Mises Daily Articles
The Corruption of Union LeadershipTags Labor and Wages
[Originally published in The Freeman, May 1, 1959.]
Coercion marks the beginning and corruption the conclusion of the march of union power observable in the McClellan Record. The process begins with the use of compulsion to secure members. Thereafter new and different coercive devices are used to bind the unwilling employees to the union. After a union has learned the usefulness of coercion in increasing membership, it falls into the habit of using even more in disputes with employers.
Some trade union leaders hold that any employer who resists their demands is an “enemy of the labor movement” who must be taught a lesson, and, if he continues to resist, must be exterminated. If employees themselves refuse to acquiesce in strikes, if, instead, they exercise their right to continue working during strikes, they are considered traitors, against whom brutal reprisals are not only permissible but praiseworthy.
Law-enforcement officials sometimes stand in the way, however, and it, therefore, becomes necessary to take care of them, too. Pure bribery is not always the appropriate method here, and often a generous campaign contribution will do as well. If the laws of the land pose an obstacle to the use of union power against traitorous employers and employees, then the laws must be changed, and full-scale political action, largely financed by membership dues contributed in a substantial degree by workers of differing political views, is the appropriate vehicle for change. Candidates who support the unions’ claims of special privileges to coerce and compel get extensive, expensive, and enthusiastic political support; those who insist that the laws of the land should apply to trade unions are marked for extinction. Too often the unions have their way, although a startling exception here and there indicates that the black night has not yet fallen.
Meanwhile, alongside the structure of traditional unionism, there begins to grow in its shadow a murky pseudo-unionism. A two-stage process is at work. Frequent use of coercion and violence by traditional unions induces their leaders to include on their staffs—alongside college-trained economists—men with criminal records and backgrounds of brutality; if dirty work is to be done, it is just as well to have a person around who has had some experience with it. And the practical privilege to coerce, to extort, to shake down, to compel (such as has accrued to the unions) is precisely what the denizens of the underworld, the professionals of organized crime, have been searching for most avidly, ever since the rich pickings under Prohibition dried up.
If a single picket will harm a business badly enough to make the owner sign up with the union, maybe it will also serve to shake loose some immediate money. In either case, the picket line is coercive, and if it is a specially privileged form of coercion in the one case, why not in the other? Thus the professional extortionist discovers a new tool for his trade, and thus to are born “racket-picketing” and its associated shakedown techniques.
Convicted criminals are in the unions then with both feet—as adjuncts to traditional unions, and on their own, cynically using the form of unionism as a cover for their age-old methods of getting ahead in the world. The one thing they have never learned is how to work for a living. As union agents and leaders they live very well off the product of those who have learned how to make a living through socially useful work—the businessmen and workingmen of the country.
Although society at large may know very little about all this, it pays the bill—an overwhelming, extortionate, and destructive bill. A shakedown induced by “stranger-picketing” has to be made up by the businessman somehow.
The situation is not made any better by the shrill accusations of the union leaders against businessmen about the high cost of living and unemployment. The plain fact is that no businessman ever likes to cut back production. He does so only when he has to. More often than not the union leader has been responsible for pricing union members out of the market. For that, he ought to be fired, or law and law enforcement ought to be rigorous enough to keep him from abusing workers, union members, businessmen, and the public.
Special Privilege—Unlimited Power
The point cannot be emphasized enough. The harm done by criminals masquerading as union officials is enormous and filled with the most ominous signs for the future of society. But it is still less than that produced by the power of the traditional unions. They daily coerce and brutally attack workers who decline to join or refuse to participate in strikes. They throw out of work hundreds of thousands of men because of their artificially inflated wage costs. They create irresistible inflationary pressures and compound the evil by encouraging costly and destructive deficit-spending by governments. Through the use of legal and political special privileges, they tie up entire industries into tight monopolies and cartels which abuse the public and threaten the destruction of the free and competitive economy which has always been the American ideal.
This is the panorama of union power. Traditional unions have secured for themselves special privileges which vest in them unlimited power. This power, like any other unlimited power, can only be abused, and it is abused. Violence and economic coercion by themselves create socially harmful conditions, the consequences of which are infinite and unpredictable. Besides, they exert a magnetic force, drawing to the trade unions some of the worst types of criminals, who find there an environment which suits them.
