by Neville Kennard, veteran preaching and practising capitalist
Trade unions in Australia once again are flexing their muscles, this time because their political party, the Labor Party, is in government and they have the leverage to get certain Acts of Parliament which will benefit their members and the ruling elite of the trade union movement, passed. Also there is pretty much full employment in Australia — that is, if you discount the tens of thousands on some sort of structured benefits that ensure their unemployment or under-employment, but where they don’t count in the official unemployment numbers.
So the time is right for trade unions to start once again to extort benefits for their members from employers. That this is to the detriment of all other employed Australians, and of the cost-of-living, and to productivity and competitiveness, is undisputed.
But what is of more interest, perhaps, is the ethical and moral position of trade unions and their power.
Voluntary trade unions, or any other voluntary group of people, who do not have special legal privileges and are not engaging in any coercive activity, are quite moral and ethical. There are many trade organisations and associations where membership is voluntary and where these associations or their members have no special legal privilege, and these inflict no financial burden or ethical conflict on those with whom they may deal.
But trade unions as we know them do have special legal privilege and they use this as a mafia or protection racketeer might. Organised crime organisations are less harmful than trade unions, however, as they are somewhat constrained by the law, even if they may violate the law with some impunity at times. But they are petty criminals compared with trade unions.
Trade unions can now, since the government of the day authorised it, enter employers property, talk with his employees and even force the employer to negotiate. Trade unions can require that an employer deduct their union members fees from his pay and remit it to the union. And while trade union membership is not compulsory, the union can make it quite uncomfortable for non-members, and for non-compliant employers.
The ethics of this use of force and coercion is obvious. If an ordinary person were to do what the trade unions do they would be guilty of extortion, or attempted extortion. The victim would probably call the police and seek the arrest, or at least the restraint of the person who was threatening to harm and damage the employer.
Traditionally, trade unions have justified their extra legal powers on the grounds that it balances the power of lowly employees against more powerful employers. This is an attractive (at first glance) proposition, but it is quite fallacious as well as being immoral. Employers need to attract good people and pay them market rates. If they don’t, they will be forced to hire not-so-good people at lower rates, and this makes the employer and his products or services uncompetitive.
Henry Ford understood this and hired workers at double the going rate; he knew that he could get the best people and get them to work very productively if he paid them well. He knew he could pick and choose, and he could also demand high productivity. And people came by the train-load to get a job at Ford Motor Company. It also had the effect of lifting the going wage in other industries and of lifting the standards of performance and productivity.
With more and more service industries, more and more self-employed “contractors,” the demand for membership of trade unions is declining. The division of labour, an ever increasing trend, where more and more specialists offer their unique skills in niches to businesses and private people, makes it very difficult for the unions to find and to extort fees from them. Self-employed people don’t need or want the “services” of trade unions. They also like their independence and ability to negotiate their pay and their productivity with the “customer,” who may have previously been their boss.
Coercive trade unionism with its special privileges is a dying institution. It is dying because it is both immoral and unethical and also because it is uneconomic. It will continue for quite a while probably in government and public service jobs where the productivity is difficult to measure, where profitability of the employer is not measurable, and where competition is non-existent. With the trend to privatisation of government services, even in the public service trade union membership will be in decline.
Non-coercive trade unions could fill a useful need to employers by relieving them of the need to find good staff and by becoming, in effect, “contractors,” labour-supply contractors who relieve an employer of the need to search for labour and skilled people. Competing trade unions would vie with each other for contracts with employers who would then negotiate productivity deals with them. Trade unions would thus become a productive part of the process, part of the division of labour process which ever-increases productivity and prosperity. It may happen when their privileges are taken away.
After a hundred years of trade union privilege and cosy relationship with governments, the day of the unethical and immoral trade union will draw to an end. The days of the coercive trade union bosses, bully-boys (and girls) that they are, is drawing to an end.
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