The Perversion of Pluralism

Dr. Petro is Professor of Law, New York Uni­versity, and author of The Labor Policy of The Free Society (New York, Ronald Press, 1957).

The key problem of man in soci­ety today is not individualism against collectivism, as it is so often said to be, but rather one of volitional activity as against com­pelled action. The problem of the individual and the group is in fact but a small part of this greater, more comprehensive one: coercion as against volition.

Man from his earliest origins has lived and progressed as a col­lective being. He has never lived the solitary life of the hermit. His life, to the degree that it has been rich and full, has been a life with his fellows, characterized by the most productive system of action that has ever been conceived, namely, the division of labor. Hence I conclude that the most fruitful area of investigation lies in the analysis of man and his voluntary associations as against man and his compelled associa­tions.

Conflict and war permeate the international scene. On a smaller scale, too, conflict characterizes the affairs within all nations, in­cluding our own. The future of mankind hangs, as we have heard ad nauseam, in precarious balance. There are deep disagreements as to the causes of this condition, but I believe that the basic cause lies in the distortions that have oc­curred in the relationships be­tween private associations and the state that are so characteristic of our time. My purpose here is to define a relationship between vol­untary associations and the state which will transform this conflict and waste into peaceful order and productivity.

Of Bismarck, Gladstone once said, “He made Germany great and Germans small.” And William Graham Sumner wrote, in 1899, “There is today scarcely an institution in Germany except the army.” Such are the results to be expected in any society in which the respective roles of private as­sociations and the state are con­fused.

Freedom and Voluntary Association

Exercising the personal auton­omy which prevails in a free so­ciety, men seek to fulfill them­selves by forming and joining pri­vate associations, whenever group action seems more promising than individual action in attaining the ends they seek. The function of the state in respect to private as­sociation, precisely as in respect to individual action, is to prevent infringement of the rights of per­sons, if the society in which this state operates is to be a free one. When a state permits associations to make transgressions which are denied to individual persons—as has been done, for example, most notably with trade unions in our country—it delegates governmen­tal power to such associations. When a state engages itself in cre­ative and productive activities, it diminishes personal freedom and responsibility and thus weakens the character of society. Ultimate­ly, the confusion of roles means the end of the free society and the disappearance of all genuinely pri­vate and voluntary associations—even those such as trade unions, which were at first benefited by special privileges. Nothing is more important to the future of free society, therefore, than to arrive at a satisfactory definition of the respective roles of voluntary as­sociations and the state.

Let us start with some basic truths. The power and the wealth of any society manifestly depend upon the character and activity of its members. As persons grow—in intellectual, material, and scien­tific strength—the natural prod­uct is a society of great and diver­sified resources, capable of with­standing shocks and of overcoming obstacles which prove too much for societies of inferior develop­ment. The principal social institu­tion involved is not the state. The principal association or institution accountable for the progress of society is the voluntary associa­tion. For its mere existence is proof of its value. Being volun­tary, it could not survive if it failed to serve the purposes both of its members and of society.

Free men exercising their basic property right of freedom of con­tract naturally seek their fulfill­ments, spiritual and material, in forming and joining associations with men of similar mind and ob­jectives. If any association fails to provide the expected fulfillment, men will abandon it in order to seek another method. This is the sense in which I say the existence of a voluntary association may be considered self-evident proof of its value; but only, I repeat, if it is a genuinely voluntary association, one exposed to the selective and improving rigors of competition.

Americans Are Joiners

The United States is often re­ferred to as a “pluralistic” society. Properly understood, the designa­tion is both accurate and signifi­cant. There are in the United States, I believe, almost as many voluntary associations as there are persons. Everyone belongs to at least one, and a great number belong to many. The word “join­er” is of American coinage. The long period of limited government here has created a tendency toward self-reliance, personal responsibil­ity, and voluntary private associ­ation which even the last 25 years of statism have not vitiated. Al­though an ugly perversion of pri­vate associations is now becoming more evident, the country today remains incredibly, fantastically rich and diverse in its private as­sociations of a genuinely voluntary character.

