By Simon Grey, on April 4th, 2011
I came across this other day when stumbling around In Mala Fide:
God may be dead, but the cubicle jockeys and castrated middle-class drones of this land still think of themselves as part of a warped Calvinist elect. To them, their willingness to have their humanity stripped away day by day sucking at Mammon’s teat is proof that they are God’s chosen people. Anyone who questions the presuppositions of the American cult of “hard work” and “self-reliance” is ostracized from polite society…
The biggest flaw in Puritan doctrine, as I see it, is that there is a worship of work. Being a worker is a false idol unto itself. Yes, man was created to work. And yes, man is to put his best effort into his work. The problem, however, is that the Puritan work ethic has been twisted into a doctrine of worshiping workaholics, and, with that, a doctrine of materialism.
Perhaps this is another reason why America has started its decline: materialism is being used as a substitute for spiritualism. Everyone in America is told, from childhood onward, to be a good student, to get good grades in school, to get into a good college, to get a good job, to be a good worker, and then all the rewards in life will be given to you. And this message always takes a turn for the ruthless.
Good now becomes best, and everything becomes cutthroat. Lots of people begin to compete for limited elite pre-school slots, who in turn compete for elite primary school slots, elite middle school slots, elite colleges and universities, and finally elite jobs. And all these things start to get treated as entitlements (if I go to a good college, I deserve a top position in a Fortune 500 company, etc.) All these things are pursued with intense rigor, as if having an elite education or an elite job is the most meaningful thing in the world.
There’s a reason this is a cliché: “no one sits on their deathbed, wishing they spent more time in the office.” We have allowed our education and jobs, and little beyond that, to define who we are. In reality, though, we’re more than a sum of numbers attached to us by teachers and bosses. Each one of us, at the least, is someone’s child. We’re someone’s spouse, parent, sibling, or friend. We belong to families, to churches, to civic groups. And yet we define our worth by what we make and where went to school.
Now, it is true that our jobs/careers play some role in defining us. We can’t fully escape that. But we don’t have to let our job or our education be the sole (or even main) component of self-definition. Instead, we should let go of this materialistic mindset, and embrace our spiritual and social side. Maybe that’s what we need to do to get rid of the social cancer called materialism.
By Russ Nelson, on September 22nd, 2010
Unions are against globalization. To listen to them, unions are a force for good for all workers (rather than just the workers who pay the union its dues). But to watch them, you can see that they’re in favor of cartelization. They don’t mind other people
competing against them, as long as those people are hobbled by the same pay rate, protections, and benefits as the union members have. In other words, they’re not allowed to use a lower cost of living, or a lower regard for their own safety, or a longer work week as a competitive advantage.
Sigh. Unions! Still selfish, after all these years.
By Rok Spruk, on October 5th, 2009
Gary Becker (link) and Richard Posner (link) opened a discussion on how unions influence policymaking decision. Recently, president Obama imposed punitive 35 percent tariff rate on imported Chinese tire (link) risking the coming trade war. Indeed, China may file a case against the U.S at the WTO, and the WTO may rule against the U.S for imposing illegal and discriminatory trade practices.
Many believe that president Obama enforced trade protection to win the support of the unions in health care reform. In fact, the bailout of GM and Chrysler was one of the major efforts to help unions, particularly the United Auto Workers, in paying the health-care and pension benefits that GM and Chrysler couldn’t actually afford to pay.
Recently, the Congress has been split up on Employee Free Choice Act which suggests giving mandate to unions representing employee in arbitrating union-management contracts. I believe the Congresional Budget Office will yield a meaningful research on the economic effects of the act.
The empirical evidence on union activity is, in fact, quite clear. In OECD comparison panel (link), there is a strong, negative and significant relationship between the density of union membership and labor market rigidity. Sweden, for example, hasn’t enforced a general level of minimum wages. Yet in 2007, over 7o percent of the working population was unionized. High union density further contributed to inflexible labor market structure which led to low employment growth, low productivity growth and exerted a strong upward pressure on real labor cost.
