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TITLE (supplied by the customer): "Trade Unionism & Working Class Culture"

DESCRIPTION (supplied by the customer): Define working class culture, talk about class, class struggle, class conflict, and class consciousness and then define trade unionism as the voice of working class, relate working class culture to trade unionism. Talk about solidarity and the motto of unionism that says injury to one is injury to all. Talk about Marxism and working class; use quotes. Please include your own point to the essay and what you think should be included. 

PROJECT DEVELOPED:

Introduction.

The mid and late nineteenth century was marked by another wave of the industrial revolution. Capitalism was entering a stage of unprecedented productivity, with machinery increasingly being employed in many processes [Soule, 1952: 57-58]. However, many advanced capitalist systems in Europe were beginning to impose more and more strenuous working conditions on the factory and extraction sectors employees. What one observed was, in fact, a deteriorating social security system, even though the supply side of the economy was supposedly improving. Normally, debates around the existing social security and safety net system are focused on the dynamics of the economy's productive capacity, or indeed its productive possibilities frontier. The manifestly deteriorating standard of living for the poorest strata of the society was, ironically, accompanied by technological revival and progress. The strange tendency was not pronounced from the very beginning, though, and it took the perspiration of several generations of observers to come up with a reasonably satisfactory answers to the questions raised. However, those solutions were at best partial diagnoses providing an insight into the particular aspects of the complex situation, but clearly inadequate to explain the whole picture. It was not until Marx's genius approached the issue and gave it a thorough examination. He proved able to identify some inherent properties that largely accounted for the gap as well as other phenomena observed. 

Class Struggle: Background & Discussion.

If we are to visualize the economy as the production function turning inputs or factors of production into final output (products and services), then each factor-capital, land, and labor-would be characterized by the single most important parameter: productivity [see, e.g., Varian 1992 for details]. More precisely, we are talking about the productivity of the last unit ('marginal productivity') of each factor employed, since the overall productivity may start to slow down if too much of each factor is employed. The classical economic theory, constituting the more rigorous aspect of the political and philosophical thought pertaining to social processes at the time, would predict that each factor would earn its marginal product. Moreover, if the technology improves, for instance if more and better machinery is introduced in a process, the productivity of each factor improves accordingly. Then, one would expect that the workers (owners of labor) should enjoy a higher compensation under technical progress, since their wages must follow the path of their incremental productivity that's improving. However, what was observed was totally contrary to the expectations: factory employees had to work longer hours, while wages stagnated or even were bid down. The new, complicated, and still far from perfect equipment created new risks and hazards on the job, and called for more investment into the security of the working environment. The owners of capital, however, exhibited reluctance to incur these additional costs, threatening the worker's life, health, and quality of the human capital. Since most workers found themselves locked-in within the areas of their current employment, migration to better environments was effectively blocked. That immobility of resources effectively amounted to their specificity, which implies that they are segmented from other labor markets, and the employers were simply not forced into competition. The owners of capital were therefore enjoying a much higher bargaining power, tantamount to monopsony power (buyers or employers accounting for a large chunk of the supplier's market or the employee's time). [Varian, 1992]

Workers were thus under-compensated in several ways. For one, they were only paid a fraction of their marginal product contribution. For another, that gap of under-compensation was increasing, since the worker's wage was set at a stable level only enough to earn a subsistence, while the value of his product was growing. It means that workers-and for one reason or another this group exhibited an affinity with the lowest socioeconomic stratum-were being stripped of the assets they had full title to. Moreover, the deteriorating safety environment could also be viewed as a major, and growing, tax on the individual's well-being, by redistributing it to other individuals (capitalists who appropriated the surplus). That might not amount to outright stealing per se, since we are disposed to believe that the progressive and entrepreneurial capitalists were taking care of, and investing in, productivity of the processes. The upside of competition is that the societal advancement at large resulted from those purely private and selfish incentives to improve own competitive advantage, much in line with Adam Smith's invisible hand as an aggregate-level force mapping selfish incentives into best public good [refer, e.g. to Soule 1952: 41-43].