This wealth of variety is paral­leled by the profusion within cate­gories. The larger cities of this country are a maze of associations indescribable in their profusion. Many pages would be required to list only the religious groups which freedom of worship has pro­duced. As disturbing as it may seem to those who are convinced that theirs is the true religion, it is not uncommon to see people shifting from one religious group to another within the same com­munity, as well as when they move—as they frequently do—to differ­ent communities. The minister of a Methodist church, as I have ob­served, has almost as much compe­tition to meet as the proprietor of a commercial establishment.

Competition and diversity reach a peak, however, in the commer­cial and industrial businesses of the country. With no exception, their membership is voluntary. With the exception of the rela­tively few which receive govern­ment subsidies and protection, and even including them in certain im­portant senses, these commercial establishments must prove them­selves in free markets if they are to survive. Their basic soundness, strength, and contribution to so­ciety is thus for the most part demonstrated also by their mere survival.

Of all private associations in the United States, trade unions have the most precarious and dubious claim to the designation “volun­tary.” They are not only the bene­ficiaries of special governmental privileges which make them bargaining representatives for people who do not want their representa­tion, but their arrangements for eliminating competition among themselves are approved by gov­ernment and—even more impor­tant than that—their violent methods are, to a considerable de­gree, tolerated by government.

The Duty of the State Toward Voluntary Association

In a free society, the state has but one duty to perform in re­spect to private voluntary associa­tion. That duty is precisely the same one which obtains in the case of individuals. It is the duty to restrain and to prevent transgres­sions upon the rights of persons. More particularly, the state has a duty to restrain associations from the use of force, fraud, and vio­lence.

If you ask whence I derive this duty, I respond that these are simply the conditions necessary to human freedom. Moreover, if the free society presupposes that the same rules apply to all persons, it necessarily follows that the same rules must apply to all associations of persons. Personal freedom in society is violated if the members of a business association are re­strained from the same kinds of honest and peaceful actions which are permitted to members of a labor association, or, for that matter, to members of a religious or any other kind of association. In the same way, conduct rightfully prohibited to one kind of group must be prohibited to all. Other­wise, the persons subject to a spe­cial burden are, to that degree, more properly characterized as slaves than as free men.

Nevertheless, business associa­tions and labor associations, in our day, are subjected to substantially different rules in significant areas of similar action. Recently the ex­ecutives of several electric firms received criminal penalties for en­gaging in price-fixing agreements. The penalties were imposed, not­withstanding the fact that the businesses involved had abandoned the agreement before the govern­ment began its prosecution and also in spite of the fact that the abandonment had begun long be­fore the prosecution had been con­templated.

On the other hand, when the large unions of the United States combined to form one huge labor organization, and when all the members of this combination agreed to refrain from competing among themselves for members, the highest officials of the federal government, from the President down, sent them telegrams of con­gratulations. Far from being pros­ecuted for such a gigantic combi­nation in restraint of competition, the union leaders were regarded as public heroes.

It is well understood, it is even boasted, that members of all un­ions participate in price-fixing agreements. All members, if they wish to remain members, and per­haps even if they wish to remain healthy, must agree to insist upon the same level of wages and work­ing conditions. The price of labor is quantitatively the most influen­tial price in any economy. In spite of all this, few governments in the Western world plan on prosecut­ing unions and their members for their price fixing, even though it is of so much more significance to society than the ephemeral price-fixing agreements for which busi­nessmen are fined and sent to jail. On the contrary, governments not only wink at the same kind of con­duct in unions which they repress among businessmen, but they also permit unions to enforce their price fixing by violent methods which businessmen simply do not use.

I do not believe that government may, consistent with the principles of personal freedom, prohibit vol­untary price-fixing agreements among either businessmen or workers. However, those principles absolutely require the government to prevent both workers and busi­nessmen from imposing their prices by force and violence. When governments fail in this task, they in effect grant governmental pow­ers to the private price-fixing agencies. Those private agencies then do precisely what price con­trol agencies of government do. That is, they impose, by brute force, a price. Physical violence is the sanction. Obviously, it is im­proper to speak of such a system as a coherent part of a free soci­ety.

Exclusive Bargaining Status

The federal government gives unions a number of other extreme­ly damaging special privileges. Unions are permitted to engage in economically coercive activities which are denied to employers. Compulsory unionism agreements, picketing, and secondary boycotts, are examples. Far more important, both in fact and in principle, is the exclusive bargaining status which a union acquires when a bare majority of the employees in an appropriate bargaining unit se­lect it as their representative.

