Again about unions

I decided to continue our discussion of unions on a new thread since the previous one became too clattered with particulars. Do not get me wrong, though. I would be happy tot talk about Keynesian versus Friedman economics, or about education any time, but I believe that these topics are too important to be buried somewhere in the middle of the discussion about unions.
Nathan, in one of his last comments, very passionately defended union’s role during Gilded Age and the first Progressive era of American history. I am afraid, however that he has wasted all this passion busting a door, which was already open. Presently, hardly anyone (with a possible exception of extremely hardcore libertarians) doubts that at that time unions played an important role in funneling angst of the workers into a socially more or less acceptable form. Even though Adam Smith considered collective bargaining analogous to price fixing by manufacturers, and, therefore going against the free market principles, one can still accept this practice as a way to compensate extensive power of the Capital against a much weaker position of an individual easily replaceable worker.
One, however, must clearly separate private sector unions and organizations of state employees. In the early days of the labor movement, the idea of unionizing workers on government’s payroll was perceived as a perversion even by labor leaders, and for very good reasons. First, the politicians and appointed by them bureaucrats, who negotiate salaries and benefits of people working for government, divide money, which is not theirs. All these salaries and benefits come from the taxes, but the taxpayers have no say in the negotiation process. Therefore, out of share sense of fairness, the suggestion by Wisconsin governor that all pay raises for governmental workers going beyond the corrections for inflation must be approved by the taxpayers makes to me a lot of sense. If this idea seems too extreme, one could delegate this decision to the local legislatures, which are elected, and are, therefore, responsible before the taxpayers. Unions, in this case would have to “negotiate” with the public convincing them that their members do such a good job that they deserve a pay raise.
Second argument against collective bargaining by government workers has been restated many times, but is still misunderstood, thus I will repeat it here. If a politician is elected with a primary support (financial and organizational) of people whose salary he/she is supposed to negotiate, this process becomes inherently and irrevocably corrupt. In this case, they are not negotiating, they are fulfilling their campaign promises, and since the money does not come from their personal pockets, they do not care much if they are spent efficiently or not. They main area of concern for the politicians is to deliver on the promises in order to get support for the next election.
The rule is, of course, not absolute, as nothing in politics is absolute. An interesting situation is developing in Connecticut, where the new governor, a democrat, who was elected with a heavy union support, suddenly demanded huge concessions from the unions. The union’s reaction was sheer disbelief in what is happening: their man turned against them, a scandal! The problem for the unions in this particular case came from changing political situation due to events in Wisconsin and elsewhere. Besides, the governor Malloy was elected with a very narrow margin, and perceived that union’s support actually coasted him votes. Thus, there is nothing surprising in Connecticut’s events, just a politician being a politician, and nothing is really new or unusual: investment in politicians always carries a risk. This is true for unions or for any other donor giving monies to politicians.
This brings me to Nathan’s assertion that union’s support of politicians is no different from the similar support of, for instance, defense contractors, contributing financially to politicians making decisions about defense spending and writing military appropriation bills. I agree that these relationships can and often do result in corruption, which is an unavoidable evil of government interaction with private companies. Still, since we cannot privatize defense, in this area government and private sector are necessarily intersect and corruption becomes an issue. However, I do not think it is correct to compare the political support provided to politicians by private firms, even if they receive governmental contracts, with support provided by unions. Private companies, unlike unions, receive taxpayers’ money as a payment for goods, which government needs (tanks, airplanes, etc.). Obviously, these companies sell these things to the government at a profit, and it is this profit, which they use to secure a continuous flow of governmental orders by supporting “friendly” politicians. Besides most government contracts are awarded on a very competitive basis (with few exceptions, when there exist only few companies able to produce required goods, like Boeing), so that even if you pay off a politician or two you still must be able to deliver the tangible goods to win the contract. At the same time, there cannot be any competitors for unionized government workers, and their financial support of elected officials is pure ugly bribery. It is even uglier than usual corruption involving private companies and municipal bureaucrats, because in the case of unions, the bureaucrats virtually paying bribes to themselves using unions simply as a conduit for the money.
The last arguments explaining why unions of government workers should not have rights for collective bargaining was presented recently in a very clear form by Thomas Sowell in National Review On Line. Basically he makes a point that competition makes unions in the private sector responsible for their action, while lack of thereof in governmental sector enables unions of state employees make exuberant demands without any real consequences for union bosses and their membership. For instance, unions virtually destroyed the coal industry in this country, but paid for it with its own extinction. Unions of public employees, however, do not have to face reality of the market, and, therefore, their power can only be limited by limiting their right to bargain.