Mises Daily Articles
[Libertarian Forum, June 1971]
New Yorkers have recently had to suffer yet another irresponsible blackjacking at the hands of power-drunk labor unions. This time it was the bridge tenders and garbage-incinerator workers who, angered at the state legislature's balking at their receiving pensions that no private industry could afford, took their frustrations out on an innocent public by not only striking but sabotaging traffic facilities.
Admittedly, there was no way that they could win their strike, because upstate legislators could hardly be brought to their knees by traffic tie-ups and sabotage in New York City, but it was a nice way to have a couple of days off while sticking a knife into the ribs of John Q. Public. Libertarians must always concede the right to strike, since otherwise labor would be compulsory rather than voluntary; but if employers had the fortitude and they were allowed to do so by law, they would automatically fire any and all strikers, and thereby take the strikers' quitting their jobs with the serious response that they deserve.
In the case of outright sabotage and destruction, along with threats of violence against those who continue to work or are hired to replace the strikers, the unions who commit such aggression should be treated as the criminals that they are. And because such coercion is the general rule in strikes, these criminal penalties would, in a libertarian society, be widespread rather than nonexistent as they are now. For it should never be forgotten that a libertarian society does not mean the total absence of coercion but only the absence of coercion against noncriminals. Those who invade the rights of others by violence deserve their proper check and punishment by the force of law.
In the light of the black record of union violence and intimidation over the years — a violence inherent in their assumed power to keep nonstrikers off "their" jobs — it is difficult to understand why so many libertarians have lately become enamored of anarcho-syndicalism and the "working class." For the arrogant and coercive labor unions are indeed "syndicalism" in embryo, and the harbinger of any future fully syndicalist society.
Of the three major proposals for running an advanced industrial society — socialism, syndicalism, and free-market capitalism — syndicalism is the most blatantly unworkable and most rapidly disastrous. For in such a society, there must be some rational mechanism for allocating resources efficiently, for seeing to it that the proper amounts of labor, land, and capital equipment are employed in those areas and in those ways most efficient for satisfying the wants and desires of the mass of consumers. Free-market capitalism not only provides the most smoothly efficient way; it is also the only method that relies solely on voluntary inducements.
Thus, suppose that a great number of new workers are needed in a new and expanding industry, say, plastics or electronics. How are these workers to be supplied? The market way is to offer new jobs at higher wages in these new areas and fields, while firing people or cutting wages in those industries that are in decline (say the horse-and-buggy industry). The pure socialist way is to direct the labor out of one industry and into another purely by coercive violence — i.e., by forced labor direction. The socialist method is both despotic and highly inefficient, and so even the socialist countries have been turning more and more to free-market methods in the allocation of labor. But at least socialism is an attempt at a rational allocation of labor in a modern, industrial society.
Syndicalism, on the other hand — i.e., full worker "ownership" of "their" industries — does not even attempt to achieve a rational allocation of resources. Both the free method of market allocation and the coercive method of central dictation are eliminated. And what is to take their place? In effect, nothing but chaos. Instead of a coordinating mechanism there is now only the chaotic will of groups of brawling monopoloid syndics, each demanding parity and control regardless of economic law.
Does anyone think for one moment that the horse-and-buggy workers would have permitted higher wages in the budding automobile industry? Or have permitted the dismissal of workers? All one need do is to observe the arrogant behavior of unions with monopoly power to know the answer. But the problem lies deeper than bad will on the part of union syndics. The problem is that, even in a community of "saints," even in an improbable world of meek and altruistic union monopolists, there would be no way for the syndics to make their decisions on wages, employment, or allocation of production. Only a system of market pricing and wage rates, guided by profit-and-loss considerations for market firms, can provide a mechanism for such decisions.
Furthermore, the myriad jurisdictional disputes that already plague our system of unionism would be far more intense and out of control in a syndicalist society. Take for example carpenters working in the steel industry.
Would the carpenter syndic "own" the product of their carpentry, or would they be merged unheralded and unsung into the general syndic of steel workers? Professor von Mises has scoffed at the syndicalist cry of "steel to the steel workers, aluminum to the aluminum workers, and garbage to the garbage collectors!" And in a syndical society, who indeed would own the garbage, the garbage-collecting syndic or the street-maintenance and repair syndic?
Syndicalism would therefore be totally incapable of organizing an industrial economy, and this total failure is, indeed, the economic embodiment of the dysfunctionality of the antitechnological youth culture that has given rise to the new syndicalism. In a recent Firing Line interview, Bill Buckley asked Karl Hess the elementally silly question: in an anarchist society, if one group of workers wanted to work from 8 to 4, and another set in the same plant wished to work from 9 to 5, who would decide? Karl, trapped in an anarcho-syndicalist framework, could only lamely reply that the workers would come to some sort of agreement. The proper and swift answer would have been that the stockholder-owners would decide, just as they are doing now. Anarcho-capitalism is an easily explainable system, precisely because its configuration would be very similar in most ways to the society that we have now.
Like the New Left generally, the proponents of syndicalism suffer most from a total ignorance of economics, and therefore of the ways in which an industrial society can function. If the syndicalists can be persuaded to get "into" reading, especially of a subject they usually define as being inherently "repressive," they might learn something from the critiques of syndicalism in Mises's Socialism and Human Action, and in Henry Simons's Economic Policy for a Free Society.
