Doug Kasey On Labor Unions

Tyler Durden's picture

Doug Casey of Casey Research is interviewed by Louis James on the topic of Labor Unions

Contrarian investor and free-market thinker Doug Casey doesn’t mince his words. That’s why he is a sought-after speaker at investment conferences – not only for his spot-on investment advice but for his no-holds-barred views of the markets, economy, and politics. In light of the recent events in Wisconsin, here are his musings on labor unions.

L: Doug, we recently 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.

L: Always a dangerous thing. As a matter of principle, whenever unions get politicians to write their wishes into law, what they do ceases to be collective bargaining and becomes naked coercion. And of course the politicians pander to the big unions; unions are big blocks of voters. How could it be otherwise?

But Doug, you're the capitalist's capitalist, the world's most unabashed defender of wealth accumulation – aren't you supposed to hate labor unions? Don't you risk being kicked out of the cigar club for The Evil Exploiters of the Masses?

First off, there's no way I'm giving up my cigars – especially those from Cuba. But how could I object to voluntary associations of people? If unions were more like the Lions Club or Rotary Club – both of which simply encourage people to get together and act in unison – I'd have no beef with any of them. But the fact of the matter is that labor unions, guilds, and so forth are not truly voluntary associations. And that's entirely apart from the corruption that the union movement is riddled with – not just in the U.S., but everywhere in the world.

The good news, however, is that coercive unions are on the way out. They're anachronisms. They're leftovers from the time when people were like interchangeable parts in the giant factories they worked in. People were so replaceable that one person was little better or worse than another – because they were basically biological robots. In the early industrial era, labor was in oversupply, society was poor, and conditions were harsh everywhere. It's understandable why workers felt they had to band together for self-protection. But the industrial era is gone. The assembly line with thousands of workers is totally outmoded. In the global information age, trying to extort high wages for manual labor is pointless. Soon robots will be doing almost everything, then nanomachines will replace the robots. People will only be doing work that requires thought, judgment, and individuality. Those aren't things that can be unionized.

L: I've long thought that Big Labor was a rational market response to Big Business, a lot of which relied on rote behaviors back then. If you were just one little guy on the assembly line and your supervisor didn't like you, what chance did you stand without the backing and solidarity of your fellow laborers? Unfortunately, huge industrial concerns were highly vulnerable to sabotage – it's hard, for example, to police thousands of miles of railroad tracks.

I believe that weakness in the soft underbelly of tight-fisted business owners proved too tempting a target for many workers. And that sort of thuggery prompted management to hire thugs as well, to intimidate workers. I can't really say who started it, but tit for tat brutalized the whole dialogue – and both sides scrambled to secure politicians in a sort of labor-relations arms race. "Labor" and "management" have been at odds – sometimes violent odds – ever since. It's no surprise to me that Marx and Engels, products of the early industrial era, saw everything in terms of class conflict.

Absent government coercion to be used as a weapon by one side or the other, organized labor and management would have worked out their differences in a very different way. If one union bargained collectively for a high wage for their members, another union could bargain for a lower wage for their members and get the jobs. Or the company could decide to hire non-union employees and take on the extra burden of dealing with each employee individually. It would be a normal market process that would discover the right price for reliable labor at any given time and place.

As with so many things, it's the state and its coercive power that's the problem, not the unions. Nor management.

Doug: Exactly. It was also a time in history when society was changing from an agricultural base to an industrial one, so of course there was turmoil. Just like today.

Suppose some Mexicans or Salvadorans living in Detroit got together today and formed a union for Hispanic people and offered to build cars for half the wages the current unions are getting. They could even allow non-Hispanics to join the union – to try to defuse the inevitable accusation of racism – but the deal would be that you join to get steady work in exchange for willingness to work cheap. Would the mouthpieces of Big Labor stand up to defend them? I doubt it.

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PeterSchump's picture

We have two rackets, the corporate protection racket and the union protection racket.  They are both equally and inherently evil.

New_Meat's picture

PeterS: nay, that's three rackets, gotta' add the statist racket that feeds the U.S. "civil service" racketz that are on evidence e.g. WI and OH and soon to be coming to a location near <most of us> {not presuming where u come from, but, well, great pair on your icon}.

- Ned

samsara's picture

About as black and white as Democorp and Republicorp.


DavidPierre's picture

Then there is the Dug Kasey PUMP and DUMP newsletter(s)!

I hope some wild ass Gauchos over run his lastest scam...

