Organizations with some of the strongest expressions of Chosen People thinking are unions and professional guilds. More than most organizations these are founded on Us versus Them thinking. In the case of unions, “Us” refers to the workers in an organization or industry, and “Them” refers to the managers and owners in those organizations and industries - “bosses” in union parlance. In the case of professional guilds, “Us” refers to the practitioners who are members of the guild and also refers to regulators of the profession; regulators are supportive of guild members’ views of circumstances. “Them” refers to clients as well as people outside the guild who aspire to do the same work that the members do.
The bright side of unions is offering a second point of view on organization operations with particular regard to safety. The bright side of guilds is offering standards of performance in how the profession is conducted. The dark side of both is supporting blind-spot-thinking and prescriptionism - excessive and slow-to-change rules and regulations concerning how things should be done. The changes can be so slow that the standards of performance become rituals. The conduct of courts of criminal law is a good example of this happening.
The call for unions originated as the Industrial Revolution gained speed and started engaging a larger percentage of the work force. In the 1800’s factories were a new concept and one that started spreading rapidly. How work should be conducted in factories was also a new concept. Working around the complex machines that were installed in the factories was another new concept. Consequently, a lot of experimenting was going on, and as technology kept advancing the playing field kept changing - what worked well one day was often upset by a new machine being introduced the next. The result was a lot of uncertainty for workers in these factories. Often the factory managers could figure things out well, but many times mistakes, sometimes deadly mistakes, were made. In some of those cases the mistakes were obvious to the workers who were on the front lines dealing with all the changes.
The concept of the union was to give workers a say in how the workplace was organized so fewer mistakes would be made. This was a neat concept from the worker point of view, but a deeply scary one from the manager and factory owner point of view. It would divide leadership and slow down the decision-making process. In modern parlance - “It’s complicated.” And that wasn’t the end of the complications.
In sum, the Industrial Revolution was slapped with The Curse of Being Important (my term). Everyone seemed to be invested on some level. The factory owners were putting up a lot of money to buy machines, and workers were anxiously waiting to see if their new-style, industrialized jobs would make their lives better. And it wasn’t just the factory workers, owners, and managers who were paying attention. People throughout communities were paying attention: people whose friends, sons, and daughters were heading off to work at factories, as well as all the people who were refreshing themselves at local pubs and coffee houses. When factory experiments went wrong, a lot of people were affected and were ready, willing, and able to second guess the direct participants. Calling for unions was part of this second guessing.
The heart of the pro-union argument has always been, “Managers can't get it right. And, they won't listen to us workers if we don’t have our own organization.” As a result it has always been easy to mix in virulent Us versus Them thinking as part of the support for having a union.
The problem, the goat sacrificing, that so readily surfaces in the following examples, is that the Us versus Them attitude supports instinctive non-cooperation, as well as fear, when changes are proposed. This fear, by the way, can show up on either side - management or union. If the fear goes unchecked, over time change becomes something suspicious. The more this suspicion becomes the habitual thinking, the slower the organization evolves in response to both challenges and opportunities that present themselves. This is not just annoying; it is deadly to some organizations.
High-profile examples of this leading to organization extinction in the 2010's timeframe are the demise of Hostess Brands and the city of Detroit. Both went bankrupt. In these cases cumbersome work rules were supported vigorously by the unions. In the case of Hostess, expenses got out of hand, and when competition shrunk the market, the company was no longer viable. In the case of Detroit expenses also got out of hand, and people and businesses left. In 2010 the city had a population of seven hundred thousand, less than sixty percent of what it had in 1950. The city could no longer pay its bills. The blind spot thinking of the union leaders and members in both cases surfaced as disbelief in the harsh reality that the looming abyss was real, and something they needed to take action on. In their eyes someone else was at fault.
As this book is being written, another high profile example is taking place within York City’s Metropolitan Grand Opera (the Met). The Met has always been about being a showcase for philanthropy. This is a symbiotic relationship. It offers a high class organization for donors to give to, and it must be sensitive to what pleases the high class benefactors. One of the sensitivities attributed to givers is they want to help the arts and artists. The Met gives fulfilling jobs to entertainment workers and performers. It is advancing the arts and advancing them in a way that defines grand fashion. Another benefit to givers is they can portray themselves as benevolent rather than members of a stereotypical, cold-hearted upper class. One curious side result of these desires is the givers vigorously support unions at the Met – not just one union but sixteen. (Most factories have one union.) The good side of this proliferation of unions is that the philanthropists sleep better at night knowing they are supporting a progressive institution on its labor side. The dark side happens when all these unions and all these negotiations lead to resistance to change at this venerable institution.
