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Wednesday, November 21, 2007

Writers' Strike

One issue that has me pretty confused is the writers' strike. This post has a very good explanation of why a writers' union is needed, from the writers' point of view. That post does have one error. The author says that cartelization of the entertainment industry is an inevitable consequence of a free market. That is false. It is an inevitable consequence of a corrupt economic system, which is falsely touted as a "free market". Cartels don't occur in a truly free market. (If a cartel does occur in a free market, that means that the free market has been destroyed and someone has successfully established a new state.)

Why is the writers' strike industry-wide? Why should the Tonight Show, Letterman Show, and Daily Show writers be all striking simultaneously? They are owned by three separate corporations. Shouldn't NBC/GE, CBS, and Viacom each negotiate their own separate agreements with the writers' union? Why can't the Daily Show say "We agree to the writers' contract request", while the writers for other shows keep striking?

The answer is that the entertainment industry has organized itself as a cartel. There are a handful of corporations that dominate the entertainment industry. Even worse, these handful of corporations have decided to offer standardized terms to writers. This is like GM, Ford, and Chrysler negotiating in unison; in practice, this is what actually happens, because the contract negotiated at one is used as the model for the other two.

The entertainment industry has decided to offer standardized terms to all writers. The writers respond by unionizing. The entertainment cartel LOVES this arrangement, because it means they don't have to compete on price. The writers' union is, in effect, an extension of the state. The writers' union legitimizes this corrupt practice by the entertainment industry. Under US government rules, the entertainment cartel gets immunity from antitrust regulations when negotiating with workers, if the workers are unionized.

A group of writers can't get together and say "Let's start our own TV station", because of the barriers to entry to the market. There is no true free market in writing for TV stations, so you can't really say that the actions of anyone are violating the spirit of a free market. A writer isn't free to personally negotiate his own terms. A TV station or program isn't free to individually negotiate with writers.

BTW, the actual issue appears to be Internet sales of programming. With TV broadcasts, it is generally acknowledged that writers get a certain % of sales. The writers want the same percentage to apply to Internet sales that apply to regular broadcast sales. The TV stations want the percentage to be 0% or a lower %. IMHO, it should be the same % for each.

In a truly free market, the issue of "what % of revenue the writer gets" should be individually negotiated by each writer. That is precisely the sort of price competition the TV stations do not want.

In the current system, a writer who attempts to negotiate individually with TV stations will see the same lousy terms offered by each corporation in the cartel. Given the context of an un-free market, forming a union is the writers' best alternative. A writers' union does give each individual writer the opportunity to settle pay disputes cheaply, through the union arbitration process. Under a corrupt legal system, it would not be practical for each writer to individually sue if they were cheated out of their pay.

Writers' Union vs. Editors' Union

This joke is circulating on the Internet: "If the fiction writers are on strike, then how come Fox News is still on the air."

The answer is actually very simple. The news editors are represented by their own separate union. Reality show writing falls under the editors' union instead of the fiction writers' union.

The writers' union attempted to unionize the writers on a reality show. They found themselves in a turf war with the editors' union. Their attempted strike failed miserably.

This is precisely the way the red market likes it. Even though the writers' union has a certain degree of power and influence, the writers' union and the editors' union are separate. When the writers' union attempted to unionize reality show writers, the turf war between unions took precedence over negotiating with the employer. That is precisely what the red market wants to do: divide and conquer the workers.

You shouldn't have any animosity towards the writers' union, who are doing the best they can in the context of a corrupt system. You should blame the TV stations, because if they broadcast honest news stories detailing the corruption, the system would be reformed. The truth is leaking out slowly on the Internet.

The NFL Players' Union Gambit

If the writers' union winds up being broken in the current strike, they could take a page from the NFL players' union playbook. After frustration with the NFL, the players' union decertified itself and filed an antitrust lawsuit. This wound up leading to the current free agency system, which is far better than anything the players had previously, although still short of optimal.

Since the TV industry is organized as a cartel, perhaps the writers' union could decertify and file an antitrust lawsuit. On the other hand, that's just relying on one part of the red market to protect you from another part of the red market. Perhaps they would be better off converting to agorism.

In fact, when I watch some TV fiction shows, I wonder if some writers are trying to secretly leak out the truth. A writer can't come out and say "The US Government is evil." However, it is perfectly acceptable for a writer to say "Ming the Merciless' government is evil", and have Ming use tactics similar to those the US government uses.

I wonder if that explains movies such as "The Matrix". Many people say that "The Matrix" is an analogy for the corrupt economic and political system we live in today. Maybe that is the real reason for that the popularity of that movie. Some people say "The Matrix" is nonfiction. Did a bunch of clever writers figure out a way to leak part of the truth?

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