THE SMITH CENTER

for Private Enterprise Studies

The Right to Work Issue:

A Rebuttal of Hogler and Shulman

by
Charles W. Baird
Emeritus Professor of Economics and Former Director of the Smith Center
California State University, East Bay

The manuscript, "The Law, Economics, and Politics of Right to Work: An Analysis of Colorado's Labor Peace Act," by Raymond L. Hogler and Steven Shulman (hereinafter, HS), both at Colorado State University, is full of stuff and nonsense. The authors' intent is to make a case against right-to-work laws in general and Colorado's Labor Peace Act in particular. They use all the standard arguments, but they add a perverse twist. They enlist Thomas Jefferson, Thomas Paine, and even Milton Friedman in their cause, and along the way they manage to misrepresent the views of James Madison and Alexander Hamilton. Moreover, the authors are badly confused, or at least they are confusing, about rights, liberty, equality, democracy, and majoritarianism. Their agenda is the triumph of collectivism over individualism, and politics over law, all in the name of freedom and justice.

What Are Human Rights?

Human rights are possessed by individual human beings. Who else could possess them? Moreover, reason tells us that all individuals have exactly the same human rights. When Jones asserts that he has a right to X, he must, on pain of self-contradiction, concede that every other person has exactly the same right. Otherwise, Jones' claim would amount to an assertion of a Jones right, not a human right. As the 18th century philosopher Immanuel Kant put it, a legitimate human right must be "generalizeable." If one person has it, everyone does. Furthermore, Jones' exercise of the right cannot impose an obligation on any other person, Smith, to undertake any positive action. For if it did, Smith would involuntarily become the means by which Jones' ends are achieved. Kant's justly famous categorical imperative is that every human be treated by others as an end in himself, not as an involuntary means to the ends of others.

Elsewhere I have argued that "nonrivalrous rights" is a good name for such rights. As with public goods, all individuals can exercise claims to such rights simultaneously with no one person's exercise in any way diminishing the ability of others to do the same.1 No person exerts power of coercion over any other person. The only obligation that a nonrivalrous rights claim imposes on others is non-interference. It is an obligation NOT to do something.

Of course, any person has a right to enter into a voluntary exchange relationship with another person whereby each becomes the means by which the other achieves ends; but neither is forced to be the means by which the other achieves ends. The arrangement is by mutual consent. It is called a contract, and the essence of every employment relationship is contract.

Many people assert claims to different sorts of rights. HS, for example, strongly imply that all workers should have a right to a job. Reason tells us that such right cannot be a fundamental human right. If Jones has a right to a job in the sense that he must be guaranteed that he will hold a particular job, or at least that he must be guaranteed that he will have some job, then there must be some person, Smith, who is obliged to provide the job. But then Smiths' job-related rights are subordinated to Jones' job-related rights. Smith is forced to be a means for Jones to achieve his ends. Jones' claim to a right to a job in this sense is a rivalrous rights claim. Jones' rights claim competes with Smith's rights. Jones has powers of coercion over Smith.

I will have more to say about Thomas Jefferson below. Here it is sufficient to point out that when Jefferson, in the Declaration of Independence, said that it is "self-evident" that "all" people 2 are "endowed" with "unalienable rights" such as "life, liberty, and the pursuit of happiness," he was using reason (self-evidence) to discern those rights that all humans have because of their nature (endowments), and which they can exercise nonrivalrously (they are unalienable, no one can impair them). He was talking about rights, not powers of coercion.

HS assert that unions have rights which should trump individual employee rights (p. 26). Included in union rights, according to HS, is the right to coerce individual employees into paying union dues (pp. 4-5). But this defies reason. Rights reside in individuals. A union, or any other group, is merely a collective of individuals. The only legitimate rights that a union has are those of its individual members. If I do not, as an individual, have the right to steal money from someone, I do not gain such a right merely by joining other people in the theft. If I do not, as an individual, have the right to prevent a willing worker from accepting employment from a willing employer, I do not gain such a right merely by joining other people in the coercion.

What Is Liberty?

Liberty, or freedom, is also correctly understood as applying to individuals. As noted above, Jefferson saw liberty as an unalienable right of all people. But if liberty is unalienable, one person's liberty cannot trespass against another person's liberty. Reason tells us that liberty and freedom must be nonrivalrous. Jones is free if he can pursue his goals, without interference from others, using whatever means are at his disposal, so long as he does not engage any other person in any involuntary exchange. One person's liberty imposes an obligation on others NOT to interfere. It does not impose an obligation on any other person to take any positive action. The freedoms associated with the First Amendment -- freedom of speech, of the press, of religion, and of association -- are all nonrivalrous freedoms.

For example, consider freedom of association. It means that any person may affiliate with any other willing person or persons for the purpose of pursuing any legal ends. It also means that every person must be free to refuse to affiliate with other people even if they are pursuing legal ends. The freedom to associate necessarily implies the freedom not to associate. Specifically for our purposes, Jones clearly has a right individually to choose to join a union, if the union is willing to accept him, but he also clearly has the right to choose not to do so. To deny this one would have to say that freedom of association implies that association can be coerced. That is simply illogical. As we will see below, deciding the issue by majority vote, on questions that are in the private, not governmental, sphere of human action, does not solve the logical problem.

HS say that liberty must take on "social dimensions" (p. 19). They assert, "True freedom of choice is inherent in the emancipatory effects of collective voice and not in individual decisions divorced from the overriding goal of union power" (p.20). In other words liberty means subordination to collective power. George Orwell would be impressed. This is a view of liberty espoused by Robespierre during the French Revolution. He had a guillotine to back him up. HS seek merely the threat of lost employment (for union-free workers) to back them up.

The HS view of liberty is liberty as power. On this reading, Jones is free if he is provided the means to achieve the ends that he seeks, even if the necessary means are taken from some other person or persons who, presumably, are also free to steal from others. Of course, the stealing must be done collectively, because to do it individually would be illegal. Worse, HS assert that Thomas Jefferson would agree with them.