The following article reveals this resistance quite well as it describes the work rules that have evolved and the workers taking them for granted. This 27 Jun 14 WSJ article, “A Modern Opera: Fat Unions May Kill the Fat Lady”, by Eric Gibson, tells how things are getting out of hand at the Metropolitan Opera. From the article, “An epic confrontation is playing out at the Metropolitan Opera, only it isn't the familiar one between star-crossed lovers. The famed opera company, which opened its doors in 1883, is in a life-or-death negotiation with its unions - 15 of them.” Gibson goes on to explain that negotiations between the Met and the unions consist of standard demands such as overtime, health-care, and wages. But with the “average singer in the Met’s 80-person chorus making between $145,000 and $200,000” a year, and the Met’s financial environment changing for the worse due to unstable philanthropy trends, the organization wants to affect realistic, budget minded adjustments. The unions will not have it - “Pay what we want, or we’ll go on strike.” True to form, Us vs Them has created blind-spot-thinking. This is another case where the abyss is looming, and the unions seem oblivious to it.
Factories aren't the only places people work. Another style of work is service work. One of the uncertainties of employing a service worker is whether or not he or she can do the job. Are they competent? Are they delusional about their own abilities? Or, worst of all, are they flim-flammers who are trying to fleece some naive unfortunate? In individualistic occupations such as domestic service this question is answered by references. In occupations that are more formally structured a guild can emerge to offer a solution.
Guilds date back to the Middle-Ages. This 30 Nov 13 Economist article, “The New Hanseatic League”, describes guild-supported international trade in Northern Europe in the 15th through 17th centuries. From the article, “A walled city-within-a-city once stood on the site now occupied by London’s Cannon Street station. From the 15th to 17th centuries, its counting houses, guildhall and wharves echoed to a babble of Germanic languages. It connected London with a chain of other Hansa trading posts strung along the shores of the North and Baltic seas. These shared a common legal system and sheltered each other from tariffs and customs restrictions. For centuries the Hanseatic League’s cogs and hulks plied the inky waves, pregnant with cloth, timber and furs.” This guild provided a standard for business conduct, as compared to the alternative of doing a whole lot of guessing about how some stranger would conduct business with you. It was a big benefit. Keep in mind, this was an era when “Robber Barons” really were barons who habitually took advantage of hapless traders plying the rivers of Northern Europe by offering “protection” in the modern gangster sense of the word.
Even today, similarities tell of Hanseatic links: old style pubs and merchants’ houses are found all along the rugged coasts of the old trade routes. And merchants throughout the area share a common value and respect for “balanced books and free trade.”
Guilds have changed a lot since then. Many organizations, that today function like guilds used to, don’t call themselves guilds. No matter what they are called, the bright side has not changed as modern day guild-equivalents continue to set ethical standards and codes of conduct that both members and clients can understand and agree on. One example is the Better Business Bureau, setting what are considered good business standards that help provide consistent and reliable levels of service.
The dark side, however, is supporting blind-spot-thinking - the guild members become delusional about their role in society and the consequences of their conduct. They start cheap-shotting and writing those cheap shots into their codes. Guilds often come out against using new technologies to better the client's life. An example in the 2010's is the rise of ride-sharing apps. This is a way of using smart phones to locate a nearby ride. As described in this 10 Jun 14 USA Today article, “Regulators wreck Uber innovation: Ride-share services benefit consumers, but the taxi commission doesn't want to give us a good deal” by Glenn Harlan Reynolds, the taxi and limo guilds are vigorously resisting letting these apps be used, and they are enlisting regulator support. App users see this as a convenient, new way to get a quick and cheap ride. Taxi drivers see it as a threat to their existence. In most cities traditional taxi services are regulated by some sort of taxi commission. Membership is limited as a way to limit competition. In holding down competition, regulators act on behalf of the entities they supposedly regulate for the benefit of consumers.
