A Matter of Common Interest
AUGUST 01, 1960 by PAUL L. POIROT
When persons with a common interest cooperate voluntarily, their organized effort constitutes a powerful creative force. On the other hand, some of the world’s most perplexing problems stem from attempts to reconcile conflicting interests by merging them into one big organization.’
Why organizational efforts succeed in some cases and fail in others will continue to puzzle mankind until the elemental fact is recognized and accepted that an individual does best what he understands and wants to do of his own choice. No police force is needed to compel anyone to do as he pleases, whether by himself or in concert with others. When everyone involved in a project is truly interested and wants to help, no effort need be diverted to persuade the unwilling or to whip the laggards into line.
Persuading a person to do other than he chooses seldom resolves conflicting interests but, more often, pushes the conflict into open violence. This, in turn, invokes government action. Thus it is, that efforts to merge and organize conflicting interests lead to increasing governmental power over human affairs.
One could cite many examples of the disastrous consequence of trying to organize without a common objective, including the broken treaties and agreements at the international level. Closer to the experience or observation of most of us, however, is the example of actively competing sellers of a particular commodity or service trying to combine or organize to protect their presumed common interests. What they presume to have in common is a right to supply all of a given market demand for their product or service. They hope for a monopoly power to exclude from "their" market certain other suppliers categorized as "unfair competition."
When competing sellers succumb to this ancient and hardy temptation, they overlook the fact that any organization to control a particular segment of a market necessarily must include the customers as members of the organization—because they constitute the demand side of that market. It is most difficult to explain to an intelligent customer that it would be to his advantage to buy at a high price from a "fair" seller when he could get the same thing at a lower price from an "unfair" seller. If the customers refuse to cooperate voluntarily in the organizational effort, the stage is set for coercion—and government intervention. Sometimes the government intervenes in behalf of sellers by imposing and enforcing tariffs or other trade barriers. In other cases, the government condemns the action of the sellers as a "combination in restraint of trade." In either case, whether through protectionism or through antitrust activities, the governmental intervention is a consequence of an attempt to merge and organize conflicting interests. A true commonality of interest exists between a buyer and a seller—not between sellers who are competing for that buyer’s patronage, or between buyers who are competing for the available supply of some commodity or service.
Price Control and Cartels
How often one hears the proposal: "If only the consumers would organize!" The implication is that consumers would be well advised to gang up on suppliers in some way, as though they could then command twice as much for half the price, or something like that. But what supplier wants to cooperate in such a program? Where is the supply to come from to give every consumer all he wants at a price he would like to pay? We have been through all that, many times, and especially under the price control and rent control regulations of World War II. We should know that consumers will not stay organized under such conditions; first one and then another will desert the organization and turn to "the black market" for supplies.
The same thing happens when sellers attempt to organize a cartel or monopoly. No sooner does such organized curbing of the supply begin to reflect itself in higher prices than one or more of the member suppliers finds an opportunity to improve his own position by selling a little bit more than his quota. This is why such combinations in restraint of trade must, and do, quickly fall of their own weight, despite coercive efforts to enforce the monopoly. Meanwhile, as we have observed, the government will have been drawn in, either to suppress or to sustain the attempted coercion. No matter which side government takes, an organized effort that must rely on force against either its own members or against outsiders always results in an expansion of government activities—an extension of government control over human affairs.
The economic and moral case against business combinations in restraint of trade is fairly well understood in the United States today. But not everyone who understands about cartels in business is equally aware that many, if not most, of the labor unions are organized around that same absence of a common interest. What can be the common objective of two or more workers who are competing for the same job opportunity? And what could be more logical than peaceful cooperation between an employee who wants to perform a service and an employer who wants to hire him?
Nevertheless, we find labor unions insistent on compulsory union membership, compulsory collection of union dues, compulsion over their own members, and compulsion against their only customers: the employers of labor. This also is a form of combination in restraint of trade. It is quite possible that compulsory unionism, directly and indirectly, is accountable for a larger proportion of the growth of government in the United States in the past 30 years than is any other organized effort, including the threat of Soviet communism.
Lest anyone think this a reckless and unfounded charge, let him consider some of the following aspects or developments of a labor-oriented national policy of "full employment":
1. A Social Security program with its multibillion-dollar annual tax bill. One of the major arguments for the program in 1935 was that it would provide job opportunities for younger workers as the older ones retired.
2. State and federal unemployment compensation payments of billions of dollars a year.
3. Billions of dollars of farm price supports designed at least in part to slow the movement of farm workers into union-controlled jobs and to hold down the cost of living of urban families.
4. The countless make-work projects—highways, airports, government buildings, dams, river and harbor improvements, and other spending programs supposed to relieve "distressed areas" from one end of the country to the other.
5. Public housing, "urban renewal," and other federal and state aid programs largely for the supposed benefit of low- and middle-income families.
6. The damage and cost of strikes, slowdowns, boycotts, featherbedding practices, and other burdens of compulsory unionism.
7. The legalized looting of private pensions, insurance funds, and other savings because of the inflationary deficit financing that inevitably goes with a program of "full employment" through government intervention.
The foregoing list is not meant to suggest that organized labor is the only pressure-group activity responsible for the inordinate growth of government in our time. Nor would it be proper to conclude that competing workers have no common interest at all around which to organize. Their true common interest lies in the restoration and preservation of a competitive market economy under a government limited to the defense of life and property—an interest that ought to be shared by every person in the world concerned for his own well-being. Trying to organize around a special privilege, at the expense of other persons or groups, is to forfeit freedom and invite government control.
If ever there were grounds for common cause in this nation, surely the paramount common interest today would lie in a re-examination of our so-called voluntary associations—all of them—so that we might support and strengthen the real ones, withdraw from the others, and thereby relieve ourselves of excessive government and taxes.
1 For further discussion of some of the problems of organization, see: Read, Leonard E. “On That Day Began Lies,” Essays on Liberty, Vol. I. Irvington, N.Y.: Foundation for Economic Education, Inc., 1952. p. 231; Brown, W.J. “Imprisoned Ideas,” Essays on Liberty, Vol. V, 1958. p. 18.
Ideas on Liberty
I have always in my own thought summed up individual liberty, and business liberty and every other kind of liberty, in the phrase that is common in the sporting world, "A free field and no favor."