From the mailbag comes a lesson in economics that touches on the inevitable friction between management and labor; the always-present friction that ultimately drives business forward.
Hostess Brands Inc. is permanently closing three bakeries following a nationwide strike by its bakers union.
“We deeply regret this decision, but we have repeatedly explained that we will close facilities that are no longer able to produce and deliver products because of a work stoppage — and that we will close the entire company if widespread strikes cripple our business,” Hostess Brands CEO Gregory F. Rayburn said.
This is how it works folks, and we should applaud the market when it makes these decisions.
Labor always wants to be paid as much as is possible for its effort. Manangement wants to pay as little as possible for the same effort. The market guarantees a clearing price; below that and labor refuses to work, above it and management refuses to pay. If either party attempts to push the transaction boundary beyond what can be accepted there is no transaction at all and the result is the closure of the business.
That failure of negotiation costs both management and labor; labor loses its job and income, and management loses its job and income. The consequence is identical and this is entirely rational, ordinary, expected and proper.
I don’t know if there is a “factually wrong” position in this particular dispute but it doesn’t matter if there is or isn’t a “factually wrong” party. All that matters is that there is no meeting of the minds and thus no trade takes place. The market performed its function of matching buyers and sellers and finding no meeting of the minds between the two sides no transaction occurs.
Now consider the situation where the service or good in question is compulsory, such as “constitutionally-guaranteed” public schools. In this case there is no market because there is no factual ability to walk off by management, despite the averred claim that there is that occasionally results in strikes. Since the Constitution of the state in questionrequires the provision of the service and worse, the people doing the negotiating for management are hired through voting, and the union members are able to vote there is no adversarial procedure at all! Both sides of the table are in fact represented by the same people and this turns what was a market function into effective and factual theft from all who are not union members.
Theft is wrong and in fact a crime.
Therefore, public-sector unions are criminal enterprises and as they are organized criminal enterprises they must be prosecuted under Racketeering Laws and their membership and leaders imprisoned.