"And it ignores the fact that labor has stated that it will support-- and has supported -- trade agreements where labor rights of workers in developing nations are supported."

Nathan,

As a lefty who is simultaneously pro-labor and pro-free trade, I'm curious what your take is on the US-Jordan free trade agreement negotiated in the waning days of the Clinton administration.

My somewhat superficial understanding is that the US-Jordan agreement should be the template for future agreements.

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And on your main point about the First Amendment, I'm in total agreement.

Nowhere more true than at wal-Mart.  However, I have a strong suspicion that traditional organized labor tactics aren't going to be the answer there.  I don't think the priorties should be simply trying to line up the votes to get nrlb repensentation, etc.  Wal-Mart people shld at this point simply find ways of talking to each other, especially between stores.  let it at first be an association rather than a union; somthing very different from our standard AFL-CIO approach.  Being sentimental, I'd look to the IWW for creative tactics

I had very rarely thought about labor that much until, well, yesterday.  The reason is that I am like most people, thinking of labor as outdated, corrupt, and uninteresting.  Nathan's formulation definitely made a big impact on me, and in thinking about other formulations that might convince people to think about the labor movement in a positive light, I realized this: labor can save us from globalization.

I think I feel like most people about globalization: I accept Friedman's "The World Is Flat" meme, and I even accept his belief that it will be good for the world economy overall, but I think it's going to suck for me personally (and I also think Friedman should get over himself, but that's a separate issue). The world he describes, in which nobody has any job security, and the global standard for work-to-benefit ratios is what is acceptable to a Chinese peasant, is appealing to CEOs and Wall Street, but not to me, nor, I would imagine, most Americans, but we don't think there's any way of avoiding that future.  I realize now, however, that there is one way, and only one way: organized labor.

It's really a very simple historical analogy.  Friedman and others like to argue that we're in some historically unique time, but claims of exceptionalism should always be viewed very critically, and this (of course), is no exception.  The globalization revolution is really no different from the Industrial Revolution.  What happened in the Industrial Revolution was straightforward: before, the scope of people that a worker was competing against was basically limited to his village.  If you were a blacksmith, or a weaver, or a farmer, then there were a very limited number of people to compete against you.  That all changed with the Industrial Revolution.  Suddenly, if you were a weaver, then you were forced to compete with the entire continent at producing textiles, including many people who were willing to work in conditions far worse than you had ever imagined.  This is exactly the situation the American worker in say, the computer programming field faces today.  While formerly he was only competing against other programmers in the United States, all of whom had fairly high expectations for their work environment and compensation, suddenly he is competing against everyone in the world, and the race to the lowest common denominator has begun.  In the end, he will need to do the same thing workers did in response to the Industrial Revolution: unionize.

That's how labor can be sold to the average American.  You have to demonstrate that the post-globalization labor movement will be different than the one today, that as corporations become transnational, so, too, will the labor movement.  Show Americans that they have two, and only two choices: raise labor standards in China to our level, or lower labor standards in America to China's level.  When Americans are faced with that choice (which they are, whether they know it or not), they won't have any trouble deciding.

"Why is it that a contribution of capital is recognized as ownership in a company but not a contribution of labor? "

Um, because they are the owners.

Under the current legal system, but that could be changed Robert. It's not divinely ordained.

Shareholders have more to lose from bad decisions.

Tell that to the Enron employees.

They lose all the money they have invested in the corporation never to be recovered if the corporation goes bankrupt. Employees simply have to find another job.

It's not always simple to find another job--and it can be devastating economically.

If employees had a vote on company policy they would have every incentive to vote themselves fat salaries and benefits even if it placed the corporation at risk.

Kind of like CEOs, you mean? I think employees are actually capable of being more responsible than you think. I've worked mostly in partnerships (where the employees are the owners) and we make good decisions about our business all the time because it is our business and we care about it.

I'm not exactly sure what change in law you have in mind. Expropriate capital and distribute it to the masses?

