Dave and Saul Discuss Market Basket

Throughout the course of a series of email exchanges, Saul and I discussed the story centered around Market Basket, a regional New England-based chain of grocery stores that drew national attention after a longstanding dispute between two sides of the family that owns it boiled.  A brief introduction is in order.

Market Basket is New England-based a family-run grocery store chain that has been in business for almost 100 years.  It currently operates approximately 71 stores and generates approximately $3.5 billion in revenues.  The company’s reputation is stellar because it not only generates profits but also treats its employees very well with respect to compensation, benefits, profit sharing, etc.  This culture starts at the top with its CEO, Arthur T. Demoulas.  His reputation of being a man that genuinely cares about his employees is legendary.  Stories of him attending funerals, calling employees inquiring about sick family members and hospital visits are all over the internet.  You’d think that people would be happy with this situation, right?

Not exactly.  While it was technically a family-run business.  The two sides of the family have been at each other’s throats for decades and make the Hatfields and McCoys look like rank amateurs.

Simply put, there are two factions, each faction is led by a grandson of the late led by a cousin (Arthur T. and Arthur S. Demoulas).  Their grandfather (another Arthur Demoulas) founded the business.  Their fathers, Mike and George, eventually took over.  When George passed away unexpectedly, Mike pledged to take care of George’s children (including Arthur S.)  In 1990, Arthur S. sued Mike alleging that Mike attempted to defraud the Arthur S. side out of shares of the company. One lawsuit led to another lawsuit, more litigation, accusations of wiretapping, bad behavior and all sorts of crazy things.

Out of this mess, the court found in favor of the Arthur S. side and awarded his side of the family 50.5% of the total shares of the company.  However, because of an issue between one of the shareholders and Arthur S., the Arthur S side did not vote in a unified bloc until 2013.  Prior to 2013, despite having a minority ownership position, the Arthur T. side had the majority vote and controlled the Board of Directors.  In the meantime, Arthur T. was appointed CEO in 2008.

In 2013, the Arthur S. side, regained control, unsuccessfully attempted to remove Arthur T. as the CEO and then worked to boost returns to shareholders (something he had wanted to do but couldn’t prior to 2013).  Shortly after gaining control of the Board, it approved a $300 million cash distribution to shareholders, a move so bitterly opposed by Arthur T. that he attempted to sue his cousin to block the attempt (he lost).

Things hit the fan this past June when Arthur T. was finally removed at the CEO of Market Basket and replaced with two co-CEO’s, both of whom were outsiders to the company. Having read the background story, it was pretty clear to me that Arthur S. was prepping the company so his side of the family could sell its shares, most likely to a private equity firm that would have seen the value in the company’s market position and more value in boosting returns by cutting costs.  Smart enough to see the writing on the wall and already being deeply loyal to Artie T., employees refused to show up for work, deliver food to stores and joined rallies in support of their ousted CEO.  Despite threats of lost jobs (some in management actually did lose jobs), many employees refused to yield.  At the same time, customers supported the employees by boycotting the stores.  They wanted their CEO back and they weren’t going to stop until that happened.

To me, the really remarkable aspect of this story was the solidarity shown by the employees and the customers because for six weeks, they did exactly that.  They had successfully suspended the operations and threaten the company’s existence, so much so that the governors of MA and NH got involved in the negotiations between the two warring factions.  Given that this had gone on for six weeks and both sides needed to come to their sense, a deal was reached between the two sides – the Arthur T. side agreed to purchase the remaining shares of the company from the Arthur S. side for approximately $1.5 billion.  Arthur T. resumes CEO duties.  Market Basket remains a family business.