 Argentinian Gated-Community Hideout for Rich MoFos 

...And they mount his pompous head on a bloody pike.


CH1's picture

Dude, they're developing property. That's evil?

Hacksaw's picture

Not even close. I never knew a union to off shore it's member's jobs.

Slartibartfast's picture

Unions almost became redundant, but then big corp. greed heads like the Koch Bros. et al reminded everyone why they're necessary. Face it, corporations would bring back slavery tomorrow if they could. There was enough state legislated worker protection in place, but then the lobbyists went to work and queered the deal. If the Koch Bros. don't like unions, they only have themselves to blame. Every lobbyist dollar they spent undermining labour protections breathed new life into unions, proving once again that Greed Has No Off Switch.

Xkwisetly Paneful's picture

Public unions are non-sensical.

Not only isn't there a presence of an exploitative capitalist but the government's goal should be to provide as many services as inexpensively as possible, while the goal of labor unions is to maximize compensation and minimize work.


The union bots can keep howling to the contrary but it doesn't change the above.

snowball777's picture

"We rarely hear, it has been said, of the combination of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate" - Adam Smith

RKDS's picture

Public unions are non-sensical.

Not only isn't there a presence of an exploitative capitalist

Yeah, corporate lobbyists totally don't infest the government and write its laws...

Orly's picture

"...the union is not a defender of the little guy, but a kind of protection racket. It's a fraud."


Give that man the blue ribbon!

Oh regional Indian's picture

Totally. It is well known, I think anyways, that unions go their start with longshoremen. A notorious industry on both sides of the coin. And the organizers were all mafioso. And the opressors were smuggling all kinds of contra-band (drugs/things/people).

So, the birth of the Union movement was infected with the criminal mind.

TO expect an apple tree to grow from an orange seed is to be delusional.

Unions have become criminal looking because they had criminal roots.

For a while back there, when a big boost was needed to get the consumption climbing straight up, collective bargaining etc. were used to mollify workers. But the men that stood for them? 

Remember the quick and ugly death of the One page union agreement at Saturn Motors? 


DavidPierre's picture


There aint no Mafia in the good ol USSA.


 FBI Director J. Edgar Hoover attempts to block the formation of the Kefauver Committee which is intended to investigate organized crime in the U.S.

 Hoover repeatedly tells committee members that he knows nothing about the Mafia.

In fact, Hoover and his lover, FBI Assistant Director Clyde Tolson, are long time associates and frequent guests of leading American Mafiosi and receive lucrative "tips" on fixed horse races from their gangster friends.

Heavily censored documents in Senator Kefauver's FBI file will show that Hoover collected material on the senator, clearly for the purpose of blackmail or smearing him. Hoover refuses to provide FBI protection to Committee witnesses, even after two are murdered.

Even when the Kefauver Committee determines, despite J. Edna's protests, that the Mafia does exist and is doing big business in the U.S., Hoover, predictably, does nothing.

 Fraud artist, unindicted criminal, conspicuous WWII non-combatant and and homosexual transvestite cum FBI Director J. Edna Hoover hires cute little Clydie Tolson as an FBI agent-in-training.

Within a year, J. Edna is insisting that her new squeeze be included on White House invitation lists.

By 1930, Clydie is miraculously promoted all the way from agent-in-training to Assistant Director of the FBI, J. Edna's right hand man, as it were.

 Tolson will remain in that position and be the gay-bashing Hoover's lover until J. Edna's long overdue death in 1972.

Although Hoover's homosexuality is well-known, his much propagandized and completely fictitious public persona is dead butch and, as part of the cover up and because he is a nasty old queen, Hoover persecutes homosexuals and other "sex deviates" relentlessly.

J. Edna makes rather ironic public statements about hunting for "sex deviates in government service" and orders FBI agents to "penetrate" homosexual rights groups across the U.S., collecting the names of members, photographing demonstrations and recording speeches.

The FBI's criminal spying on American citizens attempting to practice their theoretical rights of free speech and freedom of assembly will go on for at least twenty three years.

Hoover repeatedly uses homosexuality, real or fictitious, as a smear tactic against those who dare to speak out against his endless abuse of power or in order to discredit people of whom he disapproves.

In addition, the threat of exposure for real or imagined homosexuality is a powerful blackmail tool in Hoover's arsenal although doubtless there are other things in his arsenal.

Hoover will misuse his position as FBI Director for half a century to persecute, oppress and blackmail homosexuals and to blackmail heterosexuals with the threat of being smeared as homosexual.

