1. Skip to navigation
  2. Skip to content
  3. Skip to sidebar
Source link: http://archive.mises.org/2477/the-myth-of-voluntary-unions/

The Myth of Voluntary Unions

September 14, 2004 by

A basic understanding of the elementary economics of unionism shows why violence against competitors has always been an inherent feature of unionism, even apart from the “violence” of state-imposed legislative privileges that unions enjoy. In order for the strike to work, and for unions to have any significance at all, some form of coercion or violence must be used to keep competing workers out of the labor market. [Full Article]

{ 48 comments }

Anonymous September 14, 2004 at 2:04 pm

It never ceases to amaze me how short sighted academia is. Now, before we move forward, I would like to state that I have been in academia as student, grad, post-grad, r&d and professor. Currently I work for a big corporation and, no, I am not unionized, nor have I ever been (and I certainly DID have the chance to be).
I do agree with Thomas that violence is not the way forward, but, I the most traditional “we didn’t start it” way I have to remind him that the worker’s movement started because the blunt (i.e. slave-like) abuses from companies. Furthermore, the word “cartel” was invented to define companies or corporations that “muscled-in” or “ganged-in” over consumers and workers alike. So, to call union workdes a “labor cartel” is just plain cynic.
Furthermore, since we are most definitively NOT in a utopian Misenian economy, I can’t see any problem with workers demanding “above free-market rates”. Two things: 1- there is no such thing as a “free-market rate” rates are negotiated in each and every transaction, this is the whole point of a “free-market”. 2 – There is no such thing as a “free-market” markets are constatly manipulated either by big-money or the government. So, what is the problem with the ones with less power to gain some? It just help balancing a system that is patently and bluntly stacked against them. Now, before you start screaming bloody-lefty, let me remind you that the whole labor mess started with the industrial revolution, not the bolchevique one. At this point in history, capitalists simply enslaved laborers because they could do it. Heck! Go to places such as Africa or India and take a good look at child labor! THERE is where it al started. Get a grip! Unions did not started the problem. Capitalists did.
In my book, this means they are getting what they deserve.

Mark Hughes September 14, 2004 at 2:31 pm

Hmmm…wasn’t the northern force in the U.S. Civil War referred to as “The” Union…?

In consideration of the unexcelled violence that has been either initiated and/or amplified by *that* Union, I’m hopeful that Professor DiLorenzo is onto something in terms of trend-shifts.

Somewhat ironic, though, that in the final analysis we’re all one big union. Ref: “Quantum Reality” by Nick Herbert

Thant Tessman September 14, 2004 at 2:32 pm

One-hundred-year-old myths are pretty hard to shatter.

The book that did it for me was “Child Labor and the
Industrial Revolution” by Clark Nardinelli. Unfortunately
it is out of print.

Lisa Casanova September 14, 2004 at 2:32 pm

Anonymous,
Your post is not the first time I have heard the Industrial Revolution cited as justification for labor unions, government intervention, etc on the grounds that workers were being horribly exploited by capitalists. However, the people who toss out this assertion never furnish any proof. Could you please do so?

David Heinrich September 14, 2004 at 2:54 pm

The anonymous post just again revelases Mises brilliant insight that interventionism leads to more interventionism. Contrary to the anonymous post, the short-sighted thing is allowing and encouraging exploitation and counter-exploitation, coercive force and counter-coercive-force, rather than working to eliminate interventions by the State into the free market.

David Grey September 14, 2004 at 2:59 pm

I belong to ALPA (Airline Pilot’s Association). One comment: Does it come as ANY surprise that ALPA and AFL-CIO has endorsed John Kerry for President? Why do you suppose this is true? No, not because the Republicans oppose big labor but because the Democrats support ‘collective bargaining’ or ‘give me what I demand or expect and I won’t make trouble for you’. Yes, labor unions have had a place in history since the days of Carnegie and Morgan but they are ever weaker because they have lost sympathy with the middle class, the part of society that has paid exhorbitant union ‘dues’ and received less expectation in return, the part that is now outsourced and lost to automation. Organized labor unions are a thing of the past.

Toadie September 14, 2004 at 3:07 pm

What wasn’t addressed in detail is how ALL unions in the US are essentially State creations.

The whole idea of “bargaining units” recognized by the National Labor Relations Board forces unionization on a minority of workers at a firm by a majority group of workers.

As the author said, the idea of unionization is economically unstable without violence. Once again, the violence is transfered from the union to the Federal Goverment.

