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Chapter 282 of 943 · Business Tides: The Newsweek Era of Henry Hazlitt by Henry Hazlitt

We Took a Wrong Turn

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May 12, 1952

In the course of his opinion holding that the seizure of the steel industry was illegal, Judge David A. Pine pointed to some of the presuppositions behind the Administration’s argument:

“Assuming the disastrous effects on the defense effort envisioned by the defendant, that can come about only in case of a strike, and that presupposes that the United Steelworkers will strike notwithstanding the damage it will cause our defense effort. It also presupposes that the Labor Management Relations Act, 1947, is inadequate when it has not yet been tried, and is the statute provided by Congress to meet just such an emergency. And it further presupposes, as defendant apparently does, that, this statute being inadequate, Congress will fail in its duties, under the Constitution, to legislate immediately and appropriately to protect the nation from this threatened disaster. I am unwilling to indulge in that assumption. . . .”

Judge Pine might have mentioned still another unstated presupposition in the Administration’s argument. This is that when the head of an industrywide union threatens to bring a whole industry to a halt unless his demands are met, there is no way to counter his threat; we must simply hasten to grant his demands. The Administration has come to regard it as unthinkable that a strike should be allowed to fail, or that employers should have once more the freedom that they had prior to the passage of the Wagner Act to discharge strikers and peaceably hire other workers in their place.

And Congress has made itself impotent by its own legislation. It has put in the hands of irresponsible private individuals the power to bring the whole industry of the country to a halt. And instead of acting to take such power out of these hands. Congress treats the strike orders of a Philip Murray or a John L. Lewis like some inescapable “national emergency.”

The truth is that twenty years ago the whole labor policy of the country took a wrong turning. Congress was sold the one-sided idea that there was only one cause of labor disputes—unfairness to labor. On that assumption it concluded that there was one all-sufficient cure for labor disputes, which was to make every union stronger, to strengthen its bargaining position further, to help it to win strikes or prevent it from losing them. It put more legal weapons into the hands of union leaders at the same time as it illegalized counterweapons by the employers. In 1932 it passed the Norris-LaGuardia Act (reputedly drafted by Felix Frankfurter) which put paralyzing restrictions on the right of the Federal courts to grant injunctions against strikes and strike practices.

The next major step of Congress (after the temporary Section 7a of 1933) was the Wagner Act of 1935. Under this the government itself was in effect set up as a union organizing agency. It provided the election machinery. It named the “appropriate bargaining unit.” It threw any “company-dominated” union off the ballot—which seemed to mean, in practice, any union that could be shown to be on friendly terms with the employer or that was not affiliated with the AFL or the CIO.

Under this government tutelage union membership was built up from about 4,000,000 just prior to the Wagner Act to some 15,000,000 today. Industrywide unions have been legally granted the right to cripple the

nation, even in time of war.

What is urgently needed now is not ex-post-facto authorization by Congress for further industry seizures by the President, but fundamental revision of our whole labor policy of the last twenty years. No private organization can be allowed to retain the power to coerce the public by paralyzing industry. Congress should clarify the antitrust laws as applied to labor unions. It should drastically revise the Norris-LaGuardia Act. And it should restore the provisions in the Taft-Hartley Act as originally passed by the House (they failed to carry by only a single vote in the Senate) which removed the compulsion on employers to bargain with industrywide unions.

Business Tides: The Newsweek Era of Henry Hazlitt

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