What is Equality?

There are two incompatible ideas of equality in discussions of political economy. One, embodied in Declaration of Independence and the U.S. Constitution, is that all people are entitled to equal treatment by the law. Jefferson wrote that all people are created equal in the sense of having equal rights which it is the duty of a just government to protect. The Fourteenth Amendment states this idea in its "equal protection of the laws" clause. In other words, all people are expected to play by the same rules. A just government neither imposes special burdens on, or grants special favors to, any individuals. The statue of Justice wears a blindfold signifying that government should not care who seeks justice. Race, ethnicity, gender and wealth are all irrelevant to justice. The rule of law must be applied equally to all regardless of outcomes. Robert Nozick calls this "process equality." 3

The other view of equality, the one favored by HS (see pp. 22-25), focuses on outcomes. Equality is achieved, in this view, when all people have the same, or nearly the same, income and wealth. Given that people are endowed with very unequal mental and physical abilities, interests, degrees of alertness, and attitudes, the free-market process will result in very unequal amounts of income and wealth. In this view a just government is one that takes from people with high income or wealth and gives to people with low income or wealth. Nozick calls this "end-state equality."

For our purposes it is important to note that although both ideas of equality are valid, they are totally incompatible.4 When a government takes from Jones and gives to Smith it is treating those two individuals unequally. If government wishes to treat them equally, it must forgo involuntary redistribution through the law.

Abuse of the Founders

The most incredible part of the HS manuscript begins on p. 19. They correctly say that Senator Robert Wagner, the chief proponent of the 1935 National Labor Relations Act, advanced a "political manifesto about the meaning of freedom under American capitalism." He sure did, and it was all wrong. What was that manifesto?

True freedom, Wagner insisted, could only be attained under conditions of economic sufficiency, and economic sufficiency could be attained only through workers' solidarity. Thus, individual will is best articulated through group action.... True freedom of choice is inherent in the emancipatory effects of collective voice and not in individual decisions divorced from the overriding goal of union power (19-20).

Wagner certainly believed that to be true. However, HS go on to say, "Far from being and idiosyncratic relic of New Deal politics, Wagner's ideas have a historical resonance in American thought and a strikingly modern turn" (20). What does this mean? As far as historical resonance is concerned they assert that

Jefferson, Paine and other theorists advocated a state in which government served not merely as a guarantor of property and markets, but as the vehicle by which all citizens would enjoy an equitable share in the country's economic wealth, and as a result, an equal chance to participate in the political sphere. Humans, according to Jefferson, had a substantive right to economic freedom, a right of access to the means of life (pp. 20-21).

Now, this is an extraordinary claim. It amounts to saying that Jefferson and Paine subscribed to the doctrine of rivalrous freedom, of freedom as power rather than freedom as noninterference, and that they subscribed to an end-state view of equality. HS support their claim by reference to a 1993 book written by Christopher L. Tomlins.5

In footnote 76 on p. 21 HS quote Tomlins on Madison and Hamilton:

Pursuers of security rather than happiness, they created a state whose discourse in crucial respects privileged law over politics. Faced with the problem of reconciling private [nonrivalrous] rights and democracy the framers chose to confine tightly the scope of democratic politics by creating a highly mediated system of representation and a watchdog judiciary to stand guard over its legislative products.

In other words, Madison and Hamilton, unlike Jefferson and Paine, were benighted. They favored an individualist view of the rule of law over the collectivist view that all aspects of life should be politicized. Note that, in Tomlins' view, the nonrivalrous view of rights and freedom "privileges law over politics." Tomlins correctly states that under "the rule of law" favored by Madison there is "social and economic individualism, the protection of property, a filtered democracy, and a hobbled state" (26). But he thinks this is lamentable, for the rule of law "could not contemplate the use of government to work for equality in the form of social or economic justice, because it could not trust government" (23). Tomlins argues for the substitution of the rule of politics (put everything up to a vote) for the rule of law (limited government and process equality).

Tomlins also makes much out of the fact that in the Declaration Jefferson substituted "pursuit of happiness" for "property" in John Locke's list of natural rights - life, liberty and property (84-85). Tomlins interprets this to mean that Jefferson regarded property right as secondary to pursuing happiness, and pursuing happiness is to be done by unlimited majoritarian democracy at the state level.

Tomlins is a philosophical collectivist and a contributor to the neo-Marxist critical historical and legal studies literature. He says the nonrivalrous view of rights and freedom and the process view of equality espoused by Madison and Hamilton were

beset by powerful anomalies and contradictions. Most obvious were the growing disparities of material capacity rendered immune from meliorative intervention by the legal order's careful cabining [sic] of the state's redressive potentialities. Their development both accounts for and to an important extent justifies the traditional Marxist critique of "bourgeois law" as "a formal framework for the realization of private power and domination." Yet such a critique does not quite get to the heart of the matter. What were ostensibly "bourgeois" freedoms - independence, competency - were as highly valued by working people as anyone. Rather [this is the neo-stuff], the point is that their enjoyment of such freedoms was all too often countermanded not just by burgeoning material inequalities but by doctrinal constructions of social roles interpolating legal conditions of existence directly belying independence and competency (XV).

While traditional Marxists rested their analysis of political economy on class struggle, Tomlins is more sophisticated. His analysis rests on the interaction of "class power and law" (13-15).

While discussing another author, Tomlins expresses sympathy with the view that "majoritarian democracy [is] the only genuine expression of the ideal of free republican government, the only basis upon which citizens [can] be required and expected to submit to government" (7). Freedom, it seems, is guaranteed "in mass participation in democratic politics" (8). In other words, freedom does not involve a private sphere of human action protected by noninterference. Rather, it involves putting all aspects of life up to a majority vote. You are free when a majority of your fellow citizens decide what you may and may not do. Therefore, according to HS, a simple majority vote among workers in favor of a union in a certification election is all the justification that is needed for forcing all represented workers to join unions or at least pay union dues.

