposed costs on the economy

27
00:03:24.360 --> 00:03:32.360
because I didn't really develop that point too much before lunch. I gave some brief indication of it.

28
00:03:32.360 --> 00:03:38.360
And by the way, if you want to get these points, you can either get Professor Reynolds' book,

29
00:03:38.360 --> 00:03:42.360
which is out of print and difficult to find, or you can get my book, The Church and the Market,

30
00:03:42.360 --> 00:03:46.360
which is in a second edition. My second printing has just come out.

31
00:03:46.360 --> 00:03:49.360
That was the second annoying thing I've said all week.

32
00:03:49.360 --> 00:03:53.360
My quote is, I think I have three more between now and the end.

33
00:03:53.360 --> 00:03:58.360
Here's what they are. He says, number one, the redistribution of income from the general community

34
00:03:58.360 --> 00:04:02.360
to Union Bureaucracies and their members.

35
00:04:02.360 --> 00:04:05.360
Number two, he says the unemployment effects of unions,

36
00:04:05.360 --> 00:04:11.360
which is naturally going to happen if you increase wages artificially,

37
00:04:11.360 --> 00:04:14.360
less labor will be demanded.

38
00:04:14.360 --> 00:04:18.360
The consequences of union wage inflexibilities over the business cycle,

39
00:04:18.360 --> 00:04:21.360
so these union wage contracts make wages inflexible

40
00:04:21.360 --> 00:04:25.360
even at times when wage flexibility seems to be called for

41
00:04:25.360 --> 00:04:28.360
Number four, the cost of union work rules.

42
00:04:28.360 --> 00:04:30.360
Union work rules would be things like...

43
00:04:30.360 --> 00:04:35.360
I remember a situation where...

44
00:04:35.360 --> 00:04:37.360
I can't remember if it was in college or where it was,

45
00:04:37.360 --> 00:04:41.360
but any time somebody flipped over a cassette tape,

46
00:04:41.360 --> 00:04:44.360
you had to have a guy from the labor union come in

47
00:04:44.360 --> 00:04:46.360
and flip over the cassette tape for you.

48
00:04:46.360 --> 00:04:48.360
You couldn't actually get up and flip it over.

49
00:04:48.360 --> 00:04:52.360
Sometimes you get these bizarre rules that are inserted

50
00:04:52.360 --> 00:05:01.360
Sometimes you get these bizarre rules that are inserted into labor contracts that lead to just bizarre inefficiencies and certainly that would be an example.

51
00:05:01.360 --> 00:05:11.360
Or other union work rules would involve deliberately avoiding using labor-saving machinery because we want more workers.

52
00:05:11.360 --> 00:05:20.360
By the way, in case there still is anybody, I'm sure not in this room, but anybody listening who is uncomfortable about labor-saving machinery,

53
00:05:20.360 --> 00:05:25.360
I remember reading the Grapes of Wrath years ago, John Steinbeck.

54
00:05:25.360 --> 00:05:30.360
There is a part where he goes on this little tangent about farm machinery

55
00:05:30.360 --> 00:05:33.360
and how bad it is because it throws people out of work.

56
00:05:33.360 --> 00:05:39.360
I always have to use this example in my classes to make sure they all understand this point.

57
00:05:39.360 --> 00:05:43.360
I say, let's suppose you have an economy made up of four people

58
00:05:43.360 --> 00:05:46.360
and three of them work at the post office, let's say.

59
00:05:46.360 --> 00:05:50.360
So, like, all their work, three people, is to send letters to the other guy.

60
00:05:50.360 --> 00:05:56.360
Okay, so there's a, so there's a, so I say to them, this is not a realistic scenario, but it nevertheless works.

61
00:05:56.360 --> 00:06:02.360
And the other guy basically, you know, has an orange grove.

62
00:06:02.360 --> 00:06:10.360
Well, let's suppose that the post office gets some of those, you know, stamp vending machines.

63
00:06:10.360 --> 00:06:14.360
And to get, to buy stamps, you don't have to wait in line the more you just go to the machine.

64
00:06:14.360 --> 00:06:19.360
I suppose that means that you now need only two people working at the post office, okay?

65
00:06:19.360 --> 00:06:22.360
Well, that means that with two people working at the post office,

66
00:06:22.360 --> 00:06:25.360
you can now produce the same amount that you did with three,

67
00:06:25.360 --> 00:06:28.360
but now you've released one person to go out into the economy

68
00:06:28.360 --> 00:06:30.360
and produce more things that we couldn't have had before

69
00:06:30.360 --> 00:06:33.360
because he was wasting his life selling stamps to you.

70
00:06:33.360 --> 00:06:35.360
Now he can go work in an orange grove or something

71
00:06:35.360 --> 00:06:37.360
and increase the overall amount of wealth,

72
00:06:37.360 --> 00:06:41.360
so there's no need for that third person to go up to that machine

73
00:06:41.360 --> 00:06:46.360
And shake his fist at it and say, you, SOB, taking my stamp dispensing job away.

74
00:06:46.360 --> 00:06:49.360
No, you should think in terms of all of society.

75
00:06:49.360 --> 00:06:54.360
It's hard to do sometimes when you're the one who has to bear the burden of benefiting all of society.

76
00:06:54.360 --> 00:07:00.360
But the point is that any alternative situation in which people start smashing machines,

77
00:07:00.360 --> 00:07:03.360
or I'm entitled to sell stamps the rest of my life,

78
00:07:03.360 --> 00:07:08.360
is just antisocial and interferes with the increase in everyone's standard of living.

79
00:07:08.360 --> 00:07:15.360
The fifth one, the dynamic impact of unions in discouraging research and development, investment and entrepreneurship.

80
00:07:15.360 --> 00:07:18.360
And he can give you examples of that.

81
00:07:18.360 --> 00:07:25.360
Number six would be the direct costs of strikes, strike threats, negotiating costs, labor consultants,

82
00:07:25.360 --> 00:07:31.360
national labor relations board elections, bureaucratic costs, grievance costs and related expenses.

83
00:07:31.360 --> 00:07:44.360
And then finally, the political role of unions in increasing international trade barriers, which is well known, government spending and related forms of discoordination sustained by political action.

84
00:07:44.360 --> 00:07:47.360
Okay, I'm going to come back to that sheet later.

85
00:07:47.360 --> 00:07:57.360
My second small point before my large, but the first point was to go over what Reynolds points out are some of the deleterious effects of labor unions and exactly what they are.

86
00:07:57.360 --> 00:08:02.360
The Theory of Money and Credit

87
00:08:27.360 --> 00:08:35.360
It means that in labor relative to land, it's just an empirical fact, that labor is scarce relative to nature-given factors.

88
00:08:35.360 --> 00:08:40.360
If this were not the case, we would have no unused or sub-marginal land.

89
00:08:40.360 --> 00:08:47.360
If labor were just super-abundant, or at least abundant in relation to land, all land would be brought into use.

90
00:08:47.360 --> 00:08:52.360
The very fact that some land and some resources remain untapped reflects the scarcity of labor,

91
00:08:52.360 --> 00:08:58.360
which is to say that labor is too dear to be wasted on extracting resources or using land

92
00:08:58.360 --> 00:09:03.360
whose returns would be lower than in some other area in which scarce labor is more urgently needed.

93
00:09:03.360 --> 00:09:09.360
And also George Reisman notes this, I think it's a very good point.

94
00:09:09.360 --> 00:09:15.360
Many of us would be happy to have the services of cooks, gardeners, personal secretaries and the like

95
00:09:15.360 --> 00:09:20.360
but we're frustrated in this desire precisely because of the scarcity of labor.

96
00:09:20.360 --> 00:09:27.360
Most of us cannot command the funds necessary to divert scarce labor away from other sectors of the economy

97
00:09:27.360 --> 00:09:32.360
and toward the fulfillment of domestic labor and personal services for ourselves as individuals.

98
00:09:32.360 --> 00:09:41.360
In addition, while it is possible for any given person to desire a supply of goods that could be produced only by the labor of many individuals,

99
00:09:41.360 --> 00:09:47.360
on average, a person can of course never acquire more than the products of just one other person.

100
00:09:47.360 --> 00:10:17.360
When the very young and the sick and infirm are allowed for, who can only be supported by the labor of others, it turns out that for each person who consumes, there is, on average, substantially less than the labor of one person available to produce, and then he goes on to provide much more evidence of the ineradicable scarcity of labor, including the fact that as workers grow wealthier and more comfortable, they begin to desire more and more leisure and thereby wish to supply less and less labor.

101
00:10:17.360 --> 00:10:25.360
really is in fact true and a defensible statement that there is such a thing as a scarcity of labor.

102
00:10:25.360 --> 00:10:34.360
Now typically the way a lot of market economists explain, see I have bottled water here, I forgot about this,

103
00:10:34.360 --> 00:10:39.360
sort of rude to drink water right out of the bottle, so especially like on camera,

104
00:10:39.360 --> 00:10:44.360
I'm not rude, but not sophisticated like drinking out of a glass, so I'll drink out of the glass.

105
00:10:48.360 --> 00:10:53.360
Now, if only I had one of those little umbrellas, then I'd be really sophisticated.

106
00:10:53.360 --> 00:10:58.360
Like Steve Martin wanted in The Jerk. Be somebody!

107
00:10:58.360 --> 00:11:01.360
All right, let's just move on.

108
00:11:01.360 --> 00:11:04.360
I watched The Jerk recently with my wife. I'd seen it in college.

109
00:11:04.360 --> 00:11:08.360
We'd watched like a TV-edited version of it over and over when there was nothing else on.

110
00:11:08.360 --> 00:11:13.160
And then years passed, I was in grad school, years passed, and then I was with my wife recently and said,

111
00:11:13.160 --> 00:11:14.760
Oh, this is a great movie, we've got to watch it.

112
00:11:14.760 --> 00:11:17.760
I put it on, I totally forgot how stupid this movie is.

113
00:11:17.760 --> 00:11:22.160
Oh my gosh, I was, just the whole movie, I just wanted to cringe and leave.

114
00:11:22.160 --> 00:11:25.960
So anyway, if you're watching, dear, I'm sorry, sorry we had to watch that.

115
00:11:25.960 --> 00:11:33.560
Anyway, when it comes to labor unionism, typically market economists will argue along these lines.

116
00:11:33.560 --> 00:11:41.160
They'll say that it's natural for people's well-being to increase on the free market as laborers

117
00:11:41.160 --> 00:11:45.260
because there's competition among employers for this scarce labor.

118
00:11:45.260 --> 00:11:53.260
And so if somebody is employing me and I'm making pentium processors and you're paying me a dollar a day,

119
00:11:53.260 --> 00:11:58.260
well, the argument goes that there'll be another employer somewhere who will bid me away,

120
00:11:58.260 --> 00:12:04.500
who also wants to have somebody like me and will say well I'll pay you two dollars a day

121
00:12:04.500 --> 00:12:10.020
and so then the other employer has to bid up so that eventually the argument goes that

122
00:12:10.020 --> 00:12:17.060
through in effect a kind of labor arbitrage eventually the price of my labor is bid up to the point

123
00:12:17.060 --> 00:12:21.540
you know more or less at my discounted marginal value product so that it gets to the point where

124
00:12:21.540 --> 00:12:26.660
you know I'm in effect being employed more or less at the level of at a wage that more or less

125
00:12:26.660 --> 00:12:30.660
That's something like the argument that you hear market economists make.