Jardinero1 September 14, 2004 at 3:30 pm

I don’t get where this essay is going. Are unions bad because they use violence and coercion or are they bad because they intervene with so-called “market forces”? Does the state sanction the violence and there are no penalties for said behavior? What is he getting at?
The fact is that unions are legitimate economic actors just as individual capitalists and individual workers are. Unions act to consolidate their labor power and fetch the highest possible price. I have never understood why that is such a no-no. A capitalist, businessman.. whatever you want to call him, works in the opposite direction to consolidate as much land and capital as cheaply as possible and then sell his finished goods at the highest possible price. Why is it supposed to work in one direction but not the other?

Steven M September 14, 2004 at 4:27 pm

Even given that the majority of unions use coercive tactics, we should be careful to criticize either these tactics or the specific unions that use those tactics, not unions in general. Voluntary, non-coercive collective bargaining should be tolerated (natural right to free association), even though some individuals may fare better bargaining individually.

In addition, coercive bargaining is acceptable to counter and only to counter coercive employment (slavery). While this is quite rare in the U.S. and even abroad, undoubtedly, it still occurs even today.

Toadie September 14, 2004 at 4:30 pm

Actually Steven, he pretty much destroys the idea that non-coercive collective bargaining is even possible.

In a free society people can call themselves whatever they want and use whatever non-coercive collective bargaining tactics they want. But is clear that the idea of “collective bargaining” is impossibe without violence and/or State intervention (same thing really).

Michael Halbert September 14, 2004 at 5:18 pm

Why is it that folks talk about a “free labor
market” when outside of a few white-collar jobs
no such thing exists except in the abstract.

If you look at the history of organized labor,
you’ll probably find the movements arose in “company towns”. The employers held a monopoly
of jobs in their area. So it was “my way or the
highway.”

If you felt your roots deep in that location what recourse did you have but to put pressure on the employers. Free labor was “contract labor”.
Contractors went to the most likely place to recruit replacement workers.

Today, these benevolent employers skip a step
in this process. They recruit directly to third
world countries even before the jobs become available to locals.

I’m not convinced that a “free market” exists or that a “free labor market” ever existed.

Mike Halbert

Brandon Berg September 14, 2004 at 5:52 pm

Under normal circumstances, pure water cannot be heated above 100 degrees Centigrade. I have a few questions regarding this fact:

1. Why not?
2. Under what conditions is it possible to heat pure water above this point?
3. Why does this work?

Finally, what do these questions and their answers have to do with the ability of unions to raise wages above the market level through voluntary collective bargaining?

Steven M September 14, 2004 at 6:40 pm

Toadie:

I have only seen a list of aggressive union tactics. There is, however, a list of non-agressive union tactics: picketing in which anyone is free to cross the picket line, truthful consumer education, and collective withdrawal of labor or a slow down of productivity, provided that such a labor slow down does not break the labor contract. I reread the article and did not see any argument that destroys my assertion.

A union’s problem is painfully obvious: organized strikers must shut down the enterprise, close the market to everyone else—uncooperative workers, union members, disenchanted former strikers, and employers—in order to force wages and working conditions above free-market rates.

No, organized strikers do not have to engage in any of these unacceptable practices. Instead they can withdraw their labor either individually or collectively barring a valid contract to the contrary. In fact, I would venture to state that unions (employee associations) are alive and and well in forms that are unrecognizable to those looking for stereotypical, tendencious associations: tiger teams, activity commitees, community outreach programs, etc. I think unions are evolving as employees and employers gain an understanding of what makes a private-sector company successful: treating each other with respect and recognizing the valuable service and dependency of both the employer and employee.

Note: This only applys to competitive markets. Public-sector companies have a different, bizarre incentive structure.

Toadie September 14, 2004 at 8:49 pm

Steven:
Your assertion is hot air. Yes the tactics you cite are fine and dandy from a moral basis, but the laws of human action show they will be ineffective.

You are committing the error as seeing “workers” as a collective and not individual workers. Hence your support for the concept of a “strike” – a halt of labor-selling by every single worker.

Unfortunately we all know that prices will adjust within the firm and other (individual) workers will more than willing to take the place of the striking workers and sell their labor for wages. The same goes for the consumers of the firm’s products. This concept is an indisputable result of the axiom of human action. Do you disagree with this concept?

So if we know that eventually non-striking workers will take the place of striking workers (which is undisputable), why would union workers bother to strike in the first place? If they can’t maintain a monopoly over the labor supply, the whole idea of “collective bargaining” will fail to be effective.

The answer is clear:

1) The concept of “striking” is inherently based on the threat or use of violent force to intimidate (extort) other workers (including both existing workers and potential new workers) from freely bidding for the labor market of the firm in question. Like all monopolies, the union can only maintain its monopoly of the firm’s labor market by violence force. Even if violence is not used, the THREAT of it is clear from the very concept of “striking” and will terrorize other workers from bidding on the work.

