Labor Corporatism Fails In Volkswagen Union Vote

The curious conservatism of a left-wing cause


Leading up to the recent election conducted by the National Labor Relations Board at the Volkswagen automobile plant in Chattanooga, Tennessee, in which workers voted 712 to 626 against joining the United Automobile Workers (UAW), left-wing supporters of the union drive demonstrated a curious lack of understanding of the conservatism of their cause.

The fact that Volkswagen tacitly supported the UAW signaled to only a stalwart few on the hard left of the labor movement that unionization in this case might have favored something other than the interests of the workers. Last year the UAW distributed cards to employees in the plant which, when signed, authorized the union to represent them in collective bargaining but also declared that "We commend and embrace the Volkswagen philosophy of co-determination and … believe that the best way to actively participate in our company and to contribute to VW's continued success is to achieve representation as our colleagues have at the other 61 Volkswagen facilities across the globe."

This signaled the UAW's commitment to institute what in Europe is known as a "works council," a committee of workers that co-manages a facility with the employer and is legally or contractually obligated to work in the interests of both workers and company. Works councils are common in major industries in Europe, especially in Germany, and operate in every VW plant except in China and Chattanooga. Typically, works councils are forbidden from supporting a strike, and have been criticized by some on the left for serving to constrain workers' demands for better wages, hours, and working conditions and for enmeshing labor with the state. Many of the companies co-managed by works councils, including Volkswagen, are also co-managed by their respective state or national governments.

The conservative effect of works councils and the UAW's acquiescence to it most likely account for Volkswagen's support for the union. It was also the intention of the creators of the doctrine—known as corporatism—that gave rise to works councils.

Corporatism was first developed as a coherent ideology by Pope Leo XIII in his 1891 encyclical Rerum Novarum. Responding to mass labor unrest and the spread of revolutionary fervor in a rapidly industrializing Europe, Leo called for employers and workers to treat each other as members of a loving family, subsuming their self-interest to the interests of the company, the Church, and "the commonwealth." It is "ordained by nature," he declared, "that these two classes should dwell in harmony and agreement, so as to maintain the balance of the body politic."

The Pope endorsed unions that were cooperative with employers and introduced a concept that was later realized in the creation of works councils: "Should it happen that either a master or a workman believes himself injured, nothing would be more desirable than that a committee should be appointed, composed of reliable and capable members of the association, whose duty would be, conformably with the rules of the association, to settle the dispute." This system of industrial harmony would bring national harmony as well: "men would cling to the country in which they were born, for no one would exchange his country for a foreign land if his own afforded him the means of living a decent and happy life." Following the publication of the Pope's encyclical, the Church supported a number of trade unions in Europe that eschewed anarchism and socialism, collaborated with employers, and declared their loyalty to God and country.

In the 20th century corporatism split into several variants. In Italy and Germany, it formed the basis of fascist economic policy. Workers and employers were expected and when necessary forced to renounce their self-interest and cooperate—through "corporatives" in Fascist Italy and "industrial cartels" in Nazi Germany—in building stronger industries for the health of the nation-state. Because German works councils had been infiltrated by communists and other radicals who sought to subvert them, the early Nazi regime replaced them with more compliant "councils of trust," which served the original, intended function of works councils.

In the United States, corporatism guided the formation of the National Industrial Recovery Act of 1933 (NIRA), the defining legislation of the so-called "First New Deal." Very similar to the national economies established in Italy and Germany, the NIRA and the National Recovery Administration, which put the law into practice, suspended all federal anti-trust laws and created "code authorities" made up of businessmen and representatives from compliant unions that — instead of market forces or worker demands — determined how much products would cost, how much workers would make, and how much companies would produce.

During World War II, corporatist leaders of unions affiliated with the Congress of Industrial Organizations, notably Walter Reuther of the UAW, enforced a no-strike pledge and helped employers discipline workers who rebelled against production speedups and government-imposed wage caps.