Yet, there is a distinctive character of trade unions within Europe. Traditionally, unions in Europe possessed a stronger influence on political decision in areas such as taxation, income redistribution and government size. However, there are significant disparities in union activity throughout Europe. In 1990s, Denmark enforced a series of reforms that deregulated labor market structure towards greater flexibility. Today, Denmark’s labor market is cited as the most competitive in the world (link). From 1990 to 2007, union density decreased from 75.3 percent to 69.1 percent. On the other side, labor market structures in Continental and Mediterranean Europe are known for inflexible features, regulation and rigidity. Meanwhile, Anglo-Saxon countries, Britain and Ireland, are known for flexible labor markets and few barriers impeding labor market performance. Dismissing and employee costs 10 weekly salaries in Ireland compared to 56 weekly salaries in Spain.
Although variation in trade union density over time explains a relatively large part of variation in productivity, union activity and influence in political decision-making could be the decisive factor in explaining cross-country variation in labor market outcome. That would requiring the design of principal indicator that could measure union influence on the quantitive basis. The influence of trade unions has, in my opinion, a strong common connection to cultural patterns and informal institutions.
For instance, countries with weak rule of law, persistent corruption, high tax burden and barriers to trade and investment, tend to have larger underground economies. Empirical estimates on the size of underground economies suggest that, in Europe (link), Mediterranean countries (Italy, Spain, Greece, Portugal) have the largest share of shadow economies. There is a significant cross-country variation. The estimates of shadow economies for 28 transition countries is 40.1 percent and 16.3 percent for the OECD. So, could union activity affect the size of shadow economies
If unions, as an interest group, exert a strong influence in politics, their political philosophy will probably lean left. Thus, if unions influence decisions on taxation issues, welfare benefits, pension schemes and government size, the outcome will probably induce more complexity, more regulation and more barriers to trade, entrepreneurship and investment. The combination of those factors can strongly influence labor and business incentives and, hence, also determine and productivity growth.
By Ajay Shah, on August 12th, 2009
Air India has got itself into serious trouble, and private airlines are also doing badly. The CMIE report on air transport for August 2009 shows a bad picture for the airline industry: from the quarter ended June 2007 onwards, in each quarter, the PAT margin was negative.
There are three interesting aspects to the present situation. The first is about the role of the State. Flying by plane is a private good and not a public good. Seats in a plane are rival and excludable. I fly in a plane, I benefit. There is, hence, no role for government to be in this area. Governments in good countries do not run airlines. The right thing to do is to privatise Air India as soon as possible, without trying to engage in a government-led restructuring. In an auction, if the highest bid is a negative number, government should pay this to get the company out of public ownership.
The next point is the cost of a bailout. NHAI highways cost roughly Rs.5 crore per kilometre. Hence, if government puts Rs.5,000 crore into Air India, this comes at the opportunity cost of 1000 km of four-lane highways.
The most interesting dimension, and one that has not been widely noticed in India, is the impact of Air India upon the woes of the aviation industry. Air India today is a `zombie airline’: a firm which should be dead but isn’t only because it is artificially propped up by the government. (The phrase `zombie firms’ or `zombie banks’ originates in the experience of Japan in the late 1980s).
If market forces were allowed to work, then Air India would go into liquidation. This would lead to somewhat higher prices for air travel since competition would be reduced. In addition, it would lead to somewhat lower prices for staff (since erstwhile Air India staff would be looking for jobs) and somewhat lower prices for planes (since erstwhile Air India aircraft would be available for purchase or lease).
Other firms in the industry would thus obtain somewhat higher revenues and face somewhat lower costs.
Conversely, when a government steps in to create a zombie firm in an industry, it damages profitability and investment amongst the healthy firms of that industry. If this process goes on for a while, then otherwise healthy firms in an industry will become sick. This was the experience in Japan, when the `zombie firms’ supported by the government led to sickness spreading amongst other firms and led to a extended period of reduced private corporate investment.
In summary, one reason why the private airline industry as a whole is in the doldrums is that Air India is being artificially kept alive.
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