“Those who tell you of trade-unions bent on raising wages by moral suasion alone are like people who tell you of tigers that live on oranges.” – Henry George, 1891
From colonial times, trade unionists found the going difficult in North America. There was no prevailing ideology of “working-class solidarity,” and unions were far from respectable; in fact, they had a well-earned reputation for being antisocial, even criminal. FULL ARTICLE
{ 64 comments }
← Previous Comments
>”"Second, workers priced out of work by unions >remain unemployed or obtain jobs at nonunion >companies. A larger labor supply depresses wage >rates there, so union wage rates come partially at >the expense of lower nonunion wages.”
>There’s an easy solution for those nonunion >workers: JOIN A UNION.”
That’s no solution. If all workers were unionised, it would not be possible for unions to raise their members’ wages (except at the cost of profitability and production: see Britain in the 1970s for an example).
The special benefit of union membership (higher wages, lower levels of acceptable productivity) can only ever benefit one group at the expense of another (those unable to enter the induustry at a lower wage), since trade unions gain their benefits by use of the political, not the economic, means.
“The weapon of the trade union is the strike. It must be borne in mind that every strike is an act of coercion, a form of extortion, a measure of violence directed against all who might act in opposition to the strikers intentions. … The policy of strike, violence, and sabotage can claim no merit whatever for any improvement in the workers position.” LvM, Socialism
‘That’s no solution. If all workers were unionised, it would not be possible for unions to raise their members’ wages (except at the cost of profitability and production: see Britain in the 1970s for an example).”
That’s right. They wouldn’t have to, because they would have successfully defeated capital monopolies to bring wages into “equilibrium”. Right now capital monopolies can get away with paying lower wages than they could if labor were organized.
“The special benefit of union membership (higher wages, lower levels of acceptable productivity) can only ever benefit one group at the expense of another (those unable to enter the induustry at a lower wage), since trade unions gain their benefits by use of the political, not the economic, means.”
A union contract is no different than any other contract. You don’t like paying higher wages to union workers? Then don’t sign a union contract. But it might be in your best business interest to sign, if your other choice is for the workers to stop working. That’s not political; that’s economic. There is nothing about labor unions that implies state backing other than enforcement of contracts.
“The weapon of the trade union is the strike. It must be borne in mind that every strike is an act of coercion, a form of extortion, a measure of violence directed against all who might act in opposition to the strikers intentions.”
And is an employer using coercion when it uniliterally cuts your wages and says “take it or leave it”? Is that extortion?
A company can raise prices for goods and services. Is that extortion?
So 51% can “force” the other 49% to strike? If so, the workers signed a CONTRACT that binds them to whatever the union management says. It’s no different than any other condition of employment. “But they want to work without going through union management”. Well too bad, because the employer already contracted to get all its labor from the union. No third party has the “right” to interfere with that contract.
There’s no such thing as “capital monopolies” or an equilibrium price. See Mises, Socialism, Part 3, Section 1, Chapter IV for his critique of class conflict analysis, and I daresay one of Hazlitt’s two anti-Keynes books has something to say about equilibrium prices.
Organising workers/companies into guilds/cartels/unions is a conspiracy against the public to charge higher prices than would otherwise be the case under free market conditions.
To complain that “right now capital monopolies can get away with paying lower wages than they could if labor were organized” is to clamour for maximum prices and the replacement of free competition with a closed guild system! If prices (including wages) were maximised, rather than minimised, production and prosperity would be hugely harmed, not helped. Do not forget that every member of society benefits from costs, including wages, in every industry other than his own, to be kept as low as possible.
Unions should no more be allowed to commit violence market competitors than companies should be allowed to destroy the produce of their lower-priced competition. But without violence or the threat of violence, the union can do very little to aid its members. Member benefits can only be gained by excluding potential rivals from entering the protected industry at lower prices. The union seeks to create unemployment for non-members so as to raise the wages of members. Union violent action does not create wealth, so there must be a cost to offset any particular gains to the strikers.