As Saul and I discussed this, we came up with five discussion points. In the interest of time, we limited ourselves to a single response.  We’ll have the rest of our dialogue in the comments section:

1. Does the Market Basket story fit within an ideological narrative?

Dave

I’m having a difficult time finding an ideological narrative, but keep in mind that I’m also notoriously against leaning on ideology when I approach business-related issues (as an example, categorically blaming labor unions for the woes of companies like General Motors or, more recently, Hostess, is a viewpoint I completely reject).   Where does one look for that?  If I had to try to step into your shoes, I can think of two possibilities: 1) the belief that workers deserve a larger share of the pie and greater respect from management than what’s typically given in corporate America.  Market Basket, especially under Artie T. fits that narrative.  The second possibility is the argument that labor may have helped Artie T. win this fight (more on this shortly).  There may be some truth to this, but from an ideological standpoint, wouldn’t this victory have better fit the liberal narrative if the labor force was unionized?  Isn’t one of the takeaway lessons from this the fact that unions aren’t needed if the employees are already treated well?  What could be considered one of the more significant labor victories in recent time was achieved by a non-unionized workforce.

My other concern with trying to fit this story in an ideological narrative is that I’ve never known conservatives or libertarians, as a matter of political principle, that suggests that employees have to be treated poorly.  Although I have no background in moral philosophy, it seems like how people are treated fall under that umbrella as opposed to political theory.  Then again, I’m completely outside my area of expertise on this.

Saul

I should start off by saying that despite my reputation for being a dedicated social democrat on OT, I am not a raging anti-capitalist. I am a capitalist skeptic and think that socialism works for some goods better than the free market. I admire companies that treat their workers well and earn a profit at the same time.

When we were discussing this post in e-mail, I said that I agreed with many of your points at least I agreed in theory but not necessarily in reality for some of them. One thing you wrote in an e-mail is that you found it hard to determine where this story felt on the ideological map because “there’s nothing that I can think of in conservative or libertarian thought that requires a belief in treating employees poorly.”

I don’t disagree with this as a sentiment largely or at least in theory. There are probably many conservative and libertarian bosses who treat their workers well. During the 2012 election, David Siegel was briefly infamous for sending around a letter to all his employees that said everyone would get the axe if Obama was reelected. This turned out to be an empty threat and a lot of hot air.

There have been times on OT when I have criticized the neo-liberalism of people like Matt Yglesias and Ezra Klein for treating people like they are “optimization” problems. James K and others agreed with me that people are not optimization problems but government (and probably also running a business) are optimization problems. This is true but you cannot run a business or a government without people (at least not yet) and eventually the optimization will need to interfere with people. This is nothing new. Henry Ford’s assembly line was an optimization issue. My Corporations once gave an anecdote about a Ford employee who quipped “If I turn nut #256 one more time, I am going to become a nut.” I can’t confirm whether this quip is true or not but does speak to how people dislike micromanagement and want a sense of agency over their labor. Factory workers hated Taylorism because they felt like robbed them of their agency.

I suspect we are seeing businesses getting more and more sophisticated about how they can optimize for maximum profit. There are computer programs that are very good at analyzing how many people need to be on-call and when and companies can tell shift workers to go home early if there is an anticipated lull in the business day. They can also rely more on hiring many part-time workers so benefits do not need to be paid. In my mind, all of this represents a form of burden-shifting. The people with the most resources are placing the burden of a down-time or a lull in business on the people with fewer resources.

I suppose what matters is how much you think this is intentional or not. Humans are social and tribal by nature and we have wonderful ways of maintaining hierarchy and distinction based on allegedly better status. I see this in many law firms. The non-legal staff tends to be paid on an hourly basis. In some ways this is good because they have decent work schedules and sometimes the attorneys do stay until very late at night to work on a last minute brief. On the other hand, attorneys get more work from home privilege and get to leave early if there work is done for the day. Corey Robin defines conservatism not as desiring limited government in order to preserve or increase liberty but as a practice and ideology meant to enforce hierarchy and power. I think this is true for at least some in the current American conservative movement. You can hear this in any kind of “real America” narrative from the right-wing. This is not necessarily new. Many incidents and policies in American history are a struggle between the urban and the rural or can be viewed that way. There is a school of thought that Prohibition was largely about rural and small-town protestant American trying to exert power and control one more time over the new urban masses who were starting to be dominant in American politics. The problem is that the United States is a representative democracy and no one is going to get very fair by arguing against representative democracy. The only people I’ve ever met who openly called themselves authoritarian happened to be rather dorky and unpopular teenage boys who were more likely to be on the debate team  than in a motorcycle gang. So we are forced to use the same word to mean different things and everything becomes an abuse or an attack on liberty and freedom. The fight is over whose liberty and whose freedom and when limits are acceptable.