Consider how this may work in a factory employing one thousand workers. If 350 of the workers strongly favor union representa­tion, and if 340 strongly oppose unionization, with the remaining 310 indifferent—the 350 strong unionists are in a position to im­pose the union not only upon the 310 indifferent workers but upon the 340 anti-union workers as well.

If only the interested 690 vote, with 350 voting in favor of the union, it becomes the exclusive bargaining representative of all one thousand workers. This status precludes any of the workers in the union from bargaining with their employer directly or through a representative of their own choos­ing. Indeed, the individual work­ers and the employer can scarcely communicate on any matter in­volving terms and conditions of employment without violating the law. When one considers that the concept of personal freedom—so far as wage workers are concerned—is most meaningful in connection with their employment, the depri­vation of personal freedom wrought by the exclusive bargain­ing principle assumes enormous quantitative dimensions. When one considers further that the status of slavery is distinguished from the status of freedom largely in respect to the employment rela­tionship, the exclusive bargaining principle assumes extremely grave qualitative importance. The great English legal scholar, Sir Henry Maine, wrote in the nineteenth century one of the most produc­tive and fertile generalizations I suppose that social science has pro­duced—that the movement in pro­gressive societies had theretofore been a movement from status to contract. The exclusive bargain­ing status of majority unions is quite clearly a movement in the opposite direction.

Government Involvement in Business Activity

The federal government has thus, on the one hand, been dele­gating to such private associations as trade unions, privileges of com­pulsion which, in a free society, only the state should have. On the other hand, it has itself been en­gaging in more and more of the creative and productive functions which are, again in a free society, the exclusive province of free men following their creative inclina­tions. The government is in the banking business, the retail busi­ness, the education business, the insurance business, the electric power business, the real estate business, and almost any other business one might imagine. Per­haps its most significant nongov­ernmental activity, however, is its preoccupation with giving away money to both citizens of the United States and other countries. This pseudo-charity is in fact involved even in what I have called the “business activity” of the gov­ernment. For in not a single in­stance does the government actu­ally follow proper business prac­tice—in regard to either its costs or prices or financing methods. Naturally, it is not to be expected that market controls will influence the more explicit subsidy pro­grams.

Thus we observe government in­volved in a thorough-going confu­sion of roles. On the one side, con­veying government powers to pri­vate associations, and, on the other, engaging itself in the kinds of conduct characteristic of indi­viduals and private associations in a free country. There are those who find nothing anomalous and nothing dangerous in this confu­sion of roles. The fact is, however, that there is no greater anomaly in the political world and none which even approaches its perilous threat to the freedom and the pro­ductivity of society.

Freedom’s Checks and Balances

There is no need to explain at great length the damage which is done to personal freedom by the confusion of roles which I have just described. When a trade un­ion can force a man into union membership against his will, that man can no longer be called a truly free man. The same is true when a union can forcibly prevent a man from working at a wage different from the one the union insists upon. Finally, it is clear that no man is free when he is compelled to accept as his bargaining agent an organization which he has not himself chosen.

The consequences for general social freedom are less obvious. And least obvious of all is the dam­age to productivity which a state inflicts when it engages in crea­tive, productive, and charitable ac­tivities. These require elaboration. Consider the game of golf. In Westchester County, New York, there are many golf courses, all of which resemble each other in cer­tain physical ways. There is a dif­ference, however, which is quite substantial even though physically imperceptible. Some of these golf courses I must pay for, whether or not I use them—while others I pay for only if I use them. The former are those which people tend to speak of as public golf courses. That is, they are golf courses operated by persons em­ployed by government and owned by no one. The latter are those op­erated by voluntary private asso­ciations, either as profit-making ventures or simply as nonprofit adjuncts of social organizations.

I do not play golf, and, there­fore, do not use either the private or the public golf courses. I have no objection, nor any ground for objection, to the private golf courses in Westchester County. While I do not use them, and while I also have little use for the game of golf, I have no valid ground of objection to those who choose to direct their energy and resources into the maintenance of private golf courses. They cost me noth­ing; they are no skin off my back.