2) The State institutionalizes this violent monopoly by recognzing “bargaining units” which recieve monopolistic charters over a firm’s labor market.

3) Why don’t the unsatisfied workers simply find new employement? The answer is that they know they can terrorize other workers with or without the State.

In short, unions are institutionalized banditry of other workers.

The good news is that the concept and mythology of “Labor Movement” is being exposed and discredited every day.

I also think it is completely moral to shoot workers attempting to injure other workers or customers (for their defense) and to use violence force (but not deadly) to protect company property. So let’s give two cheers to the Pinkertons and their fire hoses and clubs. They had that part right!

Rod P September 14, 2004 at 11:16 pm

“A capitalist, businessman.. whatever you want to call him, works in the opposite direction to consolidate as much land and capital as cheaply as possible and then sell his finished goods at the highest possible price. Why is it supposed to work in one direction but not the other?” -Jardinero1

I would say, Jardinero, that the answer lies in the purpose of the market itself. The market exists to deliver to the consumer what the consumer wants or needs. It does not exist to provide a job.

The consumer will (usually) encourage efficiencies in the market, such as the leveraging of capital you speak of, while discouraging inefficiencies, such as labor priced higher than market-clearing levels.

Fra. 219 September 15, 2004 at 12:07 am

I in no way excuse or justify the initiation of force on anyone’s part. So I was surprised to read M. DiLorenzo’s words here:

“In principle, unions could conceivably be just voluntary associations of workers seeking to improve their own economic wellbeing, just like everyone else, including the combinations of individuals who we label as ‘corporations.’”

For, after all, it is a sickening fact that corporations, and those acting on behalf of corporations, have also many times in our history engaged in thuggery, violence, and coercion. The social form known as the “corporation” is in no way immune from that same ugly sticker.

All of us could be better libertarians and better citizens (as well as better Christians, Buddhists, or what-have-you) by more thoroughly rejecting the use of coercion and initiation of force by ALL players.

To go a little bit further from the topic, consider this: Not only is the corporation not innocent, but (just as M. DiLorenzo claims about unions) its very nature impels it towards wrongful action.

The modern corporation is based on the idea of “limited liability”: that I may invest my funds in a business; and if that business harms others, I take no further responsibility for that harm. (The “harm” might include polluting others’ property, or hiring thugs to kill competitors. It doesn’t matter — I’m safe.)

I may expect to profit by that harm if the corporation is clever enough to avoid justice; but I will not be held accountable for it if the corporation is brought to justice. Thus, there is a very real sense in which avoidance of justice (and therefore, an economic bias to behave wrongly) is at the center of this idea of the corporation.

Brandon Berg September 15, 2004 at 1:25 am

Under limited liability, those who actually commit crimes can be held criminally liable for them. Why should innocent investors lose their homes or be held criminally liable for crimes committed without their knowledge or consent?

Anonymous September 15, 2004 at 6:20 am

To Brandom Berg:

1 – Basically because what keeps the water molecules together is the Hidrogen Bonds (not covalent) but described by the Van Der Waals forces. If you add more energy, you simply break the bonds and water changes phase into gas (i.e. it boils). The whole thing is more complex involving free energy in the phase change, but this is the short version.

2 – If you have ultra-pure water with no vibrations and ultra-clean surfaces, then the water won’t boil because even though you are adding enough energy to break the Van Der Waals bonds, water has not had the chance to organize itself into gas (i.e. bubbles) and hence it cannot change phases.

3 – It works because in order to have boiling water, you need first a cohesive association of water molecules with sufficient energy to break Van Der Waals forces. This necessitates a starting point where such “vapor-in-liquid” molecules can associate and create a “bubble”. Unless such a point(s) are provided (such as a dissolved solid, a rugged surface or vibration), bubbles will simply not form.

Strictly speaking, water above 100 C in liquid state at 1 Atm of pressure is considered to be “superheated”. It explots at any disturbance.

4 – No relation with current economic topic :-)

Socialism: Mind of a Child September 15, 2004 at 8:03 am

“But mommmmmy, some evil corporations used violence a hundred years ago so why can’t ALL unions use violence AGAINST OTHER WORKERS to force them out of a market????”

scott September 15, 2004 at 8:33 am

[i]Unfortunately we all know that prices will adjust within the firm and other (individual) workers will more than willing to take the place of the striking workers and sell their labor for wages. The same goes for the consumers of the firm’s products. This concept is an indisputable result of the axiom of human action. Do you disagree with this concept?p[/i]

not if it is more expensive to hire new workers than it is to simply meet the current workers’ demands.

Toadie September 15, 2004 at 9:11 am

scott:

Why would it be more expensive? And why do you assume all individuals workers striking have the same valuation of what a “fair” wage?

