Saturday, May 15, 2010

Public and Private Unions

My friend David inspired me to write about public unions. My views are rooted in my longstanding adherence to voluntary association moderated by competition.

Human beings are social animals that have the natural capacity to organize themselves into groups of other like-minded, self-interested humans. We certainly associate ourselves with a wide variety of groups. Like all groups labor unions are the manefestation of this natural capacity to form cooperative groups to advance individual self interest. The libertarian stance on labor unions requires adherence to the principles of voluntariness, non-aggression, and competition. Therefore, unions, like any other voluntary associations must be subject to "creative destruction," which is nature's way of weeding out group dysfunctionality and inefficiency. When a union ceases to advance the self-interest of it's members, or if another union does a better job of advancing those interests at a lower cost, that dysfunctional and/or inefficient union loses members to its competitors and becomes extinct. If a union does an extraordinary job of serving the interests of its members, it may temporarily achieve monopolistic status; at least until its competitors figure out how to compete for members more effectively by offering superior functionality more efficiently. However, unions, like other voluntary associations, often develop survival strategies that have nothing to do with serving members more efficiently. The most common strategy is to employ coercion or the threat of coercion to force new members to join the union and/or prevent old members from abandoning the union; thus undermining voluntariness, non-aggression, and competition. And of course, the most sure-fire way to maintain dysfunctional unions is to employ the coercive power of government to control entry and exit.

Originally, unionization arose as a natural counter-balance to the growth of private corporations, which at least in theory, are also subject to creative destruction. However, since the 1960s, there has been a growing movement toward public unions; that is unions that are formed in order to meet the wants and needs of those who are employed by government. As agencies of government gradually displaced private corporations, unionization was gradually introduced into the public sector; most notably, in the areas of public education and postal service. So what's the libertarian stance on public sector unionization? Well, most of us libertarians oppose governmental encroachment into the private sector, therefore public sector unions border on absurdity. Other than relying on that reductio ad absurdum argument, what else can be said about public unions?

First of all, public sector monopolies are by their very nature immune from competition, which explains why public education and postal service have remained low quality and inefficient for so long. Public unions contribute to low quality and inefficiency by protecting workers from competitors via controlling union entry and exit, and by preventing the formation of competing public unions. Note that the salaries of public workers are paid for via coercive taxation, and that public officials are less than frugal when they spend tax other people's money. Therefore, we end up with a growing public sector workforce, protected by non-competitive unions that reward incompetency with non-competitive salaries and benefits. And of course, this devolutionary process ultimately leads to public spending deficits, increased taxation, and inferior public services.

Some misguided libertarians argue that public unions ought to be illegal. But I would argue that what we really need to do is to get back to limited government, or at least regulate both the public and private realms by enhancing competition rather than stifling it. My prediction would be that if left to the impersonal working of creative destruction, both public and private unions would eventually become extinct. And, where unionization is justified, competing private unions would drive public unions out of business. In short, libertarians must eschew all artificial monopolies, including both corporations (corporate welfare) and unions (union welfare). But we can't simply deploy the coercive power of government to prevent the formation of unions or any other voluntary associations. That's just another indirect expedition on that road to serfdom.


writewriterandtutor said...

I agree with your comment regarding libertarians must eschew corporate welfare as well as unions, but as long as there is one there has to be the other. As you know, I've been in a union for 30 years and it hasn't gotten me anywhere--being a member of the technical professional union did not give me any greater access to jobs at the university than outsiders. Now the teachers' union I belong too does not even so much as protect my job, but they still collect $1000 a year from me in dues! Yet, there needs to be a zig for a zag--in other words, as long as there is corporate welfare there needs to be a some kind of countervailing weight for the working stiff. It's all about balance. We are wildly out of balance when corporations pay no taxes and 50% of the population pay no taxes because they are unemployed; yet some still have defined benefit pension plans while the rest of us have lost our 401K's in the stock Market. There's no one left to pay the bills!

Timothy said...

WW&T raises a good point about balance, but if you ask me his point returns to the "Limited Government" line towards the end. Yes, corporations and 50% of private citizens pay no taxes - but were the government to not be so big, it would not be so much of a problem.

Having never been on either side of a Union War, all I can do at this point is agree with what has been said already - Unions that do not protect the interests of each member of the union fail to be what a union is supposed to be in the first place!

Freedom's Philosopher said...

Government protects ineffective corporations and unions from creative destruction. The "working stiffs" need more options, not government assistance. Options include competing unions and/or no unions at all. Teacher's unions are the epitome non-competitive crony capitalism.