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Sylvester Petro's Austrian Perspective on Labor Unions

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November 10 marks the 10th anniversary of the death of someone the Mises Institute has named “one of the giants of the Austrian tradition” — Sylvester Petro. Since 2017 also marks the 100th anniversary of Petro’s birth and the 60th anniversary of his best-known book, The Labor Policy of the Free Society, described as “the definitive Austrian treatment of the topic,” it is very much worth remembering his wisdom.

Petro was a law professor, primarily at NYU and Wake Forest. He lectured widely and wrote many books and articles, primarily on the free society, labor law and history, contract law and antitrust law. In addition, his obituary described him as “a member of the Mont Pelerin Society, a tireless worker for the Foundation of Economic Education, and the National Right to Work Committee.” One of his colleagues for over a decade, Norman Dorsen, said of him, “Sylvester Petro was an unabashed libertarian, strongly maintaining that government regulation of the economy was undesirable in almost all circumstances.”

In an extensive body of research and writing, a short article cannot do him justice. So I will focus on Chapter 7, “Trade Unions in the Free Society,” in his The Labor Policy of the Free Society, as it offers a good, non-technical, discussion of his core beliefs about their intersection, starting from individuals’ freedom of association.

A good way to introduce Trade Unions in the Free Society,” is to begin with two notable quotes from John Stuart Mill which open two preceding chapters. Chapter 2 begins with: “…but the only unfailing and permanent source of improvement is liberty, since by it there are as many possible independent centres of improvement as there are individuals.” Chapter 3 complements that with: “The only freedom which deserves the name, is that of pursuing our own good in our own way, so long as we do not attempt to deprive others of theirs, or impede their efforts to obtain it.”

Joel Seidman’s 1958 review of The Labor Policy of the Free Society in the University of Chicago Law Review also provides a good summary. In his words:

The author starts with the free, competitive market and the rights of private property and freedom of contract. By strict adherence to these rights and principles, he believes, the free society can be built, with freedom, well-being, and security assured. … Consequently, he would abolish every form of intervention by the state, restricting its function to that of keeping the peace. … With the conditions of peace and freedom thus established, the function of advancing the interests of the citizens is best left to them, acting individually or in voluntary associations. The sole restrictions are that they may not invade the property rights of others, that they must avoid violent, coercive, or fraudulent conduct.

With the above background, consider some of Sylvester Petro’s most insightful words contrasting freedom, especially freedom of association, with unions empowered to coerce individuals in his (from Trade Unions in the Free Society):

  • Trade unions in a free society embody the right of working men, shared with every other member of the society, to join together in the pursuit of common interests ... society demands of the private association only that it refrain from advancing the interests of its members by antisocial means.
  • Trade unions misconceive their role if they assume either that they must or that they may legitimately utilize compulsion.
  • Trade unions achieve their own corruption if they coerce and compel … they add substantially to the forces constantly at work in the continuous struggle against the free society by the totalitarian spirit.
  • The theory of the free society only prohibits to men in trade unions the invasion of the property rights of other members of society. … If men wish to form or join a union, they are free to do so. If, having combined in order to promote their own economic and other interests, they decide to withhold their labor in concert, they are free to do that, too, so long as they do not invade the property rights of others by their concerted action. …The free society declares to trade unions only that they may not regulate the conduct or impair the rights of others.
  • Whether or not trade unions contribute to the achievement of the material and nonmaterial goals of men depends entirely upon whether or not they act, or are made to act, consistently with the rules and principles of the free society.
  • Free trade, leading to greater productivity and capital investment, appears to be the explanation of the economic process which creates the high standard of living prevailing in the United States … trade unions have nothing whatsoever to do with this process. And when trade-union leaders boast of how much they do as regards raising living standards for society as a whole, they are simply taking credit which does not belong to them.
  • The main reason for the poor performance of many American trade unions is that they alone, among the “voluntary” associations of this society, have tended to use violent and coercive methods at every stage of their operations. … No other private association has so habitually terrorized and exploited both members and nonmembers.
  • Coercive conduct has been characteristic of trade unions in this country throughout our history at all levels of union action. … Fashioned to a great degree by coercive methods, trade unions in this country tend to use coercion habitually.
  • Unions and their members can and do raise their own wages over free-market levels; but in each and every instance that they do, they exploit their fellow workers and consumers.
  • A viable, effective labor policy would need only eliminate from unionism its violent, coercive, monopolistic practices … an enduring labor policy need only be oriented in terms of the basic operating principles of the free society — private property and freedom of contract.

Sylvester Petro made it clear that the source of all union abuses was coercive power. But no private association, in a free society, should have such power. That pointed to eliminating such power as the solution to union problems as we have experienced them. As he summarized his argument in chapter 18, “Free Collective Bargaining,” we would do far better, at a far lower cost to society, if we left labor relationships to freely chosen market arrangements.

Free collective bargaining is a principle inherent in the theory of the free society and differs in no material way from other institutions of the free market. Far from clashing with the free society, it is a product of one of the basic rights in such a society, the right of free association.

The free market can provide the means of civilized settlement of even the most complicated industrial disputes. If it is to do so, however, all violent, coercive, and monopolistic interference in its operation, whether by unions or employers, must be eliminated.


Gary Galles

Gary M. Galles is a Professor of Economics at Pepperdine University and an adjunct scholar at the Ludwig von Mises Institute. His research focuses on public finance, public choice, economic education, organization of firms, antitrust, urban economics, liberty, and the problems that undermine effective public policy. In addition to his most recent book, Pathways to Policy Failures (2020), his books include Lines of Liberty (2016), Faulty Premises, Faulty Policies (2014), and Apostle of Peace (2013).

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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