This less than glowing history has long been known by labor activists and intellectuals associated with anarchist, syndicalist, and certain Marxist tendencies that have been critical of state intrusions into industrial relations. It may also explain why so few who supported the union campaign in Chattanooga identified the objective of the UAW and VW as corporatism. A notable exception to this was Demos co-founder David Callahan, who acknowledged the favorability of corporatism to employers and nonetheless (or therefore?) endorsed it. "Capitalism needn't feature nonstop conflict between workers and owners, and can actually work better if these two sides cooperate," he wrote on the eve of the Chattanooga election. "That's the basic idea behind corporatism, and decades ago, it had pretty wide traction among America CEOs and elites generally."

The crowning irony of all this came in the days before the election, when the left roared in defense of nothing less than corporate welfare. Following a threat issued by Republicans in the Tennessee legislature to stop "any additional incentives from the citizens of the state of Tennessee" going to Volkswagen "for expansion or otherwise" should the UAW be voted in, left-of-center media outlets from MSNBC on down angrily aligned themselves with the right of the corporation to receive government subsidies.

It was a perfect corporatist moment for the American left. But one might be forgiven for wondering what exactly was left about it.

NEXT: Southern Poverty Law Center Finds Fewer Far-Right Groups, Warns Us To Be Worried Anyway

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  1. This signaled the UAW’s commitment to institute what in Europe is known as a “works council,” a committee of workers that co-manages a facility with the employer and is legally or contractually obligated to work in the interests of both workers and company.

    You mean like a manager?

    1. Whenever I read one of your comments, I wish the squirrels would move user names to the bottom of posts instead of at the top.

    2. “Manager” has “man” right in the front of the word. Microaggression!

      1. Start working at home with Google! Just work for few hours and have more time with friends and family. I earn up to $500 per week. It’s a great work at home opportunity. I can’t believe how easy it was once I tried it out. Linked here

    3. Yes, but a council where employees have (possibly elected) non managerial representatives and possible voice on what the company does.

      The NLRA (and NLRB’s interpretation of it) bans companies from introducing various committees and councils designed to give workers a say (and assuage their concerns) unless the union is considered truly independent. But, contra Thaddeus here, I think that there is a fine case for a works council as being better for employees that more authoritarian management styles. It seems a bit silly to say that management can’t poll their workers on possible policies or solicit formal feedback.

      1. The business and the employees can probably work that out for themselves.

        1. Not according to current law, though. If the business goes too far in setting up worker committees, it’s an illegal company union.

        2. I work for one such business, the management went from corporatism to might makes right
          Guess which way the profits rolled

  2. I don’t see why VW’s support says anything about whether or not the UAW would have been good for workers.

    Even making the assertain that VW support = bad for workers buys into the union line that employers are inherently hostile to their own workforce.

    Ask yourself the converse: if VW had opposed the UAW here, would that mean that the UAW must be good for VW workers? My own default position is that unions are good for unions, and any benefits to workers range somewhere from incidental to accidental. Given that unions impose deadweight costs on employers and actual out-of-pocket costs on workers, I suspect that on net and generally speaking, unions are not good workers, and this has nothing to do with the employer’s attitude.

    1. There’s also the possibility that VW felt that unionization would overall be a slight negative to them (or have little to no effect), but they felt that the negative PR would be worse and decided to support unionization as a way to get ahead of the ball.

      1. Wal Mart is in the midst of a similar ploy with their farm workers.

      2. Also possibly to mitigate potential damages caused by unions by professing support for the workers so that they might all try to cooperate instead of play who can hate the boss hardest

  3. Who believes that the UAW had in mind anything like the concept of codetermination? They wanted to muscle into non-union territory and mulct more funds from working people.

    The thought that the UAW thugs and layabouts would behave like VW’s Betriebsrat in Wolfsburg is silly, just silly.

  4. I’m a little embarrassed to admit that until now I hadn’t ever heard of the Rerum Novarum or its contribution to corporatism as a political philosophy. Meet the new pope, same as the old pope.

    1. Feel free to read it, especially this Lockean discussion:

      “9. Here, again, we have further proof that private ownership is in accordance with the law of nature. Truly, that which is required for the preservation of life, and for life’s well-being, is produced in great abundance from the soil, but not until man has brought it into cultivation and expended upon it his solicitude and skill. Now, when man thus turns the activity of his mind and the strength of his body toward procuring the fruits of nature, by such act he makes his own that portion of nature’s field which he cultivates – that portion on which he leaves, as it were, the impress of his personality; and it cannot but be just that he should possess that portion as his very own, and have a right to hold it without any one being justified in violating that right.”…..um_en.html

      1. And he tears socialism a new one.

        1. I’ll bookmark it for later, but I’m a tad skeptical given the bits quoted in the article and your previous interpretations of papal opposition to communism/socialism that seem a bit, shall we say, generous.