Of course, it is proper for Tomlins and HS to undertake whatever analysis of political economy they choose. What is not proper is for them to buttress their arguments by misrepresentations of the views of the Founders.

The Founders' Views

Tomlins and HS depict James Madison as caring only about the defense of property rights in the narrow sense of landed property. According to them Madison didn't care very much about the rights of people without property. Madison's Constitution was largely a pretext for protecting the interests of the "powerful and monied but unproductive few" against "the weakly organized and poor but productive many" (Tomlins, p. 8). This preposterous claim is put to rest in Madison's 1792 essay, "Property." 6 In discussing the meaning of "property" he wrote:

In its larger and juster meaning, it embraces every thing to which a man may attach a value and have a right; and which leaves to every one else the like advantage . ... [A] man has a property in his opinions and the free communication of them. He has a property of peculiar value in his religious opinions, and in the profession and practice dictated by them. He has a property very dear to him in the safety and liberty of his person. He has an equal property in the free use of his faculties and free choice of the objects on which to employ them. In a word, as a man is said to have a right to his property, he may equally be said to have property in his rights.

Madison, as well as Jefferson and the other founders, were devoted to the defense of the nonrivalrous rights of everyone. All such rights are the unalienable property of each individual, and, as Jefferson stated in the Declaration, the reason why governments are instituted is to "secure these Rights."

The claim by HS that Robert Wagner's redistributist agenda, was shared by Thomas Jefferson (pp. 19-21), is put to rest in Jefferson's First Inaugural Address, March 4, 1801:

Still one thing more fellow citizens - a wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicities.

That doesn't sound like an endorsement of an expansive government in pursuit of end-state equality to me. To the contrary, Jefferson favored a "hobbled state," whose principle duty is to protect individuals against trespass by other individuals. Nor does it sound like an appeal for the triumph of politics over the rule of law, or the substitution of majority rule for individual rights.

Now, Tomlins argues, and HS seem to agree, that Jefferson was in favor of hobbling the federal government but not state governments. When it came to state governments, Tomlins suggests (Chapter 2) that Jefferson favored an expansive view of police powers to include the pursuit of happiness through coercive redistribution of wealth and income. The best source to understand Jefferson's philosophical views on political economy is a 1994 book written by David N. Mayer.7 Mayer makes it clear (especially in Chapter 3) that Jefferson feared overweening government at all levels. While he trusted state governments more than the federal government, and local governments more than state governments, he wanted to bind them all down with the duty to protect individual rights. The passages that Tomlins uses to assert that Jefferson favored unlimited scope for state government involvement in private affairs, were merely Jefferson's statements of what we now call the principle of subsidiarity - higher levels of government should be resorted to only where lower levels of government are incapable of doing what government must do.

Mayer demonstrates that Jefferson's substitution of "pursuit of happiness" for "property" in the Declaration did not in any way subordinate the natural right to property. The means by which one pursues happiness is through the acquisition, use and disposition of property, broadly defined (Mayer, pp. 77-78). In Mayer's words, "'pursuit of happiness,' as used by Jefferson, was a kind of generic term for a bundle of rights that included property rights" (78).

Moreover, Mayer shows that Jefferson thought that reason implied that groups could not have any rights other than those of the individuals who are voluntary members of the groups. For example, Jefferson said exactly that in a 1804 letter to the French economist Jean Baptiste Say concerning the rights of communities and individuals.

So invariably do the laws of nature create our duties and interests, that when they seem to be at variance, we ought to suspect some fallacy in our reasoning. ... [T]he rights of the whole can be no more than the sum of the rights of individuals (Mayer, p.76).

As to the preposterous claim, quoted above, that Jefferson favored coercive redistribution through government as a means of achieving freedom as power, it should suffice to quote Jefferson in 1816:

To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, "the guarantee to every one of a free exercise of his industry, and the fruits acquired by it" (Mayer, p. 79).

This was simply a restatement of the principle Jefferson enunciated in his Second Inaugural Address in March 1804. There he said that it was the policy of his presidency that "equality of rights [be] maintained, [along with] the state of property, equal or unequal, which results to every man from his own industry, or that of his fathers" (Mayer, p. 79).

Tomlins and HS simply misconstrued Jefferson's attack on the "pseudo-aristocracy" - people with heredity land titles that did not emerge from individual industry - as an attack on all unequal property holdings. In fact, Jefferson strongly supported what he called the "natural aristocracy" of talents, industry and virtue (Mayer, pp. 74-83).

There is no doubt that Jefferson agreed with Madison's conception of a wall of separation between the private and governmental spheres of human action. Jefferson abhorred the idea that majority voting, a proper principle of decisionmaking in governmental affairs, should ever be used to coerce individuals in their private affairs. As Mayer explains, Jefferson's idea of republicanism

posited government and society as two separate autonomous spheres: a realm of politics which encompassed what was truly of common interest, on the one hand, and on the other, a sphere in which individuals could fashion their lives as they saw fit, through voluntary social relationships. By thus positing a distinction between the public and private realms, republicanism set a limit to political power, Outside that limit, individuals literally govern themselves (69-70).

Finally, with regard to Thomas Paine's views on whether majoritarian politics should trump individual rights, consider the following statement by Paine in Common Sense (1776) in which he distinguishes between society and government.

