I’ve written before about how “The Box,” that is, containerization, slashed the cost of international trade, thus leading to more of it. My guess is that that reduction in cost was the equivalent of dropping tariffs by at least 5 percentage points.
I quoted the famous statement by Paul Krugman that put it nicely:
The ability to ship things long distances fairly cheaply has been there since the steamship and the railroad. What was the big bottleneck was getting things on and off the ships. A large part of the cost of international trade was taking the cargo off the ship, sorting it out, and dealing with the pilferage that always took place along the way. So, the first big thing that changed was the introduction of the container. When we think about technology that changed the world, we think about glamorous things like the internet. But if you try to figure out what happened to world trade, there is really a strong case that it was the container, which could be hauled off a ship and put into a truck or a train and moved on.
The quote is from here.
Like Krugman, I’m a big fan of Marc Levinson’s The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger, Princeton University Press, 2006.
I happened to page through Levinson’s book the other day looking for something on the famous Harry Bridges, leader of the International Longshoremen’s and Warehouseman’s Union (ILWU). He was very important in the West Coast economy in the 1950s and 1960s, and especially the San Francisco Bay Area economy. Not that I was looking for this, but, as one wag put it when Bridges’s power was near its height, “In San Francisco, there are three bridges: the Golden Gate Bridge, the Oakland Bay Bridge, and Harry Bridges.”
In the process I found an interesting tidbit on Eric Hoffer, the author of The True Believer. (That’s a picture of him above.)
In 1960, employers on the West Coast were trying to clear the decks (pun intended) for mechanization and so they had a bright idea: compensate port workers with the amount of compensation scaled according to how long they had worked.
Levinson writes that in return for “near-total flexibility, the employers agreed to pay $5 million per year.” That was a lot of money in 1960 dollars. Longshoremen with 25 or more years of service would get $7,920, which was about 70 weeks’ base pay, upon retirement at age 65. They would also get the $100 per month ILWU pension. Workers aged 62 to 65 “would be paid $220 a month until age 65 if they retired early.” Others were guaranteed wages on 35 hours of work weekly even if their services weren’t needed. Levinson adds, “Anyone hired as a longshoreman after the agreement was signed would never be eligible for the guarantee because, as a union spokesman explained, ‘they will not have given up anything.'”
I think that most economists who looked at this agreement would approve of it as a way of compensating losers in a relatively efficient way. Eric Hoffer didn’t like it.
Levinson writes:
More than one-third of the ILWU’s members voted no. Some opponents, such as San Francisco’s famed longshoreman-philosopher Eric Hoffer, were outraged on ideological grounds. “This generation has no right to give away, or sell for money, conditions that were handed on to us by a previous generation,” Hoffer stormed.
In short, Hoffer saw the right to a job as an inalienable right.
READER COMMENTS
Jerry Brown
Jan 11 2021 at 8:44am
“In short, Hoffer saw the right to a job as an inalienable right.”
I’m not sure I follow your argument. Not that I know anything about this particular situation. How is it you conclude that inalienable right to a job thing? I don’t see that.
But there have been more recent examples where unions could be said to throw newer workers under the bus in an attempt to protect wages and benefits of more senior workers. I think maybe the UAW and the Teamsters at UPS might have done something along those lines. I don’t agree with that strategy but I would not be surprised if most economists did. Many economists seem to think that labor unions mostly impose costs on society even when they manage to help their members.
‘they will not have given un anything.’” Is that a typo or is an accurate quotation?
David Henderson
Jan 11 2021 at 9:37am
Thanks, Jerry. Typo corrected.
KevinDC
Jan 11 2021 at 10:40am
One implicit point worth making explicit is that, I believe, “rights” in this discussion is being used to describe negative rights, not positive rights. So, having a (negative) right to a job means that if you and an employer come to an agreement over terms of employment, nobody else is allowed to prevent that from occurring – if they do so, they violate your (negative) right to a job. By contrast, a positive right to a job just holds that you’re entitled to be employed by someone, and if you’re unemployed for whatever reason, your rights are being violated by…someone? Everyone? It’s a little unclear.