There difference between liberals, conservatives, and libertarians is probably about where the limits should be on how far businesses can or should go in order to optimize and maximize profits. I would have no problem with laws and regulations that prohibited certain practices like letting shift workers go early because a computer program predicts a downtime and lower profits.

As for the non-union angle, I would argue that the workers effectively helped Artie T. by acting like they were effectively unionized. They went on strike and effectively shut down Market Basket as a business for the length of the fight. They were helped by politicians and consumers also deciding that Artie T was in the right and the workers did deserve their salaries and benefits. It is clear that part of Market Basket’s appeal was the well-known employee benefits. Wegman’s is another supermarket with similar appeal and large amounts of worker autonomy. So is Cost Co. These are also largely businesses that stereotypically cater to well-educated liberals but I don’t know if you can easily peg the ideology of millions of consumers easily. I would argue that this shows that union techniques are largely needed to win a battle but you also need the general sympathy of the public. This is why transit strikes usually don’t go well with the people, the inconvenience is too much. This also happened in liberal New England. I wonder if the results would have been different in a more red-state area like the South. My hunch is that Artie S. would have one in a more conservative area.

2. Who won?

Dave

In a way, everyone did.  The customers and workers won because their efforts to restore Artie T. as the CEO paid off.  They took the biggest risks and it was clear that they weren’t going to budge at all consequences be damned.  Artie T. won because he got his position back and got complete control of the company.

At the same time, even if Arthur S. wasn’t able to sell his shares of the company to a third party, his side of the family is getting $1.5 billion so it’s hard to say that they lost

Saul

I don’t have anything to add here. Everyone “won” in a sense but it seems like the battle went on for an unnecessarily long time and this is probably because of dysfunctional family dynamics between Artie S. and Artie T. I wonder how quickly it will take Market Basket to recover from the lost profits during the fight.

3. Artie T.

Dave

I don’t recall ever seeing a CEO with this kind of admiration from employees, customers and the community at large.  He’s also an excellent CEO with his ability to produce a profitable business model and expand the franchise at the same time.  That Blackstone partnered with him on his purchase of his cousin’s interest in the company says a lot about what Blackstone believes about him.  This should not be taken lightly.

At the same time, it’s obvious that the family dispute brings out the worst in him when it comes to dealing with his cousin.  His relationship with the Board, especially with Arthur S. and the independent directors representing the Arthur S. side was not good in a way that gets CEOs fired.  There were problems with transparency.  There were fights over whether or not the Board should impose any spending limits on Artie T, something that is the norm in most companies.  There was the issue over dividends and I think the Arthur S. side had a reasonable complaint about not receiving a dividend.  Yes, Artie T. was putting cash back into the company.  However, the company’s balance sheet was so strong and interest rates so low that I’m at a loss to figure out why Artie T. never considered using conservative levels of debt to expand the company, especially now that he’s using debt to acquire his cousin’s share.

There was also the issue with the interparty transactions between the company and Artie T.’s side of the family with respect to the real estate deals.

Saul

I don’t think that Arthur T. is a saint. He probably did have some or many ulterior motives with the way he treated workers. However, these have been tough years for the American working and lower-middle classes and I do believe that income inequality is a serious problem.The Great Recession was tough on many Americans. The lowest Quintile of households went from a net worth of -915 dollars in  2005 to -6029 dollars in 2011. The middle 20 percent of American households went from a net worth of 106,591 dollars in 2005 to a networth of 68,839 dollars in 2011. Arthurt T. might not be a saint but he did pay his workers good middle-class salaries and that should count for a lot and other companies should look to him for an example. Market Basket under Arthur T. should be a Harvard Case study in how to run a business with notoriously tight margins and still treat workers with dignity and decency and make very good profits.

