The intellectual defenders of “free market” capitalism will argue that the system is based above all on the “liberty of contract.” Employees contract their labor with employers. Property owners contract with one another. Lenders contract with those who need loans. The main function of the government, they say, should be to allow such a “free” market to function, and punish those who violate their contracts.
But right now state governments across the country are trying to break their contractual obligations with public-sector unions, calling for workers to accept severe cuts to wages, pensions and health care.
State governments claim that workers must concede their hard-earned contracts as a matter of necessity. These workers—teachers, firefighters, sanitation workers, health care workers, janitors, clerical workers, social workers, and many others—are told this process is inevitable, it is a matter of simple dollars and cents, and there is no use in fighting it. What happened to the “liberty of contract”—aren’t contracts in a capitalist society supposed to be sacred and inviolable?
The economy is played with two sets of rules. There is one set of rules for the banks, from which state and municipal governments take out loans to meet their budgets and make payroll. When the banks insist that the government pay up, and service their debts, the government immediately makes it the top priority. The concept of defaulting on these contracts is considered unthinkable. As the banks bark out their orders, the politicians hop to attention: “sir, yes sir.”
Then there is the set of rules for workers. State governments have flaunted their desire to break, or ignore, their contractual obligations to workers and their unions. Some governors, like New
Jersey’s Chris Christie, have simply stopped paying into the state
pension plan, as he is contractually required, until unions agree to
renegotiate.
This double standard is made all the more outrageous when you remember that when the banks defaulted, the politicians used public funds to bail them out. Now that the governments are at risk of defaulting on loans from these very same bailed out banks, we are told that poor and working people must sacrifice wages and social services. They call this “shared sacrifice.”
Those who have resisted giving up their hard-earned retirements, health coverage and cost-of-living wage increases have been deemed “privileged” or even “greedy.” In television commercials, newspaper articles and even feature films (“Waiting for Superman”), public-sector unions have been portrayed as selfish. They’re running the same game in the private sector.
They’re running the same game in the private sector, with General Motors and other industrial giants threatening insolvency and plant closures if workers don’t agree to major give-backs. In Indianopolis, Ind., autoworkers voted 384-22 last May against reopening their contract so that their wages could be cut from $29/hour to $15/hour. When they did not bend to pressure from GM and the UAW international, the company announced the closure of the plant. Shortly after, a 50-percent cut was announced for new hires at the Lake Orion, Mich. plant; this time, the 1,300 autoworkers there were not given a chance to vote.
According to all the neutral-sounding bourgeois economists, the cuts are inevitable. They say that corporations must remain competitive or they will close down. They say states must balance their budgets and the worst-case scenario would be defaults and bankruptcies.
Of course, they do not raise the possibility of across-theboard taxation on the rich—a policy that is broadly favored by the population.
Nor do they recognize what from our standpoint is plainly obvious: that the workers, not the banks, are the principal creditor to every employer. For one, workers are indispensable to all production and services. Secondly, only the workers advance something of real value—their labor power—before getting paid. Workers put in their time on the basis that they will be paid later—and this includes the pensions they are owed.
So if any entity is in financial straits, or even bankruptcy, it should not be the biggest banks that are first to get paid, or in charge of the reorganization of finances. It should be the workers and their unions.
We have been told since birth that workers have no right to such control or ownership. But it is high time that we challenge this concept. To do this, we must work to put boldness and determination back on labor’s agenda.