Among Hoover's victims-to-be are Franklin Roosevelt's Undersecretary of State, Sumner Welles, who will be entrapped in an engineered homosexual liaison and forced to resign.

Hoover will also use the homosexual smear tactic in attempts to discredit Martin Luther King, Adlai Stevenson and three of Richard "Tricky Dick" Nixon's gang of criminal thugs, for whom it is hard to feel sorry.

But the darkest side to Hoover's hidden homosexuality and predilection for wearing ladies' clothing is that it lays him wide open, no pun intended, to blackmail. The Mafia, CIA Director, Nazi shyster and Rockefeller minion Allen Dulles and others are quick to take advantage.

A photograph of the Director of the Federal Bureau of Investigation performing fellatio on the Assistant Director of the FBI ends up in the hands of Mafia kingpin Meyer Lanksy.

 Possession of the photo ensures complete freedom of operation for the Mafia in the United States during almost forty years of Hoover's tenure.

Hoover will repeatedly stymie and block investigations into the mob and claim that the Mafia simply does not exist.

"No one who is a sex deviate
will ever be appointed to the FBI."
J. Edna Hoover
Homosexual transvestite and FBI Director

"I regret to say that we of the FBI
are powerless to act
in cases of oral-genital intimacy

unless it has, in some way,
obstructed interstate commerce."
  J. Edna Hoover
"J. Edna gave great Hoover."   Clydie Tolson
J. Edna's main squeeze and Assistant FBI Director


"That old cocksucker...." Richard "Tricky Dick" Nixon
(This might have been just about the only thing Tricky Dick ever said which wasn't a lie.)


So just forget all that shit about the Mafia and Unions! No such thing... another   CuntSpiracy Theory!
Slartibartfast's picture

Unions didn't start in America. Hate to break it to you, but their history goes back much further. Guilds and Trade Associations trace their history back to the middle ages. Unions became necessary because working conditions were inhuman. The fact they got hijacked by organized crime is merely a US sideshow in the big story. Big business never raised its head and said 'unions are run by criminals'; instead, they just cut deals with the criminals running the unions.

What's amazing is how short our memories are...there are guys still alive who remember 'the company store', and other outright usury tactics where workers were cornered into working for essentially nothing. Think it's all about 'class'? Well, it is...welcome to economics.

snowball777's picture


Those short memories are no mere accident.

CH1's picture

Totally. I have stories I could tell...

anythingispossible's picture

Is it Doug Casey or Kasey?

xPat's picture

Stay tuned for the next article, "Tieler Durdin on Speling"...


snowball777's picture in "I'm gonna Casey this joint and see if there's anything valuable and easy to fence."

Long-John-Silver's picture

Make sure Max Keiser reads this. He's supporting that Public Service Union is Wisconsin.

Spitzer's picture

Yes but Max Kieser is just trying to have all the rioters on his side, I don't blame him. Deep down, he knows unions are a joke.

Max wants revolt, where ever he can find it. He was in Lebanon recently, trying to start a riot there.

bob_dabolina's picture

Unions are fucking pointless.

We have OSHA, Federal Minimum Wage, Workers Compensation, Disability Insurance all these fuckin' Federal laws to protect the workers rights and these pieces of shit call their critics "Hitler" and "Satan"

Fuck off shit turds. Welcome to the real world where you have to work for your shit.

Suck my balls you evil pricks. What did the bond holders get for lending you money? Fucked in the ass. AND YOU STILL MAKE SHITTY CARS,2933,472304,00.html

Bobbyrib's picture

They had all this stuff in the 19th century when unions didn't exist too.

snowball777's picture

FAIL. Google Knights of Labour, ignorant.

Almost Solvent's picture

My sarcasm detector is failing.

First, I thought Bob was being sarcastic.

Then, I figured Bobby was being sarcastic.

Then, I Googled Knights of Labour and now I have a sarcastic headache.

Spastica Rex's picture

Wow. Tell us more about your balls and fucking.

trav7777's picture

fuck you.

Let's see you condemn the management that fires workers to pad their own bonuses.

bob_dabolina's picture

I condemn management for not disemboweling the UAW with a rusty spoon.

dark pools of soros's picture

there really is no point in explaining the truth to folks like this - the country is eating itself alive in search of growth and profits and the people against unions want it all to go back to slave labor anyway.. they enjoy seeing half the world starve to death.

eventually, Americans will be so jaded that any country can invade us and there will be no will to fight..  fight for what?? 



bob_dabolina's picture me where I said anything about slave labor.

