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Spring 2008

ISSN 0890-913X

Volume 23, Number 2

Categories: Spring 2008 | Marketing

Hayek on Labor Unions: Economic and Social Consequences

Charles W. Baird, California State University Hayward

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TheJournalofPrivateEnterprise23(2),2008,19-37HayekonLaborUnions:EconomicandSocialConsequencesCharlesW.BairdCaliforniaStateUniversity,EastBayAbstractWhileAmericanunionshavealowanddecliningmarketshare,theyremainverysignificant,especiallyinthepoliticalmarketplace.Thatpoliticalinfluencemakesitpossibleforunionstoyieldfarmorepowerintheprivatesectorthantheirmarketshareinthatsector(7.5percent)implies.Allthisispossiblebecauseofthesubstantialgoodwillcapitalthatunionsstillenjoy.F.A.Hayekthoughtthatifpeople,includingworkers,understoodthenegativeconsequencesofunionism,unionswouldlosemostofthatgoodwillcapital.Hayekwroteextensivelyontwocategoriesofmaligneffectsofunionism:thoseinvolvingbreachoftheruleoflawandthoseinvolvingtheeconomyandthefreesociety.Thispaperexamineshisviewsonthelatter.I.IntroductionManypeople,awarethatonly7.5percentofprivatesectorAmericanworkersareunionized,concludethat,atleastintheU.S.,unionsarelargelyirrelevant.Thatinferenceisverywrong.Tobeginwith,35.9percentofgovernmentsectorAmericanworkersareunionized.Toalargeextentcollectivebargaininginthegovernmentsectorresultsingovernmentemployeesimposingtaxation-withoutrepresentationontherestofus.(Wagesandsalariespaidtogovernmentworkersarepaidforoutoftaxes,andtaxpayersdon'tgettovoteontheprovisionsofcollectivebargainingagreements.)Moreover,despitethelow,andfalling,marketshareofprivatesectorunions,theirabilitytoextractforcedduesfromworkerswhowantnothingtodowiththemgivesthemfartoomuchinfluenceinthepoliticalmarketplace.Thissorrystateofaffairsismadepossiblebythefactthatunionsenjoyfarmoregoodwillamongthepublicthantheydeserve.F.A.Hayekbelievedthatifpeople,includingunionizedworkers,cametounderstandtheactualconsequenceofunionismas19

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Metadata [hide]

Title	Hayek on Labor Unions: Economic and Social Consequences
Authors/Creators:	Charles W. Baird, California State University Hayward
Year:	2008
Volume:	23
Number:	2
Pages:	19 - 37
Publisher:	The Association of Private Enterprise Education
ISSN:	0890-913X
Document Type:	Articles
Keywords:	Hayek, Labour Market, Rule of Law, Political market, Economic coordination, Inflation, Money, Keynes, Standard of living, Economic reform

Citation:
Baird, Charles W. / 2008. "Hayek on Labor Unions: Economic and Social Consequences." The Journal of Private Enterprise, 23(2): 19-37.