Organized Labor

In the war and after-war boom period from 1917 to 1920 the greater bargaining power of organized labor enabled it to push not only for higher wages and shorter hours, but for the closed shop, which made great headway. The rail roads, under federal control by the Railway Administration, were almost completely unionized, and great numbers of manufacturers conceded the closed shop to the unions. In 1920, with the onset of unemployment, began a most active propaganda in favor of the open shop. This produced, prob ably, an exaggerated effect upon the public mind, seeking a scapegoat for the high cost of living, and finding easy ex planations in "profiteers" on the one hand, and on the other in the unreasonable demands of labor, excessive wages, and re duced output. The effect was to neutralize in large part within the year the gains made by the closed shop, and to produce alarm in circles of organized labor.

§ 14.

Political and economic considerations. The ques tion of the closed or open shop has some very broad aspects. Is the closed shop, and are the other policies of trade-unions, morally right ; and ought they to be legally sanctioned t Such questions are not for the economist alone to answer. They in volve moral and political considerations—not merely exist ing formal law, but the fundamental issue of personal liberty and of interference with the liberty of some citizens by another group acting without political authority. For example, if a workman is unable to earn the standard rate' and is not permitted to take less, he is forced to move to a place where there is no union, or is forced out of the trade entirely. In the latter case he probably is compelled to take a lower wage than he could get in his regular occupation. Likewise, this change artificially increases the pressure of competition and reduces the wages of others in the occupation to which he turns. So, in the case of persons prevented from becoming apprentices in a trade, or kept from taking work by threats, or by the dread of boycott, or by the fear of viol 8 See § 11.

ence, in any degree however slight, there is present an ele ment of personal coercion by the organized laborers. This is the price others are made to pay for a favorable effect on the wages of the organized laborers. Now, the more strictly economic question concerns the part as to the effects upon wages, and hardly extends to a judgment on the moral recti tude (and the desirability in law) of such acts and policies.

One who fully shares the feelings of the organized workers will believe that the winning of a strike or the general im provement of the strikers' condition is so important that it outweighs the evils to other individuals and to society as a whole. Indeed, to one in that state of mind the evils appear very small or non-existent. The economist can only issue the warning that the commonest illusion he encounters is the belief of each class—commercial, banking, manufactur ing, wage-earning—that what is for its particular interest is, in a peculiar manner, for the general interest, so much so as to justify favoring legislation or special exemption from the general law, or even sheer lawlessness.

§ 15. The public's view of unions. We may, however, observe the view of the onlooker striving to be impartial. The attitude of the public in labor disputes, and particularly in regard to the closed shop, is a vacillating one. The gen eral public sympathizes in large measure with the unions in their efforts up to a more or less certain point ; but the public does not like to see organized labor with the power to dictate terms absolutely to the employers, any more than it likes to see employers crush the union. The unions are ef fective in varying degrees in strengthening the bargaining power of the workers, and accordingly the results vary not merely in degree but in kind. The public wishes to see "fair play," and up to a certain point the union is a device to get fair play. In truth, what is in the public's thought, some what vaguely, is approval of unions as far as they go to es tablish a real equality in competitive bargaining with the employers, but disapproval where the power of the union gets greater and becomes monopolistic. It is at this point that organized labor loses the sympathy of most of the "general public" outside of unions. When the union tries to force a higher wage than the market will warrant, when it strives not to establish but to defeat competition, the public condemns. It sees, though not quite clearly, that such action makes an un stable equilibrium of wages, which tempts to constant friction and discord with employers and with unorganized laborers. It sees also that if the unions force a wage higher than a fair and open market affords, this is rarely done at the expense of the employer; that in the long run it is at the expense of the purchasing public itself, including the unprivileged work men.