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Advancing Austrian Economics, Liberty, and Peace

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Making Economic Sense
by Murray Rothbard
(Contents by Publication Date)


Chapter 37
The Union Problem

Labor unions are flexing their muscles again. Last year, a strike against the New York Daily News succeeded in inflicting such losses upon the company that it was forced to sell cheap to British tycoon Robert Maxwell, who was willing to accept union terms. Earlier, the bus drivers' union struck Greyhound and managed to win a long and bloody strike. How were the unions able to win these strikes, even though unions have been declining in numbers and popularity since the end of World War II? The answer is simple: in both cases, management hired replacement workers and tried to keep producing. In both cases, systematic violence was employed against the product and against the replacement workers.

In the Daily News strike, the Chicago Tribune Company, which owned the News, apparently did not realize that the New York drivers' union had traditionally been in the hands of thugs and goons; what the union apparently did was commit continuing violence against the newsstands--injuring the newsdealers and destroying their stands, until none would carry the News. The police, as is typical almost everywhere outside the South, were instructed to remain "neutral" in labor disputes, that is, look the other way when unions employ gangster tactics against employers and non-striking workers. In fact, the only copies of the News visible during the long strike where those sold directly to the homeless, who peddled them in subways. Apparently, the union felt that beating up or killing the homeless would not do much for its public relations image. In the Greyhound strike,  snipers repeatedly shot at the buses, injuring drivers and passengers. In short, the use of violence is the key to the winning of strikes.

Union history in America is filled with romanticized and overblown stories about violent strikes: the Pullman strike, the Homestead strike, and so on. Since labor historians have almost all been biased in favor of unions, they strongly imply that almost all the violence was committed by the employer's guards, wantonly beating up strikers or union organizers. The facts are quite the opposite. Almost all the violence was committed by union goon squads against the property of the employer, and in particular, against the replacement workers, invariably smeared and dehumanized with the ugly word "scabs." (Talk about demeaning language!)

The reason unions are to blame is inherent in the situation. Employers don't want violence; all they want is peace and quiet, the unhampered and peaceful production and shipment of goods. Violence is disruptive, and is bound to injure the profits of the company. But the victory of unions depends on making it impossible for the company to continue in production, and therefore they must zero in on their direct competitors, the workers who are replacing them.

Pro-union apologists often insist that workers have a "right to strike." No one denies that. Few people--except for panicky instances where, for example, President Truman threatened to draft striking steel workers into the army and force them back into the factories--advocate forced labor. Everyone surely has the right to quit. But that's not the issue. The issue is whether the employer has the right to hire replacement workers and continue in production.

Unions are now flexing their muscle politically as well, to pass legislation in Congress to prohibit employers from hiring permanent replacement workers, that is, from telling the strikers, in effect: "OK, you quit, so long!" Right now, employers are already severely restricted in this right: they cannot hire permanent replacement workers, that is, fire the strikers, in any strikes over "unfair labor" practices. What Congress should do is extend the right to fire to these "unfair labor" cases as well. 

In addition to their habitual use of violence, the entire theory of labor unions is deeply flawed. Their view is that the worker somehow "owns" his job, and that therefore it should be illegal for an employer to bid permanent farewell to striking workers. The "ownership of jobs" is of course a clear violation of the property right of the employer to fire or not hire anyone he wants. No one has a "right to a job" in the future; one only has the right to be paid for work contracted and already performed. No one should have the "right" to have his hand in the pocket of his employer forever; that is not a "right" but a systematic theft of other people's property.

Even when the union does not commit violence directly, it should be clear that the much revered picket line, sanctified in song and story, is nothing but a thuggish attempt to intimidate workers or customers from crossing the line. The idea that picketing is simply a method of "free expression" is ludicrous: if you want to inform a town that there's a strike, you can have just one picket, or still less invasively, take out ads in the local media. But even if there is only one picket, the question then arises: on whose property does one have the right to picket, or to convey information? Right now, the courts are confused or inconsistent on the question: do strikers have the right to picket on the property of the targeted employer? This is clearly an invasion of the property right of the employer, who is forced to accept a trespasser whose express purpose is to denounce him and injure his business.

What of the question: does the union have the right to picket on the sidewalk in front of a plant or of a struck firm? So far, that right has been accepted readily by the courts. But the sidewalk is usually the responsibility of the owner of the building abutting it, who must maintain it, keep it unclogged, etc. In a sense, then, the building owner also "owns" the sidewalk, and therefore the general ban on picketing on private property should also apply here.

The union problem in the United States boils down to two conditions in crying need of reform. One is the systematic violence used by striking unions. That can be remedied, on the local level, by instructing the cops to defend private property, including that of employers; and, on the federal level by repealing the infamous Norris-LaGuardia Act of 1932, which prohibits the federal courts from issuing injunctions against the use of violence in labor disputes.

Before 1932, these injunctions were highly effective in blocking union violence. The act was passed on the basis of much-esteemed but phony research by Felix Frankfurter, who falsely claimed that the injunctions had been issued not against violence but against strikes per se. (For a masterful and definitive refutation of Frankfurter, which unfortunately came a half-century too late, see Sylvester Petro, "Unions and the Southern Courts--The Conspiracy and Tort Foundations of Labor Injunction," The North Carolina Law Review, [March 1982], pp. 544-629.)

The second vital step is to repeal the sainted "Wagner Act" (National Labor Relations Act) of 1935, which still remains, despite modifications, the fundamental law of labor unions in the United States, and in those states that have patterned themselves after federal law. The Wagner Act is misleadingly referred to in economics texts as the bill that "guarantees labor the right to bargain collectively." Bunk. Labor unions have always had that right. What the Wagner Act did was to force employers to bargain collectively "in good faith" with any union which the federal National Labor Relations Board decides has been chosen in an NLRB election by a majority of the "bargaining unit"--a unit which is defined arbitrarily by the NLRB.

Workers in the unit who voted for another union, or for no union at all, are forced by the law to be "represented" by that union. To establish this compulsory collective bargaining, employers are prevented from firing union organizers, are forced to supply unions with organizing space, and are forbidden to "discriminate" against union organizers.

In other words, we have been suffering from compulsory collective bargaining since 1935. Unions will never meet on a "fair playing field" and we will never have a free economy until the Wagner and Norris-LaGuardia Acts are scrapped as a crucial part of the statism that began to grip this country in the New Deal, and has never been removed. 

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