Compulsive Bargaining Reviewed; C. W. Anderson

c. W. Anderson ~~t~ Compulsive Bargaining Reviewed CONGRESSpassed the Wagner Act in. 1935 with great hope that it would give employees job security and bring industrial peace on the labor·· management front. Even though the results have been vastly different from the intentions, there has been no serious public examination of the premises which give justification to this law or the 1947 Taft-Hartley amendments. The idea that compulsory collec tive bargaining is beneficial to em ployees and the public is still ac cepted without question by most people and is still being taught in our schools-now by unionized teachers. However, falling productivity and skyrocketing labor costs have been C. W. Anderson of Sun City, Arizona, is retired Pres ident of Management Resources Association of Mil waukee and past Chairman of the Institute for Hu mane Studies. shaking the credibility of the claims of public benefits; higher levels of unemployment cast doubts as well on the so-called benefits for employees.

What are some of the unforeseen results of this well-meaning effort to equalize the bargaining power of the employee and the corporation? The thousands of strikes, billions of dollars of lost pay, vicious picket line violence and destruction of prop erty, make a mockery of the "indus trial peace" objective. Current unemployment and the relocation of thousands of employees in heavy industries to other kinds of jobs is directly related to the high la bor costs (not only payroll costs but the rigidities of negotiated work rules) and the refusal of union lead ership to allow local units to make concessions which might break cer403 404 THE FREEMAN July tain "patterns." The fact that some concessions have occurred is evi dence of the severity of the economic predicament of the employees and industry. But it is important to un derstand that in a truly free labor market these wrenching, violent re locations would not occur; transi tions would be gradual, nondis ruptive.

Given the low level of public trust in unions as revealed in many opin ion polls, and the declining union membership through layoffs, decer tifications and losses of representa tion elections, it would seem that a reevaluation is in order. Voluntary Action Approved To guard against misunderstand ing, there is no suggestion here to eliminate voluntary collective bargaining. Free, voluntary association is surely harmonious with economic freedom-free enterprise, if you will. When not mandated or interfered with by law, peaceful, collective ac tion will serve as a restraint against any employer practices or policies that are excessively punitive or out of step with the realities of the sur rounding labor market. It is in every employer's self-interest to hold his most productive employees. Does compulsory union bargain ing for employees breed conflict? There is now strong evidence that in many cases it tends to. To understand why, just put yourself in the position of a union agent. Your job and your prestige depend on what you can get for the members that they believe they can't get for them selves. So, when an employer is trying to be fair, paying as much or more than competitors, what can you as an agent do? Guess how long you'd last if you tried to be fair by telling the members they had a good em ployer who was doing his best to make their jobs secure.

The hard fact is that to justify your job and your union, you must attack the employer. The more wedges you can drive between the employer and the employees the more secure is your job. It is mainly because this built-in conflict is becoming more evident that growing numbers of employees are resorting to the decertification process to rid themselves of this dis ruption. When business is booming and inflation permits regular in creases in compensation and easy movement to other jobs, inner con flicts are much less evident. It is in slack times that it becomes apparent that the self-interest of the union hi erarchy has taken precedence over the interests of employees. This self-evident source of conflict alone is good cause for a re-exami nation of long accepted bargaining dogma. But, beyond the practical negatives there are other worrisome questions of principle. Space permits 1985 COMPULSORY BARGAINING REVIEWED 405 touching on only one-the right to own and control property in a free society. Because of the many prior le galized infringements on this right, it is now rarely defended. But those expedient compromises have taken us far down the road to the socialism (common ownership) envisioned by Karl Marx and also the British Fa bian Society which, incidentally, ad vocated strong unions as a key factor in the breakdown of property rights.

If we accept the idea that we have a right to life, and understand that sustaining life depends on a right to own property, how can we, in prin ciple, favor a law that violates that right? Compulsory collective bar·· gaining demands that the owner of a business "bargain in good faith" with a union which can be elected by Reprints . .. a small portion of the employees (only 51 percent of those voting). Practically, "good faith" is inter preted by the National Labor Rela tions Board and the courts to mean making concessions and, in fact, such concessions, which may not be fa vored by most employees, can de stroy a business. Furthermore, the employees who want to work under conditions agreed to voluntarily are legally deprived of their property right which is to contract individ ually for their work. Should we be concerned about what has been happening to prop erty rights in this effort to force col lective bargaining? I think so, and I believe that millions of people in shops and offices are more than ready for a reappraisal. il A Page on Freedom Each of these brief messages is a handy way to share with friends, teachers, editors, clergymen, employees and others a thought-starter on liberty. It also serves to introduce the reader to our work at FEE.

See page 387 for this month's Page on Freedom. (Copies of previous messages are also available; specify title when ordering.) Small quan tities, no charge; 100 or more, 5 cents each. Or, feel free to reprint the message in your own format if you'd prefer. We hope you'll enjoy this feature! Order from: FOUNDATION FOR ECONOMIC EDUCATION, INC. IRVINGTON-ON-HUDSON, NEW YORK 10533 George Voss if The Economics of Medical Care IN voluntary markets, private med icine included, the key knowledge necessary for trade is conveyed by freely fluctuating prices. The price system conveys knowledge of the personal and subjective utilities of the actors, that is, of the supply and demand of various commodities and services, which cannot be compared otherwise. Demand for ordinary medical care in voluntary markets is highly elastic and medical care by physicians is largely optional, ex cept for some categories of life threatening conditions, few in num ber and low in incidence, sometimes known as "catastrophic illness." As history shows, medical care in esGeorge Vosslf, M.D., Ph.D., Is In the practice of psy chiatry, Birmingham, Alabama. His Interest In eco nomics evolved from his study of the effects of fees and reimbursement systems on the psychotherapeu tic process.