Arthur S. did not do anything illegal. He was in full right to decide that he wants to optimize shareholder value and potentially sell of the shares to a private equity company for maximum profit. This does not necessarily mean that it is moral or ethical to do so. Arthur S. is already a billionaire and it is hard for me to feel much sympathy for a person who thinks that paying people a decent wage is a stumbling block to selling out to private equity in order to get more money.

I’ve never been one to let the perfect be the enemy of the good. The world requires moral compromises and deciding what is more important at any given moment and in general I think the treating workers well and with dignity and decency is more important than maximizing wealth for a handful of individuals. Arthur T. might not have followed best corporate practices and might have ulterior motives in treating workers well but as far as I can tell, he also seriously thinks that Market Basket is part of the New England community and he thinks that it is good business practices to treat workers like human beings instead of easily replaceable cogs even if they are relatively unskilled.

4.  Can any lessons be learned from this?

Dave

In a way, I see Market Basket having something in common with Hobby Lobby. Both companies are known for operating in accordance with moral and/or religious beliefs.  Both companies are unique in the way that those belief systems are more commonly associated with sole proprietors and small businesses.  Very few regional or national companies fit this profile.

The events that transpired were made possible by the animosity each side of the family had for the other.  In a more normalized dynamic, if the Arthur S side of the family wanted to sell its interest in the company, the first thing they do is contact the remaining family members are work out a deal from there.

This isn’t going to change the relationship between workers and management.  If the workers had any leverage here, it was because the customer base was so devoted to them and Artie T that they were willing to cripple the operation of that company.  I don’t think that can be said for Wal-Mart.  The Market Basket story will get far more traction in Hollywood than it will ever get in corporate America.

Saul

As I wrote above, I think we can learn that unionized tactics can win for workers. They might not be officially unionized by all the workers at Market Basket worked together for a similar goal or at least enough of them did. They were well-organized, cohesive, and knew their goals.

I am not sure how rare it is to see businesses like Hobby Lobby and Market Basket. Wegmans is another super-market chain known for treating workers well and having a philosophy behind it. I’ve heard of other businesses that do the same but it is probably more rare than I would like to admit.

5.  What happens now?

Dave

The reason why I put this here is because Robert Kuttner wrote an interesting article about the Artie T deal raising concerns about the fact that Artie T now has to answer to a private equity firm and pay mortgage debt.  He’s concerned about how that could impact workers if the company doesn’t perform.

I think what’s going to happen over the course of the next few years is that Artie T. will first repair whatever damage was done during the six week standoff, return the company to profitability and leverage its business model to expand its footprint. If the company is as good as it believes it is, it should have no trouble entering new markets and competing with the established grocers within them.

What is a $3 billion company today will be 40% to 50% more than that in the next few years.  I think that’s Artie T’s vision and that’s why Blackstone has made a significant investment.  Contrary to what may be popular wisdom, that private equity firm sees the upside in letting Artie T. run the company the way he has.  Time will tell.

Saul

I am in agreement with you here. I just hope that Blackstone gives Arthur T. enough room to let him return the business back to normal and treat workers well. It would be horrible for everyone involved except Arthur S. if Blackstone decides to interfere and tosses Arthur T. out in order to maximize profit by bringing in a new CEO who slashes salaries and benefits.

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28 thoughts on “Dave and Saul Discuss Market Basket

  1. People usually go into business because they want to make a lot of money. Most people really don’t have much of a problem with that. The real issue is whether or not you can make a lot of money by treating your workers well or not. For some business people treating workers well is not contradictory towards generating wealth or its even part of the equation because well treated employees are more likely to aid you with your goals. For other business people, the opposite is true. Labor is a cost and you make money in business by keeping down costs no matter what. If this means that you can’t treat employees well than thats that unfortunately. We will never resolve this dispute, nor will we get universal practices about this.

