I’m looking for information about the Austrian view of labor unions. Any help would be appreciated. Thanks.
Philosophic view or economic view?
economic
A cartel is a group of firms that collude to restrict their output of goods to raise their prices. A labour union is based on the same principle.
They do two things that restrict supply:
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They lobby the government to restrict new entrants into the market (through licencing laws)
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They strike (ie reduce their output) in order to extort a higher price (wage) for their labour.
I’m certainly not pro-Union, but we have to also recognize that Unions can be a product of the right to voluntarily associate..
This isn’t necessarily the Austrian view, but it’s my personal view.
In the late 19th century and early 20th century, workers formed unions as a response to abuses in factories. These unions were unregulated and effective.
The Taft-Hartley act regulated unions, which neutered their effectiveness. Union leaders became State bureaucrats instead of true workers’ advocates. (See elsewhere for discussion of the Wobblies vs. AFL-CIO. The Wobblies refused to submit to regulation, but the AFL-CIO embraced the regulations. This made the AFL-CIO a corporate bureaucracy. The leaders of the Wobblies were “terrorists” and they were stampted out.)
In a true free market, unions are unnecessary. Workers who feel mistreated would just start their own competing businesses.
Unions evolved to patch up symptoms of a corrupt system. State regulation of unions cripples unions.
There is the right to associate as in voluntarily joining a club, or joining the an orgainzation like the Automobile Association, but what most Unions do is insist that only they can negotiate with the employer, and only members of their Union can carry out particular job functions. This is effectively forced association and therefore not compatible with liberty.
There’s another point I forgot to mention. There’s the “closed shop” law. A union may, as part of its contract, require all employees in certain roles to be members of the union. Employees are barred from negotiating individual agreements with their employer.
Via the “closed shop” law, unions become advocates for the employer’s needs! The employer only needs to offer least-common-denominator working conditions, rather than negotiating separately with everyone. For example, a really skilled unionized worker can’t ask for 10%-20% higher salary.
I don’t think it’s really fair to call union strikes extortion. It’s collective bargaining. They can get a higher price (or what have you) if they all demand it together than if they do so individually. Unlike with an actual extortion, the employer can choose not to pay, they just won’t have workers. However, this does not constitute the force or threat of force extortion implies. The workers do not threaten to harm the employers, just not to help them. Different, see?
But the union only exists in the first place because there’s a federal law that requires employers to engage in collective bargaining once the majority of employees vote to organize.
I agree that company unions and guilds would not be unheard of in a free market, but that is not the situation under the NLRA.
Well, yeah, I agree, today’s unions under today’s laws can be extortion rackets, as much for those they “represent” as their employers, but I was speaking of unions more generally. The way the post I responded to put it was that unions, in general, were cartels that extorted employers. That’s the way I read it, anyway. I saw it as hyperbole, a bit too typical of those who lean right.
Out of curiosity, would you also recognize the right of employers in a particular locale to get together and agree on the wages they would pay?
Of course, such attempts at cartelization would fail as soon as demand for labor exceeded supply and this, by the same token, is why it is hard to imagine unions in a truly free labor market.
Absolutely.
I think they would actually end up more like guilds. We think in terms of employers and employees based on the corporatist model, not the true free market where one individual deals with another. Your employer would not be your boss, but your customer, in a true free market. The paternalistic sort of business model we currently operate under is silly and very unanarchistic. Guilds would serve not only as a protector of the interests of the employee, but an assurance of quality to the employer.
From an economic point of view, labor unions simply create wage rigidities which create unemployment. Employers should be given full power to bust unions.
I am afraid that extortion is the right word. Any worker can choose not to work, but what the union demands is that the those workers have the right to withold their labour and that the employer does not have the right to employ anyone else.
So with the protective labour laws, the employer can choose not to pay if he prepared to go bust! Not much of a choice. The workers do not threaten to harm the employer? Not true, they are threatening to bankrupt him. What is more is that the striking workers do often threaten and indeed do beat up other workers do not follow the unions instructions and carry on working.
Collective bargaining is Orwell speak for violence and intimidation.
Going back to the original topic.
Unions could and likely would exist in an “Austrian” society, but certainly not in the form that they do now. All Federal and State labor laws would have to be repealed. Unions would be totally voluntary. The employer could choose to recognize or not recognize the union as a bargaining agent. The employer could choose to bargain or not to bargain with the union. The employees of the company could choose to join the union and attempt to collectively bargain or choose NOT to join the union and instead bargain directly with their employer. The employer would be free to fire employees for striking. Certainly, a group of employees has the RIGHT to associate in a union. At the same time, the employer has the RIGHT not to associate or interact with that union.
Under the current work environment, regulatory agencies and corporatism restrict employment choices, harming workers far more than unions harm employers. The law works both ways, and in most ways in favor of large, grotesque artificial legal entities known as corporations. That being said, once corporatism is done away with, an employer should be able to make employment decisions as suit them. A union ought only be successful in striking if there are not enough available workers to replace those striking. It is the legal environment, not the existence of unions themselves, which bring about the extortion aspect. However, as I said before, these laws are not necessary for unions to operate, especially among skilled workers who are inherently difficult to replace in large groups.
An employer unwilling or unable to pay what the workers in a particular field collectively demand will not be able to gain or retain employees. They will go out of business. I don’t see anything wrong with that.
That is about the same thing then threaten to fire, not promote or blacklist certain workers. So I guess the ‘bankrupting’ mechanism works both ways.
Talking about unions in these terms is missing the true point.
Why can’t I start my own monetary system and bust the Federal Reserve’s monetary monopoly?
Why can’t I start my own car manufacturing business and bust GM/Ford/UAW’s monopoly? The reason there have been no new car manufacturers for awhile is that the industry is HEAVILY regulated.
You can’t talk about abuse of unions unless you also address the abuses that make it hard for individuals to start businesses.
These unions were actually very ineffective. Unions were practically powerless until they got government backing.
They also were criminal enterprises. Unions were practicioners of private crime, until they enlisted the government to commit their violence for them.