          1. I won’t sugarcoat it – Pope Leo XIII would not have been a member of the Libertarian Party. He said that wages should be made high enough “to support a frugal and well-behaved wage-earner.” (in contrast to modern policy which is not to care how beneficiaries of govt aid act frugally or well-behaved)

            A key passage illustrates that the worker/employer associations are to be in part a *buffer* between the individual and the state, which is already a contrast with the fascist/nazi vision of these associations being under the State’s thumb:

            “In these and similar questions, however – such as, for example, the hours of labor in different trades, the sanitary precautions to be observed in factories and workshops, etc. – in order to supersede undue interference on the part of the State, especially as circumstances, times, and localities differ so widely, it is advisable that recourse be had to societies or boards such as We shall mention presently, or to some other mode of safeguarding the interests of the wage-earners; the State being appealed to, should circumstances require, for its sanction and protection.”

            1. “I once believed that Pope Leo XIII’s social encyclicals, if they did not call for a welfare state, could at least be read in such a way to justify that principle. Rereading Rerum Novarum in the light of [John] Locke’s influence, however, it is not possible to sustain this interpretation. On a deeper level, it is clear that Locke and Leo were ultimately dealing with the same issue: setting the boundaries on the scope of government’s legitimate role via natural rights.”


  5. I thought that the National Labor Relations Act prohibited employers from endorsing specific unions or telling their employees that a specific union is the favored or “better” one. An employer can oppose all unions and urge its employees to remain non-union, but it cannot endorse one union over the others or imply that it approves a specific union. That being the case, how could VW express its desire to work with the UAW without running afoul of a key principle of federal labor law since 1935?

    1. I heard somewhere that the NLRB had something to do with this. Does anyone know if this is so?

      1. The NLRB enforces the NLRA. The NLRB has said that works councils in the absence of an independent union are a banned company union, which the NLRA bans under section 8(a)(2). Courts have upheld this opinion, as in Electromation, Inc. v. NLRB (1994).

        I added this, and the cites to Wikipedia’s entry on works councils.

        VW likes works councils, but they couldn’t introduce one without having an NLRB-approved union.

        1. Thanks for the explanation.

        2. Thanks John! That explains a lot, although that opinion is rage inducing aside from the idiotic employees and management (also employees) labels. It’s perfectly ok to be a workplace tyrant and rule with an iron fist and a tin ear but it’s not ok to to pull one of your employees into your office to discuss the workplace and solicit their opinions.

          1. Right, it’s this theory that the company, by doing so, is undermining the chance of an independent union. Perhaps, but if the company undermines the chances of an independent union by giving workers what they want, including on pay and workplace environment, what really is the problem?

    2. how could VW express its desire to work with the UAW without running afoul of a key principle of federal labor law since 1935?

      By imperial decree, graciously handed down by Barack I in recognition of the devoted service of his vassal UAW?

  6. The courts will claim Rand has no standing to sue the NSA for constitutional violations, BUT THIS GUY was clearly wronged.

  7. I knew it. You Californians are never fucking happy. If you aren’t bitching about droughts you’re bitching about mudslides.

    1. Don’t forget fires.

  8. So now that the vote went against the UAW it’s all settled, right?

    1. so droll

  9. The fact that Volkswagen tacitly supported the UAW signaled to only a stalwart few on the hard left of the labor movement that unionization in this case might have favored something other than the interests of the workers.

    Uh, yeah.

  10. Those guys in Wolfsburg should do a little digging into the history of Saturn before they hop into bed with the UAW.

  11. Heretic

    Earlier this week, a co-founder of the environmental group Greenpeace told a Senate panel something unexpected for a green activist: Climate change is not caused by humans.

