A: The right to unionize should be a basic right of any group. You should be able to organize. You should have no privileges, no special benefits legislated to benefit the unions, but you should never deny any working group to organize and negotiate for the best set of standards of working conditions.
What does Ron mean here? Is he pro or anti unions? I know he is a follower of the Austrian school of economics, so is his stance on unions anti-Austrian or anti-Mises?
His stance on unions is perfectly libertarian. Libertarians do not have any problem with unions per se. The problem is that governments have given unions special privileges over and above the rights of their individual members. That’s what Ron Paul is opposed to - the special privileges.
Yes, but I would say that in some context it is also anti-Austrian, because Austrians seem to attack Unionization from an economic standpoint, though they may permit it because of morality.
Well, it is questionable whether unions would exist in a free market, stripped of their special privileges. They almost certainly wouldn’t resemble unions as we know them today.
The question is whether it is really possible for an employee to obtain higher wages via negotiating collectively than he could negotiating as an individual. I think this unlikely, but I don’t think it can be ruled out a priori. This is something the market would figure out.
As far as I know, that is the only economic grounds for “attacking” unionization per se as opposed to merely the government-granted special privileges that have historically gone along with it.
If an individual has the right to negotiate on his own behalf, how could it be justified to prevent him from joining with others to do the same thing? (I know, this is going back to a moral argument. But what if it turns out that unions ARE economically inefficient? Would it then be OK to use force to prohibit them? That’s why I’m not a big fan of arguments from a strictly utilitarian perspective.)
I’ve never heard of an Austrian argument for prohibiting voluntary unionization; an Austrian would simply point out that it is inefficient. That is all praxeology can say on the matter.
I will agree with you, subject to a few clarifications.
“Bad acts” = initiation of force
“right to strike” = the right to commit trespass and assault, the right not to be fired, etc.
Employees always have the right to quit or threaten to quit, individually or en masse; and the right to protest peacefully, provided this does not involve trespassing. On the other hand, employers also have the right to fire employees whose behavior they disapprove of.
There’s absolutely nothing wrong with groups of employees getting together, forming voluntary associations, calling themselves unions, and withdrawing their labor en masse in the form of strikes if that’s what they decide to do.
There’s also nothing wrong with employers banning unions on their property as a condition of employment.
What’s wrong is when governments intervene and grant unions special privileges that prevent employers from firing union members or when unions themselves use violence and coercion against those workers who refuse to join.
There is nothing anti Austrian with organized labor.
Strikes are against both economic sense and libertarian law. However, unions or guilds do not require violence to exist.
Voluntary unions could provide things like collective bargaining or market standards(eg license doctors) that would be both economically beneficial and in line with libertarian law.
Many on the left can not distinguish between business and government monopoly, anti-unionism is its right wing equivalent.
So, I notice everyone stepping around the question in some way: to an Austrian, is unionization inefficient? Notice that this is not answered by saying something like “voluntary unionization doesn’t harm anyone’s rights.” From a strictly economic viewpoint, leaving aside the question “what would you do about it?” one can reasonably ask what the economic effects are. I submit that voluntary unionization is not inefficient, but efficient in terms of producing more prosperity. Remember that Mises says economics cannot tell you what to do, but can tell you what actions will produce prosperity and which won’t. You can then choose if you want prosperity, or value other things more highly - this is where ethics enters. However, from the pure science of human action:
Suppose that a voluntary union exists. Then either the employer is permitting it to exist, or has required it (I have long maintained that right-to-work laws are far from libertarian, because a closed shop still has a voluntary union.) If the employer is permitting it to exist, then either he does so because he actually likes the union, or because he would have trouble recruiting adequate, qualified, reasonably-priced labor if he forbade it. In the first case, the psychic income from the existence of the union outweighs the monetary loss from the existence of the union, and the employees have a monetary gain. What is unknown is the psychic gain or loss of the workers, however, the employer was permitting the union, not requiring it, so the workers formed it, so they prefer it too. So gains to everyone. If the employer is accepting the union because it is economically forced upon him (forbidding it prevents him from obtaining adequate, qualified, reasonably-priced labor) then the employees clearly gain from the existence of the union, and the owner also gains from it, all else being equal - he is netting monetary savings and/or higher profits from it. If the employer requires the union, clearly the owner prefers to have it, so monetary loss is more than offset by psychic gain. The employees also clearly prefer it, since they work there. So voluntary unionization, unlike coercive unionization, increases everyone’s profit, and enhances everyone’s position with no victims.