I think also your use of the word “demands” illustrates my point. In normal business, bargaining takes place through “bids” and “asking price” and “offers.”

“Demands” is a word we use for violent hostage-takers and terrorists.

When a union makes “demands” they are using threats of violance to hold other workers (or customers) as hostages.

Jardinero1 September 15, 2004 at 10:25 am

Rod P.,

I beg to ask you who are the consumers in this market of yours. Are they labor or the owners of capital or some, as yet, unnamed third party?

Toadie September 15, 2004 at 10:32 am

Jardinero1: Every human labors (i.e. is a worker) and every human saves (i.e. is a capitalist). If you fail to distiguish map from the territory, then the fault is your reasoning (or lack of), not the fault of reality.

I would ask you to read Von Mises (located free on this site) and see the faults in your reasoning….but it isn’t really about understanding, is it?

You really don’t want to understand the world, you want to cast capitalists as evil (i.e. hold a slave morality) in a pathetic effort to gain power.

Steven M September 15, 2004 at 12:55 pm

Toadie:

I believe it is unreasonable to view all strikes as “threats of agression”. Rarely do stikers carry anything other than large signs designed to inform customers/employers of a grievance. If they intended to commit acts of violence, perhaps they should carry weapons?? Perhaps, you also assume that peace demonstrators on a candlelight vigil are threatening to burn other’s property?

Demands backed by the threat of aggression are, of course, wrong; however, “demands” or requests backed simply by the “threat” of collective withdrawal of labor (self ownership) are perfectly acceptable.

I would like to add to Scott’s excellent point of the not-insignificant costs associated with hiring and training new employees. There is also a cost associated with getting the new employees to function as a team.

You also make the not-necessarily-true assertion that a union must be demanding net wages in excess of their collective productive value. This may or may not be true, but can only be determine via negotiation, competition and hiring/firing on the free market. Free means that neither side is coerced. As I pointed out before, I do not think either strikes or work slow downs are coercive, but, in some cases(air traffic controllers), such tactics may be a contract violation.

Some striking individuals may accept wages below what they could attain as individuals because they wish to work with other congenial or complementary employees. This is what teamwork is all about and many successful companies foster this attitude to some extent.

In modern strikes, strikers may actually be striking for such things as flexible working hours, better tools, or a change of management. These changes may actually improve the productivity of the workers.

Brandon Berg September 15, 2004 at 12:56 pm

Regarding the water analogy:

1. The energy of the molecules in a pot of water is not uniform. Some move faster than others. The water’s temperature is a measure of the average energy of its molecules. The fastest-moving molecules will escape as steam, so the average energy level can never rise above the boiling point.

2. You can boil pure water by putting an airtight lid on the pot and subjecting it to pressure (or by superheating, but that doesn’t really fit into the analogy).

3. This works because the fastest-moving molecules can no longer escape, allowing the average energy level to rise above the boiling point.

So it is with collective bargaining. At most, it can set the wage level at the average productivity of the workers in the bargaining unit. But if it’s voluntary, more productive workers will opt out and negotiate individually for a better deal. This will lower the average productivity of the remaining workers, and consequently the wage level they can negotiate. Then even more workers will opt out. And so on, until only one worker remains in the bargaining unit.

As longers as workers have varying levels of productivity, voluntary collective bargaining is inherently unstable. The only way unions can make it can work is to put a lid on the pot and force more productive workers to stay in the bargaining unit and accept a lower wage.

scott September 15, 2004 at 1:04 pm

Why would it be more expensive? And why do you assume all individuals workers striking have the same valuation of what a “fair” wage?

i didn’t. but hiring new workers has added costs in addition to replacement wages, due to the bureaucracy involved. and by hiring more and more new employees you reduce the labor pool for that position, just driving up new wages, right?

Toadie September 15, 2004 at 1:43 pm

Steven:
You are quite the romantic. But you are missing the point that the ONLY reason a strike lasts longer than a few seconds is the threat of violence from the union keeps the strikers in line.

See Brandon Berg’s post above. And I would add that all workers have varying levels of productivity.

The logic of human action dictates striking is impossible without the threat of violence. Arguing for “strikes without threat of force” is like arguing for a “square circle.”

The costs of hiring an entire new workforce as replacements is a red herring. Without threats of violence the workers will be a mix of existing employes (see Brandon Berg’s post above) and repleacements – hardly exceptional as turnover is naturally constant within free labor markets.

V Harris September 15, 2004 at 9:16 pm

Lamentably, with his September 14th essay entitled “The Myth of Voluntary Unions,” Thomas DiLorenzo has once again embraced an occasion to pander to the anti-labor interests — while simultaneously declining yet another opportunity to advance the cause of liberty by befriending the rank-and-file worker.

