Labor’s Strong Arm

Labor unions in the United States have succeeded like no other interest group in staging a public-relations coup. Consider that the media, government, the academic community, and the general public generally perceive the interests of organized labor to be synonymous with the interests of workers as a group; that unions are popularly regarded as necessary to correct the “inequality of bargaining power” between individual employees and corporate employers; and that the so-called right to strike has attained an unchallenged status as one of the basic components of a free society.

Yet each of these perceptions, which have been keystones of national labor policy in this country since the 1914 Clayton Act and the 1935 Wagner Act, is empirically and theoretically unsound. Nonetheless, only a handful of contemporary economists have recognized the errors of these policies. In the last 30 years the mainstream of economic thought has departed from the view that, in the words of Harvard economist Edward H. Chamberlin, “the public interest requires the imposition of major restrictions on the monopoly power of labor.” In its place is the now-dominant position that unions play a necessary and positive role in mediating the harsh forces of modern industrial life.

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