Society is produced by our wants and government by our wickedness; the former promotes our happiness positively by uniting our affections, the latter negatively by restraining our vices.... Society in every state is a blessing, but Government, even in its best state, is a necessary evil; in its worst ... an intolerable one (Mayer, p. 70)

Notwithstanding their feeble attempts at historical revisionism in an effort to buttress their case for politicizing all of society, Tomlins and HS cannot enlist the Founders in their crusade. In the Founders' view, civil society is a network of voluntary relationships of private individuals interacting with each other through voluntary exchange agreements. Such a civil society is the source of our happiness. Government merely exists to protect each individual's voluntary exchange rights from trespass by other private individuals and groups. If there were no danger of such trespass - i.e., if we all were angels - we wouldn't need government. The Founders created government and gave it a monopoly on the legal use of force for the sole purpose of defending the rights of all individuals. Like any monopolist, government is prone to abuse its monopoly power. Deciding government action by majority vote is nothing more than an attempt to give the governed some protection against the monopolist. The Founders never intended to extend that monopoly power to all of life through unlimited use of majoritarian democracy. The involuntary imposition of majority rule decisionmaking in the affairs of civil society is itself a trespass against the rights of individuals.

Free Choice and Union Membership

As noted above, the HS manuscript advocates repealing Colorado's Labor Peace Act by building a general case against all right-to-work laws. The Colorado law requires that any union security agreement between an employer and a union certified as an exclusive bargaining agent must be approved by a majority of the workers voting on the agreement or three-quarters of the workers who are eligible to vote on the agreement, whichever number is greater.

For readers who may not know, a union security agreement between a union and an employer says that, as a condition of continued employment, every worker represented by the union must become a union member at least to the extent of paying union fees, dues and assessments. Section 8(a)3 of the National Labor Relations Act, as amended (NLRA), authorizes such agreements, and Section 14(b) of the same Act authorizes states to decide whether to allow such agreements within their own jurisdictions. States that proscribe union security agreements are called right-to-work states. Colorado turned down a regular right-to-work law by referendum in 1958. Its Labor Peace Act was law before the adoption of 14(b) in 1947, and it continues to be law today.

Exclusive Representation

To understand the usual arguments on both sides of the right-to-work debate it is first necessary to understand the peculiar American principle of exclusive representation by certified unions.8 Section 9(a) of the NLRA says that the question of whether a union is to represent employees in a firm is to be decided by majority vote among all the workers who would be represented by a winning union. Such a "certification election" is conducted by secret ballot among the workers. There can be more than one union competing for such votes; but most often only one union does so. Let's say that there are two unions trying to be certified as exclusive bargaining agent for a given set of employees (a given "bargaining unit") in a firm. The ballot would include three choices: Union A, Union B, and no union. If one of the three choices gets a majority of the votes cast, it is the sole winner. If no choice gets a majority, there is a runoff between the top two vote-getters on the first ballot. If only one union attempts to be certified, there will usually be a winner, either the union or the no-union choice, on the first ballot.

If a union wins a certification election, either on the first ballot or in the runoff, it becomes the exclusive bargaining agent for all the workers who were eligible to vote in the election. It represents those who voted for it, those who voted for another union, those who voted for no union, and those who did not vote. It is a winner-take-all process. When there is a certified union, individual workers are forbidden to represent themselves. The scope of such monopoly bargaining includes wages and salaries and all other terms and conditions of employment.

Now, is exclusive representation unionism (we haven't even begun to talk about union security yet) legitimate? Does it square with the constitutional principles of the Founders or with subsequent amendments to the Constitution? Those who answer this question in the affirmative do so on the basis of "workplace democracy." They construct an analogy between certification elections and elections to select members of Congress or state legislatures. A winning candidate in an election to represent the people in a given congressional district in the House of Representatives, for example, gets to represent all the people in the district. This includes people who voted for another candidate, people who didn't vote, and residents of the district who were ineligible to vote, as well people who voted for the winner. It is a winner-take-all process. No one claims that this is illegitimate. To the contrary, the Constitution clearly calls for such a winner-take-all process. Therefore, supporters of exclusive representation unionism argue, it must be legitimate in the case of certification elections. It is merely workplace democracy. It is an extension of political democracy to economic democracy.

There is a very telling omission in this analogy. In governmental elections winning candidates have to stand for reelection at specific intervals - every two years in the case of the House, every four years in the case of the president, and every six years in the case of the Senate. By contrast, a certified union has no fixed term. Once it wins it is presumed to have majority support indefinitely. That presumption can only be rebutted by a decertification election which never happens unless at least 30 percent of the covered workers sign a petition demanding such an election. By analogy every elected government official would have an indefinite term.

Those who, like the present author, argue that exclusive representation unionism is not legitimate - that it is, in fact, unconstitutional - argue that the analogy with governmental elections is inapt. As discussed above, the Founders advocated a wall of separation between the private and governmental spheres of human action. To them, forcing a minority to abide by the will of a majority in governmental matters is a necessary evil.. It is an evil because it involves coercion; it is necessary because governments are natural monopolies. There can be only one government wielding sovereign authority in a jurisdiction at a time. We cannot allow some people in a jurisdiction to be governed by one government, other people in the same jurisdiction to be governed by another government, and still others to be subject to no government. To the Founders, compulsory majority-rule decisionmaking was simply the least coercive way to make decisions about what government will do and who will wield governmental authority.

However, to the same Founders, compulsory subjection of minorities to the will of majorities was totally illicit in decisionmaking concerning private matters. Individuals could, on an individual basis, choose to form voluntary associations in which majority-rule would be used for group decisions, but no one could legitimately be forced to affiliate with such groups. The Founders would regard a law passed by Congress that gave any private group such coercive authority to be an unconstitutional delegation of governmental powers to the group. Furthermore, there have been no amendments to the Constitution that justify such delegations.

Of course, what is and what is not considered constitutional for official purposes is up the votes of at least five sitting Supreme Court justices at any time. And, ever since the 1930s, most justices have felt empowered to make it up as they go along without paying any attention at all to the original understanding of the Founders. This is the notion of the "living constitution" that must always be reinterpreted to make it serviceable to the "needs" of the moment.