While the historical and contemporary labor-union system merits his excoriation, his concocted critique of the impossibility of nonviolent, voluntary collective bargaining is entirely baseless — and rings hollow. This is unfortunate in the extreme, because liberty in general — and Mises Economics specifically — require impartial contributors from academe to help convey an essence of legitimacy.

Just as Mr. DiLorenzo can describe the requirements for a nonviolent business community, so he should use his intellectual ability to delineate the requirements for a nonviolent, voluntary, organized labor association — and how it might best maximize worker’s wages in a non ‘perfectly competitive’ market.

Come on Mr. DiLorenzo, you’d help the cause of liberty enormously if you’d surrender the vendetta, and propose a model wherein workers can maximize their wages — along with the transition scheme away from today’s coercive labor-union system.

We need you, Mr. DiLorenzo, on the side of liberty. But we need the labor union’s workers too. Please?

V Harris

Rod P September 15, 2004 at 9:45 pm

Jardinero1,

The consumer is every human who possesses something of value, and wishes to trade it to someone else in the most economical way possible. In other words, he wants more for less.

That something of value, of course, may include a man’s labor, which he will wish to trade for the highest possible payment. To apply force and coercion in order to artificially increase his payment above the levels set by the free market is not only unethical, it should be illegal.

If you’re so worried about giving money to the workers, wouldn’t it be nice if the moustache-twisting capitalist could employ a few more workers by reducing his per-worker expense? Unemployment reduced, there would be more consumers out there to buy stuff. Huzzah!

Toadie September 15, 2004 at 10:54 pm

V Harris pulls out the lamest of leftist tricks: The SHAME attack.

Not a peep on Mr. DiLorenzo’s reasoning from Harris. Not a single argument offered.

Just a vague warning about not being accepted by “academe,” a snotty, unfounded accusation about pandering to “anti-labor interests,” a pathetic threat to remove “worker support” of liberty and Mises.org and the typical whining attempt to shame a well reasoned argument into silence.

V Harris, is this the best you can up with? Can’t you at least threaten to key scratch Mr. DiLorenzo’s car or threaten him with a baseball bat like your comrade thugs in the Union-Mobsters movement???

V Harris September 16, 2004 at 12:23 am

Toadie, I posted at length regarding this exact issue on the blog regarding Mr. DiLorenzo’s previous article “Do Capitalists Have Superior Bargaining Power,” which you can read here:

http://mises.org:8080/cgi-bin/mt-comments.cgi?entry_id=2444

I saw no reason to restate those arguments on this blog.

Further, one fallacy in Mr. DiLorenzo’s position is the underlying assumption that workers labor in a perfectly competitive market — which they do not, and which point I did address in my post here.

V Harris

porus September 16, 2004 at 12:52 am

Hmmmm…I don’t know what to make of this assertion by the author: “In a labor force of some 130 million, private sector unions in the U.S. claim less than 10 million as members. The overwhelming majority of American workers have decided that individual or group bargaining on the free market, without a union, is in their own best interest.”

Oversimplification? You bet!! Why is there no mention of the promises made by the Reagan administration and Gingrich’s Contract with America to break the back of private unions? The drop in union numbers have to do as much with selective state policies as they have to do with the desire for the consumer to get the best product at the cheapest price.

Lest you think that I am a socialist, a unionist, or something equally banal, let me point out that I am aggressively pro-free market. However, I want to point out that unions are not unnatural as this article appears to suggest. Devoid of their regrettable, and sometimes terribly mistaken, policies, the basic principles of unionism are designed to address the disadvantages of an individual (the consumer as a producer) working within a well-established nexus of the state and a few corrupt and powerful oligarchies and monopolies.

NamedForRep.Ron September 16, 2004 at 1:35 am

Question: What is the fetish some people have with ‘organizing’ workers? I realize Marx saw them as the Messiah who would deliver humanity from bla bla bla. Why has this weird idea stuck around for so long? Do people get warm and fuzzy when they see workers organizing, like one would when seeing a puppy and kitten play? Doesn’t matter what else happens in the world, The Workers just hafta get organized!

RE: Mr. Harris’ post, it’s nice that he throws us the bone of “sure, unions have done some bad stuff in the past.” Has he succeded in fusing Marxism with Austrian Economics?? If so, he should be appointed a labor cadre who will explain to workers how economic calculation and property rights will be forced on them with an iron fist.

Kudos to Mr. Berg, by the way, on a fantastic analogy.

Steven M September 16, 2004 at 12:52 pm

Brandon states:

As long as workers have varying levels of productivity, voluntary collective bargaining is inherently unstable.

