Defend the Free Market - Support the Strikers

This week the Communication Workers Union (CWU) announced that 120,000 postal workers at the Royal Mail have voted to go on a two day strike over "outstanding problems of job security, work levels, bullying, and reward”. A persistent belligerence on behalf of management, such as the rejection of CWU proposed compromises earlier this week, led to strike action being confirmed.

Furthermore, a leaked Royal Mail document makes clear that if management does not get what it wants then things have already been “positioned [..] in such a way as there is shareholder, customer and internal support for implementation of changes without agreement”. It should be noted here that the Royal Mail is a nationalised industry and so the word 'shareholder' actually means 'state'.

Now don't get me wrong, I am a believer in the free market and do not want to see the continued existence of state-owned firms - even if they treated their workers like kings. But Socialist ideals run just as deep in my veins as Libertarian ones, and as such, I will defend to the hilt any attempt by my peers to collectively organise for improved conditions regardless if those attempts take place by workers within in state ran enterprises.

These beliefs however, put me at odds with conventional wisdom, and I have been told many times by traditional right/left statists that it is impossible to reconcile Socialism with the free market. But conventional wisdom is founded on a number of incorrect assumptions and claims.
To demonstrate how a libertarian society is in complete accordance with the interests of organised labour, I shall go over a few of the claims made by the statist left/right regarding industrial disputes, and shine light on where they are going wrong.

Claim 1: The strike only serves to damage ordinary people/customers. By disrupting public services, strikes hit the small businessman, cooperative enterprise, and self employed tradesman the hardest. Think of all those Ebay and Bargain Pages traders who will suffer by this action.

Response: The key to understanding why this might be the case is to pay attention to the word 'public' – i.e. state ran. By subsidising, or fully owning, an industry, the state creates a monopoly which restricts alternatives to that organisation.

In a free market, setting up alternative structures of service provision becomes far easier. Without government regulations, taxes and zoning laws etc, the start-up costs are far lower and so within the reach of individuals/community organisations. Without the unfair advantage that government subsidy provides, a newly formed small enterprise would have an even playing field to compete on.

Minus a state cartelised economy, alternatives to the postal system in times of industrial dispute would be freely available, and the damage to the independent trader would be barely perceptible.

Claim 2: Striking only hurts the strikers because it causes damage to the company that employs them. This could eventually lead to the business failing or employees being laid off. Unionism hurts the working class.

Response: This is half true, striking favours working people but does indeed cause damage to the company that employs them - thats the point! I do not say this because I enjoy watching people lose their livelihood, I say this because I am a Libertarian who wants to see the people that create wealth receiving that wealth back – i.e. those that operate the sorting machines, deliver the parcels, clean the floors and run the canteens etc.

Let us consider for a second what a market economy actually is. It is essentially a system of comparing efficiencies – those forms of organisation that provide services in the most efficient manner are the ones that will prevail. A company that routinely craps on its employees would, in an economy that permits freedom to unionise, face many more disruptions to its production than a company that treats its employees well.

The most efficient form of organisation would therefore be the one that has the happiest workers, and research shows that implementing participatory practices in the workplace is the most successful route to achieving this. So genuine free markets favour employee-controlled business, and the prospects of a company failing due to strike action only really persists in our current system of restricted unionism – in a genuine free market it is unlikely that these exploitative business models would even be set up, let alone survive long enough to cause serious damage when they fall by the wayside.

Claim 3: These strikers only ever have power when a government monopoly exists. Just look at the low rate of unionisation in the private sector, that demonstrates how organised labour could never survive in a free market and is at root a statist construct.

As mentioned above, we do not have complete freedom to organise for collective action. For example, it is illegal for workers to engage in solidarity striking, there is a ban on closed-shops, and there are legal requirements to vote before a strike takes place. Unions then, are not statist in nature. In reality their powers are curtailed by state legislation that encourages a balance of power in favour of hierarchical capital.

Claim 4: Unionism is anti free-market because is disrupts commerce. I remember the 1970's when unions had so much power that the economy went down the pan. These union types are all Commies. Bring back Thatcher!

The situation in the 1970's was that the state had co-opted the power of organised labour. The nature of a statist union is completely different to the nature of a free-market union, which is the natural expression of an unmet need. In this context, collective bargaining is a process akin to the interplay of supply and demand in which needs and abilities are matched through the market mechanism.

It does not matter who is at the controls of the state apparatus or who they claim to be controlling it for. The Soviet Union was no more worker-owned than corporatist Italy under Mussolini, or current day China. The state will always operate in its own interests, and in the interests of a ruling minority. Thatcher was similar in this respect to a soviet apparatchik, the only difference is that she chose the capitalist class to be the ruling elite rather than the union bosses.

The limits that she imposed on union activity created a situation of 'sticky contracts' that are analogous to the notion of 'sticky prices'. For markets to operate freely, there needs to be real-time flexibility for labour to renegotiate the terms of employment at any given moment (similar to the way that there needs to be a responsive price mechanism to prevent unequal exchange).
Without this flexibility, the equal exchange of payment for labour is replaced by the exploitative exchange of payment for labour power. That is to say, an ability for an employer to refuse to pass on gains in productivity to the worker - hence the extraction of surplus value. The Thatcher/Reagan model of a 'free-market' is no more about genuine free-markets than a state-socialist model.

Given all these points I hope it is a little clearer why I believe that the only route to genuine Socialism is via the genuine free-market. The value that organised labour can provide for a society is as vast as the value provided by free enterprise. Given the current system in which the power of labour is suppressed by the state, support for striking workers is an anti-statist position and so should be encouraged by anyone with a Libertarian streak.