126
00:12:30.660 --> 00:12:33.660
Certainly there's something to that, I think.

127
00:12:33.660 --> 00:12:36.660
But there's another way of looking at this wage question, I think.

128
00:12:36.660 --> 00:12:38.660
And again, I say this as a layman.

129
00:12:38.660 --> 00:12:44.660
But I'm quite taken by George Riesman's explanation of why it is that laborers tend,

130
00:12:44.660 --> 00:12:48.660
through the natural workings of the market, to grow wealthier and wealthier.

131
00:12:48.660 --> 00:12:53.660
In fact, what he's going to argue is that there is a natural tendency for all real incomes

132
00:12:53.660 --> 00:12:59.660
and the natural tendency for all real incomes to increase over time on an unhampered market.

133
00:12:59.660 --> 00:13:02.660
So what I'd like to do now is to look at that for a moment

134
00:13:02.660 --> 00:13:06.660
and give this alternative explanation as to why it is that people, in fact,

135
00:13:06.660 --> 00:13:14.660
workers included, tend to do better and better over time in an unhampered market.

136
00:13:14.660 --> 00:13:21.660
First of all, Reisman points out that let's bear in mind that his theory is not going to be that easy to see

137
00:13:21.660 --> 00:13:28.660
...place in our economy, because we have an economy with an expanding money supply, a very active Federal Reserve system,

138
00:13:28.660 --> 00:13:34.660
and so we've grown up in an economy in which we think it's just normal that things get more expensive all the time,

139
00:13:34.660 --> 00:13:39.660
like this is just like a fact of nature, things always get more expensive and that's just the way life is.

140
00:13:39.660 --> 00:13:45.660
But it need not be so, of course the price level in America was consistently falling for a century and a half,

141
00:13:45.660 --> 00:13:49.660
really from the 18th century, if you don't include wartime,

142
00:13:49.660 --> 00:13:53.660
And that's because if you have a more or less fixed supply of money,

143
00:13:53.660 --> 00:13:56.660
and the gold supply is more or less fixed,

144
00:13:56.660 --> 00:14:00.660
I mean, at least compared with the money supply since going off gold,

145
00:14:00.660 --> 00:14:02.660
if you have a basically fixed money supply,

146
00:14:02.660 --> 00:14:05.660
but you have an economy that gets progressively more productive

147
00:14:05.660 --> 00:14:08.660
and it produces more and more goods all the time,

148
00:14:08.660 --> 00:14:11.660
well, then that constant amount of money will come to command

149
00:14:11.660 --> 00:14:13.660
correspondingly more and more goods.

150
00:14:13.660 --> 00:14:18.660
Whereas we live in an economy where both wages and prices just seem to be going up

151
00:14:18.660 --> 00:14:41.660
Supply.

152
00:14:41.660 --> 00:14:47.220
The key to the process whereby the unhampered market increases the average standard of living

153
00:14:47.220 --> 00:14:52.020
is business investment in capital goods that increase the productivity of labor,

154
00:14:52.020 --> 00:14:56.420
which is to say, how much each worker is capable of producing.

155
00:14:56.420 --> 00:15:03.020
A forklift, for example, makes it possible for a worker to move and stack far more pallets than before

156
00:15:03.020 --> 00:15:07.020
and to reach heights that would have been impossible with his bare hands.

157
00:15:07.020 --> 00:15:11.620
Other kinds of machinery can multiply the efficiency of a single worker many times over,

158
00:15:11.620 --> 00:15:14.220
sometimes by orders of magnitude.

159
00:15:14.220 --> 00:15:19.020
The amount of goods the economy is capable of producing rises and at times even explodes

160
00:15:19.020 --> 00:15:21.540
and this is how wealth is created.

161
00:15:21.540 --> 00:15:26.380
As a result of capital investment, firms can now produce many, many times more goods than

162
00:15:26.380 --> 00:15:29.700
before and at considerably lower cost.

163
00:15:29.700 --> 00:15:35.340
Thanks to the pressures of market competition, firms pass on these cost cuts to consumers

164
00:15:35.340 --> 00:15:41.540
in the form of lower prices, better quality merchandise or a combination of both.

165
00:15:41.540 --> 00:15:45.480
The ordinary person's standard of living increases, therefore, not because government takes from

166
00:15:45.480 --> 00:15:50.620
the rich to give to him, or because labor unions struggle with employers to win him

167
00:15:50.620 --> 00:15:51.620
concessions.

168
00:15:51.620 --> 00:15:55.980
His standard of living increases because on the unhampered market, business firms are

169
00:15:55.980 --> 00:16:00.420
in a position to invest in machinery that makes it possible for more and more goods

170
00:16:00.420 --> 00:16:05.680
to be produced with fewer and fewer hands, thereby increasing the overall amount of material

171
00:16:05.680 --> 00:16:09.020
goods available and rendering them less and less expensive.

172
00:16:09.020 --> 00:16:19.020
It is the productivity of labor that determines the supply of consumer goods relative to the supply of labor, and thus the prices of consumers' goods relative to wage rates.

173
00:16:19.020 --> 00:16:29.020
This does not mean that we will run out of jobs. As long as human wants remain even partially unfulfilled, there will never be a shortage of jobs.

174
00:16:29.020 --> 00:16:30.020
Research of Jobs

175
00:16:30.020 --> 00:16:34.980
Now, Riesman sometimes puts this sort of playfully and he'll say, you know, look, I mean, as

176
00:16:34.980 --> 00:16:40.260
a, like right now, you know, most people would like to have, you know, you'd like to have

177
00:16:40.260 --> 00:16:45.580
your own gardener or you'd like to have two cars or better cars than you have now or a

178
00:16:45.580 --> 00:16:50.980
yacht or a plane or a yacht from which you can launch your plane, you know, he says,

179
00:16:50.980 --> 00:16:54.580
he says, you know, like in other words, you can always imagine at least some material

180
00:16:54.580 --> 00:16:58.660
improvement that, you know, not everybody needs to have that sort of thing, but in other

181
00:16:58.660 --> 00:17:08.660
In other words, given where we are now, and given a society where everybody is launching his plane from his own yacht, there's quite a ways to go.

182
00:17:08.660 --> 00:17:21.660
In some fields, such as agriculture, the increase in output made possible by productivity gains will not be met by a proportionate increase in consumption.

183
00:17:21.660 --> 00:17:27.660
For example, we increase the productivity of agriculture such that we can produce ten times as much food.

184
00:17:27.660 --> 00:17:30.660
It doesn't necessarily mean that we're all going to want to eat ten times as much.

185
00:17:30.660 --> 00:17:33.660
In that case, we're always going to want to shift resources out of agriculture,

186
00:17:33.660 --> 00:17:37.660
because otherwise we're just going to be drowning in rotting food.

187
00:17:37.660 --> 00:17:41.660
So in that case, even though it'll get more productive,

188
00:17:41.660 --> 00:17:45.660
we'll probably have fewer people employed in agriculture, as has in fact happened.

189
00:17:45.660 --> 00:17:50.660
But this released labor is now available to produce other goods that we could not have had before.

190
00:17:50.660 --> 00:18:14.660
This is labor that had previously been tied up in agriculture and so we have greater wealth, but in other fields like automobile manufacturing, productivity increases will make possible a mass market in a product that had once been a mere luxury and will therefore attract more employment. In both cases, the great mass of consumers are enormously benefited.

191
00:18:14.660 --> 00:18:22.660
Now, this is not the description of events that you find in a typical history book.

192
00:18:22.660 --> 00:18:37.660
Instead, we hear, and I remember this from junior high onward, that massive redistribution of wealth from rich to poor was morally necessary and economically indispensable in order to improve the lot of the least wealthy.

193
00:18:37.660 --> 00:18:43.660
But that kind of policy could have done absolutely nothing to improve the standard of living of American workers.

194
00:18:43.660 --> 00:18:46.660
Riesman's description as follows. He says,

195
00:18:46.660 --> 00:18:55.660
If one person in a thousand, say, is a wealthy capitalist and eats twice as much and has 20 times the clothing and furniture as an average person,

196
00:18:55.660 --> 00:19:05.660
hardly any noticeable improvement for the average person could come from dividing the capitalist's greater-than-average consumption by 999 and redistributing it.

197
00:19:05.660 --> 00:19:12.660
So at best, this kind of wealth redistribution would have been useless in eradicating the poverty of the past.

198
00:19:12.660 --> 00:19:19.160
But at worst, by discouraging the wealthy from investing, by in effect threatening to confiscate their wealth again in the future,

199
00:19:19.160 --> 00:19:22.660
this approach would only have inhibited the process of wealth creation,

200
00:19:22.660 --> 00:19:26.660
and diminished or halted altogether the progress toward a higher standard of living

201
00:19:26.660 --> 00:19:29.660
that would otherwise have occurred for the great mass of the population.

202
00:19:29.660 --> 00:19:32.660
Now, this is a very brief overview of this.

203
00:19:32.660 --> 00:19:37.660
Isn't it true, though, that workers in the past had to work very long hours?

204
00:19:37.660 --> 00:19:43.660
Isn't there some kind of intervention that's necessary to alleviate that problem?

205
00:19:43.660 --> 00:19:48.660
And certainly that is true. I wouldn't want to be a laborer in the year 1870.

206
00:19:48.660 --> 00:19:53.660
By today's standards, people in the 19th century worked an exhausting schedule.

207
00:19:53.660 --> 00:19:57.660
But again, when output per worker is miserably low,

208
00:19:57.660 --> 00:20:02.700
But again, when output per worker is miserably low, then a supply of consumer goods that

209
00:20:02.700 --> 00:20:07.460
most people consider adequate requires people to work correspondingly long hours to produce

210
00:20:07.460 --> 00:20:15.580
them all. I mean, if all the machines in our society were suddenly to break down, but yet

211
00:20:15.580 --> 00:20:20.380
nevertheless we all continued working 40-hour weeks, we'd probably all die. Or at the very

212
00:20:20.380 --> 00:20:25.380
least we'd be living in huts or we'd be scrounging for worms to eat or something. I mean, it

213
00:20:25.380 --> 00:20:31.780
It would be difficult if you thought all we need is the aggregate amount of work that can be produced by everybody working 40 hours.

214
00:20:31.780 --> 00:20:39.080
Well, 40 hours working with everybody's bare hands would not produce anything like the goods that we've taken for granted.

215
00:20:39.080 --> 00:20:42.880
So you need the machines. The machines are the key here.

216
00:20:42.880 --> 00:20:51.380
So this is, this and not the wickedness of big business accounts for the low standard of living and long hours of work that existed in the past.