The combination is a destructive force which no society can long survive: on the one hand, abuse of the citizenry and impairment of peaceful, progressive, productive activity; on the other hand, dissolution of the moral and political structure. In the special privileges of coercion and compulsion which unions have gained, there breeds a rotten growth which corrupts the whole moral and political structure of society.
The Welfare State Philosophy
The same thinking which is producing the Welfare State has also been largely responsible for the special privileges accorded trade unions. Furthermore, the welfare-state ideology has given the State so many diverse jobs to perform that it can no longer properly perform the basic job for which it was designed. That job was to insure domestic tranquility by protecting honest citizens against thugs and criminals. Proper performance of that basic function requires, obviously, a primary and predominant preoccupation by the government with the police force and the administration of justice.
While we expend our substance in granting special privileges and subsidies to the strong pressure groups, encouraging idleness and unproductiveness, we under man our police forces and pay them poorly, so that they have neither the numbers nor the quality of men necessary to do what is, after all, the basic job of civilization: keeping the peace.
While recognizing, then, that Senator Ives had hold of a piece of the truth in observing that the crime disclosed in the McClellan Record is a part of the larger problem of law enforcement created by the welfare-state distortion of the role of government, his view is not on the whole accurate. At least it is not the whole truth if he means to say that there are no independent causes for the prevalence of crime and corruption in trade unions. It is not the whole truth because it fails to explain why, among all the other private associations of society—the business firms, the bar associations, the medical associations, and the thousands of other private associations in this country—violence, crime, and corruption do not prevail as they do among trade unions.
Violence, crime, and corruption prevail among trade unions to a degree unmatched in any other private association because trade unions have acquired from society and the law special privileges allowed to no other private association. There is every reason to believe that any other private association accorded the same privileges would manifest the same characteristics which the McClellan Record discloses in trade unions.
If, for example, businessmen were allowed to compel the purchases of their customers, to assault them when they showed any intention of removing their patronage, and to block access to competitors—there is very little reason to believe that such conduct would not become common business practice, leading to more and more of the same as the selective process wore on in business in the way that it has in trade unions : with the productive and the ingenious giving ground before the thugs, the bullies, and the master strategists of large-scale organized violence.
Businesses compete in a civilized way partly because the law compels them to do so and partly because the law’s compulsion has created a selection process which grinds out the thugs and the lawless and advances the able and the industrious. Among trade unions, precisely the contrary process of selection has been going on, with, as might be expected, precisely the contrary results.
Errors in Government
The sources of the special privileges which trade unions enjoy are to be found in the policies and conduct of the federal government over the past thirty years, beginning in 1930 and continuing to this date. The responsibility is nonpartisan, with Republicans and Democrats sharing it, although not in equal proportions. It is distributed in another way. Rather than being confined to one or another of the three branches of the federal government, it is shared, instead, by all three: the legislative branch, the executive branch, and the judicial branch.
Unwise laws have been made worse by the administration and interpretation they have had, while socially beneficial laws have been reduced to impotency by a reluctant administration, on the one hand, and dubious interpretation, on the other. Without exonerating Congress from its share of the responsibility, one still must acknowledge in the interests of accuracy that its record is not as defective as that of the other parties: the National Labor Relations Board, representing the executive branch; and the United States Supreme Court, representing the judicial branch.
Accuracy calls for further qualification. There have at all times been on the Supreme Court some justices who resisted valiantly and with great legal ability the errors and excesses of that Court. Again, some of the justices who earlier participated in the most dubious decisions of the Court have shown since then that theirs were good-faith errors; and, as all good and learned men will do upon finding themselves in error, they have taken steps toward correction.
It should also be noted that at frequent intervals between 1935 and 1953 there were some members of the NLRB who recognized and dissented from improper decisions of the Board. Moreover, the majority of the Board since 1953 has been guilty of nothing comparable to the outrageous misinterpretations of the Taft-Hartley Act handed down by the majority which prevailed from 1949 to 1953, although the more recent majority has been very slow to correct some and has failed completely to reverse the most serious of its predecessor’s misinterpretations.
