Judith and Lewis Leavitt characterize Wisconsin Governor Walker?s attack on the public employee unions as the opening salvo in a new class war. They are absolutely correct to characterize Walker?s attempt to outlaw collective bargaining as class warfare. But they are wrong to call it the first salvo. On the contrary?this is a war that began a generation ago, when Michael Milken and his Wall Street cohorts taught management how to use leveraged buyouts and the threat of foreign competition to squeeze employee wages, the Supreme Court reinterpreted the NLRA to radically increase management power, and Ronald Reagan used the Air Traffic Controllers? strike to make union busting respectable. Private sector unions were decimated years ago; the attempt to suppress the public unions is only a coda.
Market-based economies distribute income and wealth according to power: those who can walk away from a deal?quintessentially, mobile investment capital freed of all restraints?will always get better terms than those who must accept what they are offered because they have children to feed and a community they are committed to. Decent countries address this imbalance of bargaining power in a variety of ways, starting with unions?the institutional equivalent to organized capital in the form of the stock market and multinational corporations.
American politics, in contrast, have largely gone the other direction. We began with foundational errors in the New Deal: requiring unions to organize by plant rather than industry, thus encouraging management to destroy unions and community alike by the simple expedient of creating disposable plants and disposable workers. This, compounded with employer-based pensions and medical care, eventually resulted in an enormous incentive to entrepreneurs to find ways to renege on their obligations. Then, in the name of Reaganite ?deregulation,? we spawned vast subsidized industries. Some draw their strength from government monopolies, like the extended patent and copyright laws that allow drug manufacturers, Silicon Valley, and Hollywood to profit from past effort instead of innovation. Others benefit from outright subsidies, such as the free ?tail risk? insurance?the Greenspan put, as the industry called it?that allows Wall Street to make astonishing profits while leaving its bad bets for the taxpayers to pay. Still others are granted a license for theft, such as the permission to pollute and the free military services that undergird the oil industry, its carbon-based competitors, and the car and housing industries (each of which also depend on straightforward corporate welfare in the form of tax-funded highways and financing).
Now, we are perilously close to the end game. Citizens United has loosened the last restraints on the power of corporate money to buy legislation. Lose the last institutional sources of countervailing power, and we will be in the nightmare of individuals standing alone against an organized opponent: corporations that view employees?as in, ordinary Americans?as ?costs? to be minimized and a compliant government happy to set the rules of the game so that past winners have a lock on the future. Neither market capitalism nor democracy can long survive if power can buy power with no restraint.