All Commentary
Sunday, December 1, 1985

A Page on Freedom: Number 26

Production Is a Team Effort

From the mine to the auto, the farm to the grocer, the lab to the hospital, production is a team effort, not a class struggle. Workers and managers are teammates in a common enterprise. Everyone gains if the operation functions smoothly; everyone loses if it is disrupted. Everyone depends on everyone else.

The producer’s goal is to develop a smoothly functioning team effort and avoid costly disruptions. The prices and wages he pays are determined by the market. To obtain raw materials and workers, producers at each stage of the production process must outbid their competitors. Yet they cannot long afford to pay more than customers will pay for the final product.

Occasional disruptions such as floods, fires, earthquakes and hurricanes are inevitable. But violent man-made disruptions like strikes could be avoided if everyone realized that production is a team effort. Unfortunately, many people don’t; they accept the class conflict idea and believe they must strike to receive the full value of their labor.

Strikers do not realize that management must pay market wages. If they pay less, workers will leave them; if they pay more they face bankruptcy. Resilient and innovative entrepreneurs can, and often do, overcome the disruptive effects of strikes. They rearrange production plans and reestablish effective team efforts. But a strike is expensive. In the long run, its costs are distributed through the market among all those who would otherwise benefit. The costs of the disruption are carried back through the market as every stage of the team effort is disrupted from the automobile back to the mine, the grocer back to the farm and the hospital back to the lab.

  • Contributing editor Bettina Bien Greaves was a longtime FEE staff member, resident scholar, and trustee. She attended Ludwig von Mises’s New York University seminar for many years and is a translator, editor, and bibliographer of his works.