The Case Against Labor-Market Individualism: The Prisoner’s Dilemma And the Indispensability of Organized Labor


Ever since J.P. Morgan convinced major nineteenth-century industrialists that the key to averting recurrent economic contractions was to forego fratricidal price competition in favor of consolidation holding prices steady and minimizing economic instability, organization has long been understood by capital to be essential to furthering its class interests. Capitalists have also understood that the same logic applies to the achievement of labor’s class goals, and have accordingly fiercely resisted organized labor.

Labor gets nothing unless it exhibits class consciousness, a trait long exhibited by its class enemy. And this involves acting in concert with fellow workers. That organization among workers is a necessary condition of a successful struggle to overcome and transform the business-dominated and aggressively anti-labor politics of neoliberal finance capitalism should be a no brainer.

Under modern capitalism labor unions have been the principal form of organization by which working people can bring concerted power to bear on their negotiations with employers. But two features of present-day unions have discouraged enthusiasm for them as an effective form of class power. The union leadership is more often than not in bed with employers, and therefore has been well behind the rank and file in militancy.

In addition to these internal weaknesses, unions face intense employer and government opposition. Kate Bronfenbrenner has documented the extensive nature of the private and government anti-union tactics that began in earnest in the 1970s. Government has not lifted a finger to penalize what has become employers’ habit of illegal anti-union harassment of workers: 63% of employers interrogate workers in mandatory one-on-one meetings with their supervisors about support for the union; 54% of employers threaten workers in such meetings; 57% of employers threaten to close the worksite; 47% of employers threaten to cut wages and benefits; and 34% of employers fire workers. Other punitive tactics include surveillance and alteration of benefits and conditions.

That employers fear and resist unions suggests that employers have a greater appreciation than many of their employees that organization is for workers a powerful weapon in the class war. It is now a commonplace to point out that the beginnings of wage stagnation and economic, social and political inequality coincided with the decline of union membership in the mid-1970s. Revitalization of the labor movement is an essential condition for a larger political mobilization against the ravages of neoliberalism and for the forging of a society very different from the workers’ hellhole we now inhabit.

None of today’s gross anti-union activity would be possible were the 1935 Labor-Management Relations Act (NLRA) -The “Wagner Act”- currently in force. In passing NLRA the federal government had unambiguously guaranteed to workers their right to organize, i.e. join unions and bargain collectively. Companies were prohibited from forcing workers to join a company union and from interfering with union organizing. Nor could they harrass or fire activists for attempting to organize workers, and they were forbidden to refuse to participate in collective bargaining with unions. NLRA was a capitalist nightmare.

Labor was finally able to exploit, through legislation, a source of power capital had the good sense to achieve privately late in the nineteenth century. Organization, Morgan’s “consolidation,” enables gains unavailable to those who act as indididuals. The rewards in question are returns to the organized group, and to the individual via membership of that group. The coalition may be informal, e.g. industrialists who have agreed among themselves out of self-interest not to engage in cutthroat price competition, or formal, like the American Medical Association or the United Auto Workers of the 1950s, ‘60s and ‘70s. In either case enhanced power is achieved through organization.

In a capitalist society in which business persons have, in addition to the power conferred by coalition, structurally determined power by virtue of their ownership of society’s productive and financial resources, labor is deeply disadvantaged and subordinated without its own form of organization. The union is such a form. It simultaneously constrains the power of capital and strengthens the power of workers. The Wagner Act entrenched that power at the level of the State.

Attempts to undermine the Act began immediately upon its passage. There was great enthusiasm for “right to work” laws which was propagated from economic to political elites into the 1940s. But it was with the passage of the Taft-Hartley Act of 1947 -The Labor-Management Relations Act- that organized labor was dealt a devastating and enduring blow. Taft-Hartley’s outlawing of the closed shop was the decisive move. In allowing states to pass laws banning the closed union shop Taft-Hartley created and exploited a deep potential conflict of interest among workers. The anatomy of that conflict, and the general means of overcoming it, is best illustrated in the Prisoner’s Dilemma (PD).