As HS write on p. 10, the Supreme Court upheld the constitutionality of the 1935 Wagner Act, the centerpiece of which was (and is) the principle of exclusive representation, in May 1937. But the full story of the Court's 5-4 vote in the case, NLRB v. Jones & Laughlin Steel Corp. [301 U.S. 1 (1937)], should be told.9

In 1933, President Roosevelt and the Congress enacted the National Industrial Recovery Act (NIRA). The main purpose of NIRA was to eliminate price competition in markets for goods and services. Producers of everything, from chickens to automobiles, were told to get together and fix minimum prices, below which no seller would be permitted to sell, for each product and service. These minimum prices, decided by private producers, were called "codes of fair competition," and they were enforced by government. Now, a Mr. Schechter, a producer of kosher chickens in New York, decided that he should be able to sell his chickens for lower prices than were permitted by the "live poultry" code of fair competition, and he proceeded to do so. Whereupon, the heavy fists of the chicken police descended upon him, and litigation ensued. In Schechter Poultry Corp. v. U. S. [295 U.S. 495 (1935)], a unanimous Supreme Court declared that NIRA was unconstitutional because the codes of fair competition amounted to an impermissible delegation of government authority to private groups. The codes were just like exclusive representation on that score.

Not to put too fine a point on it, President Roosevelt was not pleased with the "nine tired old men" on the Court. He noted that the Constitution does not specify the number of Supreme Court justices. It had been nine for some time, but it could be any number chosen by Congress and approved by the president. He threatened to expand the Court to fifteen and appoint new justices who would stop worrying about what the Constitution said and focus on the needs of the times.

Meanwhile, in 1936 the Court decided another case involving the delegation of government authority to private groups involving the coal mines and mine workers. The 1935 Guffey Coal Act provided that if the producers of more than two-thirds of the coal and the unions representing one-half of the mine workers reached agreement about maximum working hours and minimum wages, the terms of that agreement could be imposed, by force of federal law, on other private coal producers and mine workers. In Carter v. Carter Coal Co. [298 U.S. 238 (1936)], the Court, by a vote of 6-3, said that this also was an unconstitutional delegation of government authority to private groups.

Almost everyone expected that the Court would declare the Wagner Act unconstitutional in its 1937 decision in Jones & Laughlin Steel Corp. The justices that heard the Jones & Laughlin case were exactly the same who decided the Carter case, and the principal issue was the same - can Congress grant governmental authority to private groups? In Carter the votes against the Guffey Coal Act were cast by Justices Hughes, Roberts, Sutherland, McReynolds, VanDevanter and Butler. The votes in favor of granting government power to private groups were cast by Justices Brandeis, Cardozo and Stone. In Jones & Laughlin Justices Hughes and Roberts switched sides and said that government could give governmental authority to private groups called labor unions. This switch of votes has become known as "the switch in time that saved nine." In exchange for the vote switch, Roosevelt stopped pressing for his court-packing plan. Later, when Roosevelt became convinced the switch would hold in other such cases, he dropped the court-packing plan. This is the stuff of hardball politics. It is not rational jurisprudence based on constitutional principals.

An Alternative to Exclusive Representation

In 1934 there was a strike threat against the entire American automobile industry. The United Auto Workers (UAW) insisted that because it represented a majority of workers in the industry, it should be recognized as the exclusive bargaining agent for all workers in the industry. The employers refused, and the UAW threatened to shut down all automobile production. President Roosevelt inserted himself into the dispute, and in March 1934 he proudly announced that he had worked out a solution based on proportional representation rather than exclusive representation. Moreover, he asserted in a radio address that proportional representation was the only form of union representation consistent with American principles of liberty.10

Proportional representation is often called members-only bargaining. A union gets to bargain for its voluntary members and for no one else. Suppose again that 60 percent of the employees of a firm choose to join Union A, 30 percent choose to choose to join Union B, and 10 percent choose to be union-free. The union-free workers would represent themselves. Collective bargaining for the other 90 percent would be done by a collective bargaining committee from the two unions. Union A's representatives would constitute two-thirds of the committee, and Union B's would constitute the other third. Their representation on the committee would be proportional to the number of workers who are their members.

This may seem odd to American readers, but proportional representation unionism is very common in other countries. In those countries, unlike here, workers really are given free choice in union representation.

HS on Exclusive Representation and Free Choice

HS argue that workers have all the free choice they need concerning labor unions because they get to vote in certifications. They write

To begin with, workers exercise a basic choice about their participation in unions because they can reject unionization in their workplace altogether. Before a union can legally represent employees as the agents of workers, the union must demonstrate its majority status, by means of a secret ballot or by other accepted methods of recognition (27).

This mirrors the fiction written into the NLRA that exclusive representation is a means by which workers may "designate representatives of their own choosing." It is simply not true. Individual workers do not, on an individual basis, designate representatives of their own choosing. Minorities are compelled, by force of law, to subject themselves to the wills of majorities in the designation of representatives.

Throughout Section D, titled "Some Dimensions of Free Choice and Union Membership," HS identify free choice with the ability to vote (27-36). First, is free choice in certification elections, then there is free choice in decertification elections, then there is free choice in state elections, and finally there is free choice in national elections. Choices in state and national elections determine the rules under which we all have to live, including union-related rules. This, HS assert, is all the free choice that American workers ought to have about unions. This is what I meant when I said above that their agenda is the triumph of collectivism over individualism. It is what they meant when they wrote "the matter of individual free choice [must be evaluated] within the context of collective action" (4). It is an argument toward the end of politicizing all of life by putting everything up to a vote. It is, at least from the Founders' perspective, un-American.

Union Security

The principle argument used by union sympathizers in support of union security and in opposition to right-to-work laws is the problem of the "free rider." It goes like this. Because of exclusive representation, a certified union must represent all of the workers in a bargaining unit. It cannot bargain just for its own voluntary members. Since all workers receive the benefits of union representation, it is only fair that all workers pay for those services. Otherwise there would be individual workers who would take the benefits for free. They would be free riders, or, in the usual union vernacular, free loaders.

