The More Things Change, the More They Stay the Same
Plus: "New" ideas that aren't so new, Hayek agrees with Marx (sort of), and the Year of Dottie Weisenflanker.
Reading Amity Shlaes’ Great Society, an excellent history of Lyndon B. Johnson’s titular misadventure in public policy, one is struck by the fact that mid-century union bosses failed entirely to see the self-destructive trajectory they had chosen. Take the auto industry. American labor’s highly touted contract negotiations with Detroit bigwigs undermined their ability to remain competitive with leaner, more efficient, better foreign manufacturers.
One is also struck by the fact that unions seem not to have learned these lessons since. As this author wrote in November in the Washington Examiner, following the end of the United Auto Workers’ (UAW) strike:
[UAW President Shawn] Fain has secured concessions that far exceed the workers’ earnings at nonunionized American and foreign plants. This will reduce the competitiveness of UAW-hiring manufacturers, incentivizing them to operate in right-to-work states or foreign countries — or simply to automate faster. Any manufacturer that sticks doggedly with unionized labor will likely find itself outcompeted and losing market share to nimbler, leaner firms.
The UAW’s agreements with Ford, General Motors, and Stellantis are fairly similar. Workers will likely receive something like a 25% raise over 4.5 years, as well as better retirement benefits, higher compensation for part-time workers, and more. According to preliminary analysis of the GM deal , UAW members’ total compensation will rise from the mid-$60s to as much as $90 per hour. For reference, the average hourly worker compensation rates at nonunion and nonunion Tesla plants sit at $55 and $45, respectively.
Most union workers will likely earn well above $80,000 annually (roughly $42 per hour), and Ford says its new contract will add $850–$900 in labor costs per vehicle. In total, JPMorgan estimates the company will likely incur $1.5 billion (about 13% of its global operating profit) in new labor costs annually.
Besides these new operational costs, the UAW strike cost Stellantis roughly $3 billion, Ford roughly $1 billion, and GM $800 million. Considering all this, it seems foolish for auto manufacturers to cling to Detroit’s outmoded model of labor and manufacturing.
Too many observers of American politics assume that every fight between a union and an employer ought to culminate with a labor victory. This notion credulously relies on the notion that labor unions are cosmically aligned with “The Good” and corporations with “The Bad.” Economics, history, and human nature have many more complexities than this impoverished view of the world suggests. Just as some powerful corporations periodically take advantage of others, so too do labor unions , particularly when they enjoy outsize political or economic influence.
Some Wisdom
One would expect Paul Johnson to have understood the lessons of history better than practically anyone. It turns out, he did.
The eminent Brit wrote:
The study of history is a powerful antidote to contemporary arrogance. It is humbling to discover how many of our glib assumptions, which seem to us novel and plausible, have been tested before, not once but many times and in innumerable guises; and discovered to be, at great human cost, wholly false.
Stumbling through intellectual, historical, or public-policy debates without understanding the past resembles trying to understand modern music without reference to classical music, jazz, the blues, the ‘60s, the ‘80s, or any other note or rhythm composed before 2000.
Especially as a young person, one stumbles on swarms of “new” and “modern” ideas — ideas whose merits the old fuddy-duddies’ calcified brains cannot possibly understand. However, upon briefly reviewing the relevant history, one usually realizes that said fuddy-duddies reject whatever bold, persistent experimentation is in question because their generation, or that of their parents, definitively proved its abject uselessness decades ago.
Or, perhaps, centuries or millennia ago.
Some Beauty
In The Fatal Conceit, Friedrich Hayek argues that maintaining free markets — unplanned, with undistorted price signals — is an existential necessity. No other economic system can, in short, produce the needed prosperity to provide for the modern world’s unprecedentedly large population. (In 1988, The Fatal Conceit’s original publication year, the world’s population was roughly 5.1 billion; today it is almost 7.9 billion.)
Hayek writes:
[I]t would be more accurate to conclude…that the process of growth benefits the larger number of the poor more than the smaller number of the rich. Capitalism created the possibility of employment. It created the conditions wherein people who have not been endowed by their parents with the tools and land needed to maintain themselves and their offspring could be so equipped by others, to their mutual benefit.
For the process enabled people to live poorly, and to have children, who otherwise, without the opportunity for productive work, could hardly even have grown to maturity and multiplied: it brought into being and kept millions alive who otherwise would not have lived at all and who, if they had lived for a time, could not have afforded to procreate. In this way the poor benefited more from the process. Karl Marx was thus right to claim that ‘capitalism’ created the proletariat: it gave and gives them life.
That, for anybody who loves humanity (despite the many indecencies of individuals), is beautiful — and worthy of preservation.
Some Humor
Every December, Dave Barry’s Year in Review is required reading.
He begins his recap of 2023 thus:
It was a year of reckoning, a year in which humanity finally began to understand that it faces an existential threat, a threat unlike any we have ever faced before, a threat that will wreak havoc on our fragile planet if we fail to stop it — and it may already be too late.
We are referring, of course, to pickleball.
Nobody knows where it started. Some scientists believe it escaped from a laboratory in China. But whatever its origin, it has been spreading like rancid mayonnaise ever since, to the point where pickleball courts now cover 43 percent of the continental US land mass, subjecting millions of Americans to the inescapable, annoying POP of the plastic ball and the even more annoying sound of boomers in knee braces relentlessly telling you how much fun it is and demanding that you try it.
Person of the Year? Dottie Weisenflanker…
Sundry, &c.
Blog: “American Compass Dodges KOSA’s Deficiencies”
New Zealand’s Parliament still has less yelling than your average congressional hearing.