I am in the process of rewriting Henry Hazlitt's book, Economics in One Lesson.
One of the points that is not clear in his book is this: the right to a job.
In a free market, there is no right to a job. There is no right to work. There is no right to another person's wallet. There is no right to tell somebody else what the terms of exchange must be.
COMPETITION
Employers compete against employers. Employers also compete against would-be employers. Employees compete against employees. Employees also compete against would-be employees. Out of this competition come jobs.
This seemingly simple concept is not widely understood, but it is the essence of free market competition. It is not understood by Keynesians, socialists, Marxists, and welfare state advocates. It is also not understood by most free market defenders.
Conservatives proclaim this doctrine: "the right to work." They say there ought to be right-to-work laws. This makes for great politics, but it is bad economics.
Does somebody have a right to a job? This completely misses the point. What is a job? This is the key question, and it is rarely discussed.
A job is an outcome of competitive bidding. Employers compete against employers and would-be employers. They offer an opportunity to sell labor. Employees compete against employees and would-be employees. They offer an opportunity to purchase labor.
Various employers offer money in exchange for labor. Various employees offer labor in exchange for money. These offers constitute legal bids. Neither of these types of offers constitutes a job. Only when the two offers made by two parties, the employer and the employee, are mutually accepted does a job come into existence. The job is an outcome. It is an outcome that prevails for only as long as both parties to the transaction agree to continue the transaction.
A job is often considered as one transaction, but in fact it is a series of transactions: employment continuity. We usually think of a job as going on five days a week, but it is really going on hour by hour, minute by minute. A job is an arrangement; it is not a commodity. No one owns a job in the way that someone owns a commodity. As soon as one of the parties to an arrangement is no longer willing to remain in the arrangement, the job ends. In a society in which liberty is defended, there is no such thing as a job that is not a matter of mutual agreement.
Nobody has a right to a job in a free society. This is because nobody has a right to compel somebody else to accept his offer. The company does not own the job; the employee does not own the job. The job is a word that we give to a continuing exchange relationship. This relationship can end at any time unless a contract says otherwise.
There is no right to work. There is only a right to make a bid.
LABOR UNIONS
It was the great political deception of the public by the trade unions that the concept of a worker's right to a job came into existence. This is another way of saying that a worker has a legal right to call in somebody with a badge and a gun, and order the person with the badge and a gun to stick that gun in the belly of an employer, and force that employer to hand over money to the labor union member. This is enforced by the National Labor Relations Board (NLRB). This bureaucracy came into existence under the Wagner Act.
The arrangement is based on theft: theft by ballot box. It has been theft by political lobbying.
The NLRB determines that under certain conditions, when members of an existing workforce vote to be represented by a labor union, this vote must be accepted by an employer. In other words, the NLRB has created something known as "job rights." It has created a legal obligation on the part of employers to deal with a minority of workers who happen to be members of the labor union. The NLRB enforces this course of contract.
The result of this policy since about 1953 has been the slow decline of the number of workers who are members of unions. Even more relevant is this: the steady decline of the number of trade union members employed in the private sector. The unions, with the backing of the NLRB, were able to achieve above market wages for their members in about 25% of the jobs in America in 1953. That percentage has declined ever since. It is now about 11%. It is 6% in the private sector.
REJECTED BIDS
Today, an employee who demands higher wages can be fired. This means that an employer is not compelled to accept the offer of the employee. If the employer thinks that there is another would-be employee out there who is willing to work at a lower wage, the employer may decide to terminate the employment of the person.
Employers compete against employers. Employees compete against employees. There are outsiders on both sides of the arrangement who are willing to become participants at some price. This is the key phrase: at some price.
A retail seller of a good has the right to make a bid. He says that he will sell an item for a certain amount of money. A customer has a right to make a bid. He will buy the item for certain amount of money. If there is an agreement on this amount of money, there will be an exchange. If there is no agreement, there will not be an exchange.
This is how the job market works. Until there is a sale, day by day, month by month, career by career, there is no job. The employer must pay money to buy the labor, and the employee must pay labor to buy the money. This continuing arrangement is called a job. Nobody has a right to one. Everyone has a right to reject the bid. This is what liberty requires. No badges. No guns. No violence.
Someone with a badge and a gun has the right to impose negative sanctions on violence. He does not have the right to impose negative sanctions on someone who does not want to accept a bid.
CONCLUSION
Don't speak of a right to work. Speak of a right to bid. Speak most emphatically of the right to accept or reject a bid.
What is a right to accept or reject a bid? It is a legal immunity from coercion -- coercion either by the state (NLRB) or by private parties (union members).
© 2022 GaryNorth.com, Inc., 2005-2021 All Rights Reserved. Reproduction without permission prohibited.