Against Trade Unionism

The pilots’ strike at Jet Airways is hogging the editorial pages today. And this gives me an opportunity to discuss what libertarians think of trade unions, and their most potent weapon – the strike. Or, what occurs more often, the strike threat.

In the first place, it must be noted that trade unions and their methods can never raise the wages of workers in general. They raise wages in particular areas only, for certain chosen workers who belong to the combination – while keeping the rest of the workers excluded. They are therefore promoters of particular interests alone; they are against the general interest.

What galls libertarians most is that trade unions are legally authorized to use force – against workers, against the management, against workers who break the strike. According to libertarian philosophy, no one should be allowed to use force in markets. Further, there is no reason to believe that a free market for labour is not in the best interests of the entire working class. Trade unionists are a labour elite who represent a privileged constituency of labour. They should never be seen as truly representative of workers as a “class.”

Let us examine the libertarian view on trade unionism in the light of the present strike by Jet Airways’ pilots:

At the root of things lies the “contract” between every individual Jet Airways pilot and his employers. Since every pilot has signed such an individual contract with the company, they are all individually bound to deliver their services as per contract. The pilot can demand pay as per contract; and the company can demand work as per the same contract.

Today, it is the pilots who are violating their individual contracts and not delivering work as they should. This is against Law as commonly understood. It was therefore not surprising to hear that, within 24 hours of the strike, both the Left parties and the BJP “had come in support of the strike and the right of the pilots to form a union.” They want to inject politics into everything; they want to politicize a purely legal matter relating to the enforcement of contracts.

I read three editorials on the pilots’ strike today: The ToI is the most illiberal, supporting “collective bargaining” on the one hand and yet trying to oppose the strike; the Express contrasts the cabin crew with the privileged pilots; while Mint goes the whole hog and asks whether all our labour legislation is outdated.

I think it is Mint that has hit the nail on the head. At the core of the issue is the matter of legislation – and the privileges thereby conferred to unions. This is something that began in the West – and has ruined the West. Let us dump this as we try and build a new, competitive India.

What would airline pilots do without unions? Why, they would simply join which ever airline paid more. That is, their wages would be determined by market forces, not politics. And that would be in the best interests of all, including ALL pilots.

Recommended reading: The works of WH Hutt. In particular, The Theory of Collective Bargaining, available here. After reading this, go to The Strike Threat System: The Economic Consequences of Collective Bargaining, available here.