Unions: Part of the Market
Posted in LFA Flashback by R Lee Wrights on July 13th, 2007 by Thomas L. Knapp
I read Pacificus’s most recent piece (”Not So Nice ‘Sno-in-U’“) with some interest. I often find his opinions enlightening and always entertaining.
This article is a forgivable exception when it comes to matters of fact. While I can understand reflexive dislike for unions as such, I feel bound to correct some of the misunderstandings that Pacificus and others fall victim to when I see them in print.
Where to begin? I suppose we could start with that reflexive dislike itself. “As a long time proponent of Laissez-Faire capitalism,” says Pacificus, “the idea of unions is especially repugnant to me.”
Laissez-faire is the philosophy that government should not interfere in economic matters. It offers no basis for a dislike of unions as such, because unions, rightly formed and empowered, are private, not government, entities. To find unions “repugnant” on the basis of a deeply held laissez-fare belief is as illogical as finding corporations “repugnant” on the same belief. It is not something in the concepts themselves that conflicts with laissez-faire ideas, but the fact that government has interfered with, redefined the relationships of and between and in general distorted, these concepts which make their current incarnations offensive.
Let’s move on to the actual content of the article and see if we can’t trace the origins of Pacificus’s discomfiture. We can start with the following statement: “With unions you’ve got an absurd, nearly upside-down and backward situation where employees are encouraged to be forever at odds with their employers.”
Unions, as such, are an instrument whereby employees can deal with employers on the basis of express, detailed, binding contractual language. Contract is the basis of the free market; yet the non-union laborer’s “contract” is an unenforceable, malleable verbal agreement which can be rescinded or modified at any time, called “at will employment.” There’s nothing philosophically repugnant about “at will employment,” but I find it odd that Pacificus does not likewise decry written, enforceable, binding contracts between other entities — suppliers and purchasers, for example.
Far from putting employers and employees at odds with each other, dealing on the basis of explicit contract minimizes misunderstandings. Each party knows what he or she is required to do to execute the contract, and each party knows what he or she can expect as a benefit under it.
“The state says that if you’re a union member you can go on strike, potentially shutting down the company you work for, not to mention all the other companies, branching in every direction, with which you conduct business,” Pacificus continues, once again demonstrating that he hasn’t closely examined the paradigm of the union workplace.
Nobody needs “the state” to decree that they can walk away from their job. As a matter of fact, what federal law does is prevent workers from walking away from their jobs en masse (i.e. striking) during the performance of a contract. When a contract expires, if a new one cannot be negotiated, then the workers are free (just as they have always been as individuals) to walk off the job … and the employer is free to hire people to replace them.
It is here that I find Pacificus’s point confusing. Let’s go to analogy. Suppose that I owned a lawn-cutting business, and that one summer I engaged in a contract with Pacificus to mow his yard once a week, for payment of $10, for the duration of the summer. Let us further assume that I showed up on his doorstep at the beginning of the next summer, with a new contract in hand offering to mow his yard once a week, for the duration of the summer — but for payment of $12.
If Pacificus does not wish to accept the new contract and the new price, I cannot compel him to. If he offers to sign the contract only if the price is once again $10, I am not compelled to accept it. I can walk away. I can even walk up and down the sidewalk with a sign that says “Pacificus Unfair,” and he can even hire someone else to mow his grass. And, sooner or later, one of three things will happen:
1. Pacificus will decide that the new kid isn’t working out and that it’s worth $11 to get me back behind the lawnmower.
2. I will decide that I’d rather make $10 than walk up and down the sidewalk with my “Pacificus Unfair” sign; or
3. He’ll like the new kid’s work and I’ll eventually move on to another job.
What I have just described is a microcosm of the union “strike.” Anything other than that described above falls under the rubric of either crime (I break Pacificus’s window and beat up the “scab” lawn guy to intimidate him) or government interference (the National Labor Relations Board intercedes and forces us to go to arbitration and “make a deal”).
But the concept of the strike itself, I hope you will agree, is not in any way repugnant to laissez-faire. It’s the market in action.
Pacificus’s next complaint is that contract terms are “extracted from the employer in a coercive manner.” Once again, in the absence of crime or government interference, nothing could be further from the truth. It is not “coercion” to say “If we can make the deal I want, I’ll work for you. If we can’t, I won’t.”
In the early days of the labor union movement, the government took the side of the companies, often bringing out the police or militia to intimidate — and sometimes harm or kill — strikers. Today, the government is more even-handed but just as intrusive, forcing both parties to “negotiate in good faith” whether they want to or not, with a bureaucrat defining “good faith.”
