Countervailing Power

When I was growing up in Anderson, Indiana, both my parents were passionately anti-union. There was a reason: my father had a small auto-parts business, and frequent strikes in Anderson’s then-dominant automotive plants meant fewer customers. Furthermore, there was a considerable amount of what can only be described as union “thuggery” that occasionally erupted. So I grew up with a very dim view of unionization.

Let’s just say I’ve developed a more nuanced perspective.

What my parents and I failed to recognize “back in the day” was that it’s not good when either unions or management holds vastly superior power. The ideal is balance, or what has been described by scholars as “countervailing power.”

The phrase “countervailing power” was coined in the 1952 book American Capitalism: The Concept of Countervailing Power by the economist and social thinker John Kenneth Galbraith. Galbraith argued that, in a modern technological society, most important markets would be dominated by a few large firms. Their market power and political influence could be checked, however, by countervailing power—both public, in the form of a strong regulatory state, and private, in the form of labor unions and consumer cooperatives. Arguing that measures to strengthen the bargaining power of unions and farmer groups were “among the most important legislative acts of the New Deal, all designed to give a group a marketing power it did not have before,” Galbraith asserted that “the support of countervailing power has become…perhaps the major peacetime function of the Federal Government.”

The equation of the New Deal with government-supported checks and balances in the market may seem surprising today, when many associate the New Deal with social insurance programs like Social Security or Keynesian deficit spending in downturns. But this view was the conventional wisdom (another phrase coined by Galbraith) of many New Dealers. For example, in 1940, the journalist John Chamberlain wrote: “The labor union, the consumers’ or producers’ cooperative, the ‘institute,’ the syndicate—these are the important things in a democracy. If their power is evenly spread, if there are economic checks and balances to parallel the political checks and balances, then society will be democratic.”

When there is no countervailing power–when those sitting on one side of the bargaining table are easily able to dominate or intimidate those on the other side– the result is inevitably negative. The longtime imbalance between management and workers in the auto industry has enriched  managers–obscenely– at the expense of those who make their companies profitable: CEO compensation for 2022 is reportedly  $29 million for GM’s Mary Barra, $21 million for Ford’s Jim Farley and $24.8 million for the CEO of Stellantis (and as the Free Press recently noted,  those weren’t even the highest payouts to an individual last year at the companies).

It’s not difficult to understand why union members– who had agreed to reduced wages and benefits in 2009 when the economy tanked and who still haven’t caught up– would be resentful.

In the more than half century since I left Anderson, the precipitous decline in the power and influence of organized labor has led to a number of unfortunate consequences. As the linked essay notes, one of those consequences has been an “upward shift of political power on the center-left to college-educated progressives,” and a politics that is more   technocratic and top-down. Another has been the captivity of the GOP  to the anti-labor agenda of the party’s libertarian donors.

Technocratic neoliberalism ignores the values and interests of the two core constituencies of the New Deal—the working class and rural Americans. Unrepresented in either party, these groups are drawn to outsider populists, including maverick old-school New Dealers like Sanders and right-wing demagogues like Trump.

I think the above paragraph oversimplifies the reason working and rural folks have flocked to Trump –it overlooks the extent to which his appeal is to a still-potent, still widespread racism. The racist element of his appeal been repeatedly documented.

But it’s also true that when people feel powerless or abandoned, racism that might otherwise be latent rises to the surface, so the observation isn’t entirely wrong.

The bottom line is that bargains made by unions composed of the laborers whose prospects are on the line–the people with “skin in the game”– are infinitely preferable to laws passed by well-meaning elected officials. The parties to any negotiation are privy to the issues particular to that workplace, and an agreement hammered out between employers and workers is unlikely to stoke the same level of resentment as a measure imposed by lawmakers.

The recent rise in union activity may be disruptive, but it’s long overdue.


  1. Many anti union people do not know what life was like before unions. They think 40 hour work week, overtime, paid holidays, paid vacations, health insurance and more were always a part of work life. But all of those came from the union struggle. Balance is key as prof K said.

  2. I grew up in a small community just outside of Anderson. The majority working in the auto factories. My parents did not. It has taken me a bit to evolve my thinking about Unions, a hold over from those years in a small, union town. It has been 50 years since I lived in and around Anderson. I had to laugh as I became a supporter of this strike as I realized the difference between now and then.

  3. The manufacturers are offering entry level pay lower than union pay in 1978! AM General which turned into the Hummer plant in northern Indiana was offering 19 bucks an hour to start in ‘78. They are stupid if they think anybody can live on 19 bucks an hour in today’s dollars. There isn’t a minimum wage available anywhere in the US that allows someone to rent a 2 bed apartment. Those hires need WIC or Section 8 along with food banks to survive. Again, please stop discriminating against childless adults too.

  4. Where I work (cashier, retail, busy store), we’re short staffed and it’s brutal at times. Customers mutter that everywhere they go, businesses are short staffed and then I hear those magic four words: Nobody wants to work. My response often is that many people can’t AFFORD to work, especially if they have children and need childcare. As AgingLGirl stated, nowhere in this country is there a minimum wage that affords even basic living needs, and the outcry against raising said wages is always that that would kill businesses and create massive unemployment. Yet those at the upper levels are making obscene profits. Sometimes I think there needs to be a national general strike.

  5. “The ideal is balance…” This is true of almost every issue on which people disagree. It’s why checks and balances were built into the Constitution. It’s a principle that is fundamental to everything, a healthy ecosystem, a healthy emotional life, a healthy community and, certainly, a healthy system of governance.
    Beware the extremists and the fundamentalists of all stripes. They are the enemies of balance.