The only kind of union I will disagree with its existence are the public employees unions. As for the other kinds. I might or might not disagree with their stands on some issues. I agree with their existence.
Well, that is a legitimate and interesting question, but it was not the original question asked in this thread. The question was whether Ron Paul’s position on unions was somehow anti-Austrian, to which several people have given excellent replies, IMO.
But to take up the question of whether voluntary unions are economically inefficient - you are absolutely correct from an a priori standpoint. If people choose to unionize voluntarily, they must believe it will make them better off (ceteris paribus). And that is all we can say, without attempting to make inter-personal value comparisons.
There is a different but related question that myself (and I think one or two others) touched on briefly but didn’t really get into. Given that one’s end is to increase one’s monetary income, is voluntary unionization a suitable means to achieve that end?
I would contend that in general it is probably not. Here’s why. Let’s assume that 100 people want to form a union to negotiate higher wages (and that wages would henceforth be equal for all 100, or distributed according to some other scheme that is not based on productivity). It should be clear that only those employees who are less productive benefit from this. The more productive would always be better off negotiating as individuals. So the 50 top performers would have an incentive not to join the union (actually the people with above-average productivity, but the end result is the same). Now you’re in the same situation as in the beginning, just with 50 people instead of 100. This continues until there is only one person (the lowest performer) left willing to unionize - and there is no more union. Hence, why unions have historically had to resort to coercion.
I’ve made the assumption that there is a fixed pool of of money available for wages, but the same logic would hold true as long as you assume the money available for paying wages is not infinite. The more productive would always maximize their income by negotiating individually, rather than forming an alliance with the less productive. I’ve also assumed that employers are “rational” in allocating wages - meaning their end is to get the maximum productivity for the minimum cost.
But collective negotiation can change how much money is allocated to wages. Suppose I am the most productive employee, and I ask for a raise myself. It might be in the employer’s best interest to say no, and run the risk that I’ll quit - one employee can be replaced. But if I organize with other workers, even though their MP is less than mine, the package might be harder to replace.
I think it’s somewhat informative that a lot of people would have trouble understanding Paul’s answer. To many people, the dichotomy is pro-union, anti-union. Pro-union means favoring coercion to help unions, anti-union means banning unions. No other option presents itself to many people.
Often times, union contracts devalue the merits of employees, that is, what they deserve. And restrict the employers legitimate authority.
For instance, in public school system, if a part-time employee is willing to teach more classes, he won’t be able to. Even he’s willing to get paid with the same rate. It’s not that the administration don’t want him to do it; it’s the contract that requires him not to do so.
True, but so can individual negotiation. The question is whether collective negotiation could achieve better results for all the unionized employees than what they could achieve individually. I’m saying that this seems unlikely - but I won’t rule out the possibility.
There are 2 possibilities. If the employee can obtain a better wage from another employer, then the employee is better off quitting - the fact that he may be able to obtain the higher wage from his current employer by joining a union is irrelevant - why bother? In any case, competition for labor between employers will eventually force the company to raise wages in order to retain its workforce. Unionization may accelerate the process a little if the company is faced with the prospect of losing their entire workforce at once - but the end result cannot be higher than the competitive market wage rate - unless the owners are willing to accept lower profits than they could get elsewhere (because they value this result more than the lost income).
If there are not other employers offering a better wage, then that likely means the market wouldn’t support it - the firm would become uncompetitive and eventually cease to exist if it allocates any additional money to wages - that’s what I meant when I said the money available for paying wages is finite.
I disagree. Certain unions could be very benefitial, though they would be very different from what people think of as unionism today.
If an ogranizations exists to certify surgeons then hospitals might decide to only hire certified surgeons. This would have the effect of reducing transaction costs and allowing for wage standarization/stability.
I think the entire topic’s message is a bit confused. Are unions good for America? Who cares!? The question to be asked is whether they are good for all the parties involved. I suppose in some situations they could be, and given that they are the result of voluntary agreement, they are fine.