217
00:20:51.380 --> 00:20:55.820
As the productivity of labor increases and with it the level of real wages, people can

218
00:20:55.820 --> 00:21:00.620
begin to opt for additional leisure rather than continue to work the long hours of the

219
00:21:00.620 --> 00:21:06.640
past. So without the need for any government legislation, a situation will eventually arise

220
00:21:06.640 --> 00:21:12.280
in which employers find offering correspondingly fewer hours to be in their own economic interest

221
00:21:12.280 --> 00:21:18.120
and will offer them without the need for coercion. If someone who once worked 80 hours per week

222
00:21:18.120 --> 00:21:22.840
now wishes to work only 60, that is three-fourths as many hours, and is willing to accept a

223
00:21:22.840 --> 00:21:28.440
wage at or less than three-fourths that of his previous wage as a premium on the leisure

224
00:21:28.440 --> 00:21:32.640
he will now enjoy, it makes perfect sense for his employer to offer these terms.

225
00:21:32.640 --> 00:21:37.280
To the extent that maximum hours legislation corresponded with people's desire to work

226
00:21:37.280 --> 00:21:43.480
fewer hours, it was superfluous since such an outcome would have come about by this means.

227
00:21:43.480 --> 00:21:47.680
But to the extent that such legislation was economically premature, forcing fewer hours

228
00:21:47.680 --> 00:21:56.680
on Workers who needed the wages of their longer hours in order to maintain what they considered an adequate standard of living, it harmed people, it harmed the people who were supposed to help.

229
00:21:56.680 --> 00:22:01.680
And this is true in the same way for legislation to improve working conditions.

230
00:22:01.680 --> 00:22:07.680
Obviously, people want to have improved working conditions, but there are other considerations here.

231
00:22:07.680 --> 00:22:14.680
Now, improvements in working conditions that pay for themselves in terms of less workplace damage and disruption,

232
00:22:14.680 --> 00:22:22.680
Perhaps, better morale among the workers will be readily adopted by any profit-seeking enterprise because it's in their interest to do so.

233
00:22:22.680 --> 00:22:36.680
But even improvements that do not pay for themselves will still be adopted in cases in which the wage premium that would have to be offered to attract workers in the absence of the improvement would be higher than the cost of simply introducing the improvement.

234
00:22:36.680 --> 00:22:42.680
So, for example, the only non-arbitrary way of introducing an improvement like climate-controlled facilities, therefore,

235
00:22:42.680 --> 00:22:47.080
and the only way of doing so that does not price workers out of jobs entirely

236
00:22:47.080 --> 00:22:50.920
or impoverish society out of proportion to the satisfaction

237
00:22:50.920 --> 00:22:55.800
derived by workers now enjoying climate control is by paying attention to the market.

238
00:22:55.800 --> 00:22:59.480
Everyone knows that certain lines of work, because of their difficulty

239
00:22:59.480 --> 00:23:03.560
or because of undesirable or unpleasant aspects of the labor involved,

240
00:23:03.560 --> 00:23:06.600
carry a wage premium to attract sufficient workers

241
00:23:06.600 --> 00:23:09.400
by compensating them for these negative factors.

242
00:23:09.400 --> 00:23:14.040
As time goes on, and more and more places become climate-controlled,

243
00:23:14.040 --> 00:23:18.120
the wage premium for non-climate-controlled workplaces will rise.

244
00:23:18.120 --> 00:23:22.760
The wage differential that the non-climate-controlled workplace must pay

245
00:23:22.760 --> 00:23:27.080
in order to attract workers away from employers with climate-controlled facilities

246
00:23:27.080 --> 00:23:30.520
may eventually reach a level at which it would be less expensive for the firm

247
00:23:30.520 --> 00:23:32.720
simply to install climate control,

248
00:23:32.720 --> 00:23:37.240
rather than to go on paying higher wages than their competitors who provide it.

249
00:23:37.240 --> 00:23:43.240
The market thus allows for rational allocation of resources and helps to ensure that improvements in workplace conditions

250
00:23:43.240 --> 00:23:47.240
do not come at the expense of other goods that workers and consumers value more.

251
00:23:47.240 --> 00:23:52.240
After all, there is no logical limit to the improvements in working conditions that could be brought about.

252
00:23:52.240 --> 00:23:59.240
We would all enjoy having five-hour lunch breaks, the service of a masseuse, and an office with a view of Niagara Falls.

253
00:23:59.240 --> 00:24:05.240
But any improvement in working conditions must come at the expense of something else that must now be foregone.

254
00:24:05.240 --> 00:24:12.240
and there is no way, in isolation from market exchange, that these foregone opportunities can be rationally compared.

255
00:24:12.240 --> 00:24:17.240
So this is why taxes on business and capital are so foolish and counterproductive.

256
00:24:17.240 --> 00:24:24.240
Since these taxes hamper business investment, which as we've seen is precisely what raises our standard of living,

257
00:24:24.240 --> 00:24:28.240
to impose them is in and of itself destructive.

258
00:24:28.240 --> 00:24:34.240
Now the vast bulk of high school teachers spend their time condemning the wickedness of businessmen and the wealthy

259
00:24:34.240 --> 00:24:42.240
and describe taxation as a righteous method for redistributing the supposedly ill-gotten gains of the wealthy to the oppressed poor.

260
00:24:42.240 --> 00:24:47.240
To put it kindly, such people have not the faintest idea of how wealth is created

261
00:24:47.240 --> 00:24:55.240
and their envy-driven policy proposals inevitably make society poorer than it would otherwise be.

262
00:24:55.240 --> 00:25:01.240
Now, let's recall the point about labor union work rules.

263
00:25:01.240 --> 00:25:06.240
Labor unions are notorious for opposing the introduction of labor-saving machinery,

264
00:25:06.240 --> 00:25:11.240
since they believe, sometimes rightly, that it will lead to the unemployment of some of their members.

265
00:25:11.240 --> 00:25:14.240
But such machinery, in the steel industry, let's say,

266
00:25:14.240 --> 00:25:18.240
allows the same amount of output to be produced by fewer hands,

267
00:25:18.240 --> 00:25:22.240
thereby releasing into the economy a supply of labor that can now be applied

268
00:25:22.240 --> 00:25:25.240
to the production of goods that we could not have had before,

269
00:25:25.240 --> 00:25:28.240
because the requisite labor had been tied up in the production of steel.

270
00:25:28.240 --> 00:25:31.240
This is an example again of how wealth is created.

271
00:25:31.240 --> 00:25:37.240
The additional goods produced by the additional labor have the happy result of raising real wages,

272
00:25:37.240 --> 00:25:39.240
that is the purchasing power of wages,

273
00:25:39.240 --> 00:25:43.240
since an increase in the supply of goods available will increase real wages

274
00:25:43.240 --> 00:25:47.240
by endowing all real incomes with greater purchasing power.

275
00:25:47.240 --> 00:25:50.240
Thus, by opposing the introduction of labor-saving machinery,

276
00:25:50.240 --> 00:25:57.240
labor unions directly sabotage the very mechanism by which real wages are raised.

277
00:25:57.240 --> 00:26:05.240
Okay, well that's a little bit of theory on this and I'd like to look at some specifics from history.

278
00:26:05.240 --> 00:26:12.240
There's a very interesting, along these lines, a very interesting chart in Tom DiLorenzo's book,

279
00:26:12.240 --> 00:26:21.240
How Capitalism Saved America, and he and I seem to be in some kind of a mutual help society

280
00:26:21.240 --> 00:26:25.240
The Theory of Money and Credit

281
00:26:25.240 --> 00:26:29.240
The Theory of Money and Credit

282
00:26:51.240 --> 00:27:03.240
What Tom has done is to list the number of minutes of labor that it took in each of those years for you to earn enough money to buy the product.

283
00:27:03.240 --> 00:27:11.240
And what he's showing is the incredible increase in productivity over the years that's made it possible for people to produce so much in such a little time

284
00:27:11.240 --> 00:27:18.240
that they can command so many goods in the marketplace on the basis of a very short amount of time spent in labor.

285
00:27:18.240 --> 00:27:37.240
So, for example, we have a half gallon of milk, well, I don't know, 2005, we have to remeasure this one, but nevertheless, 1900 would have taken you 56 minutes of labor, 1950, 16 minutes of labor, and 1999, 7 minutes.

286
00:27:37.240 --> 00:27:44.240
And then he goes on in this regard, there are some of these, the data is not available from the year 1900.

287
00:27:44.240 --> 00:27:49.240
But, for example, chocolate bars I'm going to ignore for reasons I've already mentioned earlier.

288
00:27:49.240 --> 00:27:52.240
We're not going to discuss chocolate bars, but a pair of jeans.

289
00:27:52.240 --> 00:27:57.240
Nine hours in 1900 to work to get a pair of jeans.

290
00:27:57.240 --> 00:28:00.240
Four hours in 1950, three hours in 1999.

291
00:28:00.240 --> 00:28:06.240
A three-pound chicken, okay, we're going to imagine this as a skinless chicken

292
00:28:06.240 --> 00:28:11.240
with nothing fun, no cheese on it, no bacon.

293
00:28:11.240 --> 00:28:17.240
1900, 2 hours and 40 minutes for a 3-pound chicken.

294
00:28:17.240 --> 00:28:22.240
1950, an hour and 11 minutes for a 3-pound chicken.

295
00:28:22.240 --> 00:28:27.240
1999, 24 minutes, baby, you got yourself a 3-pound chicken.

296
00:28:27.240 --> 00:28:34.240
100 kilowatts of electricity, 107 hours and 17 minutes in the year 1900.

297
00:28:34.240 --> 00:28:37.240
Is it even worth it at that point?

298
00:28:37.240 --> 00:28:46.240
and then 1952 hours, 1999 14 minutes, and then finally a three-minute coast-to-coast phone call.

299
00:28:46.240 --> 00:28:54.240
In 1950, you'd have to work an hour and 44 minutes to be able to make a three-minute coast-to-coast phone call.

300
00:28:54.240 --> 00:29:02.240
In 1999, you had to work for two minutes. So, you know, there you go, two minutes, three minutes phone call.

301
00:29:02.240 --> 00:29:17.240
And actually, even better, since my wife and I, we use IDT, long-distance, we pay a flat $40 a month and we get free everything, free interstate, free within state, I got like a hundred bucks for that.

302
00:29:17.240 --> 00:29:24.240
No, that's not true, but I mean, you're crazy not to be using this thing, like my friends call me and I say, let me call you back, it's free, and they're going, whoa!

303
00:29:24.240 --> 00:29:29.240
So I'm getting lots of calls these days, all kinds of calls from people, because I call them back for free.

304
00:29:29.240 --> 00:29:38.240
So that's quite impressive, I think this is where you take some of this theory and you show that it actually does correspond to something in the real world.