Yes, it is true that unions are not necessarily backed by the state, and I am not opposing voluntary organisations of workers, or even unions per se. However, unions cannot be very effective/harmful without state support.
To answer your questions:
“And is an employer using coercion when it uniliterally cuts your wages and says “take it or leave it”?”
That would depend on the terms of the contract, but not necessarily, no.
“A company can raise prices for goods and services. Is that extortion?”
Certainly not, unless it enters into a price-fixing cartel with other companies and uses violence against new market entrants.
In the hypothetical case you outline, it all seems fine, except that I would expect the case to be far more seldom if a third-party, the State, had not previously interfered on the side of labour unions (as detailed in the article).
“There’s no such thing as “capital monopolies”"
Then there’s no such thing as “labor monopolies”.
“or an equilibrium price”
Well, tell that to Emil Suric.
“Organising workers/companies into guilds/cartels/unions is a conspiracy against the public to charge higher prices than would otherwise be the case under free market conditions.”
Organising capital/stockholders into businesses/cartels/corporations is a conspiracy against the public to charge higher prices than would otherwise be the case under free market conditions.
“To complain that “right now capital monopolies can get away with paying lower wages than they could if labor were organized” is to clamour for maximum prices and the replacement of free competition with a closed guild system!”
If people set up contracts to form “closed guilds” and charge the same price for goods and services, that IS free competition. People don’t like what the “closed guilds” charge? That encourages people to allocate resources into learning certain skills the “closed guilds” have. The locksmithing guild is charging high prices? Then people are encouraged to learn locksmithing and undercut the guild. The tailoring guild is charging high prices for suits? Then people are encouraged to learn tailoring and undercut the guild. That IS free competition. That’s how the market responds to inefficiencies. Nobody has a “right” to the price they want.
“That would depend on the terms of the contract, but not necessarily, no.”
Oh, so you want it both ways. It’s not extortion when an employer cuts wages and tells its workers to “take it or leave it” and physically blocks workers from entering the workplace (by firing them) until they accept, but it is extortion when the workers demand wages to be increased (and in return also say “take it or leave it”.)
“Unions should no more be allowed to commit violence market competitors than companies should be allowed to destroy the produce of their lower-priced competition. But without violence or the threat of violence, the union can do very little to aid its members. Member benefits can only be gained by excluding potential rivals from entering the protected industry at lower prices. The union seeks to create unemployment for non-members so as to raise the wages of members. Union violent action does not create wealth, so there must be a cost to offset any particular gains to the strikers.”
What violence? Competitive business by itself isn’t violence. A strike is not necessarily violent. If you call striking “violence”, then you are a lost cause. It’s no different than the employer using “violence” to prevent you from entering the workplace until you give in to wage cuts.
“Certainly not, unless it enters into a price-fixing cartel with other companies and uses violence against new market entrants.”
Sure, but you keep redefining “violence” to suit your own interests.
“Member benefits can only be gained by excluding potential rivals from entering the protected industry at lower prices.”
And how do they “exclude” those rivals? If it’s through CONTRACTS with employers, then there’s no “violence”.
End the fed,
How does one exclude potential rivals with contracts? A competitor can win all business if he undercuts the cartel, so why would he sign a contract to join a cartel, if he can offer lower prices? Free-market cartels are always going to be short lived for this reason. AND, the free-market cartel can only charge slightly higher prices, since outrageous prices make any and all competitors viable. A government cartel on the other hand employs violence.
End the fed,
How does one exclude potential rivals with contracts? A competitor can win all business if he undercuts the cartel, so why would he sign a contract to join a cartel, if he can offer lower prices? Free-market cartels are always going to be short lived for this reason. AND, the free-market cartel can only charge slightly higher prices, since outrageous prices make any and all competitors viable. A government cartel on the other hand employs actual violence, and can keep prices outrageously high indefinitely.
