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If There Really Were A Real Estate Agents’ Union…

…this is how business might be done:

You (a willing home seller) would look for a real estate agent and discover that the government mandates that you hire, its delegated agent, to market and negotiate on your behalf.  That chosen agent will be the only one who can deal with potential buyers and will select which offer you should consider, among the many offers available.  The agent presents the offer, to which you suggest a counter-offer or refusal.

In this hypothetical example, the agent tells you that you don’t have the option to counter and reminds you that you have a binding contract with her as an exclusive agent; she says “Take the ‘reasonable’ offer or suffer the consequences”.  Obviously, you don’t think that’s fair and want to test the free market.  You might consider another real estate agent because you don’t think she’s negotiating on your behalf.

Rather than allow you to pursue your own course of action, the real estate agent accuses you of “agent busting”.  She sets up a picket line, in front of your home, with big signs proclaiming you to be “evil” or responsible for “unfair tactics”, or “greedy”.  She turns away all potential buyers of the home by calling them “scabs” and proclaiming that a reasonable enough offer was on the table and you were just an evil, greedy agent buster.

She might convince the power company to sever your electricity, phone and internet.  She might try to prevent the grocery store, pizza delivery guy, landscapers, and pool maintenance guy from servicing you, per your standing contract with them.  Finally, she might try to restrict your income by hampering your ability to work .

You’re a tough cookie, though.  It’s your home.  You bought it, improved it, kept it clean, and want the best price a willing buyer might pay you. You hold out, regardless of the wacky protesters, bused in from out-of-town, screaming at you, your children, your neighbors, and anyone who might dare speak with you.  Even your priest declines your dinner invitation because he wants to stand “in solidarity” with the “fair traders”.  He dare not call you evil but his actions suggest that you are being unfair.

The manufactured shunning, and (false) threat to eternal damnation still doesn’t work.  It’s your damned house, paid for with your hard-earned money!  You intend to sell it for the best price you can receive!

The real estate agent brings a government board in to bind you to mediated terms, whether you’re in agreement with them or not.  If you try to walk away from the home, and let the agent deal with the bank (which will foreclose on your property), she’ll get the government board to seize your home, or have that government board order you to sell it to her hand-picked buyer, or have that government board throw you in jail.

That sounds crazy, doesn’t it?

Of course it does but that’s the exact effect The Wagner Act of 1935 had on labor relations.   The Wagner Act assigned exclusive negotiating rights, to a designated agent, on behalf of all employees.  Whether the employee consents to that agency relationship or not, the designated agent has the power of force (the government) behind it and all employees are bound to accept that agents’ negotiated terms.

The Wagner Act permitted the coercive tactics of picket lines, to scare away customers, potential employees, suppliers, etc.   In essence, the Wagner Act proclaimed that the labor monopoly has the “right”, under the direction of its exclusive agent, to engage in such coercion.  If the business owner complained, well then he had to deal with force (the government),,, again.

Finally, The Wagner Act also established the National Labor Relations Board , to mediate the price of labor, if that designated agent could not convince a business owner to accept the terms offered.   The business owner could either:

  • (a) accept the mediated terms (offered by the NLRB), or
  • (b) surrender the business to the NLRB, or
  • (c) move to another jurisdiction, outside of the reach of the NLRB.

Which option do you think private business owners chose? If you remember the outsourcing movement, in the 1980’s, you have discovered the answer.

Labor, like land or capital, is a factor of production.  When force is introduced, to a commercial exchange of  any of those factors, it is no longer voluntary.  There will be unintended reactions to that introduction of force.

If you wouldn’t condone my hypothetical real estate agency relationship (monopoly backed by force), why would you turn a blind eye to the very same practice in the labor movement?

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