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Friday, January 20, 2012

Unions, the Rule of Law, and Political Rent Seeking

Unions, the Rule of Law, and Political Rent Seeking  by Armand Thieblot
Cato Journal

The Clayton Act of 1914, limiting labor injunctions and endorsing picketing and related union tactics, was among the first of the proce- dural laws. (The substantive working-condition laws are not of con- cern here.) It would be perfected by the Norris-LaGuardia Act of 1932, which guaranteed the collective right to strike for any purpose, the right to pay strike benefits, the right to disregard “yellow-dog” contracts, and exemption from antitrust restrictions, among other things. This act, alone, effectively moved the center of the code of law to the union side of the conflict. The same actions by unions that had formerly been violations of law would now not only be tolerated, they would be affirmatively protected, even promoted as sound pub- lic policy.
Perhaps the most significant developments of the new rules of labor law before the New Deal were the now-forgotten Adamson Act of 1916 that imposed an 8-hour day (with no diminution in pay) on railroads to avert a rail strike, and the establishment of the cabinet- level U.S. Department of Labor in 1913, whose secretary was empowered to act as a mediator and to appoint commissioners of conciliation in labor disputes. With these began the new role of gov- ernment in procedural labor relations. Thenceforth, government would take an ever more active role not only in moving public policy and the rule of law from anti-union to neutral to full-fledged pro- union, but also in involving itself selectively and purposefully in the minutia of the business-labor interface. Union access to rent sharing, facilitated by government, had begun, as had the duty of employers to create the rents for unions to share.
Unquestionably, the main statute affecting unionization for the private sector was (and still remains) the National Labor Relations Act of 1935, also called the Wagner Act. Applying to all industries except railroads and air transport (similarly though separately gov- erned by the Railway Labor Act of 1926), the NLRA sets the basic ground rules for union involvement in how employees and employ- ers should reach agreement about their economic relationships. The NLRA expressly encouraged not just collective bargaining, but unionized collective bargaining—preferably by national organiza- tions—on the assumption that employees had always wanted to be unionized but had been perpetually frustrated in this goal by obsti- nate employers. “The Act assumes that collective bargaining itself is impossible, infeasible, or impractical without a unionized context, i.e., that only a union is able to engage in collective bargaining. Accordingly, the NLRA makes unionization the ‘natural’ state of affairs, with all procedures designed to facilitate or to promote its achievement and to frustrate those who would oppose it”

Armand Thieblot
Unions, the Rule of Law, and Political Rent Seeking
(PDF, 22 pp., 191Kb)

Cato Journal
An Interdisciplinary Journal of Public Policy Analysis
Volume 30 Number 1, Winter 2010

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