You don't need to expropriate capital. All you need to do is legally recognize employees as owners and give them votes equivalent to shareholder votes. Another approach--which isn't quite the same as giving employees ownership, but which gives them a strong say in how the company is run--has been adopted in some European countries. By law in these countries, employees have a representative on the board of directors. I've worked with very successful Swedish companies that have workers on their boards--and it hasn't hurt the profitability of these companies at all. In fact, because they want to keep their jobs as long as possible, employees are often more interested in the long-term financial health of their companies than are typical shareholders, who seem primarily concerned with short term results, and managers, who are usually rewarded based on short term performance.

Robert, if you want to argue that ownership of capital assets entitles you to ownership of the company, that's one thing (I personally disagree, but I recognize that belief is widely accepted in American society).  However, it is simply not true that shareholders are the ones who fund the corporations.  The reality is that more than 90% of corporate financing comes from retained earnings, and most of the rest comes from bank finance and bonds.  In fact, in recent years, corporations have spent more on stock buybacks than shareholders have invested in new equity.

Most stockholding is purely speculative and doesn't reach corporations.  Not that speculation can't be socially useful (since it enhances liquidity), but it's inaccurate to say that shareholders are the ones who bear the risks of the free market.   The turth is, unless the shareholders are the purchasers of new common stock (which is rarely the case), shareholders only bear the risks of companies' in the sense that a gambler from Philadelphia   bears the risks of the Eagles losing the Super Bowl.    Even Enron, which clearly devastated shareholders, can be traced to our focus on maximizing shareholder value, since Enron was so fearful of reporting anything that would damage its share price.   

Under current law and convention, shareholders are indeed the owners of public corporations, as Robert quite accurately states.

The question here, though, is should the law and conventions be changed to allow ownership to be expanded to include (in some fashion) employees as well as shareholders? Would there be advantages to giving employees a voice in company decisions at least as powerful as those of the shareholders? I suspect Robert would never agree that there are any advantages. However, I see several:

1. I think it's simply fairer, just like democracy is fairer than monarchy. In our modern world, work controls a large portion of our lives--we should have a say in what happens at work, just like we have a say in our civil government.

2. I do think employees--if properly educated about the financial realities and constraints of the business--do make good decisions and are, in particular, concerned with the long-term health of their company, primarily because they want to preserve their job as long as possible. Shareholders (particularly in large public companies), on the other hand, are primarily interested in quarterly earnings--and so, primarily, are CEOs. Because shareholders and managers are so focused on quarterly earnings, decisions are made to boost stock performance over shorter periods, often at to the detriment of long-term financial health. 

3. With weak shareholder involvement and weak boards of directors, the CEO and his/her direct reports become the "effective" owners of a public company--making all the key decisions. Unfortunately, these people frequently are most concerned with maximizing their income over relatively short time periods. Their decisions are therefore often biased toward those that benefit them--sometimes to the detriment of the company as a whole and often to the detriment of employees.

Anyway, Europe does give workers a larger voice in public corporations and, while some complain about this, in my experience working as a consultant with European companies, I generally think the European system works pretty well. Certainly, the companies I've worked with have been highly profitable and major players in the global business world--not weak or disadvantaged in any way compared to American companies.

It will certainly be harder for companies to lay off employees if employees have a vote--you are absolutely right about that. But in my experience when faced with grim facts, employees make rational decisions to sacrifice the jobs of some (and/or to cut wages and benefits) to prevent the company from going bankrupt.

The problem right now is that management really has little incentive to try to protect employee jobs. If cutting 20,000 employees will drive the share price up in the short term, then management will do it in a blink of an eye (and generally will be highly rewarded for it, too, if it triggers a quick boost in share price). Unfortunately, this can actually encourage management to keep chopping up the company--cutting operations and selling portions of the business to achieve quick gains--rather than really trying to figure out how to make their company grow over the long term. I think if management had to listen to employees more, you'd have more of the competition between interests that you are praising--as well as a stronger focus on a company's long-term performance.

I believe that executives do have a responsibility to protect as many jobs as possible, while still ensuring that their companies are as profitable and healthy as possible. Currently, however, too many executives are concerned primarily with increasing their own wealth and prestige--regardless of what's in the long-term interest of shareholders, employees, or customers.  Why do you think, for instance, Carly Fiorina insisted HP acquire Compaq? Mostly because she got a huge bonus for completing the merger. But was that merger really in the interest of anyone other than her? I think not.