Your reasoning is analogous to that applied to the stability of monopolies. If you do not argue for government-intervention against monopolies, nor should you argue for such intervention against voluntary collective bargaining. In addition you have overlooked the possibility that to enter the voluntary union one would be required to sign a contract (temporarily) waiving your right to negotiate individually in the case that the collective agreement should be accepted. Are you saying that individuals should not be allowed to enter in such sorts of contracts?

rtr September 16, 2004 at 1:20 pm

Take a look at the current National Hockey League dispute between the corporate cartel Owners Association and the Unionized Players Association. This is an example of s relatively perfectly working free market union. In fact this should probably be a new topic on the Mises blog and I’m kind dissapointed that it isnt (hint hint).

The owners’ cartel wishes to impose a team salary cap on the players due to claims of losing money. The free market professional sports business model may in fact be that the normal state of operations is a business monetary loss and the total “profit” comes in the prestige an egotistical owner gets from owning a winning franchise. If enough owners are competing that way then everyone other owner must be forced to compete that way as well to win.

The players union isnt trashing anything. They have voluntarily agreed to join the union (peer pressure counts as still voluntarily agreeing) as long as every individual hockey player is free to leave the union and bargain on his own. The owners could hire replacement players but the state through the owners and the courts would prevent the players from forming their own teams and cutting out the owner middlemen. The situation is similar to that of the music industry. The free market solution is prevented through such cartelization and here is a perfect example of free market unionization working to establish free market wage wates for professional hockey players.

rtr September 16, 2004 at 1:21 pm

Take a look at the current National Hockey League dispute between the corporate cartel Owners Association and the Unionized Players Association. This is an example of s relatively perfectly working free market union. In fact this should probably be a new topic on the Mises blog and I’m kind dissapointed that it isnt (hint hint).

The owners’ cartel wishes to impose a team salary cap on the players due to claims of losing money. The free market professional sports business model may in fact be that the normal state of operations is a business monetary loss and the total “profit” comes in the prestige an egotistical owner gets from owning a winning franchise. If enough owners are competing that way then everyone other owner must be forced to compete that way as well to win.

The players union isnt trashing anything. They have voluntarily agreed to join the union (peer pressure counts as still voluntarily agreeing) as long as every individual hockey player is free to leave the union and bargain on his own. The owners could hire replacement players but the state through the owners and the courts would prevent the players from forming their own teams and cutting out the owner middlemen. The situation is similar to that of the music industry. The free market solution is prevented through such cartelization and here is a perfect example of free market unionization working to establish free market wage wates for professional hockey players.

Let’s Go Red Wings!!!

Toadie September 16, 2004 at 2:07 pm

OK, rtr makes a fair point.

However, professional hockey players are highly specialized labor and hockey is a team intensive sport.

I don’t think the same situaion would apply on more commoditized (easily replaced) labor.

And it still doesn’t prove that voluntary unions (unions in a free market) are possible, since the professional hockey business is a regulated (State-created) cartel.

Steven still doesn’t get that monopolies are CREATED by intervention and institutionalized violence. Intervention by the State (or anybody) against voluntary collective bargaining is impossible, since voluntary collective bargaining is impossible.

Steven might as well post that the State shouldn’t invervene against the creation of square circles or round rectangles.

Toadie September 16, 2004 at 2:54 pm

In addition to the NHL Player’s Association, you could also bring up the cast of “Friends.” All of the cast refused to work unless they recieved a million dollars per epsidode.

In this case, the actors (like the players) had an nearly unreplacable role. They couldn’t just put another actor in place of Matthew LeBlanc without changing the Joey character. The actors products were unique.

So I don’t think either the actors or players (or musicians) would play the role of “workers” in this scererio. And in that case, it isn’t reasonable to compare their association as a “labor union.”

The products of Steve Yzerman or Matthew LeBlanc are unique. No amount of threats or violence will allow someone else to step in replace them in their markets.

The products of Steve the manual laborer or Jim the electrician or Jose the fruit picker are not unique. Because of this, there will always be markets for their products. In order to monoplize these markets from other workers (i.e. “collectively bargain”) these workers need what every monopoly needs – either threats of force or the State.

rtr September 16, 2004 at 3:04 pm

In a free market the amount of work to be done is limitless. Full employment is readily available for all who wish to trade their labor. The amount of work that can be done is limited by the given natural resources and the labor pool. Unions in addition to at least temporarily helping price information discovery would readily exist the same way corporate *brands* exist. To diffentiate themselves as something other than mere commoditzed generic labor. Can brands compete long term with generic commoditized substitutes? The free market will work that out.

