IDEOLOGIES AND PERSPECTIVES (1)
18th Century philosopher, George Berkeley, challenged the philosophy of
materialism by maintaining that so called “real” things are only ideas of those
perceiving them. While the weight of philosophical opinion was and remains
contrary to Berkeley’s ideas, his work highlights the importance of human ideas
and action in shaping the world in which we live.
*For more on Berkeley, see http://plato.stanford.edu/entries/berkeley/*
The relevance of this to labour relations and the role of trade unions in
contemporary Canadian society is that ideas and belief of reality play a crucial part
in influencing human action. The lenses through which human beings perceive the
“real” world affect greatly, if not exclusively, the nature and evolution of human
action.
In Chapter 1, Godard identifies various paradigms of belief systems. Their
importance is that people’s ideologies and beliefs affect their values and actions.
The paradigms considered by Godard are:
Neoconservative/neoclassical;
Managerialist;
Pluralist;
Liberal Reformist;
Radical.
These are now considered and compared.
Neoconservative/neoclassical
Classical economic theory emerged in the late 18th Century. It criticized the system
of patronage in which the government created business and trading monopolies
which shared part of their profits with the government.
Economist Adam Smith in 1776 produce his work The Wealth of Nations where he
argued that economic efficiency is best maximized for the public good by
competition among small producers and service providers. No actor in the
economic system should have the ability to control prices and quantities produced.
Nor should there be collusion among economic actors to control prices and
quantities produced.
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In pursuing their own self-interest producers etc. would also contribute to the
public interest by competing to provide products and services at prices and of
quality most attractive to consumers. The most competitive producers would be
most successful. Producers charging too much or failing to deliver good quality
would fail in the market.
If firms made high profits new producers would enter the market and sell at lower
prices. This would prevent exploitation of consumers. Monopoly profits would be
competed away by an “invisible hand” that is by the sum total of individual
decisions made by countless
consumers and producers. Smith’s model was democratic as it placed in the hands
of consumers the power to decide what would be bought and sold. See the concept
of “consumer sovereignty”. There was no need for government manipulation of the
system. Indeed, that would be harmful. Smith saw the main danger to his system to
be the presence of large producers who could dominate price fixing and volume of
output to avoid competition.
Neoclassical economics emerged in the mid to late 19th Century as capitalism
emerged as a significant economic force. It remains a force today. The main
concern of its proponents is efficiency of production and minimization of costs of
production in order to beat competitors.
The focus is on labour markets – higher wages are viewed as meaning higher
prices and therefore a threat to efficiency and competition.
It is seen as necessary to keep government out of the market because of the anticompetitive practices of patronage, subsidies, restrictions of trade etc. Deregulation
and the removal of governments from the market are goals of today’s big business.
Trade agreements between and among countries (e.g. NAFTA) typically reduce the
role of governments and courts in regulating action by large corporations. This
raises the question of the appropriate balance of power between corporations and
elected governments.
In the neoclassical tradition, power is seen as operating through the market. If one
cannot compete on price and quality etc. one has the power to improve
competitiveness or exit the market.
Conflict is seen as minimal if market forces are allowed to operate freely.
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Unions are seen as having negative economic and social consequences.
The prescription of neoclassicals is to reduce govt. and union interference with the
competitive market. Also privatization of public services.
Positives – highlights the importance of markets – avoids command economy with
controlled markets. Incentives to produce; contributes to the power of consumers
in the market; facilitates the potential for competition and the avoidance of state
patronage.
Negatives. It ignores the imperfections in the market. Today there are many
monopolies, oligopolies cartels etc. which undermine the fundamentals of classical
perfect competition theory. Also the free market does not allocate resources well in
essential services such as health, education, affordable housing, childcare, seniors
care.
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