Seeing as you won't be able to, please allow me to retort - don't put words in my mouth scum bag.

I work for a large company that doesn't allow unions and guess what? I love my fucking job. If my job was a woman I would make love to it for days on end (and no, it's not financial services)

Henry Hub's picture

I'm very glad you enjoy your job at Wall-Mart. They certainly appreciate a happy worker. And one of these day they are going to raise your hourly rate above $7.25 an hour. It's going to happen real soon now. And you certainly don't need a union, no sir! You hang in there now.

CH1's picture

Nice try, HH. Unions are pigs - I've known many of them. Their promise to you is to be better thugs than the other chumps. Period.

snowball777's picture

Do you love it enough to work for half your salary? How about a quarter?

NOTW777's picture

r u serious?  the unions are gorging at the public trough in hard times and you accuse those who suggest they should back off a few steps of imposing slavery?  where does this left wing demagoguery come from?

bob_dabolina's picture

It comes from his shit knot.

nmewn's picture

"Let's see you condemn the management that fires workers to pad their own bonuses."


Or grants themselves stock options after layoffs.

And I remain anti-public sector unions.

Freewheelin Franklin's picture

So, as a business owner, I shouldn't have the right to hire and fire anyone I choose, but workers should have the right to quit whenever they want and go work for someone else for more money? Fuck you. High turnover rates cost employers money. Most employers want to retain skilled workers, not fire them, asshole.

Hacksaw's picture

Where is your business and what is the name of your business. I want to be sure not to throw any business your way.

snowball777's picture

 "Most employers want to retain skilled workers..."

 "...and go work for someone else for more money?"


I think you just answered your own question, Hoss. If you want skilled workers, but don't want to pay them what they're worth on the labor market, then fuck YOU.

snowball777's picture

So let me get this straight...we shouldn't protect workers, but should protect people who invest poorly?

Did the people making the cars fuck up GM, or was it the financial wing, GMAC, sidling up to the securitization and usury trough?

Know your enemy, fool.

NumberNone's picture

You got it right SB.  I personally could give a shit about unions, just like any other organization that becomes institutionalized corruption seeps in and the original intent for their formation just becomes running cover for graft.

But right now unions have become the magician's favorite distraction right now.  Country crashing financially because of the greed of the financial institutions and the ass raping they've handed the country...but they get to lie in the shadows and cover their tracks with trillions of dollars from The Bernank.  Hardly a peep from the public. 

Elected officials sucked up every dollar from the ponzi bubble then spent five.  Now that the shit has hit the fan, time to parade out everyone's favorite whipping boy the unions. Unions provide public displays, unlikeable people, and a message that most American's can understand and hate...guaranteed wages above minimum wage and retirements guaranteed for life.  The average American caveman will stare and scratch his ass over a discussion of derivatives and housing bubble...but put up on the tv some union illiterate that screams about how unfairly they are treated then remind American caveman that this union puke gets to retire before sixty suddenly you've got the masses divided. 

Dr. Porkchop's picture

It's the life cycle of these things. It started with workers standing up for better conditions and often paying with their lives. It became another bureaucratic organization that now simply works to justify its own existence.

GottaBKiddn's picture

Totally one-sided and uninsightful post, and the comments went downhill from there.

SRV - ES339's picture

Weasel words... very disappointed in ZH for posting this as a serious piece of journalism, it is not, this guy is a shill, nothing more.

So unions should give workers a choice in a union shop... maybe we should make income tax voluntary as well, I'm sure the majority would do their civic duty and pay up... give me a freakin break.

Cistercian's picture

 One word to google: Matewan

  I am descended from coal miners and steel mill workers.Before the Unions, a lot of people died on the job.While some Unions became very corrupt, the reasons they started should not be forgotten.

 I support the Miners and the Steel Mill workers...strongly.It's in my blood.


dark pools of soros's picture

most people who talk smack about unions do not know that the majority just want a steady job to raise a family and do all the happy horseshit that the morning news and schools and holidays point you towards.. none of them get rich.   


That's like saying all the bank tellers are living like Dimon - sure there are some creeps out there abusing the system.  So take them out, not the system

SRV - ES339's picture

Very true Cistercian... as business person, I have lots of problems with how unions function (sometimes they're almost as bad as But it's so sad to see the union demonizing from the right (like this piece) has turned so many who benefit so much from the union movement, against them.

And good for you, for remembering where you came from!