How would competing doctors advertise their talents? Most likely union membership in associations claiming accredited qualifications. In the free market anyone can seek employment as and claim proficiency as a doctor. If you did not personally know a doctor in a given area you might choose the union accredited doctor over the shady back alley doctor. You are in a Union if you received a degree from an educational institution and trumpet that degree on your resume. Here’s an example where corporations readily seek union employment. “BA required. 2 years experience related field work.” Same thing with programmer getting Microsoft certifications. They pay dues to take a test and are accepted into the membership through the form of certification.

If collective bargaining was impossible, the institution of marriage would not exist. Highly sought individuals may bargain that their friends receive employment and that the leader has his team hired. Nepotism, though perhaps relatively inefficient and not economically viable long term, is not against the rules in the free market.

Any group of individuals that have a common need may seek the employment of a specialist. Hiring a real estate agent can easily be regarded as membership in a Union. Just like not everyone is an expert at all nuances of buying and selling realestate everyone is not an expert at all the nuances of buying and selling labor. “Union members” in the free market are clientele of a specialist. Any “standaridized” job in a field can have vastly different pay rates. Take a look at the way the job process works today. Information is exteremly highly fragmented and a speicialist who can maximize his clients wages while also saving them the time and trouble of sorting through all that information is why they would exist.

Without state sponsored violent coercion, I would expect to see more unions in the free market. More workers would compete with each other seeking advanatageous “differentiations” to avoid the commodization label and you would also see unions competing with other unions.

It also may make economic sense for unions to be highly prevalent in certain industries, such as construction where a large number of workers are needed for short term projects. Individual construction companies may hire workers and bid on contracts. Hiring a bunch or qualified union guys saves the expense of training and/or determining qualifications for every individual hire. Also those individual workers may find themselves in a similar situation to today’s professional hockey players or todays recording artist musicians where it makes economic sense, i.e. it is an increase in their wage rates, to cut out the middleman as a group. Just as profit opportunity is temporary and fleeting for entrepreneurs so to may be the profit opportunity of non-violent union membership. It is these agents that compete to help determine market wage rates.

Toadie September 16, 2004 at 3:15 pm

But rtr, what you describe has NOTHING in common with what we call “labor unions” or what the Labor Movement advocates!

In fact they sound to me like “professional organziations” or “benevolent fraternaties” or “indusrtry associations.”

All of these already exist, and nobody confuses them for labor unions.

So are you just spin-doctoring to sell the free market to the Labor Movement (which confuses those who wish to discuss these concepts in a clear manner)?

Or describing a “circle” and calling it a “round square”?

If that’s the case, why not just call it a circle (i.e. free associations) instead of confusing us by calling your circle (which we agree exist) a “square circle” (i.e. a “voluntary labor union”)??

rtr September 16, 2004 at 4:00 pm

Why call theft taxation and tranfer payments?

Why call state school education investing in human capital?

I do not see the point of differenting voluntary free maket collective groups along the lines of union or associations.

I only see the point of differentiating along the lines of whether individuals employ the use of violence of the threat of the use of violence to steal.

Any and all crime is a form of left. Murder is theft of life. Labor unions employing tactcics of violence are bad because they employ tactics of violence not because they are an amelgamation of individuals who choose to seek a negotiating agent for selling their labor, which every individual or business is free to negotiate or not negotiate with.

I think I have sufficiently shown that free market voluntary non-coercive unions can and do exist. I’ve even shown forms of them that currently exist that are not readily recognized by most. Therefore, voluntary unions are not a myth, as the original article claimed.

You are making the same mistake that socialists make when they castigate state sponsorsed corporate monopoly and lesser forms of them as “free market capitalism”. Labor unions using violence are not labor unions, free market negotiating entities, but a group of mafia like thugs. Just like Microsoft is not a free market business selling software but a state protected monopoly (through patents and copyright) riding the violent coercion of government to its increased ill-gotten wealth.

Jardinero1 September 16, 2004 at 5:03 pm

Dear Rod P.,

Stop twisting the violence part into the argument; it’s a canard. Nobody is condoning it and it’s not legally sanctioned anywhere in the USA. With regard to coercion, all bargaining involves a certain degree of coercion, else it would not be bargaining.

With regard to the “market“. The “market” is a theoretical construct to explain what goes on in the “real world“; it is not the “real world“. That’s where all these arguments start to go offbase when they start talking about the “market” and what should “logically” occur in them.

But lets get offbase and talk logically about what should occur in a “free market“. How can a collective bargaining unit artificially increase his payment above the levels set by the free market? Logically, it can’t work. In the “free market” collective bargaining units can’t collect above a certain max any more than anyone else can.

In the “free market” the capitalist will only pay a wage up to the point where his marginal cost curve hits his marginal return curve. Logically, he can’t pay higher than that. Logically, when his costs bump above that point he will shut down that operation and invest his capital elswhere.