The same, of course, is not true of the public golf courses. Far from being “free,” as public golf courses are sometimes said to be, they seem to me to be the most expensive golf courses in the world—so expensive that even nonusers must pay for them. Even more im­portant, at least to me, they are very expensive to my liberty. I must, in effect, join them and sup­port them, even though I not only do not use them, but even have an antipathy to the game of golf it­self. My antipathy and my resent­ment are not lessened by the fact that golfers, as a rule, are finan­cially able to pay their own way. And this fact suggests other, even more egregious, violations of my purse and of my liberty.

For governments in the United States do not stop with the pro­viding of golf courses. Consider the marinas provided by some lo­cal governments, in which the rich keep their expensive boats. Gov­ernments also provide bowling al­leys, amusement parks, wild life sanctuaries, electric power—a multitude of other goods and serv­ices.

Each of these is subject to the same analysis. Each constitutes a successful raid upon both my lib­erty and my purse. I find myself compelled to join and support them all. Each chips off more of my substance, more of my capaci­ty to provide for me and mine the things which I wish to provide.

Each Wants His Share

The deadly peril to freedom and productivity which this proc­ess entails lies in the self-stimu­lating, servo-mechanism character of the machinery which it sets into motion.

For each time I must pay against my will for the enjoyment or the well-being of others, my capacity and my zeal for provid­ing for my own needs and desires are lessened. In each case, without exception, the government takes from all to serve the special needs and desires of a few—so that all members of society are in the same position in which I have found myself. All are, therefore, similarly motivated to go them­selves to government for aid and assistance, for government has the great and supreme power of compulsion and taxation. People feel they must go to the govern­ment to get back some of what they have involuntarily contrib­uted to others.

This process is at work today on a prodigious scale. Voluntary associations, originally and properly designed to aid individuals in the attainment of individual ob­jectives—through their own ef­forts—are now in danger of be­ing corrupted into lobbying and pressure groups vying with each other to despoil other taxpayers. It is not at all surprising that the most vehement lobbyists in the United States today are the trade unions and the public school teachers’ organization—the Na­tional Education Association. Their appetites have been stimu­lated by what they have fed upon.

Where can this end but in the ultimate destruction of all per­sonal freedom and responsibility? If government compulsion is ac­ceptable in the case of golf courses, how can it be denied in regard to medical care? If medical care, why not food, clothing, and housing? These represent far more basic needs. And if the proc­ess continues, we shall be unable, as individuals, to provide these far more basic needs for ourselves. But if all these are provided by the state, the citizenry become di­minished men. Perhaps America will be great, but certainly there will be few great Americans.

In a market economy, the pro­ducer of goods and services must serve the consumer if he wishes to stay in business; he cannot force his tastes upon unwilling cus­tomers. The market economy, therefore, is consistent with per­sonal freedom for each member of society. But when the state is the supplier of goods and services it is under no obligation to serve the consumer, and, in consequence, there is no possibility of universal personal freedom.

Bureaucratic Procedures

I have yet to see a bureaucrat who is willing to submit to the selective and improving rigors of competition. For the state, as a provider of goods and services, will not subject itself to the will of the consumer. It will not be­cause it need not, and perhaps can­not. It is able, indefinitely, to pro­duce and supply things that peo­ple do not want. And because it retains the power to tax and to is­sue fiat money, the state need never worry as private business must ever do, about making a profit.

Political, rather than economic, considerations guide the decisions of politicians. And a political de­cision is different from an eco­nomic decision in regard both to its stimulus and its consequence. People, as Professor Mises has said, are infinitely wiser and bet­ter informed in their economic judgments than they are in their political judgments. Unable, how­ever, to see that they pay for ev­erything that government provides, they constantly approve government expenditures because they feel that they only benefit from and do not pay for the serv­ices involved.

In addition to the violation of personal freedom which the pro­vision of goods and services by government entails, great losses in productivity are the necessary consequence of the waste which is built into economic activity by government. In the absence of the market discipline and the function­al checks which keep the business­man on the right track, it is im­possible for governments to avoid wasting the community’s sub­stance when they try to engage in productive activity. An unfree, un­productive socialist society is a predictable consequence of gov­ernment invasion into the sphere of action of voluntary association.

The same result must be ex­pected when government permits private associations to exercise the powers of compulsion which the theory of a free society accords only to duly constituted political authority. For then the functional checks imposed by free, peaceful, competitive markets are with­drawn from their control upon the action of private persons and as­sociations. If a union, for example, may violently prevent an employ­er and his workers from agree­ing upon a wage that is lower than the union demands, the re­sult is a monopolistic wage which abuses the public—not a compet­itive wage which serves the public.