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    • I’m not sure that I agree with this. I am not even sure it is true for many or most businesses. Sure everyone wants to support themselves but I don’t know or think everyone is out there to be Warren Buffet, Steve Jobs, or Bill Gates.

      I think there are plenty of lifestyle businesses where people are not looking for lots of wealth but just looking to do something that they enjoy instead of being really rich. Now many of these businesses might also fail but I am thinking of things like used bookstores, record shops, comic and hobby shops, gaming stores, coffeehouses, craft breweries, music stores (not big ones like Sam Ash), boutiques, etc.

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      • , there are a wide variety of reasons to get involved with a particular business and it is often a labor of love for many people. I’m still relatively sure that people want to earn a bit more money than simply sustaining themselves even if they don’t want millionaire or billionaire level of success.

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    • I agree with Dave’s business strategy (as opposed to ideological) lens. How well you treat workers is a strategic decision much more so than ideological, and to the extent ideology trumps effective strategy, I question whether it will tend to lead to better outcomes for us collectively.

      First, there are benefits economically (to the employer) with having happy employees. Therefore, absent a COST of treating an employee well, an employer is making a mistake to not treat an employee as well as possible. It is a tactical error. Any reasonable employer would agree.

      But many forms of treating employees better DO have costs, and thus involve trade offs. Do I treat employees better, or give them more money, or lower my prices, or increase advertising, or improve product safety, or hire more people, or….

      Every firm makes strategic decisions on the exact mix that it follows. This is their overall strategy within the market. In addition, the mere existence of certain strategies enables others to emerge either as followers or competing/contrasting alternatives. Low cost providers open up the potential for higher quality, etc.

      Prospective employees similarly choose which type of employer to work for. Some choose higher than otherwise wages and worse than otherwise conditions, others choose the opposite. These choices feed into staffing quality, training and turnover costs and thus there is a feedback loop between employee preferences and employer treatment. There are also feedback loops between consumers and firms. In the end, the consumer votes with their dollar and decides winners and losers. Return on investment means those selecting superior overall strategies prosper and crowd out those choosing poorly. Over time losers disappear from the scene and only relative winners are left.

      As such, Lee’s comment …

      ” Labor is a cost and you make money in business by keeping down costs no matter what. If this means that you can’t treat employees well than thats that unfortunately. We will never resolve this dispute, nor will we get universal practices about this.”

      Is a mis -characterization of the issue. Treating employees well isn’t always a cost. When it is a cost it is part of a cost benefit situation. When it is a cost benefit, it becomes a strategic issue with tradeoffs. There is no single standard that all employers, employees or customers want nor would a universal practice be a panacea. It will however tend to resolve itself over time (continuously’ dynamically and never endingly) via competition and market discovery.

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      • I think this is a simplistic view on two counts.

        First, it’s a mistake to suppose that all businesses treat employees the way they do for strategic reasons. I think it’s true of the centralized policies of large businesses, but not of smaller businesses, nor of managers of small units within larger businesses that have higher degrees of independent authority. These small business owners and independent managers are very often not thinking strategically, whether that involves treating employees well even when it’s strategically unsound or whether it’s treating employees poorly as an abuse of petty authority.

        Second, I am convinced that there are employers that treat employees badly, not because they do not want to bear the costs of treating employees well, but because they have adopted strategies that rely on negative or conflicted treatment of employees. Pick-up artists and cult leaders both treat their targets poorly because a target with less self-esteem is a target they have more power over. I believe that some businesses do the same thing with their employees.

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      • I don’t think it’s necessarily that employers treat employess badly due to some “employment game”. It could just be that the manager of that group only knows one way to “manage”. Maybe he’s not very good at interpersonal dealings but good with technical details or such.

        I see somthing similiar to this with “not being in the office”. Several managers have told me that they only cared about production/results. They didn’t care if you were physically IN the building. Others have told me “you may not have anything to do, but you are in the office not working”. No lie.

