(Interviewed by Louis James, Editor, International Speculator)
Editor's Note: Next week we're planning a special edition of this missive in which Doug will answer questions from readers. If there's anything you would like to ask him – about investing, the economy, where we're headed, his personal philosophy, or anything at all – send us an email to email@example.com. We can't guarantee your particular question will be answered, but we will present them to Doug. The deadline for questions is Sunday, March 6. We look forward to seeing what nuggets you come up with.
L: Doug, last week we talked about turmoil arising from the clash between labor unions clinging to wages from the fat years and bankrupt governments facing lean-year budgets. You saw that as a sign of more imminent chaos – a warning worth giving – but we didn't really get into the subject of labor unions themselves. Knowing your philosophical bent, I'd bet your views on them might surprise many people…
Doug: My take is that there's nothing inherently wrong with unions, as long as they are voluntary associations of people – they're just associations working in certain trades or in certain places. It's natural. Sure, why not?
But there are problems with the way unions exist in reality today, particularly when membership is made mandatory. That's a violation of the human right to work. When you can't work unless you join the union, and union membership is limited – often to people with political connections, or family relations with union officials – it's clear that the union is not a defender of the little guy, but a kind of protection racket. It's a fraud.
That doesn't just harm the individual worker who may wish to enter a unionized field; it has broad economic consequences. When only union members can work, the union can set wages at whatever level they want. That makes the product or service in question more expensive for everyone in society. In other words, unions don't help the average working man – they only help those who can get into the unions. They hurt everybody else: non-union workers, employers, and consumers at large. And it gives union bosses extraordinary power.