Corruption and Disguised Anarchy

Corruption and disguised anar­chy will characterize both the state and voluntary associations when they have confused their re­spective roles. While their serv­ices to society are of the highest order of importance when con­fined properly in accordance with the principles of the free society, private associations and the state become the worst and most vi­cious enemies of man’s freedom when they confuse their nature and function. The result of such confusion is not really “society”; it is the war of all against all.

Consider the total situation of the advanced welfare state. It en­gages in every kind of activity known to mankind. It has millions of functionaries. In fact, every member of society becomes a functionary, each a despot in his own petty province. There is no market, no profit motive, no com­petition to keep the individual in line—to remind him that service to the consumer is the prime pur­pose of business. The maxim, “the customer is always right,” could not possibly have been conceived in a welfare or socialist state, as Pro­fessor Mises has often pointed out. In the advanced welfare state, the petty bureaucrat will dispense favors in accordance with the emoluments offered by supplicants for his favor. The corruption as­sociated with oriental despotism is what may be expected.

Some will say that political checks can keep down such abuses—but all experience and all reason are to the contrary. The purely political check—the popular vote—can be of no material conse­quence in an advanced welfare state. At best the mass of voters can be even minimally informed only on a few very broad issues. What a voter does in the ballot box cannot affect the civil servant ensconced behind a metal grill in the government bureau of shoe production.

To put up a building on Man­hattan Island today requires the builder to grease the palm of at least 15 party bureaucrats, ac­cording to many estimates. The franchise on Manhattan has been universal for almost 200 years, but such corruption has prolifer­ated, not diminished, in that time. As the activities of the welfare state multiply, the capacity of the citizen to keep watch upon the peccadilloes of bureaucrats diminishes in increasing ratio. I live in a welfare city of some 70,000 persons. Although I have special training in the affairs of law and government and a very keen interest in the subject, I find it impossible even to begin to be familiar with all the affairs, however suspicious, in which the local politicians daily engage. I know only that my local taxes are, for me, quite burdensome, while the so-called “services” they are supposed to provide decline in quantity and quality by the day.

“Power Tends To Corrupt”

When private associations are permitted to practice compulsion, the effect upon them will be simi­larly corruptive and disastrous. In this respect, the disclosures of the McClellan Committee, which I have recounted elsewhere in de­tail,* provide us with all the nec­essary documentary material. Not that such documentation is really necessary. It is only necessary to understand Lord Acton’s state­ment: “Power tends to corrupt and absolute power corrupts abso­lutely.” The rest follows inevit­ably.

Whoever is given the kind of power which government has giv­en to trade union leaders will be corrupted. The national labor pol­icy is based upon a desire to im­prove the condition of the average workingman. Yet the workingman has been abused by unions far more viciously than he has ever been abused by any employer.

The McClellan Committee found that unions have frequently been guilty of physical violence in forc­ing men to become members, and, after they became members, to submit to the most degrading kinds of controls. Union leaders bought and sold their respective memberships. They regarded union treasuries, built exclusively by dues payments, and in large part by compulsory dues payments, as if those treasuries were their own pocket money, purchasing all kinds of personal luxuries as well as businesses whose profits they pocketed. If members objected to such treatment, they were bru­tally beaten or hounded out of the community. In combination with unscrupulous employers, drawn into business by their affinity for such jungle conditions, unions were guilty of the very kind of worker exploitation that the na­tional labor policy set out to elim­inate. From this development the language gained a new expression—”the sweetheart contract,” the labor contract which provides gains only for union leaders, not for workingmen.

The Price of Resistance

The McClellan Committee found also that employers were fre­quently victimized by the power­ful and corrupt union leaders which special privilege had cre­ated. Bold and courageous em­ployers, such as the Kohler Com­pany, have refused to give in to the violent, brutal techniques of union bullies. But the cost has been very high for both the em­ployers and the workers who re­fuse to bow to the union thugs. Personal injuries, vandalism, de­grading threats, costly interfer­ences with production—these are the prices which must be paid by those who resist union aggres­sion.

