After having an enormously long argument on another thread it seems that everyone here thinks that just about every single rule a government may think up to "interfere" with the "free market" is bound to be bad and make the economy worse... Now I have just finished reading "economics in one lesson" by Henry Hazlitt and noted that he talked rather disparagingly about the work of unions, so presumably Austrians disapprove on unions and would like to perhaps ban them or curb their powers (am I right?). But then we have a contradiction:- unions presumably can evolve right out of a free market, so one could say they are even part of a free market and the only thing that can be done to reduce their power is to let the government create some rules to suppress the unions... but then that's like the government interfering with the free market... which so many people here say is a bad thing.
So how do you resolve that contradiction?
The obvious answer to me appears to be that maybe *most* things a government does to interfere with the free market are bead, but there are a *few* things that they should do.
Rothbard:
"Unions, therefore, are theoretically compatible with the existence of a purely free market. In actual fact, however, it is evident to any competent observer that unions acquire almost all their power through the wielding of force, specifically force against strikebreakers and against the property of employers. An implicit license to unions to commit violence against strikebreakers is practically universal. Police commonly either remain "neutral" when strikebreakers are molested or else blame the strikebreakers for "provoking" the attacks upon them. Certainly, few pretend that the institution of mass picketing by unions is simply a method of advertising the fact of a strike to anyone passing by.
When unions are permitted to resort to violence, the state or other enforcing agency has implicitly delegated this power to the unions. The unions, then, have become "private states.""
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The National Labor Relations Act is full of them.
John Ess: One would be all the public sector unions. Including cops, teachers, air traffic control, etc. That basically is not negotiation, but political control that has nothing to do with democracy or the market.
One would be all the public sector unions.
Including cops, teachers, air traffic control, etc. That basically is not negotiation, but political control that has nothing to do with democracy or the market.
You mean the government set up those unions? Or runs them? I find that very hard to believe.
Lilburne: Rothbard: "Unions, therefore, are theoretically compatible with the existence of a purely free market. In actual fact, however, it is evident to any competent observer that unions acquire almost all their power through the wielding of force, specifically force against strikebreakers and against the property of employers. An implicit license to unions to commit violence against strikebreakers is practically universal. Police commonly either remain "neutral" when strikebreakers are molested or else blame the strikebreakers for "provoking" the attacks upon them. Certainly, few pretend that the institution of mass picketing by unions is simply a method of advertising the fact of a strike to anyone passing by. When unions are permitted to resort to violence, the state or other enforcing agency has implicitly delegated this power to the unions. The unions, then, have become "private states.""
I don't see why we couldn't make a similar argument about corporations.
Brainpolice:I don't see why we couldn't make a similar argument about corporations.
Spend some more time thinking about it.
If you find something evil that wobbles, push it. - Gary North
So you seem to be suggesting that as long as unions are not given any special privileges and are treated just like any other body in the legal system then their harm is so limited that no special laws to limit their powers would be required.
Ok, I'll buy that.
Thanks,
mickanomics:so presumably Austrians disapprove on unions and would like to perhaps ban them or curb their powers (am I right?).
In a free market, no ban or curb is necessary.
1. Unions will not be able to force employees to join based on 50% +1 democratic ballot.
2. Unions will not be able to protest or organize on company property or time.
3. Unions will not be able to employ violence against replacement workers during a strike or against company property via vandalism.
4. Unions, like all cartels, that seek privilege through monopoly (solidarity) will be susceptible to outside competition by non-union labour.
5. Employers can dismiss all union employees without penalty under law.
6. Unions will not be able to constrict, impede or manage the flow of labour within a firm. New workers will not be defacto required to join the union as a condition of employment.
That's not to say that employees should not organize and have fraternal organizations, but the idea of insulating workers from competition, and forcing higher than market labour rates (attainable by free market competition among employers for labour) through force and coercion is simply not compatible with a free market.
Some terms could be negotiated, but again, even if they were, why would a firm negotiate with everyone, or a large group of people, and not individuals? And what leverage does a worker have, but to sell his labour to another buyer? If there are no better offers, it seems to me he has no leverage, and if there are better offers, why is he negotiating with his current firm?
