Sunday, December 9, 2012

Marvin Miller, RIP

Marvin Miller died two weeks ago. He was one of those people who looked old even when he was young (think Richard Nixon with a dapper mustache and a good tailor), and whose legacy was misunderstood. Miller was an economist by trade and had worked for the United Steel Workers. His background was labor unions, traditionally understood. And what does that mean? Very simply, to use existing laws and economic power to force employers to pay workers more than they otherwise would in a free and unregulated market. Thus, if factory workers are making $4.00 an hour in 1960, unions would try to negotiate a contract for perhaps $4.50 an hour and throw in more pension and overtime benefits, etc. The unions' ultimate bargaining chip was their ability to strike and the company's inability to fire them if they did. Of course, the workers would not get paid but they had a certain legal protection that protected them. Underlying every union/management conflict was a simple truth: the purpose of the union was to force management to pay workers more than they would under a completely free market. Prior to the labor laws of the 1930's, management had a very powerful weapon: "you don't like what we pay you? Quit and find a better paying job elsewhere." This is no different from shopping around for someone to paint your house. One person may offer to do it for $2000.00. If someone else offers to do it for $1500.00, you are not legally obligated to hire the more expensive painter. You have the freedom to contract with whomever you want. But unions restrict an employer's freedom to contract by creating a legal monopoly or cartel that an employer must negotiate with. Fast forward to major league baseball. In the mid 1960's (I use that era only because that is when I seriously started following baseball, every player had a contract that contained something called the "reserve clause." As interpreted by the owners, it meant that a player was forever contractually bound to the team he played for. Thus, every player was stripped of his most powerful negotiating weapon: the ability to sell his services to the highest bidder. He could always hold out as many a player did but all he was doing was depriving his team of his services and himself of money. Read properly, the contracts stated that a player could free himself of this legal language by simply holding out and not playing for one year after which he would become a free agent but the courts refused to so hold. Contrary to the economics of traditional labor unions, the baseball labor issues were almost the opposite power play. Unlike the factory worker, a baseball player's chief complaint was that there was not a free market where he could call the owner's bluff and sell his services to another team at a higher price. Where a factory owner could offer his workers the option of quitting and finding higher pay elsewhere knowing full well there was a plentiful supply of workers to fill the void, a baseball owner faced the opposite predicament. Faced with the prospect of a Sandy Koufax or Frank Robinson seeking employment with another team, an owner knew damn well that another team would pay double or triple for their services. Thus, the reserve clause sophistry. If a factory worker could at least double his salary by going from GM to Chrysler, there would be no union. Miller's players were agitating because there was not a free market for labor while the traditional unions recognized the effects of a free market for their members and sought legal protection against it. Imagine if, in 1965, every owner said that they were applying the same logic to baseball as was applied to every other business: "if the players don't like what they are being paid, hit the road fellas. You are now on your own. If you don't accept my offer, you are fired and good luck trying to get some other owner to pay you what I am paying you. You will come crawling back soon!" The players back then would have been ecstatic. A price war would have broken out for their talent. Any doubters need only look at what happened when the AFL competed with the NFL, or the ABA with the NBA, or WHL with the NHL. Miller deserves a lot of credit for accomplishing free agency. I read his autobiography, "A Whole Different Ball Game" years ago as well as the Curt Flood biography by Brad Snyder, "A Well Paid Slave." Miller may have been an egomaniac who always thought he was smarter than everyone else, but give the man his place in history. But it is wrong to equate him with other union leaders of his time. In a way, he was the complete opposite. Another point about Miller's success vis a vis other unions. A good baseball player will play for ten years or more. The injuries in baseball are fewer than in other sports and quickness and speed are not that important. Most players do not hit their prime until that are 26. Football and basketball place a very heavy premium on speed and quickness. Thus the average player is finished after three or four years. Going on strike in the NFL could destroy a career whereas in baseball a player would realize the benefits of a strike four or five years down the line. NFL and NBA players are not going to sacrifice their careers so some college kid can make millions after they have retired. Baseball does not have this problem.