Labour Market

Power or productivity? Why we disagree over tube strikes

“Strikes have the added benefit that they give people a nice opportunity to signal their ideology to others”, a friend of mine tweeted yesterday. At least as far as my timelines on Twitter and Facebook were concerned, that was exactly right, even if the signalling activities were highly asymmetrical. There were a few conspicuous hard-line anti-union contrarians, but the ones who shouted their positions from the rooftops loudest were the strike supporters. As in every other tube strike I remember, unconditional support for the strikers was the ‘high-status opinion’ that educated, intelligent people were socially expected to hold.

This article is not about whether the strike was justified or not, or about how Transport for London should be organised. Instead, it offers a potential explanation for why so many people on the left feel obliged to defend tube strikes, whatever the circumstances. This is not self-evident. Tube strikes actually undermine the political left. They work against the left-wing narrative of the world, which holds that society consists of two separate species called The People (aka Working People or Ordinary People) and The Elites (aka The Establishment or The Plutocrats). The People are kind, emphatic and generous, The Elites are greedy, cruel, and rapacious. But The Elites are also skilled manipulators, so they often manage to sow artificial discord among The People, which is how they sustain their power.

Tube strikes do not fit well into this storyline. At a starting salary of £49,673, plus generous fringe benefits, it is not obvious that tube drivers are a victim group in need of protection. Regardless of whether one deems their remuneration package reasonable or not, there is no disputing of the fact that it is ultimately paid by the people who travel on the tube, many of whom will not be nearly as well-off as the drivers. So why do they defend their pay package and working conditions with all their might, even if this comes at the expense of people far more hard-pressed than they are?

The answer is simple: because they can. And in the left-wing view of the world, this is not supposed to happen, because tube drivers are part of The People, not The Elites, so by definition, they cannot be greedy. The Elites are greedy, but to The People, that sentiment is completely alien. Thus, in order to avoid cognitive dissonance, tube drivers have to be presented as an exploited victim group, and their struggle has to be presented as The People’s struggle.

But there is something else at play. At the heart of our disagreement over strikes lies the fact that different political camps hold fundamentally different assumptions about the question of what determines the living standards of ordinary people. Why is a manual labourer in 2015 so much better off than a manual labourer in 1915, and why is a manual labourer in the UK so much better off than a manual labourer in the Philippines? People who broadly believe in free markets would answer the question in more or less the following way:

With the right set of institutions in place, an economy’s capital stock grows over time, which raises the productivity of labour, and thus its remuneration. Technological and organisational innovation raise Total Factor Productivity, which works in the same direction. Improvements in transport, logistics and communication technology lead to ‘thicker’ markets, as they enable wider, more sophisticated patterns of specialisation and exchange. We get better at matching the right kind of labour with the right kind of capital. The economy grows, we all grow richer.

For large parts of the left, these are at best sideshows. They believe that progress in the lives of ordinary people is the result of power struggles. It does not just happen ‘naturally’, it has to be actively fought for, wrestled from the hands of a reluctant elite, and then constantly defended.

When it comes to telling stories, supporters of the market economy would talk about the first railroads, the first telegraph, the first transatlantic flight and the first mass-produced car, about computerisation and digitalisation, about the emergence of discounters and no-frills airlines. Left-wingers would talk about the history of factory acts and other pieces of ‘progressive’ legislation, the emergence of trade unions, the creation of different layers of the welfare state.

The two stories are not mutually exclusive. You can believe that the living standards of ordinary people are primarily determined by economic fundamentals, but that social movements and ‘progressive’ legislation also have a role to play. And you can believe in the positive role of social movements and ‘progressive’ legislation without disputing the need for a robust, functioning economy. But at the very least, the two stories differ vastly in emphasis, and they can lead to different conclusions.

I recently wrote an article on the Greek crisis for the Independent, in which I emphasised the flaws in the country’s economic policy fundamentals, especially in areas like enforcing contracts, registering property, judicial independence and the protection of property rights. Judging from the comment section, quite a few readers saw this as an attempt to detract from the ‘real’ issue: This was a plucky little country standing up against austerity, international financial institutions, and richer, more ‘powerful’ Eurozone countries. For them, this crisis was all about power struggles, not boring stuff like contract enforcement.

For the left, tube strikes touch the right buttons, even if the rest does not fit into their preferred story. Therefore, the strikers’ motives have to be romanticised, they have to be promoted from people who act in their own financial interest to people who are fighting for us all. They earn far more than soldiers, firefighters, nurses, teachers and policemen, you say? Well, that’s an argument for raising the wages of soldiers, firefighters, nurses, teachers and policemen, not for cutting the wages of tube drivers. Never mind that in a country where the average full-time salary is £32,250, we cannot all earn close to £50,000, no matter how much redistribution there is, and no matter how strong the union movement.

But such details are as unimportant as the specifics of what a strike is about. Strikes divide us, because we tell ourselves different stories about how the world works, and role of strikes differs vastly from story to story. Whatever the details of the next tube strike, the ideology-signalling will continue.

Dr Kristian Niemietz is the IEA’s Senior Research Fellow.

Dr Kristian Niemietz is the IEA's Editorial Director, and Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).

1 thought on “Power or productivity? Why we disagree over tube strikes”

  1. Posted 13/07/2015 at 13:04 | Permalink

    Withdrawing your labour is only an exercise in price discovery. Sure, the employer should be free to sack strikers and re-employ. But, withdrawing your labour to get better conditions/wages seems very free market to me.

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