    Patrick Moore, a Canadian ecologist who helped found the organization in 1971 and remained a member for 15 years before leaving in 1986 because he disagreed with the group’s turn from science to politics, told the Senate Environment and Public Works Committee, “There is no scientific proof that human emissions of carbon dioxide are the dominant cause of the minor warming of the Earth’s atmosphere over the past 100 years,” according to a Washington Times report. “Today, we live in an unusually cold period in the history of life on earth, and there is no reason to believe that a warmer climate would be anything but beneficial for humans and the majority of other species.”

  12. Moore added that humans evolved as a tropical species and can only survive colder climates today because of fire, clothing, and housing. He also said that during the Ice Age, carbon dioxide was 10 times higher than today, but humans still prospered?an interpretation dismissed by some scientists. Moore blamed environmental groups like Greenpeace for spreading misinformation. Activists use faulty computer models and scare tactics to advance their political agendas, he alleged.

    Crazy talk.

    1. Yeah, while I’m very sceptical of the “science” that an increase of trace gas can cause significant warming, I’m significantly more sceptical about the predictions of doom should the planet’s temperature rise a handful of degrees.

      Mankind thrives in warmer places. I’m guessing at it’s worst it would be a push. Montana could warm up a bit and I wouldn’t mind… -18 right now.

  13. This is the worst chatroom EVAH!

    This topic is as exciting as watching paint dry. Can’t we get a good abortion or at least a circumcision thread?

    1. OK!

      Cecile Richards, head of Planned Parenthood: “”For me, I’m the mother of three children, for me, *life began when I delivered them.* They’ve been probably the most important thing ever since. But that was my own personal decision.”” [emphasis added]…

      1. So, Eddie, what is it about abortion that makes you so passionate about it?

        For me, I couldn’t give a rat’s ass. I see both sides of the topic and neither is particularly compelling as neither side can prove their claims. That being the case, the matter becomes one of beliefs rather than facts, so I default to allowing others to do as they believe regarding the issue.

        Why is this your thing? Were you born with a coat hanger protruding from your head or something?

        1. I dunno, some people care about legal dope (I do, for one), and others (or the same people) care about abortion.

          I will note one thing in my defense. Sometimes I look at an abortion thread started by someone else, a thread where I may not even have commented, and I see passionate discussion. So it’s not just me.

          1. Anyway, you invited it this time.

            And no love for the circumcision story below?

            1. Let me put it this way – assume that, hypothetically, the government was tolerating violence against some group whose race or color they thought made them less than full citizens. Suppose that violence against members of this group was committed and left unpunished by the authorities. Not that this has ever happened in US history. Would this be a matter where you shouldn’t get all worked up?

              1. No matter how bad a given injustice, there will be people defending it with passionate, often very learned, arguments. Slavery, lynching, Marxism-Leninism, you name it.

                It’s a bit too easy to say “neither side can prove their claims” about, say, racial oppression. Or that there’s good arguments for and against slavery or Marxism. One has to evaluate the arguments.

              2. Of course I would, but it’s a false equivalence.

                At some point, a bunch of cells becomes a person with rights. I’m certain it’s a person post birth. I’m fairly sure it’s a person pre birth. I’m nearly sure it isn’t a person at conception.

                Why worry about shit you can’t possibly know/prove and more importantly, why attempt to force your belief on others?

                1. To some of us, that’s like asking, “why attempt to force your anti-lynching beliefs on others?”

                  1. As I said. False equivalence.

                    1. All right, but I’m guessing from what you said that you disagree with Cecile Richards, since she waits until after birth to recognize a person’s humanity.

                    2. But she is closer to the abortion status quo than the views of us prolife wackos. Couldn’t the “moderates” at least join with us in putting the line of legal protection at least *some* place before birth?

                    3. But she is closer to the abortion status quo than the views of us prolife wackos.

                      Her definition of personhood is no more/less provable than yours.

                    4. She was defining life, not personhood, and she said her kids’ lives began at birth. At least “for me.”

                    5. Only people have rights. Until the fetus is a person, the rights of the mother take priority.

                    6. But she referred to life, not personhood.

                    7. Then she is confused as well.

                    8. Essentially what you’re arguing is that it’s impossible to rule on moral questions, but that’s not true. This one just happens to be a more difficult moral question because there’s no universal consensus on when a human organism becomes a person and becomes entitled to rights. And it’s not a fact-based question. You can’t scientifically prove “personhood”, let alone the rights that accompany it. It’s really not an entirely false equivalence with slavery, because at the time it was well understood that blacks were not fully “persons”, and the question of their rights came down to the same issue. Animal rights is in a similar category as well.