It is true that the Yugoslav economy is working well, but the remarkable Yugoslav shift from socialist central planning to a relatively free-market economy has never been clasped to the New Left bosom. For while the workers in each plant indeed own their plants, the relations between plants are strictly governed by a free price system, and by profit-and-loss tests. It is precisely the adoption of the free market, of money, prices, competition, self-reliance, etc., by the Yugoslavs that prevents the anarcho-syndicalists and the other egalitarians and antimarketeers of the New Left from treating Yugoslavia with anything but pained silence. Furthermore, the Yugoslavs are rapidly moving in the direction of individual shares of ownership for each worker, and the subsequent trading of such shares in some sort of "people's stock market," which will culminate their shift to a free-market economy.
The Yugoslav system, therefore, is indeed not syndicalist, but a market economy of producers' cooperatives. If this is really all that the anarcho-syndicalists demand, then they can easily bring the new society into being by simply forming producers' co-ops owned by the workers themselves. In free-market capitalism, there have never been any restrictions on workers banding together in producers' co-ops to own their own capital equipment.
And yet, in the free economy, producers' co-ops have been notorious by their nonexistence, or rapid failure in competition with "capitalist" firms. The reason is that, unknown to the economically ignorant syndicalists, the capitalists perform an extremely important service to the workers, as a result of which most people prefer to be hired by capitalists rather than be self- or cooperatively employed.
The two basic functions are those of the "capitalist" per se and those of the "entrepreneur." As a capitalist, the employer saves money from his possible consumption, and invests the money in paying workers their income in advance of sale of product. In an automobile factory, the capitalist pays workers their weekly wages now; in a producers' cooperative factory, the workers would have to go without income for months or years until their product is finally sold to the consumers. The capitalist earning of "interest" for this advance payment is precisely equivalent to the creditor who earns interest by lending someone money now while being repaid at some point in the future. In both cases, "interest" is earned as payment for savings and time preference for income now rather than waiting for the future.
The second service performed by the employer is to assume the significant risks of entrepreneurship. A producers' cooperative firm invests resources in a product, and then hopes to sell that product to the consumers at a net profit. But suppose that the efficiency and the foresight of the workers is minimal; suppose, in short, that they produce an Edsel that fails to sell? If they do, their income is negative rather than positive, and they lose capital assets that they can scarcely afford. In the capitalist economy, the employer assumes these capital risks, and only he therefore is subject to monetary losses if his product is inefficiently produced or if he cannot achieve satisfactory sales.
Most workers are unwilling or unable to assume these risks of entrepreneurship, and therefore they greet the employer's willingness to do so, as well as to pay them in advance of sales, with sighs of relief. Or would if they understood the process. We can confidently predict that if Yugoslavia ever allows full-scale capitalist employment (as it does now for small-scale enterprise) that its producers' co-ops will rapidly give way to orthodox "capitalist" modes of production — to the benefit of all concerned.
The question of whether a future free society will be "co-op" or communal or capitalist brings up the most disturbing problem about the anarcho-syndicalists and communalists. This is the famous "question of Auban" — the question that "Auban," the individualist anarchist hero of John Henry Mackay's novel The Anarchists, put to the left-wing anarchists. In essence: would you, in your proposed anarchist society, permit those who so wished to have private property, to engage in free-market transactions, to hire workers in "capitalist" relations, etc.? The communist anarchists in Mackay's book never answered the question clearly and lucidly, and neither do any left-wing anarchists that one may encounter today.1 Generally, the left-anarchists reply that, in their utopian society, no one will be so base as to want to indulge in private property or in capitalist social relations. But suppose they do? one persists. The answer is generally either a repeat of the utopian answer or an evasive silence.
And when the left-anarchists can be pressed for an answer, the response is disturbing indeed. Take for example one of our most distinguished socialist-anarchists, Professor Noam Chomsky. Professor Chomsky has recently expressed a great deal of worry about the recent rise of our "right-wing" libertarian movement; apparently he is — I am afraid unrealistically — concerned that we might succeed in abolishing the State before the State has succeeded in abolishing private property! Secondly, Chomsky has written that the anarcho-capitalist society would constitute "the greatest tyranny the world has ever known." (What, Noam? Greater than Hitler? Than Genghis Khan?)
Whether or not anarcho-capitalism would be tyrannical is here irrelevant; the problem is that, in so expressing his horror at the possible results of complete freedom, Professor Chomsky reveals that he is not really an "anarchist" at all, indeed that he prefers statism to an anarcho-capitalist world. That of course is his prerogative, and scarcely unusual, but what is illegitimate is for this distinguished linguist to call himself an "anarchist."
And I very much fear that the same can be said for the other varieties of left-anarchists: communal, syndical, or whatever. Beneath a thin veneer of libertarian rhetoric there lies the same compulsory and coercive collectivist that we have encountered all too often in the last two centuries. Scratch a left-wing "anarchist" and you will find a coercive egalitarian despot who makes the true lover of freedom yearn even for Richard Nixon (Arghh!) in contrast.
If this analysis is correct, as I believe it is, then it makes all the more absurd the hankering by so many of our "left wing" for an intimate comradely alliance with the anarcho-Left. Beneath superficial agreement in rhetoric, there is nothing in common between genuine libertarians and collectivist "anarchists." Superficially, we both oppose the existing system — but so too do monarchists, Nazis, and those who hanker for a return to the Inquisition — scarcely enough for a warm and comradely dialogue.
It is indeed fortunate for liberty that the left-anarchists have about as much chance of victory as some of our conservatives have to restore the Bourbon dynasty. For if they did, we would soon find that the embrace of left-anarchy is the embrace of death.