The counter-argument is obvious. Abolish exclusive representation. Let unions represent only their voluntary members. Then there could be no free riders. With few exceptions, the benefits obtained by unions through collective bargaining are not public goods. Nonpayers (union-free workers) can easily be excluded from receiving them. That is certainly true of wages and salaries, fringe benefits and job security, which are the major subjects of collective bargaining. What the union gets an employer to agree to would be provided only to its members. It would be up to union-free workers to make their own bargains. There may be a few environmental benefits - e.g., the speed of an assembly line or the quality of workplace lighting - from which non-payers could not be excluded, but these are rarely bargaining issues. OSHA regulations have made bargaining about workplace environments redundant.

However, the unions are not likely to give up the privilege of exclusive representation without a fight to the end. They fought President Roosevelt over the issue in the 1934 automobile strike-threat and lost. But they won the battle in 1935 with Roosevelt's blessing. Since then it has, perhaps, become politically impossible to abolish exclusive representation.

There is a second, less obvious counter to the unions' free rider argument. All costs and benefits are evaluated by individuals according to their own subjective value scales. Even when money is involved, each individual attaches a different degree of significance to, say, $100. To some the amount is very significant, to others it is not. And money is not all that matters. Suppose, for example, that a union is able to convince me that it can add $1200 to my annual income through collective bargaining. I would say that the subjective costs imposed upon me by forced association with the union through exclusive representation far outweigh the significance I attach to $1200. If, though union security, I were forced to pay for the union's representation services, I would be a forced rider, not a captured free rider. A forced rider is a person who receives net harms from some collective action and is coerced into paying for those harms. The beauty of this argument is that any person accused by a union of being a free rider can deny it on the basis of the subjectivity of costs and benefits. It is impossible ever to prove whether a forced dues payer is a captured free rider or a victimized forced rider. Without knowing which is the case, how can any forced dues ever be justified?

Recall that HS assert that Robert Wagner's political manifesto has "a historical resonance in American thought and a strikingly modern turn" (20). The strikingly modern turn refers to a 1965 book by Mancur Olson.11 That whole book is about the free-rider problem in large groups. If the ability of a group to generate nonrivalrous benefits is not significantly affected by the failure of an individual to support the group, it is rational for the individual to try to be a free rider. However, all individuals are faced with the same cost/benefit calculus, and if everyone tries to be a free rider there will be no ride for anyone. Another name for this phenomenon is the prisoners' dilemma. This is the standard argument in support of the imposition of taxes to support government provision of public goods. It can also be applied to private groups. For example, it is used to justify homeowners dues levied by private homeowners associations. And it is true that Olson applied the argument to justify union security arrangements.

However, the truly modern literature on collective action has been written by the Virginia-school public choice economists such as James Buchanan and Gordon Tullock and their progeny. There, a normative distinction is made between fees imposed by voluntary private groups, such as homeowners associations, and fees imposed by involuntary private groups such as labor unions. The imposition of fees in voluntary associations is justified because people who do not wish to enter the association and obey its rules are free to abstain or exit without losing anything to which they are entitled. In contrast, fees imposed by associations made involuntary by government-imposed rules amount to the imposition of government taxation by private groups. Labor unions, by virtue of the NLRA, are involuntary private organizations. Employers are forced to recognize and bargain with certified unions. They are forbidden to hire willing workers who wish to represent themselves. As discussed above, all individuals have a basic right to enter into voluntary exchange contracts with willing exchange partners. By force of law employers and union-free workers are forbidden to enter into employment contracts with each other wherever there is a certified union. If an employer has freely chosen to enter into an exclusive representation contract with a willing union, and if all the members of that union are voluntary members, it would be perfectly legitimate for the employer and the union to coerce every worker into paying union dues as a condition of initial and continued employment. However, that necessary voluntarism is missing in all labor agreements under the NLRA.

The Abuse of Milton Friedman

Milton Friedman is the best known and most widely respected free-market economist in the world. Throughout his long, productive career he has been a consistent advocate of individual liberty (in the nonrivalrous sense) and an equally consistent opponent of overweening government. He identifies himself as a classical liberal, or what most people call a libertarian. Modern liberals, such as HS, stand for more government involvement in people's lives. Classical liberals stand for minimizing that role. Yet, HS claim that Milton Friedman is on their side supporting involuntary unionism. They make their case by quoting a carefully selected and edited passage from Friedman's 1962 book, Capitalism and Freedom. 12 First, they leave out important parts of the two paragraphs they quote. Then, they fail to include the two paragraphs that follow the two they do include. If they had included them Friedman's intended message would have been obvious. In my judgment, that is precisely why HS did not include them.

The two paragraphs that HS include on p. 39 are as follows. I will put the missing parts in italics. The bracketed terms are mine.

The principles involved in right to work laws are identical to those involved in FEPC. Both interfere with the freedom of employment contract, in the one case [FEPC] by specifying that a particular color or religion cannot be made a condition of employment; in the other, that membership in a union cannot be. Despite the identity of principle, there is almost 100 percent divergence of views with respect to the two laws. Almost all who favor FEPC oppose right to work; almost all who favor right to work oppose FEPC. As a liberal, I am opposed to both, as I am equally to outlawing the so-called 'yellow-dog' contract (a contract making non-membership in a union a condition of employment).

Given competition among employers and [among] employees, there seems no reason why employers should not be free to offer any terms they want to their employees. In some cases employers find that employees prefer to have part of their remuneration take the form of [benefits] rather than cash. Employers then find that that it is more profitable to offer these [benefits] as part of their employment contract rather than to offer higher cash wages.... None of this involves any interference with the freedom of individuals to find employment. It simply reflects an attempt by employers to make the characteristics of the job suitable and attractive to employees. So long as there are many employers, all employees who have particular kinds of wants will be able to satisfy them by finding employment with corresponding employers. Under competitive conditions the same thing would be true with respect to the closed shop. If in fact some employees would prefer to work in firms that have a closed shop and others in firms that have an open shop, there would develop different forms of employment contracts, some having the one provision, others the other provision (Friedman, pp. 115-116).