  6. The unions, including the teachers union, have become corporate bureaucracies. For instance, when the railroad workers voted to go on strike, the Railroad Barons went to Congress and had Nancy Pelosi and other lawmakers order them not to strike, which demonstrates the extent of their influence. Unfortunately, workers today are facing multiple challenges under the oligarchy, especially in right-to-work states like Indiana. This is particularly evident in the case of CEOs who earn $24 million annually, as they are considered part of the oligarchy.

    As a Bernie Sanders supporter, I am disappointed by how the DNC has treated him unfairly twice. Despite this, he remains faithful to the party, which is puzzling to me. I am also surprised that other progressives across the country are not getting elected, given that the working class and rural voters tend to support populist candidates like Sanders.

    The reason for this is that the oligarchy owns the media and controls the message. They would rather have Trump than Sanders in power, which speaks volumes about the state of American politics.

  7. Growing up, our household was very pro-labor. Today, my brothers and I would have some difference of opinion. I’m still very much pro-labor, while at least one brother doesn’t have much good to say about the unions that represented him. Like any other group in the world, unions need good, ethical people at the top. Not all have that. I advise those who look at their unions and find something or someone they can’t support, run for the job yourself, or find a good candidate to support and get active. This latest effort of the UAW might be just what the doctor ordered for our economy. FYI, most of my work life was in management.

  8. I checked with Bard about general strikes:

    “A general strike is a work stoppage by all workers in a country or region. General strikes are rare, but they have been used in the past to protest unfair labor practices, government policies, or other issues. The last general strike in the United States was in 1946.”

    I would say we are long overdue for a general strike. Bard also said:

    “It is possible that the UAW could order a general strike in the future, but it is unlikely in the current economic climate. A general strike would have a devastating impact on the US economy, and it is unlikely that the UAW would want to take that risk.”

    Shocking the economy is precisely what is needed to countervail the power of our existing oligarchy.

  9. Another line from JKG was, “When we all do well, we all do well.” What he meant was a kind of spin off of Henry Ford’s original idea about paying his workers enough so they could afford to buy the cars they built.

    Squeezing working class wages is the genetics of unrestricted capitalism where slavery is the ideal labor environment. The greed of “management” is profound: To whit, the 400% higher income of executives than the working people who make them rich; why does the CEO of GM need $29 million PER YEAR just to feel properly compensated? Really?

    To achieve that “balance” mentioned, everyone must remember the prophetic words of Karl Marx regarding un-regulated capitalism. The stockholders who drive “management” philosophy are like hungry hatchlings in a nest always wanting more. These “investors” give not a single damn about the people who are trying to save the middle class and working hard to feed their families. It’s all about the Benjamins.

  10. I have always been a fan of the un ion movement, though I recognize that some of the bigger unions of the past, have been run in a mobster way.
    Joan Baez’ “Joe Hill” song can still bring moisture to my eyes.
    The oligarchs have become much too accustomed to the wealth to which they, apparently, think they are entitled to, and do not give a darn about their employees. They ought to learn to respect the source of their wealth, and maybe the strikes will work towards this.

  11. I have always been on the lower end of earnings. My first job as a high schooler was with Target and that was when employers still offered things like 401Ks, health insurance, and a 40-45 hour work week without issue. Over time, all of this has eroded and I worked for several businesses running skeleton crews and refusing to hire full time people. I have also watched the “interview process” for getting a job become ridiculous with multiple interviews and computer dependent. You can’t just walk into a place anymore and hand them your resume. So stupid!

    Personally, I refuse to apply to any place that makes the interview process a headache. The employer that I work for now on a seasonal basis luckily has common sense when hiring. I haven’t had any problems with this employer or other employees which hasn’t been the case working retail.

  12. For those who tell me that unions are evil and corrupt, I ask them: “Where is there NOT corruption?” Religious institutions, police departments, corporations, politicians? Every single institution that is run by humans – last I looked, they all are – is plagued by corruption. The only thing we can do is fight corruption, whenever we see it and wherever we see it. Then, fight for fairness in all human endeavors. The people who hate fairness are the ones who will profit from unfairness.

  13. I have a slightly different take. I grew up in Detroit to a pro-union home with a family owned business.

    At one point, the Teamsters tried to unionize my father’s business, even though he spent huge amounts of money to air condition two floors of his warehouse because he couldn’t imagine working in an air conditioned office while everyone else sweated all summer. In addition, he went to the bank every Friday morning so that he could personally cash the weekly paychecks. He recognized that the alternative was the commercial check cashing ripping off his employees. Employees were viewed as family, not “expenses”.

    The union gave up, but my family remained pro-union.

    The real problem is short memory. I heard that from older UAW members in my younger years. The younger members wondered what good their union dues were doing. They didn’t remember what came before. Just as the manufacturers fooled people with claims to have “given America” the 40-hour work week and an end to child labor, while opposing those all along, the younger members had no sense of history. They had no idea of how bad it would be without unions.

    More recently, a former air traffic controller told me that his union supported Reagan, but he regretted it now. He, of course, is banned FOR LIFE from ever working in that field. Reagan was a kindhearted man.

    Reagan promised more prosperity when the unions were at their strongest and had achieved most of the needed concessions from industry. The young people, with no memory and aided by the racist whistle calls, voted for the man who wanted to undo that past 40-50 years of social and economic progress, and partially succeeded.

    Sometimes we miss the timing of when the seeds hit the soil and only start counting when we see the plants growing.

  14. A federal policy data nerd on a recent TV network said 60% of American taxpayers make $40,000 or less annually. That shocked me but guess it shouldn’t have. Since Reagan’s attack on unions and declining union memberships, companies moving off shore, and GOP tax policies increasing the income gap between workers and the top 5%, I shouldn’t have been surprised. However, workers can’t buy what the top 5% are producing without purchasing power that keeps pace with prices.

    Joe Biden is right when he says everyone does better when everyone does better.

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