All of those libertarians who support workplace sit-ins are actually for violating property rights.
Presumably they can still boycott the business though, everyone has that right.
'It is difficult to imagine any normal person wishing to meet Marx for a third time.' - Alexander Gray, The Socialist Tradition
Laughing Man:Presumably they can still boycott the business though, everyone has that right.
Right, but it is my opinion, that in a free market, people may boycott by selecting another party to exchange with, but they will not protest. It is only under this monopoly state system, which raises the barrier to entry for labour, so that they are disinclined to engage in their own entrepreneurship that breeds a static labour/capital paradigm. Without the state forcing up barriers, and with open competition, may more worker will chose to work for themselves, or generate increased competition among employers for their services naturally.
That is the problem with unions. The labour sits around demanding a better deal, when if a better deal could be found elsewhere, presumably they would leave and take advantage of it.
Remember, good employees typically don't have a problem getting paid, moving up, getting bonuses etc. Companies work hard to retain quality employees, because even in the statist market, they have the most leverage.
It's generally the mediocre, the dull and dishonest who seek a higher labour rate and protectionism through coercion, because there are no better opportunities for such people.
liberty student:Right, but it is my opinion, that in a free market, people may boycott by selecting another party to exchange with, but they will not protest.
Well if they are committed enough then they can protest. It is certainly an option I wouldn't rule out but I would agree that they could be doing better things.
By not letting the state do anything to begin with. If unions aggress against property owners voluntary institutions responsible for law and order can deal with them. Why is the state needed?
To darkness I condemn you...
Laughing Man:Well if they are committed enough then they can protest. It is certainly an option I wouldn't rule out but I would agree that they could be doing better things.
They can do anything. It is simply not very worthwhile. When I was on my hiatus, I ended up arguing this with some veteran libertarians, and they couldn't grasp the idea that if organizing is ultimately futile, then organizing isn't preferable market behaviour. I mean, people can jump off cliffs, but that doesn't mean that they should. And likewise, people can organize, protest and strike, but when they are replaced and have to take less money in another job, that decision can't be seen as more than a failure, as their metric for success was forcing better wages and conditions at that particular workplace and they did not achieve it.
I liken it to eating soup with a fork. You can do it, but why would you?
Unions (and protests) are not effective free market methods. They are effective under the state. Libertarians who embrace this line of thinking, IMO are still working with a state paradigm perspective.
liberty student: I liken it to eating soup with a fork. You can do it, but why would you?
It meets the non-aggression axiom, therefore it is libertarian!
Soup with forks! Soup with forks!
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I'm a huge fan of Hutt and am quite partial to his macroeconomics (he is torture to read though), so I'm not exactly the biggest fan of unions. This said, I do think that they can serve certain purposes such as reducing transaction costs and giving more bargaining power to the workers. I don't really see why there is any reasons why some for of collective bargaining won't exist in a free market, I just things might be different when unions don't have the power of the state behind them. Although, once again, I don't necessarily think it's any more fair to talk of coercive unions than it is to take of coercive corporations or whatever else.
"You don't need a weatherman to know which way the wind blows"
Bob Dylan
Giles, this isn't to poo-poo your post, but when you get out in the working world, you will likely see that when firms unionize, it is the lowest skilled and least productive workers who vote for the union, and the most skilled don't vote or abstain. That's because better workers are already compensated based on the leverage that they could change firms, or become competitors. They don't get anything out of having their fortune tied to the less productive, less skilled workers with less career mobility.
GilesStratton:I don't necessarily think it's any more fair to talk of coercive unions than it is to take of coercive corporations or whatever else.
Unions are inherently coercive. They don't actually have control of property in order to exclude, and so they have to rely on monopoly privilege, either enforced by the state, or by violence (Tom Woods covers this in his 10 part lecture series on Mises org). Corporations may seek privilege as it relates to liability, but the act of pooling capital to engage in large scale projects is not inherently coercive.
GilesStratton:I don't really see why there is any reasons why some for of collective bargaining won't exist in a free market
Because a free market will disincentivize collectives and incentivize competition. You should brush up on your Rothbardian cartel theory (no, I am not kidding).
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