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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.

(in order of appearance on
  1. Welcome from Neville Kennard
  2. Think Tanks Don't Work
  3. "Market Failure": Just what the government ordered!
  4. The Tragedy of the Tax Pool Commons
  5. Corporate Welfare
  6. Citizenship for Sale?
  7. I Don't Vote
  8. Voting: Right or Privilege?
  9. Stockholm Syndrome and our Love-Hate Relationship with Government
  10. Civil Disobedience: The Rules of Engagement
  11. Should Respect for Law Extend to Bad Laws?
  12. Jaywalking as a Demonstration of Individuality
  13. Government Likes War
  14. Collusion is Our Right
  15. Why Not the Drug Olympics?
  16. Unconventional Wisdom
  17. Tiger Farming: An Alternative to Extinction
  18. Looking Backwards: Mont Pelerin Society Conference, Sydney, 2010
  19. Tax Avoidance is a Patriotic Duty
  20. Kennard Writes to IPA Review Editor
  21. Genocide by Welfare: A Tragedy from the Aboriginal Welfare Industry
  22. Separating Sport and State
  23. Your Home is Not an Investment
  24. Dick Smith, Celebrity Philanthropist
  25. A Libertarian's New Year's Resolution
  26. Extend Politicians' Holidays to Create Prosperity
  27. Entrepreneurs are Disruptive, and Bureaucrats Hate It
  28. What is a good Australian?
  29. Governments Like Employment But Hate Employers
  30. The Market Failure Industry
  31. Neville Kennard: The Tax Avoidance Imperative
  32. Wot if ...?
  33. The Tribal Chief and the Witch Doctor
  34. The Tannehills
  35. Democracy versus Property Rights and Prosperity
  36. Government Doesn't Work, and That's the Way They Like It
  37. Minarchy vs Anarchy
  38. Euthanasia and Self-Ownership
  39. The Right Policies to Fix a Depression
  40. Is Howard Our Best PM?
  41. Tax Producers vs Tax Consumers
  42. Where There's a Queue, There's a Business Opportunity
  43. Authoritarian Freedom
  44. Why Classical Liberals Should Debate Anarchocapitalists
  45. The Tyranny of the Majority
  46. If you could choose to whom you paid your tax
  47. Business Should Exploit Boat People
  48. The Immorality of Trade Unions
  49. "America" vs "The United States"
  50. Sweet Anarchy
  51. The Illusion of "Job Creation"
  52. Gold Is Money
  53. Guilty Capitalists
  54. Bureauphobia
  55. Prosperity vs Growth
  56. Capitalism vs Democracy
  57. More people = More fun
  58. Self-Ownership - the very idea!
  59. Government will murder Neville Kennard if he doesn't back away
  60. The Australian Dollar Has Been Cowardly and Criminally Devalued, Harming the Poor Particularly
  61. Is Taxation Theft and Government a Tax Cheat?
  62. My Journey to Anarchy:
    From political and economic agnostic to anarchocapitalist
  63. Government Needs Bad Guys –
    that's why they like wars
  64. What Is Obscene?
  65. Traffic Economics
  66. Wayne Swan stands on the shoulders of other intellectual pygmies
  67. Neville Kennard Obituary
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