Unions: Scapegoat for Inflation

The support of conservatives and businessmen for continuing wage and price controls seems based largely on the stubborn hunch that, without controls, unions would have unlimited power to raise wage rates. Though conservatives realize that we cannot have a free economy without free pricing, their concern about inflation often leads to the belief that we must, however reluctantly, choose government power over union power, socialism over syndicalism.

Trade unions have always created another dilemma for those who wish to maximize individual choice: Though people should surely be free to join together to accomplish common goals, it is equally sure that such associations should not be allowed to coerce some workers to join, keep others out, and forcibly prevent employers from hiring workers who choose not to join. From much of the talk about “bargaining power,” it isn’t clear, however, why unions should have to employ such coercive tactics. It would seem, instead, that a big union would have the “bargaining power” to get everyone employed at high wages, and would therefore have no reason, say, to discriminate against minorities or worry about nonunion rivals.

About the Author

Alan Reynolds

Alan Reynolds, National Review’s economics editor from 1972 to 1976, is a senior fellow at the Cato Institute and the author of Income and Wealth.

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The support of conservatives and businessmen for continuing wage and price controls seems based largely on the stubborn hunch that, without controls, unions would have unlimited power to raise wage rates. Though conservatives realize that we cannot have a free economy without free pricing, their concern about inflation often leads to the belief that we must, however reluctantly, choose government power over union power, socialism over syndicalism.

Trade unions have always created another dilemma for those who wish to maximize individual choice: Though people should surely be free to join together to accomplish common goals, it is equally sure that such associations should not be allowed to coerce some workers to join, keep others out, and forcibly prevent employers from hiring workers who choose not to join. From much of the talk about “bargaining power,” it isn’t clear, however, why unions should have to employ such coercive tactics. It would seem, instead, that a big union would have the “bargaining power” to get everyone employed at high wages, and would therefore have no reason, say, to discriminate against minorities or worry about nonunion rivals.