The pursuit of self interest

Industrial relations in essence connotes a system of procedures and relationships describing the manner in which economic exchanges will take place between capital and labour, the dealings or relations of an industrial concern with its employees, with labour in general and the administration of such relations. A dictionary definition adds that its purpose is to maintain goodwill for an industrial concern.

Such arrangements, in the view of the owner of the commercial entity, are intended to achieve efficiency leading to profit. But over the longer term that surely becomes achieving effectiveness and therefore a task of management, indeed a responsibility of leaders. If so, then we might seek examples of correlations between management practices and effectiveness.

We would conclude that issues of trust and training and skill-development are highlighted and that conditions would be conducive to retaining employees who are at least satisfactory because they represent an investment which can hardly be considered merely a sunk cost. And so on. The employee, at his or her most basic level, agrees to give fair work in exchange for being treated decently. That is where the agreement is broken.

When I was growing up I was taught much about the evils of the capitalist world by a father who was active in the union movement; and in the peace movement as well for which he was imprisoned for daring to suggest that Hitler constituted a threat to the World. Like many others I retained concerns about human rights and the dignity of persons, or thought I did, but rejected the proposition that business should be always treated with at least suspicion. Sixty years on, I am forced to the view that what I was taught was right.

Unfortunately, for centuries, best practice, even common sense, has not been pursued. Rather practices which emerged after the cessation of tenant farming and the industrial revolution have persisted. Those seeking to maintain the dignity of labour have been pursued as jeopardising the inalienable rights to make a profit by those who have often contributed no more than the capital to support the operation, sometimes not even the knowledge or skills.

To have these views is not to be against democracy. But it is to acknowledge that concern for human dignity and human rights by unions is not to be confined to the workplace but quite properly extends to the workplace in another country, to the vast cattle stations where Indigenous people have been exploited and so on. Yes, those practices of business which typify the worst, which we have seen again in the last year as increasing shareholder wealth has become the rationale for business instead of the provision of needed goods and services, are not universal.

Too many examples of gross violations of human decency have been exposed. The lessons of what constitutes good management and leadership have been ignored by those who simply are too lazy to put in the hard work of genuine organisational advancement, whether they are in government or business.

Much of the worst practices of industrial relations are to be found in the USA, though the clay workers of Wales, the coal miners of France buried alive and those of Harlen County, USA choked by coal dust, the asbestos miners brought down by cancer, the waterside workers and mariners of many countries and the building labourers falling off buildings or the assembly line workers crushed by machinery are never to be forgotten.

Two recent reviews crystallise these thoughts for me. Though the situation in Australia is not as bad as in the US the lessons are relevant nevertheless. In “Night comes to the Appalachians” in the New York Review of Books for September 25 2008, Michael Tomasky (Editor of Guardian America) reviews three books about the coal industry and coal mining in West Virginia.

They are stories of capitalists and industrialists who took most of their profits to Baltimore or New York; of bigger and bigger machines taking the tops off mountains; open cut mines thousands of acres big; and dumping the chemically contaminated waste in impoundments in valleys eventually making sick the citizens in nearby towns. Of doing everything possible to de-unionise mine sites; the bribery of politicians and judges; the alarming amounts of dust released into the air; of terrible accidents killing hundreds of miners; and of ongoing actions by mining companies to deny any responsibility.

Above all, over the decades rules intended to protect workers and citizens have been put into legislation but those rules are seldom enforced, particularly by the Bush administration.

In “Time for a New Deal” in the same issue of the New York Review of Books Jeff Madrick (Visiting Professor at Cooper Union) reviews The Big Squeeze: Tough Times for the American Worker by Steven Greenhouse. It is a story of “how the nation's businesses have illegally, callously, and systematically abused their workers in a time of increased global competition and technological change, while government protection of workers' rights has significantly weakened. [Of] factory employees and retail clerks, truck drivers and store managers, computer technicians, middle managers, and engineers ... all [facing] similar difficulties: they have lost their places in what was once a secure and confident middle class.”

Walmart, for instance, among the largest of US employers, pays most of its employees so little that many are forced to seek income support; thus taxpayers are subsidising the wealth of a family which in aggregate is among the half dozen richest persons in the country.

These facts have been acknowledged for centuries, let alone decades and celebrated in songs like “Joe Hill”, sung by Paul Robeson to the workers on the Sydney Opera House when he visited, having been let out of the USA after accusations that he was a communist because he lobbied Presidents about civil rights leading to relentless persecution by Hoover’s FBI. They are expressed in Bob Dylan’s “North Country Blues”.