Further, to say that your (negative) right to a job is inalienable entails that nobody outside of the agreement has the right to alter the terms of the deal or to force the deal to be broken, regardless of how numerous they are, how strongly they object, or how much they might benefit personally from forcing the deal to be broken. Hoffer is saying “This generation has no right to give away, or sell for money, conditions that were handed on to us by a previous generation”. He’s not making the weaker claim that they merely had “insufficient grounds” to interfere or something like that – he’s making the very strong claim that they had no right whatsoever to do what they did. To say that an outside party has no right to interfere with your (negative) right to a job, necessarily entails that your (negative) right to a job is inalienable. Nobody else is permitted to negate it.
Jerry Brown
Jan 11 2021 at 1:27pm
Thank you Kevin. I just have to say that this framework of negative and positive rights is new to me and is not how I interpret the world. But I appreciate that you answered even though I don’t quite understand it. I will have to think about this some more.
KevinDC
Jan 11 2021 at 2:44pm
No problem. In general, negative rights are a way of viewing rights as “freedom from state interference” while positive rights usually mean something like “actual effective capacity, enforced if necessary by the state.”
These two conceptions of rights are playing out in the US right now in the dispute over what a “right to free speech” means – people are in a spat over the question of whether being booted from Twitter violates one’s rights to “free speech.” Viewing someone as having a negative right to free speech means their rights would be violated if and only if the government were to silence them. So, if I host a podcast, and an anti-vaxxer wanted to use that platform to advocate for his views, and I say “No, I’m not letting you on my show”, that would not be a violation of his (negative) free speech rights. If, however, I did decide to host him, and the state shut the podcast down, that would violate his, and my, (negative) right to free speech.
If someone was to take the view of free speech as a positive right, then my refusing to use my podcast to provide a platform for an anti-vaxxer would constitute a violation of his (positive) free speech rights. On the positive conception of rights, freedom does not mean a mere “lack of legal barriers” – you must have an active capacity to achieve something for your rights to be meaningfully respected. Having a positive right to a job means being unemployed violates your rights, having a positive right to speech means you must be capable of reaching your target audience, etc.
On the negative conception, rights allow you to compel people to leave you be – they can’t forcibly stop you from achieving your goals as long as you do it in a way that does not violate the equal negative rights of others. On a positive conception of rights, your rights are tools by which you can coercively compel people to actively provide you with the fulfillment of your goals. If I can’t find anyone to give me a job, then my positive “right to a job” means someone must be compelled to hire me – if that compulsion doesn’t take place, my rights are violated. Similarly, if I can’t effectively get my speech to my desired audience, then someone must be compelled to provide me with a platform and the means to do so – failing to coercively compel them in that way would be a violation of my (positive) free speech rights.
Libertarians and classical liberals tend to be much more prone to view rights as negative rights, while progressive and egalitarians are much more likely to take a positive view of rights.
robc
Jan 12 2021 at 4:36pm
The problem right now, is though the negative rights view is the correct one, IMO, it isn’t being applied consistently. For the last 60 years, freedom of speech and freedom of association have been treated as more and more of a positive right. From the Pickrick restaurant (which closed 56 years ago) to photographers refusing to work gay weddings, the negative right perspective has been fought against.
Twitter absolutely should be able to do as they want, but the people supporting Twitter today havent been consistent. And vice versa.
Phil H
Jan 11 2021 at 9:25am
I think using the term “property rights” is not sufficiently accurate. He wasn’t demanding the right to own his job and bequeath it to the person he chose.
It looks like Hoffer was objecting to what he saw as an unethical institutional change. The union wanted to fundamentally alter the balance of power between workers and employers; they were getting a payout for that alteration, so presumably this was an alteration in favour of the employers. So Hoffer was seeing this action as a form of one-off rent-seeking, which would alter the institutional landscape, as he saw it, for the worse.