Whereas the NLRB and the Supreme Court have preponderantly contributed decisions heightening the abusive powers of trade unions and negating the efforts of Congress to reduce such powers, the record of the Federal Circuit Courts of Appeals has been one, preponderantly, of the kind of excellence in legal scholarship, fair-mindedness, and fidelity to law and precedent which is to be expected of all judges. The Circuit Judges, with some exceptions, have neither tried to give trade unions and their officials more privileges than the laws of Congress intended nor have they negated, except by direct mandate of the Supreme Court, the laws of Congress which were intended to limit abusive and monopolistic trade-union conduct.
Little need be added at this point on the kind of corruption at all levels which we have witnessed in the preceding chapters…. But we must bear in mind that moral and political corruption of the varieties recounted their rot integrity at all levels and thus weaken the fiber of society, making it prone to further corruption of a million kinds in a million ways, every day. Nonunion men treated brutally as outlaws and union members as serfs, the infiltration of unions by professional gangsters, extortion from businessmen, bribery and corruption of public officials, the theory that trade unions are entitled to special privileges from government—no society can survive much of that for very long.
Destructive Monopoly Powers
All these put together, however, probably do not equal and certainly do not exceed the danger inherent in the necessary course of monopolistic unionism. As much as trade unions may protest their virtue and distort the truth, it is the opinion of the most competent economists in this country, and of the greatest economists in the world, that monopolistic trade unionism will destroy any free enterprise system if it is allowed to proceed unchecked. Many of America’s ranking economists have come to more or less this same conclusion—Fritz Machlup, Milton Friedman, David McCord Wright, Edward H. Chamberlin, Philip Bradley, Henry C. Simons, and many others of equal ability and disinterested devotion to truth. Their conclusions are shared by economists of unsurpassed international reputation, including Friedrich A. Hayek and Wilhelm Roepke, as well as the man who has in our time achieved the greatest stature of all in the social sciences, in my opinion, Professor Ludwig von Mises.
Steps in the Process
All these men agree, not only as to the fact but as to the process by means of which trade unions will, if unchecked, bring about the destruction of the free society. First, compulsory membership leading to dictatorial control of all workers; second, through the ensuing monopolistic regimentation of all industry, the securing of wage structures higher than the market will bear; third, in inevitable consequence, drastic and severe unemployment of great numbers of workers; fourth, clamorous insistence that government, through deficit spending, create jobs and other subsidies for the men thrown into unemployment by the union monopolies; fifth, loose money policies by the monetary arm of a government politically committed to “full employment” policies; sixth, a crackup inflation; seventh, consequent mangling of the lives of all those who have attempted to save; eighth, increasing chaos and dislocation; ninth, the rise of vicious demagogues playing upon the confusion, chaos, and dissatisfaction of the populace to secure for themselves dictatorial powers which permit them to apply totalitarian remedies which the Constitution of the United States inhabits; tenth, dissolution into the jungle.
The McClellan Record demonstrates the fundamental culpability of the federal government for the intolerable conditions which exist in labor relations. Attacks on thugs, racketeers, and power-hungry union leaders miss the real point. The real problem, the real fault, lies in a theory of government which ensures an awful paradox: a virtual anarchy within a plethora of laws. We have thousands upon thousands of rules and statutes, millions upon millions of government employees. Yet we have no law.
Government’s Limited Role
The ultimate responsibility falls to the public. But this fact does not absolve the members of the government from all responsibility. It is their job to inform the public that they cannot deal with all the things which the special privilege groups are seeking and still run a decent government in the general welfare. Then it is the job of the public to understand that government, like all other human institutions, has very narrow limits. It may be able to do a fair job of providing for the national defense, of keeping the peace, of enforcing the laws, and of administering justice in the courts—if it devotes all its time and energy to those difficult tasks. But it cannot do those things at all, as the McClellan Record so vividly demonstrates if its energies are expended on every pet project upon which every pressure group from the National Education Association to the National Committee for the Protection of Tropical Fish comes running to Washington for help.
I do not know of any short way to bring about limited and therefore effective government in this country; that will come only when large numbers of people appreciate its value and insist upon it. Yet I am convinced that the jungle, retrogression, and decay are the necessary result of unlimited government, just as they are the necessary result of unlimited power in trade unions. No civilization can long survive unlimited power in any hands. The greatest contribution of the McClellan Committee lies in its overwhelming documentation of that truth.