Now, these two paragraphs are nothing more or less than a forceful argument in favor of complete individual freedom in the formation of employment contracts. The part that HS left out of the first paragraph shows that Friedman's argument works against a government regulation of employment contracts of which HS approve (the proscription of union-free contracts), as well as a government regulation of employment contracts of which they do not approve (right-to-work laws). The part that they left out of the second paragraph makes clear that Friedman is concerned with individual, not group rights. Inasmuch as HS' major theme is that union rights should trump individual worker rights, it is disingenuous for them to have left out that part, and it is outrageous that they then assert that Friedman agrees with them.

But the real outrage is the fact that they completely ignored the following two paragraphs wherein Friedman attacks the monopoly unionism (exclusive representation) as the source of all that is wrong with American labor relations law.

As a practical matter, of course, there are some important differences between FEPC and right to work. The differences are the presence of monopoly in the form of union organizations on the employee side and the presence of federal legislation in respect of labor unions. It is doubtful than in a competitive [unregulated] labor market, it would in fact ever be profitable for employers to offer a closed shop as a condition of employment. Whereas unions may frequently be found without any strong monopoly power on the side of labor, a closed shop almost never is. It is almost always a symbol of monopoly power.

The coincidence of a closed shop and labor monopoly is not an argument for a right-to-work law. It is an argument for action to eliminate monopoly power regardless of the particular forms and manifestations which it takes. It is an argument for more effective and widespread antitrust action in the labor field (Friedman, p. 116).

Friedman regards right-to-work laws as an inappropriate way to deal with monopoly unionism. In his view, if we eliminate the unions' monopoly privileges granted through "federal legislation in respect of labor unions" (exclusive representation and antitrust exemption), right-to-work laws, which in themselves are illegitimate, would not be necessary to protect individual worker rights. As always, Friedman eschews trying to fix the problems created by one regulation by passing another regulation. He prefers to abolish the regulation that causes the problem in the first place.

As I argued above, without exclusive representation there cannot be any free riders. If HS want to solve the unions' free-rider problem in a Friedmanesque way, they will join us in our advocacy of repealing exclusive representation. Let workers really designate representative of their own choosing.

Bargaining Power

HS support Robert Wagner's view that without labor unions workers would have a bargaining power disadvantage relative to employers. This hoary myth has got to be the main reason why so many people are sympathetic to unions. While this does not directly relate to the right-to-work issue, it is an important reason why, according to HS, legislation, such as elimination of right-to-work laws, should favor unions.

To understand the bargaining power issue one must understand how labor markets work in the absence of regulation. The labor market, like any other market, is a process of interaction between forces of demand and supply. The buyers of labor are employers, and the sellers of labor are job seekers and job holders. When employers "buy" labor, they hire the productive services of workers. Labor is employed, along with materials and supplies and the services of capital goods, to produce output that employers, in turn, sell to customers. Workers supply labor services to employers in exchange for compensation packages that include wages and salaries and benefits.

The maximum amount that an employer is willing to pay for labor services from a worker is called his demand price for the labor. It depends on the increment to output that the worker's services make possible and on the prices for which the employer can sell the additional output to customers. Suppose that employer expects that an additional worker makes possible the creation of ten additional units of output per day, and that when those ten additional units are sold the employer will receive $120 of extra revenue net of all other incremental costs. Hiring cost is the sum of compensation paid to the worker and employment taxes paid to government. The employer would not be willing to pay $120 per day or more for the worker's services, but at any hiring cost less than $120 per day, the employer would add to profits by hiring the worker. From the employer's point of view, the lower the hiring cost the better so long as he can hire the quantity and quality of labor he wants. The lower the hiring cost, the more eager the employer will be to hire additional workers if he can get them.

The minimum compensation that an employee will accept from an employer is called his supply price (or reservation wage) for the job. It depends on his perception of his alternative employment (and unemployment ) opportunities. Other things equal, the better his alternatives the higher his supply price. If you know that you can get $15 per hour from Employer X for doing a job, you will not accept anything less from Employer Y for doing the same job. If your alternative to working for Employer X is to be unemployed (a very unlikely situation), you will have a higher supply price if your family will support you during unemployment than you will if your best alternative is to become homeless.

So, there is an upper limit on what an employer will pay for a worker's labor services, and there is a lower limit on what a worker will accept in payment for his labor services. The actual rates of compensation paid and received depend on the relative strengths of two types of competition in the relevant labor market - competition among employers to hire and competition among employees to be hired. For a given level of competition among employees to be hired, the greater the extent of competition among employers to hire the higher will be the compensation rates offered and accepted. Conversely, for a given level of competition among employers to hire, the greater the competition among employees to be hired the lower will be the compensation rates offered and accepted. Every hiring of every worker is an employment contract based on voluntary exchange. Every employer and every employee enter into such contracts because they expect to be better off than they would be if they did not do so.

From an individual worker's point of view, the best of all possible labor market situations is to be the only one who can do a particular kind of work (no competition among employees to be hired) and to have hundreds of employers who are competing with each other to hire someone who can do the job. Such a worker would have tremendous bargaining power, and any one employer would have almost no bargaining power. Similarly, from an individual employer's point of view, the best of all possible labor market situations is to be the only buyer of a particular kind of labor service (no competition among employers to hire) and to have a plethora of workers competing with each other to be hired to do the job. Such an employer would have tremendous bargaining power, and any one worker would have almost no bargaining power. Bargaining power in any market depends on the alternatives available to the actors therein.

A situation in which there is no competition among employers is called a monopsony (literally, one buyer). A situation in which there is no competition among sellers of labor is called a monopoly (literally, one seller). The unions' argument has always been that monopsony, or near monopsony, is what workers face in an unregulated market. Therefore, workers must combine into unions to remove wages from competition. The resulting labor monopoly is necessary as a countervailing power to the employers' natural monopsony.