In the world of Administrative Law, this phenomenon is known as "regulatory capture." Regulatory capture is an example of a good intention getting perverted by lack of vigilance. In other words, without vigilance, a government agency established to regulate an industry for consumer protection, will eventually replace its focus on consumers with a focus on the service providers and wind up regulating on behalf of the providers. The new ride sharing app is an example of established guild practices getting disrupted by a new technology, followed by the guild’s use of regulatory capture to resist the change.
My prediction is we haven’t seen the last from taxi guilds. As driverless cars become popular, they will most likely be used more for taxi service than for personally owned cars. And as this becomes clear to the taxi guilds, we will have another turf war on our hands.
Another dark side is rules and regulations with a hidden agenda. A common temptation for hidden agenda rules is limiting competition. When the hidden agenda goal becomes establishing barriers-to-entry that keep other aspirants from practicing the service, guilds are performing a disservice, not a service. This 13 Dec 13 Chicago Tribune editorial, “How to combat income inequality: Empower those at the bottom of the ladder”, discusses how guilds that limit competition hurt those aspiring to offer simple services. From the article, “But in many states, including Illinois, it's not so simple. If you want to braid hair professionally, you must be a licensed cosmetologist. And to get that license, you have to get 1,500 hours of training. A poor woman who wants to pick up a little cash off the books can usually get away with it. But if she hopes to earn a living and can't afford the training, she's out of luck.” This woman is not a problem for customers, but obviously a problem for guild members who want to limit competition.
A secondary consequence of having regulations protect guild members is that growth opportunities find other places that flourish - the ambitious innovators vote with their feet. This 5 Jul 14 Economist article, “Red Tape Blues”, talks about how “America’s license raj”, as the article calls it, affects where businesses and people decide to follow their ambitions. It suggests that cutting red tape may do even more to create an attractive business climate than cutting taxes. From the article, “One surprising finding is how little local tax rates matter. Nearly two-thirds of respondents say they pay their “fair share” of taxes, which the survey-takers reckon means they don’t feel over or undertaxed. But many complain about the difficulty of complying with complex regulations: this was a strong predictor of how small businesses rank their states [i.e., business climate for starting a small business].”
The deepest dark side, the expensive side, is delusion as guild members drift into a world of their own and drift away from actions and standards that would serve the community and deal with harsh reality. This is expensive. A 2010's example of this is the criminal justice system. Criminal justice is a guild system that swirls in emotion and ritual, and it acts much like an old time guild. It sets standards for service, in this case, how criminal proceedings and trials are conducted. But the standards are set more to accommodate those who are offering the service than the clients being served. (I talk about this more in the Courtroom Drama section.) To see that standards are met, the system puts to use a lot of “teeth” - contempt of court being just one example. The goat sacrificing within the criminal justice system is the waste that comes from long and expensive proceedings.
An example of waste within the criminal justice system is the experience of a friend of a friend. Jack (not his real name) was accused by a young girl of touching her inappropriately while they were in a large public swimming pool. (She told her father, who notified the police.) Jack denied it. It was “she said, he said”. This was the sum of the issue, and all it ever became even after the police sent a detective to investigate. But because this was a child molestation accusation, the bail was set high. Jack could not pay it. Even though he was just accused, he spent the next six months of his life in jail, being treated the same as a convicted felon. The rituals he and those in this criminal justice guild went through to bring this case to trial were convoluted and set up to make the judge’s life work more smoothly, not Jack’s. (Judges are the bottlenecks in this process.) Twice his court appointment was cancelled and rescheduled for a couple weeks and a month later. In the end Jack was found not guilty. The waste, the goat sacrificing, was: the lawyer time spent on this weak-from-the-beginning case, the expense of all the jail rituals Jack had to endure, and the shattering of Jack’s personal life as he endured them. This should have been decided much more quickly, and Jack should not have been treated like a convicted felon while waiting for a decision.
Unions and guilds can serve the community, but because they don't have a “bottom line” like businesses do, it is hard for them to get forceful feedback on how good a job they are doing. Without the “business in a free market”-like focus on paying attention to profitability and adjusting quickly to trends and consumer preferences, unions and guilds are not motivated to initiate changes in regards to waste or irrelevancy. Rather, unions and guilds can easily be distracted, leaving them to pursue special interest agendas as they lose touch with harsh reality. What follows is delusion and goat sacrificing - wasting a lot of time, money, and attention on feel-good rituals, often centered on self-preservation not actions that make the community a better place to live by adapting to changing times.