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Unions as Central Planning Mechanisms

September 24, 2007

Tags Big GovernmentLegal SystemMonopoly and CompetitionProduction Theory

Lew Rockwell on unions. One of my favorite lines from people is the one that goes, "Well, nowadays unions are awful, but the early intentions were good." The early intentions of unions were the same as the modern goals: to be a social-democratic ideological and political force by aligning class interests with the political elites who hold the power, and using that alliance to minimize the role of the free market and its impact on the lives of individuals by replacing market forces with an interventionist-social engineering order that would be directed by elites from government, labor, and the corporatocracy.

Which brings me to thoughts of Walter Reuther, a most powerful force in social activism and the move toward central planning. Walter Reuther was a socialist from youth, and all members of his inner circle were active in the socialist party. Walter Reuther was a man with an entire social democratic agenda. During the New Deal era, he built alliances with some of FDR's most prominent insiders by showing New Dealers that he was a man to be taken seriously when it came to devising central planning mechanisms and shaping the regulatory environment. When America was ramping up for WWII, Reuther proposed that the private production of military aircraft be put into the hands of a federal Aviation Production Board which would be run by government planners, labor, and accomodating Yes Men from corporate America. Reuther and the union leadership under him consistently promoted economic planning and the expansion of the welfare state. Reuther supported Lyndon Johnson's Great Society, and in fact the UAW's legislative agenda for fulfilling the Great Society included a planning mechanism, or an urban TVA, "to stop erosions of cities and people." Reuther's central planning mechanism called for the federal government to create "socially meaningful" cities by turning select cities into "research laboratories for the war against poverty." The federal government would approve all planning aspects, channel funds appropriately, and create "Demonstration Cities" that would be a test run for future endeavors of social experimentation in order to meet the goals of national policy.

Reuther thought that government tax, fiscal, and monetary policy did not offer enough control, especially since corporate America could - through productive efficiency in spite of government — overcome the statist controls and therefore the market could thrive. What then? Government needed to take over private production and thus all economic planning for the nation. In essence, Reuther's overall agenda called for privately-owned companies to be ruled by a National Planning Agency that would make all managerial decisions with any economic impact whatsoever.

You can read about the sordid history of union statism and social engineering activism in Kevin Boyle's The Heyday of American Liberalism 1945-1968 and Nelson Lichtenstein's The Most Dangerous Man in Detroit: Walter Reuther and the Fate of American Labor.

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