However, did this mounting reinvestment in business development and growing productivity actually result in public good? By underpaying workers and over-investing in production, the capitalist system (underlain by greed more than by selfishness) acted to create an ever exacerbating imbalance between the demand side which was shrinking and the supply side which had a clear potential to expand. The shrinking aggregate demand was due to the ever lower buying power on the part of consumers (workers). Since the demand side may at times be a far more important component entering the economic growth and fluctuations than the supply side, the economy evidently overproduced and under-spent. However, the manufacturer will cut his output in the next period if the inventory turnover is mediocre. That means it will be forced to lay off some or reduce wages for the rest of the workers, and so on and on this vicious circle goes. The further the capitalists ripped the workers off, the more they had incentive to keep doing it, if only to economize on incremental costs that just kept on increasing as a result.

Now, evident was a conflict of interests, and indeed of incentives as characterizing the two distinct groups of stakeholders. What's important, that wasn't merely a clash between the rich and the poor, but between classes, or groups with particular structures of interests and incentives. Profit-driven capitalists, of course, did not see that their private choices collectively resulted in a vicious circle for the economy. On the other hand, the inherently spontaneous capitalist system did not have any mechanism of organizing the private choice toward a better equilibrium. There is no denying the fact that capitalists were performing the useful function of investing in technology. However, since such investment was made possible out of the workers' pocket (part of the surplus or rent appropriated by the capitalists), it was Marx's understanding that, although the production system itself should remain as it was, the means of production needed to be re-appropriated by workers. The problem was not so much about the unfairness of the distribution system, as it was about the suboptimal state of the economy subject to business cycles and major depressions of overproduction. Of course, capitalists themselves had no incentive to either reform their modus operandi or to hand over the means of production (basically, their capital over and above the initial outlay) to workers control and ownership. Therefore, there was no way out but for labor to engage in struggle-a class struggle-aimed at restoring an optimal and fair order.

Moreover, the two classes or groups of factor owners were clearly in asymmetric positions when it came to the working of the labor market. Since the workers commanded a degenerate bargaining power, there was an urge to organize them in cartel-like formations intended to control the level of market prices (wages in our case). These cartels, or trade unions, would act within an agent-principal framework on behalf of their members. To draw a tentative bottom line, evident was the diagnosis as well as implications suggesting a major conflict of interests that could not be resolved by conventional market negotiation process based on the prior distribution of bargaining power. Instead, the class conflict could only be resolved via class struggle. These basic provisions were outlined in the Communist Manifesto of 1848 [Soule 1952: 61]. After the collapse of the revolutionary movements of the late 1840s, Marx moved to London where he worked on his Das Kapital as foreshadowed by the ideas spelled out in the Manifesto [62-63]. Radical as its implications surely sounded in the laissez-faire environment of the late nineteenth century, Marx was a classical tradition economist; no wonder, then, the rest of the body of literature and political thought could be used without conceptual restrictions to test or augment his constructs. Fortunately, of course, many of his predictions never fulfilled. However, this matter-of-fact assertion should itself be adopted with a grain of salt, since the major tendencies he had outlined were exactly the material that helped the capitalist system to avoid those roadblocks in the first place.

Working Class Culture & Unions.

Now, the working class culture could be identified as a set of values, constraints, and motives that distinguish the class and provide it with a sense of group (class) identity and affinity, and mechanisms that could contribute to the stability of the system, its identity and its effective ability to influence and interact with the outside environment [Aronowitz 1992: 23]. In this light, for instance, it becomes clear why the enforceability of initiatives and class politics lie at the core of such mechanisms, and why opportunism and defecting patterns should be controlled. Here applies the principle whereby injury done to one is injury to all. The collective bargaining power in all clubs and cartels, market or political, is attained and maintained by private effort of each individual participant. The members should have an assurance that their non-opportunism and partial loss of sovereignty in an agent-principal scheme (whereby both the system and the individual are agent and principal of each other) will not be undermined by defecting conduct on the part of the system. This being one constituent of class consciousness, the latter underpins the system of motivation or mechanisms making clear for everyone the structure of interests, rules, and expected conditional payoffs, for them to make a choice as to whether to engage and stay, or opt out. Otherwise, any cartel is inherently unstable and prone to free-riding or defecting private behavior on the part of its individual members [Varian 1992: 82-102].

In light of the above, trade unions as a major component or mechanism of securing material bargaining power for those involved, certainly constitute a part of class culture. The question is just how effective and efficient this role is, and how relevant the respective relationship is. There is evidence in some economies characterized by high and growing unemployment that trade unions may have contributed to it in major ways [Mulligan, 2002; Caballero & Hammur, 2000]. Indeed, the trade union is not intended to correct the situation on the labor market at large-it only really protects/lobbies the interests of its current members ...
  
  

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