Professor Hayek shares a subtle and sophisticated understanding on the real world dynamics of labor unions. http://www.LibertyPen.com
The Foundation for Economic Education has more:
Hayek’s two most detailed discussions of labor unions are found in The Constitution of Liberty and in 1980s Unemployment and the Unions (2nd edition, 1984). He argued that unions, because of the legislation that empowers them, violate both principles of the rule of law. Isonomia precludes privilege; yet, as he wrote in The Constitution of Liberty: “Public policy concerning labor unions has, in little more than a century, moved from one extreme to the other. From a state in which little the unions could do was legal if they were not prohibited altogether, we now have reached a state where they have become uniquely privileged institutions to which the general rules of law do not apply.” …
Muddled thinking leads public opinion to tolerate legislation, such as the National Labor Relations Act (NLRA), that exempts unions from the rule of law. …
Hayek also thought that statutory unionism leads to the crippling of the market economy, which in turn leads to a vastly expanded scope of government’s role in the economy.
“[Unions] are using their power in a manner which tends to make the market system ineffective and which, at the same time, gives them a control of the direction of economic activity which would be dangerous in the hands of government but is intolerable if exercised by a particular group. … Unionism as it is now tends to produce that very system of overall socialist planning which few unions want and which, indeed, it is in their best interest to avoid.”
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