The shorter work week is entirely a capitalist invention. As capital investment caused the marginal productivity of labor to increase over time, less labor was required to produce the same levels of output. As competition became more intense, many employers competed for the best employees by offering both better pay and shorter hours. [Full Article]
Source link: http://archive.mises.org/2391/markets-not-unions-gave-us-leisure/
Markets, Not Unions, Gave Us Leisure
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I look forward to reading Professor DiLorenzo’s latest book. A question: What are the proper roles of labor unions in a free society?
Labor Unions, like Guilds, are exclusive and not inclusive entities. Their social role is of stumbling blocks for freedom and free markets, and there is no way around that. Their very nature dictates they will become corrupt in the short or long run, no matter how well intentioned their leaders might be.
This is very good, the more discussion of the costs of Unionism to our economy, the better. Any discussion of Unionism should stress the basic misconception that unions have always perpetuated, that labor is in competition with capital for the available dollar. It is easy to understand how a laborer, in negotiating his salary or wage for a particular job or an hour of work, feels that he is in conflict with the owner, entrepeneur or capitalist, but in fact he is competing, with every other laborer who might be willing to do the work. The capitalist is in competition with every other capitalist. If other capitalists are paying $50 per hour for the work, he will obviously pay that much. If they are only paying $5 per hour, then he cannot reasonably be expected to pay more, but it is the rate that other labor is willing to accept that is the limiting factor, not the capitalists’ generosity. By misrepresenting the illusion of competition, the union administrators can redirect attention from the fact that government backed monopoly has guaranteed adminitrative jobs for union officials, and that is the most important thing for them.
I am convinced that unions have become overly powerful through propaganda, and have probably in large part contributed to the outflux of jobs to other countries.
However, I do wonder about when workers first became unionized and how they must have been limited in their choices back then (early 20th century). Their ability to relocated must have been very limited compared to now, when, if you lose a job, you can shop around and move to another city. Therefore, a unionist movement must have been necessary to protect against companies relocating and thus leaving the community with few other options.
I am not well-read on the subject, but I have wondered about the beginnings of unionizations and how they seem more necessary historically rather than presently. If anybody has an argument the other way, I would welcome it.
I think the proper role of “labor unions” in a free society would be in the form of temp agencies. There’s nothing that can be done to prevent individuals associating and bargaining together if they so choose to do and an employer voluntarily agrees to negotiate with that entity. There’s also nothing preventing individuals hiring the same negotiating agent much as professional sports players do.
What cannot be done? Jobs cannot be guaranteed if the workers strike, unless a specific employer voluntarily agreed to those terms, which you could possibly expect of some businesses. Employers can hire replacements. They could not force employers to not hire non-union labor.
So a free market “union” would be an information gathering specialist whose purpose would be to obtain the best wages for its clients. Though I imagine the term agent would replace the term union.
The economics of unions would be very similar if not exactly the same as that of corporate cartels. They will be competing against individuals who choose to forego representation (less cost, higher wage). They would be competing against other unions. Members of a particular union may drop out of the union and negoitate on their own the same pay saving the costs of hiring the negotiator.
Bargaining for exclusivity is common in a free market. For example, soft drink manufacturers do it with fast food restaurants. Any individual is free to compete against that exclusivity by offering a better variety of soft drinks at a similar fast food restaurant.
Those individuals seeking to differentiate themselves as group meeting certain qualifications or claiming better quality would be classified as unions. Doctors would do it. Ecucational institutions would do it. A degree from a specific educational instition is a form of free market “union” membership. So those types of “unions” that respect private property could very much be a part of the free market form of social cooperation.
The proper role of unions is to do what they do now, except without the backing of the state. Organise, strike, bargain, do whatever to get more and better for their workers.
- Josh
Regarding the actual subject of the article, does Prof. DiLorenzo give any evidence that owners were offering shorter work weeks, safer workplaces, etc. before the rise of labour unions? He doesn’t in the article, so I was wondering if he gave any in his book.
- Josh
This article in spanish.
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