Tag Archive: free-market: Social Memory Complex

Some unions are more collusive than others

I often hear defenders of "Right to Work" (RTW) laws say that unions are collusive and extortive in a way that is simply unfair to employers. Neither workers nor management should be forced to negotiate through unions, and RTW laws simply level the playing field by ensuring that employees can always negotiate directly with management. The point of labor unions, to the mind of RTW supporters, is to exploit the Wagner Act that forces all parties to negotiate in good faith, and to thereby move wages and benefits up in a way a free market in labor would never allow. The aforementioned article on RTW even compares unions with Mafia protection rackets in this regard.

To describe this line of reasoning as selective would be a gross understatement. After all, let's assume that labor unions are as evil as the RTW lobby says they are. Even granting that for the sake of argument, labor is not the only interest engaging in collective bargaining. What about the individuals involved in the employing corporation? Aren't these businesses effectively "capital unions" exploiting incorporation laws to achieve a better bargaining position relative to labor? Isn't the reason why investors pool their resources and form businesses to get better deals in the market through economies of scale? Isn't that why they try to get investors rather than simply borrowing all the money for their start-up costs--to spread the risk and the reward?

So unions of labor are only one side of this story; to emphasize collusion on the workers' side is to leave another form of collusion totally unaddressed. Corporations are capital unions, organizations whose members work together to negotiate wages and benefits (and other costs, of course) downwards to get the best return for themselves. Why is one form of collusion wrong and the other not?


Written on Monday, December 17, 2012
Tags: labor, libertarianism, free-market, economics, corporatism