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What's amazing is how little money was involved. $30K / month, about $360K / year. In return, millions in extortion fees and a huge drag on the economy.


I always think the same thing about lobbying. The contributions to politicians are really small in comparison to the benefits received. Maybe we should make bribing more competitive to raise the price in order to make it less profitable?


It's also rather likely that unions and patent holders have some shared interests, so I doubt this is solely about the money.

Both patent holders and unions are rent seekers. Strict patent laws make monopolies/oligopolies easier to form, and unions find it easier to extract rents from monopolies/oligopolies than from competitive markets.

In a monopolistic/oligopolistic situation, the monopoly can extract rents from customers, and the union can demand their cut. In a competitive market with many players, profit margins will be thinner, and it's likely that the non-union shops will undercut the union shops. So this move might be as much about shared interests, or at least shared ideology, as it is about money.


Is it actually true that unions find it easier to extract rents from monopolies or oligopolies than from competitive markets?

Imagine that all software without exception is made by Microsoft. Then (near enough) all software developers have to work for Microsoft. That gives Microsoft a lot of bargaining power against its employees, unionized or ionized. The only way in which the Universal Programmers' Union is better off in this world than in the real one is that Microsoft (having a monopoly) may be under less pressure from the market to sell its software cheaper, and therefore may be better able to pay rent to the unionized programmers. Fair enough, but is there any actual reason to think that that outweighs MS's gain in bargaining power over its employees? (Which exactly parallels the gain in bargaining power over its customers that makes it better able to afford to pay what its employees demand, if that seems worth doing.)


A monopoly and a union have equivalent bargaining power. The union members have only vastly inferior substitutes for employment (e.g. Dairy Queen), and the company has only inferior substitutes for labor (temps). It's in both of their best interests to eventually agree to split the rents.

In a competitive market, there is less rent to split (e.g., 5% profit margin instead of 15%) and there is always a third possibility: the unionized employer goes bankrupt and only non-unionized employers remain. So producers (as a class, not any individual one) get to survive, while the union (as a class) is destroyed.

But don't take my word for it. Go take a look at the world. The primary bastions of unionization seem to be monopolies or oligopolies: the government, Big 3 automakers (in their heyday, at least), cable companies and the like. Unionization also declined (outside the government) as the country became more competitive.

Think about what nearly happened to the auto industry. Consumers suffered with crappy overpriced cars, and the Big 3 + unions enjoyed their rents. Then the market became more competitive, and absent government intervention, the unionized part of the sector would have died. The unions seem desperately afraid of this effect in education which is why they fight tooth and nail against charters/vouchers.


>Is it actually true that unions find it easier to extract rents from monopolies or oligopolies than from competitive markets?

just look at the public employees unions. The GP beautifully explained about "the cut".


Someone should make a site that allows the public to lobby congress. Maybe they'll listen to us then.





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