The strike threat system

The acceptance of trade union violence is one of the great blemishes on the face of the western democracies. The tolerance that is extended to trade unionists in that respect reflects the hold on the popular imagination that is exerted by the mythology of the labour movement. This was very clear during the waterfront dispute some years ago when the liberal intelligentsia and sympathetic commentators in the media lined up to support the wharfies without blinking an eye over the potentially lethal violence that they were using. The ultimate absurdity of their stance was demonstrated by the suggestion or implication that the substitute dockworkers were equipped with balaclavas and dogs in order to inflict violence instead of the real reason which was to save themselves and their families from violent retribution.

Collective bargaining to even up the shares between labour and capital.

Peace-loving supporters of the labour movement may concede that violence in industrial relations is an evil, but they may argue that it is (or was) a necessary evil to obtain justice for the downtrodden and disadvantaged. Can they continue to defend the strike threat system if it is demonstrated that the main beneficiaries are the most reckless and violent players, the "bloody aristocracy of labour"?

Collective bargaining is supposed to improve the lot of the working class as a whole by a redistribution of wealth from capital to labour. This is the central point that Hutt contested. He showed that claims enforced by the threat of strikes can only advance sections of the labour force at the expense of unorganized labour, the unemployed and the community at large without affecting any overall transfer of wealth to the working class at large.

As far as Hutt could find in the literature, unprotected and non-unionised workers gained proportionately as much from general upward movements in productivity as workers in unions. It seems that there is no clear correlation between the degree of unionization and the speed of wage-rate increases. The exceptions to that pattern are the most violent and uncompromising who do better than average and more lowly workers and the unemployed who do worse than average either because they are excluded from any kind of work by "the going rate" (wage rates set too high which render them unemployable) or because they are kept in lower paying jobs by regulations and practices which impede productivity and flexibility in hiring and firing.

Conclusion

A wide-ranging debate on industrial relations is required to prepare the way for a more fair and flexible system. It seems from the chapters by Grace Collier and Ken Phillips in The Greens: Policies, Realities and Consequences (summarized here) that the Fair Work Act was crafted to suit the most militant trade unions who happen to be major financial backers of the Greens. The results are causing widespread concern about genuine fairness for all the players in the system, not just the workers, and also about productivity which every economist agrees has to be raised for the benefit of everyone. Genuine fairness and productivity should not be sacrificed on the altar of trade union mythology.

More on W H Hutt can be found here including an overview of his career and major works, his important essay on the mythology of the factory system and a condensed version of his account of the apartheid system in South Africa.