To the Editor:

In response to Charles Baird’s article “Sources of Pro-Union Sentimentality” (Ideas on Liberty, March), I would like to respond with a few points overlooked. Although I agree with most of the points brought up by Professor Baird, I think unions do play a legitimate role in the marketplace for several reasons. First, large companies and workers alike both find it to their advantage to secure long-term contracts to counter the fluctuations of the market (just as companies and suppliers of energy, material, and others do). Second, it is certainly more advantageous for companies to have one contract rather than thousands. Third, just as any price negotiated by a company and its other suppliers becomes the market price, the wage negotiated by a company and its union(s) becomes the market wage. Many companies, such as Southwest Airlines, have very harmonious relations with their unions and remain very profitable. Other companies take a more adversarial position to everyone’s disadvantage. I agree that the National Labor Relations Act is antiquated and that government intervention is counterproductive, but this is the case in almost all areas of government. As far as individuals committing criminal acts during a strike (or any time), I don’t believe that is, or should be, condoned. Finally, unions, like any other entity, will strive to obtain the largest market share (including monopoly) possible. In closing, I think it would be better to examine government’s role rather than the existence of unions themselves.

—Henry S. Woodruff III

Golden, Colo.

Charles Baird replies:

First, some firms and some workers may, depending on circumstances of time and place, and for some purposes, prefer long-term to short-term contracts. But long-term contracts involving workers can be made without unions just as long-term contracts involving materials can be made without producer cartels. Second, it is unlikely that companies find it advantageous to have one labor contract rather than thousands. After all, most firms choose to try to remain union-free, and union-free firms are more successful on average than unionized firms. Third, a market price emerges out of a process that involves competition among sellers and competition among buyers. A union exists primarily to eliminate competition among sellers of labor services. Wages set in collective bargaining are no more market prices than the prices that a planning board would announce under a system of market socialism.

Finally, I agree that economists and others should examine government’s role in what unions are and what they do. I have nothing against unions comprised of voluntary members who “strive to obtain the largest market share” they can while adhering to the rules of voluntary exchange. What I object to are the special privileges and immunities that government has conferred on unions and that have placed them beyond the rule of law.

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