It sounds a bit like the rhetoric directed as private equity firms and other “corporate raiders”. They too aim to alter the institutional structure of companies, perhaps to derive a one-off profit; and partisans of those companies often decry their actions.
Mark Z
Jan 11 2021 at 3:16pm
What institutional change? New technology rendered the services of the laborers no longer needed. It’s not qualitatively any different from any situation where one party decides to stop renewing a contract (note that the employers here, as I understand are not trying to unilaterally get out of an existing contract). The idea seems to be that because a mutually voluntary contract has been renewed repeatedly for a long period of time, it eventually, somehow, becomes an obligation of one of the participants to continue to renew the contract (and an employer’s obligation is by definition a worker’s property right).
Of course even labor unions don’t believe this in general (they think workers should be allowed to quit at will, and if an employer demanded every worker who quit after working for him a long time pay said employer for the right to quit, let alone compel him to keep working for him, there’d be outrage). So my guess is the language of ethical systems and rights is just a veneer for a general belief that, because labor is always and everywhere exploited by employers, any reallocation from employers to workers is justice-increasing (and whatever reallocation is reached is almost certainly insufficient), and the details of the contract between any particular worker and employer are actually irrelevant.
David Henderson
Jan 11 2021 at 4:01pm
This is one of those rare situations in which I disagree with KevinDC. Kevin did a very nice job of distinguishing between negative rights and positive rights.
But that’s not what I think is going on in the Hoffer quote. Hoffer is talking as if he thinks these rights are inalienable. There are two problems with his claim: they’re not rights and they’re not inalienable.
The key one is the first problem. The previous generation had no right to hand a job over to people in the next generation because they didn’t have a right to the job. All they had was the right to work for a willing employer, just as all an employer had was the right to hire a willing employee. Similarly with people in the current generation that Hoffer is in at the time. Hoffer is speaking as if he thinks there is some collective right handed on from generation to generation. There isn’t.
KevinDC
Jan 11 2021 at 4:33pm
You are correct David – I misread things. Or, I breezed through and didn’t read carefully enough. I came away on the first reading thinking the complaint was more akin to an agreed upon contract between private parties being overruled – in which case one would be able to rightfully complain that their negative right to a job (in the sense I defined it) was being violated. But, I was too hasty. I’m going to blame that on insufficient coffee intake – not because I have any logical reason to do so, but because I always tend to think more coffee is a good idea and this is a good chance to confirm my bias.
I appreciate the correction!
JK Brown
Jan 11 2021 at 7:26pm
True, but one can see where unionists would come to believe they had jobs to hand down since the very defining element of a union is having taken the right to work for a willing employer from non-union members, and the right to hire a willing employee from employers intimidated and forced into union contracts. The complaint is that which was taken by previous generations should be able to be passed down to the favored in the next generation.
The liberty of a free man to work the hours and job he chooses was taken a century ago. Unions limit the work a person can do and the State denies them the liberty to work for hours or wages that are unapproved.
Today, just as, Muller v. Oregon. 208 U. S. 412. 1908, deemed women “wards of the state” and thus their hours and work controlled, men who do not qualify according to law are also “wards of the state” in regards to the hours, the wages for which, and the jobs at which they may work
AMT
Jan 11 2021 at 9:50pm
It sounds like the complementary good, powerful cranes, would probably be right up there for importance as well.
Joy D Schwabach
Jan 11 2021 at 9:50pm
Coincidentally, I just heard a great presentation today on that book and this subject! The costs of shipping are now trivial in comparison to the goods being shipped. I learned all about Malcolm McClean and his quest for standardization. For a time in the 60s, 40% of his revenues came from shipping things to the Vietnam War.
Thomas Hutcheson
Jan 12 2021 at 6:40am
I believe most people have an understanding of their (incomplete) labor contracts that make them “property” (though not heritable) so long as they do not mis-behave.
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