Using Monopoly to Shift Value
Im sure most of you are aware of the current writers strike. For those on the left that complain about the perils of corporations having monopolies on certain industries it elucidating to see your lack of concern when unions flex their monopolistic muscle. Markets find the fair price for all things including the value a writer’s skill. The writers union is unhappy with its market value and instead of finding legitimate ways to increases it’s value it aims to increase its value by forcibly taking other groups market value. The rhetorical story, in which the left buys into, is that the little man, in this case the writer, is sticking it to the rich fat cat producers which are taking inordinate amount of the profits by forcing the producers to pay more.
If unions or people on the left had even vague understanding of economics they would realize that that the cost of any of the concessions a production companies makes to the writers will have to be managed usually by being passed on to the consumer. Of course this is not always the case and as this post notes, another cost to the writers selfishly demanding more than their market value is that other jobs vital to producing entertainment are suffering.
“I respect the WGA’s position. They probably do deserve a larger percentage of profit participation, but a lengthy strike will affect more than just the writers and studios. On my show we had 14 writers. There were also 2 cameramen, 2 camera assistants, 4 hair stylists, 4 makeup artists, 7 wardrobe people, 4 grips, 4 electricians, 2 craft service, 4 props people, 6 construction, 1 medic, 3 art department, 5 set dressers, 3 sound men, 3 stand-ins, 2 set PAs, 4 assistant directors, 1 DGA trainee, 1 unit manager, 6 production office personnel, 3 casting people, 4 writers assistants, 1 script supervisor, 2 editors, 2 editors assistants, 3 post production personnel, 1 facilities manager, 8 drivers, 2 location managers, 3 accountants, 4 caterers and a producer who’s not a writer. All 102 of us are now out of work.
One possible way producers will get around the problem of having to pay more than the market value of writers is to reduce costs with these employees. Be it thorough the elimination of positions to reduction in wages, it’s quite likely producers will reduce the standard of living for some of these workers. Note that the producers will not be able to pay less than the value of these workers because he is not allowed the power of monopoly. Using force to artificially inflate market value is apparently a right only reserved for certain groups of people.
November 14th, 2007 at 9:14 am
You say that writers are selfishly demanding inflated compensation. They are only asking for a little bit more on dvd sales, and an actual cut of internet broadcast. That’s right, currently writers get NOTHING from an internet broadcast, even though networks sell ads on them. And since the internet is where the market is moving, I see no problem with the writers demanding and getting their share of the proceeds.
November 14th, 2007 at 4:24 pm
I know you’ve been bored at work lately, so I’ll give you a reply so you have something to read while you are waiting for your data processing to finish.
It’s not as though the company couldn’t hire nonunion writers to replace them, or leaving the writers to air other content, such as infomercials. Isn’t this the implicit nature of any free market transaction? The price of a good or service is determined in part by the degree to which withholding that good or service would inconvenience the buyer should he/she choose to not meet the asking price - whether the seller is an individual (such as a craftsman) or a group (such as a company or a union). As the threat of withholding becomes more potent in its ability to inconvenience the buyer, wouldn’t you say it is only reasonable that the seller should attempt to increase his or her asking price? I personally would say that some sense of fairness might play a role, but isn’t that just more evidence that I am not a pure market liberal?
In terms of your comment about the attitudes of ‘those on the left’ (I think this includes me, in your book), I don’t immediately see anything immoral about a company taking its product off the market for a time then re-releasing it later when it becomes a ‘classic’ (and perhaps hoping that classic status causes its value to shift). Didn’t coca-cola do something like that by accident, before I was born?
November 15th, 2007 at 3:15 am
He’s right- this isn’t a true monopoly, because they can hire whoever they want. I, personally, would love to write for television; I am awaiting my offer.
Also, you say that the key grips, makeup artistis, etc will all have to take a pay cut if the writers get more money. Isn’t the CEO also an employee of the company? Why isn’t he included on this list of people who will have totighten their belts in these difficult times?
November 15th, 2007 at 1:33 pm
Point to a corporation in the present or past that meets this stringent definition of monopoly.
November 15th, 2007 at 2:38 pm
A union is not a monopoply, it is a negotiation tool. A powerful one, and those who weild it do not always to it competently, but it is a tool none the less. Negotiation is a cornerstone of free markets and it happens constantly, whether explicitly or implicitly. The writers are not out to bankrupt their employers, they simply feel their compensation is not equal to their work, and it is their right as free people to withhold their work until they are paid what they think it is worth. They do run the risk of losing their jobs to non-union writers who will work for less. However, if networks/studios want the quality of a union writer, they will have to pay. Simple as that.
Although, judging from the loads of garbage I see on TV and movie screens, I would argue that the majority of writers are not worth shit and should be canned anyways. But apparently they are worth a great deal to networks and studios who make millions (billions?) from their work. So go figure.
November 15th, 2007 at 9:46 pm
Steve- under current law, anyone who invents a new drug has just such a stringent monopoly on that drug for a certain number of years.