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Unions

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TelfordUS posted on Thu, Dec 10 2009 8:13 PM

What are your views on trade unions? Why are they either constructive or destructive for an economy?

What are the views on unions from your favorite economists?

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Unions, as we see them today, are necessarily evil. The lobby for government intervention in local labor markets, making it illegal for certain businesses to hire non-union labor. They commit acts of aggression, such as violence and intimidation, yet are usually given breaks by the government.

 

The theoretical, voluntary union is not a bad thing, however. Workers have the right to freely associate and to try to use collective bargaining to raise their wages. Employers, however, must have the right to throw the union workers out on their doorstep. 


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Unions in and of themselves are inherently neutral.  However, when they (or anyone else, for that matter) combine with the government, they become a veritable engine of destruction against the economy.

I don't know how Rothbard/Mises/the Friedmans/Hayek/etc. felt about unions.

Periodically the tree of liberty must be watered with the blood of tyrants and patriots.

Thomas Jefferson

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TelfordUS:

What are your views on trade unions? Why are they either constructive or destructive for an economy?

A voluntary union of workers, I believe, is compatible with libertarian thought.  A coerced union of workers (as most present unions are), are not.  Trade unions which are coercive, first of all, are morally in the wrong, while those which collude with government to unfairly force businesses to imply with certain requirements is not only morally wrong, but economically unsound.  Why are trade unions destructive?

  1. Wages are pushed above their market wage, creating a shortage of employment and a loss in marginal revenue, and a loss in total revenue over the long-run.
  2. Increases in the cost of labor will usually mean that businesses have to cut costs elsewhere, including quality.  This leads a shift in the demand curve, given that more people are more likely to opt for substitute goods.  This can lead to the company's bankruptcy (i.e. General Motors and Chrysler).
  3. Trade unions invariably prioritize some workers over others.  Those who are marginalized are done so at the expense that are prioritized.

What are the views on unions from your favorite economists?

I think that the majority of economists which are read by members of these forums will all hold a similar opinion.

 

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A union is a partnership, people with similar skill sets coming together to do business.

Usually labor unions attempt to obtain the legal privilege to enserf worker, i.e. to impose on what terms they will be able to compete with them, to the union's benefit. This of course causes problems such as unemployment and underemployment.

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capitalist:

Unions, as we see them today, are necessarily evil. The lobby for government intervention in local labor markets, making it illegal for certain businesses to hire non-union labor. They commit acts of aggression, such as violence and intimidation, yet are usually given breaks by the government.

 

The theoretical, voluntary union is not a bad thing, however. Workers have the right to freely associate and to try to use collective bargaining to raise their wages. Employers, however, must have the right to throw the union workers out on their doorstep. 

Tru dat

This post is true. Good job on your true post

"Lo! I am weary of my wisdom, like the bee that hath gathered too much honey; I need hands outstretched to take it." -Thus Spake Zarathustra
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Alls I know is that the Big 3 were pretty much torn down by the UAW.

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I reject the idea that unions have an honest place in society.  To participate in a union is the economic equivalent of buying insurance without considering your own risk versus the risk pool.  For the most marketable labour, to unionize is to entirely surrender one's advantages.

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David Z replied on Mon, Dec 14 2009 11:26 AM

Caley McKibbin:
I reject the idea that unions have an honest place in society.  To participate in a union is the economic equivalent of buying insurance without considering your own risk versus the risk pool.  For the most marketable labour, to unionize is to entirely surrender one's advantages.

I wouldn't go so far as to reject the idea that they have an honest place in society. I think there is a place for them, but contrary to the anarcho-communists, syndicalists, and some mutualists, I do not believe that unions are the be-all/end-all of organization. It's another sticking point with the very-far left that unions = good.  In their attempt to repudiate all forms of "private property" they argue that workers will unionize in order to retain "collective" ownership of capital goods.

What happens when you want to leave the collective? Perhaps you're unsatisfied with your take. Perhaps you don't like the direction it's moving? Perhaps you have a sick aunt on the other side of the country who needs your help?  The reason you choose to leave the collective is immaterial; what matters is that you choose to leave. What becomes of your quotal share (or better, who determines what is your quotal share) of the "collectively owned capital" when you elect to leave?

I haven't heard a satisfactory response to either of these questions.

============================

David Z

"The issue is always the same, the government or the market.  There is no third solution."

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