The Mobility of Capital


South Carolina governor Nikki Haley held a press conference with business leaders and Republican lawmakers today, where they demanded President Obama address the National Labor Relations Board’s attempt to drag Boeing kicking and screaming out of right-to-work South Carolina, back to the unions of Washington State.

The NLRB maintains that Boeing tried to open its new Dreamliner production line in South Carolina as part of an illegal attempt to “punish” the International Association of Machinists and Aerospace Workers, which has gone on strike against the company in the past.

Governor Haley called this “an unbelievable attack on not just right-to-work states, but every state that is attempting to put their people to work.” 

“On one hand,” added South Carolina Attorney General Alan Wilson, “the federal government is telling businesses if you move to a right-to-work state then we will come after you.  On the other hand, the NLRB is telling businesses if you move to a union state, you’re stuck and cannot expand elsewhere.”  He said the NLRB complaint against Boeing makes union states “the economic development equivalent of a roach motel: you can check in, but you can’t check out.”

“It is absurd in this country that represents free enterprise that one unaccountable, unelected, unconfirmed acting general counsel can threaten thousands of jobs and billions of dollars in investments,” said South Carolina Senator Jim DeMint.  “This is something that would happen in a third world country, not in America.  I can’t believe the administration is sitting on the sidelines, pretending they had nothing to do with it.”

The unconfirmed acting general counsel DeMint referred to is Lafe Solomon, who wants to prosecute Boeing under the unprecedented assertion that the National Labor Relations Act gives workers a “fundamental right to strike,” which the government must enforce by pinning targeted corporations in place and forcing them to suffer the effects. 

Back in the 80s, Craig Becker, now a member of the NLRB, wrote in the Harvard Law Review that the right of labor to engage in collective action “implicitly entails legal restraint of the freedom of capital.”  He concluded that the greatest threat to “labor’s collective legal rights” was “the mobility of capital, which courts have held immune from popular control.”

In other words, a company like Boeing can move its capital away from a predatory labor union, and seek a more equitable arrangement with non-union labor in a different state.  The government is therefore obliged to use legal force to freeze Boeing’s capital in place.  No escape for you, enemy of the worker.  Might as well make yourself comfortable in that roach motel.

This kind of tyrannical government over-reach puts the very notion of ownership at risk.  Boeing doesn’t actually plan to “move” a production facility to South Carolina – they’re not shutting down any operations in Washington State.  They’ve decided to open a new facility to build Dreamliner aircraft in South Carolina instead of Washington.  The NLRB is essentially saying that Boeing doesn’t even own its intellectual capital fully.  Even the mobility of the Dreamliner concept must be restricted.  Even ideas must be frozen in amber, for the benefit of Washington State unions, at the expense of South Carolina workers eager to win Boeing’s business.

Over the past hundred years, government has gone from the buster of trusts and destroyer of monopolies, to the most powerful anti-competitive force in America.  Unions will be less reluctant to flex their muscles with strikes and excessive demands if they know they are protected from vigorous competition in right-to-work states.  The NLRB is telling Boeing that it must purchase its labor from an absolute monopoly, the International Association of Machinists and Aerospace Workers.  Removing the competition from capitalism through such practices produces a lifeless disaster called “capitalism” only by politicians seeking to escape responsibility for its creation.

The mobility of capital is an essential component of ownership.  That makes it offensive to government bureaucrats who think they own everything.  Boeing’s plight recalls that of property owners who find their land rendered worthless by government regulations.  Of course they still “own” their land, but they can’t do anything with it.  You do not own something you cannot use, or move.

Senator Orrin Hatch (R-UT) has called upon President Obama to withdraw Lafe Solomon’s appointment to the NLRB.  Governor Haley and her colleagues in South Carolina want the President to speak up on behalf of Boeing.  If he leaves Solomon in place and remains silent, then Barack Obama is the one killing those jobs in South Carolina.  As Attorney General Wilson put it, “The President’s silence is his consent.”

Note: I incorrectly attributed the “mobility of capital” article to Lafe Solomon, when it was actually written by Craig Becker.  I have corrected the reference, and apologize for any confusion.