All Commentary
Wednesday, July 1, 1964

A Reviewer’s Notebook – 1964/7

The State of the Unions

If you ask a modern “liberal” to define the duty of Congress, he will in all probability tell you that it is to pass a certain quota of new legislation each session as demanded by the President in his annual State of the Union mes­sage. But the burden of three new books on labor—Union Monop­olies and Antitrust Restraints by Patrick M. Boarman (Labor Pol­icy Association, $5), What’s Wrong With Our Labor Unions? by Maurice R. Franks (Bobbs­-Merrill, $5), and Fringe Benefits: The Golden Chains by Alex Rub­ner (Putnam, 25s.)—is that we have had far too much legislation over the past three decades, par­ticularly in regard to labor union protection.

The three authors have pro­fessedly different ends in view, but they agree among themselves in calling for a restoration of simplicity to the tangled field of labor relations. Professor Boar-man thinks the “union monopoly” problem would tend to disappear if the laws which exempt labor from the provisions of the Sher­man Antitrust Act were to be amended or canceled. Mr. Franks, a former union organizer, puts his hopes in the restoration of voluntary unionism, which would enable union members to ride herd on their leaders instead of vice versa. As for Alex Rubner, he thinks that the way to freedom lies in giving people total com­mand of their own money aside from the small portion they are willing to grant the state to carry on ordinary military, police, and limited residual welfare duties.

All three of the authors have little patience with the modern “liberal” consensus that labor is still an underdog. The most de­liberately shocking is Mr. Rub­ner, who thinks that workers are perfectly able to take care of themselves without being wrapped in any cotton batting. Paying a man a “fringe benefit” is just as insulting to his dignity as was the old-time practice of paying him with a draft on the company store. In the old days, says Mr. Rubner, we had the “truck sys­tem” and the “company town”; today the worker has permitted “fringes” to assume “such dimen­sions that they are now between one-quarter and one-half of the money wage.” To pay a man in a “fringe benefit,” so Mr. Rubner insists, presumes that he has less than human capacity to add and substract and make judgments.

Mr. Rubner recalls that the “model town of Pullman,” near Chicago, was scathingly de­scribed by a pro-labor critic of the eighteen nineties as “a gilded cage that imprisoned the manhood of its citizens.” But the motives of Mr. Pullman, who wanted to ensure that “no brothels and drinking dens” would be close to the abodes of his employees, did not differ from the motives of that modern Texas personnel di­rector who argues that payment in fringe benefits is good because his workers, “principally Latin American and Negro,” don’t know how to budget properly. “The company,” so this personnel di­rector is quoted as saying, “can do more for them by giving them better benefits than through high­er wages.”

The movement toward paying men in fringe benefits derives partly from the paternalism of modern personnel thinking, partly from a desire to avoid the ex­penses of labor turnover, and partly from our complex tax laws, which encourage both manage­ment and labor to find ways of rewarding people without letting the tax collector skim the cream of anything “extra.” Then, too, there had to be some way of cir­cumventing the intention of war­time wage freezes if production incentives were to be retained, so the fringe benefit had a hardy growth in the 1939-45 period in both Europe and America. To Mr. Rubner’s way of thinking, none of these reasons for paying in fringes instead of cash is a good reason. It would be better to change the tax laws, making the income tax less steeply progres­sive. With their “manhood re­stored,” workers would be forced to do some thinking for them­selves about old-age insurance, joining voluntary hospitalization plans, and planning their own vacations.

Economically and Morally Sound

The abolition of the fancy mod­ern “truck system,” says Mr. Rubner, would have good econom­ic effects as well as good moral effects. Private insurance com­panies are likely to invest their money more productively than pension fund guardians; men and materials that are now tied up in the administration of fringes would be released for other uses; and people would be less apt to think themselves sick on Monday morning just because the weekend has been arduous and thus de­serving of extension through sick-leave. Moreover, if men were to be paid once again in money, the more scrupulous employees would not be forced to carry the less scrupulous by paying for their insurance. As F. A. Harper once said, one man’s fringe benefit is another man’s fringe detriment, depending on who is in position to collect it.

Maurice Franks agrees with Mr. Rubner that it is an insult to man’s dignity to compel him to do things which he is perfectly able to decide upon for himself. He objects to the type of thinking that, likening dues to taxes, stres­ses the analogy between citizen­ship in a union and citizenship in a state. If such an analogy holds, the union would have the right to establish police and court func­tions as well as its right to collect taxes. Well, how do you like to think of Jimmy Hoffa as judge and cop?

“Free Coercion”

Every time a union leader re­fers to a nonunion man as a free rider or free loader, says Mr. Franks, that leader tips his hand as a totalitarian who considers that he has a right to force his own conception of welfare on everybody else. He has also lost track of the reality of democratic civil society, in which a man is free to belong to any one of a num­ber of political parties which, in turn, get representation in a par­liament. Labor unions, it hardly needs to be said, don’t have par­liaments. A union is simply an agency designed to carry out bar­gaining functions for those who feel they have need of an agent. It can also be a social club. If a man doesn’t want a social club or an agent, it hardly makes him a free loader or a free rider.

In a brilliant passage Mr. Franks defends voluntarism by singling out associations that wouldn’t dream of trying to trans­form their dues into compulsory taxes. “A physician,” he says, “is not compelled to belong to a medi­cal association in order to practice medicine…. A lawyer does not have to belong to a bar associa­tion in order to handle cases, and no citizen—however much he might profit from it—must of necessity consult an attorney or engage paid counsel beyond the point of personal desire or pref­erence. No man is compelled to own a single share of stock… no manufacturer is forced to belong to any association or con­tribute to the support of any chamber of commerce. No church has the power to coerce any be­liever into joining its congrega­tion or paying pew rent into its coffers. No United Fund… is equipped with powers to com­mandeer a single contribution, no matter how many ‘free riders’ may profit from public undertak­ings of the various organizations supported by its drive….”

Yet union leaders wish the legal power to “man-herd” all workers into their organizations! The worst of it is, they have this pow­er in thirty-odd “sovereign” states of the union.

Professor Boarman is less emo­tive than Mr. Franks in his ap­proach to the theme of union mo­nopoly. And he is less deliberately shocking than Mr. Rubner. But in his careful economist’s language he is no less devastating. His mes­sage is that the big “countervail­ing” union, by virtue of its legally entrenched position, is able to push wages above the market in its own segment of the economy. The result is unemployment and stagnation elsewhere. Incidental­ly, Professor Boarman thinks that unions have quite legitimate functions, one of which is to “cause subcompetitive wages to be raised to competitive levels.” But the union must not be en­dowed with legal exemption from the antitrust laws lest it lose its own competitive excuse for being.



The Propriety of Property

To every individual in nature is given an individual property by nature, not to be invaded or usurped by any: for every one as he is himselfe, so he hath a selfe propriety, else he could not be himselfe…. Mine and thine cannot be, except this be: No man hath power over my rights and liberties and I over no man’s; I may be but an individual, enjoy myselfe and my selfe propriety.

From An. Arrow Against All Tyrants and Tyranny
Shot from the Prison of Newgate

  • John Chamberlain (1903-1995) was an American journalist, business and economic historian, and author of number of works including The Roots of Capitalism (1959). Chamberlain also served as a founding editor of The Freeman magazine.