Thursday, March 10, 2011

The Most Powerful Special Interest Group

Overall, a solid article with a very important, widely misunderstood point: it is the corrupting political power of unions that is their most dangerous characteristic. Collective bargaining is, comparatively, a minor and subordinate issue--which, I suspect, only really becomes a major issue as a result of the political influence public sector unions exert.
However, I think he may misinterpret cause and effect in some areas: 
 “As the union share increases, a state tends to have a higher government debt load. . . . The correlation is likely caused by the fact that unionized government workers are powerful lobby groups that push for higher government-worker compensation and higher government spending in general.”
It may instead be that left wing states, whose electorates want high spending, end up with more unionized workers and government spending.
Excellent summary:
The problem is not the public-sector unions, but the public sector, full stop. So long as we are a democratic society, a large public sector will have the power to impose its will on the political establishment, even if the unions are dissolved or their organized political activity is repressed. One of the great strengths of the United States is that many of our most important decisions are made at the state and local level, but government at that level is especially vulnerable to capture by rent-seeking public-sector unions. The public sector has relatively less clout at the national level (though it has a great deal) because its influence is diluted in a sea of other influences. But when it comes to state government or local bond issues — two titanic problems in our public finances — the public sector and its unions dominate, and will continue to dominate unless we either severely reduce its members’ numbers or enact very strong formal barriers to their voting themselves money out of the nation’s treasuries.
I do not know what kind of "formal barriers" would be effective. The governments need to be squeezed and forced to outsource more work to private contractors--phase out of the public education system, facilitated by school vouchers, would be the single most effective step in this direction. Also, the unionization of the public sector certainly makes it more dangerous because of the power generated and strategically focused by the unions. A public sector comprising 30% of the economy may conceivably be less dangerous than one comprising 20% of the economy, if the former is non-union and the latter is unionized. I think both the absolute size and the degree of unionization play a major role in the capture of government policy by the "civil servant" class. The distinction he makes between the effects of unions on state and local governments versus that on the federal government strikes home.

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