When Student Basketball Teams Unionize

What’s the latest in labor union news?  The Dartmouth basketball team has formed a labor union.

Say what? Aren’t these labor organizations only for employees?  Isn’t it true that the Dartmouth basketball team members are students, not workers?  Yes, and yes, but in making these points, we reckon, is the absence of the fact that Dartmouth College is a member of the Ivy League, and they do things differently than ordinary mortals. Perhaps someone should check on whether the professors there, who led these student-athletes down this particular garden path, have been engaged in a bit of plagiarism, instead of rational teaching of their classes.  Maybe there’s something wrong with the water supply, if that is what they are drinking, in New England.

Abundance, Generosity,... Hulsmann, Jorg Guido Buy New $18.95 (as of 02:17 UTC - Details) One way to look at this new initiative is that it is stakeholder theory gone berserk.  Stakeholder theory is the view that yes, the corporation should offer a fair return to the owners, the stockholders, but should also do so for complete strangers, and people who have no ownership rights in the company at all.  For example, workers, suppliers, customers, neighbors, the man in the street (not to say the man in the moon), and people halfway around the globe, to boot, for all we know.

The point is, if (Dartmouth) students can become employees, without working for an employer or being paid to do so, then anyone can.  Hey, I shop regularly at McDonald’s (I don’t, but work with me here).  I’m now going to sign up as many diners of this restaurant as I can, and form a labor union, organized against Ronald McDonald.  We’ll bargain for lower meal prices, cleaner restrooms, etc.  And woe betide management if they do not “bargain fairly” with me and my fellow rent seekers.

I also play chess at tournaments.  Ditto.  I’m gonna organize my fellow competitors, and we’ll demand reduced entry fees.  The National Labor Relations Board can hardly say me nay, given its support for the Dartmouth basketball players.

But I am just getting started.  I’m also a straight white male.  We’re gonna get organized and demand more respect from everyone else.  Pay, too.  I am also fat, bald, and bearded.  Yes, yet another “labor union” is in the offing.

Say what you will about these reductios ad absurdum, but it cannot be denied that they are absurd.  Wokist stakeholder theory leads down some weird garden paths.

This philosophy also supports ordinary labor unions, the ones with actual employees.  It does so on the grounds that these organizations are necessary to improve wages and working conditions from what they would be in their absence.  Nonsense.  No, let me take that back and correct it: nonsense on stilts.

What determines wages has nothing to do with labor organizations.  It is all predicated upon the productivity of the worker.  You can’t get blood out of a stone.  The marginal revenue product of the employee is what sets an upper bound on the full wages (money wages plus working conditions) he can command.

Joe’s productivity is $40 per hour.  That means that for every 60 minutes he spends on the shop floor, or on the assembly line, or behind a desk, his employers’ revenue increases by precisely that amount.  Can his remuneration be $50 per hour?  No.  Then the company would lose $10 hourly, and that is no way to run a railroad.  The employer would eventually go broke, assuming he overpaid not only Joe, but numerous others.

The War on Drugs Is a ... Vance, Laurence Buy New $2.99 (as of 08:22 UTC - Details) May Joe’s wage be $25?  No, that is not sustainable, either.  For at that low rate of pay, Joe’s employer will take down a cool $15 per hour off his services.  Some other firm will be happy to have Joe on its payroll at $26, pocketing only $14 per hour, but will reason that better they “exploit” Joe to the tune of $14 than that the other firm do so at the rate of $15.  Nor will this bidding process end there.  You see where I am going with this.  Another company will offer $27, and we’re off to the races.  Where will this process end?  As near to $40 as the costs of these transactions will allow.  Wage tends to equal productivity at all times.  At equilibrium, the two are equated.

Nor must the initiative for this bidding war emanate, only, from the employers’ side.  The worker, too, can apply for a better paid job, helping this process along.

Actually, paradoxically, labor unions lower wages.  Who do you think pays for all those strikes, those elections, those efforts to organize, those slowdowns?  Those monies could have gone to the workers, but they do not.

Someone had better tell those Dartmouth jocks that labor unions are not the be-all and end-all that our friends the woke socialists think they are.

This originally appeared on American Thinker and was reprinted with the author’s permission.