The general theme here is coercion (govt.) vs. voluntary interaction.
End the fed,
“How does one exclude potential rivals with contracts?”
By negotiating a contract that requires the employer to get its labor exclusively from the union. It works so well that it’s outlawed in many places.
“A competitor can win all business if he undercuts the cartel, so why would he sign a contract to join a cartel, if he can offer lower prices?”
Because an individual worker probably isn’t able to supply the whole company’s labor, but the union is. That gives the union more bargaining power; that’s the only reason an employer will sign a union contract. Of course an individual worker or smaller group of workers can undercut the union’s price (per worker), but that won’t guarantee enough workers for the employer. Good luck winning all business unless you can supply all of the employer’s needs. The union can say, “take all of us (and noone else) or none of us”.
“Because the Free-market cartels are always going to be short lived for this reason.”
“AND, the free-market cartel can only charge slightly higher prices, since outrageous prices make any and all competitors viable.”
So why are you so scared of them?
“A government cartel on the other hand employs actual violence, and can keep prices outrageously high indefinitely.”
I’m not talking about “government cartels”. A union is not by definition a “government cartel”. But a corporation is always a government cartel, since it gains additional “rights” beyond the individual rights of shareholders.
“The general theme here is coercion (govt.) vs. voluntary interaction.”
You can play all the word games that you want, but there is nothing about unions that by definition makes them “coercive”.
Workers can voluntarily sign contracts that restrict future actions.
Workers have the right to make contracts to be represented by unions in the workplace and to be bound by the decisions of union management in the workplace even when they don’t agree with those decisions.
Workers have the right to make contracts for automatic pay raises and “above market” wages and benefits with an employer.
Workers can voluntarily sign contracts that force themselves to honor strikes as a condition of employment. You signed a contract that requires you to honor a strike but you want to work during the strike anyway? Well you signed a contract, didn’t you.
Workers have the right to negotiate a contract with an employer that requires the employer to purchase labor exclusively from the union. So you want to work but not join the union? You have no right to interfere with the already existing contract between the employer and the union. You aren’t being denied voluntary interaction; you have no right to force your conditions of employment on the employer (who already contracted to have certain conditions).
“Organising capital/stockholders into businesses/cartels/corporations is a conspiracy against the public to charge higher prices than would otherwise be the case under free market conditions.”
One business is in no way a cartel of individual businessmen; for this to be true each individual would have to be able to produce and bring to market wholly self-sufficiently at a price lower than the business itself. This is clearly absurd.
Earlier, you suggested that all workers’ wages would be higher if unionised, but now you recognise that these unions cannot exist for long where there free entry to the market; moreover, the workers’ buying power is reduced by the additional costs placed on unionised business. So which is it, do they increase everyone’s purchasing power or decrease it?
It doesn’t prove anything to ask a question and add gruesome details only after you’ve received an answer. Like I said, the rights and wrongs of the situation would depend on the contract. For example, suppose I sign a ten year contract at a certain price with an employee, but that after five years I am unhappy with the price I agreed to and now refuse to pay the employee except at a lower price. Here, I would be guilty of breach of contract. On the other hand, suppose the contract was to be renewed every month. After the sixth month, I could certainly refuse to continue the working relationship except at a different price, and the employee might or might not accept it.
I don’t think I’m using multiple definitions of ‘violence’.
A peaceful strike is certainly possible (though it will be less effective). Even a non-violent union, however, cannot bring benefits for its members without creating unemployment, and raising the costs of living for (even unionised) workers in other industries. Hazlitt explains the effect (and benefits!) of unions very well in Chapter 19 of Economics in One Lesson. Unions do not, can not, raise wages for all workers. Capital accumulation does.
End the Fed ,
some of your points are of course valid from the contractual point of view. Of course if an employer is foolish enougth to make an long-term treaty with union, he/she must honour obligations arising from it.