305
00:29:38.240 --> 00:29:46.240
Well, Tom, in the actual text of this chapter, his chapter is called, How Capitalism Enriched the Working Class,

306
00:29:46.240 --> 00:29:50.240
he points out interesting examples of other products, he says,

307
00:29:50.240 --> 00:29:54.760
When portable radios first appeared in American stores, the average American worker had to

308
00:29:54.760 --> 00:30:01.560
work 13 hours to buy one. Now it's only one hour. It used to be that in the 20s, if you

309
00:30:01.560 --> 00:30:06.580
wanted a nice men's suit, you had to do the equivalent of 79 hours of labor. Now it's

310
00:30:06.580 --> 00:30:11.360
less than half that. At the beginning of the 20th century, the typical American family

311
00:30:11.360 --> 00:30:15.840
spent three quarters of its income on food, clothing and shelter. Today it spends about

312
00:30:15.840 --> 00:30:22.840
In 1908, the typical American worker had to work two years to earn enough money to buy an average quality car.

313
00:30:22.840 --> 00:30:26.840
Today, a Ford Taurus costs an American worker about eight months of labor.

314
00:30:26.840 --> 00:30:30.840
But the car is a technological miracle compared with the cars of yesterday,

315
00:30:30.840 --> 00:30:35.840
with standard air conditioning, power seats, safety devices of all kinds, cruise control,

316
00:30:35.840 --> 00:30:40.840
In 1970, an IBM mainframe computer sold for around $4.7 million.

317
00:30:40.840 --> 00:30:45.840
Today, a personal computer that operates 13 times faster goes for under $1,000.

318
00:30:45.840 --> 00:30:50.840
And then Tom goes on to discuss the oft-debated question,

319
00:30:50.840 --> 00:30:55.840
what is the value of a personal computer?

320
00:30:55.840 --> 00:31:00.840
What is the value of a personal computer?

321
00:31:00.840 --> 00:31:30.840
And then Tom goes on to discuss the oft-debated question of has American leisure time increased because there are some scholars who argue that we're working more than ever and there's much less leisure but some of that is just playing with the data a little bit and others neglects to note the fact that now that we have all these labor-saving devices from dishwashers to a million other things, in fact that's another factor that contributes to our leisure and much as I hate

322
00:31:30.840 --> 00:31:47.840
The fact that I can make a call on my way somewhere as I'm walking down the street, which means that when I get home I don't have to waste my time on that, I can be doing other things, this actually does mean that we can be more productive and enjoy more leisure time.

323
00:31:47.840 --> 00:31:59.840
Oh, gosh, I had to really bite my tongue, grit my teeth to say that because, gosh, for some reason I know I read Jeff Tucker's beautiful piece, but I still think about people who are in 7-Eleven buying bread and they're calling home.

324
00:31:59.840 --> 00:32:05.840
And they're calling home. What is this that urgent? You've got to be on the phone right now while you're buying a loaf of bread.

325
00:32:05.840 --> 00:32:10.840
But anyway, if Jeff were here, he'd correct me. But that's his own fault once again for being out of town.

326
00:32:10.840 --> 00:32:22.840
Well, let's look at a couple of episodes from American labor history that are sometimes cited as just glorious moments that everyone should commemorate and remember and honor.

327
00:32:22.840 --> 00:32:29.840
And, you know, actually look at them in some detail and see if the facts measure up to the myth.

328
00:32:29.840 --> 00:32:37.840
Let's start, for example, with the Haymarket incident, which is a terribly tragic event, certainly.

329
00:32:37.840 --> 00:32:43.840
But it's sometimes portrayed as a great, you know, glorious moment in the history of American Unionism.

330
00:32:43.840 --> 00:32:46.840
And it's not clear why that should be.

331
00:32:46.840 --> 00:32:50.840
The major meeting that was called on May 4th when the Haymarket incident took place

332
00:32:50.840 --> 00:33:00.840
was not even called by labor unions. It was called by so-called anarchists, left-wing anarchists, so-called anarchists called it.

333
00:33:00.840 --> 00:33:05.840
And, in fact, these were people who had been denounced by labor union leaders.

334
00:33:05.840 --> 00:33:15.840
So, first of all, just on the face of it, it's not clear why this would be a glorious labor union moment when labor unions were not even supporting these people.

335
00:33:15.840 --> 00:33:17.840
But, as I say, let's look in more detail.

336
00:33:17.840 --> 00:33:23.840
There's a very useful article by Charles Baird in which he does a revisionist study of this incident,

337
00:33:23.840 --> 00:33:30.840
of the Homestead Strike of 1892 that we'll look at next, and the Pullman Strike of 1894.

338
00:33:30.840 --> 00:33:34.840
You can find it in the Cato Journal, 1990.

339
00:33:34.840 --> 00:33:38.840
Now, for those of you who don't have the entire print run of the Cato Journal in your homes,

340
00:33:38.840 --> 00:33:42.840
is there anyone who fits that description in this room?

341
00:33:42.840 --> 00:33:49.840
Then you can nevertheless find it online. You just do a Google search for, what was it?

342
00:33:49.840 --> 00:33:53.840
Oh, it's called, it's called, Labor Law Reform, Lessons from History.

343
00:33:53.840 --> 00:33:59.840
It's actually in the bibliography to my book, but you'll notice that my book doesn't cover any of that material.

344
00:33:59.840 --> 00:34:03.840
So what's it doing in the bibliography? Well, originally there was a labor union chapter.

345
00:34:03.840 --> 00:34:07.840
That was cut for space reasons, but the bibliography stayed the same.

346
00:34:07.840 --> 00:34:11.840
So sometimes there are items in the bibliography on subjects that I don't even remotely touch upon.

347
00:34:11.840 --> 00:34:17.840
But anyway, this one I highly recommend because it's an example of how labor history should be done.

348
00:34:17.840 --> 00:34:23.840
It should be done, first of all, by somebody like Charles Baird who understands the economics of labor.

349
00:34:23.840 --> 00:34:31.840
And secondly, it should be done primarily with the use of the most primary sources you can get your hands on to try to reconstruct what happened.

350
00:34:31.840 --> 00:34:40.840
Because the example of Haymarket is a good example of how very often these stories of labor union triumphs or tragedies

351
00:34:40.840 --> 00:34:44.640
are typically distorted in a standard history.

352
00:34:44.640 --> 00:34:48.080
Well, basically, we start the story of what happened at Haymarket,

353
00:34:48.080 --> 00:34:52.160
which is talking about Chicago.

354
00:34:52.160 --> 00:34:58.800
We start with the McCormick Reaper Company in February 1886.

355
00:34:58.800 --> 00:35:02.560
The incident at Haymarket takes place May 4, 1886.

356
00:35:02.560 --> 00:35:07.880
So a little earlier that year, there had been a lockout at the McCormick Reaper Company.

357
00:35:07.880 --> 00:35:11.480
The company had basically shut down in anticipation of a strike.

358
00:35:11.480 --> 00:35:19.480
There was a strike threat looming and the strike was not actually a strike about wages and hours and working conditions.

359
00:35:19.480 --> 00:35:26.780
The strike was about whether the McCormick Reaper Company had the right to employ five non-union workers.

360
00:35:26.780 --> 00:35:33.780
This was a unionized plant by and large and McCormick, though, had had five non-union workers

361
00:35:33.780 --> 00:36:03.780
The Strikers, and they claimed they have the right to negotiate with anyone on whatever terms they want but at the same time they were negotiating with this union that represented the vast bulk of the workers so they felt that they were being contractually honest and reasonable but the Strikers said, they were of the opinion that no they should not hire anyone except union workers okay well as the month of February progressed eventually the McCormick Company

362
00:36:03.780 --> 00:36:09.780
and at least a group, a committee of union men, announced that they were prepared to reopen,

363
00:36:09.780 --> 00:36:15.780
basically on the terms offered by McCormick. They were going to reopen on March 1st.

364
00:36:15.780 --> 00:36:20.780
But according to the New York Times, another group of unionists at McCormick,

365
00:36:20.780 --> 00:36:24.780
and these are the words of the New York Times, intimated very strongly

366
00:36:24.780 --> 00:36:28.780
that they would make trouble for those who do attempt to resume labor.

367
00:36:28.780 --> 00:36:35.780
Well, March 1st comes along and a great many strikers come out, crowds of them.

368
00:36:35.780 --> 00:36:42.780
And so, of the 1,000 McCormick workers who had initially indicated a desire to return to work,

369
00:36:42.780 --> 00:36:47.780
initially only 150 actually dared to do it.

370
00:36:47.780 --> 00:36:55.780
Well, once local police had managed to disperse some of the rather intimidating crowds that had gathered around McCormick,

371
00:36:55.780 --> 00:37:09.780
A couple hundred other former McCormick workers returned to work and within a couple of months the remainder of workers, for the remainder of positions, McCormick had simply hired replacements and that was really the end of that.

372
00:37:09.780 --> 00:37:16.780
And there really hadn't been a notable amount of violence in any of this process. That's sort of the background for this.

373
00:37:16.780 --> 00:37:20.780
Now on May 1st an entirely unrelated event takes place.

374
00:37:20.780 --> 00:37:28.780
For two years, basically, labor unionists had been struggling for the eight-hour day.

375
00:37:28.780 --> 00:37:35.780
Since May of 1884, there had been a campaign going on saying that for the next two years we were going to agitate for the eight-hour day.

376
00:37:35.780 --> 00:37:45.780
And let's put in parentheses here that when they say the eight-hour day, the eight-hour day movement was saying that we want to work eight hours a day for ten hours of pay.

377
00:37:45.780 --> 00:37:55.780
8 Hours of Work for 10 Hours of Pay

378
00:38:15.780 --> 00:38:20.780
I still haven't gotten on board for the 8-hour day, then we go on nationwide strikes

379
00:38:20.780 --> 00:38:24.780
and refuse to go back to work until the 8-hour day is granted.

380
00:38:24.780 --> 00:38:30.780
Well, by the time you get to May 1st, 1886, a great many firms have in fact granted the 8-hour day.

381
00:38:30.780 --> 00:38:36.780
And interestingly, the McCormick Reaper Company was granting the 8-hour day at about this time.

382
00:38:36.780 --> 00:38:43.780
But not all firms by any means had, so the strikes began, the general strikes began.

383
00:38:43.780 --> 00:38:48.780
And in Chicago in particular, you see people particularly working in lumber and other areas

384
00:38:48.780 --> 00:38:54.780
were going on this major eight-hour day strike that began on May 1st, 1886.

385
00:38:54.780 --> 00:38:58.780
Okay, so they go on strike, a bunch of workers.

386
00:38:58.780 --> 00:39:06.780
The vast majority of the people who are striking in favor of the eight-hour day beginning on May 1st

387
00:39:06.780 --> 00:39:11.780
are not people who had ever at any time worked at the McCormick Reaper Company.

388
00:39:11.780 --> 00:39:16.980
Company. There is practically no connection whatsoever between what we looked at with

389
00:39:16.980 --> 00:39:23.380
what happened at McCormick and this long scheduled rally on May 1st. They're entirely disparate

390
00:39:23.380 --> 00:39:32.260
events. Yet, as that event unfolds, there comes to be a connection between the two.

391
00:39:32.260 --> 00:39:35.900
Because at the rally for the eight hour day and at some of these rallies, May 1st you

392
00:39:35.900 --> 00:39:41.700
get a series of rallies, May 2nd is a Sunday where things are quiet, then May 3rd things

393
00:39:41.700 --> 00:39:43.700
Let's get started up again.

