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Trade Unions: Another Part of the Cartel of Big

Why are work stoppages called "industrial action"...?

HERE'S A QUESTION to ponder, writes Dan Denning, editor of the Daily Reckoning Australia.

Why are strikes and work stoppages that reduce productivity dignified with the name "industrial action"? We'd never heard the term before moving to Australia. We can't help but admire it...and hate it.

"Industrial action" is a non-deliberately ironic word; the intended meaning is different from the literal meaning. It means exercising leverage in a negotiation by doing absolutely nothing. It's a mini-strike. But really to dignify it with the term "industrial action" is to suggest it's a legitimate and normal negotiating tactic when you're looking for a raise from your boss.

Of course if you tried this at your own workplace, say, refusing to use the photocopier or the stapler for three hours, or sitting on the filing cabinet and chanting Buddhist prayers while the phone rang, you'd be out on your keester sooner than your HR manager could say, "you're fired".

Apparently it's perfectly legitimate to conduct an "industrial action" when you're part of a union though. Last night we flew up to Sydney to have dinner with a friend visiting from the States. We flew back to Melbourne early this morning. Qantas cancelled 348 flights yesterday and more are planned today thanks to planned "industrial action" by various unions.

Union power is part of the Cartel of Bigness too. The cartel is made up of politicians, bankers, defense contractors, and unions. They all benefit from a centralized system of Bigness.

The central law of this Cartel of Bigness is the Iron Law of Oligarchy. This law was developed by the German writer Robert Michels in his book Political Parties: A Sociological Study of the Oligarchical Tendencies of Modern Democracy. If you're not planning to read the book any time soon, allow us to summarize it for you.

The Iron Law of Oligarchy states that political power tends to concentrate in a democratic system over time. There are two reasons for this. The first reason is that those in power have a personal interest in staying there. While the rest of us are off being variously productive in order to pay our rent or our mortgage, the members of the Cartel of Bigness are able to tax, steal, coerce, or commandeer a share of your productivity in order to enrich and entrench themselves.

Fundamentally, the oligarchs are parasites. But when a parasite is dedicated to keeping itself alive full time at your expense, and you're too busy to do anything about it – especially when they make the laws and collect the union dues – they tend to entrench themselves more deeply in power. Call this the power of incumbency. The trick for the parasite is not to kill the host, which we'll get to in a moment.

The second reason democratic regimes devolve into oligarchy is that there will always exist a small fraction of mildly sociopathic people who enjoy the accumulation and exercise of power over other people. This could be legislative power, police power, or the power to speak on your behalf but without your consent. Fortunately, most people aren't interested in telling each other how to live down to the minutest detail, or tasering those who fail to comply with given orders, or blackmailing others through "industrial action."

Unfortunately, the ones that are interested in bossing the rest of us around dedicate all of their time and energy to putting themselves in positions of power and staying there. They will tell you that they have higher motives like "social justice" or helping the country achieve its "manifest destiny". They may partly believe it. But their motivation is the preservation of power and the accumulation of money and influence.

The trouble right now for the members of the Cartel of Bigness is that the productive class is tired of being ripped off, bossed around, and taken for granted. Usually the productive class is too busy to get stirred up about anything. And usually, it can be placated, diverted, or confused into believing what's really needed is more centralization and more authority. You just watch this happen with the Occupy Wall Street movement.

But for the privileged elite to retain its status and power, the productive class has to have a fundamental respect for the integrity of democratic institutions. Once this respect is lost – and it has been well and truly lost over the last three years – the parasites at the top are exposed for what they are: hopeless, rent-seeking know-it-alls in taxpayer-shareholder-dues payer-funded suits with taxpayer-shareholder-dues payer-funded pensions.

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Best-selling author of The Bull Hunter (Wiley & Sons) and formerly analyzing equities and publishing investment ideas from Baltimore, Paris, London and then Melbourne, Dan Denning is now co-author of The Bill Bonner Letter from Bonner & Partners.

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