Globalists and liberal types have been in retrospective mood over the last few years, busily rueing their hubris as the populists have surged forward. As we’ve all realised this had real-world consequences beyond the intellectual anguish recently displayed in The Economists’ new Liberal essay (an excellent piece though it is): Brexit, trade barriers, trouble with Iran, and tax cuts.
I would suggest that one particularly egregious example of globalist hubris has been ignored – the contempt shown to trade unions. I don’t think its a terrible exaggeration to say that many liberals, neoliberals (!! whoever they are), conservatives and libertarians have written off trade unions. They point to percentages that show ever lower private sector membership of unions (in the UK, the USA and France) and argue that trade unions are dying. Recent US supreme court rulings have indeed terrifically weakened trade union bargaining rights and it’s hard to argue with the observation that in a gig economy traditional, bureaucratic unions such as Unite, Unison and the GMB look out of place. Outfits such as the Independent Workers Union and other groupings connected to the Community Union are making real headway with gig economy workers whereas the big guns of the old union movement seem hooked on public sector workers.
Arguably the classic example of the current sad state of union politics was the 2017 re-election of Jeremy Corbyn’s best buddy Len McCluskey. According to a Guardian report from 2017, ” the incumbent defeated his opponent, Gerard Coyne, after a bitter month-long campaign that culminated in Coyne’s suspension from his union role 24 hours before the vote declaration. McCluskey won 59,067 votes (45.4%), Coyne won 53,544 (41.5%) and grassroots candidate Ian Allinson took 17,143 (13.1%), on a turnout of just over 12%”. Immediately after the result, McCluskey’s rival Coyne (who has disputed the result) was suspended for bringing the union into disrepute. I make no comment on this except to observe that Coyne came from a more traditional centre-right wing part of the union and had been more cynical about Unite’s support for Corbyn. The fact that Corbyn’s single biggest backer from the union movement – and arguably his saviour at various crisis moments – was elected on a turnout of just 12% with a razor-thin majority needs no further comment. If/when Corbyn is elected as PM, I think this election will be seen as pivotal to the future of the UK. And it was won by just a few thousand votes!
I’d argue that from a liberal, (even social democratic) pro-capitalist point of view this contempt/benign of trade unions should now be seen as dangerous – and in particular, investors need to have a big rethink. Even in the US, the Democrat Party is considering proposals from some senators to introduce worker representatives in the boardroom – an idea that PM May has also supported at various times. It’s also clear that the TUC via its dynamic boss Frances O’Grady is making determined efforts to reach out to both private sector employees and gig economy workers. In fact, O’Grady is doing a virtually single woman job of making unionism respectable again in the UK. We’ve also had slightly lamentable ideas about forming Conservative trade unions in the UK, an idea which I suspect hasn’t got very far at all.
I would make two observations, from an investor perspective. Whether we like it or not, a rebalancing of the relative powers of management versus workers is coming. Even Conservative’s accept that a re-alignment is needed and that issues such as excessive executive pay can’t bet left to the few activist institutional investors who can be bothered. Dirty truth number 1 : Capitalists need to engage with disaffected workers to legitimise capitalism. Unless anyone can come up with a better idea that means getting the unions engaged. It’ll mean union reps on remcos maybe, and it might mean more collaboration between employers and workers about issues such as worker rights in the gig economy. How that is done is up for debate but it seems like we need match fit unions as one set of potential partners. Dirty Fact Number 2: thus we need to take an interest in the current state of said unions.
Which brings me nicely to my next point. Over the last few decades, the continuous assault on the trade union movement by the right has resulted in an obvious counter-attack – the hard left has grabbed control of increasingly centralised unions. McCluskey is an obvious example – an ex Militant supporter he is at the forefront of Corbynista cheer leaders and never misses an opportunity to defend the Labour leader when he is under attack. The big unions have also been instrumental in supporting the growth of Momentum. This takeover of the union movement presents business, government and investors with a problem. For every sensible leader in the Labour movement such as O’Grady (and I’d add some of the bosses of the smaller unions plus at a push the GMB) there’s an immeasurably longer list of Communist/Trotskyite/Hard left leaders. This takeover of the union movement by hard-line socialists does no one any favours. These quite literally ‘bolshie’ leaders aren’t really interested in practical improvements to make capitalism fairer. They want to overthrow it and replace it with their own vision of a worker-led democratic socialist system (whatever that is). To be fair to this hard left leadership they’ve never been quiet about their views and they’re also fairly effective at running industrial disputes.
But these leaders have the ear of the Labour Party – and their backs – and they are now more influential than ever with the government in waiting. I suppose when the worst that we had to worry about in the past was whether Union A might influence the potential make up a London or Liverpool council, the rest of the Uk could sleep safe at night. When they have the leader of the official opposition in their pocket, we all have a problem.
So, my message is this. Don’t think we ignore the trade unions. Conservative’s may believe that they can legislate the unions into irrelevance but I doubt it somehow. If anyone can come up with a way of dislodging the hard left from the leadership of these big unions, I’m all ears. But my guess is that all roads lead back to engagement. Investors need to encourage company managers to constructively engage with carefully chosen, sensible union leaders. We, collectively, need to nurture a new generation of realist, pragmatic union activists/leaders.
One final observation – we seem very keen to borrow ideas from Germany around exporting and manufacturing. Maybe a better idea is to look at the role of the German unions and see what ideas we can borrow and adapt before it’s too late, and we end up handing the keys to power to the Hard Left.