Third, there is the bothersome question of who is a worker and who is a businessman. However far one goes in supporting the self-interest activity of unions it is assumed that certain limitations to union power are provided by the arms length and independent bargaining of businessmen on the other side of the market. But what if the wages of labor are essentially a share of the proceeds and dependent on the quantity and price of the workers' output as in the case of various east and west coast fishermen's associations? In this situation the only limitation to be found is the elasticity of the demand for the product. And what may become of arms length bargaining if managerial employees up to and including the president of the company are brought within the ranks of union membership? The United Mine Workers, at least before Taft-Hartley, frequently proclaimed their aims to include organizing everyone up to and including the mine superintendent. The Wagner Act defined employee as "any employee" and, as Justice Douglas pointed out in his dissenting opinion in the Packard case, if foremen are employees so are "vice presidents, managers, assistant managers, superintendents, assistant superintendents—indeed all who are on the payroll of the company, including the president." He goes on to say that if the majority view of the Court prevails, "The struggle for control or power between management and labor becomes secondary to a growing unity in their common demands on ownership" or—one might add—on the consumer.
Finally, there is the most bothersome question of all, the question of so-called "management prerogatives." We expect from our system of enforced competition, I take it, not only a limitation to business power but the maintenance of an environment in which business rivalry will produce a continuous flow of new and better products and new and better ways of producing existing products. One important presumption underlying this policy is that business has a substantial area of freedom to innovate and to explore ways of achieving cost reduction and product improvement. Union action could diminish this area of freedom rather drastically and this diminution could at all points be closely related to legitimate union concern with wages, hours and working conditions. E. Wight Bakke, in a perceptive paper on collective bargaining, points out that a business enterprise is a risk-taking organization in which management wants to preserve as much freedom of action as possible. The union, on the other hand, is a
security-seeking organization, one of whose objectives is a reduction in the area of employer discretion. At the Labor-Management Conference in 1945 management representatives wanted an assurance that collective bargaining would not be allowed to encroach on a specific set of "management prerogatives." The labor representatives, while recognizing that "the responsibilities of management must be preserved," took the position that collective bargaining is an "expanding process" which must necessarily encompass new subjects. One can agree with Richard Lester that unions do not normally desire to "take over" the functions of management but at the same time be impressed by the potential limitations to the effectiveness of business competition that inhere in a gradual curtailment of management's area of freedom through the process of collective bargaining.
These seem to me the principal ways in which union power may impinge upon business competition. There may be others. I do not propose to attempt here an evaluation of the effects on competition of various lines of union action but wish merely to emphasize that those who consider that the appropriate limits to union power should be established at the point where union action adversely affects the process of business competition may be embracing a lot of territory.
In conclusion let me reemphasize the view that the determination of the "proper" limits to union power is not completely amenable to logic and experience. We are concerned here with values that are to some degree conflicting and how these values are to be reconciled is a part of the political process. At the same time I feel that the gulf between those who, on the one hand, believe that there is no problem of labor monopoly worth mentioning and those on the other hand who believe that it is the problem of our generation is unnecessarily wide. Is it not possible for those who set great store by collective bargaining to recognize that there are areas in which union action may encroach rather seriously on other values and where limitations may be imposed without significant injury to the process of collective bargaining itself? And is it not also possible for those who set great store by the maintenance of a competitive society to recognize that the spread of unionism does not necessarily mean that all is lost?