394
00:39:43.700 --> 00:39:46.700
You begin to get some very inflammatory speeches being delivered

395
00:39:46.700 --> 00:39:50.700
that are not entirely related to the 8-hour day issue.

396
00:39:50.700 --> 00:39:55.700
So, for example, one speaker who represented something called the Central Labor Union,

397
00:39:55.700 --> 00:40:00.700
speaking to this group, again, which had practically no connection,

398
00:40:00.700 --> 00:40:04.700
I mean, in effect, a totally negligible connection to McCormick,

399
00:40:04.700 --> 00:40:07.700
reminded workers that, you know, right here in our midst,

400
00:40:07.700 --> 00:40:15.200
There's a plant that hired replacement workers, that hired scabs during a strike, and we should punish them for that.

401
00:40:15.200 --> 00:40:21.300
Now that has nothing to do with the eight-hour day, it just has to do with labor frustration.

402
00:40:21.300 --> 00:40:29.200
So a labor union figure from the Central Labor Union named Fritz Schmidt said this at the rally,

403
00:40:29.200 --> 00:40:34.640
On to McCormick's and let us run every one of the damned scabs out of the city.

404
00:40:34.640 --> 00:40:38.640
It is they who are taking the bread from you, your wives and your children.

405
00:40:38.640 --> 00:40:42.440
On to them, blow up the factory, strike for your freedom.

406
00:40:42.440 --> 00:40:49.040
And if the armed murderers of the law interfere, shoot them down as you would the scabs.

407
00:40:49.040 --> 00:40:52.480
Kind of an inflammatory speech.

408
00:40:52.480 --> 00:40:54.920
Well, in the midst of this type of speech being delivered...

409
00:40:54.920 --> 00:40:59.920
And by the way, again, that comes right out of the New York Times, recapping that speech.

410
00:40:59.920 --> 00:41:05.920
Right around the time these speeches are being delivered, the bell sounds for the end of the work day over at McCormick.

411
00:41:05.920 --> 00:41:13.920
And so having been, in effect, whipped into a frenzy over McCormick being a uniquely wicked employer,

412
00:41:13.920 --> 00:41:20.920
the New York Times reports that thousands of workers from this particular demonstration stormed over to McCormick.

413
00:41:20.920 --> 00:41:23.920
Now other eyewitness testimonies have the figure much lower.

414
00:41:23.920 --> 00:41:37.920
I've seen as low as 200, but the point is that at least some number of people ran over to McCormick armed with stones to start pelting the scabs with, the scabs over at McCormick.

415
00:41:37.920 --> 00:41:49.920
The result was that you had a very ugly confrontation with the McCormick workers having to run back into the plant for their own safety,

416
00:41:49.920 --> 00:42:19.920
and so they were having, so they were having rocks whipped at them and then the rocks are being thrown through the windows of the plant and eventually the police arrived and you know attempted to restore order they fired their guns trying to just get the crowd to disperse but eventually they actually ended up killing at least four people who were at least four of the people from that other rally who would run over there. The workers themselves then began

417
00:42:19.920 --> 00:42:28.920
and to open fire back, but ultimately it was viewed by some of the anarchist types as a massacre by the police.

418
00:42:28.920 --> 00:42:32.920
But let's bear in mind here, because the way it's often described,

419
00:42:32.920 --> 00:42:35.920
certainly these four people shouldn't have been killed, obviously,

420
00:42:35.920 --> 00:42:41.920
but the way this is often described is that you could be easily forgiven for believing,

421
00:42:41.920 --> 00:42:45.920
reading the standard account of this, there was a strike going on at the McCormick plant

422
00:42:45.920 --> 00:42:47.920
and the police came and started shooting them.

423
00:42:47.920 --> 00:42:55.920
But in fact, not only was that not the case, the plant had been operating for a couple of months with basically no violence,

424
00:42:55.920 --> 00:42:59.920
but also the people involved over there were not even McCormick workers.

425
00:42:59.920 --> 00:43:02.920
They were workers from a completely unrelated rally.

426
00:43:02.920 --> 00:43:15.920
Well, the next day there was a meeting held at Haymarket and there were flyers distributed to try to get people to show up.

427
00:43:15.920 --> 00:43:21.920
Not as many showed up as they wanted, but some of these flyers were distributed, as I say, by so-called anarchists.

428
00:43:21.920 --> 00:43:27.920
And one such flyer read in big letters, revenge, working men to arms.

429
00:43:27.920 --> 00:43:32.920
And it read in part, if you are men, if you are the sons of your grandsires who have shed their blood to free you,

430
00:43:32.920 --> 00:43:38.920
then you will rise in your might, Hercules, and destroy the hideous monster that seeks to destroy you.

431
00:43:38.920 --> 00:43:41.920
To arms we call you, to arms.

432
00:43:41.920 --> 00:43:43.720
Another hand-bill read,

433
00:43:43.720 --> 00:43:48.820
Attention, working men, great mass meeting tonight at 7 o'clock at the Haymarket.

434
00:43:48.820 --> 00:43:53.320
Good speakers will be present to denounce the latest atrocious act of the police,

435
00:43:53.320 --> 00:43:56.320
the shooting of our fellow workmen yesterday afternoon.

436
00:43:56.320 --> 00:44:01.620
Working men, arm yourselves and appear in full force.

437
00:44:01.620 --> 00:44:05.220
Well, as I say, this May 4th meeting was not called by the Knights of Labor

438
00:44:05.220 --> 00:44:06.620
or the American Federation of Labor.

439
00:44:06.620 --> 00:44:09.120
It was called by anarchist groups

440
00:44:09.120 --> 00:44:14.520
from which these other labor organizations had sought to differentiate themselves.

441
00:44:14.680 --> 00:44:19.680
Well, at this meeting there were, of course, still more inflammatory speeches made.

442
00:44:19.840 --> 00:44:23.200
And at the moment that the police, late at night, around 10 o'clock at night,

443
00:44:23.360 --> 00:44:27.520
demanded that people disperse, that the meeting cease and everyone go home,

444
00:44:27.680 --> 00:44:29.120
a bomb exploded.

445
00:44:29.280 --> 00:44:36.120
And to this day, no one knows exactly who it was who dropped this bomb.

446
00:44:36.120 --> 00:44:44.120
But in the chaos that ensued, in the hysteria that ensued, a number of anarchists were rounded up and accused of the crime.

447
00:44:44.120 --> 00:44:48.120
Some of them were, in fact, several of them were even executed.

448
00:44:48.120 --> 00:44:55.120
And in subsequent years, the governor actually went back and looked at the evidence and said these people were railroaded.

449
00:44:55.120 --> 00:44:57.120
So any of them who were in jail, he let them go.

450
00:44:57.120 --> 00:45:01.120
But, of course, the executed people were already dead at that point.

451
00:45:01.120 --> 00:45:07.120
But the significance of all this, as Baird says, is it may be that these anarchists were treated very badly.

452
00:45:07.120 --> 00:45:12.120
You know, there was no real evidence against them, other than the fact that they had given inflammatory speeches.

453
00:45:12.120 --> 00:45:18.120
But he says, in what way can this incident be viewed as a glorious moment in the history of American labor unionism,

454
00:45:18.120 --> 00:45:21.120
when the anarchists were not involved in the labor union movement.

455
00:45:21.120 --> 00:45:23.120
They detested the labor union movement.

456
00:45:23.120 --> 00:45:28.120
Basically, the reason that Marxists detest the labor union movement has nothing to do with it.

457
00:45:28.120 --> 00:45:36.120
And, in fact, basically what it amounts to is that it started off when a bunch of non-MacCormac people went and started throwing rocks at peaceful workers.

458
00:45:36.120 --> 00:45:43.120
I mean, what particularly is glorious about this is what Baird wants to ask, and it's a reasonable question.

459
00:45:43.120 --> 00:45:49.120
But still more dramatic, though, is what happened in 1892 in the Homestead strike.

460
00:45:49.120 --> 00:45:54.120
This is the Homestead, the Carnegie Steel Works in Homestead, Pennsylvania.

461
00:45:54.120 --> 00:46:01.120
in Pennsylvania. It was a very important facility for the production of steel.

462
00:46:01.120 --> 00:46:11.120
I mean, it was tremendously efficient, much more so than comparable European plants.

463
00:46:11.120 --> 00:46:16.120
And there's a historic strike that occurs there in 1892.

464
00:46:16.120 --> 00:46:22.120
And again, the standard account has it that, again, this is a glorious moment for organized labor,

465
00:46:22.120 --> 00:46:29.120
In 1889, there was a strike at the Homestead plant, the Carnegie Steel Works there, and during that strike, strikers were assaulting people, there was property destruction, the sheriff of Allegheny County was not able to control the strike.

466
00:46:52.120 --> 00:47:02.120
In order to control the strikers, basically anybody who might have been able to help him on the force, they were all too afraid to do anything.

467
00:47:02.120 --> 00:47:09.120
And so it's not surprising then that the Carnegie Steelworks at Homestead drew a conclusion from this.

468
00:47:09.120 --> 00:47:13.120
We cannot rely on the public authorities to defend us.

469
00:47:13.120 --> 00:47:17.120
So if something should happen again in the future, if there should be labor unrest in the future,

470
00:47:17.120 --> 00:47:22.120
and some alternative means of protecting person and property.

471
00:47:22.120 --> 00:47:26.120
Okay, now we fast forward to 1892, the year of the strike.

472
00:47:26.120 --> 00:47:33.120
There had been, for several years, a wage agreement with the workers at Homestead.

473
00:47:33.120 --> 00:47:40.120
And that wage agreement, it had involved a sliding scale in the sense that the wage that the worker was paid

474
00:47:40.120 --> 00:47:44.120
would in some way be proportionate to the price of steel at that time.

475
00:47:44.120 --> 00:47:54.120
So, in a certain sense the idea, more or less, was that it's profit sharing, so that if steel is very expensive, then we get a higher wage.

476
00:47:54.120 --> 00:48:07.120
Steel goes down, to a certain extent we get a lower wage, but if steel goes below $22 per ton, then our wage cannot go down any lower than that.

477
00:48:07.120 --> 00:48:13.120
Even if it went down to $18, $17, our wage would stay at the $22 level. That was the agreement.

478
00:48:13.120 --> 00:48:20.120
Okay, that was set to expire in July of 1892, so now you've got to renegotiate.

479
00:48:20.120 --> 00:48:30.120
Well, the price of steel had been declining, and the homestead plant was finding that it would be difficult for them,

480
00:48:30.120 --> 00:48:40.120
given that the price of steel was at $22.50 per ton, to keep $22 as that low point would have been difficult for them.

481
00:48:40.120 --> 00:48:45.120
So they wanted to negotiate that point, how would the sliding scale work under the new conditions?

482
00:48:45.120 --> 00:48:49.120
All right, so the company and the workers are negotiating back and forth.

483
00:48:49.120 --> 00:48:52.120
There were several different unions represented at this plan.

484
00:48:52.120 --> 00:48:57.120
Now, Frank Taussig, who many of you may know from his tariff history of the United States,

485
00:48:57.120 --> 00:49:01.120
said this in an article he wrote in 1893.

486
00:49:01.120 --> 00:49:02.120
He said,

487
00:49:10.120 --> 00:49:16.620
The leading workmen received very large earnings indeed, $6, $8, even $10 per working day.

488
00:49:16.620 --> 00:49:20.620
Obviously, this is not $2,005, needless to say.

489
00:49:20.620 --> 00:49:29.620
Well, by the time of July 1892, it was clear that the two sides were not going to reach an agreement.

490
00:49:29.620 --> 00:49:35.620
In particular, it was the amalgamated iron and steel workers.

491
00:49:35.620 --> 00:49:40.460
And they represented about 800 of the 3,800 workers at the plant.

492
00:49:40.460 --> 00:49:48.940
They were not accepting the new offer and they threatened a strike in that month.

493
00:49:48.940 --> 00:49:50.300
And in fact they went ahead with it.

494
00:49:50.300 --> 00:49:52.340
They went ahead with the strike.

495
00:49:52.340 --> 00:49:57.620
But it wasn't just the 800 who belonged to this recalcitrant union.

496
00:49:57.620 --> 00:50:00.260
Basically all 3,800 workers went on strike.

497
00:50:00.260 --> 00:50:05.460
And it seemed to the folks at Homestead that intimidation must have been used here.

498
00:50:05.460 --> 00:50:11.180
How would you be able to get all 3,800 workers to go on strike when 3,000 of them were perfectly

499
00:50:11.180 --> 00:50:13.300
happy with the deal?

500
00:50:13.300 --> 00:50:14.300
How did they do that?

501
00:50:14.300 --> 00:50:21.380
And so they were convinced, both Carnegie, who was not present, and the guy who was actually

502
00:50:21.380 --> 00:50:26.320
running the homestead plant, Henry Clay Frick, was of the belief that there must have been

503
00:50:26.320 --> 00:50:27.620
intimidation used.

504
00:50:27.620 --> 00:50:31.080
Well, regardless, whether there was or wasn't, it would be hard to get to the bottom of that

505
00:50:31.080 --> 00:50:32.840
at that point.

506
00:50:32.840 --> 00:50:34.740
But the strike went on.

507
00:50:34.740 --> 00:50:40.500
And so the 3800 workers basically ceased to work, ceased working.

508
00:50:40.500 --> 00:50:45.260
And Carnegie himself, when he got word of this, was stunned that his workers had gone,

509
00:50:45.260 --> 00:50:46.820
all of them had gone on strike.

510
00:50:46.820 --> 00:50:54.420
He was of the opinion that he had modern facilities, that he had reasonable safety precautions

511
00:50:54.420 --> 00:51:00.780
in place, given that steel production is inherently an extremely dangerous line of work.

512
00:51:00.780 --> 00:51:04.460
He thought he had been more than reasonable to his employees and he was quite taken aback

513
00:51:04.460 --> 00:51:16.460
Well, the strikers now form what they call an advisory committee and this advisory committee now begins to in effect exercise the powers of government in Homestead.

514
00:51:16.460 --> 00:51:33.460
This advisory committee surrounded the Homestead plant, would not allow basically anyone other than company officers entrance and they made it clear they were trying to prevent non-union workers from getting into the plant.

515
00:51:33.460 --> 00:51:40.460
They would stop and question strangers, people they didn't recognize, going into the plant.

516
00:51:40.460 --> 00:51:49.460
So, in early July, 300 guards from the so-called Pinkerton Detective Agency were dispatched.

517
00:51:49.460 --> 00:51:55.460
The Pinkertons were a private organization that would sometimes be dispatched in situations like this

518
00:51:55.460 --> 00:51:58.460
where the public authority is helpless to do anything,

519
00:51:58.460 --> 00:52:10.140
300 Pinkerton guards set out on a couple of barges along the river heading toward the

520
00:52:10.140 --> 00:52:15.500
Carnegie steelworks at Homestead.

521
00:52:15.500 --> 00:52:21.980
So there's a docking site, in other words, on the property for the barges.

522
00:52:21.980 --> 00:52:26.800
The striking workers caught wind of this, that these several hundred Pinkerton guards

523
00:52:26.800 --> 00:52:33.800
When the boats were on their way, and a mob of thousands began to rush over to the docking site.

524
00:52:33.800 --> 00:52:48.800
When the boats finally got to the docking site, the mob, in fact, greeted them by letting the Pinkerton Detective Agency guards know that they really were not welcome there.

525
00:52:48.800 --> 00:52:54.600
The way they let them know that they were not welcome there was that, for example, when

526
00:52:54.600 --> 00:53:03.100
some of the Pinkerton guards tried to disembark and actually come ashore, along with the leader

527
00:53:03.100 --> 00:53:08.600
of these guards, Captain Hinde, we get from a modern historian this description of what

528
00:53:08.600 --> 00:53:09.600
took place.

529
00:53:09.600 --> 00:53:14.840
Three strikers ran forward, two grabbed the end of the gangplank while the third deliberately

530
00:53:14.840 --> 00:53:21.840
As Hinde was trying to shove the prone man aside, the latter pulled a revolver and shot him through the thigh.

531
00:53:21.840 --> 00:53:24.840
The heavy cartridge knocked him over backward.

532
00:53:24.840 --> 00:53:27.840
A torrent of gunfire swept the men on the plank.

533
00:53:27.840 --> 00:53:31.840
Hinde was hit again. Another guard named Klein was killed instantly.

534
00:53:31.840 --> 00:53:34.840
Four of the others were wounded.

535
00:53:34.840 --> 00:53:38.840
Well, the Pinkertons hadn't even fired at this point, had not fired a shot at all.

536
00:53:38.840 --> 00:53:41.840
But at this point, given that one of them has now been killed,

537
00:53:41.840 --> 00:54:06.840
In the beginning, the strikers were killed, several injuries, the mob retreated, but temporarily, because ultimately all day long, the Pinkerton guards who are still on board the boats are being fired upon.

538
00:54:06.840 --> 00:54:12.840
And the way that the strikers are going after these Pinkerton guards changes over the course of the day.

539
00:54:12.840 --> 00:54:16.840
First they fire cannons at them, hoping to sink them.

540
00:54:16.840 --> 00:54:19.840
Then they try to set the barges on fire.

541
00:54:19.840 --> 00:54:23.840
And then they try to use dynamite on them.

542
00:54:26.840 --> 00:54:35.840
Now again, there are some sort of sticklers who would say that this is not appropriate behavior toward fellow human beings.

543
00:54:35.840 --> 00:54:40.840
I think people who say that are just oppressors of the working class.

544
00:54:40.840 --> 00:54:46.840
Well, this advisory committee now, which again is sort of directing the strike,

545
00:54:46.840 --> 00:54:50.840
as I say, it has basically usurped the powers of government in Homestead.

546
00:54:50.840 --> 00:54:54.840
They're basically running Homestead. They're censoring the press.

547
00:54:54.840 --> 00:54:57.840
They're throwing people in jail just because they said that

548
00:54:57.840 --> 00:54:59.840
we don't like the way the strike is being run.

549
00:54:59.840 --> 00:55:02.840
Charles Baird said the only thing that was missing was the guillotine.

550
00:55:02.840 --> 00:55:07.840
He said it was like the French Revolutionary Reign of Terror, in effect, compared to Robespierre.

551
00:55:07.840 --> 00:55:13.840
All right, well eventually the governor activated the National Guard

552
00:55:13.840 --> 00:55:20.840
and managed to begin to gain control over the area and the plant from the advisory committee

553
00:55:20.840 --> 00:55:27.840
and with the passage of time, non-union workers were able to be hired, enough of them

554
00:55:27.840 --> 00:55:31.840
enough of them so that you could actually get things up and running again.

555
00:55:31.840 --> 00:55:39.840
Now, in fact, even workers who have been on the strike were welcomed back to the plant,

556
00:55:39.840 --> 00:55:45.840
except those who were responsible for the most egregious, you know, examples of animal exuberance,

557
00:55:45.840 --> 00:55:51.840
you know, as we mentioned earlier today, they were exempted, but many of the strikers were

558
00:55:51.840 --> 00:55:56.840
welcomed back and some non-union workers were admitted to employment as well.

559
00:55:56.840 --> 00:56:06.840
Well, by the time you get to the fall of October, this advisory committee is still trying to carry on pressure against the Homestead plant.

560
00:56:06.840 --> 00:56:12.840
And it's pretty obvious by October that they've lost. I mean, the plant is up and running. Everything seems to be fine.

561
00:56:12.840 --> 00:56:23.840
So in October, given that even some of the people associated with the advisory committee group were going back to work for Homestead,

562
00:56:23.840 --> 00:56:29.840
We note that a bomb went off in a boarding house that housed many non-union workers.

563
00:56:29.840 --> 00:56:32.840
Another non-union worker had his own house burned down.

564
00:56:32.840 --> 00:56:37.840
Other non-union workers, when they were caught alone in town, were beaten.

565
00:56:37.840 --> 00:56:42.840
But that was it. Basically, the whole thing sputtered to a conclusion.

566
00:56:42.840 --> 00:56:49.840
Now, in the midst of all this, by the way, the gentleman who had been in charge of the plant was Henry Clay Frick.

567
00:56:49.840 --> 00:56:54.840
There's something funny about that name, and I can't put my finger on what it is exactly.

568
00:56:54.840 --> 00:56:59.840
But while this was happening, he was actually shot twice by one of these anarchists.

569
00:56:59.840 --> 00:57:04.840
But he stayed at work. In fact, he wrote a letter to his mother that day.

570
00:57:04.840 --> 00:57:08.840
And in the letter, he had this solitary reference to what had happened to him.

571
00:57:08.840 --> 00:57:17.840
He wrote, was shot twice today, though not seriously.

572
00:57:17.840 --> 00:57:22.840
It's funny, he and Carnegie, after this, actually didn't really get along, but if I were Carnegie, I'd say,

573
00:57:22.840 --> 00:57:28.840
this is exactly the guy I want working for me. The guy gets shot and he won't even...

574
00:57:28.840 --> 00:57:33.840
Don't let my mother tell the story about the winter morning when I slipped on the ice after she said,

575
00:57:33.840 --> 00:57:39.840
be careful, it's slippery out there. Yeah, yeah, yeah. Bang! And I fractured my elbow. I didn't realize that at the time.

576
00:57:39.840 --> 00:57:42.840
And I brushed myself off and went up to the bus stop and went to school.

577
00:57:42.840 --> 00:57:57.840
The Chief Justice of the Pennsylvania Supreme Court eventually made a statement on this matter because the strike leaders were tried for treason against the state.

578
00:57:57.840 --> 00:57:59.840
They were not in fact found guilty of that.

579
00:57:59.840 --> 00:58:07.840
But in the course of that case, the Chief Justice of the Pennsylvania Supreme Court made a statement on this matter because the strike leaders were tried for treason against the state.

580
00:58:07.840 --> 00:58:25.840
The Relation of Employer and Employee is one of contract merely, neither party has a right to coerce the other into the making of a contract to which the mind does not assent.

581
00:58:25.840 --> 00:58:34.840
The employer cannot compel his employee to work a day longer than he sees fit, nor his contract calls for, nor for a wage that is unsatisfactory to him.

582
00:58:34.840 --> 00:58:43.840
It follows that the employee cannot compel his employer to give him work or to enter into a contract of hire much less can he dictate the terms of employment.

583
00:58:43.840 --> 00:58:48.840
When the negotiations between the parties came to an end, the contract relations between them ceased.

584
00:58:48.840 --> 00:58:54.840
The men had no further demand upon the company and they had no more interest or claim upon its property.

585
00:58:54.840 --> 00:58:58.840
Nor does it make any difference that a large number were discharged at one time.

586
00:58:58.840 --> 00:59:02.840
Their aggregate rights rise no higher than their rights as individuals.

587
00:59:02.840 --> 00:59:12.840
The mutual right of the parties to contracts in regard to wages is as fixed and clear as any other right which we enjoy under the Constitution and laws of this state.

588
00:59:12.840 --> 00:59:20.840
It is a right which belongs to every citizen, laborer or capitalist, and is the plain duty of the state to protect them in the enjoyment of it.

589
00:59:20.840 --> 00:59:29.840
Labor historians, by the way, hate this judge. I'm not making that up. They say, this guy doesn't understand the situation at all.

590
00:59:29.840 --> 00:59:31.840
The Steel Workers' Organization Committee, Local Unions in memory of the iron and steel workers who were killed in Homestead, Pennsylvania on July 6, 1892, while striking against the steel workers' organization.

591
00:59:59.840 --> 01:00:04.840
Defends the Carnegie Steel Company in defense of their American rights

592
01:00:04.840 --> 01:00:12.840
Doesn't seem like really the description that I think I would use to describe what happened as a defense of their American rights

593
01:00:12.840 --> 01:00:24.840
And Baird's assessment is to say that it seems to me that what they were actually doing was violating the American rights of other people who just simply wanted to work at the Homestead plant

594
01:00:24.840 --> 01:00:29.840
All right, that's at least a little bit of an overview of a couple of the better-known labor incidents,

595
01:00:29.840 --> 01:00:32.840
and I think it goes to show how much work there is to be done on this,

596
01:00:32.840 --> 01:00:35.840
because that's not the version of the story that typically comes out,

597
01:00:35.840 --> 01:00:40.840
and yet these are all sources that are easily consulted, that you can easily get,

598
01:00:40.840 --> 01:00:45.840
and so we need toward a reconstruction of American labor history,

599
01:00:45.840 --> 01:00:49.840
and I now have two little kids and I have a million things to do,

600
01:00:49.840 --> 01:00:52.840
so somebody here has to undertake this project.

601
01:00:52.840 --> 01:00:59.840
Project. Okay, so we'll stop here. We'll finish with talking about labor, then take questions. Yes, sir, and then yes, sir.

602
01:00:59.840 --> 01:01:21.840
If I understand, if I could just summarize it this way, you sort of see these labor problems as the result of, to coin a phrase, outside education, that in the absence of outsiders coming in and creating turmoil, that we wouldn't have these incidents?

603
01:01:21.840 --> 01:01:28.120
Oh, well, I wouldn't say that as a matter of apodictic certainty.

604
01:01:28.120 --> 01:01:32.440
The question is, am I saying that in the absence of outside agitation,

605
01:01:32.440 --> 01:01:35.320
would we basically be free of these types of labor disputes?

606
01:01:35.320 --> 01:01:38.080
Is it only because outsiders are coming in and organizing people?

607
01:01:38.080 --> 01:01:44.720
But just as an empirical fact, it's so often the case that, at least in many cases,

608
01:01:44.720 --> 01:01:48.240
the agitation for labor organization comes from an outside organization.

609
01:01:48.240 --> 01:02:15.840
I was thinking what you said about the event and thinking about what happened to Harrison in 1876,

610
01:02:15.840 --> 01:02:27.840
And how much of that influence of what happened in Paris was going back to the anarchists that were getting involved for agitation purposes?

611
01:02:27.840 --> 01:02:38.640
Because I remember back in my college days, when agitators would say Pentecostal is now Berkeley, and we'd have, you know, people, Parkinson and out there.

612
01:02:38.640 --> 01:02:46.080
And they would get the crowd all stimulated, and they leave, and they go on facing the National Guard.

613
01:02:46.080 --> 01:02:56.280
And I was wondering how much of that outside agitation in 1892 was affected by what happened to Paris in 1876.

614
01:02:56.280 --> 01:03:02.680
Well, I don't know if there's a direct connection, but I mean, I would at least point out that the Knights of Labor,

615
01:03:02.680 --> 01:03:09.680
which had been around since the late 1860s was an organization that had enough internal problems as it was

616
01:03:09.680 --> 01:03:15.680
because after a while they were admitting farmers into it too and it began to lose focus

617
01:03:15.680 --> 01:03:20.680
but the Knights of Labor really suffered as a result of the Haymarket Incident in 1886

618
01:03:20.680 --> 01:03:26.680
because one of the people who was accused of in some way conspiring to set off that bomb

619
01:03:26.680 --> 01:03:29.680
happened to be a member of the Knights of Labor

620
01:03:29.680 --> 01:03:32.320
Now, that doesn't mean that the Knights of Labor endorsed this.

621
01:03:32.320 --> 01:03:35.080
I mean, they can't control every single person who's a member.

622
01:03:35.080 --> 01:03:40.200
But people began to associate in their minds, oh, Knights of Labor, yeah, hay market.

623
01:03:40.200 --> 01:03:41.360
And it's devastating for them.

624
01:03:41.360 --> 01:03:46.320
And it's not coincidental that it was in that year that they began to disappear

625
01:03:46.320 --> 01:03:48.640
and the American Federation of Labor began to increase.

626
01:03:48.640 --> 01:03:55.280
So it means that the best way I can answer your question is to say that there was a very

627
01:03:55.280 --> 01:04:00.080
careful attempt on the part of a guy like Samuel Gompers who was the head of the American

628
01:04:00.080 --> 01:04:06.400
Federation of Labor to try to make sure that people who were violent or radical just by

629
01:04:06.400 --> 01:04:11.120
philosophy as these types of anarchists were were not associated with his organization

630
01:04:11.120 --> 01:04:14.460
because he didn't want to scare the heck out of the country. He didn't want people

631
01:04:14.460 --> 01:04:20.000
to think of labor unions as the source of just kind of a systematic violence throughout

632
01:04:20.000 --> 01:04:24.040
society that anarchists were associated with. But I think that's about the best I can do

633
01:04:24.040 --> 01:04:31.040
Do you say more about Samuel Gompers and his role, if he's still a hero among high school students?

634
01:04:54.040 --> 01:05:00.040
Thomas Schumpers was involved in the Anti-Imperialist League at the time of the Spanish-American War,

635
01:05:00.040 --> 01:05:03.040
but then mainly the suppression of Philippine independence.

636
01:05:03.040 --> 01:05:11.040
So he was somebody who, he wasn't the sort of labor leader who rallies his troops to go be ra-ra-ra

637
01:05:11.040 --> 01:05:15.040
and we've got to support every war because they're all ipso facto just.

638
01:05:15.040 --> 01:05:20.040
You know, he took a gamble by saying, well, you know what, I think this is immoral

639
01:05:20.040 --> 01:05:23.040
and I'm going to stand up against it even if there are a bunch of flag waivers in my organization.

640
01:05:23.040 --> 01:05:27.040
I'm nevertheless going to come out against it. That's a good thing.

641
01:05:27.040 --> 01:05:31.040
So as I say, I don't want to take his name in vain too terribly much

642
01:05:31.040 --> 01:05:36.040
because that was a heroic thing and we needed many thousands more people like him doing that.

643
01:05:36.040 --> 01:05:40.040
By the way, my favorite incident on that, by the way, is Andrew Carnegie

644
01:05:40.040 --> 01:05:45.040
as if to counter the claim that capitalism is imperialistic, you know,

645
01:05:45.040 --> 01:05:48.040
like somehow of its nature is imperialistic.

646
01:05:48.040 --> 01:05:52.040
Some of you know that Carnegie was not only involved in the American Anti-Imperialist League

647
01:05:52.040 --> 01:05:56.900
League, but that he offered to buy the Philippines for $20 million so he could then give them

648
01:05:56.900 --> 01:05:57.900
their independence.

649
01:05:57.900 --> 01:06:02.120
It's a beautiful thing, and I remember saying that to somebody and saying, well, it's very

650
01:06:02.120 --> 01:06:06.160
disturbing that one person could buy the Philippines, and I thought, well, I don't find it nearly

651
01:06:06.160 --> 01:06:11.180
as disturbing as killing 200,000 of them to keep them a U.S. colony, but that's just the

652
01:06:11.180 --> 01:06:12.180
way I am.

653
01:06:12.180 --> 01:06:13.180
All right, yes?

654
01:06:13.180 --> 01:06:37.180
Do you mind sharing the, you mentioned a quote earlier this morning about the idea that voluntary unionism can't enact an exact benefit for the workers, and it's likely the state will manage to get these benefits. Is that your position?

655
01:06:43.180 --> 01:06:49.180
The Theory of Money and Credit

656
01:07:13.180 --> 01:07:19.180
In the 1920s, or a large number of them, were clamoring for one kind or another of government assistance.

657
01:07:19.180 --> 01:07:24.180
Well, certainly there are exceptions to that, but I think there are certain pressures in the very nature of the labor union

658
01:07:24.180 --> 01:07:31.180
that make it want to use the coercive powers of the state, because that way they can more effectively keep out competing labor.

659
01:07:31.180 --> 01:07:39.180
But you can nevertheless have a voluntary union that confines itself to things like helping out fellow workers

660
01:07:39.180 --> 01:07:45.180
and just negotiating with the employer, I mean it still performs a useful function

661
01:07:45.180 --> 01:07:53.180
and sometimes a strike, and I think Rothbard has made this point, a strike offering a wage that is well below the market wage

662
01:07:53.180 --> 01:08:02.180
and he may just legitimately not know this and the workers then go on strike and basically nobody comes and accepts this offer

663
01:08:02.180 --> 01:08:06.180
it's a way of alerting the employer peacefully that these terms are not acceptable

664
01:08:06.180 --> 01:08:11.180
I just kind of have a comment. In the last few years, there's two periods of unionism.

665
01:08:11.180 --> 01:08:16.180
There's one before World War II, where most unions are politically charged.

666
01:08:16.180 --> 01:08:21.180
Where now, if people want them, they work first time for the government.

667
01:08:21.180 --> 01:08:26.180
At least from that aspect, I can see that there's a lot of work to be done.

668
01:08:26.180 --> 01:08:29.180
There's a lot of work to be done.

669
01:08:29.180 --> 01:08:32.180
There's a lot of work to be done.

670
01:08:32.180 --> 01:08:53.180
At least from that aspect, I can see, like, unionism, it's like, like back then, you know, like, people like Cindy Hillman and Elizabeth Warren and so on, and they had a kind of a goal, like, with those of the communist concept that was kind of involved in labor, but now it's kind of, it's been marginalized to such an extent that it's really not there anymore.

671
01:09:02.180 --> 01:09:06.180
in terms of American workers being, the private sector being unionized.

672
01:09:06.180 --> 01:09:07.180
So there's also that fact.

673
01:09:07.180 --> 01:09:10.180
And then there's the fact that I think it was in the late 80s

674
01:09:10.180 --> 01:09:16.180
that there's a decision that people do not have to pay, or could even be in the 90s,

675
01:09:16.180 --> 01:09:22.180
that if you're paying labor union dues, you have a right on the basis of conscience

676
01:09:22.180 --> 01:09:27.180
not to have them be earmarked for political purposes that you don't support.

677
01:09:27.180 --> 01:09:30.180
Isn't that right? Wasn't there some kind of thing to that effect?

678
01:09:30.180 --> 01:09:34.180
Oh, the teachers unions have that? I'm actually in a teachers union, by the way.

679
01:09:34.180 --> 01:09:39.180
I get the American Federation of Teachers thing, because we're in a union at my college.

680
01:09:39.180 --> 01:09:45.180
And part of me wants to call up and say, hey, you know, I don't want to read this magazine.

681
01:09:45.180 --> 01:09:47.180
There's no point in you sending it to me.

682
01:09:47.180 --> 01:09:51.180
But then I remember something I learned at the Morton Blackwell Leadership Institute.

683
01:09:51.180 --> 01:09:56.180
And that is that if the bad guys want to give you a free copy of something, take it.

684
01:09:56.180 --> 01:09:59.180
Because then it's one less copy they have to give to somebody else.

685
01:09:59.180 --> 01:10:27.180
At the beginning of the election, you talked about growth effects, and I was wondering what rigor you consider, like your own work, to maintain the utilization of growth effects without submitting to thousands of people.

686
01:10:27.180 --> 01:10:33.460
without submitting to policies of social utility or interpersonal utility.

687
01:10:33.460 --> 01:10:40.860
We spent a lot of time talking about objective consumables that we have that even the people of the highest wealth in the past didn't have.

688
01:10:40.860 --> 01:10:49.540
But, I mean, granted I have a toaster oven and Henry VIII didn't, I might still rather be Henry VIII.

689
01:10:57.180 --> 01:11:00.180
This is a comment that's made by a lot of types of people.

690
01:11:00.180 --> 01:11:06.180
Just because we have amenities today that people didn't have in the past,

691
01:11:06.180 --> 01:11:09.180
that doesn't necessarily really mean anything.

692
01:11:09.180 --> 01:11:12.180
Because maybe I would still rather live at some other time in the past.

693
01:11:12.180 --> 01:11:17.180
Maybe I value other things about society more strongly than I value having a washer and dryer.

694
01:11:17.180 --> 01:11:24.180
And I'm sympathetic to that argument because washer and dryer or a toaster oven in and of themselves,

695
01:11:24.180 --> 01:11:26.180
The Theory of Money and Credit

696
01:11:54.180 --> 01:12:19.980
One point that Ludwig von Mises, Murray Rothbard, Friedrich Hayek, Eugen von Boehm-Bawerk,

697
01:12:19.980 --> 01:12:23.080
In Europe, there's a ton of them, it's a little more expensive today.

698
01:12:23.080 --> 01:12:28.680
As science becomes more wealthy, more things are required to not be pulled.

699
01:12:28.680 --> 01:12:33.280
So for instance, right now in the inner cities people are very, very poor.

700
01:12:33.280 --> 01:12:37.280
They can't afford to own an automobile. They basically can't get it by themselves.

701
01:12:37.280 --> 01:12:41.980
So as you said, people can get jobs with automobiles if they get available,

702
01:12:41.980 --> 01:12:47.340
but now in a way they're a way to sort of make people pull harder.

703
01:12:47.340 --> 01:12:55.340
because the whole system of organizations has improved to such a degree that people can be left out in new ways.

704
01:12:55.340 --> 01:13:05.340
Now, I mean, at least my point is to say while that's true, it's just, I don't know if it's the U.S. government having more of an automobile or none of that follows.

705
01:13:05.340 --> 01:13:11.340
It's not at any farthest point. It's just, I've been thinking, I've been thinking of some force. I mean, I did think of something to be aware of.

706
01:13:11.340 --> 01:13:18.340
There are certain changes that come from development that can have adverse effects on everybody.

707
01:13:41.340 --> 01:13:46.780
in the past, nevertheless, the fact of our improved standard of living means that everybody

708
01:13:46.780 --> 01:13:51.900
needs a car or needs some of these bigger things and not everyone can afford them and

709
01:13:51.900 --> 01:13:54.940
so they get left out, left behind, whatever.

710
01:13:54.940 --> 01:14:02.060
I guess I would say that just as an interesting counter example, in the 1980s, you could barely

711
01:14:02.060 --> 01:14:09.180
walk down a city block without seeing a help wanted sign and yet it seemed as if inner

712
01:14:09.180 --> 01:14:15.980
Intercity unemployment, or black unemployment, for example, seem to be more or less stagnant.

713
01:14:15.980 --> 01:14:24.140
And in fact, if you ask these people, is the reason that you don't have a job because

714
01:14:24.140 --> 01:14:26.980
there's a lack of jobs out there?

715
01:14:26.980 --> 01:14:30.300
And three-quarters of them would say, no, that's not the reason.

716
01:14:30.300 --> 01:14:33.060
And in fact, when you ask them about each other, like, what qualities do you think your

717
01:14:33.060 --> 01:14:34.060
neighbor has?

718
01:14:34.060 --> 01:14:37.900
They all found their neighbor was lazy and wouldn't get up and look for work and whatever.

719
01:14:37.900 --> 01:14:40.780
Not themselves, of course, but their neighbor.

720
01:14:40.780 --> 01:14:46.740
I have a lot of statistics about this in my chapter on the 60s in the politically incorrect

721
01:14:46.740 --> 01:14:47.740
guide.

722
01:14:47.740 --> 01:14:53.920
So, in other words, I guess I'm saying that sometimes we get kind of grandiose explanations

723
01:14:53.920 --> 01:14:59.580
for what's causing poverty in this or that sector of the economy, but yet when you actually

724
01:14:59.580 --> 01:15:02.020
look very closely, they don't seem to hold water.

725
01:15:02.020 --> 01:15:11.020
It seems to be a much more fundamental and simple matter of some kind of dysfunction that's taking place there or whatever.

726
01:15:11.020 --> 01:15:16.020
But I wouldn't discount this theory altogether, but I have to think it over.

727
01:15:16.020 --> 01:15:19.020
I don't want to give a glib answer to it because it seems...

728
01:15:19.020 --> 01:15:24.020
I don't think it's a stupid statement, so I don't want to just dismiss it as silly.

729
01:15:24.020 --> 01:15:30.020
This will be another one of those things that if only I were drinking this week, we could really elicit a good answer.

730
01:15:30.020 --> 01:15:33.380
yeah that's right yeah yeah they'll still try and get me to do it I'm sure

731
01:15:33.380 --> 01:15:42.300
anybody else yeah that's true yeah right yeah that's right look at he says the

732
01:15:42.300 --> 01:15:46.540
gentleman says go to China you see 50,000 bicycles at a red light yeah you get a

733
01:15:46.540 --> 01:15:51.860
bicycle now this this will be quote you mark my words that'll be quoted on the

734
01:15:51.860 --> 01:16:02.100
Internet. Tom Woods' Solution to Poverty? Get a bicycle. Oh, right, no, I understand.

735
01:16:02.100 --> 01:16:05.820
Yeah, no, I understand that. Yeah, yeah. Well, let's see if we can hammer out, you

736
01:16:05.820 --> 01:16:08.660
know, but that'd be a good, like, we should write something on that, because I

737
01:16:08.660 --> 01:16:13.540
know you're overloaded with spare time, as am I. Yes.

738
01:16:13.540 --> 01:16:21.540
No, but I think the bicycle answer is a reasonable response, that it can be applied to anything, but then there are also dynamic responses to anything.

739
01:16:21.540 --> 01:16:24.540
Yeah, that's right. Yeah, see, that's what I want to say, that there are dynamic responses, right.

740
01:16:24.540 --> 01:16:34.540
Brian Kaplan has a recent piece on why is it that all the statistics that are aimed at curing unemployment or homelessness,

741
01:16:34.540 --> 01:16:39.540
they draw information out of single bedroom apartment rates and whatnot,

742
01:16:39.540 --> 01:16:46.180
college freshmen around the country have to like bump down in these like slum hotels of dormitories

743
01:16:46.180 --> 01:16:49.860
and he's like to cure homelessness he says make them get roommates.

744
01:16:49.860 --> 01:16:56.140
Well that's that's that's an interesting point in fact I remember seeing thankfully when I lived in

745
01:16:56.140 --> 01:17:01.580
in in New York City when I was in grad school I had a you know reasonably good apartment but

746
01:17:01.580 --> 01:17:07.220
some of the housing they had for the grad students I thought you've got to be kidding me like I mean

747
01:17:07.220 --> 01:17:35.220
I was wondering, is there any work that you could recommend for additional reading, dealing with the movement of the radical left,

748
01:17:35.220 --> 01:17:51.220
Starting off with 1876 in Paris, coming over to the United States, a lot of American radicals from the time of World War I were going off to Russia to create the communist revolution.

749
01:17:51.220 --> 01:18:03.220
I remember one attorney from Chicago ended up being the number two person for the Far Eastern Republic, which was set up as a buffer between there and China, between the Soviet Union.

750
01:18:03.220 --> 01:18:31.220
I'm just trying to think of the history of American radicalism seems more German and maybe East European than anything and the fact that they didn't speak English seemed to be kind of a hindrance because it made radicalism seem to be something that they didn't know how to do.

751
01:18:31.220 --> 01:18:41.220
I don't know specifically on that issue, but I know a couple of people who would know, if anyone would know, so we can talk about that.

752
01:18:41.220 --> 01:18:47.220
Are we all tired now? Are we tired? I'm tired.

753
01:18:47.220 --> 01:18:57.220
Are we all tired now? Are we tired? I'm tired.

754
01:18:57.220 --> 01:19:01.220
Now, Chad, am I going to get docked if we stop?

755
01:19:01.220 --> 01:19:08.220
Somebody want to come up here and sing or whatever, have like a talent show or stupid human tricks?

756
01:19:08.220 --> 01:19:14.220
By the way, we'll just close with this. I once had a student who said, because at the beginning of the semester I just want to know,

757
01:19:14.220 --> 01:19:16.220
Give me one interesting thing about you.

758
01:19:16.220 --> 01:19:19.220
His interesting thing was, because he had no cartilage in his nose,

759
01:19:19.220 --> 01:19:22.220
he could just press it flat against his face.

760
01:19:22.220 --> 01:19:25.220
You know, and then, you know, after I stopped vomiting,

761
01:19:25.220 --> 01:19:27.220
I thought that was a pretty good trick.

762
01:19:27.220 --> 01:19:29.220
All right. All right. Thanks. Thanks a lot.