IS THE argument for the tolerance of the strike threat that the free market price of labor is “unfair”? Or is it alleged that the market price would otherwise be forced below the free market value? It is often difficult to tell. However, it is the second allegation that we are to consider in this chapter. Can the threat or use of the strike prevent the workers’ exploitation? Can it somehow achieve the results that a competitive labor market would bring about?

IT WAS argued in the previous chapter that, if monopsonistic exploitation of labor is feared, the obvious defensible remedy is dissolution of collusive practices, not the encouragement of a supposedly countervailing monopoly.

LET US now ask whether the strike threat permits exploitation of investors (assumed to be wealthy) for the benefit of workers (assumed to be poor). As we have seen, the private use of coercion is, in this case, regarded as a permissible way of “soaking the rich.” The crucial general proposition has already been stated in Chapter 1. Our task at this stage is to consider certain arguments which seem to conflict with it.

IN THIS chapter, a number of special cases of apparent investors’ exploitability must be considered. At first sight, the cases we are about to examine may all seem to constitute exceptions to the principle that forward-looking entrepreneurs who expect the strike threat to operate are unexploitable, except as third parties subject to the detriment of restrained productivity in general. In fact, I hope to show, the principle is universal.

MY PURPOSE in this chapter is to show that the enforcement of “the standard rate,” also called “the rate for the job” or often, misleadingly, “equal pay for equal work,” operates as a powerful factor not only in reducing the flow of wages and income, but in creating or perpetuating inequality of opportunity, and hence avoidable inequalities of income.

ANY STUDY of the empirical contributions which deal with the labor market must leave the student with an impression of the great complexity of that market and its even greater disorder. We find a value chaos due to the inherent arbitrariness of “exploitation” and merely private resistance to it or avoidance of it. Wage rates and earnings for different occupations within the same industry, and for different industries and different districts for the same occupations, often differ widely.

IF THE strike-threat system has failed to transfer income from investors to workers, has it not at any rate insured that the general “conditions of labor” were improved?

IN CHAPTER 3 I referred to the widespread conviction that, through the “bitter struggles” of more than two centuries, unions managed to acquire a larger share of aggregate income for the workers. This quite general belief that history records a redistribution in favor of the working class as a whole, through victorious strike-threat warfare (whether defensive or aggressive), is a formidable, illusory stereotype. In this and the next chapter we shall be concerned with changes in the proportion of income accruing to labor.

IN THIS chapter I propose to quote, and where it seems helpful to comment on, the crucial findings, expressed verbally, of the statistical economists who have conducted meticulous investigations into recorded experience of changes in income shares.

IT IS common to lay part of the blame for inflation on the unreasonable use made of the strike-threat system. The forcing up of wage rates more rapidly than productivity rises is supposed to bring about the “cost-push” as distinct from the “demand-pull” type of inflation. The notion has indirect justification, yet is seriously misleading.