catallaxy files

catallaxy in technical exile

Trade union mythology

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The capitulation of Kim Beazley to the unions on the issue of work contracts has ensured that industrial relations will be a live issue for some months to come. We are likely to hear endless repetition of a number of myths about the role of the trade unions and it may be helpful to have an alternative point of view for balance.

The positive function of trade unions

To anticipate the claim that this is just union bashing it is important to indicate that associations of workers can perform many useful functions in addition to acting as friendly societies for health and welfare provision. For example they could help their members to improve their qualifications and locate the best paid work, and they could provide legal advice and other assistance to members subjected to unfair treatment by management.

Even supporters of the centralized Australian system such as Keith Hancock know that the only way to improve the position of the workers at large is by way of increased productivity. This means that responsible unions will work enthusiastically with management to lift productivity by implementing improved work practices and new technologies. That is likely to reduce the need for personnel on site for the time being and that has prompted the unions to protect jobs in the short term rather than implement improved practices. Where unions succeed in that aim there is a cost in job creation both upstream and downstream from overmanned and inefficient sites.
As Jason has pointed out, progress occurs through the creation AND destruction of jobs and the main game is to make both of those processes as painless as possible without cramping productivity and efficiency.

8 Myths

1. The industrial revolution and the factory system resulted in a period of brutal exploitation of the labouring masses.

2. The workers were frustrated and oppressed by the Combination Acts which were designed to favour the employers and to prevent the workers from forming associations.

3. Labour has an inherent disadvantage in the contest with capital unless the state intervenes to provide assistance, especially by protecting the right to engage in collective bargaining and strike activity.

4. Labour had to wage a bitter struggle to achieve improved pay and conditions.

5. Collective bargaining by the trade unions is a manifestation of the solidarity of the working class to resist exploitation and get a fair go.

6. Wage rates are “indeterminate” so it is good for unions to bargain as hard as they can to get the best possible pay and conditions.

7. Strike activity with the use of violence against non-conforming workers is morally legitimate to adjust for the imbalance of power between labour and capital.

8. Collective bargaining, with strikes or the threat of strikes, is not only morally legitimate but it was also necessary to improve the share of the common wealth between labour and capital.

These views are deeply entrenched in the mythology and the ethos of the labour movement and in the community at large because they have been propagated in standard histories and in works of fiction (novels, films, songs, plays, and other works of art) and in folklore generally. As a result, most of them, if not all, would gain practically universal assent, even among people who deplore the abuses of trade union power and influence in modern times.

A person who used a combination of historical research, sound economic principles and clear reasoning to demolish each and every one of those eight assumptions deserves to be well known and well read, indeed he or she ought to be a household word in up to date and progressive intellectual circles. The person is William Harold Hutt (1898-1988).

A summary of Hutt’s arguments can be found here.

Hutt’s views will be widely regarded as heretical but if they stand up to criticism then the question will be asked: How did so many people manage to be so wrong for so long? For an explanation, consider what will happen if the contents of the Bringing Them Home (stolen generation) report find their way without qualification into the standard histories about the treatment of Aboriginal people that are used as the authoritative sources for all students and laypeople for a century or two. In addition, imagine a procession of films, novels, TV dramas, ballads and plays, both popular and highbrow, along the lines of the film The Rabbit-Proof Fence, perpetuating the same message. Then in the future anyone who attempts to tell the truth about this particular topic will have a hard time to get a hearing, especially if one of the major political parties and other significant interest groups benefit from the traditional story and the majority of the intelligentsia are passionately committed to defending it.

Written by Admin

June 17, 2006 at 11:21 pm

Posted in Uncategorized

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