Cartels and union shops/closed shops are just contracts binding members of these contracts and should be legal in any liberal commonwealth. But those who make or join these kind of systems should have no right to harass or extort outsiders who have no business at all with issue.
But it is the economic reality which I question. How could an employer, which has made an long-term contract concerning wages and employment related things, survive in competitive environment if his competitors have lower labor costs?
Of course unions could try to force (by witholding whole labor supply) every employer to make similar contracts in the same industry, but how this could happen if some employees would not join union and then whole labor supply is not monopolized?
How union can persuade independent workers to join if use of violence is not allowed but punished?
Production and standard of living would be lower in society where whole labour market is unionized and home production protected by high tariffs.
“Earlier, you suggested that all workers’ wages would be higher if unionised,”
I never said any such thing. But that is certainly a possibility, if corporations capitalize on their bargaining power over disorganized workers to give low wages.
“but now you recognise that these unions cannot exist for long where there free entry to the market;”
Says who? The only real competitor to a union is another union. You can even offer to work for free, but if it isn’t enough to supply the whole company with labor, the company can still be better off going with the union.
“moreover, the workers’ buying power is reduced by the additional costs placed on unionised business.”
Blah blah blah. And somehow only workers are “costs”, but executive payrolls aren’t costs. Golden parachutes aren’t costs. CEO salaries aren’t costs.
“So which is it, do they increase everyone’s purchasing power or decrease it?”
That’s a false dichotomy. Do CEO salaries increase everyone’s purchasing power or decrease it? Do golden parachutes increase everyone’s purchasing power or decrease it?
“Even a non-violent union, however, cannot bring benefits for its members without creating unemployment,”
Who cares? We should go back to slavery then, since workers would not have to be paid anything and businesses could preserve capital. Anything else would cause “unemployment”. 150 years ago, you “libertarian” apologists for big business said just that.
“and raising the costs of living for (even unionised) workers in other industries.”
Who cares? Nobody is “entitled” to anything.
“Capital accumulation does.”
Capital accumulation only raises the standard of living for owners of capital. Unions are the realization of that capital accumulation as an increase in standard of living for workers.
“Unions do not, can not, raise wages for all workers.”
CEO salaries and stock options and golden parachutes and other perks do not, can not, raise wages for all workers. Therefore they must be outlawed.
If an employer threatens to fire workers unless they give up part of their wages, that’s not extortion. If workers threaten to quit unless the employer raise wages, that’s extortion. “Libertarian” DOUBLE STANDARD.
If workers contract for “above market” (how can it be? if the employer signed it, IT IS market) wages and benefits, that’s extortion. If executives contract for golden parachutes and blow up their company, they can still get their golden parachutes and they earned it, because they had a contract, and it’s not extortion. “Libertarian” DOUBLE STANDARD.
If workers organize, that’s *automatically* a government cartel, and is anti-competitive. If capital organizes, that’s never a government cartel, even when it gains “rights” (government-enforced privileges, like debt liability) beyond the individual rights of owners. “Libertarian” DOUBLE STANDARD.
“Here, I would be guilty of breach of contract. On the other hand, suppose the contract was to be renewed every month. After the sixth month, I could certainly refuse to continue the working relationship except at a different price, and the employee might or might not accept it.”
And the employee has the right to boycott the employer by not working if it’s not accepted.
“Here, I would be guilty of breach of contract. On the other hand, suppose the contract was to be renewed every month. After the sixth month, I could certainly refuse to continue the working relationship except at a different price, and the employee might or might not accept it.”
And the employee has the right to boycott the employer by not working if it’s not accepted.
whilst i like the free-for-all approach of “end the fed”, i am doubtful that union violence wouldn’t be a problem. police are union members, and where i come from, often turn a blind eye to stand-over tactics, vandalism or intimidation of “scabs”.
nevertheless, if the field were deregulated entirely, companies could employ more aggressive security measures to safeguard property and strikebreakers.
← Previous Comments
Comments on this entry are closed.