Then the shaft was soon shut
And more work was cut,
And the fire in the air, it felt frozen.
'Til a man come to speak
And he said in one week
That number eleven was closin'.
They complained in the East,
They are paying too high.
They say that your ore ain't worth digging.
That it's much cheaper down
In the South American towns
Where the miners work almost for nothing.

The drive to minimise union influence is based on the proposition that unions are a break on productivity and allowing union organisers into workplaces leads to intimidation; to restriction of worker’s choices. The former Australian government’s WorkChoices legislation was supported by phoney statistics purporting to show that individual contracts, not union brokered awards, led to higher productivity and by equally phoney arguments that those workers gained higher wages.

IR academics such as David Peetz who pointed out the errors of these arguments were attacked vigorously by the Howard Government. Andrew Leigh (On Line Opinion, October 8, 2008) rightly quotes Peetz in pointing out that the decline in unionism is a major factor in the extraordinary growth of inequality where company executives receive huge salaries and bonuses, even if their company fails, while workers have to put up with meagre if any increases with consequential impacts on society as a whole.

The decline in unionism is not simply the result of employees independently deciding that unions are not bringing them benefits and are alienating them from management which would otherwise reward them fairly. The decline is largely the result of aggressive campaigns by company management involving intimidation in the workplace and achieving support of conservative governments which legislate to put as many barriers as possible in the way of unions.

The argument that unionism too often involves involuntary demands to join and that people should be able to choose whether they financially support certain activities is nonsense. Joan Baez and others tried to refuse to pay their taxes because they went to support the cost of the unjust conflict in Vietnam: she was quite properly, though unfortunately, told she did not have that right. A civil society involves everyone contributing to the common good, whether they use all the services or not. It is something that those in gated communities have shut out of their minds.

Of course not all unions have been blameless in their actions and their campaigns, let alone in their daily actions in the workplace and elsewhere. But how different is that from any entity of any kind, government or non-government, professional or blue collar, political or anything else? To claim union thuggery as something unique, as threatening the fabric of civil society, even if it be a union of university students or teachers or nurses, is no more than cant.

Chris Lewis (On Line Opinion, October 15, 2008) rightly draws attention to Judith Brett’s argument that the WorkChoices legislation was nothing more than a determination by Howard since his youth in the 1970s to defeat the union movement. The arguments for “WorkChoices” were supported by groups like the Business Council of Australia and the Australian Chamber of Commerce and Industry who actively promoted the shonky statistics. There was the same vigour as in attempts to destroy the waterfront union by bringing in former soldiers at the behest of the Farmers Federation. That this should be done when days lost through industrial disputes had reached the lowest in history is astounding. And so pointless.

That no attention was paid in the waterfront arguments to the number of containers that crane drivers move every hour, to the impact of forward information, delays due to queuing problems outside the control of the crane driver or position on the wharf of containers relative to trains, trucks and ships is par for the course.

As consultant Gabrielle Gouch (Ockhams Razor, ABC Radio National May 17, 1998) said, “if everybody in the stevedoring industry had put more time and interest into absorbing some facts, analysing and solving some of the logistic problems, instead of concentrating on industrial relations and continually rewriting the Enterprise Bargaining Agreements, we'd all be better off.”

What is relevant is not the injustice which might attend the requirement to join the union representing the Coles and Woolworths employees, as Graeme Haycroft (On Line Opinion, October 7, 2008) seems to argue, but that employers seem unwilling to take up with the union the way it functions. After all the employees are both employees and union members. Or is that just too naïve?

Andrew Leigh (On Line Opinion, October 8, 2008) quite properly points to the feeling by many that unions have too much power. How many think employers have too much power?

In the end to deny the right of any group of people to “organise”, celebrated so movingly by the story of Joe Hill and many, many others, is itself an attack on human rights. To campaign against unions is utterly counter productive. When the situation is properly managed, unions’ policy development can save the management substantial time. More than that, civilised union advocacy represents a challenge necessary to the arrival at sensible decisions which is so often missing.

Many professional people believe that unions are for “workers”, that they have no need of them. They have reaped the rewards as university staff are overrun by mindless bureaucracy requiring adherence to practices irrelevant to teaching or scholarship, their class sizes and workload increased to near intolerable levels leaving no time to think; as government scientists are shoehorned into pursuit of projects of short term interest; to businesses too short-sighted to realise their responsibility to the intellectual future of the country.

Too often professionals ignore the lessons from some of their generously remunerated colleagues in the medical profession, for instance, who are able to put aside their differences, join together and with others pursue what they see as their interests.

The whole issue of industrial relations and unionism is in the end just another example of our failure in much of the western world to really think through the best way forward. Rather we have pursued our narrow self interest, at the same time ignoring the fact that Adam Smith used that term to mean self improvement for ordinary people, not a prisoner-like refusal to co-operate, not the primacy of individualism.