In the 19th and early 20th centuries, monopsony was much more prevalent than it is now. There were many geographical areas where there was a dominant employer. Workers were much more immobile than they are now. If a worker wasn't employed by the dominant employer in his geographical area, his employment alternatives were dismal. So a dominant employer had a bargaining power advantage. But then came Henry Ford and his mass-produced automobiles priced to be accessible to the broad general public. Worker mobility greatly increased. The size of the effective job search area for the typical worker was greatly expanded. Workers had increasing numbers of alternatives, so their bargaining power increased. Henry Ford did more to increase the bargaining power of the average worker than any union ever did.

Furthermore, empirical data suggest that monopsony power in America was waning throughout most of the 19th century and into the 20th. The trend of real wages was strongly positive, and worker-initiated job-switching steadily increased. 13 And this occurred long before unions became a significant influence in any labor markets.

The unionist argument that employers have a natural bargaining power advantage over individual workers is superficially plausible because most employers are bigger economic organizations than individual workers. Bigness, unionists imply, is what creates the bargaining power advantage. But bigness implies no such thing. For example, compared to Safeway, I am very small. I am only one of hundreds of thousands of individual people who buy their groceries at Safeway. Do I have a bargaining power disadvantage relative to Safeway? Can Safeway exploit me? Of course not, I and all other Safeway customers have tremendous bargaining power because we have readily available alternative stores from which to buy groceries. All it takes to attract Safeway's attention is for several customers to desert Safeway and buy at Lucky. The alert and activist few, shoppers at the margin, protect the indolent and idle many from exploitation.

The labor market is no different from any other market. Workers have many and increasing employment alternatives in today's economy. They don't need unions to protect them. And that is why the unions' share of the private employment market has been declining ever since the mid-1950s. It is now less than 10 percent and it continues to decline.

The Decline of Private Sector Unions

HS are sympathetic to the oft-repeated allegation that employer opposition to unionization is the major reason for the unions' declining market share (pp. 28-29). In fact, there is good evidence that that is not the case. Economists at the Employment Policy Foundation in Washington, D.C. measured the impact of the variables that are most commonly considered to account for the decline in American union density (market share) from 1950 to 1990.14 The table on the following page summarizes their results. The variable with the largest negative impact is the percent of women in a state's workforce. Women are much less likely to be interested in unionization than men. Since the women's labor force participation rate has increased substantially relative to men over time, the effect is to decrease union density by almost 20 percent. The next most important variable is the percent of a state's labor force in blue collar occupations. That

Variables Measuring Union Decline 1950-1990

percent has been declining, and since blue-collar workers have a higher propensity to unionize than other workers, that accounts for almost 6 percent of the union decline. The third most important negative influence is the percent of a state's labor force age 55 and over. That percent is decreasing, and that accounts for 2.86 percent of the union decline. It seems that younger workers are not as interested in unionization as older workers have been. Private sector unions are becoming a thing of the past. Note that the managerial opposition variable accounts for only 0.35 percent of union decline, and the right-to-work variable accounts for only 0.46 percent of the decline.

Finally, a recent paper by economists Henry Farber and Alan Krueger demonstrates that there has been a substantial decline in American workers' demand for unionization.15 Employers aren't struggling to keep workers out of unions. Increasing numbers of workers have concluded that unions aren't worth the strife and costs that they impose.

In Conclusion

The HS manuscript attempts to hide a radically collectivist political agenda behind a purported concern for working Americans. It fails to make a convincing case against right-to-work laws in general or against Colorado's Labor Peace Act in particular. Its witless attempt at historical revisionism regarding the Founders, and its disingenuous exploitation of the views of Milton Friedman should be enough to convince most readers that every copy is a waste of paper.

Endnotes

1. Charles W. Baird, "Rights, Freedom and Rivalry," The Freeman, October 1996: 667-669.

2. Sure, he said all "men," and he didn't include slaves. Jefferson's hypocrisy here is undeniable. However, it is the general principle that counts. Great ideas do not become bad ones merely because their proponents don't always abide by them. No one is perfect.

3. Robert Nozick, Anarchy, State, and Utopia, New York: Basic Books, 1974, Chapter 8

4. F.A. Hayek, The Constitution of Liberty, Chicago: University of Chicago press, 1960, Chapter 6.

5. Christopher L. Tomlins, Law, Labor, and Ideology in the American Republic, Cambridge, England: Cambridge University Press, 1993.

6. Robert A. Rutland, et. al., editors, The Papers of James Madison, vol. 14, 6 April 1791 - 16 March 1793, Charlottesville: University Press of Virginia, 1983.

7. David N. Mayer, The Constitutional Thought of Thomas Jefferson, Charlottesville: University Press of Virginia, 1994.

8. Canada is the only other country in the world that has exclusive representation unionism. They have it because they copied us.

9. Charles W. Baird, Opportunity or Privilege: Labor Legislation in America, Bowling Green, OH: Social Philosophy and Policy Center, Bowling Green State University, 1984. See also Howard Dickman, Industrial Democracy in America, LaSalle, IL: Open Court, 1987.

10. He changed his mind in time to sign the Wagner Act on July 5, 1935, which he agreed to do to get even with those who applauded the Court's decision in Schechter.

11. Mancur Olson, The Logic of Collection, Cambridge: Harvard University Press, 1965.

12. Milton Friedman, Capitalism and Freedom, Chicago: University of Chicago Press, 1962.

13. Morgan Reynolds, Economics of Labor, ITP International Thomson Publishing, 1995, pp. 10-14.

14 Employment Policy Foundation, The American Workplace 1998, Washington, D.C., 1998, pp. 38-39. Also available at www.epf.org.

15. Henry Farber and Alan Krueger, "Union Membership in the United States: The Decline Continues," National Bureau of Economic Research Working paper # 4216, November 1, 1992.