Understanding this, many em­ployers have thought it best to deal with union leaders in the way that others deal with the pet­ty governmental functionary who will not do his duty without spe­cial pay. These employers have “bought labor peace,” as the say­ing goes. The method of payment is sometimes straightforward, but more often devious. Contributions are made to racketeering enter­prises run by union thugs. Per­haps the union leader is given advance information about a fi­nancial undertaking of the em­ployer on the basis of which sub­stantial profit is easily made. In the case of one powerful union leader, subjugated employers paid tribute in the form of expensive memberships in a country club which they owned but which they never used.

Pluralism Perverted

Only the simple-minded will fail to realize that corruption of this kind constitutes a supreme and pervasive threat to the good society. It makes a mockery of personal freedom. It is morally degenerate. It wastes the economic substance of the community. In­dividuals are harmed in every possible way that harm can be done: permanent damage is done to the integrity and the dignity of the person. This being so, the social harm reaches gargantuan dimensions. When the state de­generates from the defender of personal freedom to the dispenser of special privilege, it carries with it into corruption the once proud and independent voluntary asso­ciations. It destroys the healthy, pluralistic society, the society in which multitudes of private and voluntary associations strive in a peaceful and competitive way to improve the positions of their members.

In the peaceful, uncorrupted so­ciety, voluntary associations seek improvement by enhancing their members’ capacity to contribute to the welfare and well-being of the rest of society.

In the coercive society, the cor­rupted private association is also preoccupied with the self-interest of its members. But there is a difference. It practices extortion upon the rest of society.

Thus pluralism is perverted and excellence in productive perfor­mance is scorned in favor of per­fection of the extortioner’s art. The membership dues of private associations are not spent in or­der to improve productive capac­ity. They are spent instead in lobbying for special privilege. The great lobbyists in the United States today—the National Edu­cational Association and the pow­erful trade unions—are unlike the older associations of business­men who expended their efforts in Washington, D. C., mainly re­sisting destructive special-priv­ilege legislation. The new lobby­ists build marble castles and pal­aces in Washington, give parties for congressmen, make substan­tial political contributions, all in order to exact special privileges and subsidies.

The aim of these special-priv­ilege private associations—the perversion of pluralism—is self-improvement, all right, but in a special sense: special self-im­provement at the expense of the rest of society. Today it has be­come fashionable to regard such lobbying as a healthy manifesta­tion of the pluralistic tradition. One writer has gone so far as to say that it is in the interest of society deliberately to build up the power of such organizations as the trade unions and the Na­tional Education Association. The welfare and security of society will be promoted, he says, by such an enhancement of the principle of “countervailing power.” Noth­ing, in fact, could be more de­structive than this distortion of the pluralistic conception. In the limited government society, where government gives no special priv­ileges or subsidies, but confines itself to defending personal free­dom and the right of private prop­erty, men will naturally form vol­untary associations where group effort is more efficacious than sol­itary action. Voluntary associa­tions do, then, indeed make pro­digious contributions to the prog­ress of mankind. They diversify, enrich, harmonize, and stabilize society. In a regime of unlimited government, however, strong pri­vate associations expend their ef­fort in a quest for special privilege and advantage. Disguised anarchy, large-scale power structures, and chaos are the necessary long-run consequences.

Man’s profound insistence upon social order can have but one result in such circumstances. Voluntary private associations must disap­pear and the fascinating prolixity of institutions in a free society must give way to the monolithic in­strument of coerced order—the army or the secret police. The condition of Germany as described by Sumner in 1899 will then pre­vail once more.

The fundamental duty of the state in a free society, I repeat, is to prevent any person or group from infringing on the rights of others. Failing to perform this task—and our government is today failing to perform it—the modern state is guilty of the most profoundly damaging dereliction of duty. In­stead of being the servant of the community, it becomes a co-con­spirator against the community. Instead of waging unceasing war against the enemies of society, it joins with them in a league of mutual assistance against society.

Unions are a problem. But they are not our basic one. Somehow we must control the state so that the state works for society rather than against it. Until this is done, there can be no such thing as a fully productive society. Until this problem is solved, the concept of voluntary association must con­tinue to wither, and the rich and healthy pluralistic society which America once knew must turn into a pale and flaccid mendicant. America will not be great, and Americans, most certainly, will be small.

 

*See Power Unlimited: The Corruption of Union Leadership (Ronald Press, 1959).