The laws which make unionism “automatic” based on government-sponsored “elections” are another case of government interference stemming from FDR’s New Deal … which was opposed, at the time, by the unions. And I am unaware of the laws which Pacificus mentions which require companies to allow union organizers on their property (I’ve always been approached by unions outside the gate) or prevent them from saying “bad idea” (the companies I worked for did just that, issuing warning messages whenever a union drive was going on).
Finally, in my own experience, the following from Pacificus is inaccurate: “In any event, and from what I have gathered unions usually result in less not more. Less for the employee: by virtue of costs associated with union dues and lost voting positions.”
I worked for several years in non-union factories, eventually topping out at a wage of $7.75 per hour. When I went to work in a union factory, I paid union dues of $25 per month, eventually going up to $30 … and my wages ascended to $16.42 per hour. Do the math on that (for a forty-hour work week at 4.3 weeks per average month) and tell me how much less I was making because of the union.
Pacificus continues: “Less for the employer: by virtue of stagnant growth and stunted vision owing to third party interference.” This is also at variance with my experience. Where non-union shops that I worked in often experienced employee “turnover” of 20-30% per year, the union shop’s turnover was about 5% — mostly due to retirements. A skilled labor force stayed where they were, saving the company vast amounts of wages, supervisor hours and lost productivity spent on training replacements for workers who left every time the grass looked greener somewhere else.
I will not urge anyone to seek union employment. That’s a personal decision. What I will do is hold that unions are not inherently in conflict with the free market. Rightly organized and without aid or impediment from the state, they are part of the free market.
Originally published in Liberty For All May 23, 2002.
Thomas L. Knapp is the publisher of Rational Review. He is a former United Food and Commercial Workers member, steward and bargaining unit official.
Jim Davidson said,
July 15, 2007 @ 5:48 am
There’s nothing wrong with collective bargaining as a tactic. It is perfectly reasonable for people to form groups, including unions, when, as, and where they see fit. So, you are correct to suppose that a laissez faire economist cannot oppose unions in general.
However, there are states where workers have a “right to work” and other states where workers are required to join the union. There are states where unions are subject to the constraints imposed by private property owners, and others where unions are not only allowed to organize on company property, but where interfering with such organization is a crime (mala prohibitum of course). That is true among the states in the uSA, and even more true among the countries of the world.
Unions were wrongly discriminated against in the past, and in some instances lately. It was certainly wrong for the Rockefellers to massacre union organizers of their mining interests in, e.g., Colorado during the 20th Century. Non-union workers and private enterprise have also been wrongly discriminated against by governmental policy in the past, and in many instances lately.
Generally, unions belong to the Progressive era - an era of racism, fascism, socialism, totalitarianism, “progressive” income taxation, foreign interventionism, and other nonsensical policies. While being part of a bad set of policies in the past doesn’t prevent the occasional labor union from having some meritorious role in the present, it does set a context for viewing many of them, in many places, in a bad light. So, in general, unions get very little benefit of the doubt from me. I find their overall pro-government stance to be perilous to my liberty. And, yes, I am aware that there are dangers inherent to any generalization.
BradSpangler.com » Blog Archive » Knapp on labor unions said,
July 15, 2007 @ 6:25 am
[...] July 15th, 2007 by Brad Spangler reddit_url = ‘http://www.bradspangler.com/blog/archives/703′; digg_url=’http://www.bradspangler.com/blog/archives/703′; digg_skin = ‘button’; digg_bgcolor = ‘#FFFFFF’; digg_title = ‘Knapp on labor unions’; digg_bodytext = ”; digg_topic = ”; Powered by Gregarious (42)Newly available again, Thomas L. Knapp’s 2002 libertarian defense of unions as a legitimate part of the free-market order, “Unions: Part of the Market“. [...]
bill wald said,
July 18, 2007 @ 9:20 pm
The average blue collar / white collar worker is much better off financially with a union contract. In which industry are scab wages better than union wages?
How about in the Party? I don’t see that our scab Libertarians are doing better as a whole than our union member Libertarians.
Libertarians think they are superior employees, should thus be paid superior wages and complain about unions when they don’t. Me, I was an average employee and was happy to have a union fighting for me.
Liberty For All » Blog Archive » Value is Subjective said,
July 19, 2007 @ 11:43 pm
[...] A response to T.L. Knapp’s piece-Unions: Part of the Market [...]
JE said,
August 20, 2007 @ 12:42 am
Great Article. I find it apalling that anyone who would associate themselves with the libertarian left would
a). believe in the lie that is laizze-faire capitalism
b). be against workers rights
But then again I’m new this I am part of the “libertarian Left” but I actually believe the nebulous idea of free markets?
Outside of local bartering system markets are created they don’t arise organically. Hence the need for protectionist measures in the first place…
Then again what do I know I just a libertarian socialist from Denver
Thomas L. Knapp ”Związki zawodowe: część rynku?” | Liberalis said,
March 29, 2008 @ 9:33 pm
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