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  2. I suppose whether Arthur S. lost or not depends on how much the firm he was going to sell his shares to was offering. If it was more than 1.5 billion then yes, he lost (though I’d agree with Saul that my sympathy is low for him).

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  3. I’m not sure there are many things to take away from this case. Sure treating workers really well has some significant benefits but i don’t’ think that is a surprise. The many businesses that don’t treat their workers well, don’t care about it and don’t see any benefit.

    This doesn’t change my feelings about unions. Unions serve a valuable purpose given that many businesses still prefer to treat workers like rented mules. Some places without unions only treat their workers well to keep unions out, which supports the purpose of having unions.

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  4. It seems worth mentioning that, because of how the NLRA is structured, what the employees did here may have been possible only because they were not unionized. What the employees did would, at minimum, fit within the general concept of a “wildcat” strike, which has long been illegal if you are unionized because it technically violates the notion of the union being an exclusive bargaining unit. It was done in an uneven and erratic manner that organized labor does not, to my knowledge, have the ability to do, but that is particularly unpredictable for the employer and thus very difficult for the employer to plan around.

    While a unionized employee base could have theoretically declared a uniform strike, I’m not at all convinced that this would have been overly successful. For one – to my knowledge, at least – unionized strikes usually need to be ratified by a supermajority of the union. While that can theoretically happen instantaneously outside of circumstances inapplicable here, as a practical matter, I’d expect that it would take some time to organize and properly ratify the strike, with the employer all the while having the opportunity to plan and prepare for the strike.

    I guess what I’m saying is that, while this does show the possibilities and value of collective employee action and of labor unionism very broadly, it does not provide much support for the form of unionism that has existed in the US since the NLRA was passed in the 1930s.

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      • The VW plant in TN revealed a huge problem with union regulation — lack of any facility for setting up a cooperative process. All our regulation creates an antagonistic relationship.

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      • I think this is more due to Taft-Hartley and Republican control of the NLRB during the Bush II years than it is because of the NLRA in general.

        Before the NLRA, you had fun things like corporations basically having “internal security” departments which were no more than thugs on payroll who were meant to make union-busting quite literal. See the “Battle of the Overpass”. You also had incidents like Lawrence and many more of the National Guard being brought in to bust up strikes.

        I don’t see how returning to pre-NLRA is going to be good for unions.

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      • I dunno Saul, I have seen a lot of pro union types point out that Taft-Harley AND the NLRA were a deal where corporations made out well, government got a lot of control and the existing corporate structures were required to be really good to the existing unions. Then economies changed and vulture capitalism ate said existing corporate structures alive. Now many of the parts of the old deal that benefited the unions are mostly gone but all the chains constraining them are still alive and well.

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      • I don’t think that is quite true. The problems with unionization in Tennessee were multi-fold but over regulation in the neo-liberal sense. The problems down South were:

        1. Southern States have long been the least friendly to union. Union success happened largely in places where the workers were not Anglo in origin. The unions succeeded in the Northwest because a large amount of the workers were Germans, Jews, Italians, Eastern Europeans, and others who did not care about Anglo-Saxon notions of individualism.

        2. Southern politicians threatened that jobs might disappear because of unions.

        3. The laws used to hamper unions are largely so called “right to work” laws which are not found in the NLRA but largely found in post-NLRA regulations as passed by right-wingers.

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      • all of what you say is true; and even given less-antagonistic union regulation, I doubt it would have passed.

        But up here in Maine, where paper was once king, I’ve watched a lot of the same problems, union regulation getting in the way of a union and a company working to make the company successful and so protect the union-workers’ jobs. I’ve written about it more then once.

        The way the dialogue between a union and management takes place is, by regulation, antagonistic. This is a problem; the opposite extreme of union leaders and management colluding. Somewhere in the middle, there’s a better spot.

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      • Well, I think we have to start off by recognizing that the nature of the system is that people who don’t like unions are going to be in power about 50% of the time no matter what.

        Second, I’ll link to these two pieces again: http://ordinary-gentlemen.com/blog/2011/02/23/labor-roundtable-why-market-anarchy-favors-labor
        And
        http://ordinary-gentlemen.com/blog/2011/02/23/labor-roundtable-kevin-carson

        While Taft-Hartley is certainly a huge part of this issue as a whole, and should be repealed under most circumstances, in the specific case of what the employees in Market Basket are doing here, the obstacle to it being done in a union context would not be Taft-Hartley but rather the NLRA more generally. This is because what the employees in the Market Basket context have done seems to rely heavily on a decentralized approach that would be difficult to accomplish in an exclusive bargaining rights situation,which is what the NLRA creates. There are certainly understandable and appealing reasons for requiring exclusive bargaining rights in the collective bargaining context, but the flip side of it is that it acts to make unpredictable wildcat-type strikes very difficult, if not impossible regardless of any laws prohibiting them.

        This is not an argument for repealing the entire NLRA and saying that unions will be better off without it. As the first of my two links shows, there was actually quite a bit of regulation of unions prior to the NLRA, which was on the whole certainly an attempt to remedy the problems that largely stemmed out of government’s longstanding cooperation with anti-unionism. But because of how it formalized everything, it also left unions more of a sitting duck in the long run from a strategic standpoint if/when anti-union legislation was ultimately passed.

        Labor’s greatest leverage in the long run, particularly in the private sector, is its ability to throw management a curveball and be unpredictable. For all the advantages that the NLRA provided labor, it of necessity undermined this leverage by making labor more predictable and an easier target to hit. Whether that tradeoff was ultimately worth it is a separate question, but the point for our purposes here is just that the tradeoff exists, and the specific type of tactics that Market Basket employees used here would not be available in the context of a post-1935 union environment.

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      • Your point rests on a legal decision that you conceded was bizarre. If courts went the other way (and you indicate that this would have been reasonable), we would see corporations using the Clayton Act against Unions left and right.

        Market Anarchy is one of those phrases that libertarians can use and be strident about while seemingly being unable to see why people might be highly unattractive to people on both the labor and corporate side.*

        I think the NRLA was really what legitimized unions. Before then, people were able to see unions as illegitimate and unions were often seen as illegitimate for the same reasons that some libertarians rail against them today about.

        The Battle of the Overpass happened after the NRLA was passed but it was only the law that recognized the right to Unionized, that caused Ford to admit it was in the wrong and finally sign a contract with the UAW in 1940.

        I think corporations would never recognize unions unless required to.

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      • There is some merit to the idea that unionism is dying because of regulation. In the days before the Wagner Labor Relations Act or Taft-Hartley, you could form a union by having a bunch of people coming together and agreeing to create one. Hash out a mission statement and organization agreement at John’s after work. You can’t do this these days because the laws on union-forming have been formalized by law. The problem was that while it might have been easier to form a union, it was also easier for employers to ignore, not deal with, or even destroy a union back than by calling in the Pinkertons or even the Feds. While forming a union might have been easier, getting results through the Union was much much difficult. If there were laws regarding union formation, we might find more employees creating unions but the success rates of these ventures would be less than that of a really risky business venture.

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      • For the specific purpose of the Market Basket issue, that decision is irrelevant. It is the NLRA that makes wildcatting illegal or at least damn near impossible in the context of a unionized employer.

        As for the rest, the numbers don’t lie – prior to the NLRA, the private sector unionization rate in the US was more than double its current rate. Now I concede that the NLRA itself increased labor’s power for the 15 years or so it was in effect before Taft-Hartley really kicked in, but my point is that formalizing unions in the way that the NLRA did, while providing a massive short-term boost to unions, also provided a stable target for management to shoot once it regained the upper political hand. And it was inevitable that management would eventually regain the upper hand politically.

        The NLRA plus Taft-Hartley, say the numbers, is at least arguably worse than having neither, even if the NLRA alone would have generally been good for labor, and even if the regulatory regime that existed prior to the NLRA explicitly disfavored unions. The problem is that once the NLRA created a static target, it was just a matter of time before we were no longer dealing with the “NLRA alone.”

