How Wall-Mart is seeking to destroy the free market and our democracy

A modern democracy, founded on a liberal, free market economy needs unions in order to function properly. It may seem philosophically strange for all of you that grew up in the neo con era where the legacy of giants, great thinkers such as Smith and Keynes have been bastardised by a right wing intent on destroying the very institutions that they claim to revere, but true it is, and its logic and foundation in economic theory can not be denied (for those that don’t wish to believe my arguments read the passage from Adam Smith’s Wealth of Nations below).

Nothing more illustrates the point than the current news that Wall-Mart, in an act reminiscent of Putin’s Russia, is attempting to influence the elections by coercing its workers to vote Republican. The company is holding mandatory meetings with its staff warning them that a Democratic victory could lead to job losses and high union dues.

And this is exactly the point. Without unions, who is there to prevent this disgusting behaviour on the part of Wall-Mart. Without unions, there are no institutions to protect workers from political coercion and when large corporations work to manipulate elections in order to prevent the freedom of association, one of the founding principals of American democracy, is our democracy itself not at threat?

Indeed why is Wall-Mart so afraid of the freedom of association? because it is afraid of being exposed to a free market. A free market is free because it allows all of the participants to engage and disengage with it freely, as equals. Its about choice, but above all its about power, because if I am to choose who to buy from and whom to sell my things too freely I must have the same power as the person I am dealing with. During the siege of Sarajevo, the town’s symphony orchestra sold their grand piano for a few bags of flower, they did not do so because they were free, but because they were desperate and weak.

There is a common misperception that money is power, but in a modern democracy power does not come from money but through organisation. Corporations are organisations of capital. It concentrates capital and then a group of leaders working together through a board decide how to employ it. This ability to organise channel and employ substantial economic resources is the source of their great power and not just the possession of the capital itself. Now I’m not against corporations as such, in fact they are incredibly efficient in deploying the capital needed to produce the goods and services that we need and have had huge benefits for our economy but if capital is organised than labour must be organised too to guarantee that it gets a fair deal. If one party in the deal is organised and powerful and another isnt, how can the transaction ever be considered free? A market which is on founded on transactions between the powerful and the poor can never be called a free market and in deals between great corporations and individual workers it is always the former that will always prevail.

Hence Wall-Mart, through seeking to weaken its workers, is also seeking to avoid the consequences of a market free of coercion. The real free market. If organisation is power then we too must organise against this. Thankfully as Art Levine write in the Huffington post, Wall-Mart’s actions have provoked many to organise in support of the rights of unions and a petition has been started in support of the Employee Free Choice Act which I would invite you to sign here.

People on the right have often confused the meaning of freedom to mean freedom from law, but without law there can be no justice and without justice we cannot be free. This conception of freedom is what was embodied in the Declaration of Independence, when America founded a nation of laws, freeing itself from the tryanny of royal rule. In the same year as America gained its independence Adam Smith completed his An Enquiry Into Nature and the Causes of the Wealth of Nations, still today one of the most beautiful pieces of prose ever written. I invite you to read this passage, taken from book 1 Chapter 8 of his epic, which deals with the organisation of labour:

What are the common wages of labour, depends everywhere upon the contract usually made between those two parties, whose interests are by no means the same. The workmen desire to get as much, the masters to give as little as possible. The former are disposed to combine in order to raise, the latter in order to lower the wages of labour.

It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily; and the law, besides, authorizes, or at least does not prohibit their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work; but many against combining to raise it. In all such disputes the masters can hold out much longer. A landlord, a farmer, a master manufacturer, a merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long run the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate.

We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate. To violate this combination is everywhere a most unpopular action, and a sort of reproach to a master among his neighbours and equals. We seldom, indeed, hear of this combination, because it is the usual, and one may say, the natural state of things, which nobody ever hears of. Masters, too, sometimes enter into particular combinations to sink the wages of labour even below this rate. These are always conducted with the utmost silence and secrecy, till the moment of execution, and when the workmen yield, as they sometimes do, without resistance, though severely felt by them, they are never heard of by other people. Such combinations, however, are frequently resisted by a contrary defensive combination of the workmen; who sometimes too, without any provocation of this kind, combine of their own accord to raise the price of their labour. Their usual pretences are, sometimes the high price of provisions; sometimes the great profit which their masters make by their work. But whether their combinations be offensive or defensive, they are always abundantly heard of. In order to bring the point to a speedy decision, they have always recourse to the loudest clamour, and sometimes to the most shocking violence and outrage. They are desperate, and act with the folly and extravagance of desperate men, who must either starve, or frighten their masters into an immediate compliance with their demands. The masters upon these occasions are just as clamorous upon the other side, and never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combinations of servants, labourers, and journeymen. The workmen, accordingly, very seldom derive any advantage from the violence of those tumultuous combinations, which, partly from the interposition of the civil magistrate, partly from the necessity superior steadiness of the masters, partly from the necessity which the greater part of the workmen are under of submitting for the sake of present subsistence, generally end in nothing, but the punishment or ruin of the ringleaders.

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