                    9. D.N.A.

                    10. If someone looks at a picture of a 20 week old fetus and then claims, ‘Nope, not a person to me’, I think that person is lying to him/herself.

                      The proof is in what it is.

                      It is pretty easy to say there is an individual life present from conception. That’s science. As the life progresses through the pregnancy it gets harder and harder to say, ‘Nope, I still don’t see it’. To the point where it is one of those ‘who are you going to believe, N.O.W. or your own eyes’.

                      The argument ‘I have the right to end this life’, is the argument that needs to be proved. The argument, ‘it is an individual life’, is easily provable.

    2. Let’s make it a twofer:

      “[Israeli] Attorney General Yehuda Weinstein urged the High Court of Justice on Tuesday to overturn a rabbinical court ruling ordering a woman to circumcise her son.”…..m-1.573756

      1. (article from Feb 11)

  14. Works council unions do at least seem to align incentives between capital and labor much better than do our typical American unions.

  15. The CAW has been trying to get a toe in the door of the factory where I am employed for as long as I have worked there. They haven’t even been able to garner enough signatures for a vote.


    Nice piece on “hidden law”.

    1. Rauch’s “hidden law” is really just another way of saying “common sense” (not common sense in the O’Reilly moron sense, but in a real person’s sense). In other words, people are incredibly complicated and not every situation they encounter can be codified into law (I would argue that none of it can, not properly), and so people have to make constant micro-judgement calls about every encounter they have.

      Laws and codification attempt to shoehorn that very finessed human interaction into words on paper. It’s fucking asinine. So I get what Rauch is saying about when his “hidden law” is politicized and drawn into the spotlight, but I think calling it “hidden law” is actually insulting, as “law” is the problem here. It’s just sophisticated, complex human interaction. And yes, attempting to shoehorn it into “laws” and bullshit like that is a severe problem.

    2. Thanks for posting this. Great read.

    3. Goldberg had me interested until he decided he was going to absolve conservatives of being statists with:

      Once it was established that we are to be ruled by legalistic reformers, it was inevitable that the Right would find its own to fight fire with fire.

      “Well he did it first!” really isn’t what I’m looking for in an intellectual movement.

      1. Conservatism is a political movement, not an intellectual movement.

        I mean, he makes a very good point, and it’s a consistent one in his writing: you’re not putting the genie back in the bottle. There is going to be a centralized, re distributive, bureaucratic, and coercive federal government. I mean, you could argue we lost that battle in 1789. Certainly it was gone by 1935 or soon.


    Google pays the vig.

    1. The donation came after Supervisor David Chiu’s meeting with Google’s corporate executives. In the meeting, he urged the company to be more engaged in the community.

      Sure. More engaged? Google is the first page that every person goes to when they turn on their computer or smart phone. It is the most advanced tool ever devised to collect and organize information, and has improved humanity (including San Franciscans) beyond any measurable amount. It has poured tens of billions of dollars into the San Francisco economy. But yeah, the problem is that Google wasn’t engaged with the community. Fucking politicians…

      1. Well, at least they’re trapped in San Francisco and can’t get out no matter how much they get shaken down by local politician/hoodlums.

        1. Cut up the goose and it will be endless gold forever more!

      2. But yeah, the problem is that Google wasn’t engaged with the community.

        But they make MUNYZ with all that stuff. Only free stuff is of benefit, because… good intentions.

        1. FEEEELZ!

      3. David Chiu is a mendacious ass. Note that the article is rife with the desire to shake down, er, “encourage” other companies to do the same. The net of this is that they can’t logically come up with other revenue models, so the conversation most likely went like this – “Nice little company you have there, it would be too bad if SF public services couldn’t meet your needs. I’m sure there’s some way we can help each other…”

  18. Um, OK. Don’t think this adds much to the discussion OTHER THAN the whole pope thing, about which I was unaware. Makes me dislike corporatism even more.

    “Crony capitalism – now with MOAR RELIGION added to the favoritism and statism!”

    I’m still enjoying the yummy schadenfreude – ooo, how appropriate to use a German word in this case! – of this loss for Bob King. Michigan’s adoption of right-to-work legislation is directly attributable to his actions. The governor assured King he wouldn’t sign RTW if it came up. Rather than leave it alone, King decided to go forward with a ballot initiative to basically ban RTW in MI. It failed miserably. The TEAM RED state house/senate then sent the gov RTW, and he signed it = “up your ass, Bob”. He wouldn’t have done it had King on badly misjudged the whole situation.

    Love it. Love it. Love it. Couldn’t happen to a more miserable man and organization. Also, fuck VW.

    1. “Crony capitalism – now with MOAR RELIGION added to the favoritism and statism!”

      Why not read the relevant document (see above), complete with defense of private property and denunciations of arbitrary government.

      Not a libertarian manifesto, by any means – too much distributive justice. It does try to put the brakes on the forward-thinkers of the time. The encyclical’s defense of private property in land led to a rebuke from Henry George:


      1. The Catholic Church’s “social justice” encyclicals have always just been Third Way bullshit with a drizzle of God.

        1. The Catholic Church’s encyclicals have always been distinguishable from the Libertarian Party platform or the position papers of the Reason foundation and magazine.

          But where did the LP and Reason get the very concepts being used in these debates? Whence came the idea of the dignity of the individual human person being central? Whence came the idea that there are higher principles than the positive law?

          1. Classical Greece. Zeus Eleutherios ring any bells?

            1. “First ask yourselves, Gentlemen, what an Englishman, a French-man, and a citizen of the United States of America understand today by the word ‘liberty’. For each of them it is the right to be subjected only to the laws, and to be neither arrested, detained, put to death or maltreated in any way by the arbitrary will of one or more individuals. It is the right of everyone to express their opinion, choose a profession and practice it, to dispose of property, and even to abuse it; to come and go without permission, and without having to account for their motives or undertakings. It is everyone’s right to associate with other individuals, either to discuss their interests, or to profess the religion which they and their associates prefer, or even simply to occupy their days or hours in a way which is most compatible with their inclinations or whims. Finally it is everyone’s right to exercise some influence on the administration of the government, either by electing all or particular officials, or through representations, petitions, demands to which the authorities are more or less compelled to pay heed. Now compare this liberty with that of the ancients.

              1. “The latter consisted in exercising collectively, but directly, several parts of the complete sovereignty; in deliberating, in the public square, over war and peace; in forming alliances with foreign governments; in voting laws, in pronouncing judgments; in examining the accounts, the acts, the stewardship of the magistrates; in calling them to appear in front of the assembled people, in accusing, condemning or absolving them. But if this was what the ancients called liberty, they admitted as compatible with this collective freedom the complete subjection of the individual to the authority of the community. You find among them almost none of the enjoyments which we have just seen form part of the liberty of the moderns. All private actions were submitted to a severe surveillance. No importance was given to individual independence, neither in relation to opinions, nor to labor, nor, above all, to religion.”


    1. But but it would have been so much worse if they had guns…

  19. It’s just about time for you to change your handle again, isn’t it, Ed?

    1. Don’t be touching my handle.

  20. So, both the Union organizers and the parent Corporation wanted the Union adopted ?. and the majority of the workers didn’t. Even if, in some objective POV, the Union would be good for the workers, surely that is THEIR decision? And shouldn’t that serve as a serious wake-up-call to all the people who wanted the election to go the other way?

    Mind you, I’m betting on blovation and blame-shifting.

  21. The conservative effect of works councils and the UAW’s acquiescence to it most likely account for Volkswagen’s support for the union.

    VW’s “support” was due to the union threat of doing nasty things at the other 61 plants if VW didn’t roll over and not contest the election.

    And yet the union still lost the vote, narrowly.

    1. VW in Germany has union representation on the Supervisory Board (Aufsichtsrat), a not completely toothless parallel to the Management Board (Gesch?ftsf?hrung). Labor members there could make trouble by blocking or forcing certain management decisions.

  22. National Industrial Recovery Act of 1933 (NIRA) was found unconstitutional by SCOTUS.

  23. My wife’s Passat is 10 years old. Been a great car. I was so glad the UAW ate crow I bought a new VW!

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