        But that point isn’t what’s relevant for purposes of this thread. What’s relevant for now is only the recognition that there is in fact a tradeoff involved in the NLRA, which I don’t even think is debatable – there are tradeoffs involved in almost all legislation anyways.

        Market Anarchy is one of those phrases that libertarians can use and be strident about while seemingly being unable to see why people might be highly unattractive to people on both the labor and corporate side.*

        Oh, I get why it’s unattractive, particularly on the corporate side (and again, I have to reemphasize that this is beyond the scope of my point in this specific thread, which is only that the type of action in the Market Basket case would be illegal in a unionized environment because of the NLRA). I’ll even be the first to acknowledge that outright market anarchy across the board would be very bad for GDP, amongst other things.

        But it’s close to being tautologically true that anarchy in labor markets favors labor over management. After all, the tactics that labor has just about always used as negotiating leverage are tactics that attempt to either exploit or introduce chaos or uncertainty into management’s business – indeed, that’s the entire strategy underlying a strike or a secondary boycott or whatever.

        If you say “we’re all going on strike a year from now if you don’t give us what we want,” then management has a full year to plan for you being on strike: getting scabs lined up, making plans for outsourcing, building up a reserve, etc., etc. But suddenly have a significant part of management’s workforce walk out on strike without notice, though, or act in other ways that allow you to be a moving rather than a static target, and management’s in deep shit and has little choice but to negotiate and cooperate.

        And I’ll just add that none of this means that it’s inconceivable for there to be a regulatory regime that would in the long run be beneficial to labor. But for such a regime to be effective, it has to change the entire paradigm in which labor and management are set up as adversaries and instead sets them up as partners.

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      • I concede that you and my brother have points about how it was much easier to form a union pre-NRLA. My brother is right though that it was easier to form a union, it was just as easy for management to ignore or bust unions and they often did. How many labor strikes and other tactics ended well for unions pre-NRLA? I can think of the dispute meditated by Teddy Roosevelt involving Pennsylvania miners but no others. This does not mean that they don’t exist but my understanding is that pre-NRLA, most strikes ended in victories for management and often brutal losses for labor. This includes: The Pullman strike, The railroad strike organized by Eugene Victor Debs, various conflicts out West which resulted in trials for labor leaders for murder, acquittal for the owners in Triangle Shirtwaist, etc.

        I think the decline in unionism has to do with Taft-Hartley, increased people entering the white collar work-force, and the fact that the post-War period might have been an economic freak incident if Pinkerty is right. Maybe the rise of the service and gig economies will see more people being inclined towards labor unions. Millennials are supposed to favor them more than older Generation Xers. The fast food industry seems like it will be a place for labor to get good victories and on the brainier side, adjuncts are starting to unionize.

        Anarchy can be good for labor. Wages and freedom for workers did rise after the Black Death in England. This was quickly oppressed by Edward III though. Can you think of a system that sees management and labor as partners instead of antagonists? Maybe Germany but nowhere else as far as I can tell. I think some or a lot of the antagonism could be innate. Hence snide talk about being “job creators”

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      • We probably need more data, but keep in mind that a lot of those pre-NLRA losses are going to be largely/primarily attributable either to:
        1. The government actively intervening against the unions, sometimes in brutal ways (the Pullman strike is exhibit A1 here); and
        2. Courts issuing injunctions under anti-trust laws.

        Part of my argument acknowledges that pre-NLRA was hardly an anarchist utopia for labor, and a remedial action of some sort was necessary. But I’d argue that much of it should have been to forbid government intervention in various disputes entirely.

        Again, though, it’s almost tautological that labor is at its strongest negotiating power relative to management in more anarchic conditions. The word “management” is synonymous with imposing control over a situation, ie, making the situation predictable in order to make it profitable. Unpredictability and chaos are the antithesis of management.

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