Corporate Unions

In an ordinary employer-employee relationship with a large company, the employer has most of the power. When any individual employee seeks a higher wage, he or she has no leverage; for a large company to lose a single employee makes little difference. In the U.S., unions have been a way for employees to get more leverage. The large company can not ignore the effect of many employees working together.

However, many people dislike unions, because unions are only effective when the union members work together. Many people feel that this takes away individual rights, as indeed it does.

It recently occurred to me that there is a different way to look at the issue. Think of the union as a company itself, a special sort of company which operates as a monopsony. When you join the employer, you are actually joining two companies: the employer and the company which provides employees to the employer. The union company and the regular company have a tight relationship, but this is no different from an ordinary monopsony supplier situation, such as is widely found in, e.g., the automotive business. Union companies tend to be more democratic than most companies, but this is not a fundamental difference.

One can of course have multiple union companies providing labor to the parent company. However, it is perfectly reasonable for the parent company to negotiate only with union companies for labor, rather than with individuals. After all, only in exceptional situations would a company purchase non-labor supplies from an individual. Why should labor be any different? Thus the “closed shop” has a clear support: it’s a matter of efficiency for the parent company.

This perspective may remove some of the traditional complaints against unions. They are replaced by a different issue, which is that every employee has two loyalties. However, in reality we all have multiple loyalties in our lives—to our families, our sports teams, etc.

Try thinking of the matter this way the next time you feel angry about unions. They are just doing what regular companies do.

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Nuclear Irrationality

I was recently thinking about my college studies of nuclear warfare. At the time it seemed like a relevant topic, and I took two courses on it. Like everything, the more you look into it the more complex it gets. The depth of the thinking in nuclear warfare planning was both impressive and appalling.

One of the more interesting cases was driven by the fear of a Soviet invasion of Western Europe. In retrospect we know there was never a danger of that, but at the time it was a real concern. The western strategists feared that in a conventional war, the Soviet tanks would rapidly rout the smaller European armies. The use of nuclear weapons, or at least their potential use, was an obvious way to counter this threat.

However, most of the nuclear weapons were in the U.S. It was clear that no U.S. president would launch nuclear weapons at the Soviet Union in order to forestall an invasion of Europe. The U.S. promised to support Europe, but if the war actually started, a nuclear attack on the U.S.S.R. could only end in a nuclear counter-attack on the U.S. That would never happen. England and France had a few nuclear weapons, but would their leaders really launch them, knowing that they would face certain death in the overwhelming nuclear counter-attack? A bold and calculating leader of the Soviet Union might be willing to risk that nobody would take the nuclear option, and be willing to gamble that they would win a conventional war (again, this was the fear of the U.S. and Europe, the Soviet Union knew perfectly well that they could not win such a war). How could the U.S. and Europe use nuclear weapons as a credible deterrent to a conventional invasion?

The answer was, as I said, both impressive and appalling. NATO distributed low-yield nuclear weapons throughout Europe (they even had nuclear landmines). In the event of an invasion, complete control over the weapons was handed over to local commanders. The decision to use nuclear weapons would not be in the hands of an elected leader far from the war zone. It would be in the hands of a local colonel facing the immediate loss of his command. The Soviet Union might gamble (so the thinking went) on the reactions of a few political leaders they could study closely. They would never gamble on the reactions of several hundred local military commanders. Although the weapons were relatively low-yield, the expectation was that once a war went nuclear, the only thing that would stop it from escalating would be a quick complete cessation of hostilities.

This is a nice example of achieving your goal by explicitly giving up your ability to act rationally.

Comments (7)

Sudoku

I’ve been playing Sudoku on Google+. i’ve more or less mastered the easy and medium levels, but it takes me about 30 minutes to do a hard level, and I haven’t tried expert yet. Sudoku is a fairly dumb game in some ways; as a colleague of mine pointed out, it’s trivial to write a computer program which will win every time. But I find the game somewhat interesting because it mirrors, in reverse, the way I think about programming.

You can write a computer program more or less any way you like. So I tend to think of a program in terms of constraints. Typical constraints are: the desired behaviour; the available runtime; the algorithmic complexity; the available libraries; the language; maintainability; who is going to review the code and what they will accept. Write a program is a matter of finding the simplest solution which meets the constraints. Difficult programming problems are ones where the constraints come into conflict, and it’s hard to see your way through.

Sudoku works the same way, only in reverse. In programming you are allowed to write any code that meets the constraints. In Sudoku you know that there is only one solution, so you have to look for moves that are forced by the constraints. Solving a Sudoku puzzle is a matter of looking deeper and deeper into the problem until you have eliminated all moves but one.

My hope is that practice in this area will subconsciously encourage me to look deeper for constraints when writing code, which will save time in the long run because I will have to throw away less code. I doubt this will actually work, but it seems worth a try.

Also Sudoku is a good way to exercise short term memory, as I’m avoiding writing anything down while solving the puzzle. I used to play cards regularly (bridge, whist) and I was able to remember the location of many of the cards in other people’s hands. I noticed that I lost that facility as I’ve failed to practice it. As i write this I realize that short term memory is not too important in today’s world, but at least it makes me feel smarter.

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Pay Voting

New plan: let’s let people pay to vote. Everybody gets one vote free, just like today. You can also pay, say, $1000 for another vote, then $2000 for the next one, $3000 for the one after that, etc. Also, you can sell your vote, so a cheaper way to get more votes is to pay a bunch of people $500.

Advantage: it’s no longer necessary to give candidates money so that they can advertise for votes. Currently politicians spend at least half their time asking for money. This would let them spend all their time on their actual job.

Advantage: money paid for votes goes straight to the treasury, rather than to television stations.

Advantage: Many fewer horrible political ads.

Disadvantage: politicians do what rich people want them to do. But wait, that is already the case. So this isn’t a disadvantage at all.

The U.S. is already a plutocracy. Making it explicit is more efficient all around.

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Voluntary Foreclosure

The otherwise completely forgettable movie Larry Crowne had one scene I found quite interesting. The eponymous protagonist, played by Tom Hanks in his blandest mode, is presented as an all-around good guy. He is gentlemanly, helpful, considerate, and in fact has no flaws except for the rather minor one which starts the little action there is in the movie: he did not go to college. In college he studies, among other things, economics, in a class taught by Lt. Sulu.

Studying economics leads Larry Crowne to the one interesting scene: he abandons his mortgage and returns his house to the bank. The bank representative warns him that this will hurt his credit, but he assures her that it is the right thing for him to do, and that he has the right to do it, provided he vacates the house in 30 days.

The U.S. is a country which famously agreed to pay all its debts when it was founded—the newly created federal government assumed the debts that the various states had accumulated during and before the War of Independence. In general American culture assumes that you are required to pay all your debts. Declaring bankruptcy is a sign of personal failure.

Apparently the financial crisis, and the stagnation of middle class income compared with the increasing price of housing, has now made it acceptable for a mainstream movie character to renege on his debt. This is of course a calculation that businesses make routinely, but not individuals. Admittedly voluntary foreclosure is not quite as bad as bankruptcy. After all, the bank does get the house, which is worth something although it is clearly understood that the bank does not want it.

Given the current main news story, I just have to hope that this acceptance of foreclosure does not carry over to thinking it is OK for the entire country to go into default.

Comments (2)

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