The Prisoner’s Dilemma and the Social Illogic of Individualism: The Case For the Union Shop

Both the seductive features of non-collective, individual bargaining and the extraordinary power of the case for unions are best illustrated by the logic of the Prisoner’s Dilemma (PD). The PD is based on elementary game theory, and is familiar to those who follow television police procedurals. PD situations are ones in which a powerful adversary attempts to secure his interests at the expense of his antagonists by dividing them as a means of disempowering them. PD applies equally to alleged perps (the Prisoners) interrogated by agents of the prosecution, and workers bargaining with their employers. It establishes the overwhelming logical force behind the claim that workers must pursue through organization the goals they seek as workers.

PD illustrates with mathematical precision three truths which together display the iron-clad foundation of the case for unions. First, it demonstrates that, in the absence of organized labor, it is eminently rational for each worker to bargain as an individual with her employer. Individualistic negotiation, if pursued rationally, will indeed avert the worst possible outcome for individual workers. Second, PD proves that the very best outcome individual negotiation achieves is nonetheless a worse outcome when compared to what workers could have won through non-individual, collective bargaining. Third, PD conclusively establishes that the best possible outcome for workers is possible only when workers organize and bargain collectively with employers. By uncontroversial and consensually validated standards of rationality, it is irrational for workers not to belong to unions. The force of ‘irrational’ here is that non-unionization does not permit workers to get what they themselves acknowledge would be best for them. Individual rationality necessarily fails workers.

Taft-Hartley’s outlawing of the closed shop effectively forced workers to optimize their chances in negotiations with employers by exercising indididual rationality. PD’s outing of the pitfalls of individual rationality establishes most powerfully the overwhelming logical force behind the claim that workers must pursue through organization the goals they seek as workers.

It is evident with respect to a game that how well a player fares depends on what the other players do. The import of this simple truth is profound with respect to workers in a capitalist world in which membership of a union is at least in principle possible.

PD demonstrates with iron logic the rationality for all workers of union membership and of the closed shop.

The standard example is this: two individuals suspected of commiting a crime are interrogateded by the police, always individually, in order to obtain incriminating evidence. The optimal outcomes for the prosecution are that both prisoners confess, or that at least one of the suspects confesses and implicates the other. This requires that the suspects must not be allowed to confer before or during interrogation, because the logic of collaboration, as we shall see, makes it impossible that the prosecutor obtain either of the outcomes he desires.

PD shows that choice under individualistic conditions, where each suspect chooses without collaborating with the other and is motivated solely by furthering his individual interest, leads to an outcome worse for each prisoner than what would occur were they to act in solidarity.

The lesson is transferrable to the worker’s choice as to whether to come to terms with her employer individually or to bargain through a union. Specifically, the PD illustrates the desirability for workers of a closed shop, where individual bargaining is ruled out.

Assume two suspects, A and B, charged with burglary. The prosecutor has conclusive evidence to convict on a lesser charge, breaking and entering, but lacks sufficient evidence to convict on the greater charge. If, however, at least one of the prisoners confesses, implicating the other, the prosecutor will be able to convict both of the greater charge. With this in mind, the prosecutor offers a deal to each prisoner. Recall that the deal must be offered to each prisoner individually, so that they are unable to respond as a team.

What the prosecutor must do is to offer to the suspects terms which make it rational for each suspect to make the choice that is best for the prosecutor and worst for the prisoners. And it can indeed be genuinely rational for each prisoner under the stipulated conditions, i.e. where each prisoner reasons as an individual, not in collaboration with the other prisoner, to make the choice which leaves him better off than he would be under any of the other three choice combinations, but worse off than both would be had they collaborated.

Each prisoner may either confess or not. There are thus only four choice combinations. Either both confess, or both refuse to confess, or one confesses and the other does not. The prosecutor offers the following four consequence combinations.

1. If A and B both confess each will be sentenced to three years.

2. If A confesses and B does not, A will be leniently sentenced to one year on the lesser offense and B to four, based on evidence provided by A.

3. If B confesses and A does not, B will be leniently sentenced on the lesser offense to one year and A to four, based on evidence provided by B.

4. If both refuse to confess each will be sentenced to two years for the lesser offense (the only offense, recall, for which the prosecution has conclusive evidence).

It is clear from the choice conditions and consequence combinations that each prisoner can fare better by confessing and implicating the other, irrespective of whether the other confesses or does not confess. Each prisoner has no choice but to act in his individual self-interest, and neither knows what the other will choose. But each knows that his own outcome will depend on the other’s decision. Therefore each prisoner must begin deliberation anticipating the other’s choice.

A begins with the truism that B will either confess or not. What if B confesses? In that case A will get four years if A does not confess and three years if he does confess. Thus, if B confesses, A is better off confessing. But suppose B does not confess. In that case, if A does not confess he will get two years, but only one year if he does confess. Thus, if B does not confess, A is better off confessing. Whatever B does, A is better off confessing. B will reason exactly as A does and will come to the same conclusion, that whatever A does B is better off confessing. If both A and B correctly calculate their self-interest in this situation, both will confess and each will be sentenced to three years.

Unfortunately for them both, this was not the best outcome available. Had neither confessed, each would have been sentenced to two years. Their (forced) individualism did them in.

Given their interest in getting the lightest sentence, they would have been better off if neither had confessed. But the limitations of exclusively self-interested decision-making precluded the best outcome. The lessons implicit in the PD are illuminating for social, political and economic theory.

We have demonstrated that there are at least some social interests, social goods, that are not the sum of the interests of individuals. What is good for us is not to be determined by adding up what is good for each of us individually. The social is irreducibly social; both ontological and methodological individualism are false. Further, the identity of the social good, what is in fact in our interest, is determined socially. Collaboration would have guaranteeded the optimal outcome for both; they would have agreed not to confess.

In order to arrive at the best outcome for everyone, it is sometimes necessary to forbear doing what is best for the individual as a mere individual. Thus, while the closed shop closes an employment opportunity to the worker who insists on the “right to choose” to bargain individually with his employer (and, of course, the right to be fired at the employer’s discretion), the interests of the working class are protected. We shall see below how the open shop, the prioritizing of the individual’s “right to work,” directly undermines workers as a social group, i.e. jeopardizes the interests of the working class.

The relevance of the PD to the political economy of work, and especially to appreciating the undesirable consequences for workers of the open shop, is best illustrated by reflection on the role of trust in the PD scenario. Each isolated prisoner is capable of seeing that the given alternatives make choosing not to confess his best option. Why then does not each prisoner refuse to confess? Because neither, motivated as he is solely by self-interest and disallowed to confer with his confederate, cannot be sure that the other will cooperate in not confessing. It’s about trust or solidarity. The PD situation rules solidarity out by making self-interested deliberation the only available option. Each prisoner is like a worker in an open shop and each worker in an open shop is like the prisoner in the PD.

Assume that, like workers beginning employment at the same workplace, the prisoners have no prior shared experience, so that they know nothing of the other’s character. Thus, even if they were somehow able individually to promise not to confess, neither would have the assurance that the other would comply. People are not angels. What is needed is an institution, endorsed by all the workers, to guarantee compliance. It is the need for both cooperation and reliable implementation that requires, in the workplace, solidarity exhibited in unionized labor and the closed shop as the guaranteeing mechanism. The closed shop is necessary because in a society in which all have been acculturated into a individualist ethos, there is a built-in inducement both for the employer to undermine worker solidarity and for some workers to yield to temptation. This inducement is most conspicuous under the circumstances of the open shop.

Employers will not hesitate to reap gains at workers’ expense by exploiting opportunities inherent in the open shop to impede solidarity among workers. Without the closed shop employers can undermine the collaboration enjoyed by union workers and thus turn the choice to join or not join a union into the precise analogue of the PD choice to confess or not, even when the workers have what the prisoners don’t, freedom of association. Employers can create self-interest options that appear to override the benefits of union solidarity. They don’t deny that non-union wages are lower, but can and do claim that this is compensated by workers not having to pay union dues. New workers are thus discouraged from joining the union and union members are seduced to defect. The more workers defect, the weaker becomes the union.

The scenario unfolds like a Greek tragedy: as union power erodes, the union wage declines. Soon there is no union wage at all, which empowers employers to reduce the non-union wage, touted previously as preferable to the (now non-existent) union wage. The logical outcome is that the company’s workers are now stuck with the same result as suffered by the prisoners who ended up having to confess, i.e., the worse outcome. When union power declines across the nation, as it in fact has, the economy is turned into the kind of low-wage country characteric of contemporary neoliberalism, where most workers are gradually turned into hapless prisoners.

Existing Unions As Collective Individuals

Who doesn’t know that unions today are not what they were during their formative years? Much of the union leadership has identified with the boss, in return for which betrayal the economic and political rewards have been great. The silver lining is that much of the rank and file is notably more progressive, i.e. acute to the genuine interests of workers, than their supposed representatives. Still, a union’s conception of its objectives is almost always limited to its objectives. Each union seeks to enhance its own interests. It tends to act as a collective individual.

In this sense, unions are not at present working-class agents. Were unions truly working-class organizations they would struggle to further not their individual interests but the common interests of the entire working class. Unions would have to consolidate, with each union acting as a member of an association aiming to heighten the power, in and outside the workplace, of the entire class of workers. Each union would have to see the benefits of identifying with the consolidated meta-union in the way that individual workers see the benefits of belonging to a union.

We know what this would look like in practice. Immediately after the war unions in Sweden determined to have all union contracts come up for (re)negotiation at the same time. The threat to business did not have to be stated. If one union was treated unjustly by an employer and chose to strike in response, all the others could, and frequently did, strike in class sympathy/solidarity. This constitutes an enormous disincentive for employers to resist workers’ demands. During the postwar period Swedish workers enjoyed the greatest social-democratic benefits of all European workers.

The Prospects For a Reconstituted Union Movement

The activist Left should not be discouraged regarding the prospects of successful organizing among non-union workers and of increasing the degree of inter-union consolidation. In an extensive survey of the U.S. working population, the Harvard labor economist Richard B. Freeman reveals that more workers want unions now than ever before. In 1985, 30 percent of nonunion workers would have would have voted for union representation if they could. In 1995 the portion had risen to 32-39 percent (depending on the survey). At that point, with at least 90 percent of union workers happy to remain in unions, if all workers wanting union representation had it, 44 percent of the workforce would have been unionized. By 2005, the share of the nonunion workforce desiring union representation had risen dramatically to 53 percent. So, if all workers in 2005 desiring unionization belonged to unions, 58 percent of the total workforce would be organized.

The potential addition to the ranks of organized workers is very great. Were the indispensability of inter-union solidarity to become a subject of discussion among even a fraction of existing union members, the additional workers in all unions would be introduced to the notion of union consolidation in an umbrella organization aiming to advance the interests of the working class as a whole. Given the growing disillusionment of working people with the ability of existing economic arrangements to deliver the goods they deserve, we would have the perfect context for raising in the workplace the issue of sociali…, er, of economic democracy as both possible and desirable.

It is easy to be discouraged by the decline in union membership since the mid-1970s and the class collaboration of so many union leaders. But we have exaggerated the decline of opportunity and ignored important headways. It is common, for example, to hear the South written off as a loss to organizing efforts. Many manufacturing employers moved to the South to exploit lower-wage workers, and manufacturing companies are the most likely to threaten plant closing and offshoring when organizing campaigns get under way. Yet the Cornell University labor economist Kate Bronfenbrenner reports that unions have had “at least as much if not more success organizing in manufacturing in the South than in other regions.” (“Overcomoing the Challenges To Organizing in Manufacturing,” Research Study, Cornell University ILR School, Dec. 6, 2002) The South has more workers likely to join unions -black workers, women of color, immigrant workers, low-wage workers- in more manufacturing facilities than do other regions, which have more white male workers, those least likely to join manufacturing unions.

Thus, if organizing campaigns include efforts to build alliances with ethnic and other groups and organizations known to be union-friendly, with the aim of countering the anti-union offensives of business and government officials, unionization struggles will have a far greater chance of success.

Union campaigns in a world where production is globally integrated will also have to acknowledge the need to exploit the possibilities of mounting cross-border campaigns employing international alliances and strategies. Bronfenbrenner has shown that the beginnings of such campaigns are already in place in “agriculture (bananas), maritime labor (dock workers), manufacturing (apparel, automobiles, medical supplies), food processing, and services (school bus drivers).” (Global Unions: Challenging Transnational Capital Through Cross-Border Campaigns, Cornell University Press 2007)

The task ahead will not be easy. Discouragement makes it more difficult still. This essay has tried to show that a resurgence of militant labor unions is an essential ingredient of of popular anti-capitalist mobilization, and that discouragement has far fewer grounds than some of us had thought.

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