12.
Unions
Unions are a matter
of pitting one group of workers against other workers; it is not a worker
versus manager phenomenon.
Successful unions are those which are able to exclude workers, and the
unions most able to exclude workers are those composed of skilled workers. Skilled workers are more difficult to
replace than unskilled workers and thus are better able to succeed in a
strike. As Milton Friedman has
stated, "unions don't cause high wages, high wages cause unions."
When unions strike
they are not merely refusing to work but are preventing any labor from being
offered to the employer. Those
workers who do cross a union line are called "scabs," thereby
illustrating the lack of working class solidarity and clarifying the fact that
the issue is one group of workers against other workers.
When unions are
successful they raise the wages of their membership but do so only at the
expense of reducing the number of workers employed by the firm. Those workers unable to find employment
in the unionized sector must seek work in the non-unionized sector, thereby
depressing the wages for the non-union workers. Unions do not raise wages, they increase wages for one group
of (unionized) workers at the expense of lowering wages for the remaining
(non-unionized) workers.
The problem with
unions in modern America is that like businesses which enjoy government
protection through regulation, unions have been granted legal privileges. These legal privileges include the
Wagner Act, the Norris-LaGuardia Act and lenient courts which treat job related
violence as somehow legitimate. In
a free market, the limited role of unions would be beneficial as they might act
as job clearinghouses and standards-certifying boards.
Anyone truly
concerned with the welfare of workers should first analyze the source of
wages. Wages are determined by
worker productivity. Worker
productivity is determined by the availability of capital goods (tools) to the
worker to help him in his production.
The availability of capital goods is determined by the prospect of
profiting from such an investment.
And the appropriate mix of investment in capital goods results from
freedom in the marketplace. Thus
anyone concerned with the welfare of workers should be the greatest advocate of
free markets.
If this sounds too
theoretical, consider the action of real world workers concerned with their
personal welfare without regard to theory or ideology. The experience the world over is one of
workers constantly seeking out freer economies, escaping from East Berlin to
West Berlin, from China to Hong Kong, from Mexico to the U.S. The world has yet to see such a mass
migration of workers from the freer economies to the less free economies.
-
Branden, Nathaniel
"Common Fallacies about Capitalism" in Capitalism the Unknown Ideal edited by Ayn Rand,
(New York: New American Library, 1967)
pp. 83 - 88.
-
Friedman, Milton and Rose
Free to Choose,
(New York: Harcourt Brace Jovanovich, 1980)
pp. 228 - 247.
-
Mises, Ludwig von
Human Action,
(Chicago: Henry Regnery Company, 1966)
pp. 777 - 779.
-
Reynolds, Morgan O.
Making America Poorer: The Cost of Labor Law,
(Washington, D. C.: The Cato Institute, 1987)
-
Rockwell, Llewellyn
"The Scourge of Unionism" in The Economics of Liberty edited by Llewellyn Rockwell,
(Auburn, Alabama: The Ludwig von Mises Institute, 1989)
pp. 27 -31.
-
Schiff, Irwin
The Biggest Con: How the Government is Fleecing You,
(Hamden, Connecticut: Freedom Books, 1976)
pp. 185 - 192.
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