The Capitalist Manifesto by Andrew Bernstein is a must read for anyone seeking to understand the current economic, political and philosophical situation, and to find a solution. Bernstein presents a rock solid defense of capitalism against all comers, logically demonstrating capitalism's moral and practical superiority, and then uses his clear arguments to demolish the common myths and falsehoods presented by anti-capitalists of all stripes.
Rather than offer a detailed review (though I hope to return to various topics raised by this excellent book) I'd like to present a hypothetical scenario that occurred to me while reading Bernstein's discussion of unions, near the end of the book.
Bernstein makes the case that "unions seek, and through government intervention gain, monopolistic control over an industry's labor supply." Various laws and Supreme Court rulings have "compelled employers to to recognize and bargain with unions -- and forced non-union workers to accept the union as their sole bargaining agent... [T]he government also required companies to bargain with such coercive unions 'in good faith.' No matter how outrageous a union's demand, the company was legally obligated to respond with a counter-offer... that made some concessions."
Once a union catches hold, it wields its coercive power by mandating a litany of absurdities: "feather-bedding" where more workers than are necessary must be hired for a job, technological advancements (and thus productivity increases) are outlawed in an attempt at keeping people in jobs, and make-work schemes are employed, "such as requiring that pipe delivered to construction sites with screw thread already on it, have its end cut off and new screw thread cut on the site." These practices are so outside the bounds of sanity that if someone where to write fiction about them, it would be too crazy to be believable.
With all of that being said, could unions have a place in a free market system? Of course, Bernstein answers. As long as government is not there to act as a coercive force on one party's side in violation of the rights of the other side -- the very definition of a free market -- then workers can voluntarily organize and employers can choose to recognize the union, or not.
This last point got me to thinking... would there be a place for unions in a free market? Of course their existence is possible, but is there any case where they might be a productive force benefiting employer and union-member alike? Would unions not only be possible, but also likely?
Let's look at a hypothetical example. What if there were 3,000 factory workers, all at roughly the same skill level and pay scale (regardless of specific job description) who, essentially, offered the same product on the labor market. The company would have to employ X number of human resources staff, have the infrastructure in place to deal with individual contracts for each employee, track them all (for bonuses, reviews, discipline, and the like), employ X number of attorneys, etc... just as the cost of managing the workforce.
Now, what if the employees decided to band together and offer a "volume discount" for the labor they supplied, and bargained collectively, letting the employer save money and time on administrative burdens because everyone in the union would agree to abide by the negotiated contract.
In return, the union could ask for higher wages, more time off, a fast-track for training and advancement... something of value. Both parties would benefit, and no one's rights would be violated. It wouldn't be coercive, and productivity and merit would still be the drivers because workers wouldn't see the union as the sole source of employment and advancement (i.e. by seniority alone), and the employer wouldn't be the evil bastard that the union wanted to soak for any concession it could. Instead, joining the union would simply be a shrewd business decision for the laborers. And for the owners, it would offer administrative efficiency, allowing time and money to be dedicated to other productive ventures, increasing the profitability of the company, and likely leading to more workers being hired.
It's difficult to imagine more detail than that, considering how far our society is from such a mutually beneficial employer/employee arrangement. But the point is that, left free to decide on their own how to maximize their opportunities, with whom to contract and for what purpose, it is not a bit of a stretch to think that creative people would find ways to make unions a productive advantage, leading to greater prosperity for all involved.
Such is the awesome power of capitalism.