Logically, the collective bargaining unit can only obtain that highest marginal cost or they go walking. Logically, if that’s the highest price they can get, then Mr. Capitalist will stay in business. So, logically, what’s unethical about them obtaining the highest possible wage rate Mr. Capitalist has to offer? Why should it be illegal?

Rod P September 17, 2004 at 12:18 am

Jardinero1,

One obvious reason it should be illegal is because that collective of workers puts others outside of the collective at risk.

Case in point: US Airways is filing for its second bankruptcy, and one of the biggest problems the company is immediately facing is stonewalling unions. There are hundreds of non-union employees whose jobs are at risk because of this action, and they can do nothing but watch.

These sideline employees are being held hostage by the unions, making their pleas to the employer for settlement work in their favor. The hostages, however, won’t be getting any raises for their trouble of playing human shield in the union’s war.

Another good case, as mentioned above, is the NHL trainwreck. How’s a popcorn vendor supposed to make any money hawking to empty seats? What about the zamboni drivers, or the sports reporters who specialize in covering hockey? Think of how many talented players in the minor leagues would give their front teeth (literally) to play in the big show as scabs just to keep the season going and to make sure those folks still have a job…

(I don’t understand your need to put the “market” in quotes, and talk about the “real world” as if I’m not aware of it. What other world is there? I don’t live in a classroom simulation, and I surely don’t think in those terms.)

Jardinero1 September 17, 2004 at 10:23 am

Rod,

Those other non-union people should get themselves organized as well.

The reason I used quotes is to make the distinction between “market theory” which can be used to show “logically” that unions don’t prevent market optimization and the real world where sometimes they do and sometimes they don’t.

Study economic history and labor practices in the USA and you will find that management in some industries finds unions advantageous to work with. Collective bargaining units provide management with one agent to clarify and rectify labor grumblings that they might otherwise not be aware of. Management can articulate its needs directly to labor through that single agent. They give management a single agent to work through to enforce discipline on the shop floor.

In the world of outsurcing and restructuring you will probably notice that most of the outsourcing is occuring in non-union industries. In unionized industries, unions often work with management to make the productivity enhancements necessary to keep the jobs here.

What’s wrong with that?

Steven M September 17, 2004 at 7:05 pm

But rtr, what you describe has NOTHING in common with what we call “labor unions” or what the Labor Movement advocates!

In fact they sound to me like “professional organziations” or “benevolent fraternaties” or “indusrtry associations.”

All of these already exist, and nobody confuses them for labor unions.

Define your terms Toadie. We define a labor union as a group that bargains collectively for their labor. This bargaining may be either a result of a valid contract (voluntary) or the union may be forced upon the employees by threats of violence (involuntary). The author was falsely claiming that the former could not exist. This is patently false.

By any sensible definition of “labor union” trade associations, marriages, unions in government settings, etc are “labor unions”. A house wife/husband is most definitely a laborer in a voluntary contractual union. What sterotypical “union” are you calling a “union’? It is not RTR who obfuscates, it is you who fails to define what constitutes a “labor union” and it is you who makes any ever contracting definition of a labor unions to defend your point.

Rod P September 18, 2004 at 1:45 am

So the solution, Jardinero1, is for everyone to organize into collective bargaining groups? Surely you must see the gridlock which would result…? Unionizing an entire company would only drive more business toward the Wal-Marts of the world, and I’m guessing you don’t want that. (I wouldn’t mind it much at all.)

There is nothing wrong with unions working with management to make the productivity enhancements necessary to keep the jobs here. But why could a group of employees not do this outside of a union? This one possible bright side of unions doesn’t convince me.

Omch'Ar September 23, 2004 at 11:06 pm

The “…imagine if we did all these bad things one night to our competitors” analogy is specious. Name one union that has done all those things in a simultaneous assault on anyone else.

Over the course of a century or so–sure, most large, established unions have resorted to any or all of the barbarity described. So have most large, established companies. The Thieblot/Haggard sample of unions was laughable and discounted the majority of small unions–much like how proponents of state intervention site samples of monopolistic corporate tactics that never seem to take into consideration how the activities of small businesses would shed some light on the integrity of the “numbers.”

I have an idea. Outlaw unions, and see how long it takes for the newly non-unionized workers to stage a general strike large enough to cripple the economy.

What’s that? “We only need to educate the masses enough that they understand the futility of organized labour?” You obviously haven’t been paying attention to the latest plagues of drive-throughs and reality TV (or are unions to blame for indolence as well as violence?).

Future of the Union Discussion Forums April 4, 2005 at 11:57 pm

What’s Wrong With The Labor Unions?
http://www.futureoftheunion.com/forum/viewtopic.php?t=712

Comments on this entry are closed.

Previous post:

Next post: